ACIT, New Delhi V. Sh. Ashok Alexander, New Delhi

ITA 4063/DEL/2011

• Counselvise Citation: 406320114 RSA 2011
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-06-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 06-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Assessee Lawyers: SANJIV CHAUDHARY
• Keywords: Unexplained cash credit; Deduction for capital gain; Gift
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI T.S. KAPOOR ITA NO. 4063/DEL/11 A.YR. 2004-05 ACIT, CIR. 43(1), VS. SHRI ASHOK ALEXANDER, NEW DELHI. 26, SULTANPUR ESTATE, MANDI ROAD, NEW DELHI-30. PAN: AAJPA5919M ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : MRS. ANUSHA KHURANA SR. DR RESPONDENT BY : SHRI SANJIV CHAUDHARY CA O R D E R PER R.P. TOLANI, J.M: : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DA TED 21-6-2011 RELATING TO A.YR. 2004-05. FOLLOWING GROUNDS ARE RA ISED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN: (I) THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN D ELETING THE ADDITION OF RS. 3,26,690/- MADE BY THE AO AS INCOM E FROM UNDISCLOSED SOURCES. (II) THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 29,20,228/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAIN BY DISALLOWING THE EXEMPTION CLAIMED BY THE ASSESSEE U /S 54 OF THE I.T. ACT. 2. BRIEF FACTS ARE: THE ASSESSEE WAS AN EMPLOYEE OF BILL AND MILINDA GATES FOUNDATION, USA (BMGF ), USA AND WAS APPOIN TED TO WORK WITH THE LIAISON OFFICE OF BMGF, NEW DELHI AS DIRECTOR I N ITS INDIA AIDS INITIATIVE PROGRAM. ASSESSEE COULD NOT FILE HIS RET URN OF INCOME WITHIN TIME 2 PRESCRIBED BY SECTIONS 139(1)/139(4), HOWEVER, AFTE R THE LAPSE OF TIME THE RELEVANT INCOME WAS OFFERED FOR TAX BY WAY OF PAYIN G THE CHALLAN & TDS. FURTHER A LETTER WAS WRITTEN TO THE AO INDICATING T HIS FACT AND ACCOMPANYING TDS CERTIFICATE AND PAYMENT OF REMAINDER OF TAX. ON THIS BASIS, ASSESSING OFFICER INITIATED PROCEEDINGS U/S 148, ASKING THE ASSESSEE TO FILE A RETURN OF INCOME, WHICH WAS DULY FILED. THE ASSESSING OFFICER MADE THE ABOVE TWO ADDITIONS TO THE INCOME OF THE ASSESSEE, WHICH HAVE BEEN DELETED BY THE CIT(A). 3. DURING THE COURSE OF APPELLATE PROCEEDINGS CIT( A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER WHICH IS ALSO CONSIDERED IN HIS ORDER. FACTS ABOUT FIRST GROUND ARE THAT ASSESSEES WIFE AND SON RECEIVED GIFTS FROM ASSESSEES FATHER-IN-LAW. THEY WERE CREDITED I N A JOINT A/C OF ASSESSEE AND HIS WIFE. ASSESSING OFFICER , HOWEVER, HELD IT TO BE UNEXPLAINED CASH CREDITS OF THE ASSESSEE U/S 68. CIT(A) OBSERVED TH AT THE BANK A/C IN QUESTION IN WHICH THESE GIFTS WERE CREDITED, WAS ACTUALLY A JOINT ACCOUNT HELD WITH THE ASSESSEE WIFE. THE AMOUNTS WERE GIFTED BY THE ASSE SSEES FATHER-IN-LAW OUT OF HIS OWN BANK ACCOUNT. ACCORDING TO CIT(A) THE A DDITION COULD NOT BE MADE IN ASSESSEES HANDS AS: (I) THE GIFT WAS GENUINE, GIVEN BY THE ASSESSEES F ATHER-IN-LAW TO HIS OWN DAUGHTER AND GRAND SON THROUGH BANKING CHANNELS . (II) THE GIFTS BEING RECEIVED BY THESE TWO PERSONS, THEY COULD NOT BE ADDED IN ASSESSEES HANDS AS HIS UNEXPLAINED CASH C REDIT. 4. APROPOS SECOND GROUND, BRIEF FACTS ARE: THE ASSE SSEE WAS OWNER OF THE PROPERTY STANDING IN HIS NAME WHICH WAS SOLD; Q UA CAPITAL GAIN EXEMPTION U/S 54F WAS CLAIMED BY THE ASSESSEE AS T HE SALE PROCEEDS OF THE PROPERTY WERE UTILIZED FOR PURCHASING ANOTHER HOUSE IN THE NAME OF ASSESSEE AND HIS WIFE. WIFE DID NOT CONTRIBUTE ANY AMOUNT T OWARDS PURCHASE. THUS 3 NEW HOUSE WAS PURCHASED BY THE ASSESSEE. THE ENTIR E PURCHASE AMOUNT WAS SOURCED BY THE ASSESSEE FROM THE SALE OF HOUSE PROP ERTY. RENTAL INCOME FROM THE SOLD PROPERTY WAS EARLIER OFFERED IN THE HANDS OF THE ASSESSEE. ASSESSING OFFICER WAS OF THE VIEW THAT EXEMPTION U/S 54 WAS ALLOWABLE TO ASSESSEE TO THE EXTENT OF ONE HALF OF THE PURCHASE AMOUNT AS ON E HALF BELONGED TO WIFE. CIT(A) ON THE BASIS OF EVIDENCE, REMAND REPORT, FAC TS AND CIRCUMSTANCES HELD THAT SEC. 54 IS APPLICABLE WHEN THE ASSESSEE H AS UTILIZED THE ENTIRE PROCEEDS OF ITS PROPERTY IN THE PURCHASE OF A NEW H OUSE WHICH IS COMPLIED WITH. RELIANCE WAS PLACED ON HONBLE MADRAS HIGH CO URT JUDGMENT IN THE CASE OF CIT VS. V. NATARAJAN 287 ITR 271 HOLDING T HAT EVEN IF THE NEW HOUSE IS PURCHASED BY THE ASSESSEE IN THE NAME OF H IS WIFE WITHIN A PERIOD OF ONE YEAR OF RECEIVING THE SALE PROCEEDS, THE EXEMPT ION U/S 54 WAS ELIGIBLE. 5. AGGRIEVED, REVENUE IS BEFORE US ON THESE GROUNDS . 6. LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER. 7. APROPOS FIRST GROUND, LD. COUNSEL FOR THE ASSESS EE, RELIED ON THE ORDER OF CIT(A). APROPOS SECOND GROUND, LD. COUNSEL, AP ART FROM RELYING ON THE ABOVE JUDGMENT IN THE CASE OF V. NATARAJAN (SUPRA) , FURTHER RELIED ON HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF CI T VS. RAVINDER KUMAR ARORA 342 ITR 38 (DEL.), OBSERVING AS UNDER: ON THE AFORESAID FACTS, WE ARE OF THE VIEW THAT TH E CONDITIONS STIPULATED IN SECTION 54F STAND FULFILLED. IT WOULD BE TREATED AS THE PROPERTY PURCHASED BY THE ASSESSEE IN HIS NAME AND MERELY BECAUSE HE HAS INCLUDED THE NAME OF HIS WIFE AND T HE PROPERTY PURCHASED IN THE JOINT NAMES WOULD NOT MAKE ANY DIF FERENCE. SUCH A CONDUCT HAS TO BE, RATHER, ENCOURAGED WHICH GIVES EMPOWERMENT TO WOMEN. THERE ARE VARIOUS SCHEMES FLO ATED BY THE GOVERNMENT ITSELF PERMITTING JOINT OWNERSHIP WI TH WIFE. IF THE VIEW OF THE ASSESSING OFFICER (AO) OR THE CONT ENTION OF THE REVENUE IS ACCEPTED, IT WOULD BE A DEROGATORY STEP. 4 8. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE SEE NO INFIRMITY I N THE ORDER OF CIT(A), INASMUCH AS: (I) THE GIFTS IN QUESTION HAVE BEEN RECEIVED NOT BY THE ASSESSEE BUT BY HIS WIFE AND SON, GIFTED BY ASSESSEES FATHER-IN-LA W, WHO IS A CLOSE RELATIVE. THE GIFTS ARE FROM BANK A/C OF DONEE. I N VIEW THEREOF, WE ARE UNABLE TO HOLD THAT THE GIFTS IN QUESTION WERE UNEXPLAINED CASH CREDITS OF THE ASSESSEE. IN ANY CASE, THE AMOUNTS A RE NOT RECEIVED BY THE ASSESSEE BUT HIS WIFE AND SON. THEREFORE, TH E QUESTION OF THIS ADDITION IN THE HANDS OF ASSESSEE DOES NOT ARISE. (II) APROPOS SECOND GROUND, RESPECTFULLY FOLLOWING THE HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF RAVINDER KUMAR A RORA (SUPRA), WHICH IN TURN FOLLOWS HONBLE MADRAS HIGH COURT JUD GMENT IN THE CASE OF V. NATARAJAN (SUPRA), AND HONBLE ANDHRA PR ADESH HIGH COURT JUDGMENT IN THE CASE OF MIR GULAM ALI KHAN VS . CIT 165 ITR 228, WE UPHOLD THE ORDER OF CIT(A) ON THIS ISS UE ALSO. 9. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON 24-08-2012. SD/- SD/- ( T.S. KAPOOR ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24-08-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 5