SH. LALIT DEEWAN, JAMMU V. D.C.I.T., CIRCLE-2, JAMMU

ITA 453/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3320 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 20-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-04-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 04-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C J S NANDA
• Keywords: Capital asset; Opportunity of being heard; Additional evidence; Wrong claim; Onus to prove; Set aside
• Section: 54F; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I. T. A. NO. 453/ASR/2017 ASS ESSMENT YEAR: 2013-14 LALIT DEWAN, 9, CANAL ROAD, JAMMU [PAN: ABMPD 9066G] VS. DY. CIT, CIRCLE-2, AAYAKAR BHAWAN, RAIL HEAD COMPLEX, PANAMA CHOWK, JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY : SH. C J S NANDA (C.A. ) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 11.04.2019 DATE OF PRONOUNCEMENT: 30.05.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE OR DER BY THE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU (CIT(A) FOR SHORT) DATED 31.03.2017, DISMISSING THE ASSESSEES APPEAL CONTESTING HIS ASS ESSMENT UNDER SECTION 144 OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) VIDE O RDER DATED 22.01.2016 FOR ASSESSMENT YEAR (AY) 2013-14. 2. THE FACTS OF THE CASE IN-SO-FAR AS ARE RELEVANT ARE THAT THE ASSESSEE SOLD AN IMMOVABLE PROPERTY, BEING A PLOT OF LAND (AT GATTHA SOHANA, HARYANA) DURING THE ITA NO. 453/ASR/2017 (AY 2013-14) LALIT DEWAN V. DY. CIT 2 RELEVANT YEAR (ON 18.3.2013) FOR RS.63 LACS, CLAIMI NG EXEMPTION U/S. 54F (AT RS.56,86,491) ON THE LONG-TERM CAPITAL GAIN (LTCG) ARISING ON THE SAID SALE. THE SAME STANDS DENIED BY THE REVENUE ON THE GROUND THA T THE ASSESSEE HAD, ON THE DATE OF TRANSFER (18.03.2013), MORE THAN ONE RESIDENTIAL HOUSE, AS UNDER, DISENTITLING HIM FOR THE SAID CLAIM: (A) A FLAT AT 142, BELVEDERE TOWERS, DLF PHASE II, GURGAON; (B) A RESIDENTIAL QUARTER AT BOHRI (BORARI), MUMBAI ; AND (C) A RESIDENTIAL HOUSE AT 102, PARK VIEW APARTMENT S, NEW DELHI. THE PROPERTY AT (A) IS ADMITTED, BEING IN FACT LET BY THE ASSESSEE DURING THE RELEVANT YEAR, RETURNING THE ANNUAL VALUE THEREOF ( RS.4.31 LACS) TO TAX. THE PROPERTY AT (C), AS EXPLAINED BY THE LD. COUNSEL FOR THE ASS ESSEE, SH. NANDA, IS BY WAY OF A MISTAKE. THE SAME GETS INCLUDED BY THE REVENUE IN T HE LIST, I.E., OF THE RESIDENTIAL HOUSES OWNED BY THE ASSESSEE, ONLY ON ACCOUNT OF IT S MENTION, ALBEIT WRONGLY, IN THE ASSESSEES RETURN FOR THE RELEVANT YEAR, I.E., WHILE RETURNING THE RENTAL INCOME OF THE PROPERTY AT (A) ABOVE. THAT IS, THE MENTION OF THE HOUSE PROPERTY AT (C), INSTEAD OF THAT AT (A), WAS A TYPOGRAPHICAL MISTAKE, FURTHE R POINTING, ON ENQUIRY, THAT THE SAID HOUSE PROPERTY [AT (C)] IS IN FACT THE RESIDEN TIAL HOUSE OF THE HUSBAND OF THE LESSEE, MS. SUMITRA SRINAVASAN BAKLIWAL, I.E., OF M R. ATUL BAKLIWAL, FOR WHICH HE WOULD REFER TO THE LEASE DEED IN RESPECT OF THE HOU SE PROPERTY AT (A) ABOVE (PB PGS. 34-38). THE OWNERSHIP OF THE PROPERTY AT (B) IS AGA IN ADMITTED. THE SAME, SH. NANDA WOULD CONTINUE, HOWEVER, IS IN A DILAPIDATED CONDITION, SO THAT IT CANNOT BE REGARDED AS A RESIDENTIAL HOUSE, I.E., AN INHABITAB LE HOUSE. THE REVENUE DISPUTES THIS ON THE BASIS OF THE ASSESSEES WEALTH-TAX RETU RNS FOR ASSESSMENT YEARS 2010-11 TO 2012-13, I.E., THE THREE IMMEDIATELY PRECEDING Y EARS, WHEREIN THE SAME IS SHOWN AS A SELF-OCCUPIED HOUSE PROPERTY. TRUE, SH. NANDA WOULD ASSEVERATE DURING HEARING, THE SAME WAS SELF-OCCUPIED FOR THOSE YEARS , BUT NOT FOR THE CURRENT YEAR. ITA NO. 453/ASR/2017 (AY 2013-14) LALIT DEWAN V. DY. CIT 3 THE WEALTH-TAX RETURN FOR THE CURRENT YEAR VALUES T HE SAME, ACCORDINGLY, AS AN OPEN PIECE OF LAND (PB PG. 33), DEMOLISHING THE STRUCTUR E IN APRIL, 2012. THIS FACT HAS BEEN OVERLOOKED BY THE REVENUE, RELYING ON THE INSP ECTORS REPORT DATED 05/1/2016 WHICH WAS IN FACT NEVER CONFRONTED TO THE ASSESSEE, DESPITE BEING REQUESTED FOR. THE REVENUES CASE, ON THE OTHER HAND, IS THAT THE ASSESSEE HAD BEEN ALLOWED ABUNDANT OPPORTUNITY; HE, IN FACT, PARTICIPATING IN THE ASSESSMENT PROCEEDING, BECAME RECALCITRANT UPON DETECTION OF THE UNTRUTH O F HIS CLAIM, AND TOWARD WHICH THERE IS EXTENSIVE REFERENCE IN THE IMPUGNED ORDER, INCLUDING THE REMAND REPORT DATED 30/3/2017. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE VALIDITY OF THE CLAIM U/S. 54F IN THE PRESENT CASE BOILS DOWN TO WHETHER THE PROPERTY AT BOHRI (BORARI), MUMBAI, I.E., THE R ESIDENTIAL QUARTER ON LAND MEASURING 1 KANAL 3 MARLAS OWNED BY THE ASSESSEE, W AS A RESIDENTIAL HOUSE AS ON THE DATE OF TRANSFER OF THE CAPITAL ASSET DURING TH E YEAR (18/3/2013), YIELDING LTCG AT RS.57,58, 240 (PB PGS. 59-10). THE ONUS TO PROVE HIS RETURN, AND THE CLAIMS PREFERRED THEREBY, IS ON THE ASSESSEE ( CIT V. CALCUTTA AGENCY LTD. [1951] 19 ITR 191 (SC); CIT V. R. VENKATA SWAMY NAIDU [1956] 29 ITR 529 (SC)). THE ONLY EVIDENCE FURNISHED BY THE ASSESSEE IN THIS REGARD IS THE WEALTH-TAX RETURN FOR THE CURRENT YEAR, I.E., THE FINANCIAL YE AR ENDING 31.03.2013, VALUING THE SAID PROPERTY AT RS.17 LACS (AT THE RATE OF RS.15 LACS PER KANAL), AS AN OPEN LAND, AS AGAINST ITS VALUATION AT RS.50,000 FOR THE THREE IMMEDIATELY PRECEDING YEARS, VALUING THE SAME AS A RESIDENTIAL HOUSE (SELF-OCCUP IED). HOW COULD, THEN, BEING A SELF-OCCUPIED HOUSE AS LATE AS ON 31.03.2012, IT BE CONSIDERED AS A DILAPIDATED HOUSE DURING THE CURRENT YEAR OR ON THE DATE OF TRA NSFER ? ONLY AN INHABITABLE HOUSE COULD BE, AFTER ALL, SELF-OCCUPIED? SH. NANDA COULD NOT FURNISH ANY ANSWER TO THESE QUESTIONS, MUCH LESS SATISFACTORILY, POSED TO HIM D URING HEARING. THE WEALTH-TAX ITA NO. 453/ASR/2017 (AY 2013-14) LALIT DEWAN V. DY. CIT 4 RETURN THEREFORE ITSELF DISPROVES THE ASSESSEES CL AIM WITH REGARD TO THE HOUSE BEING IN A DILAPIDATED CONDITION AS ON THE DATE OF TRANSF ER, SO AS NOT TO BE REGARDED AS A RESIDENTIAL HOUSE PROPER. THIS THOUGH RAISES A LEGA L ISSUE IN-AS-MUCH AS SUCH A HOUSE, WITH/UPON REPAIRS, COULD BE MADE HABITABLE. THE CONTENTION OF THE HOUSE BEING DILAPIDATED ALSO MILITATES AGAINST THE ASSESS EES CLAIM, AGAIN UNEVIDENCED OTHER THAN THE WEALTH-TAX RETURN, OF HAVING DEMOLIS HED THE SAID HOUSE IN APRIL, 2012. THERE IS NOTHING ON RECORD TO SHOW THAT THE H OUSE WAS DEMOLISHED DURING THE CURRENT YEAR, WHICH WOULD ENTAIL EXPENDITURE, AND W HICH SHOULD BE EVIDENCED IN THE NORMAL COURSE, BESIDES RAISING THE QUESTION OF THE HOUSE INHABITED BY THE ASSESSEE DURING THE CURRENT YEAR; THE ASSESSEES ON LY OTHER HOUSE BEING LET OUT. IN FACT, SH. NANDA WAS SPECIFICALLY QUESTIONED DURING HEARING ON THIS AS WELL, I.E., THE HOUSE OCCUPIED BY THE ASSESSEE DURING THE CURRENT Y EAR, TO WHICH HE, AGAIN, COULD NOT FURNISH ANY ANSWER. HE COULD EVEN NOT FURNISH T HE DATE ON WHICH THE WEALTH-TAX RETURN FOR THE CURRENT YEAR (AY 2013-14) WAS FILED. THIS ASSUMES RELEVANCE AS IF NOT FURNISHED IN THE REGULAR COURSE U/S. 14(1), IN THE ABSENCE OF ANY POSITIVE MATERIAL EVIDENCING THE CLAIM OF DEMOLITION, IS LIA BLE TO BE REGARDED AS FILED ONLY TO EXHIBIT THAT THE HOUSE STANDS SINCE RAISED TO THE GROUND. THE SAME CANNOT BY ITSELF BE REGARDED AS A POSITIVE EVIDENCE OF DEMOLITION, P ARTICULARLY IN THE ABSENCE OF ANY CORROBORATIVE MATERIAL SUPPORTING THE ASSESSEES, W HO IS UNABLE TO STATE AS TO WHERE, THEN, HE RESIDED DURING THE CURRENT YEAR, CL AIM. THEN, AGAIN, THE DEMOLITION, I.E., ASSUMING SO, COULD BE FOR THE PURPOSE OF BUIL DING A NEW HOUSE AT THE SAID LAND; THE ASSESSEE HAVING IN FACT ACQUIRED, AS STATED BY SH. NANDA, MORE LAND ADJACENT TO THE ASSESSEES LAND IN FAMILY SETTLEMENT DURING THE FOLLOWING YEAR. THAT IS, IS ONLY AN INTERIM STATE, WITH THE ASSESSEE BEING IN THE PR OCESS, ASSUMING SO, OF REFURBISHING OR RENOVATING HIS HOUSE, A NORMAL INCI DENT INASMUCH AS OLD HOUSES NEED TO BE SUBSTANTIALLY REPAIRED OR ALTERED TO ADA PT TO THE CHANGED NEEDS AND ITA NO. 453/ASR/2017 (AY 2013-14) LALIT DEWAN V. DY. CIT 5 CIRCUMSTANCES. THIS INDEED RAISES A LEGAL ISSUE, AS ANOTHER DIMENSION OF THAT RAISED EARLIER. COMING TO THE INSPECTORS REPORT, THE ASSESSEES PR INCIPAL GRIEVANCE, VALID IN PRINCIPLE, IS THAT THE SAME WAS NOT CONFRONTED TO H IM. THE ONLY IMPLICATION THEREOF IS THAT THE SAME CANNOT THEREFORE BE RELIED UPON. W E HAVE ALREADY OPINED THAT EVEN DE HORS THE SAID REPORT, RELIED UPON BY THE REVENUE, THE A SSESSEE CANNOT BE SAID TO HAVE PROVED HIS CASE DESPITE ABUNDANT OPPORTUNITY. IT IS THEN SAID THAT THE REPORT, BEING DATED 05/1/2016, COULD NOT BE RELIED UPON. WE HAVE ALREADY CLARIFIED THAT THE NON-CONFRONTATION OF THE SAID REPORT WOULD ONLY IMP LY THAT THE SAME CANNOT BE RELIED UPON BY THE REVENUE. FURTHER, IF THE REPORT STATES OF AN INHABITABLE STRUCTURE ON THE SAID LAND IN 2016 (AS THE ASSESSMENT AND THE IMPUGNED ORDER STATE), HOW WOULD IT HELP THE ASSESSEES CASE UNLESS, OF COURSE , HE SHOWS THAT THE ASSESSEE BUILT ANOTHER STRUCTURE THEREON, WHICH ITSELF WOULD PROVE THE DEMOLITION OF THE PREVIOUS STRUCTURE, SO THAT THE QUESTION THAT WOULD STILL SU RVIVE IS OF THE DATE OF THE SAID DEMOLITION. THE DATE/S OF INVESTMENT IN THE NEW STR UCTURE MAY THROW SOME LIGHT IN THE MATTER, QUA WHICH THERE IS NO EVIDENCE ON RECORD. IN THIS REGA RD THE INVESTMENT ON WHICH THE EXEMPTION U/S. 54F IS BEING CLAIMED IT SELF ASSUMES SIGNIFICANCE INASMUCH IT MAY WELL BE THAT THE SAME IS ON THIS NE W STRUCTURE. WHERE SO, WHETHER THE SAME IS AN EXTENSION OR A COMPLETE NEW STRUCTUR E WOULD ALSO HAVE A DIRECT BEARING OTHER ISSUES APART, ON THE ASSESSEES CLA IM. THE REVENUE, OR EVEN THE ASSESSE FOR THAT MATTER, IS NOT REQUIRED TO PROVE A DMITTED FACTS; THE PRIME BEING OF THE SAME BEING A SELF OCCUPIED RESIDENTIAL HOUSE AS AT 31.3.2012, I.E., THE BEGINNING OF THE CURRENT YEAR, AND, IN FACT, FOR THE PAST SEV ERAL YEARS. IF THE STRUCTURE WAS NOT, AS CONTENDED, INHABITABLE, WHICH THOUGH IS CONTRARY TO THE CLAIM OF THE SAME BEING A SELF-OCCUPIED HOUSE PROPERTY, IT WOULD STAND TO B E VALUED AS AN OPEN PIECE OF LAND FOR THE PRECEDING YEARS AS WELL; THE ONLY ADJU STMENT (IN THAT CASE) TO THE SAID VALUE BEING THE REDUCTION THEREFROM OF THE ESTIMATE D EXPENDITURE ON THE DEMOLITION ITA NO. 453/ASR/2017 (AY 2013-14) LALIT DEWAN V. DY. CIT 6 OF THE SAID UNINHABITABLE STRUCTURE, WHICH EXPENDIT URE HAS NOT BEEN SHOWN. IN FACT, IF THE DEMOLITION HAD TAKEN PLACE BEFORE 18/3/2013, AS CONTENDED, WHY, ONE WONDERS, DID THE ASSESSEE AT ALL RAISE THE ISSUE OF THE HOUSE BEING IN A DILAPIDATED CONDITION, CONTRADICTED BY HIS OWN SWORN STATEMENT (PER THE RETURN OF WEALTH, WHICH BEARS A VERIFICATION) OF THE SAME BEING HIS S ELF-OCCUPIED HOUSE. FURTHER, AS AFORE-NOTED, HOW COULD A HOUSE, INHABITABLE ON 31/3 /2012, BECOME UNINHABITABLE ON 01/4/2012 OR THE SUBSEQUENT MONTHS? 4. THE ASSESSEES CASE, IN LIGHT OF THE FACTUAL MAT RIX, IS COMPLETELY UNPROVED. WE MAY, HOWEVER, IN THE INTEREST OF JUSTICE, PARTIC ULARLY CONSIDERING THAT A FALSE CLAIM INVITES PENALTY, REMIT THE MATTER BACK TO THE FILE OF THE AO, TO ALLOW THE ASSESSEE AN OPPORTUNITY TO STATE HIS CASE. THE REVE NUE, WHERE IT WISHES TO RELY ON THE INSPECTORS REPORT, AS IT DOES BEFORE US, SHALL HAVE TO NECESSARILY PROVIDE A COPY THEREOF TO THE ASSESSEE. THE BURDEN TO PROVE HIS CL AIM U/S. 54F, IS THOUGH ON THE ASSESSEE, AS WELL AS TO MEET THE EVIDENCE GATHERED OR SOUGHT TO BE RELIED UPON BY THE REVENUE. THE REMISSION WOULD ALSO MEET THE ASSE SSEES CLAIM OF HAVING NOT BEEN ALLOWED A REASONABLE OPPORTUNITY, RAISED BEFOR E US PER LENGTHY GROUNDS OF APPEAL, EVEN AS HE HAS BEFORE US BEEN UNABLE TO STA TE OR POINT OUT ANY EVIDENCE WHICH HE WISHES TO RELY UPON (OR TO MEET THE REVENU ES RELIANCE ON THE INSPECTORS REPORT), THOUGH COULD NOT FOR WANT OF OPPORTUNITY. THERE IS NO APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE THE FIRST A PPELLATE AUTHORITY, OR EVEN A PRAYER FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE US, SO THAT, AS WE UNDERSTAND, THE GRIEVANCE COULD ONLY EXTEND TO BEING UNABLE TO EXPLAIN THE EVIDENCE BEING RELIED UPON BY THE REVENUE. THE AO SHALL DECIDE ON THE BASIS OF THE MATERIAL ON RECORD, ISSUING DEFINITE FINDINGS OF FACT CONSISTEN T THEREWITH, TAKING INTO ACCOUNT THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, AND AF TER ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD, AND WHICH HE SHALL DO IN A TIME-BOUND ITA NO. 453/ASR/2017 (AY 2013-14) LALIT DEWAN V. DY. CIT 7 MANNER. SURE, HE IS TO DECIDE THE LEGAL ISSUE/S AFO RE-REFERRED AS WELL, I.E., WHERE THE SAME ARISES IN THE FACTS AND CIRCUMSTANCES OF THE C ASE. NEEDLESS TO ADD, THE ASSESSEE, ON WHOM THE PRIMARY BURDEN TO PROVE LIES, SHALL COOPERATE IN THE SAID PROCEEDINGS. AS APPARENT, WE DO SO ONLY AS MATTER O F ABUNDANT CAUTION, SO AS TO ESCHEW ANY MISCARRIAGE OF JUSTICE; THE RECORD REVEA LING THE ASSESSSEES WIFE TO BE UNWELL AT THE RELEVANT TIME, SO THAT THE INFERENCE DRAWN BY THE REVENUE OF THE ASSESSEE BECOMING RECALCITRANT SUBSEQUENTLY, I.E., UPON DETECTION OF ADVERSE MATERIAL, APPEARS UNFAIR. THE ISSUE BEING PRINCIPAL LY FACTUAL, HAS IN ANY CASE TO BE DECIDED ON THE BASIS AND STRENGTH OF THE EVIDENCES, FOR AND AGAINST, AND NOT ON THE BASIS OF PRESUMPTIONS, WITH THE ASSESSEE IN ANY CAS E BOUND TO COOPERATE IN THE SET ASIDE PROCEEDINGS. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 30, 2019 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 30.05.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: LALIT DEWAN, 9, CANAL ROAD, JAMMU (2) THE RESPONDENT: DEPUTY COMMISSIONER OF INCO ME TAX, CIRCLE-2, AAYAKAR BHAWAN, RAIL HEAD COMPLEX, PANAMA CHOWK, JAMMU (3) THE CIT(APPEALS), JAMMU (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER