Syeda Zehra Jabeen, Bangalore V. ITO, Bangalore

ITA 480/BANG/2014

• Counselvise Citation: 48021114 RSA 2014
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 11-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD K JT
• Assessee Lawyers: C R NULVI
• Keywords: Gift; Assessment record
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.480/BANG/2014 ASSESSMENT YEAR : 2008-09 SYEDA ZEHRA JABEEN, OPP. ANJANEYA TEMPLE, TAVARAKERE BUS TERMINAL, BTM 1 ST STAGE, BANGALORE. PAN : AEAPJ 1605C VS. THE INCOME TAX OFFICER, WARD 10(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI C.R. NULVI, C.A. RESPONDENT BY : DR. SHANKAR PRASAD K., JT.CIT (DR) DATE OF HEARING : 11.09.2014 DATE OF PRONOUNCEMENT : 19.09.2014 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 31.1.2011 OF THE CIT(APPEALS), LTU, BANGALORE AND P ERTAINS TO ASSESSMENT YEAR 2008-09. ITA NO. 480/BANG/2014 PAGE 2 OF 9 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN SIX GROUN DS OF APPEAL, OF WHICH GROUNDS NO.1, 5 & 6 ARE GENERAL NEEDING NO A DJUDICATION. 3. VIDE GROUND NO.2, THE ASSESSEE IS AGGRIEVED THAT A CLAIM FOR DEDUCTION U/S. 54F OF THE INCOME-TAX ACT, 1961 [TH E ACT] WAS NOT ALLOWED. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FIL ED RETURN FOR THE IMPUGNED ASSESSMENT YEAR DECLARING AN INCOME OF RS. 1,48,500. SHE HAD SOLD A PROPERTY FOR RS.30 LAKHS ON 14.1.2008. OUT OF THIS, SALE PROCEEDS OF RS.29,90,000 WAS DEPOSITED IN SB A/C. AGAINST THE CAPITAL GAIN ARISING OUT OF THIS SALE, THE ASSESSEE HAD CLAIMED A DEDUCTION U/S. 54F OF THE ACT. THE ASSESSING OFFICER DISALLOWED THE CLAIM FOR TWO REAS ONS. FIRST WAS THAT THE ASSESSEE HAD NOT DEPOSITED THE CONSIDERATION RECEIV ED IN CAPITAL GAINS ACCOUNT SCHEME, AS REQUIRED UNDER SECTION 54F OF TH E ACT. SECOND WAS THAT THE ASSESSEE HAD NOT PRODUCED DETAILS OF THE P ROPERTY CONSTRUCTED AND THE INVESTMENTS MADE IN SUCH CONSTRUCTION FOR CLAI MING THE DEDUCTION U/S. 54F OF THE ACT. 4. AGGRIEVED, THE ASSESSEE MOVED APPEAL BEFORE THE CIT(APPEALS). 5. THE LD. CIT(APPEALS) ON VERIFYING THE ASSESSMENT RECORDS FOUND THAT THE ASSESSEE HAD GIVEN A COPY OF ESTIMATE PREPARED BY ONE M/S. SPACE CONCEPT, A FIRM OF ARCHITECT & ENGINEERS. AN APPRO VED PLAN DATED 19.1.2009 WAS ALSO FILED BEFORE THE AO. THE ARGUME NT OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT SHE HAD STARTED CONSTRUC TION OF THE HOUSE AND INVESTED THE ENTIRE CAPITAL GAIN THEREIN BEFORE JAN UARY, 2010. THE ITA NO. 480/BANG/2014 PAGE 3 OF 9 ASSESSEE ALSO FILED A COPY OF RECEIPT DATED 31.3.20 10 GIVEN BY CHIEF ARCHITECT OF M/S. SPACE CONCEPT, IN WHICH THEY HAD ACKNOWLEDGED RECEIPT OF RS.26,25,000 DURING THE PERIOD JANUARY, 2008 TO FEBRUARY, 2010 FOR CONSTRUCTION OF A HOUSE FOR THE ASSESSEE. IN SUPPO RT OF THE CONTENTION THAT THE CONSTRUCTION ALREADY STOOD COMPLETED, THE ASSES SEE ALSO PRODUCED A LETTER OF ASST. EXECUTIVE ENGINEER, BESCOM LTD., WH EREIN IT WAS CONFIRMED THAT R.R. NO.6816037 WAS FOR THE DOMESTIC LIGHTING AT NO.54, 16 TH MAIN, 21 ST CROSS, N.S. PALYA, BTM 2 ND STAGE, BANGALORE 560 076 IN THE NAME OF SMT. SYEDA ZEHRA JABEEN. BILLS RAISED BY M/S. BESC OM WERE ALSO PRODUCED. THE ASSESSEE WAS ALSO ABLE TO FURNISH BI LLS FROM BWSSB FOR WATER CONNECTION. 6. HOWEVER, THE LD. CIT(APPEALS) AFTER GOING THROUG H THE DOCUMENTS PRODUCED BY THE ASSESSEE, WAS OF THE OPINION THAT T HE ESTIMATE GIVEN BY THE ARCHITECT DID NOT CARRY ANY EVIDENTIARY VALUE. FURTHER, ACCORDING TO HIM, THE CONFIRMATION FROM BESCOM DID NOT ESTABLISH THE PERIOD OF CONSTRUCTION NOR THE DATE OF COMPLETION OF CONSTRUCTION. AS PER THE LD. CIT(A), IT WAS NECESSARY FOR THE ASSESSEE TO PRODUCE A CONFIRMATIO N FROM THE MUNICIPAL AUTHORITIES FOR COMPLETION OF THE CONSTRUCTION. 7. AS REGARDS THE NON-DEPOSIT OF AMOUNTS IN THE DES IGNATED ACCOUNT, SUBMISSION OF THE ASSESSEE BEFORE THE CIT(A) WAS TH AT THE TIME FOR DEPOSITING SUCH AMOUNT HAD TO BE CONSTRUED WITH REF ERENCE TO SECTION 139(4) OF THE ACT. ACCORDING TO THE ASSESSEE, EVEN PRIOR TO THAT OUTER LIMIT, ITA NO. 480/BANG/2014 PAGE 4 OF 9 CONSTRUCTION WAS COMPLETED. THE LD. CIT(A) REFUSED TO ACCEPT THIS CONTENTION ALSO. ACCORDING TO HIM, IN THE NAME OF LIBERAL INTERPRETATION, THE TIME FOR DEPOSITING INTO THE CAPITAL GAINS ACCOUNT SCHEME COULD NOT BE EXTENDED. 8. NOW BEFORE US, THE LD. AR STRONGLY ASSAILING THE ORDER OF AUTHORITIES BELOW, BROUGHT TO OUR ATTENTION THAT THE LOCATION O F THE PROPERTY NEWLY ACQUIRED WAS STATED BY THE AO HIMSELF AS NO.54, 16 TH MAIN, 21 ST CROSS, N.S. PALYA, BTM 2 ND STAGE, BANGALORE 560 076. PLACING RELIANCE ON PA GE 12 OF THE PAPERBOOK, THE LD. AR SUBMITTED THAT BESC OM HAD CERTIFIED DOMESTIC ELECTRICITY CONNECTION BEING GIVEN TO THE BUILDING THEREIN. RELYING ON PAGE 30 OF THE PAPERBOOK, THE LD. AR SUBMITTED T HAT THE ELECTRICITY BILL DATED 8.3.2010 RAISED ON THE ASSESSEE CLEARLY MENTI ONS THE SAID R.R. NO. THIS WOULD MEAN, THE LD. AR SUBMITTED, THE CONSTRUC TION STOOD COMPLETED BY MARCH, 2010 AT LEAST. THE ASSESSMENT YEAR BEING 2008-09, ACCORDING TO HIM, THE TIME AVAILABLE FOR THE ASSESSEE FOR INV ESTING IN THE NEW CONSTRUCTION WAS UPTO 31.3.2010. SINCE THE ASSESSE E HAD ALREADY APPLIED THE CAPITAL GAINS IN THE NEW CONSTRUCTION, THERE WA S NO QUESTION OF ANY DEPOSIT BEING MADE IN THE CAPITAL GAINS ACCOUNT SCH EME. RELIANCE WAS PLACED BY THE LD. AR ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF FATIMA BAI V. ITO (2009) 32 DTR 243 (KAR) . 9. PER CONTRA, THE LD. DR SUPPORTED THE ORDERS OF A UTHORITIES BELOW. ITA NO. 480/BANG/2014 PAGE 5 OF 9 10. WE HAVE PERUSED THE IMPUGNED ORDERS AND HEARD T HE RIVAL CONTENTIONS. THERE IS NO DISPUTE THAT THE ASSESSEE HAD NOT DEPOSITED CAPITAL GAIN IN THE SPECIFIED CAPITAL GAINS ACCOUNT SCHEME. HOWEVER, THE TIME PERIOD AVAILABLE FOR THE ASSESSEE FOR MAKING S UCH DEPOSIT WAS ALSO AN ISSUE BEFORE THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF FATIMA BAI (SUPRA) , WHEREIN IT WAS HELD AS FOLLOWS:- 9. THE S. 139(4) DECLARES THAT THE ASSESSEE SHOUL D FILE RETURNS WITHIN THE TIME PRESCRIBED, IF HE FAILS TO FILE RET URNS, HE MAY FILE RETURNS FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE EX PIRY OF ONE YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. 10. IN THE INSTANT CASE, THE DUE DATE FOR FILING O F RETURN IS 30TH JULY, 1988. UNDER S. 139(4) THE ASSESSEE WAS ENTITL ED TO FILE RETURN IN THE EXTENDED TIME, WHICH IS WITHIN 31ST MARCH, 1 990. 11. THE EXTENDED DUE DATE UNDER S. 139(4) WOULD BE 31ST MARCH, 1990. THE ASSESSEE DID NOT FILE THE RETURN W ITHIN THE EXTENDED DUE DATE, BUT FILED THE RETURN ON 27TH FEB ., 2000. HOWEVER, THE ASSESSEE HAD UTILISED THE ENTIRE CAPIT AL GAINS BY PURCHASE OF A HOUSE PROPERTY WITHIN THE STIPULATED PERIOD OF S. 54(2) I.E., BEFORE THE EXTENDED DUE DATE FOR RETURN UNDER S. 139. THE ASSESSEE TECHNICALLY MAY HAVE DEFAULTED IN NOT FILING THE RETURN UNDER S. 139(4). BUT, HOWEVER, UTILISED THE CAPITAL GAINS FOR PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DATE U NDER S. 139(4). THE CONTENTION OF THE REVENUE THAT THE DEPO SIT IN THE SCHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DUE DATE IS AN UNTENABLE CONTENTION. 12. THE GAUHATI HIGH COURT IN CIT VS. RAJESH KUMAR JALAN (2006) 206 CTR (GAU) 361: (2006) 286 ITR 274(GAU) H AS TAKEN A SIMILAR VIEW THAT THE TIME-LIMIT FOR DEPOSIT UNDE R THE SCHEME OR UTILISATION CAN BE MADE BEFORE THE DUE DATE FOR FIL ING OF RETURNS UNDER S. 139(4). ITA NO. 480/BANG/2014 PAGE 6 OF 9 11. THE CERTIFICATE ISSUED BY BESCOM PLACED AT PAGE 12 OF PAPERBOOK SHOWS THAT THE ASSESSEE HAD A DOMESTIC ELECTRICITY CONNECTION AT NO. NO.54, 16 TH MAIN, 21 ST CROSS, N.S. PALYA, BTM 2 ND STAGE, BANGALORE 560076. R.R. NO. IN THE CERTIFICATE IS 6816037. I N THE ELECTRICITY BILL DATED 8.3.2010, COPY OF WHICH HAS BEEN PLACED AT PAGE 13 OF THE PAPERBOOK, THE SAME R.R. NO. IS MENTIONED. THE ASSESSEE HAD ALSO PRODUCED EVIDENCE FOR HAVING OBTAINED WATER SUPPLY CONNECTION. THERE FORE, THE ASSESSEE HAD PRODUCED, IN OUR OPINION, SUFFICIENT EVIDENCE TO SH OW THAT CONSTRUCTION WAS COMPLETED BEFORE 31.3.2010. 12. IN ANY CASE, THE HONBLE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT V. SAMBANDAM UDAYKUMAR, 251 CTR 317 , HAS CLEARLY HELD THAT IT IS NOT NECESSARY TO COMPLETE THE CONSTRUCTION WITHIN T HE THREE YEAR PERIOD FROM THE DATE OF TRANSFER. THEIR LORDSHIPS HELD TH AT IF THE ASSESSEE HAD INVESTED MONEY IN CONSTRUCTION OF RESIDENTIAL HOUSE , MERELY BECAUSE THE CONSTRUCTION WAS NOT COMPLETE IN ALL RESPECTS AND I T WAS NOT IN A FIT CONDITION TO BE OCCUPIED WITHIN THE PERIOD STIPULAT ED, WOULD NOT DISENTITLE AN ASSESSEE FROM CLAIMING THE BENEFIT U/S. 54F OF THE ACT. 13. WE ARE, THEREFORE, OF THE OPINION THAT THE ASSE SSEES CLAIM U/S. 54F OF THE ACT HAS TO BE ALLOWED. THUS, GROUND NO.2 O F THE ASSESSEE IS ALLOWED. 14. VIDE GROUND NOS.3 & 4, THE ASSESSEE IS AGGRIEVE D THAT THE GIFT OF RS.3 LAKHS RECEIVED BY HER FROM HER RELATIVE WAS NO T ACCEPTED. ITA NO. 480/BANG/2014 PAGE 7 OF 9 15. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD RECEIVED A GIFT OF RS.3 LAKHS FROM ONE MOHAMMED FAZLUR RAHMAN ON 23.12 .2010 FOR WHICH A CONFIRMATION WAS FILED BEFORE THE AO. THE GIFT WAS SENT TO THE BANK ACCOUNT OF THE ASSESSEE. THE AO DID NOT ACCEPT THE GENUINENESS OF THE GIFT AND CAPACITY OF THE DONOR AND DISALLOWED THE C LAIM OF GIFT. AN ADDITION UNDER THE HEAD INCOME FROM OTHER SOURCES WAS MADE . 16. IN HER APPEAL BEFORE THE CIT(APPEALS), THE ARGU MENT OF THE ASSESSEE WAS THAT THE DONOR WAS CLOSELY RELATED TO THE ASSESSEE, WHO HAD THE WHEREWITHAL TO GIVE THE GIFT. ACCORDING TO THE ASSESSEE, THE DONOR WAS EMPLOYED IN CANADA FOR VERY MANY YEARS. IN SUPPORT THEREOF, THE ASSESSEE ALSO FILED COPY OF STATEMENT OF REMUNERATION RECEIV ED BY THE DONOR FROM HIS EMPLOYER, M/S. MURATA POWER SOLUTIONS. NEVERTHELES S, THE LD. CIT(A) DID NOT ACCEPT THE CLAIM AND CONFIRMED THE ADDITION. 17. NOW, BEFORE US, THE LD. AR SUBMITTED THAT DESPI TE CLEAR EVIDENCE BEING PRODUCED IN SUPPORT OF THE GIFT, IT WAS DISBE LIEVED. ON THE CONTRARY, THE LD. DR SUPPORTED THE ORDERS OF AUTHORITIES BELO W. 18. WE HAVE HEARD THE RIVAL CONTENTIONS. THE ASSES SEE HAD PRODUCED A CONFIRMATION FROM MOHAMMED FAZLUR RAHMAN, WHO WAS C LOSELY RELATED TO THE ASSESSEE BEFORE THE AO. THE SCANNED COPY OF CO NFIRMATION REPRODUCED BY THE CIT(A) AT PAGE 5 OF HIS ORDER CLE ARLY STATES THAT THE ASSESSEE IS DONORS FIRST COUSIN AS WELL AS SISTER- IN-LAW. IT ALSO STATES THAT GIFT WAS BEING GIVEN ON ACCOUNT OF LOVE AND AFFECTI ON. ALONG WITH THE SAID ITA NO. 480/BANG/2014 PAGE 8 OF 9 CONFIRMATION OF THE SAID MOHAMMED FAZLUR RAHMAN, TH E ASSESSEE HAD ALSO OBTAINED COPIES OF HIS AS WELL AS HIS WIFES P ASSPORT. BEFORE THE CIT(A), THE ASSESSEE HAD FURTHER FILED A STATEMENT IN WHICH THE EMPLOYER OF SHRI MOHAMMED FAZLUR RAHMAN HAD CONFIRMATION THE RE MUNERATION PAID TO HIM DURING THE YEAR 2009. IN OUR OPINION, SUFFICIE NT EVIDENCE WAS BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THE GENUINENESS O F THE GIFT AND THE CAPACITY OF THE DONOR. THERE EXISTED A VERY CLOSE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DONOR ALSO. IN OUR OPINION, THE G IFT OUGHT NOT TO HAVE BEEN DISBELIEVED. ADDITION MADE ON THIS COUNT IS D ELETED. THUS, GROUNDS NO.3 & 4 ARE ALLOWED. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF SEPTEMBER , 2014 . SD/- SD/- ( N.V. VASUDEVAN ) ( ABRAHAM P. GEORG E ) JUDICIAL MEMBER ACCOUNTANT MEM BER BANGALORE, DATED, THE 19 TH SEPTEMBER , 2014 . /D S/ ITA NO. 480/BANG/2014 PAGE 9 OF 9 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.