ACIT, Gurgaon V. Sh. Vijay Kumar Hotani, Gurgaon

ITA 4549/DEL/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6694 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 26-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRENDRA KUMAR
• Assessee Lawyers: SM MATHUR
• Keywords: Cost of acquisition
• Section: 54F; 54

Judgement Text

I.T.A. NO. 4549/DEL/2009 1/5 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH H BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO. 4549/DEL/2009 (ASSESSMENT YEAR 2006-07) ITO, WARD 2, VS. SH. VIJAY KUMAR HOTANI, GURGAON PROP. M/S. MEERA EXPORTS, C-1, 399, PALEM VIHAR, GURGAON (APPELLANTS) (RESPONDENTS) PAN / GIR NO. ABEPH 7360K APPELLANT BY: SHRI AMRENDRA KUMAR SR. DR RESPONDENT BY: SHRI S.M. MATHUR, CA ORDER PER A. K. GARODIA, AM: 1. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A) PANCHKULA DATED 122.09.2009 FOR THE ASSESSME NT YEAR 2006-07. THE ONLY GROUND RAISED BY THE REVENU E IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE SE, T HE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING TH E ADDITION OF `70,00,000/- MADE BY THE A.O. ON ACCOUN T OF CAPITAL GAIN EVEN THOUGH THE ASSESSEE HAD FAILED TO FILE EVIDENCE IN SUPPORT OF HIS CLAIM. 2. THE BRIEF FACTS OF THE CASE ARE THAT IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER THAT FROM THE PERUSAL OF CAPIT AL ACCOUNT OF THE ASSESSEE ATTACHED WITH THE RETURN OF INCOME, IT IS REVEALED THAT THE ASSESSEE HAS RECEIV ED `22 LACS ON ACCOUNT OF SALE OF PLOT. IT IS ALSO NOTED BY THE A.O. THAT HE ASSESSEE HAS NOT DECLARED CAPITAL GAIN ON S ALE OF THIS PLOT IN THE COMPUTATION OF ITS INCOME. THE A. O. ASKED I.T.A. NO. 4549/DEL/2009 2/5 THE ASSESSEE TO FURNISH THE DETAILS OF PURCHASE OF PLOT, COST OF ACQUISITION AND NET CONSIDERATION FOR SALE OF PL OT. IN REPLY, THE ASSESSEE FURNISHED ALLOTMENT LETTER OF P LOT NO. A- 1557 IN THE NAME OF SHRI VIJAY HOTANI I.E. THE ASSE SSEE AND SMT. SYLLVIANE HOTANI ALONG WITH CALCULATION OF CAP ITAL GAIN. IT IS ALSO OBSERVED BY THE A.O. THAT AS PER THE AGR EEMENT FURNISHED BY THE ASSESSEE, IT IS SEEN THAT THE PLOT HAS BEEN ALLOTTED TO SHRI VIJAY HOTANI. IT IS FURTHER OBSER VED BY THE A.O. THAT A PERUSAL OF AGREEMENT EXECUTED BY THE AS SESSEE REVEALED THAT IT HAS BEEN EXECUTED ON 05.12.2006. IT IS ALSO OBSERVED BY THE A.O. THAT THE ASSESSEE HAS NOT FURNISHED THE DETAILS OF YEAR WISE PAYMENTS MADE FO R PURCHASE OF PLOT. THE A.O. HELD THAT THE ASSESSEE IS THE OWNER OF THIS PLOT AND IT IS NOT A JOINTLY OWNED PR OPERTY AND HENCE, THE A.O. HELD THAT THE ENTIRE SALE CONSIDERA TION OF THIS PLOT OF `70 LACS IS ASSESSABLE IN THE HANDS OF THE ASSESSEE AS CAPITAL GAIN BECAUSE THE ASSESSEE HAS N OT FURNISHED THE DETAILS REGARDING COST OF ACQUISITION AND REGARDING COMMISSION SAID TO HAVE BEEN PAID FOR THE SALE OF THE PLOT. IT IS FURTHER OBSERVED BY THE A.O. IN PARA 4 OF THE ASSESSMENT ORDER THAT IN THE COMPUTATION OF CAP ITAL GAIN CLAIMED BY THE ASSESSEE, HE HAS INVESTED `20 L ACS IN THE PURCHASE OF FLAT IN PALAM VIHAR, GURGAON. IT I S ALSO NOTED BYTE A.O. THAT THE ASSESSEE WAS ASKED TO FURN ISH DOCUMENTARY EVIDENCE WITH REGARD TO PURCHASE OF FLA T. THE A.O. HAS OBSERVED THAT THE ASSESSEE HAS NOT FURNISH ED DOCUMENTARY EVIDENCE REGARDING PURCHASE OF NEW FLAT AND HENCE, THE A.O. DID NOT ALLOW ANY DEDUCTION U/S 54F AND ASSESSED THE CAPITAL GAIN OF THE ASSESSEE AT `70 LA CS. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL I.T.A. NO. 4549/DEL/2009 3/5 BEFORE LD. CIT(A) WHO HAS DELETED THE ADDITION AND NOW, THE REVENUE IS IN APPEAL BEFORE US. 3. THE LD. D.R. FOR THE REVENUE SUPPORTED THE ASSESSME NT ORDER WHEREAS LD. A.R. FOR THE ASSESSEE SUPPORTED T HE ORDER OF LD. CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT VARIOUS OBJECTIONS WERE RAISED BY THE A.O. IN THIS MATTER. THE FIRST OBJEC TION OF THE A.O. WAS THAT THE PROPERTY WAS OWNED BY THE ASSESSE E FULLY AND NOT JOINTLY WITH MS. SYLLVIANE HOTANI, WIFE OF SHRI VIJAY HOTANI, THE ASSESSEE. FOR THIS PURPOSE, THE A.O. H AD REFERRED TO THE AGREEMENT DATED 05.12.2006. WE FIN D THAT IN THE PAPER BOOK PAGES 7-18, THERE IS AN AGREEMENT DATED 05.12.2006 BETWEEN THE ASSESSEE SHRI VIJAY HOTANI A ND M/S. ANSAL PROPERTIES AND INDUSTRIES LTD AND ON PAG ES 19 TO 31 IS ANOTHER AGREEMENT OF THE SAME DATE I.E. 05.12 .2006 BETWEEN MS. SYLLVIANE HOTANI AND ANSAL PROPERTIES A ND INDUSTRIES LTD. IN RESPECT OF THE SAME PLOT NO.A-15 57. THE PURCHASE CONSIDERATION AS PER BOTH THESE AGREEMENTS IS OF THE SAME AMOUNT I.E. `18.40 LACS. THE SALE DEED EX ECUTED BY M/S. ANSAL PROPERTIES & INDUSTRIES LTD. IS ALSO AVAILABLE ON PAGED 42-59 OF THE PAPER BOOK WHICH IS DATED 11.02.2005 AND AS PER THIS, THE PROPERTY HAS BEEN S OLD AND REGISTERED IN THE JOINT NAME OF MR. VIJAY HOTANI AN D MS. SYLLVIANE HOTANI FOR A TOTAL CONSIDERATION OF `38.8 0 LACS AND HENCE, WE ARE NOT IN AGREEMENT WITH THE A.O. THAT T HE ENTIRE PLOT WAS OWNED BY THE ASSESSEE INDIVIDUALLY AND NOT JOINTLY WITH MS. SYLLVIANE HOTANI. REGARDING AMOUN T OF SALE CONSIDERATION, THERE IS NO DISPUTE BECAUSE THE A.O. HAS ACCEPTED THE SAME AT `70 LACS. REGARDING THE COST OF I.T.A. NO. 4549/DEL/2009 4/5 ACQUISITION, THE SAME IS FOUND TO BE `36.80 LACS AS PER THE AGREEMENT AND ALSO AS PER SALE DEED. THE ASSESSEE HAS FURNISHED THE COMPUTATION OF CAPITAL GAIN ON PAGE 1 05 OF THE PAPER BOOK IN WHICH THE ASSESSEE HAS SHOWN THE SALE VALUE AT `70 LACS AND THE COSTS OF ACQUISITION AT ` 36.80 LACS. INDEXED COST HAS BEEN WORKED OUT AT `59,96,590/- AN D LONG TERM CAPITAL GAIN HAS BEEN WORKED OUT AT `10,03,310 /- AND HENCE, IT IS SEEN THAT IN THE COMPUTATION OF CAPITA L GAIN NO DEDUCTION HAS BEEN CLAIMED BY THE ASSESSEE ON ACCOU NT OF COMMISSION PAYMENT OF `70,000/- AND THE ONLY DEDUCT ION CLAIMED IS REGARDING INDEX COST OF ACQUISITION AND HENCE, TO THIS EXTENT, WE DO NOT FIND ANY MISTAKE IN THE COMP UTATION OF LONG TERM CAPITAL GAIN SUBMITTED BY THE ASSESSEE OF `10,03,310/-. THE ASSESSEE IS 50% OWNER OF THE PLO T AND, THEREFORE, THE LONG TERM CAPITAL GAIN BELONGING TO THE ASSESSEE IS TO BE CONSIDERED @ 50% OF `10,03,310/- AND NET CONSIDERATION OF THE ASSESSEE SHOULD ALSO BE CONSIDERED AT `35 LACS BEING 50% OF THE SALE PROCEE DS. THEREAFTER, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F ON ACCOUNT OF INVESTMENT IN PURCHASE OF ANOTHER RESIDE NTIAL HOUSE IN PALAM VIHAR, GURGAON AT THE COST OF `15,88 ,297/-. SINCE THE INVESTMENT IN NEW FLAT IS LESS THAN THE A MOUNT OF NET SALE CONSIDERATION OF `35 LACS, THE ASSESSEE IS ELIGIBLE FOR PROPORTIONATE DEDUCTION U/S 54F(1)(B) WHEREAS, IT IS HELD BY THE LD. CIT(A) IN PARA 5 OF HIS ORDER AND SINCE THE ASSESSEE HAS MADE MORE INVESTMENT IN PURCHASE OF TH E PROPERTY THAN THE CAPITAL GAIN, HIS ENTIRE CAPITAL GAIN IS ELIGIBLE FOR DEDUCTION U/S 54F. ON THIS ASPECT, WE ARE NOT IN AGREEMENT WITH LD. CIT(A) AND AS PER THE PROVISIONS OF SECTION 54F(1)(B), THE ASSESSEE IS ELIGIBLE FOR ONL Y PROPORTIONATE AMOUNT OF DEDUCTION AND HENCE, WE RES TORE I.T.A. NO. 4549/DEL/2009 5/5 THIS MATTER BACK TO THE FILE OF THE A.O. FOR QUANTI FYING THE AMOUNT OF DEDUCTION ALLOWABLE TO HE ASSESSEE U/S 54 F IN THE LIGHT OF THESE FACTS AND AS PER THE PROVISIONS OF SECTION 54F(1)(B). THE A.O. SHOULD PASS NECESSARY ORDER AS PER ABOVE DISCUSSION IN THE LIGHT OF THE PROVISIONS OF SECTION 54F(1)(B) OF THE ACT. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALL OWED FOR STATISTICAL PURPOSES. 6. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 9 TH NOV., 2010. SD./- SD./- (RAJPAL YADAV) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:19 TH NOV., 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI