ITO, Ward-4(3), Gurgaon V. Suresh Kumar, Gurgaon

ITA 5997/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3754 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMPOORANANAND
• Assessee Lawyers: REENA NE HRU
• Keywords: Income from undisclosed sources; Share purchase agreement
• Section: 143(3); 54F; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 5997 /DEL/201 7 A.Y. : 20 1 1 - 1 2 INCOME TAX OFFICER, WARD 4(3), GURGAON VS. SH. SURESH KUMAR FLAT NO. 502, THE SRI KAMAL CO-OP SOCIETY, GH-43, SECTOR-1, MANESAR, GURGAON (PAN: AEGPK0702D) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. S AMPOORANANAND, SR. DR ASSESSEE BY : MS. REENA NEHRU, ADV. ORDER ORDER ORDER ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, GURGAON DAT ED 12.7.2017 PERTAINING TO ASSESSMENT YEAR 2011-12 ON THE FOLLOW ING GROUNDS:- 1. LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION OF RS. 13,61,325/- CLAIMED BY THE ASSESSEE UNDER SECTION 5 4F OF THE INCOME TAX ACT, 1961 WHEREAS THE NEW PROPERTY W AS NOT PURCHASED IN THE NAME OF ASSESSEE. 2. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD , DELETE OR AMEND GROUNDS OF APPEAL BEFORE OR AT THE TIME FO HEARING OF APPEAL. 2 2. THE BRIEF FACTS OF THE CASE ARE THE ASSESSEE HAS FILED THE RETURN OF INCOME DECLARING INCOME OF RS. 4,19,140/- ON 01.6.2 011. THE AO COMPLETED THE ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) AT AN INCOME OF R S. 4,24,612/- BY ADDING AN AMOUNT OF RS. 5472/- ON ACCOUNT OF INTEREST INCO ME. THEREAFTER, THE ORDER WAS ASIDE BY THE LD. PCIT, GURGAON VIDE ORDER UNDER SECTION 263 DATED 31.3.2016. THE LD. PCIT, GURGAON POINTED OU T THAT THE ASSESSEE HAD EARNED CAPITAL GAINS AMOUNTING TO RS. 13,61,325 /- ON ACCOUNT OF SALE OF PLOT. THE LD. PCIT FURTHER POINTED OUT THAT THE ASSESSEE HAD CLAIMED EXEMPTION UNDER SECTION 54F OF THE ACT ON ACCOUNT O F INVESTMENT OF RS. 27,25,000/- IN PURCHASE OF FLAT. THE LD. PCIT FU RTHER POINTED OUT THAT THE ASSESSEE HAD PURCHASED A FLAT IN THE NAME OF HI S SON SH. NITIN AND AS SUCH THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION UN DER SECTION 54F OF THE ACT THE LD. PCIT ALSO POINTED THAT THERE WERE DEPO SITS AMOUNTING TO RS. 20,50,000/- IN THE BANK ACCOUNT OF THE ASSESSEE FOR WHICH NO ENQUIRY WAS MADE BY THE AO. THE LD. PCIT ACCORDINGLY SET ASIDE THE ORDER AND DIRECTED THE AO TO PASS A FRESH ORDER AFTER MAKING REQUISITE ENQUIRIES. THE AO ACCORDINGLY ISSUED NOTICE UNDER SECTION 143( 2) OF THE ACT AND AFTER CONSIDERING THE ASSESSEES SUBMISSIONS ON BOT H THE ISSUES, THE AO DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT AMOUNTING TO RS. 13,61,325/- AND ADDED THE AMOUNT OF RS. 20,5 0,000/- BEING THE AMOUNT DEPOSITED IN THE BANK ACCOUNT AS UNACCOUNTED INCOME OF THE ASSESSEE VIDE ORDER DATED 14.12.2016 PASSED US. 143 (3)/263 OF THE ACT BY ASSESSING THE INCOME OF THE ASSESSEE AT RS. 38,3 5,937/-. 3 3. AGAINST THE AFORESAID ASSESSMENT ORDER, THE ASSE SSEE APPEALED BEFORE THE LD. CIT(A)-1, GURGAON, WHO VIDE HIS IMP UGNED ORDER DATED 12.7.2017 HAS PARTLY ALLOWED THE APPEAL OF THE ASS ESSEE AND DELETED THE ADDITION OF RS. 13,61,325/- MADE ON ACCOUNT OF DISA LLOWANCE OF DEDUCTION U/S. 54F OF THE ACT. 4. AGGRIEVED WITH THE IMPUGNED ORDER, THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. DR RELIED UPON THE O RDER PASSED BY THE AO AND REITERATED THE CONTENTIONS RAISED BY THE RE VENUE IN THE GROUNDS OF APPEAL. 6. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND REITERATED THE CONTENTI ONS MADE BEFORE THE LD. CIT(A). HE FURTHER STATED THAT SINCE THE LD. C IT(A) HAS PASSED A WELL REASONED ORDER, THE SAME DOES NOT NEED ANY INTERF ERENCE. HENCE, HE REQUESTED THAT THE APPEAL OF THE REVENUE MAY BE DIS MISSED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE LEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REV ENUE AUTHORITIES. I FIND THAT LD. CIT(A) HAS DISCUSSED THE ISSUE IN DISPUTE ELABORATELY AT PAGE NO. 11 TO 12 VIDE PARA NO. 4.7. FOR THE SAKE OF C ONVENIENCE, I AM REPRODUCING HEREWITH THE RELEVANT FINDINGS OF THE L D. CIT(A) AS UNDER:- 4.7 I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE TWO ISSUES ON WHICH ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER ARE BEING DISCUSSED AS UNDER.- 1. DISALLOWANCE OF DEDUCTION UNDER SECTION 54F AMOUNTING TO RS. 13,61,325/-. IN THIS REGARD, IT IS SEEN FROM THE SUBMISSIONS OF THE APPELLANT AND THE REPORT OF THE ASSESSING OFFICER THAT THE APPELLANT 4 HAD APPLIED FOR THE PURCHASE OF FLAT TO THE SOCIETY IN THE JOINT NAME OF THE APPELLANT AND HIS SON SH. NITIN. IT WAS ONLY ON ACCOUNT OF THE FACT THAT THE RULES OF THE SOCIETY DID NOT PERMIT THE MEMBERSHIP CERTIFICATE TO BE TRANSFERRED IN A JOINT NAME THAT THE CERTIFICATE WAS ISSUED IN THE NAME OF APPELLANT'S SON SHE NITIN. IT IS ALSO SEEN FROM THE FACTS ON RECORD AND THE SUBMISSIONS OF THE APPELLANT THAT THE SOCIETY HAD ADVISED THAT THE FLAT MAY BE REGISTERED IN JOINT NAME AT THE TIME OF CONVEYANCE DEED. IN THESE CIRCUMSTANCES IT IS INCORRECT TO SAY THAT THE APPELLANT HAS PURCHASED THE FLAT IN THE NAME OF HIS SON ONLY. MERELY BECAUSE THE SHARE CERTIFICATE PERTAINING TO THE FLAT WAS ISSUED ONLY IN THE NAME OF APPELLANT'S SON DOES NOT IMPLY THAT THE FLAT WAS PURCHASED IN HIS NAME. THE DETAILED CORRESPONDENCE BETWEEN THE APPELLANT AND THE SOCIETY PROVES THE APPELLANT'S INTENT AND PURPOSE TO PURCHASE THE FLAT IN THE JOINT NAME OF THE APPELLANT AND HIS SON. IT IS NOT THE ASSESSING OFFICER'S CASE THAT THE CONVEYANCE DEED PERTAINING TO THE FLAT HAS BEEN REGISTERED IN THE NAME OF THE APPELLANT'S SON ONLY. IT IS THEREFORE, APPARENT THAT THE APPELLANT HAD MADE INVESTMENT IN FLAT IN THE JOINT NAME OF THE APPELLANT AND HIS SON. IT IS A SETTLED LAW NOW THAT IN CASE OF INVESTMENT IN JOINT NAME OF THE APPELLANT AND HIS SON, THE APPELLANT 5 WOULD BE ELIGIBLE FOR DEDUCTION UNDER SECTION 54/54F. REFERENCE IN THIS REGARD MAY BE MADE TO THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF GURNAM SINGH VS. CIT 327 ITR 278 (P&H). THE DISALLOWANCE OF DEDUCTION IS ACCORDINGLY DELETED. 8. AFTER PERUSING THE AFORESAID FINDING, I AM OF THE CONSIDERED VIEW THAT THERE IS NO INFIRMITY IN THE FINDING OF THE LD . CIT(A) AND THEREFORE, THE SAME DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE SAME AND REJECT THE GROUNDS RAISED BY THE REVENUE. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 05/02/2018. SD/- [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE05/02/2018 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES