RAJANI BALA SHARMA, Kota V. ITO, Kota

ITA 546/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99302 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M IQBAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard
• Section: 50C; 54F; 148; 139

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 VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 546/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 RAJNI BALA SHARMA, 1-THA, 22, VIGYAN NAGAR, KOTA. CUKE VS. I.T.O. WARD 1(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAAPS 4212 G VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI SIDDARTH RANKA & SHRI M. IQBAL (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 11/08/2015 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 07/09/2015 VKNS'K @ ORDER PER: SHRI T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE APPELLANT AGAINST TH E ORDER DATED 11/04/2013 PASSED BY THE LEARNED CIT (A), KOTA FOR A.Y. 2008-09. 2. THE RESPECTIVE GROUNDS OF APPEAL RAISED BY THE AP PELLANT ARE AS UNDER:- 1 THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN LAW IN HOLDING THAT THE ASSESSEE WI LL ITA 546/JP/2013_ RAJNI BALA SHARMA VS. ITO 2 NOT BE ENTITLED TO BENEFIT OF DEDUCTION U/S 54F OF THE INCOME TAX ACT WHEN NO SUCH GROUND WAS BEFORE HIM DURING THE COURSE OF APPEAL. 1.1 THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN LAW IN NOT FOLLOWING THE PROCEDURE PRESCRIBED U/S 251(2) OF THE INCOME-TAX ACT, I.E. WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE OF REJECTING THE BENEFIT OF DEDUCTION U/S 54F OF THE INCOME TAX ACT. 1.2 THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN DISALLOWING THE BENEFIT OF DEDUCTION U/S 54F OF THE INCOME TAX ACT WHEN ASSESSEE HAD ENTERED INTO AN AGREEMENT IN WRITING AND HAVING INVESTED IN PURCHASE OF RESIDENTIAL HOUSE. 3. IN GROUND NO. 1 OF THE APPEAL, THE ASSESSEE HAS CONTENDED THAT THE LD CIT(A) DOES NOT HAVE POWER TO DETERMINE WHETH ER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54F OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WHEN NO SUCH GROUND WAS BEFORE HIM DURING T HE COURSE OF ASSESSMENT PROCEEDINGS. ON PERUSAL OF THE LD CIT(A) S ORDER AS WELL AS THE ASSESSMENT ORDER, IT IS NOTED THAT THE WHOLE ISS UE OF DETERMINING THE CAPITAL GAINS U/S 50C AS WELL AS DEDUCTION U/S 5 4F OF THE ACT WAS THERE BEFORE THE ASSESSING OFFICER AS WELL BEFORE TH E LD CIT(A). IT IS A SETTLED LAW THAT THE POWERS OF THE COMMISSIONER (APPE ALS) ARE CO- TERMINOUS WITH THE POWERS OF THE ASSESSING OFFICER. I N THE PRESENT FACTS ITA 546/JP/2013_ RAJNI BALA SHARMA VS. ITO 3 WHERE THE COMMISSIONER (APPEALS) IS EXAMINING THE WH OLE ISSUE OF DETERMINING THE VALUE AT WHICH THE CAPITAL ASSET WAS SOLD AND AT THE INSTANCE OF THE ASSESSEE, THE MATTER WAS REFERRED TO THE DVO AND A COPY OF THE DVOS REPORT WAS MADE AVAILABLE TO THE A SSESSEE, IT IS VERY MUCH APPARENT THAT THE ASSESSEE WAS FULLY AWARE OF TH E ONGOING PROCEEDINGS AND THE MATTER BEING EXAMINED BY THE AP PELLATE COMMISSIONER. AS THE NECESSARY COROLLARY, THE COMMI SSIONER (APPEALS) ALSO EXAMINED THE CLAIM OF DEDUCTION U/S 54F AND CA ME TO A CONCLUSION THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/ S 54F OF THE ACT. IN OUR VIEW, THE COMMISSIONER (APPEALS) WAS WELL WITHIN H IS POWERS TO EXAMINE THE ISSUE OF TAXABILITY OF CAPITAL GAINS U/ S 50C AS WELL AS DEDUCTION U/S 54F WHEN THE WHOLE ASSESSMENT PROCEEDI NGS ARE OPEN BEFORE HIM, ALL THE MATERIALS ARE ON RECORD AND BOT H THE ISSUES OF TAXABILITY OF CAPITAL GAINS U/S 50C AS WELL AS DEDU CTION U/S 54F HAVE BEEN DULY EXAMINED BY THE ASSESSING OFFICER. 3.1 IN THIS REGARD, REFERENCE CAN BE DRAWN TO THE E XPLANATION TO SECTION 251(2) OF THE ACT WHICH STATES AS UNDER: IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEAL S) MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF T HE PROCEEDINGS, IN WHICH THE ORDER APPEALED AGAINST WAS ITA 546/JP/2013_ RAJNI BALA SHARMA VS. ITO 4 PASSED NOTWITHSTANDING THAT SUCH MATTER WAS NOT RAISE D BEFORE THE COMMISSIONER (APPEALS) BY THE APPELLANT. FURTHER REFERENCE CAN BE DRAWN TO THE DECISION OF T HE HON'BLE SUPREME COURT IN THE CASE OF CIT, U.P. VS. KANPUR COAL SYNDI CATE (1964) 53 ITR 225 (SC) WHEREIN THE IT WAS HELD THAT: THE APPELLATE ASSISTANT COMMISSIONER HAS PLENARY POWERS IN DISPOSING OF AN APPEAL. THE SCOPE OF HIS POWERS IS CONTERMINOUS WITH THAT OF THE INCOME-TAX OFFICER. HE CAN DO WHAT THE INCOME-TAX OFFICER CAN DO AND CAN ALSO DIRECT HIM TO DO WHAT HE HAS FAILED TO DO. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE CIT(A) WAS WELL WITHIN HIS POWER TO EXAMINE THE CLA IM OF DEDUCTION U/S 54F OF THE ACT. HENCE WE DISMISS THE GROUND NO. 1 OF THE ASSESSEES APPEAL. 4. REGARDING GROUND NO. 1.1 & 1.2 OF THE APPEAL, TH E APPELLANT HAS CONTENDED THAT IT HAS ENTERED INTO AN AGREEMENT IN WRITING AND HAVE INVESTED IN PURCHASE OF A RESIDENTIAL HOUSE AND ACC ORDINGLY, SHE IS ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT, WHICH HAS BEEN WRONGLY DISALLOWED BY THE LD CIT(A). IN THIS REGARD, REFERENC E IS DRAWN TO THE OPERATIVE PART OF THE LD CIT(A)S ORDER AT PAGE NO. 21 AND 22, WHICH IS REPRODUCED AS UNDER:- ITA 546/JP/2013_ RAJNI BALA SHARMA VS. ITO 5 DURING THE COURSE OF HEARING IT WAS SEEN THAT ASSE SSEE HAS CLAIMED DEDUCTION OF RS. 14,50,000/- U/S 54F ON THE BASIS, OF AGREEMENT FOR SALE. THE ASSESSEE CLAIMED THAT SHE HAS ALREADY PAID THE A MOUNT OF RS. 14,50,000/- AND TOOK THE POSSESSION OF LAND THEREFORE THE SAME AMOUNTS TO TRANSFER UNDER SECTION 2(47)(V) . AS PER THIS AGREEMENT ASSESSEE PAID A SUM OF RS. 14 ,50,000/- VIDE CHEQUE NO. 954406 DRAWN ON SBBJ BANK. THIS AGREEMENT WAS CLAIMED TO BE SIGNED ON 22/03/2008. HOWEVER, ON VERIFICATION OF BANK ACCOUNT IT WAS SEEN THAT CHEQUE NO. 954406 WAS ENCASHED ON 05/09/2008 [AS AGA INST ASSESSEES CLAIM THAT THIS AMOUNT WAS PAID ON 22/02/ 2008.] IT IS NOT POSSIBLE THAT SOMEONE WILL HAND OVER THE P OSSESSION ON 22/02/2008 WHEN THE ENTIRE PAYMENT WAS RECEIVED ON 05/09/2008. IT IS THEREFORE HELD THAT THIS AGREEMENT WAS AS AFTE RTHOUGHT AND WAS PREPARED AFTER 05/09/2008 AND WITH A VIEW TO C LAIM DEDUCTION U/S 54F THE SAME WAS BACK DATED TO 22/02/2 008. IT IS THEREFORE HELD THAT ASSESSEE WAS NOT ENTITLED FOR DEDUCTION U/S 54F. ITA 546/JP/2013_ RAJNI BALA SHARMA VS. ITO 6 4.1. THE LD. ASSESSING OFFICER ALLOWED THE DEDUCTION UNDER SECTION 54F AT RS. 14,50,000 ON NET CAPITAL GAIN OF RS. 52,40,9 83/-. HOWEVER, THIS NET CAPITAL GAIN WAS REDUCED TO RS. 12,25,983/- (RS. 14,85,000 RS. 2,59,017). THE LD. CIT (A) HAD NOT ALLOWED DEDUCTION U NDER SECTION 54F BY OBSERVING THAT THE ASSESSEES CLAIM WAS AFTER TH OUGHT. EVEN THOUGH HE WAS OF THE OPINION THAT CHEQUE WAS ENCASHED ON 05. 09.2008 WHEREAS NOTICE UNDER SECTION 148 WAS ISSUED BY THE AS SESSING OFFICER ON 18.02.2011 AND ORIGINAL RETURN WAS FILED BY THE A SSESSEE ON 10.11.2008. THE ASSESSEE CLAIMED 54F DEDUCTION IN RE VISED RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 ON 02.08.20 11. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAD NOT CLAIMED DEDUCTION U/ S 54F IN ORIGINAL RETURN FILED ON 10.11.2008. THE LD. CIT (A) HAS NOT C ONSIDERED THE SECTION 251(2) OF THE IT ACT AS THE LD. CIT (A) HAS WITHDRAWN THE DEDUCTION U/S 54F BY USING CO-TERMINUS POWER VEST IN HIM. HOWEVER, AS PER THIS SECTION, THE ASSESSEE HAS TO PROVIDE A REA SONABLE OPPORTUNITY OF BEING HEARD WHICH HAS NOT BEEN ALLOWED BY HIM. THER EFORE, THIS ISSUE REQUIRES RECONSIDERATION BY LD. CIT (A), AND ALLOW TH E REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE D ISALLOWING THE DEDUCTION U/S 54F OF THE IT ACT. ACCORDINGLY, ASSESS EES GROUND NO. 1.1 IS DECIDED IN FAVOUR OF THE ASSESSEE. ITA 546/JP/2013_ RAJNI BALA SHARMA VS. ITO 7 4.2. AS IT APPARENT FROM THE CIT(A)S ORDER, THE ASS ESSEE HAS SIGNED AN AGREEMENT FOR PURCHASE OF A PLOT OF LAND (NOT A RESIDENTIAL HOUSE) FOR RS. 14,50,000/-. FURTHER THE LD CIT(A) HAS GIVEN A C ATEGORICAL FINDING THAT THE PAYMENT FOR THE SAID PURCHASE OF LAND WAS E NCASHED ON 05 TH SEPTEMBER, 2008 AS AGAINST 22 ND FEBRUARY, 2008 AS CLAIMED BY THE APPELLANT. FOR THE PURPOSES OF CLAIMING DEDUCTION U /S 54F OF THE ACT, THE APPELLANT IS REQUIRED TO PURCHASE OR CONSTRUCT A RESIDENTIAL HOUSE WITHIN A SPECIFIED PERIOD. FROM THE FACTS, THEREFORE , IT IS NOT CLEAR WHETHER POSSESSION OF LAND HAS BEEN TAKEN AND WHETHER SALE DEED HAS BEEN EXECUTED OR NOT AND WHETHER SUBSEQUENT TO PURCH ASE OF LAND, A RESIDENTIAL HOUSE WAS CONSTRUCTED THEREON WITHIN THE STIPULATED TIME FRAME. FURTHER U/S 54F(4) OF THE ACT, IT IS PROVIDE D THAT WHERE THE NET CONSIDERATION IS NOT UTILIZED BY THE APPELLANT FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FUR NISHING OF RETURN OF INCOME U/S 139 OF THE ACT, IT SHALL BE DEPOSITED IN AN ACCOUNT IN SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED. THE MATTER IS ACCORDINGLY REMANDED BACK TO THE FILE OF THE CIT (A) ASSESSING O FFICER TO EXAMINE THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54F OF THE ACT IN THE LIGHT OF THE ABOVE OBSERVATIONS AND AS PER LAW. ITA 546/JP/2013_ RAJNI BALA SHARMA VS. ITO 8 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/09/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 07 TH SEPTEMBER, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- RAJNI BALA SHARMA, KOTA 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 1(2), KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 546/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR