Shri Ganesh Prasad Sahu, Indore V. The CIT-II, Indore

ITA 292/IND/2013

• Counselvise Citation: 29222714 RSA 2013
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Keywords: Capital asset; Principle of natural justice; Additional evidence; Cost of acquisition; Assessment record
• Section: 143(3); 54; 263; 63

Judgement Text

PAGE 1 OF 22 IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AJUPS052D I.T.A.NO. 292 /IND/201 3 A.Y. : 2008-09 SHRI GANESH PRASAD SAHU, 101, KINGS TOWER, 12/3, OLD PALASIA, INDORE. VS. COMMISSIONER OF INCOME - TAX-II, INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SUMIT NEMA, ADVOCATE RESPONDENT BY : S MT. MRIDULA BAJPAI, CIT DR DATE OF HEARING : 11 . 11 .201 3 DATE OF PRONOUNCEMENT : 18 . 1 2 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX DATED 29.3 .2013 FOR THE ASSESSMENT YEAR 2008-09, U/S 263 OF THE INC OME-TAX ACT, 1961. SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 2 PAGE 2 OF 22 2. FOLLOWING FIVE GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE :- 1. THAT, THE LD. CIT GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN SETTING ASIDE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961. 2. (A) THAT, THE LD. CIT GROSSLY ERRED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE INCOME-TAX ACT , 1961, WITHOUT CONSIDERING THE MATERIAL FACT THAT TH E ASSESSMENT ORDER PASSED BY THE LD. ASSESSING OFFICER WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO TH E INTERESTS OF REVENUE. (B) THAT, THE LD. CIT GROSSLY ERRED IN ASSUMING T HE JURISDICTION U/S 263 OF THE ACT WITHOUT CONSIDERING THE MATERIAL FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT HAD BROUGHT ON RECORD ALL THE MATERIALS AND EVIDENCES RELATING TO THE ISSUE AND THE SAME WERE DULY VERIFIED BY THE ASSESSING OFFICER AFTER APPLICATION OF HIS MIND. SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 3 PAGE 3 OF 22 3. THAT THE ORDER PASSED BY LD. CIT II,INDORE, IS WITHOUT JURISDICTION AS THE SAME HAS BEEN PASSED WITHOUT CONSIDERING THE FACT THAT SUB ORDINATE OFFICER WHO PASSED THE ORDER IS ITO, 1(2), UJJAIN, AND HE COMES UNDER THE JURISDICTION OF LD. CIT UJJAIN. 4. THAT THE LD. CIT GROSSLY ERRED AND UTTERLY FAIL ED IN HIS DUTIES IN NOT CONSIDERING THE REPLIES DATED 4.9.2012 FILED BEFORE CIT, UJJAIN AND 28-03-2013 FILED BEFORE HIM. 5. THAT THE LD. CIT, UJJAIN GROSSLY ERRED IN KEEPING THE PROCEEDINGS DORMANT FOR EIGHT MONTHS I.E. FROM AUGUST, 2012, TO 26.03.2013 AND THE LD. CIT II, INDORE, PASSED THE ORDER HURRIEDLY ON 28.3.2013 WITHOUT GIVING PROPER OPPORTUNITY OF HEARING. 3. AT THE OUT-SET, THE LD. AUTHORIZED REPRESENTATIVE PLACED ON RECORD APPLICATION UNDER RULE 29 OF INCOM E TAX SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 4 PAGE 4 OF 22 RULES FOR PLACING ADDITIONAL EVIDENCE ON RECORD AND SUBMITTED AS UNDER :- 1. THAT THE DISPUTE IN THE PRESENT CASE RELATES TO THE PERIOD OF HOLDING OF HOUSE PROPERTY. 2. THAT THE APPELLANT HAD ENTERED INTO AN AGREEMENT WITH THE SELLER ON 7.7.2004 FOR PURCHASE OF THE IMPUGNED PROPERTY AND HAD PAID RS. 1,10,000/- AS ADVANCE AND HAD TAKEN POSSESSION OF THE SAID PROPERTY. 3. THAT THE SAID PURCHASE AGREEMENT ( ORIGINAL ) WAS PRODUCED BEFORE THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS AND WAS VERIFIED BY THE ASSESSING OFFICER AND WAS RETURNED BACK TO THE ASSESSEE. 4. THAT THE SAID ORIGINAL AGREEMENT WAS KEPT BY THE ASSESSEE IN HIS OFFICE IN MPEB (WHERE THE ASSESSEE WORKS) AND THERE WAS AN ATTACK BY THE RESIDENTS ON 19.7.2012 WHO WERE AGGRIEVED BY LOAD SHEDDING AND ALL THE RECORDS WERE BURNT AND THE SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 5 PAGE 5 OF 22 ORIGINAL AGREEMENT WAS ALSO BURNT. AN FIR FOR THIS WAS LODGED WHICH IS PLACED IN THE PAPER BOOK. 5. THAT THE ASSESSEE WAS THUS NOT ABLE TO PRODUCE THE AGREEMENT BEFORE THE CIT AT THE TIME OF REVISION PROCEEDINGS. THE ASSESSEE HAS NOW OBTAINED THE SELLERS COPY OF THIS AGREEMENT WHICH IS ANNEXED HEREWITH AS ANNEXURE AD/1. 6. THAT THE SAID AGREEMENT GOES TO THE ROOT OF THE MATTER AND IS NECESSARY FOR DECIDING THE DISPUTE AND THE ORIGINAL OF THE SAME WAS PRODUCED BEFORE THE ASSESSING OFFICER. 7. THAT THE CIT INDORE DID NOT GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE NOR WAS ANY TIME GIVEN TO THE ASSESSEE TO PRODUCE THE SAID AGREEMENT. NOTICE FOR HEARING WAS ISSUED ON 26.3.2013 WHICH WAS SERVED ON 27.3.2013 AND THE SAME WAS FIXED FOR 28.3.2013. THUS ONLY ONE DAYS NOTICE WAS GIVEN WHICH IS A CLEAR VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 6 PAGE 6 OF 22 8. THAT IN VIEW OF THE ABOVE FACTS, THE ASSESSEE HUMBLY PRAYS THAT THE SAID AGREEMENT BE KINDLY ACCEPTED U/R 29 AS ADDITIONAL EVIDENCE. 9. THAT AN AFFIDAVIT IN SUPPORT OF THIS APPLICATIO N IS ANNEXED HEREWITH. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. IN THE ORDER PASSED U/S 263, THE LD. CIT O BSERVED THAT ON GOING THROUGH THE ASSESSMENT RECORD IT WAS NOTICED THAT THE ASSESSING OFFICER HAS PASSED THE ORDER WIT HOUT APPLYING HIS MIND AND WITHOUT EXAMINING AND INVESTI GATING THE ISSUES WHICH HAS RESULTED INTO NOT ONLY THE ORD ER BEING ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE. PROCEEDINGS U/S 263 WERE THEREFORE INITIATED BY THE CIT, UJJAIN, BY WAY OF ISSUE OF SHOW-CAUSE NOTICES U/S 2 63 DATED 12.08.2012 & 27.8.2012. THEREAFTER, ON ACCOUNT OF C HANGE OF JURISDICTION OVER THE CASE, A SHOW CAUSE NOTICE WAS ALSO ISSUED BY THE CIT,INDORE, ON 26.03.2013. THE RELEVANT PARA S OF SHOW CAUSE NOTICE ARE REPRODUCED AS UNDER :- SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 7 PAGE 7 OF 22 2] ON PERUSAL OF THE CASE RECORDS, IT IS SEEN THAT A RESIDENTIAL HOUSE WAS SOLD ON 8.8.07 FOR RS.1400000/-. THIS HOUSE WAS PURCHASED ON 20.10.04 FOR RS. 707000/- LTCG ON THE ABOVE WAS WORKED OUT AT RS. 574423/- AFTER INDEXATION AND WAS CLAIMED EXEMPT U/S 54 ON ACCOUNT OF INVESTMENT IN ANOTHER HOUSE PROPERTY ON 4.12.06. THE CLAIM OF EXEMPTION AND THE INDEXED COST OF ACQUISITION AND IMPROVEMENT WERE ACCEPTED BY THE AO WITHOUT VERIFYING WHETHER THE PROPERTY SOLD WAS A LONG TERM ASSET OR NOT. AS PER SECTION 2(42A) A LONG TERM CAPITAL ASSET IS ONE WHICH IS HELD FOR MORE THAN 36 MONTHS. THE HOUSE PROPERTY WHICH WAS SOLD WAS HELD ONLY FOR 34 MONTHS AND HENCE THE ACCEPTANCE OF THE CLAIM OF INDEXATION AND EXEMPTION U/ S 54 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 8 PAGE 8 OF 22 CLAIM OF DEDUCTION OF INTEREST OF RS. 116783/- HAS BEEN ALLOWED WITHOUT VERIFYING AS FOR WHICH PROPERTY AND TO WHICH PERIOD THE SAID INTEREST PERTAINS. 3] ACCORDINGLY, THE ORDER IS CONSIDERED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS THEREFORE PROPOSED TO INVOKE POWERS VESTED U/S. 263 OF THE I.T. ACT IN RESPECT OF THE ORDER REFERRED TO ABOVE. IF YOU HAVE ANY WRITTEN SUBMISSIONS TO MAKE OR ANY EVIDENCE TO FURNISH, YOU MAY DO SO BY 28.03.2013 AT 11.30 AM. YOU MAY ATTEND PERSONALLY OR THROUGH YOUR AUTHORIZED REPRESENTATIVE ON THE SAID DATE FAILING WHICH THE MATTER WILL BE DECIDED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. 5. IN RESPONSE TO THE SAID SHOW CAUSE NOTICE, THE ASSESSEE FILED WRITTEN SUBMISSION ON 28.03.2013 TOG ETHER WITH SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 9 PAGE 9 OF 22 THE COPY OF HIS REPLY DATED 04.09.2012 FILED EARLIE R BEFORE CIT, UJJAIN. 6. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD. CIT HELD AS UNDER :- 4. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE IN RESPECT OF THE ISSUE UNDER REFERENCE. THE PLEA THAT PROPOSED ACTION U/S 263 IS NOT WARRANTED IS TOTALLY MISPLACED. THE FACTS ON THE ISSUE ARE THAT THE ASSESSEE HAD SOLD A RESIDENTIAL HOUSE ON 8.8.07 FOR RS. 1400000/-. THAT HOUSE WAS PURCHASED ON 20.10.04 FOR RS. 707000/-. LTCG ON THE THAT WAS WORKED OUT AT RS. 574423/- AFTER INDEXATION AND WAS CLAIMED EXEMPT U/S 54 ON ACCOUNT OF INVESTMENT IN ANOTHER HOUSE PROPERTY ON 4.12.06. THE CLAIM OF EXEMPTION AND THE SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 10 PAGE 10 OF 22 INDEXED COST OF ACQUISITION AND IMPROVEMENT WERE ACCEPTED BY THE AO WITHOUT VERIFYING WHETHER THE PROPERTY SOLD WAS A LONG TERM ASSET OR NOT. AS PER SECTION 2(42A) A LONG TERM CAPITAL ASSET IS ONE WHICH IS HELD FOR MORE THAN 36 MONTHS. THE HOUSE PROPERTY WHICH WAS SOLD WAS HELD ONLY FOR 34 MONTHS' AND HENCE THE ACCEPTANCE OF THE CLAIM OF INDEXATION AND EXEMPTION U/ S 54 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER CLAIM OF DEDUCTION OF INTEREST OF RS. 116783/- HAS BEEN ALLOWED WITHOUT VERIFYING AS FOR WHICH PROPERTY AND TO WHICH PERIOD THE SAID INTEREST PERTAINS. 4.1] THE REPLY OF THE ASSESSEE FINDS PLACE AT PARA 3 OF THIS ORDER. IT IS SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 11 PAGE 11 OF 22 PLEADED THAT THE ASSESSEE HAD GOT POSSESSION OF THE HOUSE UNDER REFERENCE ON 07.07.2004 ON PART PERFORMANCE OF THE AGREEMENT DATED 07.07.2004 ON PAYMENT OF RS 1,11,000/ - AS AGAINST THE TOTAL COST OF THE HOUSE AT RS 7,07,000/-. ON PERUSAL OF THE REPLY OF THE ASSESSEE AND THE DOCUMENTS AVAILABLE ON THE RECORD IT IS SEEN THAT THERE IS NO MENTION IN THE ASSESSMENT ORDER OR THE ASSESSMENT RECORD THAT THE PURCHASE OF THE SAID PROPERTY WAS ON 07.07.2004 AS CONTENDED IN THE REPLY. ASSESSEE HAS ALSO STATED THAT THIS WAS SUPPORTED BY AN AGREEMENT DATED 07.07.2004 ON PLAIN PAPER WHICH WAS SUBMITTED BEFORE THE AO AND IT WAS RETURNED BACK BY THE AO. THE SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 12 PAGE 12 OF 22 PROCEEDING SHEET AND THE RECORD OF ASSESSMENT PROCEEDINGS DO NOT SHOW THAT THE ASSESSING OFFICER CALLED FOR THIS AGREEMENT, EXAMINED IT AND RETURNED IT BACK. THERE IS NO MENTION OF THE SAME IN THE REGISTRY DATED 20.10.2004. ASSESSEE HAS CLAIMED THAT NOW THE SAID AGREEMENT IS LOST IN FIRE AT HIS OFFICE. ASSESSEE HAS NOT PRODUCED ANY OTHER PROOF IN SUPPORT OF THIS ARGUMENT THAT THE PURCHASE OF THE SAID PROPERTY WAS BY WAY OF AGREEMENT DATED 7.7.04. THE CLAIM OF THE ASSESSEE THAT THIS ASPECT WAS VERIFIED DURING THE COURSE ASSESSMENT PROCEEDING IS ALSO NOT ESTABLISHED FROM RECORD. ON THE CONTRARY IN HIS SUBMISSION WHICH WAS FILED DURING ASSESSMENT PROCEEDINGS ON SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 13 PAGE 13 OF 22 21.06.2010 THE WORKING OF LTCG HAS BEEN GIVEN IN WHICH THE DATE HAS BEEN SHOWN AS 20.10.2004 AND THERE IS NO REFERENCE TO AGREEMENT OF 07.07.2004. IN THE LIGHT OF THE ABOVE IT CANNOT BE SAID THAT THE CLAIM OF LTCG WAS EXAMINED AND THEREFORE THE DEDUCTION ALLOWED TREATING THE SALE AS LTCG WAS NOT IN ACCORDANCE WITH THE FACTS ON RECORDS AND THEREFORE WAS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. SIMILARLY THE AO ALSO DID NOT EXAMINE THE CLAIM OF DEDUCTION OF INTEREST OF RS. 116783/- AS TO WHETHER IT PERTAINED TO THE PROPERTY WHICH WAS PURCHASED DURING THE YEAR OR WHETHER THE SAME WAS IN RESPECT OF PROPERTY WHICH WAS SOLD. THE ALLOWANCE OF THE SAID CLAIM WAS SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 14 PAGE 14 OF 22 ALSO THEREFORE WITHOUT PROPER INVESTIGATION AND VERIFICATION. THE ASSESSEE HAS CLAIMED THAT SINCE THIS WAS SHOWN IN THE SALARY CERTIFICATE IT WAS ALLOWABLE. THIS ARGUMENT OF THE ASSESSEE IS ALSO NOT ACCEPTABLE AS IN SUCH A SITUATION THERE WILL BE NO POINT IN EXAMINING THE CASE UNDER SCRUTINY. IT IS ALSO TO BE NOTED THAT AS PER CERTIFICATE FROM HDFC BANK WHICH IS DATED 31.07.2007 THE LOAN OF RS. 590247/- TAKEN IN OCTOBER 2004 WAS REPAID IN FULL. CONSIDERING THE ABOVE FACTS IT CANNOT BE SAID THAT THE ORDER WAS COMPLETED AFTER DUE AND PROPER ENQUIRY AND INVESTIGATION. THE ABOVE FACTS THUS INDICATE THAT THE ORDER HAS BEEN PASSED WITHOUT PROPER ENQUIRY AND SCRUTINY. SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 15 PAGE 15 OF 22 4.2] IN HIS SUBMISSION THE ASSESSEE HAS STATED THAT IN THE RECENT JUDGMENT OF THE ITAT IN THE CASE OF SMT. GEETABEN PARIKH VS. COMMISSIONER OF INCOME-TAX 19 ITJ 78 (2012) IT HAS BEEN HELD THAT AN ORDER OF ASSESSMENT PASSED BY ITO SHOULD NOT BE INTERFERED WITH ONLY BECAUSE ANOTHER VIEW- IS POSSIBLE. ON PERUSAL OF THE SAID JUDGMENT IT IS SEEN THAT 263 PROCEEDINGS IN THE CASE WERE STARTED AS IT WAS HELD THAT A.O HAD NOT MADE REQUISITE ENQUIRIES IN RELATION TO INCOME FROM LONG TERM CAPITAL GAIN ON SALE OF LAND WITH HOUSE SITUATED AT VALLABH NAGAR, INDORE AND ADEQUATE NECESSARY DOCUMENTS IN SUPPORT OF CLAIM FOR DEDUCTION OF INDEXED COST OF CAPITAL SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 16 PAGE 16 OF 22 ASSET U/S 49(1)(II) READ WITH SECTION 55 (2)(V) WERE NOT FURNISHED AND ASSESSMENT WAS COMPLETED HURRIEDLY. THE HON'BLE ITAT AFTER EXAMINATION OF THE RECORD ARRIVED AT A FINDING OF FACT THAT DETAILED SUBMISSIONS WERE MADE BY THE ASSESSEE AND ALL DOCUMENTARY EVIDENCES WERE SUBMITTED ON THE BASIS OF WHICH A.O HAD TAKEN A VIEW WHICH WAS SUSTAINABLE IN LAW. IN VIEW OF THE ABOVE AND AS IN THE PRESENT CASE NO SUCH EVIDENCES WERE FILED THE CASE CAN BE DISTINGUISHED. 4.3 AFTER HAVING CONSIDERED THE ISSUE UNDER REFERENCE, REPLY OF THE ASSESSEE THEREON FILED BEFORE ME AND ON PERUSING THE ASSESSMENT PROCEEDINGS AS CONTAINED IN THE NOTE SHEET & THE DOCUMENTS PLACED IN THE ASSESSMENT SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 17 PAGE 17 OF 22 RECORD, I FIND THE AO HAD COMPLETED THE ASSESSMENT WITHOUT MAKING REQUISITE ENQUIRIES. THE LACK OF ENQUIRY ON THE PART OF THE AO AS WELL AS NON APPLICATION OF MIND ONTO THE ISSUE UNDER REFERENCE LEAD THE ASSESSMENT ORDER MADE BY HIM NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF REVENUE. 7. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. IN THE SAID APPEAL, THE ASSESSEE IS FIRSTL Y AGGRIEVED FOR ASSUMPTION OF JURISDICTION BY CIT, INDORE, WHEN THE CONCERNED ASSESSING OFFICER WAS OF UJJAIN FALLING WITHIN THE JURISDICTION OF CIT, UJJAIN. IT APPEARS FROM REPLY FILED BY THE ASS ESSEE BEFORE THE CIT-INDORE, THAT THE ASSESSEE WAS SERVING IN MP SEB, UJJAIN, FROM WHERE HE WAS TRANSFERRED TO INDORE BY MPSEB. BEING GOVERNMENT EMPLOYEE, AFTER TRANSFER, THE ASSE SSEE USED TO RESIDE IN INDORE. NOTICE WAS ISSUED BY CIT-UJJAI N AT THE ADDRESS OF ASSESSEE AT UJJAIN. AFTER BEING RETURNED UNSERVED AT SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 18 PAGE 18 OF 22 UJJAIN ADDRESS, NOTICE WAS AGAIN ISSUED AND DELIVER ED AT INDORE ADDRESS. IT WAS CONTENDED BY THE LD. AUTHORI ZED REPRESENTATIVE THAT IN VIEW OF THE DECISION OF JURI SDICTIONAL HIGH COURT IN THE CASE OF MOTILAL VIMALCHAND JAIN, HUJ 285 ITR 224, THE CIT-INDORE WAS DUTY BOUND TO DECIDE T HE ISSUE OF ASSUMPTION OF JURISDICTION BEFORE EMBARKING ON THE MERIT OF THE CONTROVERSY. FROM THE ORDER OF THE CIT-INDORE, IT APPEARS THAT BEFORE SETTING ASIDE THE ORDER OF ASSESSING OF FICER FOR DECIDING AS PER THE DIRECTIONS GIVEN IN THE SAID OR DER, NO VERDICT HAS BEEN PASSED WITH REGARD TO ASSUMPTION O F JURISDICTION, WHICH WAS AN ISSUE RAISED BEFORE HIM. AS THE FACTS ARE NOT CLEAR FROM THE RECORD AS TO THE TRANS FER OF CASE FROM CIT-UJJAIN TO CIT-INDORE, IN THE FITNESS OF TH ING, WE RESTORE THE MATTER BACK TO THE FILE OF CIT-INDORE F OR FIRST DECIDING THE ISSUE REGARDING ASSUMPTION OF JURISDIC TION, BY CIT-INDORE, WHEN ASSESSEE HAS FILED HIS RETURN OF I NCOME WITH ITO FALLING IN THE JURISDICTION OF CIT-UJJAIN. HOWE VER, THE FACT THAT ASSESSEE WAS TRANSFERRED FROM UJJAIN TO INDORE BY HIS EMPLOYER AND HE STARTED RESIDING AT INDORE ITSELF C ANNOT BE SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 19 PAGE 19 OF 22 BRUSHED ASIDE. WE, THEREFORE, DIRECT CIT-INDORE TO FIRST DECIDE THE ISSUE OF ASSUMPTION OF JURISDICTION IN THE LIGH T OF OBSERVATIONS MADE HEREINABOVE. 8. ON MERITS, IT WAS CONTENDED BY THE LD. AUTHORIZED REPRESENTATIVE THAT THE ASSESSEES CLAIM FOR LONG T ERM CAPITAL GAIN WAS ALLOWED BY THE ASSESSING OFFICER AFTER MAK ING DETAILED INQUIRY, HOWEVER, THE CIT-INDORE DID NOT A CCEPT THE SAME AND DIRECTED THE ASSESSING OFFICER TO WITHDRAW THE ASSESSEES CLAIM FOR EXEMPTION U/S 54. AS PER REPLY FILED BY ASSESSEE BEFORE CIT, THE IMPUGNED HOUSE PROPERTY WA S ACQUIRED ON 7.7.2004 FROM SMT.VRASHALI BY MAKING PA YMENT OF RS. 1,11,000/- AND TAKING POSSESSION OF THE HOUS E. SUBSEQUENTLY, THIS HOUSE WAS SOLD ON 8.8.2007 TO SH RI AVDHESH KUMAR VERMA AND SMT. ANITA VERMA FOR RS. 14 LAKHS. THUS, AS PER ASSESSEE, THE HOUSE WAS HELD FO R MORE THAN 36 MONTHS, THEREFORE, THE ASSESSEE WAS ELIGIBL E FOR CLAIM OF DEDUCTION U/S 54 ON THE PLEA OF UTILIZATION OF C APITAL GAINS AROSE ON LONG TERM CAPITAL ASSETS. THE CIT INDORE I N HIS ORDER U/S 263 OBSERVED THAT THE ASSESSING OFFICER HAS NOT MADE SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 20 PAGE 20 OF 22 INQUIRY WITH REGARD TO DATE OF ACQUISITION IN SO FA R AS HOUSE WAS PURCHASED ONLY ON 20.10.2004. 9. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE ASSESSING OFFICER PASSED U/S 143(3) DATED 25.2.2010 FOR THE RELEVANT ASSESSMENT YEAR 2008-09 UNDER CONSIDERATIO N AND FOUND THAT THERE IS NO WHISPER REGARDING ANY HOUSE PROPERTY BEING SOLD BY THE ASSESSEE OR CLAIM OF EXEMPTION U/ S 54 WITH REGARD TO UTILIZATION OF SUCH SALE PROCEEDS. WE ARE , THEREFORE, IN AGREEMENT WITH THE FINDING OF CIT TO THE EFFECT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER WITHOUT MAKING ANY INQUIRY, WHICH RENDERED THE ORDER OF THE ASSESSING OFFICER NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST S OF THE REVENUE. 10. DURING THE COURSE OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE HAS PLACED ON RECORD APPLICATION UN DER RULE 29 OF INCOME TAX RULES, FOR PLACING ADDITIONAL EVIDENC E ON RECORD. AS PER ADDITIONAL EVIDENCE, THE ASSESSEE HAS ENTERE D INTO AGREEMENT FOR PURCHASE OF THE SAID PROPERTY ON 7.7. 2004. THE ORIGINAL OF THIS AGREEMENT WAS ALLEGED TO BE PRODUC ED BEFORE SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 21 PAGE 21 OF 22 THE ASSESSING OFFICER, WHO AFTER EXAMINING IT, RETU RNED BACK THE SAME TO THE ASSESSEE. HOWEVER, THIS AGREEMENT W AS LOST IN FIRE AND COPY OF FIR WAS ALSO FILED BEFORE THE CIT- INDORE. IN THE ABSENCE OF THIS AGREEMENT, THE CIT-INDORE WAS OF TH E VIEW THAT THE HOUSE PROPERTY WAS ACQUIRED ONLY ON 20.2.2004, ACCORDING TO WHICH, IT DID NOT REMAIN IN THE NAME OF ASSESSEE FOR MORE THAN 36 MONTHS. CIT-INDORE, THEREFORE, DECLINED TH E CLAIM OF DEDUCTION U/S 54. 11. THE ADDITIONAL EVIDENCE SO FILED BY THE ASSESSEE G OES TO THE ROOT OF THE ISSUE TO SUBSTANTIATE ASSESSEES CLAIM THAT HOUSE PROPERTY WAS HELD FOR MORE THAN 36 MONTHS SO AS TO COME WITHIN THE DEFINITION OF SECTION 2(42A). IN TH E INTEREST OF JUSTICE AND FAIR PLAY ON MERIT ALSO, WE RESTORE THE ISSUE TO THE FILE OF CIT TO DECIDE AFRESH AFTER CONSIDERING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. THE ASSESSEE HAS AL SO CLAIMED DEDUCTION OF INTEREST OF RS. 1,16,783/- IN RESPECT OF HOUSING LOAN OBTAINED FROM HDFC BANK. WHILE DECIDING THE IS SUE AFRESH, THE CIT IS ALSO DIRECTED TO CONSIDER THE AS SESSEES CLAIM FOR INTEREST PAYMENT OF HOUSING LOAN TAKEN FROM HDF C BANK SHRI GANESH PRASAD SAHU, INDORE. 292/IND/2013 A.Y. 2008-09 22 PAGE 22 OF 22 AMOUNTING TO RS. 5,90,247/- TAKEN IN OCTOBER, 2004. WE DIRECT ACCORDINGLY. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART IN TERMS INDICATED HEREINABOVE. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH DECEMBER, 2013. CPU* 1612