Pratap Chand Khanna & Sons(HUF), Delhi V. ACIT, New Delhi

ITA 5174/DEL/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0663 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 30-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Capital Gains
• Section: 54F; 234B; 13; 54

Judgement Text

ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: F: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 5174/DEL/2016 ( ASSESSMENT YEAR: 2013-14) PRATAP CHAND KHANNA & SONS (HUF), 17, ALIPUR ROAD, CIVIL LINES, DELHI 110054. VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 35(1), NEW DELHI. PAN NO: AAAHP4200R APPELLANT RESPONDENT ASSESSEE BY : SMT. LALITA KRISHNAMURTY, ADV. MS. VIDHI AGARWAL, CA REVENUE BY : SHRI SURENDER PAL, SR. DR PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL BY ASSESSEE IS FILED AGAINST THE IMPUG NED APPELLATE ORDER DATED 29.07.2016 OF LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-12, NEW DELHI, [LD. CIT(A), FOR SHORT], FOR ASSESSMENT YEAR 2013-14. GROUNDS TAKEN IN THIS APPEAL OF ASSESSEE ARE AS UNDER: 1. THAT THE SUSTAINING OF DISALLOWANCE OF EXEMPTIO N CLAIMED BY THE ASSESSEE UNDER SECTION 54/54F OF THE ACT BY THE LD. CIT(APPEALS) IN RESPECT OF THE ADDITIONAL COMPENSATION RECEIVED ON ACCOUNT OF COMPULSORY ACQUISITION IN RESPECT OF IMMOVABLE PROP ERTY NO. 13 ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 2 OF 11 SHAMNATH MARG, CIVIL LINES, DELHI, FOR THE PURPOSE OF THE DELHI METRO RAIL CORPORATION (DMRC) IS ARBITRARY, UNJUST AND UNWARRANTED ON FACTS AND LAW. 2. THAT THE AO/CIT (APPEALS) OUGHT TO HAVE ALLOWED THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 54/ 54 F IN A CCORDANCE WITH LAW AND NOT CONSIDERED BY THEM. 3. THAT THE CIT (APPEALS) HAS ERRED ON FACTS AND UN DER THE LAW IN OBSERVING THAT THE ACCESSIBILITY OF THE RECEIPT OF COMPENSATION WILL BE LINKED WITH RESPECT TO THE CLAIM OF SECTION 54 A ND NOT SUBJECT TO CLAIM BEING ALLOWED. 4. THAT THE SUSTAINING OF INTEREST LEVIED UNDER SEC TION 234B IS UNJUST, UNWARRANTED AND NOT TENABLE ON FACTS AND LAW. 5. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PR EJUDICE TO ONE ANOTHER. 6. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. (B) THE MAIN ISSUE IN THIS APPEAL IS REGARDING ALLOWAB ILITY OF THE ASSESSEES CLAIM FOR EXEMPTION UNDER SECTION 54 / 54F OF THE INCOME TAX ACT, 1961 (I.T. ACT, FOR SHORT). FROM PERUSAL OF THE AFORESAID IMPUGNED APPELLATE OR DER DATED 29.07.2016 OF THE LD. CIT(A), WE FIND THAT THE FACTS OF THIS CASE ARE IDE NTICAL TO THE FACTS IN THE CASES OF PRAVEEN CHAND KHANNA & SONS HUF IN APPEAL NO. 60/14 -15 AND NAVEEN CHAND KHANNA & SONS HUF IN APPEAL NO. 59/14-15. IN PARAGRAPH 9. 6 OF HER AFORESAID IMPUGNED APPELLATE ORDER DATED 29.07.2016, THE LD. CIT(A) HA S STATED THAT SHE WAS FOLLOWING THE ORDERS DATED 29.02.2016, IN THE CASES OF PRAVEEN CH AND KHANNA & SONS HUF AND NAVEEN CHAND KHANNA & SONS HUF. THE RELEVANT PORTI ON OF THE AFORESAID IMPUGNED APPELLATE ORDER DATED 29.07.2016 OF THE LD. CIT(A) IS REPRODUCED BELOW, FOR THE EASE OF REFERENCE: ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 3 OF 11 ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 4 OF 11 ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 5 OF 11 ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 6 OF 11 (C) REVENUE HAS FILED THIS PRESENT APPEAL AGAINST THE AFORESAID IMPUGNED APPELLATE ORDER DATED 29.07.2016 OF THE LD. CIT(A). IN THE C OURSE OF APPELLATE PROCEEDINGS IN INCOME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT), A PAPER BOOK CONTAINING FOLLOWING PARTICULARS WAS FILED FROM ASSESSEES SIDE: 1. WRITTEN SUBMISSIONS DATED 31.05.2016. 2. ORIGINAL COMPUTATION OF INCOME OF ASSESSEE FOR AY 2013-14 3. REVISED COMPUTATION OF INCOME FOR AY 2013-14 4. CAPITAL GAINS ACCOUNT SCHEME DEPOSIT RECEIPT 5. AWARD NO. 2/1999-2000 ANNOUNCED BY LAC IN RESPEC T OF 13 SHAM NATH MARG DELHI 110054 6. COPY OF CHEQUE NO. 995054 DATED 10.09.2012 7. COURT ORDER DATED 14.07.2011 FOR 506 SQ. MTRS. 8. CHART OF ENHANCED COMPENSATION AND INTEREST SUBS EQUENT TO ADJ ORDER IN RESPECT OF AWARD NO. 2/1999-2000 9. COPY OF 26AS 10. COPY OF CHALLANS DATED 30.03.2016 AND 30.06.20 15 ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 7 OF 11 (D) AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR ASSESSEE SUBMITTED, AT THE OUTSET, THAT THE ISSUE IN DISPUTE IS SQUARELY COVER ED BY ORDERS OF CO-ORDINATE BENCH OF ITAT, DELHI IN THE CASES OF PRAVEEN CHAND KHANNA & SONS HUF AND NAVEEN CHAND KHANNA & SONS HUF, VIDE ORDER DATED 23.11.2017 IN I TA NOS. 1912/DEL/2016 AND 1913/DEL/2016. SHE FURTHER SUBMITTED THAT THE FACT S OF THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE AFORESAID APPEALS VIDE ITA NOS. 1912/DEL/2016 AND 1913/DEL/2016 IN THE AFORESAID CASES NAMELY PRAVEEN CHAND KHANNA & S ONS HUF AND NAVEEN CHAND KHANNA & SONS HUF. SHE FURTHER DREW OUR ATTENTION TO THE RELEVANT PORTION OF THE AFORESAID ORDER DATED 23.11.2017 OF CO-ORDINATE BEN CH OF ITAT, DELHI, WHICH IS REPRODUCED BELOW FOR THE EASE OF REFERENCE: 2. RELEVANT FACTS FOR THE DISPOSAL OF THESE APP EALS ARE THAT WHILE SCRUTINIZING THE RETURN OF INCOME OF THE ASSESSEES, THE AO FOUND THAT DURING THE YEAR 2003-04 THE PROPERTY OF THE ASSESSEES WAS COMPULSORILY ACQU IRED, AND DURING THE FINANCIAL YEAR -20,11-12 THE ASSESSEES HAS, RECEIVED ENHANCED AMOUNT OF COMPENSATION ON ACCOUNT OF SUCH COMPULSORY ACQUISITION. ASSESSEES C LAIMED EXEMPTION UNDER SECTION 54/54F OF THE ACT IN RESPECT OF SUCH ENHANC ED COMPENSATION IN THE AY 2012-13. LD. AO HELD THAT THE PROVISIONS UNDER SECT ION 45 READ WITH SECTION 54 DEAL WITH THE EXEMPTION TO BE CLAIMED IN RESPECT O F COMPENSATION BUT NOT THE ENHANCED COMPENSATION AND INASMUCH AS THE EXEMPTION UNDER SECTION 54 IS AVAILABLE ONLY IN RESPECT OF THE' COMPENSATION, THE CLAIM OF THE ASSESSEES IN RESPECT OF ENHANCED COMPENSATION WAS NOT ACCEPTABLE . HE RECORDED A FINDING THAT IN THIS CASE, TRANSFER BY WAY OF COMPULSORY ACQUISI TION HAD TO BE CONSIDERED IN THE YEAR WHEN THE COMPENSATION WAS FIRST RECEIVED BY TH E ASSESSEES I.E.. IN THE FINANCIAL YEAR 2003-04, ON THIS PREMISE, THE AO REJ ECTED THE CLAIM FOR DEDUCTION UNDER SECTION ,54 OF THE ACT AND ADDED THE AMOUNT O F ENHANCED, COMPENSATION. 3. IN THE APPEALS PREFERRED BY THE ASSESSEES, LEAR NED CIT(A) CONSIDERED THE CASE LAW ON THIS ASPECT AND WHILE FOLLOWING THE DECISION OF THE HONBLE ANDHRA PRADESH HIGH COURT IN CHAKIRI ASHOK KUMAR VS. ITO 50 TAXMANN.COM 108 HELD THAT THE BENEFIT OF SECTION- 54H IS TO BE EXTENDED TO THE AM OUNT OF COMPENSATION AS ENHANCED BY THE HIGH COURT, THEREFORE, THE CLAIM OF THE ASSESSEES ON THAT COUNT WAS TENABLE. HOWEVER, LEARNED CIT(A) DENIED THE REL IEF TO THE ASSESSEES ON THE GROUND THAT WHAT WAS ACQUIRED IN THIS MATTER' WAS N OT A RESIDENTIAL HOUSE NOR THE LAND APPURTENANT THERETO, BUT IT IS ONLY A VACANT P LOT WITH BOUNDARY WALL AND GATE. ACCORDING -TO HIM THERE WAS NO RESIDENTIAL BUILDING AND HE STATED THAT ACCORDING TO THE AWARD NO ONE WAS RESIDING IN THE LAND UNDER REFERENCE- THEREFORE LEARNED ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 8 OF 11 CIT(A) HAD RETURNED A FINDING THAT NO RELIEF COULD BE GRANTED UNDER SECTION 5.4 (1) OF THE ACT UNLESS THERE WAS ANY SUPERIOR STRUCT URE IN THE LAND THAT WAS ACQUIRED. HE ALSO REJECTED THE CONTENTION OF THE AS SESSEES THAT THE TIME FRAMES UNDER SECTION 54 OF THE ACT ARE RELEVANT ONLY WHEN THE RELIEF UNDER SECTION 54 OF THE ACT WAS GRANTED TO THE ASSESSEES. HENCE CHALLEN GING SUCH FINDING BY THE LEARNED C!T(A). THE ASSESSEES HAVE FILED THESE APPE ALS. 4. IT IS THE ARGUMENT OF THE LEARNED AR THAT IN T HIS MATTER IT COULD BE SEEN FROM THE THIRD PARAGRAPH OF THE ASSESSMENT ORDER, THE AS SESSEES HAD CLAIMED EXEMPTION NOT ONLY UNDER SECTION 54 OF THE ACT BUT ALSO THERE WAS A CLAIM UNDER SECTION 54F OF THE ACT AND WHEN THE LEARNED CIT(A) FOUND THAT THERE WAS NO RESIDENTIAL HOUSE IN THE LAND THAT WAS ACQUIRED AUT HORITY, HE WAS UNDER AN OBLIGATION TO CONSIDER THE CLAIM OF THE ASSESSEE UN DER SECTION 54 OF THE ACT, BUT THE LEARNED CIT(A) FAILED TO CONSIDER THE SAME. THE NEXT CONTENTION OF THE ASSESSEES IS THAT THE FINDING OF THE LEARNED CIT(A) THAT THERE WAS NO RESIDENTIAL BUILDING IN THE PROPERTY WAS FACTUALLY INCORRECT IN ASMUCH AS THE PROPERTY WAS ASSESSED TO HOUSE TAX AND WHICH IS RIOT POSSIBLE WI THOUT THERE BEING ANY BUILDING. ACCORDING TO THE LEARNED AR THERE HAS BEEN A, BUILD ING AND WHAT WAS ACQUIRED IS THE LAND APPURTENANT, THERETO AND IF AN OPPORTUNITY IS GRANTED TO THE ASSESSEE, 'THE ASSESSEES ARE READY TO PROVE THE FACT OF THE E XISTENCE OF BUILDING IN THE PROPERTY THAT WAS ACQUIRED, LEARNED DR HEAVILY PLAC ED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE GONE THROUGH THE ORDERS, OF THE AUTHORI TIES BELOW. LD. AO REJECTED THE CLAIM OF THE ASSESSEES HOLDING THAT THE LAW PER MITS THE EXEMPTION IN RESPECT OF THE COMPENSATION ONLY IN THE YEAR IN WHICH THE T RANSFER TAKES PLACE, BUT THE ENHANCED COMPENSATION, STANDING ON A. DIFFERENT FOO TING* IS NOT QUALIFIED FOR SUCH EXEMPTION, LEARNED CIT(A) IS PERFECTLY LEGAL IN ACC EPTING THE CONTENTION OF THE ASSESSEES THAT IN VIEW OF THE DECISION OF CHAKIRI ASHOK KUMUR VS., JTO (SUPRA) THE BENEFIT OF SECTION 54(H), HAS TO BE EXTENDED TO THE 'AMOUNT OF COMPENSATION AS ENHANCED BY THE COURTS. 6. HOWEVER, IN SO FAR AS THE FINDINGS OF THE LEAR NED CIT(A) THAT THERE WAS RESIDENTIAL STRUCTURE IN THE LAND -UNDER ACQUISITIO N CONCERNED, RECORD DOES NOT REVEAL THAT THE LEARNED CIT(A) HAD UNDERTAKEN ANY E NQUIRY ON THIS ASPECT. HE PLACED RELIANCE, ON THE AWARD TO SAY THAT NO ONE WA S RESIDING IN THE LAND UNDER REFERENCE AND IT WAS A VACANT LAND. WE ARE UNABLE T O SEE ANY BASIS FOR THE LEARNED CIT(A) TO OBSERVE SO. WHAT WAS ACQUIRED WAS VACANT LAND, AS SUCH IT IS BUT NATURAL THAT REFERENCE WOULD READ ONLY ABOUT T HE VACANT LAND. BUT THE QUESTION THAT FALLS FOR CONSIDERATION UNDER SECTION 54 OF THE ACT IS WHETHER SUCH VACANT LAND IS APPURTENANT IT; ANY RESIDENTIAL HOUS E OR NOT. RECITALS OF AWARD NEED NOT BE THE FINAL SOURCE ON THAT ASPECT. INASMUCH AS LEARNED AM STATED IN THAT THE PROPERTY WAS ASSESSED TO HOUSE TAX AND THERE IS EVI DENCE TO SHOW THAT HOUSE LAX WAS COLLECTED, WE FIND THAT THIS REQUIRES TO VERIFI CATION, THERE WAS NO OCCASION FOR THE ASSESSEE TO PRODUCE SUCH EVIDENCE BEFORE THE LD . AO. 7. FURTHER THE LEARNED CIT(A) HAS NOT CONSIDERED THE CASE OF THE ASSESSEES UNDER SECTION 54F OF THE ACT WHEN HE REACHED A CONC LUSION THAT THE PROPERTY THAT WAS ACQUIRED IS NOT A RESIDENTIAL HOUSE OR THE LAND WAS APPURTENANT THERETO. WE, THEREFORE, FIND IT JUST AND PROPER TO DIRECT THE AO TO VERIFY WHETHER THE LAND UNDER ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 9 OF 11 ACQUISITION WAS THE LAND APPURTENANT TO A RESIDENTI AL HOUSE OR NOT AND DEPENDENT UPON THE OUTCOME HE MAY GRANT THE RELIEF, UNDER SEC TION 54 OR SECTION 54P OF THE ACT, AS THE CASE MAY BE. WE, THEREFORE, SET ASIDE T HE ISSUE TO THE FILE OF THE AO FOR COMPLIANCE WITH THE ABOVE DIRECTION AFTER GIVIN G; AN OPPORTUNITY TO THE ASSESSEES TO PRODUCE RELEVANT EVIDENCE. (D.1) THE LEARNED DEPARTMENTAL REPRESENTATIVE (LD. DR, FOR SHORT) AGREED WITH THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ISSUE IN DISPUTE IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE AFORESAID IMPUGNE D APPELLATE ORDER DATED 23.11.2017 OF CO-ORDINATE BENCH OF ITAT, DELHI. (E) WE HAVE HEARD BOTH SIDES. WE HAVE PERUSED THE MAT ERIALS AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A), VIDE HER AFORESAID IMP UGNED APPELLATE ORDER DATED 29.07.2016 HAS FOLLOWED HER OWN ORDERS DATED 29.02. 2016 IN THE CASES OF PRAVEEN CHAND KHANNA & SONS HUF AND NAVEEN CHAND KHANNA & S ONS HUF. THE LD. CIT(A) HAS ALSO OBSERVED THAT THE FACTS OF THIS CASE ARE I DENTICAL TO THE FACTS OF THE AFORESAID CASES NAMELY PRAVEEN CHAND KHANNA & SONS HUF AND NA VEEN CHAND KHANNA & SONS HUF. WE FURTHER FIND THAT THE CO-ORDINATE BENCH OF ITAT, DELHI HAS ALREADY DECIDED THE ISSUE IN DISPUTE VIDE AFORESAID ORDER DATED 23. 11.2017 IN ITA NOS. 1912/DEL/2016 AND 1913/DEL/2016. AT THE TIME OF HEARING BEFORE U S, BOTH SIDES WERE IN AGREEMENT THAT FACTS OF THE PRESENT APPEAL ARE IDENTICAL TO F ACTS OF THE AFORESAID CASES NAMELY PRAVEEN CHAND KHANNA & SONS HUF AND NAVEEN CHAND KH ANNA & SONS HUF; AND FURTHER, THAT THE ISSUE IN DISPUTE IS SQUARELY COVE RED BY THE AFORESAID ORDER DATED 23.11.2017 OF CO-ORDINATE BENCH OF ITAT, DELHI. NEI THER SIDE HAS BROUGHT ANY DISTINGUISHING FACTS AND CIRCUMSTANCES TO OUR NOTIC E TO PERSUADE US TO TAKE A VIEW ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 10 OF 11 DIFFERENT FROM THE VIEW TAKEN IN IDENTICAL FACTS AN D CIRCUMSTANCES, BY CO-ORDINATE BENCH OF ITAT, DELHI IN THE AFORESAID ORDER DATED 23.11.2 017 IN THE CASES OF PRAVEEN CHAND KHANNA & SONS HUF AND NAVEEN CHAND KHANNA & SONS HU F. THEREFORE, IN VIEW OF THE FOREGOING AND RESPECTFULLY FOLLOWING AFORESAID ORDE R DATED 23.11.2017 OF CO-ORDINATE BENCH OF ITAT, DELHI; WE SET ASIDE THE ISSUE REGARD ING ASSESSEES CLAIM FOR EXEMPTION UNDER SECTION 54 / 54F OF I.T. ACT TO THE FILE OF T HE ASSESSING OFFICER TO PASS FRESH ORDER AFTER VERIFYING WHETHER THE LAND UNDER ACQUISITION WAS THE LAND APPURTENANT TO A RESIDENTIAL HOUSE AND ACCORDINGLY DECIDE THE DISPU TE REGARDING ASSESSEES CLAIM UNDER SECTION 54 / 54F OF THE I.T. ACT; AFTER GIVING OPPO RTUNITY TO THE ASSESSEE TO PRODUCE RELEVANT EVIDENCES. AS FAR AS THE GROUND OF APPEAL REGARDING INTEREST UNDER SECTION 234B OF I.T. ACT IS CONCERNED; THIS IS CONSEQUENTIA L IN NATURE. THE ASSESSING OFFICER IS DIRECTED TO LEVY INTEREST UNDER SECTION 234B OF I.T . ACT, IN ACCORDANCE WITH LAW, AT THE TIME OF GIVING EFFECT TO THIS ORDER. (F) IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN OPEN COURT ON 20/12/19. SD/- SD/- (AMIT SHUKLA) (ANAD EE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 20/12/19 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT ITA- 5174/DEL/2016. PRATAP CHAND KHANNA & SONS (HUF). PAGE 11 OF 11 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER