Smt. Vineeta Kumar, C-13, Deepak Marg, M.D. Raod, Jaipur V. ITO, Ward-7(1), Jaipur

ITA 317/JPR/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0487 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-09-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 23-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Corroborative evidences; Revised return
• Section: 250

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ds le{k BEFORE: HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER vk;dj vihy la-@ITA No. 317/JP/2022 fu/kZkj.k o"kZ@Assessment Year : 2016-17. Smt. Vineeta Kumar, C-13, Deepak Marg, M.D. Road, Jaipur. cuke Vs. The Income Tax Officer, Ward 7(1), Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AEEPK 5409 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Ms Monisha Choudhary (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 20/09/2022 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 18/10/2022 vkns'k@ ORDER PER: SANDEEP GOSAIN, J.M. This appeal by the assessee is directed against the order dated 26.07.2022 of ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi passed under section 250 of the IT Act, 1961 for the assessment year 2016-17. The grounds raised by the assessee are as under : 1. The ld. CIT (A), NFAC has erred on facts and in law in confirming the long term capital gain from sale of ICICI Prudential Corporate Bond Fund at Rs. 3,38,161/- by denying the set off of brought forward long term capital loss of Rs. 3,37,497/- pertaining to AY 2015-16 for the reason that assessee has not submitted evidence in support of same. He has further erred in not allowing set off of long term capital loss of Rs.10,48,298/- incurred on sale of Vatika plot during the year under consideration. 2 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. 2. The ld. CIT (A), NFAC has erred on facts and in law in upholding the action of AO in computing the short term capital gain from sale of Vatika plot at Rs. 33,71,929/- as against long term capital loss of Rs. 10,.48,298/- worked out by the assessee. He has further erred in not allowing the loss for the reason that the same is not claimed/declared in the return of income and the cost of plot is not shown in the Balance Sheet. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee. 2. The brief facts of the case are that the assessee filed her return of income on 24.07.2016 declaring total income of Rs. 2,00,330/-. In the return assessee has shown carry forward long term capital loss of Rs. 3,37,497/- of A.Y. 2015-16. During the year under consideration, the assessee has sold ICICI Prudential Corporate Bond Fund for Rs. 1,13,05,896/- on which LTCG of Rs. 3,38,161/- was claimed as exempt under section 10(38) of the Income Tax Act, 1961. The AO observed that the impugned bonds are debt funds not eligible for exemption under section 10(38) and accordingly made addition of Rs. 3,38,161/-. Aggrieved by the order of A.O., the assessee preferred appeal before the ld. CIT (A). Before ld. CIT (A) assessee submitted that through long term capital gain of Rs. 3,38,161/- on sale of ICICI Bond is chargeable to tax but the same is required to be set off against brought forward long term capital loss of Rs. 3,37,497/- pertaining to A.Y. 2015-16. The ld. CIT (A), however, did not accept the contention of assessee by holding that the appellant has not submitted any evidence in support of this contention like the copy of return of income for the year or whether it was filed in time and any such loss is actually carried forward, the ld. CIT (A) thus sustained the addition. 3 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. Now the assessee is in appeal before the Tribunal. Ground No. 1 relates to confirming the long term capital gain from sale of ICICI Prudential Corporate Bond Fund. 3. Before me, the ld. A/R of the assessee has submitted that the return for AY 2015-16 was filed on 27.08.2015 (PB 37-41), i.e. within the due date of filing of return. From the same it can be noted that there is long term capital loss of Rs.3,37,497/- which has been carried forward. Thus, long term capital gain of Rs.3,38,161/- declared during the year under consideration is allowable to be set off against brought forward long term capital loss of Rs.3,37,497/- since the return for AY 2015-16 was filed in time. The Ld. CIT(A) has erred in not allowing the set off only for the reason that assessee has not submitted any evidence that return for AY 2015-16 was filed in time and the loss is actually carried forward without making any enquiry from the assessee or from AO even when the same were available on record. Further, assessee has also incurred long term capital loss of Rs.10,48,298/- from sale of Vatika Plot during the year as explained in Ground No.2 below. Therefore this loss is also available for set off against the long term capital gain on sale of ICICI Bonds. 3.1. In view of above facts, the ld. A/R submitted that the A.O be directed to set off the long term capital gain earned on sale of ICICI Bonds against the brought forward long term capital loss and long term capital loss incurred during the year. 4. On the other hand, the ld. D/R supported the orders of the lower authorities. 4 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. 5. I have heard the rival submissions and perused the material available on record and also gone through the orders of the revenue authorities. There is no dispute as to the fact that long term capital gain of Rs. 3,38,161/- on sale of ICICI Bond is chargeable to tax and is not exempt u/s 10(38). However, the claim of the assessee was that this gain should be allowed set off from the brought forward capital loss of Rs. 3,37,497/- pertaining to AY 2015-16 which was not accepted by CIT(A) on the ground that assessee has not submitted evidence in form of copy of return for the relevant assessment year or whether it was filed in time and such loss is carried forward. We find that at paper book pages 37-41, assessee has field acknowledgement for AY 2015-16 and computation of total income for that year. The return was filed on 27.08.2015 i.e. before the due date of filing of return, which was extended to 07.09.2015 vide F. No. 225/154/2015/ITA-II dated 02.09.2015. As per this return, there is long term capital loss of Rs. 3,37,497/- which is carried forward. Therefore, AO is directed to allow set off of carried forward long term capital loss of Rs. 3,37,497/- of AY 2015-16 against the long term capital gain of Rs. 3,38,161/- after verification. The balance gain would be set off against a long term capital loss on sale of plot as discussed in ground no. 2 hereinafter. Thus, this ground of the assessee is restored to the AO for allowing set off after verification. Ground No. 2 relates to upholding the action of AO in computing the short term capital gain from sale of Vatika plot. 6. The brief facts of the case are that during the year under consideration the assessee sold a plot situated in Vatika Infotech City, Jaipur for Rs.36,00,000/- to Vikesh Kumar vide sale agreement dt. 30.01.2016 (PB 15-18). The assessee has purchased this plot during the year 2006-07 for Rs.21,22,200/- (PB 34) and further 5 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. incurred expenditure of Rs.2,28,071/- during the year under consideration. Thus total cost of acquisition of this property works out at Rs.23,50,271/- (2,28,071+21,22,000). On sale of the plot, there is long term capital loss of Rs.10,48,298/- computed as under:- Particulars Amount(Rs.) Sales Proceeds 36,00,000/- Less: Indexed Cost of Acquisition 2006-07 21,22,200* 1081/519 2016-17 2,28,071 44,20,227/- 2,28,071/- Long Term Capital Loss 10,48,298/- The assessee in the return has not declared long term capital loss incurred on sale of the said plot by oversight but in course of assessment proceeding complete details were filed vide letter dated 08.12.2018 (PB 19-23)& 11.12.2018(PB 24-28) along with supporting evidences. The AO, however, observed that assessee has provided list of investment as on 31.03.2016 (PB 11) containing opening balance of each investment but the value of impugned plot is shown as Nil in the said list. The investment of Rs.7,24,31,417/- is also part of ITR (PB 9). He therefore did not allow the deduction for cost of Rs.21,22,000/- incurred in FY 2006-07 and computed the STCG on sale of land at Rs.33,71,929/- (36,00,000-2,28,071) and made addition for the same. Aggrieved by the order of AO, the assessee preferred appeal before the ld. CIT (A). The Ld. CIT (A) upheld the action of AO by holding that though the appellant claimed an investment of Rs.21,22,200/- made in this plot in the year 2006-07 but there is no opening balance shown. The appellant claimed that this happened ‘Inadvertently’. It is clear from this that this asset was acquired by the assessee outside the books of accounts and consequently this transaction was not shown in the return of income filed. It is only when the appellant’s case was selected 6 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. for scrutiny and the AO raised a query in this regard and perhaps the information regarding sale of this plot was in the possession of department, the appellant declared this transaction and further tried to take the benefit of such loss by setting it off against the LTCG earned on sale of securities. Clearly this cannot be allowed. The appellant has not claimed this loss in the return of income filed or even in the revised return. He, therefore, sustained the addition made by the AO. Now the assessee is in appeal before the Tribunal. 7. Before me, the ld. A/R of the assessee submitted that in the return filed for the year under consideration the assessee in part A-BS has shown the value of investment at Rs.7,24,31,417/- (PB 9-11). The details of these investment was provided vide letter dated 28.11.2018 (PB 35-36). In this list the opening balance, amount debited, amount credited and the closing balance with respect to each of the investment is mentioned. Against the Plot at Vatika Infotech, no amount is mentioned in the opening balance, Rs.2,28,071/- is debited, Rs.31,54,553/- is credited and the closing credit balance is shown at Rs.29,26,482/- and after considering the same the closing balance of investment is worked out at Rs.7,24,31,417/-. Since the plot at Vatika Infotech was purchased long back, the initial investment made in purchase of this plot was left to be incorporated in the details of investment by oversight but since the sale of this plot is shown in this list it shows that assessee has no intention to not disclose this investment. In fact in the Balance Sheet for AY 2015-16 the value of investment was declared at Rs.7,21,55,198/- (PB 12-13) but in the list of investment (PB 14) since this plot was not appearing, in the list of investment prepared for the subsequent year no 7 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. opening balance was shown against this plot. However, the fact remains that this plot was purchased by the assessee in FY 2006-07 for a consideration of Rs.21,22,200/- which is evidenced by the bank statement of assessee (PB 29-33) and receipt of Vatika Ltd. (PB 34). Thus, when the year of acquisition of plot and evidence of payment is available on record, the short term capital gain calculated by the AO and confirmed by the Ld. CIT(A) is factually incorrect. 7.1. It may be noted that the said plot was purchased in FY 2006-07 for Rs.21,22,200/- and further payment of Rs.2,28,071/- was made during the year under consideration. The cost incurred by the assessee is duly verifiable from the receipt issued by Vatika Ltd. (PB 34) as well as bank statement (PB 29-33) filed before the AO. The details of payment made are as under:- S. No. Cheque No. Date Amount (in Rs.) 1 19344 21.04.2006 1,17,900/- 2 19343 21.04.2006 1,17,900/- 3 295755 12.07.2006 4,71,600/- 4 295756 12.07.2006 4,71,600/- 5 16931 02.11.2006 4,71,600/- 6 399423 01.02.2007 4,71,600/- Total 21,22,200/- The ld. A/R submitted that the lower authorities have not found any discrepancy in the evidences furnished. Hence, only because in the list of investment the opening balance of this land is not reflected, it cannot be inferred that assessee has not incurred any cost on purchase of land. 7.2. In view of above facts narrated, the ld. A/R submitted that the A.O be directed to allow the deduction for cost of acquisition of the said plot and after indexation compute the long term capital loss as against short term capital gain computed by him. 8 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. 8. On the other hand, the ld. D/R supported the orders of the lower authorities. 9. I have heard the rival submissions and perused the material available on record and also gone through the orders of the lower authorities. We find that assessee sold the plot at Vatika Infotech City for Rs. 36,00,000/- vide sale agreement dated 30.01.2016. The AO computed short term capital gain on sale of this plot at Rs. 33,71,929/- for the reason that cost of acquisition on this plot is not reflected in the list of investment as on 31.03.2016. The Ld. CIT (A) has also not accepted the contention of the assessee that cost of acquisition of this plot in FY 2006-07 was Rs. 21,22,200/- and after indexation there would be long term capital loss instead of short term capital gain assessed by the AO solely for the reason that assessee has not claimed this loss in the return of income filed or even in the revised return. I find that assessee has placed on record the evidence of cost of acquisition of this land in FY 2006-07 for Rs. 21,22,200/- by submitting the bank statement showing the details of payment and also the letter from Vatika Infotech City acknowledging the receipt of such amount. This fact is not disputed by the lower authorities. Therefore, only because the assessee has not claimed the loss in the return filed by him, the same cannot be denied in computing the long term capital loss of Rs. 10,48,298/- as claimed in course of assessment proceedings vide letter dated 08.12.2018. Therefore, the AO is directed to verify the computation of long term capital loss of Rs. 10,48,298/- as claimed by the assessee and if found correct accept the same as against short term capital gain of Rs. 33,71,929/- assessed by him. The loss would also be available for set off against the long term capital gain of Rs. 3,38,161/- on sale of ICICI Prudential Corporate Fund as discussed in ground no. 9 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur. 1 above. Thus, this ground is restored to the AO as per the direction given here-in- above. 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 18/10/2022. Sd/- ¼lanhi xkslkbZ½ (SANDEEP GOSAIN) U;kf;d lnL;@ Judicial Member Tk;iqj@Jaipur fnukad@ Dated:- 18/10/2022. Das/ vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Smt. Vineeta Kumar, Jaipur. 2. izR;FkhZ@ The Respondent- The ITO Ward 7(1), Jaipur. 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. 317/JP/2022} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar 10 ITA No. 317/JP/2022 Smt. Vineeta Kumar, Jaipur.