Sh. Harish Sachdeva, Mohali V. ACIT, Mohali

ITA 320/CHANDI/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8944 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Additional evidence; Corroborative evidences
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.320/CHD/2015 (ASSESSMENT YEAR : 2010-11) SH.HARISH SACHDEVA, VS. THE A.C.I.T., KOTHI NO.85, PHASE-9, CIRCLE 6(1), MOHALI. MOHALI. PAN: AEEPS8909L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 11.08.2016 DATE OF PRONOUNCEMENT : 21.11.2016 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH DATED 24.2.2015 FOR ASSESSM ENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THAT THE ORDER PASSED UNDER SECTION 250(6) BY T HE LD. COMMISSIONER OF INCOME TAX (APPEALS)-2, CHANDIGARH IN APPEAL NO.396/12-13 DATED 24.02.2015 IS CONTRARY TO LAW AND FACTS OF THE CASE. 2 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING THE ACTION OF THE ID. ASSESSING OFFICER I N DISALLOWING THE BENEFIT TO THE APPELLANT UNDER SE CTION 54F OF RS.53,63,363/-. 3. THAT IN THE IN FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN NOT ADMITTING ADDITIONAL EVIDENCE ALTHOUGH IT GOES TO THE ROOT OF THE MATTER AND WAS T O SUPPORT THE FACTS ALREADY SUBMITTED BEFORE THE LD ASSESSING OFFICER. 4. THAT THE APPELLANT CRAVES TO ADD, AMEND OR ALTER ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL WITH THE PERMISSION OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH. 3. THE ONLY ISSUE IN THE PRESENT APPEAL RELATES TO DISALLOWANCE OF BENEFIT TO THE ASSESSEE UNDER SECTI ON 54F OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 4. BRIEF FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE HAD DECLARED LONG TERM CAPITAL GAIN ON SAL E OF ASSET IN MARCH, 2010 AND CLAIMED DEDUCTION UNDER SE CTION 54F OF THE ACT OF RS.53,63,363/-. THE ASSESSING OF FICER NOTICED THAT ON THE DATE OF TRANSFER OF THE ASSET T HE ASSESSEE OWNED TWO RESIDENTIAL PROPERTIES NAMELY HO USE NO.85, PHASE-9, MOHALI AND HOUSE 939/1. SECTOR 40, CHANDIGARH AND SO WAS NOT ENTITLED TO DEDUCTION UND ER SECTION 54F OF THE ACT. WHEN QUESTIONED, THE ASSES SEE CLAIMED THAT HE HAD ENTERED INTO AN AGREEMENT TO SE LL SECOND RESIDENTIAL HOUSE NAMELY HOUSE NO.939/1, SEC TOR 40, CHANDIGARH BEFORE THE SALE OF THE ORIGINAL ASSE T AND 3 HAD ALSO RECEIVED A CONSIDERATION OF RS.20 LACS FOR THE SAME. TO VERIFY THE CORRECTNESS OF CLAIM OF THE AS SESSEE, THE ASSESSING OFFICER ASKED HIM TO PRODUCE COPY OF AGREEMENT TO SELL AND COPY OF CONVEYANCE DEED/SALE DEED, VIDE WHICH THE PROPERTY WAS SOLD BY HIM ALONGWITH O THER CORROBORATIVE EVIDENCES, BUT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENT TO SUPPORT HIS CLAIM AND SO TH E ASSESSING OFFICER DISALLOWED THE DEDUCTION CLAIMED UNDER SECTION 54 OF THE ACT. 5. AGGRIEVED BY THE SAME THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (APPEALS). DURING THE CO URSE OF HEARING BEFORE THE LD. CIT (APPEALS), THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCE BEING THE AGREEMENT T O SELL THE IMPUGNED PROPERTY DATED 3.2.2010 AND DREW ATTEN TION TO CLAUSE-C OF THE AGREEMENT WHICH STATED THAT THE SELLER HAD DELIVERED THE ACTUAL PHYSICAL AND VACANT POSSES SION OF THE SAID HOUSE TO THE PURCHASER W.E.F. THE DATE OF THE AGREEMENT. THE ASSESSEE POINTED OUT THAT IN VIEW O F THE FACT THAT THE POSSESSION OF THE HOUSE WAS DELIVERED TO THE PURCHASER, THE SALE HAD GOT COMPLETED AND ASSESSEE WAS, THEREFORE, THE OWNER OF THE ONLY ONE HOUSE PROPERTY ON THE DATE OF THE SALE OF THIS ASSET ON WHICH IT HAD RETU RNED LONG TERM CAPITAL GAIN AND THUS, WAS ENTITLED TO DE DUCTION UNDER SECTION 54F OF THE ACT. THE LD. CIT (APPEALS ) DISMISSED THE GROUND RAISED BY THE ASSESSEE BY HOLD ING THAT IN THE FIRST PLACE THE EVIDENCE SUBMITTED BY T HE ASSESSEE BEFORE HIM WAS AN ADDITIONAL EVIDENCE AND 4 SINCE NO APPLICATION FOR ADMISSION OF THE SAME UNDE R RULE 46A OF THE ACT HAD BEEN FILED BY THE ASSESSEE, NOR HAD THE ASSESSEE EXPLAINED REASONS FOR NON-FILING THIS DOCU MENT BEFORE THE ASSESSING OFFICER, THE SAME COULD NOT BE CONSIDERED AT THIS STAGE. THE LD. CIT (APPEALS) FU RTHER STATED THAT EVEN IF THE AFORESAID DOCUMENT WAS ADMI TTED AS EVIDENCE, ITS GENUINENESS WAS DOUBTFUL SINCE IT WAS NEITHER STAMPED NOR REGISTERED. FURTHER, THE LD. C IT (APPEALS) HELD THAT EVEN IF THE GENUINENESS WAS ACC EPTED, THE ASSESSEE WAS STILL THE OWNER OF THE SAID PROPER TY ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET SINCE AS PER THE PROVISIONS OF TRANSFER OF PROPERTY ACT, AN IMMOVABL E PROPERTY GOT TRANSFERRED ONLY ON EXECUTION OF DULY STAMPED SALE DEED REGISTERED BY THE LEGAL AUTHORITY . THUS, THE LD. CIT (APPEALS) HELD THAT THE ASSESSEE HAD FAILED TO FULFILL THE CONDITION SPECIFIED UNDER SEC TION 54F OF THE ACT, OF BEING THE OWNER OF ONLY ONE RESIDENT IAL HOUSE AS ON THE DATE OF SALE OF ORIGINAL ASSET, FOR THE PURPOSE OF CLAIMING DEDUCTION THERE-UNDER AND, THER EFORE, ACCORDINGLY, CONFIRMED THE ORDER OF THE ASSESSING O FFICER IN THIS REGARD. 6. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US RAISING GROUNDS AGAINST THE DENIAL OF ADMISSION OF ADDITIONAL EVIDENCE FILED BEFORE TH E LD. CIT (APPEALS) AS ALSO THE DENIAL OF DEDUCTION UNDER SECTION 54F OF THE ACT. DURING THE COURSE OF HEARI NG BEFORE US, THE ASSESSEE FILED AN APPLICATION FOR AD MISSION OF 5 ADDITIONAL EVIDENCE UNDER RULE 29 OF THE APPELLATE TRIBUNAL RULES SUBMITTING THE FOLLOWING DOCUMENTS A S ADDITIONAL EVIDENCE : SR.NO. PARTICULARS 1) COPY OF AGREEMENT TO SELL DATED 03.02.2010. 2) COPY OF GENERAL POWER OF ATTORNEY. 3) COPY OF WILL 4) COPY OF AGREEMENT TO SELL DATED 16.10.2010. 7. FURTHER, THE ASSESSEE SUBMITTED THROUGH THE APPLICATION THAT THE DOCUMENTS NOW FILED IN THE SHA PE OF AGREEMENT TO SELL, POWER OF ATTORNEY AND COPY OF WI LL IN RESPECT OF SALE OF HOUSE NO.939/1, SECTOR 40-A, CHANDIGARH WERE NECESSARY FOR DECIDING THE ISSUE AT HAND AND WENT TO THE ROOT OF THE MATTER TO PROVE THE CLA IM OF THE ASSESSEE UNDER SECTION 54F OF THE ACT IT WAS A LSO SUBMITTED THAT THE DOCUMENTS WERE GIVEN BY THE ASSE SSEE TO ERSTWHILE COUNSEL OF THE ASSESSEE WHO APPEARED B EFORE THE ASSESSING OFFICER BUT DUE TO THE REASONS BEST K NOWN TO HIM, HE DID NOT SUBMIT THE SAME BEFORE THE ASSES SING OFFICER. THE ASSESSEE FURTHER INVITED OUR ATTENTION TO THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. MUKTA METAL WORKS (2011) 336 ITR 5 55 (P&H) FOR THE PROPOSITION THAT THE ADDITIONAL EVIDE NCE WHICH WAS NECESSARY FOR THE JUST DECISION OF THE MA TTER AND HAD DIRECT THAT BEARING ON THE ISSUE COULD NOT BE DECLINED BY THE TRIBUNAL TO BE CONSIDERED AS ADDITI ONAL EVIDENCE. 6 8. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER PLACED RELIANCE ON THE DECISION OF THE I.T.A.T. DEL HI BENCH IN THE CASE OF MAHAVIR PRASAD GUPTA VS. JCIT (2006 ) 101 TTJ 1078 AND THE DECISION OF THE I.T.A.T. BANGALORE BENCH IN THE CASE OF SMT.SELVI VENKATASUBRAMANI VS.. ITO IN ITA NO.1052/BANG/2013 DATED 7.10.2015 IN THIS REGAR D. 9. IN RESPONSE TO THE SAME, THE LD. DR FILED HIS OBJECTION TO THE ADMISSION OF ADDITIONAL EVIDENCE I N WRITING WHICH IS REPRODUCED HEREUNDER: IN THIS CASE, THE ASSESSE HAS MADE AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 29. IN THIS REGARD, IT IS SUBMITTED THAT THE APPLICATION SO FILED BY THE ASSESSE MAY KINDLY BE OUT-RIGHTLY REJECTED AS THE OPE NING WORDS IN THE RULE CLEARLY PROVIDE THAT 'THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL'. IT HAS FURTHER BEEN WRITTEN IN THE RULE THAT 'BUT IF THE TR IBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED ' THUS IT IS VERY CLEAR THAT THE ASSESSE CAN NOT SUO MOTTO FURNISH AN Y ADDITIONAL EVIDENCE. IT IS ONLY WHEN THE TRIBUNAL REQUI RES, THE ADDITIONAL EVIDENCE CAN BE PRODUCED. THIS IS ALL THE M ORE CLEAR AS IN THE SECOND PART OF THIS RULE, THE WORD 'A LLOW' HAS BEEN USED I.E. IF THE INCOME TAX AUTHORITIES HAVE DEC IDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE A SSESSE TO ADDUCE EVIDENCE, THE TRIBUNAL MAY ALLOW SUCH DOC UMENT TO BE PRODUCED... . IN THIS CASE, THERE IS NO PLEA OF THE ASSESSE THAT THE DEPARTMENT HAD NOT ALLOWED IT SUFF ICIENT OPPORTUNITY. MOREOVER, WHEN NO MIND HAS BEEN APPLIED BY THE LD. CIT(A) ON A PIECE OF DOCUMENT, THE HON'BLE IT AT IS UNABLE TO FIND OUT THE CORRECTNESS OR INCORRECTNESS O F THE JUDGMENT OF THE LOWER APPELLATE AUTHORITY. 7 IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION, THE APPLICATION FILED BY THE ASSESSE SHOULD BE STRAIGHTWA Y REJECTED. 10. WE HAVE HEARD HE RIVAL CONTENTIONS AND FIND MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE AD DITIONAL EVIDENCES NOW FILED BEFORE US BEING THE AGREEMENT T O SELL DATED 16.10.2010 OF HOUSE NO.939/1, SECTOR 40-A, CHANDIGARH, COPY OF WILL RELATING TO THE SAME AND T HE GENERAL POWER OF ATTORNEY RELATING TO THE SAME ARE DOCUMENTS WHICH HAVE A BEARING ON THE PLEADINGS MAD E BY THE ASSESSEE IN THE PRESENT CASE RELATING TO THE SA LE OF THE IMPUGNED PROPERTY. IN FACT, WE FIND THAT THESE DOC UMENTS WERE AT THE FIRST INSTANCE ASKED BY THE ASSESSING O FFICER ALSO FROM THE ASSESSEE TO SUBSTANTIATE ITS CLAIM OF SALE OF IMPUGNED PROPERTY DURING THE IMPUGNED YEAR. THEREF ORE, THERE IS NO DOUBT THAT THE DOCUMENTS NOW BEING SUBM ITTED BEFORE US ARE ITAL TO PROVE THE CLAIM OF THE ASSESS EE OF DEDUCTION UNDER SECTION 54F OF THE ACT. THE I.T.A. T. DELHI BENCH IN THE CASE OF MAHAVIR PRASAD GUPTA (SUPRA) HAS WHILE ELUCIDATING ON THE POWER OF THE TRIBUNAL IN T ERM OF RULE 29 TO ADMIT FRESH EVIDENCE, HELD THAT IT ENTA ILS AN ELEMENT OF DISCRETION WHICH IS REQUIRED TO BE EXERC ISED IN A JUDICIOUS MANNER AND IS TO BE EXERCISED NOT ONLY IN SITUATION WHERE EVIDENCE COULD NOT BE PRODUCED BEFO RE THE LOWER AUTHORITIES OWING TO LACK OF ADEQUATE OPPORTU NITY BUT ALSO SITUATIONS WHERE THE FRESH EVIDENCE WOULD ENABLE THE TRIBUNAL TO PASS ORDER OR FOR ANY OTHER SU BSTANTIAL CAUSE. FURTHER, THE JURISDICTIONAL HIGH COURT 8 IN THE CASE OF MUKTA METAL WORKS (SUPRA) HAS ALSO HELD THAT THE ADDITIONAL EVIDENCE NECESSARY FOR JUST DEC ISION OF THE MATTER CANNOT BE DECLINED TO BE CONSIDERED AS ADDITIONAL EVIDENCE. IN VIEW OF THE SAME, WE ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 11. HAVING SAID SO, WE NOW PROCEED TO ADJUDICATE THE ISSUE AT HAND. THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED BEFORE US THAT THE ASSESSEE HAD BEEN WRON GLY DENIED ITS CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT, SINCE THE ASSESSEE WAS THE OWNER OF ONLY ONE PROPER TY AS ON THE DATE OF THE SALE OF THE ORIGINAL ASSET AND T HAT THE HOUSE PROPERTY, 939/1, SECTOR 40A, CHANDIGARH, BEIN G ONE OF THE TWO ORIGINAL HOUSES OWNED BY IT, WAS SOLD BY IT BEFORE THE SALE OF THE ORIGINAL ASSET. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE ADDITION AL EVIDENCES NOW FILED BEFORE US BEING THE AGREEMENT T O SELL OF THE IMPUGNED PROPERTY DATED 3.2.2010, THE GENERA L POWER OF ATTORNEY, THE WILL AND THE AGREEMENT TO SE LL DATED 16.10.2010 OF THE IMPUGNED PROPERTY. THE LEA RNED COUNSEL FOR THE ASSESSEE STATED THAT THE ASSESSEE H AD ENTERED INTO N AGREEMENT TO SELL THE IMPUGNED PROPE RTY ON 3.2.2010, WHICH WAS BEFORE THE DATE OF SALE OF ORIG INAL ASSET AND BY VIRTUE OF THE AGREEMENT TO SELL, THE POSSESSION OF THE PROPERTY HAD BEEN DELIVERED TO TH E PURCHASER. THE LEARNED COUNSEL FOR THE ASSESSEE RE FERRED TO CLAUSE-C OF THE AGREEMENT TO SELL IN THIS REGARD , WHICH READS AS UNDER : 9 THAT THE SELLER HAS DELIVERED THE ACTUAL PHYSICAL AND VACANT POSSESSION OF SAID HOUSE TO THE SAID PURCHAS ERS W.E.F. TODAY AND WILL HAND OVER ALL THE DOCUMENTS OF SAID HO USE TO THE SAID PURCHASERS FOR THEIR RECORDS AT THE TIME OF FINAL EXECUTION OF THIS SALE AGREEMENT. THE SAID PURCHASERS HAVE BECOME THE ABSOLUTE OWNERS OF SAID HOUSE SUBJECT TO PAYMENTS TO BE MADE BY THEM. 12. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER STATED THAT THE AGREEMENT TO SELL ENTERED INTO ON 16.10.2010 COULD NOT BE TREATED AS THE DATE OF TRAN SFER SINCE THE POSSESSION STOOD TRANSFERRED ON THE DATE OF AGREEMENT TO SALE ITSELF. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF THE DELHI BENC H OF THE TRIBUNAL IN THE CASE OF SMT.SHASHI GUPTA VS. I TO IN ITA NO.609/DEL/2012 DATED 24.11.2015 IN THIS REGARD . THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT TH AT IN THE AFORESTATED CASE, THE I.T.A.T. HAD HELD THAT TH E REGISTRATION OF TRANSFER IN ACCORDANCE WITH THE AGR EEMENT TO SELL CANNOT BE TERMED AS THE DATE OF TRANSFER, R ELYING UPON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF SANJEV LAL & ANR. VS. CIT & ANR. (2014) 365 ITR 389 (SC). THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER POINTED OUT TO THE FINDINGS OF THE I.T.A.T. REJECTING THE C ONCLUSION OF THE CIT (APPEALS) IN THAT CASE THAT THE AGREEMEN T TO SELL IS A MERE START OF SALE AND CANNOT BECOME THE ACT O F THE SALE FOR SECTION 54 OF THE ACT. 13. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD. CIT (APPEALS) AND STATED THAT AS P ER THE PROVISIONS OF TRANSFER OF PROPERTY ACT, AN IMMOVABL E PROPERTY GETS TRANSFERRED ONLY WHEN A DULY STAMPED SALE DEED IS REGISTERED BY THE LEGAL AUTHORITY. THE LD . DR 10 FURTHER STATED THAT THE VERACITY OF THE DOCUMENTS O F AGREEMENT TO SELL HAD ALSO BEEN DOUBTED BY THE LD. CIT (APPEALS) AND, THEREFORE, CANNOT BE CONSIDERED FOR THE PURPOSE OF GRANTING DEDUCTION TO THE ASSESSEE UNDER SECTION 54F OF THE ACT. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF HE AUTHORITIES BELOW AND ALSO DOCUMEN TS PLACED BEFORE US. HAVING ADMITTED THE ADDITIONAL EVIDENCES BEFORE US AND CONSIDERING THE JUDGMENT OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF SMT.SHA SHI GUPTA (SUPRA) REFERRED TO BY THE LEARNED COUNSEL FO R THE ASSESSEE ABOVE, HOLDING THE DATE OF AGREEMENT TO S ELL AS THE DATE OF SALE OF ASSET, WE CONSIDER IT FIT TO RE STORE THE ISSUE BACK TO THE FILE OF THE LD. CIT (APPEALS) TO EXAMINE THE DOCUMENTS NOW PRODUCED BY THE ASSESSEE AND ADJUDICATE THE ISSUE IN THE LIGHT OF THE DECISIONS CITED BY THE ASSESSEE AND IN ACCORDANCE WITH LAW. WE MAY AD D THAT THE ASSESSEE BE GRANTED DUE OPPORTUNITY OF HEA RING. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21 ST NOVEMBER, 2016 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH 11