SHRI GAURAV TALWAR, JALANDHAR V. ASSISTANT COMMISSIONER OF INCOME TAX ,CIRCLE-3, JALANDHAR

ITA 492/ASR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7072 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 04-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAVANI SHANKAR
• Keywords: Capital Gains
• Section: 54F; 143(1); 22

Judgement Text

PAGE | 1 ITA NO. 492/ASR/2018 A.Y. 2015-16 SHRI GAURAV TALWAR VS. ACIT,CIRCLE-3 IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.492/ASR./2018 (ASSESSMENT YEARS: 2015-16) SHRI GAURAV TALWAR 44-U, COLONY GTB NAGAR EXT., JALANDHAR. VS. ACIT, CIRCLE-3 JALANDHAR. PAN AHXPT4726C (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHRAY SARNA, A.R. RESPONDENT BY: SHRI BHAVANI SHANKAR, D.R DATE OF HEARING: 08.01.2019 DATE OF PRONOUNCEMENT: 15.01.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-2, JALANDHAR, DATED 31.07.2018, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC.143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT I.T. ACT), DATED 22.12.2017 FOR A.Y. 2015-16. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE ORDER PASSED BY THE HONBLE CIT(A) DATED 31.07.2018 IS THE LAW AND FACTS OF THE CASE. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, HONBLE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN DISALLOWING DEDUCTION CLAIMED U/S 54F OF THE ACT ON LONG TERM CAPITAL GAIN TO THE EXTENT OF RS.32,00,000/- BY IGNORING THE SUBMISSION OF THE ASSESSEE THAT SELLER HAS DECLARED THIS AMOUNT AS CAPITAL GAIN IN HIS RETURN. 3. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN DISALLOWING DEDUCTION U/S 54F WITHOUT CONSIDERING THE FACT THAT DEDUCTION U/S 54F IS ALLOWED FOR THE ENTIRE AMOUNT PAGE | 2 ITA NO. 492/ASR/2018 A.Y. 2015-16 SHRI GAURAV TALWAR VS. ACIT,CIRCLE-3 INVESTED IN PURCHASE OF RESIDENTIAL PROPERTY AND NOT RESTRICTED TO THE VALUE AS PER REGISTERED DEED, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. BRIEFLY STATED, THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y. 2015-16 ON 17.12.2016, DECLARING INCOME AT RS.42,61,190/-. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE I.T. ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2). 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE WHO HAD SOLD A PROPERTY FOR A CONSIDERATION OF RS. 2,00,00,000/-, HAD CLAIMED DEDUCTION UNDER SEC.54F OF RS.1,69,80,000/- AGAINST THE LONG TERM CAPITAL GAIN (FOR SHORT LTCG) ARISING THEREFROM. ON THE BASIS OF DETAILS FILED BY THE ASSESSEE, IT WAS OBSERVED BY THE A.O THAT THE AFORESAID CLAIM OF DEDUCTION WAS COMPRISED AS UNDER: PARTICULARS AMOUNT COST OF NEW ASSET RS. 1,26,15,000/ - COST OF MALBA RIGHTS ON PROPERTY RS. 32,00,000/ - COST OF REGISTRATION EXPENSES RS. 11,65,000/ - TOTAL RS. 1,69,80,000/ - THE A.O NOT FINDING FAVOUR WITH THE CLAIM OF THE ASSESSEE IN RESPECT OF DEDUCTION UNDER SEC.54F, TO THE EXTENT THE SAME WAS RELATABLE TO THE INVESTMENT OF RS. 32,00,000/- THAT WAS CLAIMED TO HAVE BEEN MADE BY HIM TOWARDS MALBA RIGHTS, THUS DECLINED TO ALLOW THE SAME AND RESULTANTLY RESTRICTED THE ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION UNDER SEC.54F TO AN AMOUNT OF RS.1,37,80,000/- [I.E RS. 1,69,80,000/- (-) RS. 32,00,000/-]. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). PAGE | 3 ITA NO. 492/ASR/2018 A.Y. 2015-16 SHRI GAURAV TALWAR VS. ACIT,CIRCLE-3 HOWEVER, THE CIT(A) NOT BEING PERSUADED TO SUBSCRIBE TO THE CONTENTIONS ADVANCED BY THE ASSESSEE REJECTED THE SAME AND UPHELD THE ORDER PASSED BY THE A.O. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. IT WAS SUBMITTED BY THE LD. AURTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE THAT AS THE PAYMENT OF RS. 32,00,000/- THAT WAS MADE BY THE ASSESSEE TOWARDS MALBA CHARGES FORMED PART AND PARCEL OF THE PURCHASE CONSIDERATION OF THE PORTION OF THE NEW RESIDENTIAL PROPERTY I.E. HOUSE NO. 73-L, MODAL TOWN, JALANDHAR, ADMEASURING 12 MARLA- 133 SQ.FT., THEREFORE, THE LOWER AUTHORITIES HAD ERRED IN DISLODGING THE CLAIM OF THE ASSESSEE TO THE SAID EXTENT. THE LD. A.R. IN ORDER TO BUTTRESS HIS AFORESAID CONTENTION DREW OUR ATTENTION TO THE AGREEMENT, DATED 10.08.2015 THAT WAS EXECUTED BETWEEN THE ASSESSEE AND SHRI GURINDAR SINGH DHIR (THE SELLER) FOR PURCHASE OF MALBA (PAGE 25) OF THE ASSESSES PAPER BOOK (FOR SHORT APB). APART THEREFROM, THE LD. A.R SUBMITTED THAT THE AFORESAID SELLER VIZ. SHRI GURINDAR SINGH DHIR HAD DULY INCLUDED THE SALE CONSIDERATION OF MALBA WHILE COMPUTING HIS CAPITAL GAINS TAX LIABILITY FOR THE YEAR UNDER CONSIDERATION. IN SUM AND SUBSTANCE, IT WAS THE CLAIM OF THE LD. A.R THAT AS THE AFORESAID PAYMENT OF RS.32 LAC MADE BY THE ASSESSEE TOWARDS PURCHASE OF MALBA FORMED PART AND PARCEL OF THE PURCHASE CONSIDERATION OF THE NEW RESIDENTIAL PROPERTY VIZ. HOUSE NO. 73-L, MALBA TOWN, JALANDHAR, HENCE HIS CLAIM FOR DEDUCTION UNDER SEC. 54F IN RESPECT OF THE SAME WAS WELL IN ORDER AND HAD WRONGLY BEEN DISALLOWED BY THE LOWER AUTHORITIES. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R.) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. THE LD. D.R DRAWING OUR ATTENTION TO THE ASSESSMENT ORDER SUBMITTED THAT ANY PAYMENT EXCEPT FOR THAT MADE FOR PURCHASE OF THE NEW RESIDENTIAL PROPERTY CANNOT BE CONSIDERED FOR WORKING OUT THE ENTITLEMENT OF AN ASSESSEE UNDER SEC.54F OF THE I.T ACT. IT WAS SUBMITTED BY THE LD. D.R THAT THE LOWER AUTHORITIES HAD RIGHTLY DECLINED TO ACCEPT THE CLAIM OF THE ASSESSEE UNDER SEC.54F IN RESPECT OF THE AFORESAID AMOUNT OF RS.32,00,000/- THAT WAS PAID TOWARDS THE MALBA CHARGES, AS THE PAGE | 4 ITA NO. 492/ASR/2018 A.Y. 2015-16 SHRI GAURAV TALWAR VS. ACIT,CIRCLE-3 SAME DID NOT FORM PART OF THE PURCHASE CONSIDERATION OF THE NEW RESIDENTIAL PROPERTY. 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAD ON THE BASIS OF A REGISTERED DEED DATED 10.08.2015, HAD PURCHASED A PORTION OF A RESIDENTIAL HOUSE I.E. HOUSE NO.73-L, MODEL TOWN, JALANDHAR, ADMEASURING 12 MARLA-138 SQ. FT. (OUT OF TOTAL AREA OF 22 MARLA-138 SQ.FT.) FOR A CONSIDERATION OF RS.1,26,15,000/-. APART THEREFROM, THE ASSESSEE HAD INCURRED REGISTRATION EXPENSES OF RS.11,65,000/- IN RESPECT OF THE AFORESAID PURCHASE TRANSACTIONS. WE FIND THAT THE REMAINING 10 MARLA-0 SQ. FT. OUT OF THE AFOREMENTIONED RESIDENTIAL PROPERTY I.E. HOUSE NO. 73-L, MODAL TOWN, JALANDHAR WAS PURCHASED BY A THIRD PARTY I.E. SMT. REENA KOHLI , VIDE A REGISTERED DEED DATED 31.08.2015. IN SUM AND SUBSTANCE, THE AFORESAID PROPERTY I.E. HOUSE NO. 73-L, MODAL TOWN, JALANDHAR, ADMEASURING 22 MARLA 138 SQ. FT.. WAS SOLD BY SHRI GURINDAR SINGH DHIR TO THE ASSESSEE (12 MARLA-138 SQ. FT) AND THE AFOREMENTIONED THIRD PARTY VIZ. SMT. REENA KOHLI (10 MARLA- 0 SQ.FT). ON A PERUSAL OF THE REGISTERED SALE DEED, DATED 10.08.2015, IT STANDS REVEALED THAT THE ASSESSEE HAD PURCHASED A PART OF THE AFOREMENTIONED RESIDENTIAL HOUSE I.E. HOUSE NO.73-L, MODAL TOWN, JALANDHAR. APART THEREFROM, A PERUSAL OF THE REGISTERED SALE DEED ON THE BASIS OF WHICH 10 MARLA-0 SQ.FT. OF THE AFOREMENTIONED PROPERTY WAS PURCHASED BY THE AFOREMENTIONED THIRD PARTY VIZ. SMT. REENA KOHLI REVEALS THAT SHE HAD PURCHASED THE REMAINING PART OF THE AFORESAID RESIDENTIAL HOUSE. WE ARE OF THE CONSIDERED VIEW THAT NOW WHEN THE ENTIRE RESIDENTIAL HOUSE VIZ. HOUSE NO. 73-L, MODAL TOWN, JALANDHAR HAD BEEN PURCHASED BY THE ASSESSEE AND SMT. REENA KOHLI, THUS THERE COULD BE NO OCCASION FOR THE ASSESSEE TO HAVE PURCHASED ANY MALBA FROM THE AFOREMENTIONED PARTY, AT LEAST IN CONTEXT OF THE PROPERTY UNDER CONSIDERATION. WE ARE OF A STRONG CONVICTION THAT THE PAYMENT OF RS.32 LAC MADE BY THE ASSESSEE TOWARDS THE MALBA CHARGES CAN IN NO WAY BE RELATED TO THE PURCHASE OF THE AFOREMENTIONED PROPERTY UNDER CONSIDERATION I.E. HOUSE NO. 73-L, MODAL TOWN, JALANDHAR. APART THEREFROM, THE FACT THAT THE PAGE | 5 ITA NO. 492/ASR/2018 A.Y. 2015-16 SHRI GAURAV TALWAR VS. ACIT,CIRCLE-3 IMPUGNED AGREEMENT, DATED 10.08.2015 IN CONTEXT OF THE PURCHASE OF MALBA IS AN UNREGISTERED AGREEMENT, THUS THE SAME IN NO WAY INSPIRE ANY CONFIDENCE AS REGARDS THE GENUINENESS OF THE VERACITY OF THE TRANSACTION UNDER CONSIDERATION. BE THAT AS IT MAY, WE ARE OF THE CONSIDERED VIEW THAT THE PAYMENT OF RS.32 LAC MADE BY THE ASSESSEE TO SHRI GURINDAR SINGH DHIR CAN IN NO WAY BE CONSTRUED AS PART AND PARCEL OF THE PURCHASE CONSIDERATION IN CONTEXT OF THE RESIDENTIAL PROPERTY I.E. HOUSE NO. 73-L MALBA TOWN, JALANDHAR, PART OF WHICH WAS PURCHASED BY HIM FROM SHIRI GURINDHAR SINGH DHIR. WE THUS FINDING NO INFIRMITY IN THE ORDER OF THE CIT(A), WHO WE FIND HAD FAIRLY RESTRICTED THE ENTITLEMENT OF THE ASSESSEE TOWARDS CLAIM OF DEDUCTION UNDER SEC.54F TO AN AMOUNT OF RS.1,37,80,000/-, THUS UPHOLD HIS ORDER. 8. WE THUS FINDING NO MERIT IN THE APPEAL OF THE ASSESSEE DISMISS THE SAME. ORDER PRONOUNCED IN THE OPEN COURT ON .01.2019 SD/- SD/- ( N.K. SAINI) (RAVISH SOOD) VICE PRESIDENT JUDICIAL MEMBER PLACE: JALANDHAR; DATE: 15,1.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , / DR, ITAT, CAMP BENCH, JALANDHAR 6. [ / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) /ITAT, CAMP BENCH, JALANDHAR. PAGE | 6 ITA NO. 492/ASR/2018 A.Y. 2015-16 SHRI GAURAV TALWAR VS. ACIT,CIRCLE-3 SR.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS 15.1.19 SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON 15.1.19 SR.PS/PS 7 FILE SENT TO THE BENCH CLERK 16.1.19 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH OF ORDER