Bhup Singh, Faridabad V. ITO, Ward-1(2), Faridabad

ITA 590/DEL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9289 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: GAURAV KATARIA
• Keywords: Capital asset; Opportunity of being heard; Revised return
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 590/DEL/2019 ASSESSMENT YEAR: 2015-16 BHUP SINGH MCF-238, BABA HIRDAY RAM COLONY, MUJESSAR, FARIDABAD, HARYANA. PAN NO. BHWPS0157G VS ITO WARD 1(2) FARIDABAD. APPELLANT RESPONDENT ASSESSEE BY SHRI GAURAV KATARIA, CA REVENUE BY SHRI S.L. ANURAGI, SR. DR ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 29.11.2018 OF THE LD. CIT(APPEALS), FARIDABAD RELATING TO AY 2015-16. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 27.02. 2017 DECLARING TOTAL INCOME OF RS. 3,44,730/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE ALONG W ITH FOUR OTHERS HAS SOLD HIS LAND IN AMARPUR KONDALA, ALIGARH FOR A CONSIDERATION OF RS. 3,85,00,000/- VIDE SALE DEED DATED 14.01.201 5. THE ASSESSEE BEING 1/5 TH SHAREHOLDER RECEIVED RS. 77,00,000/- FROM DATE OF HEARING 04.07.2019 DATE OF PRONOUNCEMENT 08.07.2019 2 ITA NO . 590/DEL/2019 THE SAID LAND SALE. THE ASSESSEE CLAIMED EXEMPTION ON CAPITAL GAIN FROM THE LAND DEAL IN THE RETURN OF INCOME TRE ATING THE LAND AS AGRICULTURAL LAND. THE AO, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE LAND SHOULD NOT BE TREATED AS CAPITAL ASSET AND CAPITAL GAIN TAX CHARGED ON THE CAPITAL GAIN. IT WAS SUBMITTED BY THE ASSESSEE THAT THE LAND WAS AN AGRICULTURAL L AND AND DOES NOT FALL WITHIN THE MEANING OF CAPITAL ASSET DEFINE D U/S 2(14)(III)(B) OF THE I.T. ACT. HOWEVER, THE AO REJECTED THE SAID EXPLANATION ON THE GROUND THAT THE LAND IN QUESTION IS 8 KMS FROM THE BUS STAND, HOSPITAL AND RAILWAY STATION, ALIGARH AND THE SAID LAND WAS SOLD TO M/S AMAAR FROZEN FOODS PRIVATE LIMITED. THUS, THE LAND FALLS WITHIN THE MEANING OF CAPITAL ASSET AS DEFINED IN S ECTION 2(14)(III)(B) OF THE ACT. REJECTING THE VARIOUS EX PLANATION GIVEN BY THE ASSESSEE THE AO DETERMINED THE CAPITAL GAIN AT RS. 16,37,826/-. 3. BEFORE LD. CIT(A) THE ASSESSEE RAISED AN ADDITIO NAL GROUND STATING THAT ASSESSEE HAS INVESTED THE CAPITAL GAIN ON TRANSFER OF THE AGRICULTURE LAND FOR PURCHASE OF RESIDENTIAL HO USE PROPERTY AND, THEREFORE, IS ENTITLED TO EXEMPTION U/S 54F OF THE ACT. IT WAS SUBMITTED THAT ASSESSEE HAS MADE PAYMENT OF RS. 31, 91,500/- TOWARDS SUCH PURCHASE AND HAS INCURRED RS. 1,59,600 /- TOWARDS STAMP DUTY. HOWEVER, LD. CIT(A) REJECTED THE ADDIT IONAL GROUND RELYING ON THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (2006) REPORTED IN 157 TAXMAN 1 (SC), WHEREIN IT HAS BEEN HELD THAT NO NEW CLAIM CAN BE M ADE EXCEPT THROUGH A VALID RETURN OF INCOME OR A VALID REVISED RETURN OF 3 ITA NO . 590/DEL/2019 INCOME. HE FURTHER NOTED THAT EVEN ON MERIT ALSO T HE ASSESSEE IS NOT ENTITLED FOR THE CLAIM OF DEDUCTION U/S 54F AS THE SAME TRANSACTION FOR THE PURCHASE OF PLOT WAS NOT IN THE NAME OF ASSESSEE BUT WAS IN THE NAME OF THE WIFE OF THE ASS ESSEE. SO FAR AS THE ADDITION MADE BY THE AO WAS CONCERNED, HE UP HELD THE SAME. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING FOLLOWING GRO UNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE OR DER PASSED BY LD. CIT(A) IS BAD BOTH IN EYES OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY LD. CIT(A) IS NOT A SPEAKING ORDER AS PER SECTION 250(6) OF THE INCOME TAX ACT, 1961. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION MADE BY LD. AO BY HOLDING THAT THE AGRICULTURAL LAND SOLD BY AS SESSEE AT AMARPUR KONDALA TEHSIL OF ALIGARH DISTRICT, UTTA R PRADESH IS A CAPITAL ASSET HENCE LIABLE TO CAPITAL GAIN TAX. 4. THE LD. CIT(APPEALS) HAS ERRED ON FACTS AND IN LAW IN DISALLOWING THE ADDITIONAL CLAIM OF THE ASSESSEE U/ S 54F OF THE INCOME TAX ACT, 1961. 5. THAT THE LD. CIT(A) ERRED IN LAW AS WELL AS FACT IN PASSING THE ORDER WITHOUT TAKING INTO CONSIDERATION THE DET AILS AND EVIDENCES SUBMITTED BY THE APPELLANT. 6. THAT THE LD. CIT(A) ERRED IN LAW AND FACT AS WELL B Y UPHOLDING INTEREST U/S 234B, 234C AND 234D OF THE INCOME TAX ACT, 1961 WITHOUT CONSIDERING THE MERIT OF THE CASE AS THE INTEREST IN ASSESSEES CASE WAS NOT LEV IABLE. 7. THAT THE APPELLANT RESERVES THE RIGHT TO ADD, MODIF Y, ALTER, AMEND OR DELETE ANY OF THE GROUNDS. 5. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A) IN REJECTING THE ADDITIONAL GRO UND RAISED BEFORE 4 ITA NO . 590/DEL/2019 HIM AND ALSO THE DENIAL OF EXEMPTION U/S 54F OF THE ACT ON ACCOUNT OF THE LAND BEING PURCHASED IN THE NAME OF THE WIFE OF THE ASSESSEE. HE SUBMITTED THAT THE ORDER OF THE CIT(A ) THAT NO NEW CLAIM CAN BE MADE DURING THE APPELLATE PROCEEDINGS EXCEPT THROUGH VALID RETURN OF INCOME OR A VALID REVISED R ETURN OF INCOME IS NOT CORRECT IN VIEW OF THE DECISION OF HONBLE B OMBAY HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS AND SH AREHOLDERS PVT. LTD. REPORTED IN 349 ITR 336 AND VARIOUS OTHER DECI SIONS AS PER THE PAPER BOOK FILED. SO FAR AS THE OBSERVATION OF THE LD. CIT(A) THAT ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 54F OF THE ACT SINCE THE PURCHASE WAS NOT MADE IN THE NAME OF THE ASSESS EE BUT IN THE NAME OF THE WIFE OF THE ASSESSEE IS CONCERNED, HE S UBMITTED THAT THE ENTIRE PAYMENTS WERE MADE OUT OF THE BANK ACCOU NT OF THE ASSESSEE AND, THEREFORE, MERELY BECAUSE THE PROPERT Y HAS BEEN PURCHASED IN THE NAME OF THE WIFE OF THE ASSESSEE, THE DEDUCTION U/S 54F OF THE ACT CANNOT BE DENIED TO THE ASSESSEE . 6. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAVINDER KUMAR ARORA REPORTED IN 34 2 ITR 38 HE SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT WHERE THE ASSESSEE HAS INCLUDED THE NAME OF HIS WIFE AND THE PROPERTY HAS BEEN PURCHASED JOINTLY IN THE NAMES OF THE ASSESSEE AND HIS WIFE IT WOULD NOT MAKE ANY DIFFERENCE AND THE CONDITIONS ST IPULATED IN SECTION 54F STAND FULFILLED. 7. REFERRING TO THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. V. NATARAJAN REPORTED IN 287 IT R 271, HE 5 ITA NO . 590/DEL/2019 SUBMITTED THAT WHERE THE HOUSE WAS PURCHASED IN THE NAME OF THE ASSESSEES WIFE DEDUCTION U/S 54F IS TO BE ALLOWED. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. SHRI KAMAL WAHAL REPORTED IN 351 ITR 4, HE SUBMITTED THA T THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT WHERE THE ASSESSEE HAS PURCHASED THE HOUSE IN THE NAME OF HIS WIFE DED UCTION U/S 54F OF THE ACT IS TO BE ALLOWED AND THE NEW RESIDEN TIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS NAME NOR IS IT NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVELY IN HIS NAME . HE, ACCORDINGLY, SUBMITTED THAT THE CIT(A) IS NOT JUSTI FIED IN REJECTING THE CLAIM OF DEDUCTION U/S 54F OF THE ACT MERELY BE CAUSE THE PROPERTY HAS BEEN PURCHASED BY THE ASSESSEE IN THE NAME OF HIS WIFE. 8. LD. DR, ON THE OTHER HAND, STRONGLY RELIED ON TH E ORDER OF THE CIT(A). 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). I HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE ME. I FIND THE ONLY ISSUE TO BE DECIDED IN THE IMPUGNED APPEAL IS REGAR DING THE ALLOWABILITY OF DEDUCTION U/S 54F OF THE ACT ON ACC OUNT OF PURCHASE OF THE HOUSE PROPERTY BY THE ASSESSEE IN T HE NAME OF HIS WIFE WHEN SUCH DEDUCTION WAS NOT CLAIMED IN THE ORI GINAL RETURN OR IN THE REVISED RETURN AND WAS CLAIMED FOR THE FI RST TIME BEFORE THE CIT(A). THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD. REPORTED IN 349 ITR 6 ITA NO . 590/DEL/2019 336 HAS HELD THAT THE APPELLATE AUTHORITIES HAVE PO WER TO CONSIDER A CLAIM NOT MADE IN THE RETURN OF INCOME. WHILE DO ING SO, THE HONBLE HIGH COURT HAS RELIED ON VARIOUS DECISIONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GO ETZE (INDIA) LTD. VS. CIT REPORTED IN 284 ITR 323 AND THE DECISI ON OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JAI PARABOL IC SPRINGS LTD. (2008) REPORTED IN 306 ITR 42. IT HAS BEEN HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF JAI PARABOLIC SPRIN GS LTD. (SUPRA) THAT THE HONBLE SUPREME COURT IN THE CASE OF GOETZ E (INDIA) LTD. (SUPRA) HAS MADE IT CLEAR THAT THE DECISION WAS LIM ITED TO THE POWER OF THE ASSESSING AUTHORITY TO ENTERTAIN A CLA IM FOR DEDUCTION OTHERWISE THEN BY A REVISED RETURN AND DID NOT IMPI NGE ON THE POWERS OF THE TRIBUNAL. IT HAS BEEN HELD BY THE HO NBLE DELHI HIGH COURT THAT THERE WAS NO PROHIBITION ON THE POWERS O F THE TRIBUNAL TO ENTERTAIN AN ADDITIONAL GROUND WHICH IS ACCORDIN G TO THE TRIBUNAL AROSE IN THE MATTER AND FOR THE JUST DECIS ION OF THE CASE. 10. I, THEREFORE, HOLD THAT THE FINDING OF THE LD. CIT(A) THAT THE APPELLATE AUTHORITY HAS NO POWER TO CONSIDER A CLAI M NOT MADE IN THE RETURN IS INCORRECT AND NOT IN ACCORDANCE WITH LAW. I, THEREFORE, AGREE WITH THE LD. COUNSEL FOR THE ASSES SEE THAT THE APPELLATE AUTHORITY HAS POWER TO CONSIDER A CLAIM N OT MADE IN THE RETURN. 11. NOW COMING TO THE ALLOWABILITY OF DEDUCTION U/S 54F ON ACCOUNT OF PURCHASE OF THE RESIDENTIAL PROPERTY BY THE ASSESSEE IN THE NAME OF HIS WIFE IS CONCERNED, IT HAS BEEN HELD IN VARIOUS 7 ITA NO . 590/DEL/2019 DECISIONS THAT ASSESSEE CANNOT BE DENIED THE BENEFI T OF DEDUCTION UNDER SECTION 54F WHEN THE PROPERTY HAS BEEN PURCHA SED IN THE NAME OF THE WIFE OF THE ASSESSEE INSTEAD OF PURCHAS ING THE SAME IN THE NAME OF THE ASSESSEE HIMSELF. THE HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. SHRI KAMAL WAHAL REPORTED IN 35 1 ITR 4 HAS HELD THAT THE NEW RESIDENTIAL HOUSE NEED NOT BE PUR CHASED BY THE ASSESSEE IN HIS NAME NOR IS IT NECESSARY THAT IT SH OULD BE PURCHASED EXCLUSIVELY IN HIS NAME FOR CLAIMING DEDU CTION U/S 54. ACCORDINGLY, THE DEDUCTION U/S 54F WAS ALLOWED WHER E THE PROPERTY WAS PURCHASED IN THE NAME OF THE WIFE OF T HE ASSESSEE. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS . V. NATARAJAN REPORTED IN 287 ITR 271 HAS ALLOWED THE DEDUCTION U /S 54 WHERE THE HOUSE WAS PURCHASED IN THE NAME OF THE ASSESSEE S WIFE. I FIND THE HONBLE KARNATAKA HIGH COURT IN THE CASE O F DIT VS. MRS. JENNIFER BHIDE REPORTED IN 349 ITR 80 HAS HELD THAT WHERE THE ENTIRE CONSIDERATION HAS FLOWN FROM HER BANK ACCOUN T, MERELY BECAUSE EITHER IN THE SALE DEED OR IN THE BOND, HER HUSBANDS NAME IS ALSO MENTIONED, THE ASSESSEE CANNOT BE DENI ED THE BENEFIT OF DEDUCTION U/S 54 AND 54EC OF THE ACT. THE VARIO US OTHER DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSE SSEE ALSO SUPPORTS HIS CASE TO THE PROPOSITION THAT DEDUCTION U/S 54F SHOULD NOT BE DISALLOWED, MERELY BECAUSE THE PROPER TY HAS BEEN PURCHASED IN THE NAME OF THE WIFE OF THE ASSESSEE W HEN THE CONSIDERATION FOR THE PURCHASES HAS FLOWN FROM THE SALE PROCEEDS OF THE CAPITAL ASSET. IN VIEW OF THE ABOVE DISCUSS ION, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE SHOULD NOT BE DENIED THE 8 ITA NO . 590/DEL/2019 BENEFIT OF DEDUCTION U/S 54F OF THE ACT MERELY BECA USE THE PROPERTY HAS BEEN PURCHASED IN THE NAME OF THE WIFE OF THE ASSESSEE WHEN THE MONEY HAS BEEN FLOWN FROM THE BAN K ACCOUNT OF THE ASSESSEE, WHEREIN THE SALE PROCEEDS WERE DEP OSITED. HOWEVER, THIS FACT NEEDS VERIFICATION. I, THEREFOR E, RESTORE THIS ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO VER IFY THE BANK ACCOUNT OF THE ASSESSEE THAT THE SALE PROCEEDS OF T HE LAND SOLD WAS DEPOSITED IN THE BANK ACCOUNT AND HAS BEEN UTILIZED FOR THE PURCHASE OF THE RESIDENTIAL PROPERTY IN THE NAME OF THE WIFE OF THE ASSESSEE. IF THE AO FINDS THE SAME TO BE CORRECT T HEN HE IS DIRECTED TO ALLOW THE CLAIM OF DEDUCTION U/S 54 OF THE ACT. NEEDLESS TO SAY THE AO SHALL DECIDE THE ISSUE AS PE R FACT IN LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08/07/2019 SD/- (R.K. PANDA) ACCOUNTANT MEMBER DATED: 08/07/2019 *KAVITA ARORA 9 ITA NO . 590/DEL/2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 04.07.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 05.07.2019/ 08.07.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 08.07.19 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 08.07.19 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 08.07.19 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 08.07.19 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 08.0 7.19 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER