M.A. Projects (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 3432/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6320 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R K KAPOOR
• Keywords: Opportunity of being heard; Additional evidence
• Section: 54

Judgement Text

ITA NO. 3345/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3345/DEL/2013 A.Y. : 2009-10 ITO, WARD 42(4), NEW DELHI VS. SMT. NANDITA GUPTA, B-10, HOUSING SOCIETY, NDSE PART-I, NEW DELHI 110 049 (PAN: AGWPG7810N) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. PRADEEP DINODIA, ADVOCATE & SH. R.K. KAPOOR, CA DEPARTMENT BY : SH. KEYUR PATEL, SR. DR ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-XXX), NEW D ELHI DATED 22.3.2013 PERTAINING TO ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ITA NO. 3345/DEL/2013 2 1) ADMITTING THE ADDITIONAL EVIDENCE IN CONTRAVENTION S OF RULE 46A WITHOUT GIVING AN OPPORTUNITY TO THE AO NO R CALLING REMAND REPORT TO JUSTIFY THE ADDITIONS. 2) DELETING THE ADDITION OF RS. 35,00,000/- BY WITHD RAWING EXEMPTION U/S. 54 OF THE I.T. ACT. 3) DELETING OF ADDITION OF RS. 1,44,529/- MADE ON ACCO UNT OF UNDISCLOSED SHORT TERM CAPITAL GAIN. THE APPELLANT CRAVES THE RIGHT TO ALTER, AMEND, ADD OR SUBSTITUTE THE GROUNDS OF APPEAL. 3. APROPOS ISSUE OF DELETION OF ADDITION OF RS. 35 ,00,000/ APROPOS ISSUE OF DELETION OF ADDITION OF RS. 35,00 ,000/ APROPOS ISSUE OF DELETION OF ADDITION OF RS. 35,00 ,000/ APROPOS ISSUE OF DELETION OF ADDITION OF RS. 35,00 ,000/- -- -. .. . IN THIS CASE ASSESSEE HAS SOLD RESIDENTIAL PROPERT Y BEING RESIDENTIAL PLOT AT DLF CITY-IV, GURGAON, AT CHAK KAERPUR MEASURING 225 SQMTR. FOR A TOTAL CONSIDERATION OF RS. 43,05,6 00/-. THE SAID PROPERTY WAS PURCHASED IN THE YEAR 1991-92 FOR RS. 1,47,580/- AFTER DEDUCING INDEX COST OF RS. 4,31,616/- A CAPITAL GAI N OF RS. 38,73,984/- ACCRUED TO THE ASSESSEE. ASSESSEE CLAI MED TO HAVE PAID RS. 35 LACS FOR PURCHASE OF A RESIDENTIAL HOUSE AN D ACCORDINGLY, CLAIMED DEDUCTION U/S. 54 AMOUNTING TO RS. 35,00,00 0/-. THE ASSESSEE HAS SUBMITTED A SALE DEED FOR A FREE HOLD PROPERTY AT GREATER KAILASH WHICH WAS IN FAVOR OF MS. NANDITA GUPTA AND SHWETA GUPTA FOR A TOTAL CONSIDERATION OF RS. 80,00 ,000/- HAVING 50% SHARES EACH IN THE PROPERTY. THE SALE DEED WA S EXECUTED BY RAMAN GUPTA - KARTA OF GUPTA TRADERS AN HUF. FRO M THE DETAILS SUBMITTED FOR THE PAYMENT OF THE AMOUNT, AO WAS NOT SATISFIED THAT THE TOTAL AMOUNT HAS BEEN PAID. AO WAS ALSO NOT SA TISFIED THAT THE PROPERTY WAS TRANSFERRED. AO HELD AS UNDER:- ITA NO. 3345/DEL/2013 3 THE SALE DEED EXECUTED IS ON A STAMP PAPER OF RS. 100/-. THE SALE DEED IS NOT REGISTERED WITH SUB REGISTRAR OF PROPERTY. THE AFFIDAVIT FILED CONFIRMING RECEIPT OF SALE PROCEEDS IS IN INDIVIDUAL CAPACITY. THE ASSESSEE H AS NOT FILED COPY OF INCOME TAX RETURN IN THE CASE OF HUF DECLARING THEREIN THE SALE OF THE PROPERTY. THE ASS ESSEE HAS PURCHASED SHARES AND DID NOT PAY THE SALE AMOU NT TOWARDS PURCHASE OF A NEW HOUSE PROPERTY. THE ENTI RE TRANSACTION IS A FAMILY AFFAIR AND IS NOT GENUINE. THE TRANSACTION IS MADE SOLELY TO EVADE TAX ON LONG TER M CAPITAL GAIN. I, THEREFORE, HOLD THAT THE ASSESSEE HAS NOT INVESTED ANYTHING IN THE PURCHASE OF NEW HOUSE PROP ERTY TO QUALIFY FOR CLAIMING DEDUCTION U/S. 54 OF THE I. T. ACT. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT HAVE BEEN INITIATED SEPARATELY. 4. UPON ASSESSES APPEAL LD. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND HELD AS UNDER:- I HAVE PERUSED THE ASSESSMENT ORDER, GROUNDS OF APPEAL, WRITTEN SUBMISSION AND DISCUSSED THE MATTER WITH THE APPELLANT VERY CAREFULLY. THE AO HAD MADE AN ADDITION OF RS.35,OO,OOO/- BY DISALLOWING EXEMPTION CLAIMED U/S 54 OF THE LT. ACT TO THE APPELLANT. THE RE IS ANOTHER DISALLOWANCE OF RS.50,OOOI- ON HOUSEHOLD EXPENSES. THE APPELLANT IS A DAUGHTER OF A BUSINESS MAN, DERIVING INCOME FROM ADVERTISING AGENCY AND RUNNING A COMPANY NEWFIELDS ADVERTISING PVT. LTD. THE MAIN KA RTA OF THE FAMILY IS SH. RAMAN GUPTA, APPELLANT'S FATHE R. THE AR OF THE APPELLANT HAD PRODUCED A FAMILY TREE OF R AMAN GUPTA WHICH CLEARLY SHOWS HOW THE APPELLANT IS EMPL OYEE OF HUF OF RAMAN GUPTA, I.E., MIS GUPTA TRADERS. THE ITA NO. 3345/DEL/2013 4 APPELLANT AND HER MOTHER ARE EMPLOYEES IN THE HUF A ND MR. RAMAN GUPTA WITH SONS AND OTHER UNMARRIED DAUGHTER ARE EMPLOYEES OF THE COMPANY. THE APPELLAN T'S FAMILY HAD ADOPTED GOOD TAX PLANNING FROM THE BEGINNING. IT IS NOT A CASE OF TAX EVASION. THE WRI TTEN SUBMISSIONS OF THE AR ARE VERY CLEAR. THE APPELLANT HAD SOLD A PROPERTY WHICH WAS PURCHASED BY HER IN THE Y EAR 1991-92. SINCE THIS IS A LONG TERM CAPITAL GAIN, TH E AO HAD CONFUSED THE TRANSACTION BY NOT CONSIDERING THE APPELLANT'S SUBMISSION AT ASSESSMENT STAGE. THE AO IN HIS OBSERVATION IN PARA 5.III & 5.IV HAD MENTIONED THAT CHEQUE NOS.033892 & 33894 DT.13.12.2007 TOWARDS SAL E CONSIDERATION OF RS.11,00,000/- BUT HAD NOT CONSID ERED THE LEGAL PROVISIONS OF HUF LAW. THE APPELLANT HAD PAID THE CHEQUES TO THE COMPANY WHERE HIS FATHER IS DIRE CTOR, FOR PURCHASE OF THE NEW PROPERTY AND THAT THE REASO N FOR DISALLOWANCE OF THE TRANSACTION. ANOTHER CLAUSE IS SALE DEED EXECUTED IN STAMP PAPER OF RS.100 WHICH IS NOT REGISTERED WITH THE SUB-REGISTRAR OF THE PROPERTY. THE ENTIRE TRANSACTION IS A FAMILY AFFAIR AND IS NOT GE NUINE ALLEGED BY THE AO (IF IT IS A POWER OF ATTORNEY SAL E WITHIN THE FAMILY ARRANGEMENTS STILL IT IS A SALE). NOW TH E APPELLANT GOT MARRIED AND STAYING SEPARATELY IN THA T HOUSE. SINCE THE HOUSE IS ACQUIRED IN 1991 AND INVESTMENT IS MADE IN 2009, THE LONG TERM CAPITAL G AIN ARISES IN THE CASE OF EXEMPTION U/S 54 IS ALLOWED. THE ADDITION OF RS.35,00,000/-- IS DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 3345/DEL/2013 5 6. AT THE OUTSET, LD. DR SUBMITTED THAT LD. CIT(A) HAS CONSIDERED THE VARIOUS ASPECTS OF THE SUBMISSIONS OF THE ASSES SEE WHICH WERE NOT BEFORE THE AO. HE SUBMITTED THAT ASSESSEE HAS A LSO NOT MADE ANY APPLICATION FOR ADDITIONAL EVIDENCE, DESPITE TH AT LD. CIT(A) HAS PROCEEDED TO CONSIDER THE NEW SUBMISSION BY THE AS SESSEE. HE SUBMITTED THAT LD. CIT(A) HAS ALSO NOT CALLED FOR A NY REMAND REPORT FROM THE AO. HENCE, THE LD. DR PLEADED THAT THE MA TTER MAY BE REMITTED TO THE FILE OF THE AO TO CONSIDER THE ISSU E AFRESH. LD. COUNSEL OF THE ASSESSEE, ON THE OTHER HAND, RELIED UPON BY THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT LD. CIT(A) HAS PASSED REASONABLE ORDER, AFTER PROPERLY APPRECIATING THE FACTS OF THE CASE. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT FROM THE PERUSAL OF THE LD. CIT(A)S ORDER, IT IS APPARENT THAT LD. CIT(A) HAS CONSIDERED THE VARIOU S ASPECTS OF THE SUBMISSIONS AND CLAIM OF THE ASSESSEE WHICH WERE NO T BEFORE THE AO. LD. CIT(A) HAS NOT ASKED FOR ANY REMAND REPORT FROM THE AO IN THIS REGARD. IN THESE CIRCUMSTANCES, IN OUR CONSID ERED OPINION, INTEREST OF JUSTICE WILL BE SERVED, IF THIS ISSUE I S REMITTED TO THE FILE OF THE AO TO CONSIDER THE ISSUE AFRESH, AFTER GIVING T HE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. BOTH THE COUNS EL AGREED TO THIS PROPOSITION. WE HOLD AND DIRECT ACCORDINGLY. 8. APROPOS DELETION OF ADDITION OF RS. 1,44,529/ APROPOS DELETION OF ADDITION OF RS. 1,44,529/ APROPOS DELETION OF ADDITION OF RS. 1,44,529/ APROPOS DELETION OF ADDITION OF RS. 1,44,529/- -- - ON THIS ISSUE AO NOTED THAT ASSESSEE HAS MAINTAIN ED DMAT ACCOUNT WITH M/S ISF SECURITIES LTD.. AO NOTED THA T AS PER THE SCRIPT WISE NET POSITION DETAILS SUBMITTED BY M/S ISF SECU RITIES, THE ASSESSEE HAS EARNED NET PROFIT OF RS. 1,44,529/-. ASSESSEE WAS CONFRONTED WITH THIS. THE ASSESSEE RESPONDED THAT THE STATEMENT OF PROFIT OF CAPITAL GAIN SHOWN BY M/S IFS SECURITIES IS INCORRECT. AO ITA NO. 3345/DEL/2013 6 DID NOT ACCEPT THE SAME. HENCE, HE MADE THE ADDITI ON OF SHORT TERM CAPITAL GAIN OF RS. 1,44,529/-. 9. UPON ASSESSEES APPEAL LD. CIT(A) DELETED THE AD DITION HOLDING AS UNDER:- REGARDING THE ADDITION OF RS.1,44,529/- ON A/C OF SHORT TERM GAIN ON SALE OF SHARES THE AO HAD IGNORED THE SECOND LETTER ISSUED BY M/S ISF SECURITIES DATED 25.11.2011 REGARDING THE TRANSACTION WITH THE APPEL LANT. THE APPELLANT HAS ALSO SUBMITTED A CONFIRMATION STATEMENT OF ACCOUNT OF THE BROKER AND THE COPY OF DEMAT ACCOUNT TO CORROBORATE THE TRANSACTION. THESE STATEMENT WAS ALSO FILED WITH THE AO AT ASSESSMENT STAGE BUT AO HAD IGNORED ALL THESE FACTS. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO OF RS.1 ,44,529/- IS HE REBY DELETED. 10. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPE AL BEFORE US. 11. LD. DR SUBMITTED THAT ASSESSEE HAS NOT SUBMITT ED COGENT REPLY BEFORE THE AO. ASSESSEE HAS SUBMITTED THE SE COND LETTER ISSUED BY M/S IFS SECURITIES AND CONFIRMATION OF TH E STATEMENT OF ACCOUNT OF THE BROKERS AND COPY OF DMAT ACCOUNT ETC . BEFORE THE LD. CIT(A). IT WAS CONTENDED BEFORE THE LD. CIT(A) THAT THESE SUBMISSIONS WERE FILED BEFORE THE AO AT THE ASSESS MENT STAGE, BUT AO DID NOT IGNORE ALL THESE FACTS. IN THIS VIEW O F THE MATTER, LD. CIT(A) DELETED THE ADDITION OF RS. 1,44,529/-. IN THIS REGARD, LD. DR PLEADED THAT LD. CIT(A) HAS BELIEVED THE SUBMISSIO NS OF THE ASSESSEE WITHOUT CHECKING OUT THE SAME FROM THE AO. IN THESE CIRCUMSTANCES, HE PLEADED THAT THIS ISSUE MAY ALSO BE ITA NO. 3345/DEL/2013 7 REMITTED TO THE FILE OF THE AO TO CONSIDER THE SAME AFRESH. LD. COUNSEL OF THE ASSESSEE RELIED THE ORDER OF THE LD. CIT(A). 12. UPON CAREFUL CONSIDERATION, WE ARE OF THE OPINI ON THAT THIS ISSUE ALSO NEEDS TO BE REMITTED TO THE FILE OF THE AO TO CONSIDER THE ISSUE AFRESH, IN LIGHT OF THE SUBMISSIONS OF THE AS SESSEE BEFORE THE LD. CIT(A). WE HOLD AND DIRECT ACCORDINGLY. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENU E STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/4/2014, UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [R.P. TOLANI R.P. TOLANI R.P. TOLANI R.P. TOLANI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 23/4/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY COPY COPY COPY FORWARDED TO: FORWARDED TO: FORWARDED TO: FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 3345/DEL/2013 8