Mr. Gulshan Arora, New Delhi V. ACIT, Gurgaon

ITA 364/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0206 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 23-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S N MEENA
• Section: 64; 13; 54

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER SHRI N.K. BILLAIYA, ACCOUNTANT MEMBE R ITA NO. 364/DEL/2017 [A.Y 2013-14] SHRI GULSHAN ARORA VS. THE A.C.I.T C/O ATUL PURI & COMPANY CIRCLE 1(1) 121, SHANKAR ROAD MARKET GURGAON NEW DELHI PAN: ACOPA 5803 G (APPLICANT) ( RESPONDENT) ASSESSEE BY : SHRI ATUL PUR I, CA DEPARTMENT BY : SHRI S.N. MEENA, SR. DR DATE OF HEARING : 19.12.2019 DATE OF PRONOUNCEMENT : .12.2019 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] 1, GURGAON D ATED 02.12.2016 PERTAINING TO ASSESSMENT YEAR 2013-14. 2 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LD. CIT(A) ERRED IN DENYING FULL EXEMPTION U/S 54 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'] IN RESPECT O F CAPITAL GAIN DERIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION . 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED HIS RETURN OF INCOME ON 24.06.2013 DECLARING TAXABL E INCOME OF RS. 36.76 LAKHS. RETURN WAS SELECTED FOR SCRUTINY ASSE SSMENT THROUGH CASS AND, ACCORDINGLY, STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THERE IS LONG TERM C APITAL GAIN OF RS. 62.07 LAKHS, WHICH THE ASSESSEE HAS CLAIMED AS EXEM PT U/S 54 OF THE ACT. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS IN RESPECT OF THE CLAIM OF EXEMPTION U/S 54 OF THE ACT. 4. THE ASSESSEE EXPLAINED THE DETAILS BY FURNISHING THE FOLLOWING CHART: S.NO. REINVESTMENT -PURCHASE COST COST TYPE FY DOCUMENT ATTACHED PAGE NO 1 7,60,000 BUILDER COST SEP - 09 BUILDER RECEIPT 84 2 3,70,825 BUILDER COST FEB - 10 BUILDER RECEIPT 85 3 3 1,27,475 BUILDER COST APR - 10 BUILDER RECEIPT 86 4 10,52,850 BUILDER COST APR - 10 BUILDER RECEIPT 87 5 2,25,000 BUILDER COST MAY - 10 BUILDER RECEIPT 88 6 947467=00 BUILDER COST JUN - 11 BUILDER RECEIPT 50 - SUBMITTED DATED 18.01.2016 7 1065016=0 BUILDER COST JUL - 11 BUILDER RECEIPT 51 - SUBMITTED DATED 18.01.201 18 940537=0 .... ... . BUILDER COST SEP - 11 BUILDER RECEIPT 52 - SUBMITTED DATED 18.01.2016 9 1017185=00 BUILDER COST NOV - 11 BUILDER RECEIPT 53 - SUBMITTED DATED 18.01.2016 10 817185=00 BUILDER COST JAN - 12 BUILDER RECEIPT 54 - SUBMITTED DATED 18.01.2016 11 200000=00 BUILDER COST JAN - 12 BUILDER RECEIPT 55 - SUBMITTED DATED 18.01.2016 12 182585=00 BUILDER COST MAY - 12 BUILDER RECEIPT 56 - SUBMITTED DATED 18.01.2016 13 51545=00 BUILDER COST JUN - 12 BUILDER RECEIPT 57 - SUBMITTED DATED 18.01.2016 14 764567=00 BUILDER COST MAR - 13 BUILDER RECEIPT 58 - SUBMITTED DATED 18.01.2016 15 382284=00 BUILDER COST MAY - 13 BUILDER RECEIPT 59 - SUBMITTED DATED 18.01.2016 4 / 51545=00 BUILDER COST MAY - 13 BUILDER RECEIPT 60 - SUBMITTED DATED 18.01.2016 SUB TOTAL 89,56,066 (6419916) *DECLARE D AS IN RETURN FY 2012-13 17 800998 BUILDER COST JAN - 15 BUILDER RECEIPT 61 - 64 SUBMITTED DATED 18.01.2016 GRAND TOTAL 97,57,064=00 5. AFTER PERUSING THE DETAILS FURNISHED BY THE ASSE SSEE, THE ASSESSING OFFICER OBSERVED THAT AGREEMENT FOR PURCH ASE HAS BEEN AGREED UPON BY THE ASSESSEE WITH THE BUILDER ON 24. 09.2009 WHICH IS TWO YEARS 10 MONTHS PRIOR TO THE TRANSFER OF THE OR IGINAL ASSET. REFERRING TO THE PROVISIONS OF SECTION 54 OF THE AC T, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE IS NOT ELIGIBLE FOR CLAIM OF DEDUCTION AS HE HAS ENTERED INTO AN AGREEMENT WITH THE BUILDER ON 24.09.2009, WHICH IS PRIOR TO ONE YEAR BEFORE THE T RANSFER OF ORIGINAL ASSET I.E. 28.07.2012. 6. THE ASSESSEE STRONGLY CONTENDED THAT AGREEMENT W ITH THE BUILDER MAY BE TREATED AS AN AGREEMENT FOR CONSTRUCTION AND CLAIM FOR DEDUCTION U/S 54 OF THE ACT BE ALLOWED SINCE THE AS SESSEE HAS 5 CONSTRUCTED PROPERTY WITHIN THREE YEARS FROM THE DA TE OF TRANSFER OF ORIGINAL ASSET. 7. THE ASSESSING OFFICER PARTLY ACCEPTED THE CLAIM OF THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER OBSERVED THAT THE CL AIM OF THE ASSESSEE SHALL ONLY BE RESTRICTED TO THE AMOUNT OF INVESTMEN T/INSTALMENTS MADE AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET I.E. 2 8.07.2012. THE ASSESSING OFFICER, ACCORDINGLY, DISALLOWED THE CLAI M OF EXEMPTION OF THE ASSESSEE U/S 54 OF THE ACT TO THE EXTENT OF RS. 50.08 LAKHS. 8. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 9. WHILE DISMISSING THE APPEAL OF THE ASSESSEE, THE LD. CIT(A) OBSERVED THAT SINCE THE ASSESSEE HAS FILED HIS RETU RN OF INCOME ON 24.06.2013, THE AMOUNT UTILISED BY HIM TOWARDS CONS TRUCTION OF HOUSE TILL THAT DATE ONLY CAN BE ALLOWED AS DEDUCTION U/S 54 OF THE ACT. THE LD. CIT(A) FOUND THAT THIS AMOUNT HAS ALREADY BEEN ALLOWED BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSMENT WAS C ONFIRMED. 6 10. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEH EMENTLY STATED THAT SINCE MORE THAN 50% OF THE COST OF THE NEW ASS ET WAS ALREADY INVESTED BY THE ASSESSEE TOWARDS NEW ASSET SINCE TH E DATE OF AGREEMENT WITH THE BUILDER I.E. SEPTEMBER 2009, THE SAME IS ALSO ELIGIBLE FOR CLAIM OF DEDUCTION U/S 54 OF THE ACT. 11. STRONG RELIANCE WAS PLACED ON THE DECISION OF T HE HON'BLE HIGH COURT OF DELHI IN THE CASE OF BHARTI MISHRA 567/201 3. IT IS THE SAY OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE DURING CONSTRUCTION OF THE FLAT, THE ASSESSEE HAS INVESTED ENTIRE PROCEEDS FRO M SALE OF OLD ASSET, THE ASSESSEE IS VERY MUCH ELIGIBLE FOR CLAIM OF EXE MPTION U/S 54 OF THE ACT. 12. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE F INDINGS OF THE ASSESSING OFFICER. 13. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE O RDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE FLAT WAS SOLD ON 28.07.2012 WHEREAS THE ASSESSEE HAS STARTED GIVING INSTALMENTS TO THE BUILDER SINCE SEPTEMBER 2009, WHICH IS PRIOR TO ONE YEAR FROM THE DATE OF TRANSFER OF THE ASSET. IT IS ALSO NOT IN DISPUT E THAT THE ASSESSEE FILED 7 HIS RETURN OF INCOME ON 24.06.2013. IN OUR CONSIDE RED OPINION, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54 OF THE AC T FOR THE INSTALMENTS PAID PRIOR TO ONE YEAR FROM THE DATE OF SALE OF ASS ET WHICH IS 28.07.20120 AND, ACCORDINGLY, THE ASSESSEE IS ENTIT LED FOR BENEFIT OF INSTALMENTS PAID ON AND AFTER 28.07.2011. THE FIND INGS OF THE LD. CIT(A) ARE, ACCORDINGLY, MODIFIED AND THE GROUND RA ISED BY THE ASSESSEE IS PARTLY ALLOWED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO. 364/DEL/2017 IS PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.12 .2019. SD/- SD/- [SUSHMA CHOWLA ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31 ST DECEMBER, 2019 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 8 ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER