KAVITA SHARMA, Jaipur V. ITO, Jaipur

ITA 255/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4846 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 18-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: RAJIV PANDEY
• Keywords: Capital asset; Period of limitation
• Section: 143(3); 54F; 234B; 54; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 255/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 KAVITA SHARMA, 1/2, SOUMYA MARG, GANDHI NAGAR, JAIPUR. CUKE VS. D.C.I.T. CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFMPS 7370 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJIV PANDEY, (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/11/2016 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 16/12/2016 VKNS'K@ ORDER PER: KUL BHARAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 01/01/2016 PASSED BY THE LD. CIT(A)-2, JAIPUR FOR T HE A.Y. 2011-12. THE GROUNDS TAKEN BY THE ASSESSEE IN APPEAL ARE AS UNDE R:- ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN - 1. CONFIRMING THE ASSESSMENT ORDER PASSED U/S 143( 3) OF INCOME TAX ACT, 1961 AND FURTHER ERRED IN NOT HOLDI NG THE SAME TO BE UNJUST AND NOT FOLLOWING PROVISIONS O F LAW. ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 2 2. IN HOLDING THAT DETERMINATION OF CLAIM OF CAPITA L GAIN U/S 54F TO BE RS.43,73,238/- AND NOT RS.89,96,252/- CLAIMED BY ASSESSEE BEING THE AMOUNT INVESTED OUT O F SALE PROCEEDS IN CONSTRUCTION OF VILLA AT ESPACE PREMIER, NIRWAN COUNTRY, GURGAON WITHIN PRESCRIBED PERIOD OF 3 YEARS AND ERRED IN NOT FOLLOWING PROVISI ONS OF LAW. 3. IN NOT CONSIDERING ALTERNATE INVESTMENT MADE IN HOUSE PROPERTY GURUKUL YOJANA, JAIPUR WHICH IS AMOUNTING TO RS.59,29,000/- AND THIS PROPERTY WAS ALSO ELIGIBLE F OR CLAIMING EXEMPTION U/S 54F. 4. IN CONFIRMING LEVY OF INTEREST U/S 234B RS.3,36, 816/-. 5. ASSESSEE RESERVES THE RIGHT TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL BEFORE HEARING. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE CA SE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESS MENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TH E ACT) WAS FRAMED VIDE ORDER DATED 28/3/2014. WHILE FRAMING THE ASSES SMENT, THE A.O. NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 54F OF THE ACT IN RESPECT OF PROPERTY SOLD FOR RS. 89,19,000/- ON 18/ 11/2010. THE A.O. WHILE ALLOWING THE DEDUCTION U/S 54F OF THE ACT RESTR ICTED THE SAME TO THE EXTENT OF RS. 15.00 LACS. THE AMOUNT INVESTED IN A F LAT. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE AS SESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS AND ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 3 MATERIAL AVAILABLE ON RECORD, PARTLY ALLOWED THE APP EAL. WHILE ALLOWING THE APPEAL, THE LD. CIT(A) RESTRICTED THE DEDUCTION TO T HE EXTENT OF RS. 43,73,738/- OUT OF THE SALE PROCEEDS OF RS. 89, 10,000/-. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 5. GROUNDS NO. 1 AND 5 OF THE APPEAL IS GENERAL IN NATURE, NEEDS NO SEPARATE ADJUDICATION. 6. GROUNDS NO. 2 AND 3 OF THE APPEAL ARE AGAINST RE STRICTION OF DEDUCTION U/S 54F OF THE ACT TO THE EXTENT OF RS. 4 3,73,238/- AND NOT CONSIDERING ALTERNATE INVESTMENT MADE IN HOUSE PROP ERTY, WHICH IS AMOUNTING TO RS. 59,29,000/-. IN THIS REGARD, THE L D. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAD TRANSFERRED A P ROPERTY FOR A SALE CONSIDERATION OF RS. 89.10 LACS. STAMP VALUE EVALUA TED AT RS. 89,96,252/-. THE ASSESSEE HAD INVESTED A SUM OF RS. 59.20 LACS IN GURUKUL YOJANA, MAHAL, JAGATPURA, JAIPUR. HOWEVER, SUBSEQUENTLY, THE ASSESSEE CLAIMED DEDUCTION IN RESPECT OF A PROPERTY CONSTRUCTED BY E SPACE PREMIER NIRMAN COUNTRY, GURGAON AND CLAIMED THE ENTIRE SALE CONSID ERATION AS DEDUCTION. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD INVESTED ENTIRE AMOUNT WITHIN A PRESCRIBED PERIOD OF THREE YEARS IN CONSTRUCTION OF VILLA AT ESPACE PREMIER NIRMAN COUNTRY, GURGAON. THE A.O. HAD RESTRI CTED THE EXEMPTION ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 4 CLAIMED TO RS. 15.00 LACS AND HAS TAXED THE REMAINI NG AMOUNT. HOWEVER, THE LD. CIT(A) RESTRICTED THE AMOUNT OF RS. 43,73,23 8/-. 7. ON THE CONTRARY, THE LD SR. DR HAS SUPPORTED THE ORDER OF THE A.O. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD. CIT(A) HA S DECIDED THE ISSUE UNDER CONSIDERATION IN PARAGRAPH NO. 3.3 OF HER ORD ER, WHICH IS AS UNDER:- I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSME NT ORDER AND THE SUBMISSIONS OF THE APPELLANT. IN THIS CASE, THE ASSESSEE HAS SOLD A PROPERTY AT TARU CHAYA BY A REGI STERED SALE DEED ON 23.11.10 FOR AN AMOUNT OF RS 89,10,000 AND INVESTED IN THE PROPERTY AT ESPACE PREMIER, GURGAON WITHIN THE PRESCRIBED PERIOD OF THREE YEARS. IN VIEW OF THE SAME, THE ASSESSEE CLAIMED THAT SHE HAD FULFILLED THE CONDITI ONS LAID DOWN UNDER SECTION 54F OF THE I.T.ACT, 1961. THIS ARGUMENT OF THE ASSESSEE CANNOT BE AGREED TO AS THE INVESTMENT HAS TO BE MADE WITHIN THREE YEARS OF THE SALE OF ASSET, BUT THE AMOUNTS NOT UTILISED FOR THE SAME HA VE TO BE INVESTED IN SPECIFIED CAPITAL GAINS SCHEME BEFORE T HE DUE DATE OF FILING THE RETURN OF INCOME WHICH IN THE CA SE OF THE ASSESSEE WAS 31.7.11. ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 5 NOW WHEN THIS IS EXAMINED IT IS FOUND THAT THE ASSES SEE INVESTED AN AMOUNT OF RS.43,73,238 IN THE CAPITAL G AINS SB ACCOUNT SCHEME WITH OBC JAIPUR. THIS INCLUDED RS 15,00,0000 INVESTED ON 10.5.2011 AND RS. 28,73,238 ON 28.7.11 AS TRANSFER FROM SH. VIPIN CHANDRA SHARMA, HUSBANDS S.B. ACCOUNT. THIS AMOUNT HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER AS IT WAS TRANSF ERRED FROM THE HUSBANDS ACCOUNT. THUS TOTAL INVESTMENT MAD E IN THIS SCHEME BEFORE 31.7.11, I.E. THE DUE DATE FOR F ILING THE RETURN FOR THAT YEAR IS RS.43,73,238/-. A FURTHER PLEA HAS BEEN TAKEN BY THE ASSESSEE THAT INITIALLY AN AMOUNT OF RS WAS INVESTED IN PURCHASE OF PLOTS AT GU RUKUL YOJANA AND IT WAS TO CLAIM EXEMPTION UNDER SECTION 5 4 F BUT SUBSEQUENTLY IT WAS DECIDED TO TREAT THE PROPERTY AT ESPACE PREMIER AS THE ASSET FOR EXEMPTION. SINCE THE ASSES SEE HAS OPTED FOR INVESTMENT IN ESPACE PREMIER AS THE ASSET FOR CLAIMING EXEMPTION, INVESTMENT MADE IN THE SAME IS CONSIDERED FOR EXEMPTION. THUS, THE EXEMPTION TO BE ALLOWED UNDER SECTION 54F F OR INVESTMENT IS RS.43,73,738/- OUT OF THE SALE PROCEE DS RECEIVED OF RS 89,10,000.THE GROUND OF APPEAL IS THU S PARTLY ALLOWED. FROM THE ABOVE ORDER OF THE LD. CIT(A), IT APPEARS THAT THE ENTIRE DEDUCTION WAS NOT GRANTED TO THE ASSESSEE ON THE BAS IS THAT THE ASSESSEE HAD NOT DEPOSITED THE AMOUNT IN THE SPECIFIED CAPIT AL GAIN SCHEME ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 6 ACCOUNT. THE ALTERNATE PLEA OF THE LD. COUNSEL FOR T HE ASSESSEE IS THAT IF THE ASSESSEE IS NOT GRANTED DEDUCTION U/S 54F IN TH E ENTIRE SALE CONSIDERATION IN RESPECT OF THE INVESTMENT MADE IN THE VILLA AT ESPACE PREMIER NIRMAN COUNTRY, GURGAON. HE MAY BE ALLOWED D EDUCTION IN RESPECT OF THE INVESTMENT MADE IN GURUKUL YOJANA, M AHAL, JAGATPURA, JAIPUR. THE ONLY DISPUTE WHICH REQUIRES TO BE ADJUDI CATED IS WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION OF ENTIRE AMOUNT OF RS. 89.10 LACS U/S 54F OF THE ACT FOR MAKING INVESTMENT IN VILLA AT ES PACE PREMIER NIRMAN COUNTRY, GURGAON. AS PER SECTION 54F, THE DEDUCTION IS AVAILABLE WHEREIN THE CASE OF AN INDIVIDUAL, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HO USE AND THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHI N A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED ONE RESIDENTIAL H OUSE. THE CAPITAL GAIN SHALL BE DEALT WITH IF THE COST OF THE NEW ASSET IS N OT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED U/S 45 OF THE ACT. AS PER SECTION 54F(4) T HE AMOUNT OF THE NET CONSIDERATION WHICH IS NOT APPROP RIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WI THIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINA L ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CON STRUCTION OF THE NEW ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 7 ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF I NCOME UNDER SECTION 139 , SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE S PECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVE RNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF. THEREFORE, THE REQUIREMENT OF LAW FOR THE PURPOSE OF SECTION 54F IS THAT IN THE EVENT, THE ASSESSEE IS UNABLE TO MAKE INVESTMENT OF THE NET CO NSIDERATION BY PURCHASE OF A NEW ASSET OR CONSTRUCTION OF THE NEW AS SET BEFORE THE DATE OF FURNISHING U/S 139 OF THE ACT, THE AMOUNT IS REQ UIRED TO BE DEPOSITED INTO A SPECIFIED ACCOUNT. IN THE PRESENT CASE, IT I S NOT DONE. THE ASSESSEE HAS RELIED UPON THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS JAGTAR SINGH CHAWLA (2013) 87 D TR 0217 (P&H) WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER:- 10. IN THE PRESENT CASE, THE ASSESSEE HAS PROVED THE PAYM ENT OF SUBSTANTIAL AMOUNT OF SALE CONSIDERATION FOR PURCHASE OF A RESIDENTIAL PROPERTY ON OR BEFORE 31.3.2008, TH AT IS WITHIN EXTENDED PERIOD OF LIMITATION OF FILING OF R ETURN. ONLY A SUM OF RS.24 LACS WAS PAID OUT OF TOTAL SALE CONSIDERATION OF RS. TWO CRORES ON 23.4.2008, THOUGH POSSESSION WAS DELIVERED TO THE ASSESSEE ON EXECUTION OF THE POWER OF ATTORNEY ON 30.3.2008. SINCE THE ASSESSEE, HAS ACQUIRED A RESIDENTIAL HOUSE BEFORE THE END OF THE NEXT FINANCIAL YEAR IN WHICH SALE HAS TAKEN PLACE, THEREFORE, THE ASSESSEE IS NOT LIABLE TO PAY ANY CAPITAL GAIN. SUCH IS THE VIEW TAKEN BY THE INCOME TAX APPELLA TE TRIBUNAL. ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 8 INITIALLY, THE ASSESSEE HAD MADE A CLAIM FOR DEDUCT ION U/S 54F IN RESPECT OF THE PROPERTY PURCHASED AT GURUKUL YOJANA, MAHAL, JAGATPURA, JAIPUR, WHICH WAS PURCHASED ON 23/11/2010. THE ORIGINAL ASSET WAS TRANSFERRED ON 19/11/2010, THEREFORE, THIS INVESTMENT WAS WITHIN PRESCRIBED PERIOD. UNDER THESE FACTS, THE LD. CIT(A) OUGHT TO HAVE ACCE PTED THE REQUEST OF THE ASSESSEE FOR GRANTING DEDUCTION OF THE ASSET PU RCHASED IN GURUKUL YOJANA, MAHAL, JAGATPURA, JAIPUR FOR A SUM OF RS. 5 9.29 LACS. THE LD. CIT(A) HAS NOT CONSIDERED THIS PLEA OF THE ASSESSEE, THEREFORE, THE ORDER OF THE LD. CIT(A) IS MODIFIED. THE A.O. IS DIRECTED TO ACCEPT THE CLAIM OF THE ASSESSEE IN RESPECT OF INVESTMENT MADE IN GURUK UL YOJANA, MAHAL, JAGATPURA, JAIPUR. HENCE THIS GROUND OF APPEAL IS P ARTLY ALLOWED. 9. GROUND NO. 4 OF THE APPEAL IS IN RESPECT OF LEVY OF INTEREST. THIS BEING CONSEQUENTIAL, NEEDS NO SEPARATE ADJUDICATION . 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/12/2016. SD/- SD/- HKKXPAN DQY HKKJR (BHAGCHAND) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 TH DECEMBER, 2016 *RANJAN ITA 255/JP/2016_ KAVITA SHARMA VS. DCIT 9 VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. KAVITA SHARMA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 255/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR