ROHAN AGARWAL, Jaipur V. ACIT, Ajmer

ITA 51/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2116 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 18-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P P MEENA JCIT DR DHK
• Keywords: Capital asset
• Section: 143(3); 54F; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 51/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2009-10 SHRI ROHAN AGARWAL M-79, ANA SAGAR LINK ROAD AJMER CUKE VS. THE ACIT CIRCLE-1 AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AFCPA 5095 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI MAHENDRA GARGIEYA, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY:SHRI P.P. MEENA, JCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/02/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 13 /02/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) AJMER DATED 04-11-2015 FOR THE ASSESSMENT YEAR 2 009-10 RAISING AMENDED GROUNDS OF APPEAL AS UNDER:- 1 THE LD. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ALLOWANCE OF TH E DEDUCTION CLAIMED U/S 54F UPTO RS. 17,18,127/- ONLY AS AGAINST THE DEDUCTION CLAIMED BY THE APPELLANT OF R S. 46,93,353/- AND THUS THEREBY CONFIRMING THE DENIAL OF DEDUCTION OF RS. 29,13,226/-. THE CONFIRMATION OF T HE PART DENIAL OF THE DEDUCTION MADE BY THE AO, BEING CONTR ARY TO ITA NO.51/JP/2016 SHRI ROHAN AGARWAL VS ACIT, CIRCLE - 1, AJMER 2 THE PROVISIONS OF LAW AND FACTS, THE REST AMOUNT OF DEDUCTION ALSO KINDLY BE ALLOWED. 2. THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN NOT CONSIDERING ALL THE FOUR PLOTS PURCHASED AS ONE SINGLE UNIT, EVEN THOUGH THE APPEL LANT ADMITTEDLY CONSTRUCTED A NEW RESIDENTIAL HOUSE IN O NE PLACE OF LAND, WHICH IS CONTRARY TO THE PROVISION OF LAW AND FACTS. HENCE, THE APPELLANT BE DECLARED AS HAVING FULFILLE D THE REQUISITE CONDITIONS AND THE DEDUCTION AS CLAIMED K INDLY BE ALLOWED IN FULL. 3. THE AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING INTEREST U/S 234B, 24C & 234D OF THE ACT. THE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING OF ANY SUCH INTEREST. 2.1 APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STATEMENT OF FACTS, GROUNDS OF APPEAL, WRITTEN SUBM ISSION CAREFULLY. IT IS SEEN THAT THE ASSESSEE HAD TRANSFE RRED A PROPERT FOR RS. 1,92,25,000/- ON11-04-2008 WHICH HE HAD PUR CHASED ON 22-12-2011. THUS THE ASSESSEE EARNED A CAPITAL G AIN OF RS. 1,75,37,856/- ON TRANSFER OF CAPITAL ASSET. THE ASSESSEE PURCHASED RESIDENTIAL PLOTS NUMBER 1,2,3 AND 4 FOR RS. 10,64,000/-, RS. 10,50,000/-, 10,38,000/- AND 7,04, 000/- RESPECTIVELY VIDE REGISTERED DEED SR. NO. 136, 135, 137 AND 134 RESPECTIVELY, REGISTERED IN THE SUB-REGISTRAR, AJMER-1 OFFICE ON 19-05-2008 AND CONSTRUCTED A RESIDENTIAL HOUSE IN PLOT NO. 4. THE CONSTRUCTION EXPENSES INCURRED WERE 12,22,000/-. THE AO ALLOWED THE DEDUCTION U/S 54 IN RESPECT OF INVESTMENT MADE IN PLOT NO. 4 (RS. 7,04,000/-) A ND CONSTRUCTION EXPENSES INCURRED FOR THE HOUSE BUILT IN PLOT NO. 4 (RS. 12,22,000/-). THE AO DID NOT ALLOW ANY DEDUC TION IN ITA NO.51/JP/2016 SHRI ROHAN AGARWAL VS ACIT, CIRCLE - 1, AJMER 3 RESPECT OF INVESTMENT MADE IN PURCHASE OF PLOT NO. 1,2, AND 3. I HAVE GONE THROUGH THE PROVISIONS OF SEC 54F CAREFULLY. THE DEDUCTION U/S 54F(1) IS ADMISSIBLE I N RESPECT OF A RESIDENTIAL HOUSE CONSTRUCTED WITHIN THE SPECI FIED PERIOD. FROM THE ASSESSMENT ORDER ITSELF, IT IS CLE AR THAT THE ASSESSEE HAS CONSTRUCTED THE HOUSE ONLY ON PLOT NO. 4. NO CONSTRUCTION HAS BEEN MADE ON PLOT NO. 1,2 AND 3. T HE CONTENTION OF THE APPELLANT THAT ALL THE FOUR PLOTS CONSTITUTE A SINGLE UNIT IS NOT ACCEPTABLE BECAUSE THE ASSESSEE HIMSELF HAS NOT UTILIZED THESE PLOTS FOR CONSTRUCTION OF AN Y COMMON HOUSE PROPERTY. ONLY PLOT NO.4, HAS BEEN UTILIZED F OR CONSTRUCTION OF PROPERTY. ALL THE FOUR PLOTS ARE SE PARATE UNITS. I HAVE GONE THROUGH THE VARIOUS DECISIONS RELIED BY THE APPELLANT. IN NONE OF THE CASE, IT HAS BEEN HELD TH AT IF THE ASSESSEE PURCHASES FOUR PLOT AND THE CONSTRUCTION I S MADE ONLY AT ONE PLOT, THE DEDUCTION U/S 54 SHALL BE ALL OWED IN RESPECT OF INVESTMENT MADE IN OTHER 3 PLOTS ALSO. A FTER GOING THROUGH ALL THE FACTS OF THE CASE, I AM OF THE CONS IDERED VIEW THAT THE FOUR PLOTS PURCHASE BY THE APPELLANT DO NO T CONSTITUTE A SINGLE UNIT. ALL THE PLOTS ARE SEPARATE UNITS. TH E ASSESSEE HAS CONSTRUCTED THE HOUSE ONLY AT ONE PLOT I.E. PLO T NO. 4.THEREFORE, IN MY VIEW THE AO IS FULLY JUSTIFIED I N ALLOWING DEDUCTION U/S 54F ONLY IN RESPECT OF INVESTMENT MAD E IN PLOT NO. 4 (RS. 7,04,000/-) AND THE CONSTRUCTION CARRIED OUT ON PLOT NO.4 (RS. 12,22,000/-). HENCE, THE DEDUCTION C OMPUTED AND ALLOWED BY AO U/S 54F IS IN ACCORDANCE WITH PRO VISION OF LAW. ACCORDINGLY, THESE GROUNDS OF APPEAL ARE DI SMISSED. 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED FOR DELETION OF ADDITION CONFIRMED BY THE LD. CIT(A). T HE LD.AR OF THE ASSESSEE FILED THE WRITTEN SUBMISSION WHICH HAS BEE N TAKEN INTO ITA NO.51/JP/2016 SHRI ROHAN AGARWAL VS ACIT, CIRCLE - 1, AJMER 4 CONSIDERATION WHILE ADJUDICATING UPON THE ABOVE GRO UNDS RAISED BY THE ASSESSEE. 2.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LD. CIT(A). 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE HAD PURCHASED FOUR ADJOINING RESIDENTIAL PLOTS BEARING DIFFERENT NUMBERS (NOS. 1,2,3 AND 4) SPENDING DIFFERENT AMOUNT SEPARATELY R S. 10,64,000/- RS. 10,50,000/- RS. 10,38,000/- AND RS. 7,04,000/-RESPE CTIVELY VIDE DIFFERENT DEEDS (S.N. 136, 135, 137 AND 134 RESPECTIVELY) WHI CH ARE REGISTERED IN THE OFFICE OF SUB-REGISTRAR, AJMER-1 ON 19-05-2008 FROM THE ONE SELLER AND CONSTRUCTED A HOUSE IN PLOT NO. 4 COVERING ALL THE FOUR PLOTS BY A BOUNDARY WALL. THE CONTENTION OF THE ASSESSEE IS TH AT HE HAS NOT PURCHASED MORE THAN ONE RESIDENTIAL UNITS BUT HAS PURCHASED F OUR PIECES OF LAND OF SAME KHASRA NO. 923 FROM ONE SELLER. IT IS NOTED TH AT ALL THE PLOTS ARE APPURTENANT TO EACH OTHER AND ARE IN CONTINUATION. THE AO IN THE ASSESSMENT ORDER OBSERVED THAT THE ASSESSEE HAD CON STRUCTED ONE UNIT OF RESIDENTIAL HOUSE AFTER UTILIZING THE WHOLE LAND AN D THERE IS ONLY ONE BOUNDARY WALL AND ONLY ONE GATE OF THE ENTIRE HOUSE . THE AO HAS TAKEN ITA NO.51/JP/2016 SHRI ROHAN AGARWAL VS ACIT, CIRCLE - 1, AJMER 5 INTO CONSIDERATION THIS FACT AT PAGE 10 IN PARA 11 (I) OF THE ASSESSMENT ORDER AS UNDER:- (I) AFTER SELLING ONE PROPERTY THE ASSESSEE PURCH ASED ONE SEPARATE ADJACENT RESIDENTIAL HOUSE BEARING NO. 1,2 ,3, AND 4 MEASURING 492.75 SQ. YARDS, 486 SQ. YARDS, 480.33 SQ. YARDS A ND 325.91 SQ. YARDS RESPECTIVELY IN MOTI VIHAR COLONY, AJMER FOR RS. 10 ,64,000/-, RS. 10,50,000/-M RS. 10,38,000/- AND RS. 7,04,000/-RESP ECTIVELY8 VIDE REGISTERED DEEDS S.NO. 136, 135, 137 AND 134 RESPEC TIVELY, REGISTERED IN THE OFFICE OF SUB-REGISTRAR, AJMER-1 ON DATED 19 -05-2008. THE ASSESSEE HAS ACCEPTED BY THIS SUBMISSION DATED 27-0 6-2014 (AS MENTIONED IN PARA 7 ABOVE) THAT HE HAS CONSTRUCTED A RESIDENTIAL HOUSE ONLY ON PLOT OUT OF THESE, THAT IS PLOT NO. 4 AND C OVERED ALL OTHER PLOTS WITHOUT BOUNDARY WALL WITH THIS PLOT. IN THIS CASE, THE AO HAS TAKEN INTO CONSIDERATION V ALUATION REPORT FILED BY THE ASSESSEE. THE AO HAS ALSO TAKEN INTO CONSIDERAT ION INSPECTOR REPORT WHICH INDICATES THAT THE ASSESSEE HAD CONSTRUCTED A NEW BUILDING AT PLOT NO. 4. THE OTHER THREE SEPARATE ADJACENT PLOTS NO. 1,2 AND 3 MEASURING 492.75 SQ. YARDS, 486 SQ. YARDS AND 480.33. SQ. YAR DS (TOTALING TO 1459.08 SQ. YARDS) RESPECTIVELY ARE VACANT AND THESE ARE NO T BEING USED BY THE ASSESSEE. THE AO THUS NOTED THAT THE TOTAL AREA OF 1459.08 SQ. YARDS OF OTHER THREE PLOTS CANNOT BE CONSIDERED TO BE A PART OF LAND APPURTENANT TO THE SMALL BUILDING CONSTRUCTED IN PLOT NO. 4 WHICH HAS BEEN CONSTRUCTED ONLY ON 18% PART OF ITS PLOT ITSELF. THE AO FURTHER NOTED THAT ASSESSEE HAS COVERED ALL THE FOUR PLOTS BY A COMMON BOUNDARY WAL L HAVING ONE COMMON GATE BUT IT DOES NOT SEEM TO BE THE EXPEDIEN CY OF THE GROUND ITA NO.51/JP/2016 SHRI ROHAN AGARWAL VS ACIT, CIRCLE - 1, AJMER 6 POSITION AND GROUND REALITY AND THE SAME IS DONE BY THE ASSESSEE TO PROTECT HIS LAND ONLY. THE AO HIMSELF VISITED THE S ITE ON 3-07-2014 AND CLICKED A FEW PICTURES OF THE SITE WHICH ARE AVAILA BLE AT PAGE 12 OF THE ASSESSMENT ORDER. THE AO LOOKING INTO THE ABOVE FAC TS AND CIRCUMSTANCES OF THE CASE DID NOT ALLOW DEDUCTION CLAIMED BY THE ASSESSEE FOR THE INVESTMENT IN PURCHASE OF PLOT NO. 1, 2 AND 3 U/S 5 4F OF THE ACT. THE AO ONLY ALLOWED THE DEDUCTION AS TO THE INVESTMENT MAD E BY THE ASSESSEE AT PLOT NO. 4 BY OBSERVING AS UNDER:- 12. DISALLOWANCE OF INVESTMENT MADE IN PURCHASE O F SEPARATE THREE PLOTS:- ON THE BASIS OF THE ABOVE ANALYSIS THE DEDUCTION C LAIMED BY THE ASSESSEE FOR THE INVESTMENT TO PURCHASE PLOT NO. 1, 2, AND 3 IS DISALLOWED U/S 54F OF THE ACT AND ONLY THE INVESTMENT MADE IN PLOT NO. 4 TO PURCHASE IT AND CONSTRUCT A BUILDING (I.E. RS. 7,04,000+RS. 12,22,0 00/- = RS. 19,26,000/-) IN IT IS ALLOWED TO COMPUTE THE AMOUNT OF ALLOWABLE DEDUC TION IN REFERENCE TO SEC 54F OF THE ACT. CALCULATION OF LONG TERM CAPITAL GAIN IS AS UNDER: - SALE CONSIDERATION AS PER VALUE TAKEN BY SUB-REGIS TRAR RS. 1,92,25,000/- LESS: TRANSFER EXPENSES RS. 2,50,000- NET CONSIDERATION RS. 1,89,75,000/- LESS: INDEXED COST AS PER COMPUTATION OF TOTAL INCOME GIVEN BY THE AS SESSEE RS. 14,37,144/- LONG TERM CAPITAL GAIN RS. 1,75,37,856/- ALLOWABLE DEDUCTION U/S 54F(1)(B)= COST OF NEW ASSET *LONG TERM CAPITAL GAIN NET CONSIDERATION = 19,26,000 *1,75,37,856 = RS. 17,80,127/- 1,89,75,000 ITA NO.51/JP/2016 SHRI ROHAN AGARWAL VS ACIT, CIRCLE - 1, AJMER 7 THE DEDUCTION ALLOWED EARLIER U/S 54F WAS RS. 46,93 ,353/-. SO THE DIFFERENCE AMOUNT OF RS. 29,13,226/- (4693353 171 8127)WILL BE DISALLOWED AND ADDED BACK TO THE EARLIER ASSESSED INCOME OF TH E ASSESSEE. COMPUTATION OF TOTAL INCOME ASSESSED INCOME U/S 143(3) RS. 1,33,23,278/- ADD: DISALLOWANCE U/S 54F RS. 29,13,226/- ASSESSED INCOME RS. 1,62,36,504/- ASSESSED AT INCOME RS. 1,62,36,504/-. CALCULATION O F TAX AND INTEREST CHARGED ARE GIVEN IN FORM NO. ITNS-150 APPENDED WIT H THE ORDER AND THE SAME FORMS PART OF THIS ASSESSMENT ORDER. IN FIRST APPEAL, THE LD. CIT(A) HAS CONFIRMED THE A CTION OF THE AO BY OBSERVING AS UNDER:- ..IN NONE OF THE CASE, IT HAS BEEN HELD THAT IF THE ASSESSEE PURCHASES FOUR PLOT AND THE CONSTRUCTION IS MADE ON LY AT ONE PLOT, THE DEDUCTION U/S 54 SHALL BE ALLOWED IN RESPECT OF INV ESTMENT MADE IN OTHER 3 PLOTS ALSO. AFTER GOING THROUGH ALL THE FAC TS OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE FOUR PLOTS PURCHASE BY THE APPELLANT DO NOT CONSTITUTE A SINGLE UNIT. ALL THE PLOTS ARE SEPARAT E UNITS. THE ASSESSEE HAS CONSTRUCTED THE HOUSE ONLY AT ONE PLOT I.E. PLO T NO. 4.THEREFORE, IN MY VIEW THE AO IS FULLY JUSTIFIED IN ALLOWING DEDUC TION U/S 54F ONLY IN RESPECT OF INVESTMENT MADE IN PLOT NO. 4 (RS. 7,04, 000/-) AND THE CONSTRUCTION CARRIED OUT ON PLOT NO.4 (RS. 12,22,00 0/-). HENCE, THE DEDUCTION COMPUTED AND ALLOWED BY AO U/S 54F IS IN ACCORDANCE WITH PROVISION OF LAW. ACCORDINGLY, THESE GROUNDS OF APP EAL ARE DISMISSED. TAKING INTO CONSIDERATION THE ABOVE FACTS AND CIRCU MSTANCES OF THE CASE AND ALSO THE WRITTEN SUBMISSIONS FILED BY THE ASSES SEE, WE FIND THAT LD.AR OF THE ASSESSEE COULD NOT CONTROVERT THE FINDINGS O F THE LD. CIT(A) AS IN THIS CASE IT DOES NOT TRANSPIRE THAT ALL THE FOUR P LOTS PURCHASED BY THE ASSESSEE CONSTITUTE A SINGLE UNIT. ALL THE PLOTS AR E SEPARATE UNITS AND THE ASSESSEE HAS CONSTRUCTED THE HOUSE ONLY AT ONE PLOT NO. 4. IN THIS VIEW OF ITA NO.51/JP/2016 SHRI ROHAN AGARWAL VS ACIT, CIRCLE - 1, AJMER 8 THE MATTER, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THUS GROUND NO. 1 AND 2 OF THE ASSESSEE ARE DISMISSED. 3.1 THE GROUND NO.3 OF THE ASSESSEE ARE REGARDING C HARGING OF INTEREST 234B, 234C AND 234D OF THE ACT WHICH ARE MANDATORY AND CONSEQUENTIAL IN NATURE. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-02-2018. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13 /02/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ROHAN AGARWAL,AJMER 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE 1, AJMER 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 51/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR