DCIT, New Delhi V. Dr. Daljeet Singh Gambhir, Noida

ITA 3791/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6968 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 13-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Capital Gains
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 54F; 142(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI J. S. REDDY, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A. NO. 3791/DEL/2013 (ASSESSMENT YEAR 2009-10) APPELLANT BY : SH. ANIL KUMAR SHARMA, SR. DR.. RESPONDENT BY : SH. P. K. CHAUDHARY, CA DATE OF HEARING : 10.01.2017 DATE OF PRONOUNCEMENT: 24.01.2017 ORDER PER BEENA A. PILLAI, JM: 1. THE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINS T ORDER DATED 30.03.2013 PASSED BY LD. CIT (A) 28, NE W DELHI FOR ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUND S OF APPEAL: GROUNDS OF APPEAL 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD . CIT(A) GROSSLY ERRED IN ALLOWING DEDUCTION CLAIMED BY THE ASSESSEE U/S54F OF IT ACT, 1961 OF RS.70,24,934 /- NOT APPRECIATING THE FACT THE ASSESSEE HAD NOT DCIT CIRCLE 37 (1) NEW DELHI (APPELLANT) VS. DALJEET SINGH GAMBHIR H. NO. 472, SECTOR-15A NOIDA. GIR/PAN : AEKPK3363A (RESPONDENT) ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 2 OF 9 CONSTRUCTED A RESIDENTIAL HOUSE WITHIN THREE YEARS FROM THE DATE OF TRANSFER OF THE ORIGINAL ASSET WHICH IS A NECESSARY CONDITION FOR CLAIMING DEDUCTION U/S54F O F IT ACT., 1961. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) GROSSLY ERRED IN ALLOWING DEDUCTION CLAIMED BY THE ASSESSEE U/S 54F OF IT ACT., 1961 OF RS.70,24,9 34/- NOT APPRECIATING THE FACT THE AO HAD CONDUCTED PHYS ICAL INSPECTION BY THE INSPECTOR AND HAD NOTICED THAT TH E ASSESSEE HAD NOT CONSTRUCTED A RESIDENTIAL HOUSE WI THIN THREE YEARS FROM THE DATE OF TRANSFER OF THE ORIGIN AL ASSET WHICH IS A NECESSARY CONDITION FOR CLAIMING DEDUCTION U/S 54F OF IT ACT., 1961. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT (A) GROSSLY ERRED IN ALLOWING DEDUCTION CLAIMED BY THE ASSESSEE U/S54F OF IT ACT., 1961 OF RS.70,24,93 4/- NOT APPRECIATING THE FACT THE ASSESSEE HAD NOT DISC LOSED INCOME EARNED FROM 'LONG TERM CAPITAL GAINS' IN THE RETURN OF INCOME AND IT WAS ONLY DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSEE HAD MADE A CLAIM FOR DEDUCTION U/S 54F OF IT. ACT., 1961 AND ALSO DI D NOT FULFILL THE NECESSARY CONDITIONS LAID DOWN IN THE PROVISIONS OF 54F OF IT.ACT.,1961. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) GROSSLY ERRED IN ALLOWING DEDUCTION CLAIMED BY ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 3 OF 9 THE ASSESSEE U/S54F OF IT ACT., 1961 OF RS.70,24,93 4/- NOT APPRECIATING THE FACT THE ASSESSEE HAD NOT DISC LOSED INCOME EARNED FROM 'LONG TERM CAPITAL GAINS' IN THE RETURN OF INCOME AND IT WAS ONLY THROUGH AIR INFORMATION THAT THE SAID TRANSACTION CAME TO THE N OTICE OF THE DEPARTMENT. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR MO DIFY THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF THE APPEAL. 2. ASSESSEE IS A CARDIOLOGIST EARNING INCOME FROM HOU SE PROPERTY, PROFIT AND GAINS OF PROFESSION AND OTHER SOURCES. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE FILED ITS RETURN OF INCOME ON 04.10.2009, DECLARING A TOTAL INCOME O F RS. 93,28,625/-. THE CASE WAS PICKED UP FOR SCRUTINY AN D NOTICES UNDER SECTION 143(2) AND QUESTIONNAIRE ALONGWITH NO TICE UNDER SECTION 142(1) WAS ISSUED AND SERVED UPON ASS ESSEE. IN VIEW OF THE NOTICES REPRESENTATIVES OF ASSESSEE APPEARED BEFORE ASSESSING OFFICER AND FILED ALL RELEVANT DET AILS AS CALLED FOR. 3. DURING THE YEAR UNDER CONSIDERATION ASSESSING OFFI CER OBSERVED THAT ASSESSEE HAS SOLD PLOT NO. 5/1214, GH AZIABAD ON 27.10.2008 FOR A CONSIDERATION OF RS. 78, 00, 00 0/-. IT WAS SUBMITTED THAT ASSESSEE INVESTED A SUM OF RS. 81, 5 2, 000/- IN PURCHASE OF A RESIDENTIAL PLOT AT D75, SECTOR 47 , NOIDA, VIDE PURCHASE AGREEMENT DATED 25.11.2009. AS PURCHA SE ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 4 OF 9 PRICE OF THE RESIDENTIAL PLOT WAS MORE THAN THE SAL E PRICE, THE CAPITAL GAINS IN SALE OF RESIDENTIAL PLOT WAS NOT D ECLARED IN THE RETURN FOR THE YEAR UNDER CONSIDERATION. IT HAS BEE N SUBMITTED THAT ASSESSEE HAS HOWEVER DECLARED THE PA RTICULARS OF PURCHASE AND SALE OF THE PLOT IN AIR SECTION OF THE RETURN WHICH IS ANNEXED TO THE PAPER BOOK AT PAGE 1. ASSES SEE HAD SUBMITTED THAT CONSTRUCTION OF RESIDENTIAL HOUSE ON THE SAID RESIDENTIAL PLOT WAS COMPLETED ON 3.11.2010 THEREBY ASSESSEE HAD COMPLIED WITH REQUIREMENTS FOR CLAIMING EXEMPTI ON UNDER SECTION 54F OF THE ACT. ASSESSEE IN ORDER TO ESTABLISH HIS CLAIM SUBMITTED VARIOUS SANCTIONS/APPROVALS BEF ORE ASSESSING OFFICER. LD. AO REJECTED THESE DOCUMENTS AS THOSE WERE MERELY LETTERS FOR OBTAINING THE SANCTION/APPR OVAL, BUT IT WAS NOT CLEAR THAT THE BUILDING HAS BEEN CONSTRUCTE D AND WAS FIT FOR HABITATION. ASSESSING OFFICER ACCORDINGLY D ISALLOWED THE CLAIM OF ASSESSEE. 4. AGGRIEVED BY THE ORDER PASSED BY LD. AO, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO ALLO WED THE CLAIM OF ASSESSEE UNDER SECTION 54 F. AGGRIEVED BY ORDER OF LD. CIT (A), REVENUE IS IN APPEAL BEFORE US NOW. 5. LD. DR SUBMITTED THAT ASSESSEE HAS CONSTRUCTED STRUCTURE WITHOUT ANY ELECTRICITY AND WATER CONNECT ION, WHICH CANNOT BE CONSIDERED TO BE FIT FOR OCCUPATION. HE R EFERRED TO REPORT SUBMITTED BY INSPECTOR, WHEREIN IT HAS BEEN MENITIONED THAT STRUCTURE CONSTRUCTED BY ASSESSEE D OES NOT ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 5 OF 9 FULFILL ANY REQUIREMENT OF A RESIDENTIAL HOUSE DUE TO NON EVAILABILITY OF ELECTRICITY AND WATER SUPPLY. LD. A R PLACED RELIANCE UPON THE COMPLETION CERTIFICATE WHICH HAS BEEN ISSUED BY THE AUTHORITY AS ON 23.12.2011 WHICH IS B EYOND THE PERIOD OF 3 YEARS. HE FURTHER REFERRED TO AND RELIE D UPON THE FINDINGS OF THE ASSESSING OFFICER WHICH HAS BEEN RE FERRED TO IN PARA 10 OF THE LD. CIT (A) ORDER. 6. ON CONTRARY LD. AR SUBMITTED THAT ASSESSEE PURCHAS ED PLOT ON 25.02.2009 ON WHICH HE STARTED CONSTRUCTING RESIDENTIAL HOUSE. HE APPLIED FOR COMPLETION CERTIF ICATE ON 03.11.2010. HE SUBMITTED THAT MANDATE FOR CLAIMING EXEMPTION UNDER SECTION 54F IS THAT A RESIDENTIAL H OUSE HAS TO BE CONSTRUCTED WITHIN 3 YEARS FROM THE DATE OF T RANSFER OF CAPITAL ASSET. ACCORDING TO ASSESSEE 3 YEARS EXPIRE D ON 27.10.2011, BEFORE WHICH THE ASSESSEE HAD ALREADY C OMPLETED THE CONSTRUCTION OF RESIDENTIAL HOUSE WHICH IS THE REQUIREMENT U/S 54F. HE SUBMITTED THAT NOIDA AUTHOR ITIES BEING REGULATING AND CONTROLLING AUTHORITY FOR ALL PROPERTIES IN NOIDA, AND ISSUED COMPLETION CERTIFICATE ON 23.12.2 011. HE SUBMITTED THAT ASSESSING OFFICER PROCEEDED ON WRONG PRESUMPTION THAT IN THE ABSENCE OF ELECTRICITY AND WATER CONNECTION THE RESIDENTIAL HOUSE WAS INCOMPLETE AND INHABITABLE, WHICH IS NOT REQUIRED FOR CLAIMING EXE MPTION UNDER SECTION 54F. LD. AR SUBMITTED THAT EXEMPTION UNDER SECTION 54F CANNOT BE DENIED TO ASSESSEE, AS HE HAS NOT VIOLATED ANY OF THE CONDITIONS U/S 54F. ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 6 OF 9 7. WE HAVE PERUSED RECORDS IN THE LIGHT OF THE SUBMIS SIONS ADVANCED BY BOTH THE PARTIES BEFORE US. 8. IT IS OBSERVED FROM THE RECORDS THAT THE ASSESSEE HAD SOLD THE PLOT FOR RS. 78 LAKHS ON 27.10.2008 AND A SUBSEQUENT INVESTMENT IN THE RESIDENTIAL PLOT IN SE CTOR 47, NOIDA, WAS MADE ON 25.11.2009, AMOUNTING TO RS.81,52,000/-. ASSESSEE CONSTRUCTED RESIDENTIAL HO USE ON THE SAID PLOT. ASSESSING OFFICER DISALLOWED EXEMPTI ON CLAIMED BY ASSESSEE UNDER SECTION 54F ON THE GROUND THAT AS SESSEE HAD NOT COMPLETE OF CONSTRUCTION WITHIN 3 YEARS AS REQUIRED UNDER SECTION 54F. IT IS AN ADMITTED FACT BY LD. AR THAT DURING THE RELEVANT FINANCIAL YEAR THERE WAS NO ELE CTRICITY CONNECTION IN THE CONSTRUCTED RESIDENTIAL HOUSE. FR OM THE ORDER PASSED BY LD. CIT (A), IT IS OBSERVED THAT AN INSPECTOR OF THE CIRCLE WAS DEPUTED TO VISIT SITE FOR PHYSICAL I NSPECTION ON 11.11.2011 WHOSE REPORT WAS PLACED ON RECORD. IN TH E REPORT, INSPECTOR STATED THAT, A STRUCTURE IS THERE ON THE PLOT WHICH LOOKS INHABITABLE AND LOOKS OLD. 9. IN THE PAPER BOOK ASSESSEE HAS RELIED UPON LETTER DATED 17.10.2011 WHICH IS ACCOMPANIED BY A DULY ATTESTED DRAWING OF THE COMPLETED HOUSE, CONSISTING OF 3 BEDROOMS, K ITCHEN AND TOILETS ALONG WITH A DRAWING/DINING ROOM COVERI NG AND NEEDY OF 1200 FT. AS REGARDS THE REPEATED ALLEGATIO N OF ASSESSING OFFICER THAT NO WATER/ELECTRICITY CONNECT IONS WERE AVAILABLE AT SITE, THERE IS A MENTION REGARDING A S TRUCTURE ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 7 OF 9 EXISTING ON THE PLOT BY THE INSPECTOR IN HIS REPORT . TO OUR MIND NO STRUCTURE COULD BE CONSTRUCTED WITHOUT WATE R. 10. IT HAS BEEN SUBMITTED BY LD. AR THAT ASSESSEE HAD INSTALLED UNDERGROUND HAND WATER PUMP, WHICH WAS RE ADILY AVAILABLE. 11. FURTHER CERTIFICATE ISSUED BY NOIDA AUTHORITY ENSU RE THAT CONSTRUCTION HAS BEEN MADE AS PER THE APPROVED DRAWING. REGARDING ELECTRICITY CONNECTION, SECTION 54F MANDATES THAT A RESIDENTIAL HOUSE HAS TO BE CONSTRU CTED WITH THE INTENTION OF OCCUPATION BY THE ASSESSEE. IT DOE S NOT REQUIRE THE ASSESSEE TO ACTUALLY OCCUPY THE HOUSE W ITHIN THE PERIOD OF 3 YEARS FROM THE DATE OF THE TRANSFER OF CAPITAL ASSET. HENCE, IN SUCH CIRCUMSTANCES THE CONSUMPTION OF ELE CTRICITY IS SUBJECT TO ACTUAL OCCUPATION. ASSESSING OFFICER HAS DENIED THE EXEMPTION UNDER SECTION 54F ONLY ON THE GROUND THAT THE HOUSE IS NOT COMPLETE WITHOUT WATER AND ELECTRICITY CONNECTION. 12. IT IS FURTHER BEEN OBSERVED BY LD. CIT (A) THAT A SERVANT QUARTER WAS ALSO CONSTRUCTED AND A CHAUKIDAR WAS ST AYING THERE. WE HAVE PERUSED THE DECISION RELIED UPON BY THE ASSESSING OFFICER IN THE CASE OF RAJESH SURANA VS. CIT REPORTED IN 306 ITR 368. THE FACTS THEREIN ARE DISTINGUISHAB LE BECAUSE ASSESSEE THEREIN HAD MADE ADMISSION REGARDING A GAR AGE COME ROOM WITHOUT ANY KITCHEN AND TOILET BEING CONS TRUCTED. LD. CIT (A) HAS DECIDED THE ISSUE AS UNDER: ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 8 OF 9 3. I HAVE CONSIDERED THE GROUNDS RAISED IN APPEAL AND THE SUBMISSIONS OF THE AR OF THE APPELLANT. THE AR OF THE APPELLANT HAS STATED COMPLETE FACTS O N THE BASIS OF WHICH IT CAN BE PROVED THAT THE CONSTRUCTI ONS OF THE SAID HOUSE WAS COMPLETED WITHIN THE STATUTORY T IME LIMIT AND THE APPELLANT IS ELIGIBLE FOR CLAIMING EX EMPTION U/S 54F. THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER HAS BEEN DISTINGUISHED ON FACTS BY THE APPE LLANT. IT IS SEEN THAT THE APPELLANT SUBMITTED DOCUMENTS RELATING TO COMPLETION OF RESIDENTIAL HOUSE BEFORE THE ASSESSING OFFICER. THESE DOCUMENTS WERE FILED ON 3.11.2010 WITH NOIDA AUTHORITY, THE STATUTORY BODY OF THE UP GOVERNMENT WHICH DECIDES WHETHER A RESIDENTI AL HOUSE IS FIT AND COMPLETE FOR OCCUPATION IN THE NOI DA AREA. THIS MEANS THAT THE CONSTRUCTION OF THE RESID ENTIAL HOUSE WAS COMPLETED BY THAT DATE. THE FINAL COMPLETION/OCCUPATION CERTIFICATE ISSUED BY THE NOI DA AUTHORITY IS ON THE BASIS OF THE COMPLETION DOCUMEN TS SUBMITTED TO THE AUTHORITY BY THE APPELLANT ON 03.11.2010. IT IS APPARENT THAT THE FINAL COMPLETIO N PLAN APPROVED BY THE NOIDA AUTHORITY IS SAME AS SUBMITTE D BY THE APPELLANT FOR COMPLETION OF THE HOUSE ON 03.11.2010. AND THESE DOCUMENTS WERE FILED BY THE APPELLANT WITH THE ASSESSING OFFICER ON 07.10.2011. HENCE IT IS AN ESTABLISHED FACTS THAT THE SAID HOUS E UPON WHICH EXEMPTION U/S 54F HAS BEEN CLAIMED, WAS CONSTRUCTED WITHIN THE STATUTORY TIME LIMIT FOR BEI NG ELIGIBLE TO CLAIM THE SAID EXEMPTION. ACCORDING TO ME THE APPELLANT HAS CASE FOR GETTING THE CLAIM ALLOWED. I N THE CIRCUMSTANCES THE DISALLOWANCE OF THE CLAIM OF RS.70,24,934/-IS DELETED. THE GROUNDS RAISED IN APP EAL ARE ALLOWED. ITA NO. 3791/DEL/2013 (AY 2009-10) PAGE 9 OF 9 13. WE DO NOT FIND ANY INFIRMITY IN THE ABOVE FINDINGS OF LD. CIT (A) AND UPHOLD THE SAME. ACCORDINGLY GROUNDS RA ISED BY THE REVENUE STANDS DISMISSED. IN THE RESULT APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY, 2017. SD/- SD/- (J. S.REDDY) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 24.01.2017 @M!T COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI)