ANUP MADHU KARNIK, MUMBAI V. ITO WD 21(1)(1), MUMBAI

ITA 6202/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0563 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 07-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.6202/MUM/2014(AY. 2010-11) SHRI ANUP MADHU KARNIK, KARNIK CHEMIST, OPP.COOPER HOSPITAL, JVPD SCHEME, VILE PARLE, MUMBAI 400 049 PAN: AEQPK 0490L ..... APPELLA NT VS. THE ITO , WARD 21(1)(1), C-10, PRATYAKSHA KAR BHAVAN, BKC, MUMBAI -400 051 .... RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI DURGA DUTT DATE OF HEARING : 24/05/2017 DATE OF PRONOUNCEMENT : 24/05/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2010-11 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-32, MUMBAI DATED 10/06/2014, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE IN COME TAX ACT, 1961 (IN SHORT THE ACT) DATED 05/03/2013. 2. THE ONLY ISSUE IN THIS APPEAL IS WITH REGARD TO ASSESSEES CLAIM FOR EXEMPTION UNDER SECTION 54 OF THE ACT AMOUNTING TO RS.41,71,320/-. 2 ITA NO.6202/MUM/2014(AY. 2010-11) 3. AT THE TIME OF HEARING, IT WAS NOTICED THAT ON T HE EARLIER DATE OF HEARING AN APPLICATION FOR ADJOURNMENT WAS MOVED B Y THE ASSESSEE, IN TERMS OF WHICH THE MATTER WAS ADJOURNED FOR TODAY. HOWEV ER, ON THE APPOINTED DATE OF HEARING, I.E., TODAY, NEITHER THE ASSESSEE NOR ANY REPRESENTATIVE APPEARED ON BEHALF OF THE ASSESSEE AND, THEREFORE, IN TERMS OF RULE 24 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 THE APP EAL OF THE ASSESSEE IS DISPOSED OF EX-PARTE QUA THE APPELLANT AND AFTER HE ARING THE RESPONDENT REVENUE, ON MERITS. 4. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSES SEE IS AN INDIVIDUAL CARRYING ON THE BUSINESS OF RETAILING OF DRUGS AND MEDICINES AND FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, HE, INTER-ALIA , DECLARED LONG TERM CAPITAL GAIN ON SALE OF RESIDENTIAL PROPERTY OF RS .41,72,320/-. IN THE RETURN OF INCOME ASSESSEE CLAIMED EXEMPTION OF THE ABOVE CAPI TAL GAIN UNDER SECTION 54 OF THE ACT, ON THE GROUND THAT HE HAS PURCHASED A NEW RESIDENTIAL HOUSE. THE ASSESSING OFFICER DENIED THE CLAIM OF THE ASSES SEE, WHICH HAS BEEN FURTHER SUSTAINED BY THE CIT(A) AND ACCORDINGLY, AS SESSEE IS IN FURTHER APPEAL BEFORE US. 5. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIV E AND PERUSING THE ORDERS OF THE AUTHORITIES BELOW, THE FOLLOWING POSI TION EMERGES. FACTUALLY SPEAKING, IT IS REVEALED THAT ASSESSEE HAS SOLD A RESIDENTIAL PROPERTY ON 01/03/2010 FOR A TOTAL CONSIDERATION OF RS.80,00,00 0/- AND AFTER CLAIMING INDEXATION BENEFIT, THE RESULTING NET LONG TERM CAP ITAL GAIN WAS DETERMINED AT RS.41,72,320/-. IN THE RETURN OF INCOME, ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54 OF THE ACT FOR THE AFORESAID AMOUNT OF C APITAL GAIN CLAIMING THAT A NEW RESIDENTIAL PROPERTY WAS PURCHASED WITHIN TWO YEARS FROM THE DATE OF SALE OF THE OLD RESIDENTIAL PROPERTY. HOWEVER, IN THE COURSE OF ASSESSMENT 3 ITA NO.6202/MUM/2014(AY. 2010-11) PROCEEDINGS, ASSESSEE CLAIMED THAT EXEMPTION WAS WI TH RESPECT TO A NEW RESIDENTIAL HOUSE CONSTRUCTED AT HIS NATIVE PLACE. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SUBSTANTIATE THE CLAIM OF CONSTRUCTION OF A NEW HOUSE WITH EVIDENCE, VIZ, EXPENDITURE BILLS AND ARC HITECTS APPROVAL, ETC. THE ASSESSEE EXPLAINED THAT AN APPLICATION TO THE GRAM PANCHAYAT OFFICE OF THE VILLAGE WAS MADE ON 25/05/2010, SEEKING PERMISSION FOR CONSTRUCTION OF A NEW RESIDENTIAL HOUSE AND IT WAS CLAIMED THAT THE C ONSTRUCTION HAD STATED THEREAFTER. THE ASSESSING OFFICER WAS NOT SATISFIE D AND IN FACT, DISREGARDED THE ASSESSEES PLEA THAT THE CONSTRUCTION STARTED F ROM 25/05/2010, BECAUSE THE COPY OF APPLICATION SEEKING PERMISSION FROM THE GRAM PANCHAYAT SUBMITTED BY THE ASSESSEE WAS DATED 25/05/2012 AND NOT 25/05/2010. THE ASSESSING OFFICER HAS ALSO REFERRED TO ANOTHER COMM UNICATION ISSUED BY THE SARPANCH DATED 06/06/2012, WHICH WAS THE PERMISSION GRANTED FOR BUILDING THE NEW HOUSE/REPAIR OF AN OLD HOUSE. THEREFORE, T HE ASSESSING OFFICER CONCLUDED THAT THE CONSTRUCTION COULD NOT HAVE BEEN STARTED BY THE ASSESSEE PRIOR TO 06/06/2012. WITH REGARD TO THE EXPENDITUR E ON CONSTRUCTION, THE ASSESSING OFFICER NOTED THAT ASSESSEE DID NOT FILE THE PRIMARY DOCUMENTS SUCH AS BILLS/VOUCHERS, ETC. AND MERELY FURNISHED C ERTAIN ESTIMATES OF EXPENDITURE. FOR THE SAID REASONS, THE ASSESSING OF FICER DENIED THE CLAIM OF EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 54 OF THE ACT. THE CIT(A) FURTHER NOTED THAT EVEN THE BANK STATEMENTS OF THE ASSESSEE DID NOT REVEAL ANY AMOUNT PAID TOWARDS CONSTRUCTION. THE CIT(A) A LSO TOOK NOTE OF CERTIFICATE PRODUCED BY THE ASSESSEE FROM GRAM PANC HAYAT DATED 17/10/2012 STATING THAT AMOUNT OF RS.42,00,000/- WAS SPENT FOR CONSTRUCTION OF THE BUILDING. THE CIT(A) NOTED THAT THE SAID DOCUMENT COULD NOT BE TAKEN AS AN EVIDENCE OF CONSTRUCTION IN THE LIGHT OF OTHER FACT S EMERGING FROM THE RECORD. THE CIT(A) EMPHASIZED THAT THE PERMISSION TO UNDERT AKE CONSTRUCTION WAS 4 ITA NO.6202/MUM/2014(AY. 2010-11) DATED 06/06/2012 AND SUBSEQUENT TO THAT THERE IS NO EVIDENCE OF INCURRING OF EXPENDITURE ON CONSTRUCTION OF BUILDING AND, THEREF ORE, THE CLAIM OF THE ASSESSEE WAS REJECTED BY HIM. 6. IN THE ABOVE BACKGROUND, WE FIND THAT THE CONCUR RENT CONCLUSION ARRIVED AT BY THE LOWER AUTHORITIES IS BASED ON THE FACTUAL APPRECIATION OF THE AFFAIRS OF THE ASSESSEE. BEFORE US, THERE IS NO MA TERIAL WHICH WOULD ENABLE US TO INFER CONTRARY TO WHAT HAS BEEN CONCLUDED BY THE LOWER AUTHORITIES AND, THEREFORE, WE HEREBY AFFIRM THE ORDER OF THE CIT(A) DENYING THE CLAIM OF EXEMPTION UNDER SECTION 54 OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF DEPARTMENTAL REPRESENTATIVE AT THE CONCLUSION OF HEARING ON 24/05/2017. SD/- SD/- (RAVISH SOOD) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 24/05/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI