Shri Braj Mohan Sharma, Bhilwara V. ITO, Ward-3, Bhilwara

ITA 313/JODH/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6253 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 143(3); 50C; 68; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH (SMC), JODHPUR BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 313/JODH/2017 (ASSESSMENT YEAR-2011-12 SHRI BRIJ MOHAN SHARMA, 5-B-28, NEW HOUSING BOARD, SHASTRI NAGAR, BHILWARA. VS INCOME TAX OFFICER, WARD-3, BHILWARA. (APPELLANT) (RESPONDENT) PAN: AEAPS 8740 K ASSESSEE BY SHRI AMIT KOTHARI (CA) REVENUE BY SH. RAVINDER MITTAL DCIT DR DATE OF HEARING 21/05/2018 DATE OF PRONOUNCEMENT 24/05/2018 O R D E R PER: R.C. SHARMA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), AJMER DATED 18/05/2017 FOR THE A.Y. 201 1-12 IN THE MATTER OF ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS T HE ACT, FOR SHORT]. 2 ITA 313/JODH/2017 BRIJ MOHAN SHARMA VS. ITO 2. GRIEVANCE OF THE ASSESSEE REVOLVES AROUND COMPUT ATION OF LONG TERM CAPITAL GAIN AND NOT ALLOWING FULL DEDUCT ION OF COST OF ACQUISITION AND INDEXATION THEREOF AND ASSESSEES C LAIM OF DEDUCTION U/S 54 OF THE ACT. 3. THE ASSESSEE IS ALSO AGGRIEVED FOR MAKING ADDITI ON OF RS. 13.00 LACS U/S 68 OF THE ACT. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT DU RING THE YEAR UNDER CONSIDERATION, THE ASSESSEE SOLD HIS RESIDENT IAL HOUSE AGAINST WHICH CLAIM OF DEDUCTION U/S 54 OF THE ACT WAS MADE AND NET TAXABLE GAIN WAS ARRIVED AT NIL. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER HAS ADOPTED RS. 1 5,18,641/- AS AGAINST THE ACTUAL SALE CONSIDERATION OF RS. 15.00 LACS SHOWN BY THE ASSESSEE ON THE PLEA THAT THE VALUE AS PER SECT ION 50C OF THE ACT IS RS. 15,18,641/-. 5. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THERE WAS A MINOR DIFFERENCE OF 1.24% OF THE SALE CONSIDERATION , WHICH IS ON ACCOUNT OF BONAFIDE REASON. THE ATTENTION WAS ALSO INVITED TO THE AMENDMENT IN SECTION 50C, WHEREIN IT HAS BEEN PROVI DED THAT IF 3 ITA 313/JODH/2017 BRIJ MOHAN SHARMA VS. ITO THE VARIATION IS UP TO 5% OF THE VALUATION AS DECLA RED BY THE ASSESSEE, THE SAME COULD NOT BE DISTURBED. IN SUPPO RT OF THIS PROPOSITION THAT THE AMENDMENT SO BROUGHT ARE RETRO SPECTIVE IN NATURE, THE LD AR HAS RELIED ON THE DECISION OF HON 'BLE SUPREME COURT IN THE CASE OF ALLIED MOTORS P. LTD. VS. CIT (1997) 224 ITR 0677 (SC) AND CIT VS. ALOM EXTRUSIONS LTD. (2009) 2 27 CTR 0417 (2009) 319 ITR 0306 (SC). 6. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD AND I FOUND THAT THE DIFFERENCE IN THE VALUE DECLARED BY THE ASSESSEE VIS A VIS ALUE ADOPTED BY THE STAMP REGISTERING AUTHORITY WAS ONLY 1.24%. SINCE THE VAR IATION IS WITHIN THE LIMIT OF 5%, THE VALUE ADOPTED BY THE ASSESSEE COULD NOT BE DISTURBED. I DIRECT ACCORDINGLY. 7. I ALSO FOUND THAT WHILE ALLOWING THE COST OF ACQ UISITION FOR COMPUTING CAPITAL GAIN, THE ASSESSING OFFICER HAS N OT GIVEN DEDUCTION IN RESPECT OF COST INCURRED BY THE ASSESS EE IN THE F.Y 2002-03 BEING THE AMOUNT PAID TO THE RAJASTHAN HOUS ING BOARD, WHICH HAS ALLOTTED THE HOUSE TO THE ASSESSEE. FROM THE RECORD, I ALSO FOUND THAT THE ASSESSEE HAS PAID FOLLOWING AMO UNT TO THE RAJASTHAN HOUSING BOARD. 4 ITA 313/JODH/2017 BRIJ MOHAN SHARMA VS. ITO A. FY 2002-03: 37,500: SEED MONEY TO RAJ HOUSING B OARD AGAINST COST OF HOUSE. B. FY 2002-03: 15,562: INTEREST ON REGISTRATION FE ES. C. FY 2002-03: 375: INTEREST ON SEED PAYMENT BY RA J. HOUSING BOARD. 8. I ALSO FOUND THAT THE DEDUCTION FOR INDEXED COST OF IMPROVEMENT CLAIMED IN FY 2008-09 HAS NOT BEEN ALLO WED. THE ASSESSEE HAD CONSTRUCTED NEW WATER TANK, NEW BOUNDA RY WALL, NEW MAIN GATE SOILING AND PCC WORK, GARDEN AND PLAT FORM. IN SUPPORT OF THE SAME THE AGREEMENT WITH THE CONTRACT OR AND DETAILS OF PAYMENTS MADE WAS SUBMITTED DURING THE C OURSES OF ASSESSMENT PROCEEDINGS AND THE SAME IS ALSO ANNEXED IN THE PAPER BOOK FILED BEFORE ME. AS THE ASSESSEE HAS INC URRED THESE EXPENSES ON THE IMPROVEMENT OF HIS HOUSE PROPERTY. THE DEDUCTION OF SUCH COST OF IMPROVEMENT WAS ALLOWABLE TO THE ASSESSEE, AFTER GIVING CREDIT FOR INDEXATION. 9. IN VIEW OF THE ABOVE, I DIRECT THE ASSESSING OFF ICER TO ALLOW THE ABOVE COST SO INCURRED BY THE ASSESSEE AFTER CO NSIDERING THE INDEXATION AS PER LAW. 5 ITA 313/JODH/2017 BRIJ MOHAN SHARMA VS. ITO 10. THE ASSESSING OFFICER HAS ALSO MADE ADDITION OF RS. 13.00 LACS RECEIVED AS ADVANCES AGAINST THE SALE OF THE S AID PROPERTY, WHICH WAS UPHELD BY THE LD. CIT(A). 11. FROM THE RECORD, I FOUND THAT THE INITIAL AGREE MENT FOR SALE OF PROPERTY OF THE ASSESSEE WAS MADE WITH OM PRAKASH OJH A WHO PAID RS. 13,00,000/- AS ADVANCE BY TWO CHEQUES WHICH HAD BEEN CREDITED IN THE ACCOUNT OF THE ASSESSEE. SUBSEQUENTLY HE SOLD THE S AME TO OM PRAKASH RAJPUROHIT, AND THEREFORE THE SALE DEED WAS DIRECTLY EXECUTED IN HIS NAME. THE AMOUNT PAID BY OM PRAKASH OJHA WAS PAID BACK TO HIM, AND THEREFORE THE SAID ADVANCE RECEIVED FROM OM PRAKASH OJHA WAS T REATED AS CONSIDERATION RECEIVED AGAINST THE SALE CONSIDERATI ON. THE OBJECTION OF THE AO WAS THAT SINCE IN THE SALE DEED THE ENTIRE CONSID ERATION HAS BEEN STATED TO BE PAID IN CASH/ THE AMOUNT OF CHEQUES RECEIVED FROM OM PRAKASH OJHA FOR RS. 13,00,000/- REMAINS UNEXPLAINED AND THEREFO RE HE MADE THE ADDITION OF SUCH ADVANCE RECEIVED AGAINST PROPERTY WHICH WAS C ONFIRMED BY THE LD. CIT(A). 12. I DO NOT FIND ANY MERIT IN THE CONTENTION OF TH E LOWER AUTHORITIES IN SO FAR AS THE AMOUNT SO RECEIVED BY THE ASSESSEE HAS B EEN DULY EXPLAINED. THE ASSESSEE HAS ALSO SUBMITTED AFFIDAVIT OF SHRI OM PR AKASH OJHA, WHO HAD CONFIRMED HAVING GIVEN THIS ADVANCE TOWARDS SALE OF PROPERTY, WHICH FACT IS 6 ITA 313/JODH/2017 BRIJ MOHAN SHARMA VS. ITO ALSO VERIFIABLE FROM THE CERTIFICATE ISSUED BY THE BANK THAT TWO CHEQUES DEPOSITED IN THE ASSESSEES BANK ACCOUNT WERE RECEIV ED FROM SHRI OM PRAKASH OJHA WHEREIN ACCOUNT NUMBER WAS ALSO GIVEN. T HE ADVANCE WAS RECEIVED AND SINCE THE FINAL REGISTRATION WAS MADE I N THE NAME OF OTHER PERSON, THE ADVANCE BEING ALREADY RECEIVED THE BUYE R PAID THE SAID AMOUNT TO OM PRAKASH OJHA. THESE FACTS CANNOT BE DENIED, A ND SINCE THE SALE CONSIDERATION OF THE HOUSE HAS ALREADY BEEN CONSIDE RED IN THE INCOME OF THE ASSESSEE WHILE MAKING COMPUTATION OF LONG TERM CAPIT AL GAIN, ANY ADDITION IF MADE WOULD RESULT INTO DOUBLE ADDITION OF THE SAME R ECEIPT AS INCOME. 13. IN VIEW OF ABOVE, I DO NOT FIND ANY MERIT IN THE ADDITION OF RS. 13.00 LACS SO MADE BY THE ASSESSING OFFICER AND ALSO CONF IRMED BY THE LD. CIT(A), THEREFORE, I DIRECT THE ASSESSING OFFICER TO DELETE THE SAME. 13. THE ASSESSEE HAS ALSO CLAIMED EXEMPTION U/S 54 OF THE ACT STATING THAT THE CAPITAL GAIN SO EARNED WAS INVESTED IN THE NEW RESIDENTIAL HOUSE. FROM THE RECORD I FOUND THAT THE ASSESSEE HAS ACQUI RED A NEW RESIDENTIAL HOUSE VIDE REGISTRATION DEED DATED 21/2/2011 THE CO PY OF WHICH IS ATTACHED HEREWITH. THE COST OF ACQUISITION OF NEW RESIDENTIAL HOUSE IS AS UNDER: PURCHASE PRICE AS PER REGISTRATION DEED RS. 45000 0 REGISTRATION FEES RS. 47500 REGISTRY EXP. RS. 4750 RS. 502250 7 ITA 313/JODH/2017 BRIJ MOHAN SHARMA VS. ITO THE ASSESSEE HAS ACQUIRED THE NEW HOUSE PROPERTY WELL WITHIN THE STIPULATED PERIOD OF ONE YEAR FROM THE DATE OF SALE OF OLD HOU SE ON 07/2/2011 AND THEREFORE THE CLAIM OF DEDUCTION UNDER SECTION 54 WA S VALID AND LAWFUL. MERELY BECAUSE THE ASSESSEE DUE TO IGNORANCE COULD NOT CLAIM THE DEDUCTION U/S 54 OF THE ACT WHILE FILING RETURN OF INCOME U/S 139 OF THE ACT, THE SAME CANNOT BE DECLINED IF DURING THE COURSE OF ASSESSME NT ITSELF THE ASSESSEE HAS PLACED ALL SUPPORTING DOCUMENTS FOR SUCH CLAIM. KEE PING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, I DO NOT FIND ANY JU STIFICATION FOR DECLINING OF DEDUCTION U/S 54 OF THE ACT. ACCORDINGLY, THE ASSES SING OFFICER IS DIRECTED TO ALLOW THE SAME. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 24/05/2018. SD/- [R.C. SHARMA] ACCOUNTANT MEMBER DATED : 24/05/2018 *RANJAN COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 6. GUARD FILE (ITA NO. 313/JODH/2017) ASSISTANT REGISTRAR JODHPUR BENCH