Shilpa Rohit Thakkar, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-3(4), RAJKOT-GUJARAT

ITA 403/RJT/2013

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5169 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Benefit of exemption
• Section: 54; 54F; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ITA NO.403/RJT/2013 ( / ASSESSMENT YEAR : 009-10) SMT.SHILPA ROHIT THAKKAR 702, GURUPRASAD APPT. B/H. SHIV ICE CREAM RACE COURSE RING ROAD RAJKOT / VS. THE INCOME TAX OFFICER WARD-3(4) RAJKOT ./ ./ PAN/GIR NO. : AABPT 2819 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIMAL DESAI, AR / RESPONDENT BY : SHRI PRAVEEN VERMA, SR.DR / DATE OF HEARING 02/01/2019 !'# / DATE OF PRONOUNCEMENT 01/02/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)III, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-I II/0176/11-12 DATED 22/08/2013 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 29/12/2011 RELEVANT TO ASSESSMENT YEAR (AY) 2009 -10. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THE ORDER U/S.143(3) IS BAD IN LAW. ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 2 - 2. THE LD.ASSESSING OFFICER HAS ERRED IN LAW AS WELL A S ON FACTS IN MAKING ADDITION OF RS.1,40,000/- AS INCOME FROM HOU SE PROPERTY. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE SAID ADD ITION. 3. THE LD. ASSESSING OFFICER HAS ERRED IN LAW AS WELL AS ON FACTS IN MAKING ADDITION OF RS.10,28,919/- BY DENYING THE BE NEFITS OF EXEMPTION U/S.54F. THE LD. CIT(A) HAS ERRED IN CON FIRMING THE SAID ADDITION. 3. THE FIRST ISSUE RAISED BY THE ASSESSEE IS THAT T HE LD.CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER BY TR EATING THE SUM OF RS.1,40,000/- AS INCOME UNDER THE HEAD PROPERTY. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN AN INDIVIDUAL AND DERIVING HER (ASSESSEE) INCOME UNDER THE HEAD SALA RY, CAPITAL GAIN, AND OTHER SOURCES. THE ASSESSING OFFICER DURING THE AS SESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS RECEIVED RENTAL INCOME FROM DHL EXPRESS (INDIA) PVT.LTD. AMOUNTING TO RS.2,00,000/- WHICH WAS NOT DISCLOSED IN THE INCOME-TAX RETURN. THE AO ALSO GOT CONFIRMATIO N FROM DHL EXPRESS (INDIA) PVT.LTD. FOR THE PAYMENT OF RENT TO THE ASS ESSEE OF RS.2,00,000/- U/S 133(6) OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER ADDED THE SUM OF RS.1,40,000/- AFTER ALLOWING THE STATUTORY DEDUC TION OF RS.60,000/- (30% OF RS.2,00,000/-) TO THE TOTAL INCOME OF THE A SSESSEE. 5. THE AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO TH E LD. CIT(A). THE ASSESSEE BEFORE THE LD.CIT(A) SUBMITTED THAT SHE SO LD THE PROPERTY ON 15/05/2008. THE ASSESSEE ALSO CLAIMED THAT THE REN T RECEIVED FOR ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 3 - RS. 2 LAKHS WAS ALSO RETURNED TO DHL EXPRESS (INDIA ) LTD. THEREFORE THERE CANNOT BE ANY ADDITION ON ACCOUNT OF SUCH REN TAL INCOME. 5.1. HOWEVER, THE LD. CIT(A) DISREGARDED THE CONTEN TION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE FAILED TO F URNISH ANY EVIDENCE SUGGESTING THAT THE RENT WAS RETURNED TO M/S DHL EX PRESS (INDIA) PVT.LTD. ACCORDINGLY, THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 6. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. AR BEFORE US FILED A PAPER-BOOK RUNNING FROM PAGE NOS.1 TO 17 AND REITERATED THE SUBMISSIONS AS WERE MADE B EFORE THE AUTHORITIES BELOW. 7.1. THE LD.AR ALSO SUBMITTED THAT THE ASSESSEE HAD NOT TAKEN THE CREDIT OF THE TDS DEDUCTED BY DHL EXPRESS (INDIA) P VT. LTD REGARDING THE RENT PAID TO HER. 8. THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS PER FORM 26AS, THE ASSESSEE HAS RECEIVED THE RENT OF 2 LAKHS FROM DHL EXPRESS (INDIA) PRIVATE LTD IN THE YEAR UNDER ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 4 - CONSIDERATION. HOWEVER, THE ASSESSEE HAS NOT DECLAR ED ANY RENTAL INCOME IN HER RETURN OF INCOME. THE DHL EXPRESS INDIA PRIV ATE LTD ALSO CONFIRMED THIS FACT DURING THE ASSESSMENT PROCEEDIN GS. THEREFORE, THE AO ADDED A SUM OF 1.40 LAKHS AFTER GIVING THE BENEFIT OF STANDARD DE DUCTION UNDER SECTION 24(A) OF THE ACT. 9.1. THE LD. CIT (A) ALSO CONFIRMED THE ORDER OF THE AO BY OBSERVING THAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE SUGGESTING THAT THE RENT RECEIVED FROM DHL EXPRESS INDIA PRIVA TE LTD HAS BEEN RETURNED. 9.2. IT IS AN UNDISPUTED FACT THAT THE PROPERTY FROM WHERE THE ASSESSEE WAS GETTING RENT FROM DHL EXPRESS INDIA PRIVATE LTD WAS SOLD OUT ON 15 TH MAY 2008 AS EVIDENT FROM THE SALE DEED. THE SALE DE ED IS PLACED ON PAGE NO. 75-95 OF THE PAPER BOOK. BUT ON PERUSAL OF THE INCOME TAX RETURN, WE NOTE THAT THE ASSESSEE HAS NOT SHOWN ANY RENTAL INC OME UP TO THE DATE OF SALE OF THE PROPERTY. ON A QUESTION FROM THE BENCH ABOUT THE SAME, THE LD. AR FAILED TO MAKE ANY REPLY TO THIS EFFECT. HOWEVER , THE LD. AR REQUESTED THE BENCH TO RESTORE THIS ISSUE TO THE FILE OF AO F OR FRESH ADJUDICATION/VERIFICATION AS PER THE PROVISIONS OF LAW. 9.3. WE ALSO NOTE THAT THE ASSESSEE HAS NOT FURNI SHED ANY REPLY TO THE LD. CIT (A) TO DEMONSTRATE THAT THE MONEY RECEIVED FROM THE DHL EXPRESS INDIA PRIVATE LTD HAS BEEN RETURNED. THE LD. COUNSE L FOR THE ASSESSEE HAS ALSO NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO PROVE THAT THE MONEY HAS BEEN RETURNED TO DHL EXPRESS INDIA PRIVATE LTD. SIM ILARLY, THERE WAS ALSO ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 5 - NO EVIDENCE FURNISHED BY THE ASSESSEE TO JUSTIFY TH AT THE IMPUGNED RENTAL INCOME HAS BEEN ASSESSED IN THE HANDS OF SOME OTHER PARTY/ASSESSEE. 9.4. THE LD. DR DID NOT RAISE ANY OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF AO FOR FRESH ADJUDICATION AS PER THE PR OVISIONS OF LAW. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY WE ARE INCLINED TO RESTORE THIS ISSUE TO THE FILE OF AO FOR FRESH/ DE NOVO ADJ UDICATION AS PER THE PROVISIONS OF LAW. 9.5. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE D URING THE ASSESSMENT PROCEEDINGS BEFORE THE AO AND FURNISH ALL THE NECES SARY DETAILS IN SUPPORT OF HER CLAIM. IF THE ASSESSEE DOESNT CO-OP ERATE OR FAILED TO FURNISH THE REQUISITE DETAILS, THEN THE MATTER WILL BE DECIDED AGAINST THE ASSESSEE AFTER GIVING THE BENEFIT OF TDS DEDUCTED B Y THE DHL EXPRESS INDIA PRIVATE LTD. 9.6. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. THE NEXT ISSUE RAISED BY THE ASSESSEE IS THAT T HE LD. CIT(A) ERRED IN DENYING THE BENEFIT OF EXEMPTIONS U/S 54 OF THE ACT FOR RS.10,28,919/- ONLY. 11. THE ASSESSEE DURING THE YEAR HAS SHOWN LONG TER M CAPITAL GAIN (LTCG) OF RS.10,28,919/- ONLY WHICH WAS CLAIMED AS DEDUCTION U/S 54F OF THE ACT ON ACCOUNT OF THE INVESTMENT IN THE RESI DENTIAL BUILDING. ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 6 - HOWEVER, THE ASSESSEE FAILED TO FURNISH ANY DOCUMEN TARY EVIDENCE FOR THE INVESTMENT IN THE RESIDENTIAL BUILDING, THEREFORE, THE AO DENIED THE BENEFIT OF DEDUCTION U/S 54 F OF THE ACT CLAIMED BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER MADE THE ADDITIO N OF RS.10,28,919/- TO THE TOTAL INCOME OF THE ASSESSEE. 12. AGGRIEVED ASSESSEE, PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE ASSESSEE BEFORE THE LD.CIT(A) SUBMITTED THAT SH E HAD PURCHASED FOUR PLOTS FOR A CONSIDERATION OF RS.16 LAKHS. THE ASSE SSEE FURTHER SUBMITTED THAT SHE HAD INCURRED A COST OF RS. 98,800/- ON THE CONSTRUCTION OF ONE ROOM ON SUCH PLOTS. THE ASSESSEE IN SUPPORT OF HER CLAIM FILED THE COPY OF THE BILL ISSUED BY S.K. BUILDERS. 12.1. HOWEVER, THE LD.CIT(A) DISREGARDED THE CONTEN TION OF THE ASSESSEE BY OBSERVING THAT CONSTRUCTION OF ONE ROOM CANNOT BE EQUIVALENT TO THE NEW RESIDENTIAL HOUSE. THEREFORE, THE LD. C IT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 13. BEING AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 14. THE LD.AR DREW OUR ATTENTION TOWARDS PAGE NO.15 OF THE PAPER- BOOK, WHERE EVIDENCE OF CONSTRUCTION OF ONE ROOM WA S PLACED IN THE FORM OF THE CONSTRUCTION BILL ISSUED BY S.K. BUILDERS. THE LD.AR ALSO FILED A CERTIFICATE DATED 05/07/2013 ISSUED BY VIBHAPUR GRA M PANCHAYAT ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 7 - EVIDENCING THE CONSTRUCTION OF RESIDENTIAL HOUSE PR OPERTY WHICH IS PLACED ON PAGE NO.16 OF THE PAPER-BOOK. 15. ON THE OTHER HAND, THE LD.DR SUBMITTED THAT THE CONSTRUCTION OF ONE ROOM COULD NOT BE REGARDED AS THE CONSTRUCTION OF THE HOUSE. ACCORDINGLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE HAS SOLD A PLOT O F LAND DATED 02/02/2009 FOR CONSIDERATION OF 16 LAKHS AND EARNED A LONG-TERM CAPITAL GAIN INCOME OF 12,18,418.00. 16.1. THE ASSESSEE FURTHER PURCHASED 4 PIECES OF LAND AT GREEN WOODS BEARING PLOT NUMBERS 4, 5, 8 AND 9 VIDE PURCHASE AG REEMENT DATED 31 ST JANUARY 2009 AND 31 ST MARCH 2009 FOR RS. 16,21,500.00. THE ASSESSEE SUBSEQUENTLY CONSTRUCTED ONE SMALL ROOM IN THE CORN ER OF THESE PLOTS DURING THE YEAR 2009-10 AS EVIDENT FROM THE COPY OF THE BILL PLACED ON PAGE 15 OF THE PAPER BOOK-I. THE ASSESSEE IN SUPPOR T OF HER CONTENTION FOR THE CONSTRUCTION OF THE SMALL ROOM FILED THE CO PY OF THE INVOICE ISSUED BY SK BUILDERS OF 98,800/- ONLY ISSUED DURING THE FY 2009-10. 16.2. NOW THE CONTROVERSY BEFORE US ARISES WHET HER THE CONSTRUCTION OF THE SMALL ROOM IN ONE CORNER OF THESE PLOTS AMOUNTS TO THE CONSTRUCTION OF THE NEW RESIDENTIAL HOUSE AS CONTEMPLATED UNDER THE PROVISIONS OF SECTION 54F OF THE ACT. IN THIS REGARD, WE FIND THAT THE OB JECT OF SECTION 54F OF ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 8 - THE ACT IS TO EXTEND THE BENEFIT FOR THE CONSTRUCTI ON OF THE HOUSE. THUS MERE CONSTRUCTION OF A ROOM ON 4 PIECES OF PLOTS DO ES NOT ENTITLE THE BENEFIT TO THE ASSESSEE UNDER SECTION 54F OF THE AC T. IN THIS CONNECTION WE FIND SUPPORT & GUIDANCE FROM THE ORDER OF THE LU CKNOW TRIBUNAL IN CASE OF RITA GAUR (90 ITD 24) WHEREIN IT WAS HELD A S UNDER: THE VERY INTENTION OF THE LEGISLATURE IS THAT BENE FIT CAN BE EXTENDED ONLY WHEN ASSESSEE IS ABLE TO PROVE ON RECORD THAT HE HAS CONSTRUCTED A RESIDENTIAL HOUSE. HERE IN THE CASE IN HAND, THE AS SESSEE HAS NOT BEEN ABLE TO PROVE THAT MERE CONSTRUCTION OF BOUNDARY WA LL, INSTALLATION OF TUBE-WELL AND EVEN CONSTRUCTION OF ONE ROOM WILL NO T BE TAKEN AS CONSTRUCTION OF RESIDENTIAL BUILDING AND BENEFIT UN DER SECTION 54F OF THE ACT CANNOT BE GIVEN TO THE ASSESSEE. 16.3. WE ALSO NOTE THAT THE ASSESSEE MADE THE INV ESTMENT IN FOUR DIFFERENT PLOTS. BUT ONE SMALL ROOM WAS CONSTRUCTED IN ONE CORNER WHICH TRANSPIRES THAT IT HAS BEEN CONSTRUCTED ONLY ON ONE PIECE OF PLOT. THUS THE QUESTION ARISES WHETHER THE INVESTMENT IN ONE PLOT SHOULD BE CONSIDERED FOR DEDUCTION UNDER SECTION 54F OF THE ACT IN RESPE CT OF INVESTMENT ALL THE PLOTS. 16.4. IT ALSO APPEARS THAT THE ASSESSEE HAS MADE INVESTMENTS SUBSTANTIALLY IN THE PLOTS OF LAND. THERE IS NO AMB IGUITY THAT THE BENEFIT TO THE ASSESSEE UNDER SECTION 54F OF THE ACT IS AVAILA BLE ONLY FOR THE PURPOSE OF THE CONSTRUCTION OF THE HOUSE. THERE IS NO INTENTION OF THE LAW TO EXTEND THE BENEFIT TO THE ASSESSEE UNDER SECTION 54F OF THE ACT IF SHE INVESTS IN THE PLOTS. ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 9 - 16.5. WE ALSO NOTE THAT THE ASSESSEE HAS PURCHAS ED FOUR PLOTS BEARING DIFFERENT NUMBERS. BUT FROM THE PLOT NUMBERS, IT AP PEARS THAT TWO PLOTS ARE ADJACENT TO EACH OTHER SUCH AS 4 AND 5 NO. OF P LOTS. SIMILARLY, THE SAME LOGIC APPLIES TO THE PLOT NUMBERS 8 AND 9 ALSO . HOWEVER, THE QUESTION ARISES WHETHER THE PLOT NOS. 4, 5 AND 8, 9 ARE ADJACENT TO EACH OTHER. IF THESE ARE ADJACENT TO EACH OTHER THAN TO OUR MIND, ALL THE PLOTS CAN BE TREATED AS ONE UNIT FOR THE PURPOSE OF CLAIM ING THE DEDUCTION UNDER SECTION 54F OF THE ACT. BUT IN THE PRESENT CASE IF THESE PLOTS ARE NOT ADJACENT TO EACH OTHER THEN THE QUESTION ARISES WHE THER THESE PLOTS CAN BE COMBINED TOGETHER TO GIVE BENEFIT UNDER SECTION 54F OF THE ACT. HOWEVER, THIS ISSUE WAS NOT RAISED BEFORE THE LOWER AUTHORITIES, THEREFORE, WE RESTRAIN OURSELVES FROM ADJUDICATING THE SAME AN D KEEP THE ISSUE OPEN. 16.6. IN VIEW OF THE ABOVE, WE ARE NOT INCLINED TO DISTURB THE FINDING OF THE LOWER AUTHORITIES. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 17. IN THE RESULT, THE APPEAL RAISED BY THE ASSE SSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 01/02/2019 SD/- SD/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 01/02/2019 &.., .(../ T.C. NAIR, SR. PS ITA NO.403/RJT/2013 SHILPA ROHIT THAKKAR VS. ITO ASST .YEAR - 2009-10 - 10 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-III, RAJKOT 5. 012 ((*+ , *+# , !& /DR,ITAT, RAJKOT 6. 2=> ? / GUARD FILE. / BY ORDER, 0 ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) $%, !& / ITAT, RAJKOT 1. DATE OF DICTATION .. 16.1.2019(DICTATION-PAD 11- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16/18.1.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.01.02.2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 01.02.2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER