Shri Deewan Chand Maru, JODHPUR V. ITO, BIKANER

ITA 557/JODH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5202 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Section: 54F; 131; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 55 7 / JODH /201 4 (ASST. YEAR : 20 1 0 - 11 ) SHRI DEEWAN CHAND MARU, S/O SHRI KANA RAM MARU, GANDHI CHOWK, UDASAR, BIKANER. VS. ITO, WARD - 1(3), BIKANER. PAN NO. ADCPN 2308 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJENDRA JAIN ADV. DEPARTMENT BY : S HRI S.L. MOURYA - DR DATE OF HEARING : 1 4 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 1 4 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , BIKANER , DATED 30 /0 9 /201 4 . 2. THE GROUND NO.1 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) UPHOLDING THE FINDING OF ASSESSING OFFICER WITH RESPECT T O ASSESSING THE ENTIRE SHARE IN THE HAND S OF ASSESSEE WITHOUT APPRECIATING THE FACT THAT AS P ER THE SALE DEED THE ASSESSEE OUGHT TO DISTRIBUTE PART OF SALE CONSIDERATION TO ITS LEGAL HEIRS. 2 ITA NO. 557 / JODH /201 4 3 . AT THE TIME OF HEARING, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS MADE NO SUBMISSIONS ON THIS GROUND OF APPEAL OF THE ASSESSEE, HENCE, THE SAME IS DISMISSED FOR WANT OF PROSECUTION. 4 . IN GROUND NO.2 OF THE APPE A L, THE GRIEVANCE OF THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT ALLOWING EX E MPTION UNDER SEC. 54F FOR RS. 15,09,619/ - . 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER DISALLOWED THE EXEMPTION UNDER SEC. 54 OF THE ACT OF RS. 15,09,619/ - TO THE ASSESSEE ON THE GR OU ND TH A T THE ASSESSEE PURCHASED A NEW HOUSE IN THE NAME OF HIS WIFE . 6 . ON APPEAL , COMMISSIONER OF INCOME TAX (APPEALS) C ONFIRMED THE ACTION OF THE ASSESSING OFFICER BY OBSERVING THAT IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS STATED THAT INVESTMENT IS ONLY IN THE NAME OF ASSESSEES WIFE AND THE NAME OF THE ASSESSEE IS NOT AT ALL THERE IN THE TITLE DEED. THE PROVISI ONS OF SEC. 54F ARE CLEAR AND CATEGORICAL ABOUT THE INVESTMENT TO BE MADE IN THE NAME OF THE ASSESSEE OR THE PERSON SE L LING THE LAND. 7. BEF O RE US, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE RELIED ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAMAL WAHAL (351 ITR 04) , WHEREIN IT WAS HELD THAT FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SEC. 54F, THE NEW RESIDENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NOR ITS IS NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVE IN HIS NAME. PURPOSIVE CONSTRUCTION IS TO BE PREFERRED AS AGAINST A LITERAL CONSTRUCTION. FURTHER, HE RELIED ON ANOTHER DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. RAVINDER KUMAR ARORA [ (2012) 342 ITR 38 ] WHERE IT WAS HELD TH A T THE ASSESSEE HAVING INVESTED THE ENTIRE AMOUNT OF LONG TERM CAPITAL GAINS IN PURCHASE OF NEW RESIDENTIAL HOUSE WAS ENTITLED TO EXEMPTION UNDER SEC. 3 ITA NO. 557 / JODH /201 4 54F OF THE ACT IN RESPECT OF THE ENTIRE AMOUNT , EVEN THOUGH THE NEW PROPERTY WAS PURCHASED IN THE JOINT NAMES OF ASSESSEE AND HIS WIFE . 8. ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS PURCHASED A NEW HOUSE BY INVESTING RS.15,09,619/ - , THE ONLY GROUND OF DISALLOWING THE CLAIM UNDER SEC. 54F IS THAT THE ASSESSEE WAS PURCHASED THE SAME IN THE NAME OF HIS WIFE . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS RELIED ON TWO DECISION S OF THE DELHI HIGH COURT , WHEREIN IT HAS BEEN HELD THAT A DEDUCTION UNDER SEC. 54F IS ALLOWABLE TO THE ASSESSEE , EVEN IF THE PROPERTY WAS PURCHASED EITHER IN THE NAME OF HIS WIFE OR JOINTLY IN THE NAME OF WIFE AND THE ASSESSEE . THE DEPARTMENTAL REPRESENTATIVE COUL D NOT CITE ANY CONTRARY DECISION BEFORE US. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT , WE HOLD THAT THE EXEMPTION UNDER SEC. 54F FOR RS. 15,09,619/ - IS ALLOWABLE TO THE ASSESSEE AND ACCORDINGLY ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 10. GROUND NO.3 OF THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINING THE ADDITION OF RS. 2,50,000/ - BEING THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. 11. BRIEF FACTS OF THE CASE ARE THAT BEFORE ASSESSING OFFICER , THE ASSESSEE SUBMITTED THAT THE AMOUNT DEPOSITED IN THE BANK ACCOUNT ON 05/05/2009 OF RS. 2,50,000/ - WAS THE AMOUNT RECEIVED FROM THE PROPOSED BUYERS OF LAND FOR LEVELLING AND TARBANDI . THE ASSESSING OFFICER WROTE A LETTER TO THE BUYERS FOR VERIFYING THE CLAIM . THE BUYERS VIDE THEIR LETTER DATED 26/03/2014 DENIED TO MAKE SUCH PAYMENT, HENCE, ASSESSING OFFICER TREATED THE SAME AS UNEXPLAINED AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 4 ITA NO. 557 / JODH /201 4 12. ON APPEA L BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE ARGUED THAT THE ASSESSING OFFICER HAD NOT TRIED TO LOOK TO THE REALITY OF THE CASE , MERELY HE RELIED ON THE LETTER OF THE BUYERS. HE HAS TO CALL UPON THE BUYERS BY ISSUING NOTICE UNDER SEC. 131 TO EXAMINE IN DETAIL . THE ASSESSING OFFICER HAS NOT BROUGHT THE REPLIES SUBMITTED BY THE BUYERS TO THE KNOWLEDGE OF THE ASSESSEE THEREBY PREVENTING TO CROSS VERIFYING THE BUYERS, HENCE, THE ADDITION MADE CANNOT BE SUSTAINED. 13. THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF DEPOSIT IN BANK ACCOUNT AND THE BUYERS CATEGORICALLY DENIED THE PAYMENTS, AND THEREFORE, HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 14. AUTHORIZED REPRESENTATIVE OF THE ASS ESSEE REITERATED THE SUBMISSION MADE, WHEREAS DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 15 . WE FIND THAT THE ADDITION OF RS. 2,50,000/ - BEING AMOUNT DEPOSITED IN THE BANK ACCOUNT ON 05/05/2009 CAME TO BE MADE AS THE ASSESSING OFFICER RECEIVED LETTERS FROM THE BUYERS OF THE LAND, WHO DENIED HAVING MADE THE PAYMENT OF RS. 2,50,000/ - TO THE ASSESSEE. O N APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. T HE CONTENTION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE IS THAT THE LETTER OF DENIAL RECEIVED FROM THE BUYERS OF THE LAND BY THE ASSESSING OFFICER WAS NOT CONFRONTED TO HIM AND NEITHER WAS HE ALLOWED CROSS EXAMINATION OF THE BUYERS. THEREFORE, THE LETTER DENYING THE DEPOSIT MADE WITH THE ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE. THE DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THIS SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE . I T IS ESTABLISHED PRINCIPLE OF LAW THAT THE ASSESSING OFFICER CANNOT GATHER 5 ITA NO. 557 / JODH /201 4 EVIDENCE BEHIND BACK OF THE ASSESSEE AND RELYING ON THE SAME, CANNOT MAKE ADDITION TO THE INCOME OF THE ASSESSEE WITHOUT CONFRONTING THE SAME TO THE ASSESSEE. IN THE INSTANT CASE, WE FIND THAT THE DENIAL LETTER OF THE BUYERS OF THE LAND WAS NOT CONFRONTED TO THE ASSESSEE AND NEITHER ASSESSEE WAS ALLOWED CROSS EXAMINATION OF THOSE PERSONS. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER ON THE BASIS OF SUCH A LATTER CANNOT BE SUSTAINED IN LAW. HENCE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE THE ADDITION OF RS. 2,50,000/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 16 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON MONDAY , THE 1 4 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 4 TH MARCH , 201 6 . VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER .