SHRI KRISHAN KUMAR GUPTA, Jaipur V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, JHUNJHUNU

ITA 453/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9249 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 02-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: SWRAWAN KUMAR GUPTA
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Condonation of delay; Set aside
• Section: 143(3); 50C; 54F; 13; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH JESK LH0 KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH. C. SHARMA, AM & SHRI VIJAY PA L RAO, JM VK;DJ VIHY LA- @ ITA NO. 453/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 SHRI KRISHAN KUMAR GUPTA SWAROOP VIHAR SECTOR-11, UDAIPUR. CUKE VS. THE ACIT, CIRCLE, JHUNJHUNU. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACIPG 4123 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RE SPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SWRAWAN KUMAR GUPTA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K. C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING :10/08/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 13/08/2020 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 27.02.2019 OF LD. CIT (A)-IV, JAIPUR FOR THE ASSESS MENT YEAR 2013-14. DUE TO PREVAILING COVID-19 PANDEMIC CONDITION THE H EARING OF THE APPEALS ARE CONCLUDED THROUGH VIDEO CONFERENCE. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. THE IMPUGNED ASSESSMENT ORDER U/S 143(3) DATED 02.03.2016 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND ITA NO. 453/JP/2019 SHRI KRISHAN KUMAR GUPTA VS. ACIT 2 VARIOUS OTHER REASONS AND HENCE THE SAME MAY KINDLY BE QUASHED. 2.1 RS. 35,68,959/-: THE LD. CIT(A) HAS GROSSLY ERR ED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 35,68,959/- ON ACCOUNT OF LONG TERM CAPITAL GAIN B Y DENYING THE CLAIM/DEDUCTION/EXEMPTION U/S 54F. HENCE, THE ADDIT ION SO MADE OR CLAIM SO DENIED DISALLOWANCE BY THE LD. AO AND C ONFIRMED BY THE LD. CIT(A) IS BEING TOTALLY CONTRARY TO THE PRO VISIONS OF LAW AND FACTS ON THE RECORD AND HENCE THE PENALTY MAY K INDLY BE DELETED IN FULL. 2.2 THE LD. AO AS WELL AS THE LD. CIT(A) HAVE GROSS LY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN NOT CONSIDER ING THE FACTS, EVIDENCES AND VITAL JUDGMENTS. HENCE THE ADDITION S O MADE OR CLAIM SO DENIED DISALLOWANCE BY THE LD. AO AND CONF IRMED BY THE LD. CIT(A) IS ALSO BEING TOTALLY CONTRARY TO THE PR OVISIONS OF LOW AND FACTS ON THE RECORD AND HENCE THE PENALTY MAY K INDLY BE DELETED IN FULL. 3. THE LD. AO HAS GROSSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING INTEREST U/S 234 A,B,C AND D A S ALSO WITHDRAWING INTEREST U/S 244A. THE APPELLANT TOTALL Y DENIES IT LIABILITY OF CHARGING OF ANY SUCH INTEREST. THE INT EREST, SO CHARGED, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS M AY KINDLY BE DELETED IN FULL. 2. THE SOLITARY ISSUE ARISES IN THIS APPEAL IS DISA LLOWANCE OF CLAIM OF DEDUCTION U/S 54F OF THE ACT AGAINST THE CAPITAL GA IN DRIVE BY THE ASESSEE DURING THE YEAR UNDER CONSIDERATION. THE AS SESSEE IS A CONTRACTOR ENGAGED IN THE CIVIL CONTRACT WORKS AND ALSO RUNNING OF VEHICLES AND MACHINERIES ON HIRE. THE ASSESSEE FILE D HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 28.09.20 13 DECLARING TOTAL ITA NO. 453/JP/2019 SHRI KRISHAN KUMAR GUPTA VS. ACIT 3 INCOME OF RS. 25,49,550/-. DURING THE SCRUTINY ASSE SSMENT THE AO NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 5 4F OF THE IT ACT OF RS. 35,68,959/- ON ACCOUNT OF INVESTMENT OF HOUSE P ROPERTY. THE AO ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WH Y THE CLAIM U/S 54F OF THE ACT SHOULD NOT BE DISALLOWED AS THE ASSESSEE HAS NOT FILED ANY DETAIL IN SUPPORT OF THE CLAIM. AFTER CONSIDERING T HE REPLY OF THE ASSESSEE THE AO HAS DISALLOWED THE DEDUCTION U/S 54 F OF THE ACT BY CITING VARIOUS REASONS. ON APPEAL THE LD. CIT(A) HA S CONFIRMED THE DISALLOWANCE MADE BY THE AO. 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT THE AO HAS DISALLOWED THE CLAIM OF DEDUCTION U/S 54F OF TH E ACT ON AS MANY AS 4 GROUNDS WHEREAS THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE ONLY ON ONE GROUND BEING MORE THAN ONE RESIDENTIAL HOUSE S WERE OWNED BY THE ASSESSEE AS ON THE DATE OF SALE. HE HAS VEHEMEN TLY CONTENDED THAT THE ASSESSEE HAS SHOWN IN THE BALANCE SHEET AS ON 3 1.03.2013 A FLAT IN AHEMDABAD CITY HOWEVER, THE SAID FLAT BEARING NO. C -501 WAS NOT ALLOTTED TO THE ASSESSEE TILL THE DATE DUE TO SOME DISPUTE IN THE PROJECT ITSELF. THUS, THE LD. AR HAS SUBMITTED THAT THE LD. CIT(A) HAS DISALLOWED THE CLAIM WITHOUT CONSIDERING ALL FACTS AND EVIDENC ES PRODUCED BY THE ASSESSEE. HE HAS ALSO FILED ADDITIONAL EVIDENCE ALO NG WITH APPLICATION ITA NO. 453/JP/2019 SHRI KRISHAN KUMAR GUPTA VS. ACIT 4 UNDER RULE 29 OF ITAT RULES AND PLEADED THAT THE AD DITIONAL EVIDENCE MAY BE ADMITTED IN SUPPORT OF THE CLAIM THE FLAT WA S NOT FINALLY GIVEN TO THE ASSESSEE AND THEREFORE, UNTIL AND UNLESS THE FL AT IS FINALLY ACQUIRED AND OWNED BY THE ASSESSEE IT CANNOT BE CONSIDERED A S THE ASSESSEE WAS HAVING MORE THAN ONE RESIDENTIAL HOUSES AS ON T HE DATE OF SALE OF THE PROPERTY. HE HAS ALSO REFERRED THE BALANCE SHEE T AS ON 31.03.2015 AND SUBMITTED THAT IN THE SUBSEQUENT YEARS BALANCE SHEET THE ASSESSEE HAS NOT SHOWN THIS FLAT AS IT WAS NOT ALLOTTED TO T HE ASSESSEE. HE HAS ALSO RELIED UPON THE VARIOUS JUDGMENTS ON THE POINT OF LEGAL OWNERSHIP OF IMMOVABLE PROPERTY. 4. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT THE AO HAS CONSIDERED THIS FACTS OF THE ASSESSEE HAVING A FLAT AT AHMEDABAD FROM THE BALANCE SHEET OF THE ASSESSEE ITSELF AND THEREF ORE THE ASSESSEE CANNOT DISPUTE THIS FACT WHICH IS PART OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND SHOWN IN THE BALANCE SHEET. SUBSEQUENT STAND OF THE ASSESSEE IS AN AFTERTHOUGHT CLAIM WHEN THE ASSESSIN G OFFICER DISALLOWED THE CLAIM U/S 54F OF THE ACT. HE HAS RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE DOCUMENTS WHICH IS NOW RELIED UPON BY THE ASSESSEE WERE NOT FILED BEFORE THE ASSE SSING OFFICER. ITA NO. 453/JP/2019 SHRI KRISHAN KUMAR GUPTA VS. ACIT 5 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THE AO HAS DISALLOWED THE CLAIM OF THE ASSESSEE U/S 54F OF THE ACT IN PAR A 3.2 AS UNDER:- 3.2 THE REPLY FILED BY THE ASSESSEE HAS NOT CONSID ERED AND PLACED ON RECORD. ON PERUSAL OF THE DETAILS FILED W ITH THE REPLY IT IS NOTICED THAT THE CLAIM OF THE ASSESSEE AS PER DE DUCTION U/S 54F IS NOT ACCEPTABLE ON THE FOLLOWING POINTS/GROUNDS:- 1. ON PERUSAL OF BALANCE SHEET FOR THE YEAR ENDING ON 31/03/2013, IT IS NOTICED THAT THE ASSESSEE HAS ONE FLAT AT AHMEDABAD, IT MEANS THAT THE ASSESSEE HAS ALREADY T WO RESIDENTIAL HOUSE PRIOR TO 31/03/2013 THEREFORE THE CONDITION LAID DOWN IN THE SECTION 54F THAT THE ASSESSEE CAN HAVE OR CAN INVEST ONLY IN TWO RESIDENTIAL HOUSE PROPERTY F OR TAKING DEDUCTION U/S 54F OF THE ACT, 2. AS PER THE SECTION 54F THE ASSESSEE HAS TO START CONSTRUCTION AFTER THE SALE CONSIDERATION WHEREAS T HE ASSESSEE HAS STARTED CONSTRUCTION BEFORE TWO YEAR F ROM THE DATE OF SALE CONSIDERATION AS PER COMPUTATION OF IN COME FILED FOR THE A.Y. 2011-12 WHEREIN THE ASSESSEE HAS SHOWN CLAIMED LOSS ON SELF OCCUPIED PROPERTY SITUATED AT 362, SECTOR 11, UDAIPURWATI ON ACCOUNT OF INTEREST PAYME NT U/S 24(B) OF THE ACT. 3. AS PER SECTION 54F THE WHOLE AMOUNT OF SALE CONS IDERATION MUST BE INVESTED IN PURCHASE OF HOUSE PROPERTY/CONS TRUCTION OF RESIDENTIAL PROPERTY WHEREAS THE ASSESSEE TAKEN HOU SE/HOME LOAN FROM SBI BANK FOR SUCH CONSTRUCTION AS THE ASS ESSEE HAS CLAIMED HOUSE PROPERTY LOSS ON ACCOUNT OF INTEREST PAYMENT U/S 24(B) OF THE ACT. 4. FOR CLAIMING. EXEMPTION U/S 54F THE ASSESSEE HAS TO TAKE ACTUAL SALE CONSIDERATION WHEREAS THE ASSESSEE HA.S TAKEN 50C VALUE. ITA NO. 453/JP/2019 SHRI KRISHAN KUMAR GUPTA VS. ACIT 6 THUS, THE AO HAS CITED REASONS FOR DENYING THE CLAI M OF DEDUCTION U/S 54F OF THE ACT. THIS ACTION WAS CHALLENGED BY THE A SSESSEE BEFORE THE LD. CIT(A) BUT THE LD. CIT(A) IN THE IMPUGNED ORDE R HAS CONFIRMED THE ACTION OF THE AO ONLY ON FIRST REASON ITSELF I.E. T HE ASSESSEE IS ALSO HAVING MORE THAN ONE RESIDENTIAL HOUSE WHICH IS IN- VIOLATION OF THE CONDITION PROVIDED U/S 54F OF THE ACT. THE RELEVANT FINDING OF THE LD. CIT(A) IN PARA 7 TO 7.4 IS AS UNDER:- 7. IT IS SEEN THAT THE E-APPEAL IS LATE BY 88 DAYS . THE A/R OF THE APPELLANT HAS FILED APPLICATION FOR CONDONATION OF DELAY WITH STATING REASONS. CONSIDERING THE REASONS THE DELAY IS CONDONED. 7.2 I HAVE PERUSED THE WRITTEN SUBMISSIONS SUBMITTE D BY THE LD. A/R AND THE ORDER OF AO. I HAVE ALSO GONE THROU GH VARIOUS JUDGMENTS CITED BY THE LD. A/R AND THOSE CONTAINED IN THE ORDER OF AO. 7.3 THE BASIC CONTROVERSY IS DENIAL OF DEDUCTION U/ S 54F OF THE ACT. THE AO DENIED SUCH DEDUCTION DUE TO MULTIPLE R EASON PREDOMINANT BEING THE APPELLANT HAD 2 HOUSE PROPERT IES IN THE MATERIAL TIME. THE AO REFERRED TO THE BALANCE SHEET AS AT 31.3.2013 AND NOTED THAT THERE IS ANOTHER FLAT IN A HMEDABAD. THE APPELLANT HOWEVER DENIED SAYING IT WAS ONLY PAR T INVESTMENT WHEREIN NO FLAT WAS REGISTERED AND IS ALSO NOT SHOW N IN THE SUBSEQUENT BALANCE SHEETS. ITA NO. 453/JP/2019 SHRI KRISHAN KUMAR GUPTA VS. ACIT 7 7.4 I HAVE CAREFULLY PERUSED THE APB. THE BALANCE S HEET AND PROFIT & LOSS ACCOUNT ARE ON APB PAGE- 8-10. IN THE BALANCE SHEET ENTRY 'FLAT PURCHASE AT AHMEDABAD RS. 1257600 ' IS EVIDENT. I AM IN AGREEMENT WITH THE AO IN DERIVING THE INFER ENCE THAT APPELLANT HAD 2 HOUSE PROPERTY AT MATERIAL TIME. TH E APPELLANT HAS NOT FURNISHED ANY POSITIVE EVIDENCE TO SHOW THA T IT WAS ONLY A BOOKING AMOUNT. IN MY VIEW THE INFERENCE DRAWN BY T HE AO IS CORRECT. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ACTION IN DENYING THE DEDUCTION U/S 54F OF THE ACT IS CONFIRMED. APPELLANTS GROUND NO. 1 IS DISMISSED. SINCE, THE LD. CIT(A) HAS NOT DISCUSSED THE OTHER G ROUNDS WHICH THE AO HAS RECORDED IN THE ASSESSMENT ORDER ALONG WITH THI S ONE WHICH IS CONSIDERED BY THE LD. CIT(A) AND FURTHER THE ASSESS EE HAS NOW PRODUCED THE ADDITIONAL EVIDENCE IN SUPPORT OF THE CLAIM THAT HE HAS NOT ACQUIRED THE FLAT IN QUESTION AS SUCH THERE IS NO V IOLATION OF CONDITION PRESCRIBED U/S 54F OF THE ACT THEREFORE, IN THE FAC TS AND CIRCUMSTANCES OF THE CASE WE SET ASIDE THE MATTER TO THE RECORD O F THE LD. CIT(A) TO CONSIDERED THE ADDITIONAL EVIDENCE FILED BY THE ASS ESSEE AND THEREAFTER GIVE A FINDING ON ALL THE ISSUES AND GROUNDS WHICH WERE RAISED BY THE AO WHILE DENYING THE DEDUCTION U/S 54F OF THE ACT. NEEDLESS TO SAY THE ASSESSEE WAS GRANTED ONE MORE OPPORTUNITY OF HEARIN G BEFORE PASSING FRESH ORDER. ITA NO. 453/JP/2019 SHRI KRISHAN KUMAR GUPTA VS. ACIT 8 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13/08/2020 . SD/- SD/- JESK LH0 KEKZ FOT; IKY JKO (RAMESH. C. SHARMA) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/08/2020. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI KRISHAN KUMAR GUPTA, UDAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE, JHUNJHUNU. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 453/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR