RAMESH CHAND KAPOOR, Jaipur V. ITO, Alwar

ITA 255/JPR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6225 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 03-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Keywords: Cost of acquisition; Valuation report
• Section: 54B; 54F

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 255/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 SH. RAMESH CHAND KAPOOR T/H LEGAL HEIR SMT. PUSHPA KAPOOR 42, SCHEME NO. 2, LAJPAT NAGAR, ALWAR. CUKE VS. THE ITO WARD-1(1), ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: CNSPK 8802 P VIHYKFKHZ@ APPELL ANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/07/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 11/07/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 03.02.2017 OF LD. CIT(A), ALWAR FOR THE ASSESSMENT YEAR 2013-14. INITIALLY THE APPEAL OF THE ASSESSEE WAS DISPOSED O FF VIDE ORDER DATED 09.04.2018 AND THEREAFTER THE TRIBUNAL, WHILE DECID ING THE MA NO. 54/JP/2018 FILED BY THE ASSESSEE, HAS RECALLED THE EARLIER ORDER DATED 09.04.2018 VIDE ORDER DATED 14.05.2018 IN PARA 4 AS UNDER:- ITA NO. 255/JP/2017 SH. RAMESH CHAND KAPOOR VS. ITO 2 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFUL PERUSAL ON RECORD WE NOTE THAT WHILE DECIDING THE GROUND NO . 2 REGARDING DEDUCTION U/S 54F OF THE ACT THE TRIBUNAL HAS CONSI DERED THE FACT THAT AS PER THE REMAND REPORT OF THE ASSESSING OFFI CER NO CONSTRUCTION WAS CARRIED OUT BY THE ASSESSEE AS CLA IMED. HOWEVER, WE FIND THAT IN THE REMAND REPORT THE AO H AS NOT DISPUTED THE CONSTRUCTION OF NEW HOUSE AND ONLY OBJ ECTION RAISED BY THE AO WAS THAT THE ASSESSEE HAS NOT PURCHASED T HE NEW HOUSE IN HIS NAME BUT THE SAME WAS PURCHASED IN THE NAME OF WIFE. THEREFORE, WE FIND THAT THE FINDING OF THE TR IBUNAL IS BASED ON INCORRECT FACTS AS CONSIDERED WHILE DECIDING THE GROUND NO. 2 OF THE ASSESSEES APPEAL. THE SECOND MISTAKE POINTE D OUT IN THE MISCELLANEOUS APPLICATION IS REGARDING THE COST OF ACQUISITION OF PLOT OF LAND WHICH IS MENTIONED BY THE TRIBUNAL AS RS. 20 LACS BUT THE ACTUAL COST OF ACQUISITION AS RS. 21,11,500/- C OMPRISING OF PURCHASE CONSIDERATION, THE STAMP DUTY AND OTHER MI SCELLANEOUS EXPENSES. WE FIND THAT THE TRIBUNAL HAS CONSIDERED ONLY RS. 20 LACS AS COST OF ACQUISITION OF PLOT WHICH IS INCORR ECT AS THE STAMP DUTY, BROKERAGE ETC. WERE NOT TAKEN INTO CONSIDERAT ION. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT THE RE IS A MISTAKE IN THE IMPUGNED ORDER OF THE TRIBUNAL AS THE CORREC T FACTS HAD ESCAPED THE ATTENTION OF THE TRIBUNAL. HENCE, WE RE CALL THE IMPUGNED ORDER DATED 09.04.2018 OF THE TRIBUNAL TO THE EXTENT OF THE FINDING ON THE GROUND NOS. 2 & 2.1 OF THE ASSES SEES APPEAL. THE REGISTRY IS DIRECTED TO LIST THE APPEAL OF THE ASSESSEE FOR FRESH HEARING AND ADJUDICATION OF GROUND NO. 2 AND 2.1 OF THE ASSESSEES APPEAL. THEREFORE, THE EARLIER ORDER DATED 09.04.2018 WAS R ECALLED BY THE TRIBUNAL TO THE EXTENT OF ADJUDICATION OF GROUND NO S. 2 AND 2.1 OF THE ASSESSEES APPEAL WHICH ARE AS UNDER:- ITA NO. 255/JP/2017 SH. RAMESH CHAND KAPOOR VS. ITO 3 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 54F OF RS . 48,94,235/- AS THE INVESTMENT IN THE NEW ASSET HAS BEEN MADE IN THE NAME OF WIFE. 2.1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S 54F IN RESPECT OF DEPOSI T OF RS. 49 LCAS MADE IN THE CAPITAL GAIN ACCOUNT SCHEME WHICH IS UT ILIZED IN THE CONSTRUCTION OF THE HOUSE ON THE LAND PURCHASED IN THE NAME OF THE WIFE. 2. AS IT IS CLEAR FROM THE ORDER DATED 14.05.2018 I N THE MA THAT THE TRIBUNAL IN THE ORIGINAL ORDER HAS CONSIDERED THE C OST OF ACQUISITION OF PLOT AT RS. 20 LACS AS AGAINST RS. 21,11,500/-. TH EREFORE, TO THAT EXTENT WE FIND IT WAS ONLY MISTAKE APPARENT ON RECORD AND BOTH THE PARTIES HAVE NOT DISPUTED THE CORRECT CLAIM OF THE ASSESSEE ON COST OF LAND AT RS. 21,11,500/-. THE LD. AR OF THE ASSESSEE HAS SUB MITTED THAT THE ASSESSEE CLAIMED EXEMPTION U/S 54F OF THE ACT AGAIN ST THE INVESTMENT IN CONSTRUCTION OF NEW HOUSE IN THE NAME OF HIS WIF E. THE COST OF THE LAND WAS RS. 21,11,500/- AND THE PROPORTIONATE EXE MPTION WAS CLAIMED U/S 54F OF THE ACT ON THIS ACCOUNT IS RS. 14,73,890 /-. THE ASSESSEE ALSO MADE DEPOSIT IN THE CAPITAL GAIN ACCOUNTS SCHEME OF RS. 49,00,000/- THOUGH THE INVESTMENT IN THE CONSTRUCTION OF NEW HO USE WAS MORE RS. 50,00,00/-. THEREFORE, THE ASSESSEE CLAIMED THE PRO PORTIONATE EXEMPTION U/S 54F OF THE ACT ONLY IN RESPECT THE DE POSIT MADE IN THE ITA NO. 255/JP/2017 SH. RAMESH CHAND KAPOOR VS. ITO 4 CAPITAL GAIN ACCOUNT SCHEME AMOUNTING TO RS. 34,20, 342/-. THUS, THE TOTAL CLAIM U/S 54F OF THE ACT WAS MADE AT RS. 48,9 4,235/-. THE LD. AR HAS REFERRED TO THE REMAND REPORT OF THE ASSESSING OFFICER AT PAGE NO. 4 OF THE PAPER BOOK AND SUBMITTED THAT THE AO HAS ACC EPTED THE FACT OF CONSTRUCTION OF NEW HOUSE AND THE STRUCTURE FOUND W HEN THE INSPECTOR VISITED AT THE SITE. HE HAS ALSO REFERRED THE VALUA TION REPORT FOR COST OF CONSTRUCTION AT PAGE 24 OF THE PAPER BOOK AND SUBMI TTED THAT THE ASSESSING OFFICER HAS NOT DISPUTED THE CONSTRUCTION OF NEW HOUSE AT THE SAID PLOT PURCHASE IN THE NAME OF WIFE OF THE ASSES SEE THOUGH THE CLAIM WAS DENIED BY THE AO DENIED THE CLAIM ONLY ON THE G ROUND THAT THE ASSESSEE PURCHASE THE SAID PLOT AND CONSTRUCTED THE HOUSE IN THE NAME OF HIS WIFE. 3. ON THE OTHER HAND, LD. DR HAS RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIALS ON RECORD. AS REGARDS THE ISSUE OF DENIAL OF DEDUCTION U/S 54F OF THE ACT ON THE GROUND THAT THE NEW HOUSE WAS CON STRUCTED ON THE PLOT OF LAND PURCHASE IN THE NAME OF HIS WIFE THE S AID ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE WHILE PASSING THE EARLIER ORDER DATED 09.04.2018. FURTHER, WE NOTE THAT THE HONBLE JURIS DICTIONAL HIGH COURT ITA NO. 255/JP/2017 SH. RAMESH CHAND KAPOOR VS. ITO 5 IN CASE OF SHRI LAXMI NARAYA VS. CIT VIDE DECISION DATED 07.11.2017 IN D.B. INCOME TAX APPEAL NO. 20/2016 HAS CONSIDERED A ND DECIDED AN IDENTICAL ISSUE IN PARAS 7.2 & 7.3 AS UNDER:- 7.2 ON THE GROUND OF INVESTMENT MADE BY THE ASSESS EE IN THE NAME OF HIS WIFE, IN VIEW OF THE DECISION OF DELHI HIGH COURT IN SUNBEAM AUTO LTD. AND OTHER JUDGMENT OF DIFFERENT H IGH COURTS, THE WORD USED IS ASSESSEE HAS TO INVEST IT IS NOT S PECIFIEDTHAT IT IS TO BE IN THE NAME OF ASSESSEE. 7.3 IT IS TRUE THAT THE CONTENTIONS WHICH HAVE BEEN RAISED BY THE DEPARTMENT IS THAT THE INVESTMENT IS MADE BY THE AS SESSEE IN HIS OWN NAME BUT THE LEGISLATURE WHILE USING LANGUAGE H AS NOT USED SPECIFIC LANGUAGE WITH PRECISION AND THE SECOND REA SON IS THAT VIEW HAS ALSO BEEN TAKEN BY THE DELHI HIGH COURT TH AT IT CAN BE IN THE NAME OF WIFE. IN THAT VIEW OF THE MATTER, THE C ONTENTION RAISED BY THE ASSESSEE IS REQUIRED TO BE ACCEPTED W ITH REGARD TO SECTION 54B REGARDING INVESTMENT IN TUBEWELL AND OT HERS. IN OUR CONSIDERED OPINION, FOR THE PURPOSE OF CARRYING ON THE AGRICULTURAL ACTIVITY, TUBEWELL AND OTHER EXPENSES ARE FOR BETTE RMENT OF LAND AND THEREFORE, IT WILL NOT CONSIDERED A PART OF INV ESTMENT IN THE LAND AND SAME IS REQUIRED TO BE ACCEPTED. ACCORDINGLY, THE CLAIM OF DEDUCTION U/S 54F OF THE ACT CANNOT BE DENIED MERELY ON THE GROUND THAT THE NEW HOUSE WAS PURCHAS ED IN THE NAME OF HIS WIFE WHEN THE INVESTMENT MADE BY THE ASSESSE E FROM THE SALE PROCEEDS OF THE EXISTING ASSET AND YIELDED CAPITAL GAIN FROM THE SAID TRANSACTIONS. ITA NO. 255/JP/2017 SH. RAMESH CHAND KAPOOR VS. ITO 6 5. AS REGARDS THE INVESTMENT IN THE CONSTRUCTION OF THE NEW HOUSE WE NOTE THAT THE LD. CIT(A) HAS REPRODUCED THE REMA ND REPORT OF THE AO AT PAGE 2 AND 3 OF THE IMPUGNED ORDER. IN THE RE MAND REPORT THE ASSESSING OFFICER HAS ALSO REPRODUCED THE REPORT OF THE INSPECTOR WHO HAS VISITED THE PLACE AND FOUND THAT THE RESIDENTIA L HOUSE IN THE NAME OF HIS WIFE AND IT WAS CONSTRUCTED UPTO 3 STORIES H OWEVER, ONLY A MUMPTI WAS FOUND AT THE 3 RD FLOOR. THEREFORE, THE HOUSE WAS FOUND CONSTRUCTED UP TO THE LEVEL OF THE TWO FLOORS AND T HE MUMPTI AT 3 RD FLOOR. THE ASSESSING OFFICER IN THE REMAND REPORT HAS ALSO ACCEPTED THE PURCHASE OF PLOT OF LAND IN THE NAME OF HIS WIFE AS WELL AS CONSTRUCTION OF THE HOUSE. THE PURCHASE COST OF THE LAND IS NOT IN DISPUTED AT RS. 21,11,500/- AND THE CORRESPONDING DEDUCTION U/S 54F OF THE ACT WAS CLAIMED OF RS. 14,73,890/-. AS REGARDS THE COST OF CONSTRUCTION THE ASSESSEE HAS FILED A VALUATION REPORT OF COST OF CO NSTRUCTION OF RS. 50,85,953/-. HOWEVER, THE ASSESSEE DEPOSITED IN CAP ITAL GAIN ACCOUNT SCHEME ONLY RS. 49 LACS AND THEREFORE, THE PROPORTI ONATE DEDUCTION WAS CLAIMED AT RS. 34,20,345/- . THUS THE TOTAL CLAIM O F DEDUCTION U/S 54F OF AT RS. 33,84,224/- IS FOUND PROPER AND CORRECT. IN VIEW OF THE ABOVE, FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE AO HAS ACCEPTED THE ITA NO. 255/JP/2017 SH. RAMESH CHAND KAPOOR VS. ITO 7 INVESTMENT IN THE CONSTRUCTION OF NEW HOUSE THE CLA IM OF THE ASSESSEE U/S 54F OF THE ACT IS ALLOWED. IN THE RESULT, THE GROUND NOS. 2 AND 2.1 OF THE AS SESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/07/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/07/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. RAMESH CHAND KAPOOR, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT - ITO, WARD-1(1), ALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ 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/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR