Shri Rakesh Rajani, Indore V. THE ITO-1(2), Indore

ITA 407/IND/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9949 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-01-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 31-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C SELVAMANI
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 54F

Judgement Text

RAKESH RAJANI ITA NO.407 OF 2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.407/IND/2017 A.Y. 2012-13 RAKESH RAJANI, INDORE PAN AKNPR 8240 G :: APPELLANT VS ITO-1(2), INDORE :: RESPONDENT ASSESSEE BY SHRI HITESH CHIMNANI, CA RESPONDENT BY SHRI K.C. SELVAMANI, SR. DR DATE OF HEARING 19.3.2019 DATE OF PRONOUNCEMENT 01.4.2019 O R D E R PER SHRI KUL BHARAT, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT(A)-I, INDORE DATED 31.3.2017 CHALLENGING THE CONFIRMATION OF THE ADDITION OF RS.68,11,873/- ON ACCOUNT OF DEDUCTION CLAIMED U/S 54F OF THE INCOME TAX ACT. 2. FACTS, IN BRIEF, ARE THAT THE ASSESSEE RETURNED LONG TERM CAPITAL GAIN OF RS.68,11,873/- ON SALE OF LAND CLAIMING EXEMPTION B Y STATING THAT THE CAPITAL GAIN WAS INVESTED IN PURCHASE OF PLOT FOR A CONSIDE RATION OF RS.77,50,000/- WHICH WAS PURCHASED IN THE FY 2011-12 AND ON WHICH CONSTRUCTION WORK OF HOUSE WAS GOING ON. THE ASSESSING OFFICER NOTED THA T AS PER REGISTRY, THE PLOT RAKESH RAJANI ITA NO.407 OF 2017 2 WAS NOT PURCHASED IN FY 2011-12 BUT ON 23.3.2013. T HE ASSESSING OFFICER ALSO NOTED THAT THE CLAIM FOR EXEMPTION WAS MADE U/ S 54/54F OF THE INCOME TAX ACT, HOWEVER, THE CONSTRUCTION WAS NOT COMPLETE D WITHIN THE STIPULATED PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER I.E . 08.11.2014 AND ALSO THE UNUTILISED AMOUNT WAS NOT DEPOSITED IN CAPITAL GAIN ACCOUNT SCHEME AS PROVIDED U/S 54/54F. THE ASSESSING OFFICER ALSO REC ORDED A FINDING THAT ON INSPECTION OF THE NEW ASSET I.E. PLOT NO.345, GUMAS TA NAGAR, INDORE, IN THE PRESENCE OF SHRI PAWAN RAJANI BROTHER OF THE ASSESS EE ON 30.1.2015, IT WAS FOUND THAT THERE WAS NO HOUSE CONSTRUCTED ON THE SA ID PLOT. STATEMENT OF SHRI PRAMOD NEEMA, MANAGER OF INDORE CLOTH MARKET MADHYA MVARGIYA GRAH NIRMAN SAHAKARI SANSTHAN MARYADIT, SELLER WAS RECOR DED WHEREIN SHRI NEEMA ALSO GAVE A CATEGORICAL STATEMENT THAT THERE WAS NO CONSTRUCTION ON THE PLOT EXCEPT FOR CONSTRUCTION OF A WALL APPRO.10*40 SQ.FT . AND CEMENT POLES. THE CONSTRUCTION OF WALL WAS STARTED ONLY TWO DAYS BEFO RE. CONSIDERING THESE FACTS, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF RS.68 ,11,873/-. LD. CIT(A) MAINTAINED THE ADDITION HOLDING THAT THE ASSESSEE H AS NOT BEEN ABLE TO ESTABLISH THAT THE CONDITIONS SPECIFIED FOR ALLOWIN G THE CLAIM U/S 54F HAVE BEEN SATISFIED AND HENCE THE ASSESSEE IS FOUND TO B E NOT ELIGIBLE FOR THE ALLOWANCE OF THE CLAIM U/S 54F. 3. AT THE OUTSET OF THE HEARING, LD. COUNSEL FOR TH E ASSESSEE CONTENDED THAT THE ASSESSING OFFICER AS WELL AS LD. CIT(A) VIOLATE D THE PRINCIPLE OF NATURAL JUSTICE AS THEY IGNORED VITAL EVIDENCES ADMITTED BY THE ASSESSING OFFICER HIMSELF. REVENUE AUTHORITIES FAILED TO APPRECIATED THAT IT IS TRUE THAT THE RAKESH RAJANI ITA NO.407 OF 2017 3 REGISTRY WAS DONE ON 23.3.2013 BUT THE PURCHASE OF PLOT WAS MADE BEFORE 30.7.2012 IN THREE PARTS MUCH PRIOR TO THE DATE OF THE REGISTRY. THE ASSESSEE HAD FILED RELEVANT PAPERS RELATED TO BANK ACCOUNT, CASH ACCOUNT, HOUSE ACCOUNT, NEW ASSET PURCHASED ETC. EVEN REMAND REPOR T SUBMITTED BY THE ASSESSING OFFICER WAS IGNORED WHEREIN IT IS STATED THAT THE HOUSE WAS BUILT IN DUE TIME. THUS, THE REVENUE AUTHORITIES HAVE TAKEN CONTRARY VERSIONS IN THE ORIGINAL AND REMAND PROCEEDINGS. ON THE OTHER HAND, LD. SR. DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 3. ON CONSIDERATION OF ABOVE FACTS AND SUBMISSIONS OF BOTH THE PARTIES, WE FIND THAT IN THE INSTANT APPEAL, THE AS SESSEE HAS FILED PAPER BOOKS RUNNING INTO 116 PAGES ALONG WITH SUMMARY OF RELEVANT PAGES OF ORDERS AND PAPER BOOK, WHEREIN THE RELEVANT DOCUMEN TS HAVE BEEN ANNEXED, WHICH NEED RECONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS REQUIRED TO EXAMI NE THE SUBMISSIONS AS NARRATED ABOVE BY THE LEARNED COUNSEL FOR THE ASSES SEE AND THE MATERIAL PLACED BEFORE HIM IN RESPECT OF THE CLAIM. THEREFORE, IN THE INTEREST OF JUSTICE, WE DEEM IT APPROPRIATE TO SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES. THE APPEAL IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO CONSIDER THE SU BMISSIONS/RELEVANT PAPERS. THE ASSESSING OFFICER WOULD DECIDE THE APPE AL AFRESH IN TERMS AS INDICATED ABOVE AFTER AFFORDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER LAW AND THE ASSESSEE IS ALSO DIRECT ED TO RAKESH RAJANI ITA NO.407 OF 2017 4 COOPERATE/APPEAR BEFORE THE ASSESSING OFFICER IN TH IS REGARD. ACCORDINGLY, APPEAL FILED BY THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES ONLY. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 01.4.2019 . SD/- ( MANISH BORAD) ACCOUNTANT MEMBER SD/- (KUL BHARAT) JUDICIAL MEMBER DATED : 01.4.2019 !VYAS! COPY TO: APPELLANT/RESPONDENT/PR.CIT(A)/PR.CIT/DR, INDORE