Smt. Minaxiben Harshadbhai Mavani, Surat V. The Income Tax Officer, Ward-1(3)(3), Surat

ITA 2604/AHD/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5360 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 07-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO.2604/AHD/2016 (AY 2013-14) (H EARING IN VIRTUAL COURT) SMT. MINAXIBEN HARSHADBHAI MAVANI, 204, MALHAR COMPLEX, ICCHANATH, SURAT 395 007. PAN: AGJPM 8034 B VS. THE INCOME TAX OFFICER, WARD-1(3)(3), SURAT. APPLICANT RESPONDENT ASSESSEE BY NONE. REVENUE BY MS. ANUPAMA SINGLA SR.DR DATE OF HEARING 14.09.2021 DATE OF PRONOUNCEMENT 14.09.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-II [LD.CIT(A)], SURAT UNDER SECTION 143(3) OF THE INCOME TAX ACT, DATED 27.06.2016 FOR THE ASSESSMENT YEAR (AY) 2013-14. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE MADE BY AO OF RS. 56, 00, 000/- BY DENYING EXEMPTION CLAIMED U/S 54F OF THE ACT. LD. CIT (A) OUGHT TO HAVE ALLOWED EXEMPTION RIGHTFULLY CLAIMED BY THE APPELLANT OF AMOUNT INVESTED IN PURCHASE OF NEW RESIDENTIAL PREMISES. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONCURRING WITH AO THAT IN ABSENCE OF REGISTERED PURCHASE DEED EXEMPTION U/S 54F CANNOT BE ALLOWED. 3. LD. CIT (A) OUGHT TO HAVE HELD THAT INVESTING IN NEW RESIDENTIAL PREMISES WITHIN STIPULATED TIME ENTITLES THE APPELLANT TO CLAIM EXEMPTION U/S 54F. 4. BOTH THE LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE PROVISIONS OF THE SECTION THAT THE APPELLANT CANNOT BE DENIED EXEMPTION U/S 54F IN ABSENCE OF EITHER REGISTERED SALE DEED OR POSSESSION OF THE PROPERTY. THE ITA NO.2604/AHD/2016 SMT. MINAXIBEN HARSHADBHAI MAVANI (AY 2013-14) 2 APPELLANT IS ENTITLED TO CLAIM U/S 54F HAVING FULFILLED THE CONDITION OF INVESTING & BOOKING RESIDENTIAL PROPERTY WITHIN STIPULATED TIME. 5. ALTERNATIVELY & WITHOUT PREJUDICE TO THE ABOVE CONTENTION, LD. CIT (A) ERRED IN LAW AND ON FACTS IN REJECTING THE CONTENTION THAT IN CASE EXEMPTION U/S 54F IS DENIED THEN RESULTING CAPITAL GAIN BE TAXED IN THE YEAR IN WHICH PERIOD OF 3 YEARS TO SALE IS COMPLETED. IT BE SO HELD NOW. 6. LEVY OF INTEREST U/S 234A/234B/234C & 234D OF THE ACT IS NOT JUSTIFIED. 7. INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IS NOT JUSTIFIED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS INDIVIDUAL, FILED ITS RETURN OF INCOME FOR THE A.Y. 2013-14 ON 31.03.2014 DECLARING INCOME O RS.3,34,590/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT, THE ASSESSING OFFICER(AO) NOTED THAT ASSESSEE HAS SOLD ONE PROPERTY AT MALHAR FLAT, DUMAS ROAD, SURAT FOR A SALE CONSIDERATION OF RS.1.25 CRORES IN MAY 2012. THIS PROPERTY WAS JOINTLY OWNED BY THE ASSESSEE WITH HER HUSBAND AND WAS PURCHASED IN MAY 2007 FOR RS.3,74,325/-, AFTER INDEXATION OF PURCHASE PRICE, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT OF RS.56 LAKHS AND OFFERED CAPITAL GAIN OF RS.71,189/-. THE ASSESSEE HAS SHOWN TO HAVE MAKE PAYMENT OF RS.1.12 CRORE TO M/S. ELEMBEE ASSOCIATES FOR PURCHASE OF FLAT AND CLAIMED DEDUCTION OF RS.56 LAKHS. THE AO WAS OF THE VIEW THAT DEDUCTION UNDER SECTION 54 OF THE ACT IS ALLOWABLE WHEN THE RESIDENTIAL HOUSE WAS PURCHASED WITHIN ONE YEAR FROM THE TRANSFER OF RESIDENTIAL PROPERTY. THE AO FURTHER RECORDED THAT THE ASSESSEE HAS NOT FURNISHED THE PURCHASE DEED OF NEW RESIDENTIAL PROPERTY FOR SEEKING DEDUCTION UNDER SECTION 54 OF THE ACT. THE AO ISSUED SHOW ITA NO.2604/AHD/2016 SMT. MINAXIBEN HARSHADBHAI MAVANI (AY 2013-14) 3 CAUSE NOTICE TO THE ASSESSEE TO SUBSTANTIATE THE CLAIM OF DEDUCTION UNDER SECTION 54. THE ASSESSEE FILED ITS REPLY DATED 08.01.2016. IN THE REPLY, THE ASSESSEE STATED THAT SHE HAS INVESTED HIS FUND IN PROPERTY FOR PURCHASE OF NEW RESIDENTIAL HOUSE AT VESU, WHICH WAS ABOUT TO COMMENCE, HOWEVER DUE TO DISPUTE OF TITLE THE PROJECT COULD NOT BE COMMENCED. THE ASSESSEE HAS INVESTED HER FUND FOR PURCHASE OF BOOKING OF THE PROPERTY. THE PROJECT WAS DELAYED DUE TO DEFECT IN TITLE AND SOME COMPLAINT WAS MADE WITH DISTRICT MAMLATDAR OFFICE. THE ASSESSEE FURTHER CONTENDED THAT HER INTENTION WAS TO PURCHASE THE RESIDENTIAL HOUSE AND THE PAYMENT WAS MADE. THE PURCHASE VALUE OF THE PROPERTY IS MORE THAN THE LONG TERM CAPITAL GAIN TAXABLE AT THE END OF ASSESSEE. THE ASSESSEE HAS SPENT ENTIRE CONSIDERATION RECEIVED ON THE SALE OF PROPERTY FOR CONSTRUCTION OF RESIDENTIAL HOUSE. TO SUBSTANTIATE HER CLAIM, THE ASSESSEE RELIED UPON THE DECISION OF JAIPUR TRIBUNAL IN RAM PRAKASH MIYAN BAZAZ VS DCIT 45 TAXMANN.COM 550. ON THE RATIO THAT IN ORDER TO CLAIM EXEMPTION UNDER SECTION 54F OF THE ACT, THE PAYMENT MADE FOR BOOKING A FLAT WITHIN PRESCRIBED TIME HAS TO BE TREATED AS INVESTMENT TOWARDS PURCHASE/CONSTRUCTION OF NEW HOUSE AND STATED THAT SHE MAY BE ALLOWED CLAIM UNDER SECTION 54F OF THE ACT. 3. THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY THE AO BY TAKING VIEW THAT ASSESSEE FAILED TO PROVE THE CLAIM UNDER SECTION 54 OF THE ACT. ON ONE HAND, THE ASSESSEE SUBMITTED THAT SHE HAD PURCHASED THE LAND UTILISING THE ENTIRE CONSIDERATION RECEIVED ON THE SALE OF PROPERTY AND ON THE OTHER HAND, ITA NO.2604/AHD/2016 SMT. MINAXIBEN HARSHADBHAI MAVANI (AY 2013-14) 4 SHE SUBMITTED THAT ONCE THE AMOUNT WAS REALISED FROM THE FIRM, SHE WILL INVEST IN PURCHASE OF NEW RESIDENTIAL HOUSE IMMEDIATELY. ON THE BASIS OF AFORESAID OBSERVATION, THE AO DENIED THE CLAIM UNDER SECTION 54F OF THE ACT, WHILE PASSING THE ASSESSMENT ORDER. 4. ON APPEAL BEFORE THE LD.CIT(A), THE ASSESSEE FILED DETAILED WRITTEN SUBMISSIONS. IN THE SUBMISSION, THE ASSESSEE STATED THAT OUT OF TOTAL CONSIDERATION OF RS.62,50,000/- [ONE HALF OF ASSESSEES SHARE]. THE ASSESSEE INVESTED RS.56 LAKHS FOR PURCHASE OF RESIDENTIAL HOUSE IN NEW PROJECT TO BE CARRIED OUT BY M/S. ELEMBEE ASSOCIATES, WHEREIN THE ASSESSEE IS ONE OF THE PARTNERS. OUT OF HER CONTRIBUTION, THE ASSESSEE PAID RS.1.12 CRORE ON PURCHASE OF FLAT AND BALANCE AS A CAPITAL CONTRIBUTION. DURING THE ASSESSMENT, SHE PRODUCED ALL DOCUMENTARY EVIDENCES ABOUT THE TRANSFER OF FLAT [OLD ASSET] AND NEW INVESTMENT IN RESIDENTIAL PROPERTY, CONFIRMATION OF BUILDER/ ALLOTMENT LETTER. THE AO REQUIRED THE REGISTERED SALE DEED OF NEW PROPERTY AND OTHER DOCUMENTARY SUPPORT OF CLAIM UNDER SECTION 54 OF THE ACT. THE ASSESSEE AND HER REPRESENTATIVE EXPLAINED THAT DUE TO TECHNICAL HINDRANCES IN THE PROCESS, THEY ARE UNABLE TO COMMENCE THE CONSTRUCTION. TO JUSTIFY HER CLAIM, SHE PRODUCED THE BANK STATEMENT FOR DETAILS OF SALE CONSIDERATION RECEIVED AND PAYMENT MADE TO BUILDER FOR PURCHASE OF NEW FLAT. THE ASSESSEE ALSO STATED THAT DUE TO DISPUTE AND DIFFERENCES WITH THE PREVIOUS OWNER, THE MUNICIPAL CORPORATION OF SURAT HAS NOT APPROVED THE LAY OUT PLAN. THE ASSESSEE CLAIMED THAT SHE INVESTED THE ENTIRE SALE ITA NO.2604/AHD/2016 SMT. MINAXIBEN HARSHADBHAI MAVANI (AY 2013-14) 5 CONSIDERATION FOR PURCHASE OF NEW RESIDENTIAL FLAT, HOWEVER, DUE TO SOME HINDRANCES, THE PROJECT WAS NOT COMPLETED. THE PAYMENT HAS NOT BEEN RETURNED BY THE BUILDER. THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 54F OF THE ACT ON THE PRINCIPLE OF PURPOSIVE INTERPRETATION. THE LD.CIT(A) AFTER CONSIDERING THE CONTENTION OF ASSESSEE HELD THAT MERE ADVANCING AMOUNT FOR PURCHASE OF FLAT IS NOT SUFFICIENT. THE ASSESSEE HAS TO PROVE ON RECORD THAT SHE HAD PURCHASED OR CONSTRUCTED A NEW HOUSE WITHIN THE SPECIFIED PERIOD, WHICH THE ASSESSEE FAILED TO PROVE AND CONFIRMED THE ORDER OF AO. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED THE APPEAL BEFORE THE LD.CIT(A). 5. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE ON MORE THAN ONE OCCASION. PERUSAL OF RECORD REVEALS THAT INITIALLY COUNSEL OF THE ASSESSEE APPEARED ON A NUMBER OF OCCASION AND SOUGHT ADJOURNMENT. AFTER SOME TIME THE COUNSEL RESCUED HERSELF FROM THE CASE AND INFORMED THE BENCH THAT THE ASSESSEE INTENDS TO ENGAGED OTHER COUNSEL. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE. THIS APPEAL IS PENDING SINCE 2016 AND IS IN THE CATEGORY OF MORE THAN FIVE YEARS OLD CASES. IN THESE CIRCUMSTANCES, WE HAVE NO OPTION LEFT EXCEPT TO DECIDE THE APPEAL AFTER HEARING THE SUBMISSION OF LD.SR.DR FOR THE REVENUE AND THE MATERIAL AVAILABLE ON RECORD. ITA NO.2604/AHD/2016 SMT. MINAXIBEN HARSHADBHAI MAVANI (AY 2013-14) 6 6. THE LD.SR.DR FOR THE REVENUE SUBMITS THAT ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CLAIM THAT ANY AMOUNT WAS INVESTED FOR PURCHASE OF NEW RESIDENTIAL PROPERTY. THE ASSESSEE HAS NEITHER FILED ANY BOOKING RECEIPT, ALLOTMENT LETTER OR ANY AGREEMENT WITH THE BUILDER TO SUBSTANTIATE THE CLAIM THAT SHE INVESTED THE CAPITAL GAIN FOR PURCHASE OF NEW RESIDENTIAL HOUSE. THE DOCUMENTARY EVIDENCE FURNISHED BY ASSESSEE DOES NOT PROVE THE CLAIM OF THE ASSESSEE. 7. WE HAVE CONSIDERED THE SUBMISSION OF LD.SR.DR FOR THE REVENUE. WE HAVE ALSO GONE THROUGH THE ORDERS OF LOWER AUTHORITIES AND VARIOUS DOCUMENTS FILED ON RECORD. WE FIND THAT NO DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CLAIM THAT ANY AMOUNT WAS INVESTED FOR PURCHASE OF NEW RESIDENTIAL HOUSE EXCEPT A CERTIFICATE OF BUILDER WHEREIN THE ASSESSEE IS A PARTNER THAT ASSESSEE BOOKED A RESIDENTIAL FLAT. NO NUMBER OF RESIDENTIAL UNIT, COST OF NEW RESIDENTIAL PROPERTY OR ANY OTHER DETAILS OF SCHEDULED OF PAYMENT IS FURNISHED. IN OUR VIEW, THE ASSESSEE FAILED TO SUBSTANTIATE THE CLAIM BEFORE THE LOWER AUTHORITIES AS WELL AS BEFORE THE TRIBUNAL. THEREFORE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER ANNOUNCED ON 14 TH SEPTEMBER, 2021 AT THE TIME OF HEARING IN VIRTUAL COURT HEARING. SD/- SD/- (DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 14/09/2021 / SGR* ITA NO.2604/AHD/2016 SMT. MINAXIBEN HARSHADBHAI MAVANI (AY 2013-14) 7 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE BY ORDER / / TRUE COPY / / SR.PVT. SECRETARY, ITAT, SURAT