Smt. Meenu Malhotra, Kanpur V. Income Tax Officer- 2(2), Kanpur

ITA 589/LKW/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6712 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 20-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CITA BE SETASIDE; CLAIM BE ALLOWED
• Keywords: Opportunity of being heard; Additional evidence; Set aside
• Section: 143(3); 54F

Judgement Text

I.T.A. NO.589/LKW/2018 ASSESSMENT YEAR:2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.589/LKW/2018 ASSESSMENT YEAR:2013-14 SMT. MEENU MALHOTRA, 99, HIG, RATANLAL NAGAR, KANPUR. PAN:AFUPM 0622 H VS. INCOME TAX OFFICER-2(2), KANPUR. (APPELLANT) (RESPONDENT) O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A)-I, KANPUR DATED 15/06/2018 PERTAININ G TO ASSESSMENT YEAR 2013-14. IN THIS APPEAL THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS: 1. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LA W IN UPHOLDING THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 DATED 10.03.2016 WHICH ORDER I S BAD IN LAW AND BE QUASHED. 2. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE DISALLOWANCE OF RS.23,59,223/- EARNED ON ACCOUNT OF LONG TERM CAPITAL GAINS, INVESTED IN PUR CHASE OF RESIDENTIAL HOUSE CLAIMED EXEMPT U/S.54F, WITHOUT A NY BASIS OR REASONING THE SAME BE ALLOWED. 3. BECAUSE THE ASSESSEE APPELLANT HAVING UTILIZED T HE ENTIRE NET CONSIDERATION IN PURCHASE OF A RESIDENTIAL HOUS E, THE EXEMPTION CLAIMED U/S 54F BEING ALLOWABLE, THE CIT( A) WAS NOT JUSTIFIED IN DISALLOWING THE SAME. THE ORDER PASSED BY THE CIT(A) BE SET-ASIDE AND THE CLAIM BE ALLOWED. APPELLANT BY SHRI RAKESH GARG, ADVOCATE RESPONDENT BY S MT. ALKA SINGH, D.R. DATE OF HEARING 31/07/2019 DATE OF PRONOUNCEMENT 31/07/2019 I.T.A. NO.589/LKW/2018 ASSESSMENT YEAR:2013-14 2 4. BECAUSE THE ASSESSING OFFICER AS WELL AS THE CIT (A) HAVE ERRED ON FACTS AND IN LAW IN DISALLOWING AND UPHOLD ING THE DEDUCTION CLAIMED U/S 54F ON ACCOUNT OF LONG TERM C APITAL GAINS EARNED DURING THE YEAR, THE DEDUCTION CLAIMED BE AL LOWED. 5. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE DISALLOWANCE OF LOSS OF RS.1,57,718/- CLAIMED ON SALE OF UNITS AS WELL AS UPHOLDING THE ADDITION OF RS.13,189/-, THE ADDITION IS BAD IN LAW AND BE DELETED. 6. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW HOLDING THAT THE PROVISION OF SECTION 94(8) OF THE ACT ARE APPLICABLE AND THE SHORT TERM CAPITAL LOSS OF RS.1,57,718/- INCURR ED AS SALE OF UNITS OF RELIANCE INCOME FUND, IS NOT ALLOWABLE. TH E FINDING OF THE CIT(A) IS NOT BASED ON CORRECT FACTS, THE ORDER OF THE CIT(A) BE SET-ASIDE AND THE SHORT TERM CAPITAL LOSS BE ALL OWED TO BE SET OFF AGAINST OTHER INCOME. 7. BECAUSE ON A PROPER CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE THE AUTHORITIES BELOW HAV E ERRED ON FACTS AND IN LAW IN MAKING AND UPHOLDING THE DISALL OWANCES AND ADDITIONS TO THE INCOME OF THE ASSESSEE WITHOUT PRO PER APPRECIATION OF FACTS OF THE CASE, THE DISALLOWANCE S / ADDITIONS BE DELETED. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT ASSE SSEE HAD SOLD A COMMERCIAL PROPERTY AND HAD INVESTED THE PROCEEDS I N BIRLA MUTUAL FUND AND AFTER WITHDRAWING FROM BIRLA MUTUAL FUND, THE A SSESSEE HAD PURCHASED A RESIDENTIAL PROPERTY WITHIN THE PRESCRIBED PERIOD OF TIME. HOWEVER, THE ASSESSING OFFICER DID NOT ALLOW DEDUCTION U/S 54F O F THE ACT ON THE BASIS THAT ASSESSEE HAD NOT INVESTED THE PROCEEDS IN THE CAPITAL GAIN SCHEME ACCOUNT AND ALSO AT THE TIME OF SALE, THE ASSESSEE WAS HOLDING THREE PROPERTIES AND ALSO BECAUSE OF THE FACT THAT THE PR OPERTY SO PURCHASED BY THE ASSESSEE WAS PARTLY RESIDENTIAL AND PARTLY COMM ERCIAL. LEARNED A. R. IN THIS RESPECT SUBMITTED THAT REGARDING FIRST OBJECTI ON OF THE ASSESSING OFFICER THAT ASSESSEE HAD NOT DEPOSITED THE PROCEEDS IN THE CAPITAL GAIN SCHEME, THE LAW LAID DOWN BY VARIOUS BENCHES OF THE TRIBUNA L, IS THAT IF THE ASSESSEE, I.T.A. NO.589/LKW/2018 ASSESSMENT YEAR:2013-14 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, DEMONS TRATES BEFORE THE ASSESSING OFFICER THAT HE HAS INVESTED THE AMOUNT I N THE PURCHASE OF A NEW PROPERTY THEN THE REQUIREMENT OF KEEPING THE FUNDS IN CAPITAL GAIN SCHEME IS NOT NECESSARY. RELIANCE IN THIS RESPECT WAS PLAC ED ON THE ORDER OF CHANDIGRAH BENCH OF THE TRIBUNAL IN THE CASE OF SEE MA SABHARWALA VS. INCOME TAX OFFICER IN I.T.A. NO.272/CHD/2017. 2.1 AS REGARDS THE OBJECTION OF ASSESSING OFFICER T HAT THE ASSESSEE WAS HOLDING THREE PROPERTIES, LEARNED A. R. SUBMITTED T HAT OUT OF THREE PROPERTIES, TWO PROPERTIES WERE COMMERCIAL IN NATUR E AND IN THIS RESPECT INVITED OUR ATTENTION TO THE COPY OF AFFIDAVIT SIGN ED BY THE ASSESSEE AND ALSO INVITED OUR ATTENTION TO THE PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE, WHICH ARE IN THE FORM OF CONFIRMATION FROM THE TENA NTS REGARDING USE OF PROPERTIES FOR COMMERCIAL PURPOSES. LEARNED A. R. SUBMITTED THAT THESE EVIDENCES COULD NOT BE FILED BEFORE THE ASSESSING O FFICER AS THE AUTHORITIES BELOW DID NOT DEMAND THE SAME. HOWEVER, SINCE THES E EVIDENCES GO TO THE ROOT OF THE MATTER, IT WAS PRAYED THAT THE SAME MAY BE ADMITTED. 2.2 REGARDING THE THIRD OBJECTION OF THE ASSESSING OFFICER, WHICH RELATES TO THE FACT THAT A PART OF NEW PROPERTY WAS BEING U SED FOR RESIDENTIAL PURPOSES AND A PART WAS BEING USED FOR COMMERCIAL P URPOSES, LEARNED A. R. RELIED ON THE ORDER OF CHENNAI BENCH OF THE TRIBUNA L IN THE CASE OF A. M. SUBRAMANIAN VS. DCIT IN I.T.A. NO.860/CHNY/2017 AND ACIT VS. A. M. SURBAMANIAN IN I.T.A. NO.1196/CHNY/2017 WHERE VIDE ORDER DATED 05/03/2018, THE TRIBUNAL HAS HELD THAT ONLY CRITERI A FOR ALLOWING BENEFIT U/S 54F IS THAT THE ASSESSEE SHOULD HAVE PURCHASED A RE SIDENTIAL HOUSE WITHIN THE STIPULATED PERIOD AND THEREFORE, IT WAS PRAYED THAT THE NECESSARY RELIEF MAY BE ALLOWED TO THE ASSESSEE. I.T.A. NO.589/LKW/2018 ASSESSMENT YEAR:2013-14 4 3. LEARNED D. R., ON THE OTHER HAND, ARGUED THAT IF THE ASSESSEE COULD NOT FILE THE EVIDENCE BEFORE THE ASSESSING OFFICER, SHE COULD HAVE DEFINITELY FILED THE SAME BEFORE THE CIT(A) AS IT WAS THE OBJE CTION OF THE ASSESSING OFFICER AND THEREFORE, ASSESSEE SHOULD HAVE FILED T HE SAME BEFORE LEARNED CIT(A) AND IN VIEW OF THE ABOVE, IT WAS ARGUED THAT THE ADDITIONAL EVIDENCE AT THIS STAGE SHOULD NOT BE ADMITTED. 4. I HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THR OUGH THE MATERIAL PLACED ON RECORD. IN FIND THAT THE ASSESSEE DID OW N THREE PROPERTIES AT THE TIME OF SALE OF PROPERTY HOWEVER, THE NATURE OF PRO PERTIES WAS NEITHER EXPLAINED BY THE ASSESSEE NOR WAS ASKED BY THE ASSE SSING OFFICER. AS REGARDS THE ARGUMENT OF LEARNED D. R. THAT ASSESSEE SHOULD HAVE FILED THE SAME BEFORE THE CIT(A), LEARNED A. R. HAD STATED TH AT ASSESSEE WAS NEVER ADVISED BY THE COUNSEL, REPRESENTING THE MATTER, AN D SHE WAS COMPLETELY DEPENDENT UPON THE ADVISOR AND THEREFORE, THERE WAS NO FAULT OF THE ASSESSEE. LEARNED A. R. HAS ALSO STATED THAT CIT(A ) ALSO NEVER RAISED ANY QUERY TO DEMONSTRATE THE CHARACTER OR USE OF THE PR OPERTY. THEREFORE, KEEPING IN VIEW THE SUBSTANTIAL JUSTICE, I AM OF TH E OPINION THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE SHOULD BE ADMITTED AS THESE EVIDENCES GO THE ROOT OF THE MATTER AND THEREFORE, THESE ARE ADMITTED. SINCE THESE HAVE TO BE EXAMINED BY THE ASSESSING OF FICER THEREFORE, I DEEM IT APPROPRIATE TO REMIT THE MATTER BACK TO ASSESSIN G OFFICER WHO SHOULD READJDICATE THE ISSUE AFRESH AFTER KEEPING IN VIEW THE ADDITIONAL EVIDENCES. THE ASSESSING OFFICER IS ALSO DIRECTED TO EXAMINE T HE CASE LAWS RELIED ON BY LEARNED A. R. FOR THE FOLLOWING PROPOSITIONS: (A) THAT IF THE ASSESSEE HAD DEMONSTRATED BEFORE THE AS SESSING OFFICER THAT ASSESSEE HAD ALREADY INVESTED THE AMOU NT IN THE PURCHASE OF NEW PROPERTY THEN THE NEED TO PLACE THE FUNDS INTO CAPITAL GAIN ACCOUNT IS NOT NECESSARY. (B) THAT NEW PROPERTY SHOULD BE RESIDENTIAL PROPERTY, E VEN THOUGH A PART OF IT IS USED FOR COMMERCIAL PURPOSES. I.T.A. NO.589/LKW/2018 ASSESSMENT YEAR:2013-14 5 WITH THESE DIRECTIONS, THE MATTER IS SET ASIDE TO T HE FILE OF THE ASSESSING OFFICER FOR READJUDICATION. 5. THE OTHER ISSUE RAISED BY THE ASSESSEE REGARDING DISALLOWANCE OF RS.13,189/- IS ALSO SET ASIDE TO THE ASSESSING OFFI CER FOR READJUDICATION AS I HAVE ALREADY REMITTED THE SUBSTANTIAL GROUNDS TO TH E FILE OF THE ASSESSING OFFICER. NEEDLESS TO SAY THAT ASSESSEE WILL BE PRO VIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 31/07 /2019) SD/. ( T. S. KAPOOR ) ACCOUNTANT MEMBER DATED:31/07/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW