Priya Harikrishnan, Bangalore V. Income Tax Officer,ward 1(2)(1), Bangalore

ITA 319/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4996 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 22-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TSHERING ONGDA; DILIP JUNIOR STANDING
• Keywords: Opportunity of being heard; Cost of acquisition; Set aside
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 319 / BANG/201 9 ASSESSMENT YEAR : 20 10 - 11 SMT. PRIYA HARIKRISHNAN, FLAT NO. 7B, NO. 8, CRESCENT ROAD APARTMENTS, CRESCENT ROAD, HIGH GROUNDS, BANGALORE 560 001. PAN: ABHPH8426R VS. THE INCOME TAX OFFICER, WARD 1 (2) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI TSHERING ONGDA, JCIT (DR) & SHRI DILIP, JUNIOR STANDING COUNSEL DATE OF HEARING : 14 .0 5 .201 9 DATE OF PRONOUNCEMENT : 16 .0 5 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-2, BANGALORE DATED 31.12.2018 FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS-2'S ORDER IS BAD IN LAW AND OPPOSED TO FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX APPEAL IS NOT JUSTIFIED TO DISMISS THE APPEAL BY ADDING THE NON-REFUNDABLE DEPOSIT OF RS.16,66,667 TO THE RETURNED INCOME WITHOUT CONSIDERING THE DEDUCTION OF COST OF UNDIVIDED SHARE IN LAND GIVEN TO BUILDER. 3. WE SUBMIT THAT NON - REFUNDABLE DEPOSIT RECEIVED CANNOT BE CONSIDERED IN ISOLATION WITHOUT CONSIDERING THE COST. 4. THE APPELLANT PRAYS THAT THE ADDITION OF RS.16,66,667 MADE TO THE RETURNED INCOME MAY PLEASE BE DELETED AND THE REAL VALUE OR GAIN AFTER DEDUCTION OF THE COST OF SHARE OF LAND MAY BE ADOPTED. FOR THE AFORESAID GROUND AND SUCH OTHER GROUNDS THAT MAY BE RAISED AT THE TIME OF HEARING THE APPELLANT PRAYS THAT THIS APPEAL MAY PLEASE BE ALLOWED AND THE TAX OF RS.4,98,296 LEVIED PLEASE BECANCELLED. ITA NO.319/BANG/2019 PAGE 2 OF 4 3. THE APPEAL WAS FIXED FOR HEARING ON 15.04.2019. ON THIS DATE, THE LD. AR OF ASSESSEE APPEARED AND FILED WRITTEN ARGUMENTS WHICH ARE REPRODUCED HEREINBELOW FOR READY REFERENCE. THE APPELLANT MAY BE PERMITTED TO MAKE THIS WRITTEN SUBMISSION AS AR IS UNABLE TO ATTEND ON THEPRESENT DATE. THE ASSESSING OFFICER HAS TAXED ONLY THE NON-REFUNDABLE SECURITY DEPOSIT RECEIVED IGNORING THEOTHER ASPECTS LIKE VALUE OF THE FLAT RECEIVED FROM THE BUILDER AND THE COST WITH INDEXATION OF THEAPPELLANT'S SHARE OF 40% LAND GIVEN TO THE BUILDER. THE APPELLANT PRAYS THAT ASSESSEES SHARE IN 40% OF UNDIVIDED SHARE IN LAND GIVEN TO THE BUILDERWORKS OUT TO 516 SQ.FT. THE COST OF THE ASSESSEES SHARE IN 40% OF UNDIVIDED SHARE IN LAND GIVEN TOTHE BUILDER WITH INDEXATION WORKS OUT TO RS.19,09,200 WHICH MAY PLEASE BE ALLOWED AS A DEDUCTIONFROM THE TOTAL SALE CONSIDERATION. THE DETAILED WORKING OF CAPITAL GAIN IS GIVEN BELOW: STATEMENT OF CALCULATION OF CAPITAL GAIN RS. TOTAL LAND AREA 6540 SQFT. NO OF CO-OWNERS: 3 ASSESSEES SHARE IN TOTAL LAND AREA- 1290 SQ.FT GIVEN TO BUILDER 40% I.E. 40% OF 1290SQ.FT = 516 SQ.FT SALE CONSIDERATION( VALUE OF FLAT RECEIVED FROM BUILDER) 1,13,29,408 ADD: NON REFUNDABLE SECURITY DEPOSIT16,66,667 TOTAL SALE CONSIDERATION1,29,96,075 LESS: COST OF ACQUISITION AS ON 200119,09,200 ((516 SQ.FT * RS.2500))*148/100) RS.2500 GUIDELINE VALUE IS ADOPTED TAXABLE CAPITAL GAIN1,10,86,875 LESS: DEDUCTION U/S 541,13,29,408.00 TAXABLE CAPITAL GAINNIL NOTE: BUILT-UP AREA - 2902 SQ.FT COST OF CONSTRUCTION/ SQ.FT - RS. 3904 COST OF CONSTRUCTION = 1,13,29,408.00 DATE OF POSSESSION: 17.12.2012 4. THE HEARING ON THIS DATE WAS ADJOURNED TO 14.05.2019. ON THIS DATE, NONE APPEARED ON BEHALF OF THE ASSESSEE AND HENCE, THE APPEAL WAS HEARD EX- PARTE QUA THE ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). ITA NO.319/BANG/2019 PAGE 3 OF 4 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT AS PER THE WRITTEN ARGUMENT OF LD. AR OF ASSESSEE AS REPRODUCED ABOVE, THIS IS THE CLAIM OF THE ASSESSEE THAT THE AO IN THE ASSESSMENT ORDER HAS TAXED ONLY THE NON- REFUNDABLE DEPOSIT WHEREAS IT WAS THE SUBMISSION OF THE ASSESSEE BEFORE THE AO ALSO THAT NO CAPITAL GAIN WILL ARISE IN THE ASSESSEES CASE SINCE SHE HAS BEEN ALLOTTED A RESIDENTIAL FLAT, WHICH IN EFFECT, WOULD TANTAMOUNT TO INVESTING THE CONSIDERATION IN A RESIDENTIAL BUILDING WHICH IS ELIGIBLE FOR DEDUCTION U/S. 54F OF IT ACT. THE AO HAS NOT ALLOWED ANY DEDUCTION U/S. 54F BY STATING THAT THE ASSESSEE HAS ALREADY RECEIVED A FLAT AND THE ASSESSEE HAS NOT FURNISHED ANY PROOF OF STAYING IN THE SAME FLAT ALLOTTED BY THE BUILDER. BEFORE CIT (A), THIS WAS THE GROUND RAISED BY THE ASSESSEE THAT THE AO HAS CONSIDERED THE NON-REFUNDABLE DEPOSIT OF RS. 16,66,667/- AS ASSESSEES INCOME WITHOUT CONSIDERING THE COST AND ADDITIONS MADE BY THE ASSESSEE TO THE FLAT. BUT THE ISSUE WAS DECIDED BY CIT(A) AS PER PARA 5.2 OF HIS ORDER IN WHICH THERE IS NO DISCUSSION OR DECISION ON THIS ASPECT THAT INVESTMENT WAS MADE BY ASSESSEE IN THE FLAT BY WAY OF ADDITION. FOR READY REFERENCE, I REPRODUCE PARA 5.2 FROM THE ORDER OF CIT(A). THIS PARA READS AS UNDER. 5.2 THE APPELLANT HAD RECEIVED NONREFUNDABLE DEPOSIT WHICH WOULD BE INCLUDED IN THE SALECONSIDERATION HOWEVER, THE TOTAL SALE CONSIDERATION SINCE HAS BEEN INVESTED IN THE FLAT RECEIVED INLIEU OF THE TRANSFER OF THE LAND. THEREFORE, THOUGH THE SALE CONSIDERATION INCLUDING THE NON-REFUNDABLE DEPOSIT TO BE CONSIDERED FOR THE COMPUTATION OF THE CAPITAL GAINS, SINCE THE INVESTMENTMADE IN THE FLAT TO BE RECEIVED IN LIEU OF THE TRANSFER OF THE LAND WAS TO THE EXTENT OF THE VALUE OFTHE FLAT ON WHICH THE DEDUCTION U/S 54F IS ALLOWABLE. THE NON- REFUNDABLE DEPOSIT RECEIVED IN EXCESS HAS TO BE TAXED WHICH HAS BEEN DONE RIGHTLY BY THE AO THEREFORE, I DO NOT FIND ANY INFIRMITY IN THEFINDING GIVEN BY THE AO WHICH NEEDS MY INTERFERENCE. THE GROUNDS ARE HEREBY DISMISSED. 6. FROM THE ABOVE PARA REPRODUCED FROM THE ORDER OF CIT(A), IT IS SEEN THAT THERE IS NO DISCUSSION OR DECISION ABOUT THIS ASPECT AS TO WHETHER ANY ADDITION WAS MADE BY ASSESSEE IN THE FLAT OR NOT, WHETHER THE SAME IS ELIGIBLE FOR DEDUCTION U/S. 54F OR NOT. HENCE I FEEL IT PROPER TO RESTORE THIS MATTER BACK TO THE FILE OF CIT (A) FOR FRESH DECISION BY WAY OF A SPEAKING AND REASONED ORDER ON THIS ASPECT ALSO. HENCE I SET ASIDE THE ORDER OF CIT (A) ITA NO.319/BANG/2019 PAGE 4 OF 4 AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. THE CIT(A) SHOULD ALSO CONSIDER ABOUT THIS ASPECT AS TO WHETHER ANY DEDUCTION IS ALLOWABLE IN RESPECT OF INDEXED COST OF 40% UNDIVIDED SHARE IN LAND GIVEN BY ASSESSEE TO THE BUILDER BECAUSE THIS ASPECT IS ALSO NOT CONSIDERED AND DECIDED BY THE AO OR CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 16 TH MAY, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.