KALYAN PRASAD AGARWAL, BHARATPUR V. ACIT, BHARATPUR

ITA 321/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2146 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 06-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DHK
• Assessee Lawyers: MADHUKAR GARG
• Keywords: Audit objection; Benefit of exemption; Reassessment proceedings
• Section: 143(3); 54F; 147; 148

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 HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 321/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 KALYAN PRASAD AGARWAL, SHIV VILA, KALYAN COLONY, BAYANA, BHARATPUR. CUKE VS. A.C.I.T., CIRCLE- BHARATPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADXPA 1024 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MADHUKAR GARG (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21/04/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 25/04/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER DATED 07/01/2016 PASSED BY THE LD CIT(A), ALWAR FOR THE A.Y. 2008-09, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE REASSESSMENT PROCEEDINGS TAKEN IN THIS CASE ARE ILLEGAL AND UNJUSTIFIED AND THE ASSESSMENT COMPLETED BY THE ASSESSING OFFICER IS BAD IN LAW AN D DESERVES TO BE CANCELLED. 2. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN HOLDI NG THAT THE APPELLANT HAS FAILED TO ADDUCE ANY MATERIA L ITA 321/JP/2016_ KALYAN PRASAD AGARWAL VS ACIT 2 TO JUSTIFY THE QUANTUM OF RENTAL INCOME NOT DECLARE D BY HIM IN THE RETURN OF INCOME AND CONFIRMING ADDITION OF RS. 15,420/- MADE BY THE ASSESSING OFFICER. THE ADDITION CONFIRMED IS ILLEGAL, UNJUSTI FIED AND EXCESSIVE. 3. THAT THE LEARNED CIT(APPEALS) HAS ERRED IN HOLDI NG THAT THE APPELLANT WAS OWNING A HOUSE PROPERTY AT BAYANA AND HENCE WAS NOT ELIGIBLE FOR EXEMPTION U/S 54F OF THE IT ACT. THE SAID FINDING IS ILLEGAL AND UNJUSTIFIED. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) HAS ERRED IN HOLDING THAT THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM BENEFIT OF EXEMPTION U/S 54F OF THE IT ACT AND CONFIRMING THE DISALLOWANCE OF RS.6,30,886/- MADE BY THE ASSESSING OFFICER. THE SAID ACTION IS ILLEGAL AND UNJUSTIFIED AND THE ASSESSEE WAS CLEARLY ENTITLED TO EXEMPTION U/S 54F OF THE ACT. 2. THE ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME ON 27/03/2009 DECLARING TOTAL INCOME OF RS. 18,47,440/ -. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS FINALIZ ED AT AN INCOME OF RS. 20,26,440/-. THEREAFTER THE CASE WAS REOPENED BY ISSUING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT A ND THE ASSESSMENT WAS FINALIZED U/S 147 READ WITH SECTION 143(3) OF THE ACT AT AN INCOME OF RS. 24,93,750/-. 3. THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESS EE. ITA 321/JP/2016_ KALYAN PRASAD AGARWAL VS ACIT 3 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. IN THE GROUND NO. 1 OF APPEAL, THE ASSESSEE HAS CHALLENGED THE REASSE SSMENT PROCEEDINGS, IN THIS REGARD, THE LD. AR OF THE ASSESSEE HAS SUBM ITTED THAT THE REASSESSMENT PROCEEDINGS ARE ILLEGAL AND UNJUSTIFIE D. THE ASSESSEE IS A SENIOR CITIZEN. ORDER U/S 143(3) OF THE ACT WAS PASS ED ON 20/08/2010. THE CASE WAS REOPENED AND HE PLEADED THAT THE CLAIM O F THE ASSESSEE U/S 54F WAS IN RESPECT OF LONG TERM CAPITAL GAIN ARI SING ON THE SALE OF PLOT, HAS BEEN DISALLOWED. HE SUBMITTED THAT REOPENI NG HAS BEEN MADE ON THE BASIS OF AUDIT OBJECTION AND RELYING UPON TH E INCORRECT APPRECIATION OF FACTS. HE ALSO SUBMITTED THAT NO NE W MATERIAL WAS AVAILABLE WITH THE ASSESSING OFFICER TO REOPEN THE C ASE. 5. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE O RDER OF THE LD. CIT(A). SHE ALSO SUBMITTED THAT THIS GROUND OF REOPE NING WAS NOT TAKEN BEFORE THE LD. CIT(A). FURTHER HE SUBMITTED THAT THE ASSESSEE SUBMITTED A BALANCE SHEET FOR THE YEAR ENDING ON 31/3/2008 DU RING THE ORIGINAL ASSESSMENT PROCEEDINGS WHERE IN THE COLUMN OF FIXED ASSETS, THE ASSESSEE HAS DISCLOSED HOUSE PROPERTY VALUED AT RS. 16,66,980 AND ON THAT BASIS, THE ASSESSING OFFICER ALLOWED THE CLAIM OF EXEMPTION U/S 54F OF THE ACT. HOWEVER, THE ASSESSING OFFICER CAME TO K NOW THAT THE ASSESSEE WAS HAVING TWO RESIDENTIAL PROPERTIES, ONE L OCATED AT BAYANA ITA 321/JP/2016_ KALYAN PRASAD AGARWAL VS ACIT 4 VALUED AT RS. 2,25,,180 AND THE OTHER AT JAIPUR VAL UED AT RS. 14,41,820/-, THEREFORE THE ASSESSEE WAS NOT ENTITLED FOR BENEFIT OF SECTION 54F OF THE ACT AND THE REOPENING WAS JUSTIFI ED. 6. I HAVE GONE THROUGH THE RIVAL CONTENTIONS OF BOT H THE PARTIES ON THIS ISSUE. IT IS NOTICED THAT THE BALANCE SHEET SU BMITTED FOR THE YEAR ENDING OF 31/3/2008 RELEVANT TO ASSESSMENT YEAR 200 8-09 HAS SHOWN HOUSE PROPERTY AND VALUED AT RS. 16,69,980/-. HOWEVE R, THE BALANCE SHEET FILED FOR PRECEDING YEAR I.E. 31/3/2007 RELEV ANT TO ASSESSMENT YEAR 2007-08, THE ASSESSEE HAS SHOWN TWO HOUSE PROPE RTIES ONE LOCATED AT BAYANA AND ANOTHER AT JAIPUR. THEREFORE, ON THE BASIS OF THAT, THE ASSESSEES CLAIM FOR EXEMPTION U/S 54F OF THE ACT WI TH REGARD TO THE CAPITAL GAIN ARISE ON THE SALE OF LAND AT BHIM NAGA R, BAYANA IS TO BE CONSIDERED, IN LIGHT OF THAT FACT HENCE, IN MY CONS IDERED VIEW, THE ASSESSING OFFICER WAS JUSTIFIED IN REOPENING THE ASS ESSMENT PROCEEDINGS. I HOLD THAT IT WAS DEFINITELY NOT ON THE BASIS OF CH ANGE OF OPINION AS CANVASSED BY THE LD AR, THEREFORE, THE GROUND NO. 1 OF THE ASSESSEES APPEAL STANDS DISMISSED. 7. IN THE GROUND NO. 2 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED THE CONFIRMING THE ADDITION OF RS. 15,420/-. THE LD CIT(A) HAS DEALT THIS ISSUE IN HIS ORDER IN PARA 5.3 TO 5.5, WHICH IS AS U NDER:- ITA 321/JP/2016_ KALYAN PRASAD AGARWAL VS ACIT 5 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WE LL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 1 5,420 HAS BEEN MADE BY THE AO ON ACCOUNT OF UNDER DECLARATION OF RENTAL INCOME. IT IS STATED THAT APPELLANT HAD DECLARED A RENTAL INCOME OF RS. 23,74,252 FROM D AMICO SHIP ISHIMA INDIA PVT. LTD. AS AGAINST THE RE NTAL INCOME OF RS. 23,96,280 RECEIVED FROM THE TENANT. THE APPELLANT H AS STATED THAT DIFFERENCE IN THE INCOME DECLARED IS ON ACCOUNT OF SERVICE TAX LIABILITY FOR THE MONTH OF JUNE, 2007 WHICH HAS BEEN PAID BY THE APPELLANT. 5.4 THE APPELLANT HAS IN THE COURSE OF PRESENT PROC EEDINGS REITERATED THE SUBMISSIONS FILED BEFORE THE AO AND FAILED TO SUBST ANTIATE THE REASONS FOR DIFFERENCE IN THE AMOUNT OF RENTAL INCOME DECLA RED IN THE RETURN OF INCOME AND AS SHOWN BY THE TENANT IN FORM 16 ISSUED TO THE APPELLANT. 5.5 HAVING CONSIDERED THE SUBMISSIONS FILED ON THIS ISSUE AND AFTER GOING THROUGH THE MATERIAL AVAILABLE ON RECORD, I FIND TH AT APPELLANT HAS FAILED TO ADDUCE ANY MATERIAL TO JUSTIFY THE QUANTU M OF RENTAL INCOME NOT DECLARED BY HIM IN THE RETURN OF INCOME. I FIND THAT RENTAL INCOME HAS BEEN UNDER DECLARED AND THE ACTUAL AMOUNT OF RE NT RECEIVED BY THE APPELLANT IS 23,96,280 AND THEREFORE AO HAS RIGHTLY MADE THE ADDITION OF RS. 15,420 AFTER ALLOWING THE STANDARD DEDUCTION OF 30% ON THE TOTAL AMOUNT OF RENTAL INCOME UNDER DECLARED. ACCORDINGLY , I CONFIRM THE ADDITION OF RS. 15,420 MADE BY THE AO UNDER THIS HE AD. 8. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. I FIN D THAT THE LD. AR WAS NOT ABLE TO CONTROVERT THE FINDING RECORDED BY T HE LD. CIT(A) THAT THE APPELLANT HAS DECLARED RENTAL INCOME OF RS. 23, 74,252/- FROM D AMICO SHIP ISHIMA INDIA PVT. LTD. AS AGAINST RENTAL INCOME OF RS. 23,96,280/- RECEIVED FROM THE TENANT. THE ASSESSEE S CLAIMED THAT THE ITA 321/JP/2016_ KALYAN PRASAD AGARWAL VS ACIT 6 DIFFERENCE WAS ON ACCOUNT OF SERVICE LIABILITY IN TH E MONTH OF JUNE, 2007 IS NOT A JUSTIFIED CLAIM. I HOLD THAT THE RENTAL IN COME HAS TO BE ASSESSED AS MUCH AS IT HAS BEEN RECEIVED I.E. RS. 23,96,280/ -. THE ASSESSEE CANNOT MAKE ANY DEDUCTION FOR SERVICE TAXAS CLAIMED AS THIS WILL AMOUNT TO THE APPLICATION OF THE INCOME. THE SERVICE TAX I S NOT A CHARGE ON THE RENTAL INCOME EARNED. THEREFORE, I DISMISS THIS GROU ND OF ASSESSEES APPEAL. 9. IN THE GROUND NOS. 3 AND 4 OF THE APPEAL, THE IS SUE INVOLVED IS NOT ALLOWING CLAIM OF EXEMPTION U/S 54F OF THE ACT WITH R EGARD TO THE CAPITAL GAIN BENEFIT ARISES AND THE REINVESTMENT MADE. THE L D. CIT(A) HAS DEALT THIS ISSUE IN PARA 6.3 TO 6.8 OF HIS ORDER. 10. THE LD AR OF THE ASSESSEE HAS CATEGORICALLY STAT ED THAT THE ASSESSEE IS NOT HAVING ANY RESIDENTIAL PROPERTY AT BAYANA. THE FIGURE MENTIONED IN THE BALANCE SHEET WAS A MISTAKE OF THE ACCOUNTANT. THE ASSESSEE HAS SUBMITTED AN AFFIDAVIT IN THIS REGARD. 11. AFTER HEARING BOTH THE SIDES ON THIS ISSUE, I F IND IT APPROPRIATE TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL INVESTIGATE WITH REGARD TO THE CLAIM O F THE ASSESSEE THAT HE IS NOT HAVING ANY PROPERTY AT BAYANA AND AFTER ASCE RTAINING THE CORRECT ITA 321/JP/2016_ KALYAN PRASAD AGARWAL VS ACIT 7 FACT, THE ASSESSING OFFICER SHALL DECIDE THE ISSUE ACCORDINGLY IN ACCORDANCE WITH LAW. ACCORDINGLY, BOTH THE GROUNDS O F THE APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 25/04/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25 TH APRIL, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI KALYAN PRASAD AGARWAL, BHARATPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE, BHARATPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 321/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR