ITO, New Delhi V. Shri Dhirender Gaba, Gurgaon

ITA 4273/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86988 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR SENIOR
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B : NEW DELHI) BEFORE SHRI GEORGE GEORGE K, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4273/DEL./2012 (ASSESSMENT YEAR : 2008-09) ITO, WARD 11 (1), VS. SHRI DHIRENDER GABA, NEW DELHI. RAHEJA ATLANTIS, D-12, SECTOR 31, GURGAON (HARYANA) (PAN : AFUPG9615E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HIREN MEHTA, CA REVENUE BY : SMT. PARWINDER KAUR, SENIOR DR DATE OF HEARING : 17.03.2015 DATE OF PRONOUNCEMENT : .03.2015 ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE CIT (APPEALS) - IV, NEW DELHI DATED 18.05.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RETURN OF INCOME WAS FILED DECLARING INCOME OF RS.49,86,856/- ON 29.09.2008. THE ASSESSMENT WAS FINALIZED ON 25.11. 2010 ON AN INCOME OF RS.1,62,00,084/-. DURING THE YEAR, THE ASSESSEE HA S SHOWN LONG TERM CAPITAL GAINS OF RS.1,09,20,000/- AND THE COST OF ACQUISITI ON OF RS.21,76,920/-. THE CAPITAL GAIN DECLARED WAS ON SALE OF SHARES OF M/S. MARKETTOPPER SECURITIES PVT. LTD. AND HAVE BEEN SOLD OFF MARKET @ RS.2,600/- PER SHARE. ASSESSEE CLAIMED ITA NO.4273/DEL./2012 2 EXEMPTION OF LONG TERM CAPITAL GAINS OF RS.87,43,08 0/- U/S 54F OF THE ACT. THE ASSESSING OFFICER DENIED THE CLAIM OF THE ASSESSEE. THE ASSESSEE HAS DEPOSITED RS.87,50,000/- WITH THE CAPITAL GAIN FUND SCHEME ON 26.09.2008 AND THE RETURN WAS FILED ON 29.09.2008. THE ASSESSEE PURCHASED RE SIDENTIAL PROPERTY FROM RAHEJA DEVELOPERS AND PAID RS.17 LACS ON 17.06.2009 AND RS.73 LACS ON 17.07.2009. THE ASSESSEE CONVERTED THE CAPITAL GAI N ACCOUNT AMOUNT INTO TERM FIXED DEPOSIT BY CREATING THE TERM FIXED DEPOSIT ON 22.11.2008. THIS TERM DEPOSIT WAS RELEASED ON 15.06.2009 AND AMOUNT WAS D IRECTLY TRANSFERRED TO SAVING ACCOUNT OF THE ASSESSEE AND THE PAYMENTS WER E MADE FOR THE PURCHASE OF RESIDENTIAL PROPERTY FROM RAHEJA BUILDERS ON 17.06. 2009 AND 17.07.2009 AND CLAIMED DEDUCTION/S 54F OF RS.87,43,080/-. THE CIT (A) HAS GRANTED THE DEDUCTION U/S 54F. THE RELEVANT PORTION OF THE CIT (A)S ORDER READ AS UNDER :- 4.8 AS REGARDS THE DEDUCTION U/S 54F, THE APPELLAN T HAD CLAIMED THE SAID DEDUCTION IN RESPECT OF THE ENTIRE AMOUNT OF LONG TERM CAPITAL GAIN OF RS.87,43,080/- AS THE APPELLAN T HAD DEPOSITED AN AMOUNT OF RS.87,50,000/- IN CAPITAL GAIN SAVING ACCOUNT WITH PUNJAB NATIONAL BANK ON 26.09.2008. THE SAID AMOUNT WAS TRANSFERRED TO A FIXED DEPOSIT ACCOUNT UNDER THE CA PITAL GAINS SCHEME WITH PUNJAB NATIONAL BANK ON 22.11.2009. THE APPELLANT HAD SUBMITTED ORIGINAL CERTIFICATE FROM PNB CERTIFY ING THAT THE ABOVE SAVINGS A/C AND FIXED DEPOSIT A/C WERE OPENED UNDER THE CAPITAL GAINS SCHEME. IT HAD ALSO BEEN SUBMITTED BY THE APPELLANT BEFORE THE AO DURING THE ASSESSMENT STAGE THAT THE APPELLANT HAD PAID RS.90,00,000/- FROM ITS ACCOUNT WITH PNB ON 17 .06.2009 AND 17.07.2009 TO ONE SHRI BALBIR SINGH, OWNER OF A NEW FLAT FOR PURCHASE OF THE SAID FLAT BY THE ASSESSEE. THE AO I N THE REMAND REPORT DATED 04.04.2012 HAS, ON EXAMINATION OF THE DETAILS AND DOCUMENTARY EVIDENCES, ACCEPTED THE ABOVE POSITION AND HAS NOT DISPUTED THE APPELLANT'S SUBMISSION THAT THE SAID A CCOUNTS WERE COVERED UNDER THE CAPITAL GAINS SCHEME. THE RELEVAN T PORTION OF THE AO'S REPORT IS REPRODUCED HEREUNDER : '5. WITH REGARD TO DEDUCTION U/S 54F, IT IS SUBMITT ED THAT THE AO HAD MADE THE DISALLOWANCE ON VARIOUS GR OUNDS. ITA NO.4273/DEL./2012 3 EVEN IF IT IS BELIEVED THAT THE ACCOUNT OPENED WITH THE PNB WAS COVERED THE CAPITAL GAIN ACCOUNT SCHEME, 1988, THE OTHER GROUNDS OF DISALLOWANCE MENTIONED BY THE AO M AY KINDLY BE CONSIDERED BEFORE DECIDING THE ISSUE.' IN VIEW OF THE ABOVE, THIS ISSUE REGARDING THE DEPO SIT BEING COVERED UNDER THE CAPITAL GAINS SCHEME OF THE ACT IS DECIDE D IN FAVOUR OF THE APPELLANT. 4.8.1 WITH REGARD TO THE OTHER ISSUES INVOLVED IN T HE DEDUCTION U/S 54F, THE ASSESSEE HAS FURNISHED A COPY OF AGREE MENT TO SELL DATED 17.07.2009 FOR PURCHASE OF THE NEW FLAT. THE ASSESSEE HAS ALSO FURNISHED COPY OF CERTIFICATE FROM M/S RAHEJA DEVELOPERS, BUILDERS CERTIFYING HANDING OVER OF THE NEW FLAT TO THE ASSESSEE ON 17.07.2009. THE FULL VALUE CONSIDERATION OF THE FLA T, BEING RS.90,00,000/- WAS PAID BY THE ASSESSEE ON 17.06.20 09 AND 17.07.2009 TO SHRI BALBIR SINGH, THE EARLIER ALLOTT EE OF THE FLAT. THE AO IN THE REMAND REPORT DATED 04.04.2012 HAS NOT DI SPUTED THE ABOVE FACTS. IN THE ASSESSMENT ORDER, THE AO HAD DI SALLOWED THE DEDUCTION U/S 54F ON THE GROUND THAT THE AGREEMENT TO SELL WAS NOT REGISTERED WITH THE SUB-REGISTRAR. HOWEVER, IT IS A RGUED BY THE APPELLANT THAT THERE IS NO NECESSITY FOR THE REGIST RATION OF THE PROPERTY FOR THE PURPOSE OF DEDUCTION U/S 54F SO LO NG AS THE ASSESSEE HAS PAID THE FULL VALUE CONSIDERATION OF T HE PROPERTY AND HAS TAKEN POSSESSION OF THE PROPERTY AS PER THE AGR EEMENT TO SELL WHICH HAS NOT BEEN DISPUTED BY THE AO. THE ASSESSEE HAD ALSO DEPOSITED THE CAPITAL GAINS AMOUNT UNDER THE CAPITA L GAINS ACCOUNT SCHEME ON 26.09.2008 WHICH IS PRIOR TO THE LAST DAT E OF FILING OF RETURN OF INCOME IN THE CASE OF THE ASSESSEE WHICH WAS 30.09.2008 AS THE ASSESSEE WAS SUBJECTED TO TAX AUDIT U/S 44AB OF THE ACT. THE AMOUNT DEPOSITED WAS UTILIZED FOR THE PURPOSE O F PURCHASE OF THE SAID FLAT AS EVIDENCED BY THE AGREEMENT TO SELL , POSSESSION LETTER ISSUED BY M/S. RAHEJA DEVELOPERS AND CERTIFI CATE DATED 17.09.2009 ISSUED BY THE MANAGER OF PNB. FURTHER, IT IS SUBMITTED BY THE APPELLANT THAT AT THE TIME OF TRANSFER OF TH E SHARES, THE APPELLANT OWNED ONLY ONE RESIDENTIAL HOUSE AT VASAN T KUNJ, NEW DELHI AND NOT MORE THAN ONE RESIDENTIAL HOUSE AND H ENCE, THE REQUIREMENT OF PROVISO TO SECTION 54F(1) WAS FULLY COMPLIED WITH. ON CAREFUL CONSIDERATION OF THE MATTER AS MENTIONED ABOVE, I FIND THAT THE DISALLOWANCE OF DEDUCTION U/S 54F MADE BY THE AO IS NOT BASED ON PROPER APPRECIATION OF THE FACTS OF THE CA SE AND THE LEGAL PROVISIONS. THE AO IS, THEREFORE, DIRECTED TO ALLOW DEDUCTION U/S 54F OF RS.87,43,0801- AS CLAIMED BY THE APPELLANT. ITA NO.4273/DEL./2012 4 3. NOW, THE REVENUE IS IN APPEAL BEFORE US BY TAKIN G THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN ALLOWING TH E DEDUCTION U/S 54 F OF RS.87,43,080/- DESPITE BEING FACT THAT THE ASSESSEE HAD NEVER CLAIMED DEDUCTION U/S 54F IN RETURN OF INCOME FILED WITH THE DEPARTMENT BUT HAD CLAIMED UNDER SEVERAL SECTION VI Z 54D/54EC/54ED/54G/54GA OF INCOME TAX ACT 1961. 2. THE LEARNED CIT(A) HAS ERRED ON FACTS AND CIRCUM STANCES OF THE CASE AND IN LAW IN ALLOWING THE DEDUCTION OF RS.87,43,080/- U/S 54F(4) WITHOUT APPRECIATING THAT THE ASSESSEE H AS FAILED TO FULFILL THE CONDITIONS PRESCRIBED UNDER SECTION 54F OF THE INCOME TAX ACT 1961. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARIN G. 4. AFTER HEARING BOTH THE SIDES AND ON CAREFUL CONS IDERATION OF THE ISSUE, WE HOLD THAT THE CIT (A) WAS JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE U/S 54F OF THE ACT. THE CAPITAL GAIN AROSE WAS DEPOSITED I N CAPITAL GAIN ACCOUNT BY ASSESSEE PRIOR TO FILING RETURN OF INCOME. THE SAM E WAS CONVERTED INTO CAPITAL GAIN TERM DEPOSIT. SUBSEQUENTLY, ASSESSEE HAS INVE STED THE MONEY IN ACQUIRING ASSETS WHICH QUALIFY FOR DEDUCTION U/S 54F OF THE A CT. IN VIEW OF THESE FACTUAL MATRIXES, WE FIND NO FAULT IN THE ORDER OF THE CIT (A). WE DISMISS ALL THE GROUNDS RAISED IN REVENUES APPEAL. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 20 TH DAY OF MARCH, 2015. SD/- SD/- (GEORGE GEORGE K) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 20 TH DAY OF MARCH, 2015 TS ITA NO.4273/DEL./2012 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IV, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.