Dr. Vikram Kalra, New Delhi V. ACIT, New Delhi

ITA 6640/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6673 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 14-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Capital asset; Cost of acquisition
• Section: 54F; 54

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH F, NEW DELHI BEFORE : SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 6640/DEL/2015 ASSESSMENT YEAR: 2012-13 DR. VIKRAM KALRA, 215A, MIG, RAJOURI GARDEN, NEW DELHI. PAN- AHEPK 5621L (APPELLANT) VS. ACIT, CIRCLE 61(1), NEW DELHI. (RESPONDENT) APPELLANT BY SH. ARVIND KUMAR, ADVOCATE RESPONDENT BY SH. SURENDER PAL, SR. DR ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-20, NEW DELHI DATED 08.10.2015 FOR THE ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) -20, NEW DELHI, HAS ERRED ON FA CTS IN NOT AND RECKONING THE DATE OF ADVANCE OF THE SALE OF THE LA NDED PROPERTY ( APRIL 6, 2011) FOR THE PURPOSES OF CLAIM UNDER SECTION 54 F OF THE INCOME TAX ACT, AS THE DATE FOR COUNTING THE EXEMPTION PERIOD OF ON E YEAR PROVIDED UNDER THE LAW, WHICH FALLS WITHIN ONE YEAR OF THE DATE OF PURCHASE OF ANOTHER RESIDENTIAL PROPERTY (ON APRIL 9,2010) IN THE EARLI ER FINANCIAL YEAR. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) -20, NEW DELHI, HAS ERRED ON FA CTS THAT ADVANCE DATE OF HEARING 21.01.2019 DATE OF PRONOUNCEMENT 22.01.2019 ITA NO. 6640/DEL/2015 2 MONEY HAS BEEN RECEIVED BY THE ASSESSEE FROM THE PR OPERTY BROKER FOR VALIDATING AN AGREEMENT FOR SALE, IS ONLY SECURITY AND NOT ADVANCE FOR SALE OF PROPERTY, WHICH ACTUALLY RESULTED IN A SALE LATE R, CAN NOT BE CONSTRUED AS ADVANCE SALE CONSIDERATION AND HENCE THE DATE OF IN ITIATING THE SALE IS NOT WITHIN THE DUE PERIOD OF 'ONE YEAR' AND AS PRESCRIB ED UNDER SECTION 54F OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX APPEALS HAS ERRED IN LAW IN COUNTING PERI OD OF ONE YEAR OR TWO YEARS AS THE CASE MAY BE FROM THE DATE OF SALE AND PURCHASE, INSTEAD RELATING THE SAME TO THE FINANCIAL YEAR IN WHICH TH E TRANSACTIONS HAPPENED FOR THE PURPOSES OF SECTION 54F OF THE INCOME TAX A CT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A DOCTOR BY PROFESSION AND FILED RETURN OF INCOME ON 26.12.2012 DECLARING INCOME AT RS.57,53,650/-. THE CASE WAS TAKEN UP FOR SCRUTINY. THE ASSESSING O FFICER NOTICED THAT THE ASSESSEE HAS SHOWN HIS INCOME FROM BUSINESS OR PROF ESSION, HOUSE PROPERTY, CAPITAL GAINS AND OTHER SOURCES. THE ASSESSING OFFI CER FURTHER NOTICED THAT THE ASSESSEE HAD SOLD PLOT C-1417, PALAM VIHAR, GURGAON ON 24.05.2011, WHICH WAS A LONG TERM CAPITAL ASSET AND HE WAS THE OWNER OF 50% OF THAT PROPERTY. THE SAID PROPERTY WAS SOLD AND HE RECEIVED HIS SHAR E FOR SALE CONSIDERATION OF RS.52.05 LAKHS AND CLAIMED EXPENDITURE OFRS.8,20,18 0/-. RESULTANTLY, THE LONG TERM CAPITAL GAIN WAS CALCULATED AT RS.43,24,820/-. FURTHER, THE ASSESSEE ALSO PURCHASED A HOUSE AT DLF AND CLAIMED EXEMPTION U/S. 54F OF HIS OWN SHARE OF 50% TO THE EXTENT OF RS.50,53,375/-. FURTHER, THE A SSESSING OFFICER NOTICED THAT ON THE DATE OF SALE, THE ASSESSEE HAD TWO RESI DENTIAL HOUSES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILE D REVISED COMPUTATION AND CLAIMED EXEMPTION U/S. 54F ON PURCHASE OF FLAT AT C B-6A MUNIRKA, NEW DELHI OF RS.44,50,000/-. ON THE BASIS OF REVISED COMPUTAT ION FILED, THE AO NOTICED ITA NO. 6640/DEL/2015 3 THAT THE NEW ASSET SHOULD BE PURCHASED WITHIN ONE Y EAR FROM THE DATE OF SALE OF THE CAPITAL ASSET, I.E., 25.05.2010, BUT HERE TH E ASSESSEE PURCHASED THE PROPERTY AT CB-6A MUNIRKA NEW DELHI ON 09.04.2010 W HICH IS BEYOND THE PERIOD PRESCRIBED U/S. 54F FOR AVAILING DEDUCTION. ACCORDINGLY, THE AO DISALLOWED THE CLAIM OF ASSESSEE U/S. 54F AND MADE ADDITION OF RS.44,50,000/- . IN APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE MAD E DETAILED WRITTEN SUBMISSIONS AND THE LD. CIT(A), AFTER CONSIDERING T HE SUBMISSIONS OF THE ASSESSEE AND THE PROVISIONS OF SECTION 54F SUSTAINE D THE IMPUGNED ADDITION. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE IT AT. 3. THE LD. AR OF THE ASSESSEE HAS FILED A PAPER BOO K WHICH IS PLACED ON RECORD. IT WAS SUBMITTED THAT THE LIMITATION FOR PU RCHASE OF NEW PROPERTY SHOULD BE RECKONED FROM THE DATE 06.04.2011 WHEN TH E ASSESSEE RECEIVED A CHEQUE OF RS.5.00 LAKHS FROM THE BROKER AS SECURITY DEPOSIT AGAINST THE SAID PROPERTY, THOUGH THE SALE DEED OF THE PROPERTY WAS EXECUTED ON 30.05.2011. THE ASSESSEE HAD PURCHASED NEW RESIDENTIAL PROPERTY AT CB-6A, MUNIRIKA, NEW DELHI ON 09.04.2010 FOR RS.44.5 LAKHS AND THIS DATE FALLS WITHIN THE PERIOD OF ONE YEAR PRIOR TO SALE OF ORIGINAL ASSET, I.E. 0 6.04.2011. THEREFORE, THE ASSESSEE IS JUSTIFIED TO CLAIM DEDUCTION U/S. 54F O F THE ACT. IN SUPPORT OF HIS ARGUMENTS, HE RELIED ON THE DECISION OF HONBLE SUP REME COURT IN THE CASE OF SH. SANJAY LAL ETC. ETC. VS. CIT (CIVIL APPEAL NO. 5899 5900 OF 2014). 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LOWER AUTHORITIES AND SUBMITTED THAT LANGUAGE OF THE ACT IS CLEAR FOR GETTING DEDUCTION U/S. 54 F OF THE ACT THAT THE ASSESSEE SHOULD INVEST HIS MONE Y FOR ACQUIRING NEW ASSET (RESIDENTIAL PROPERTY) WITHIN A YEAR FROM THE SALE OF THE ORIGINAL ASSET. THE DATE OF SALE OF PROPERTY WOULD BE DEEMED TO BE WHEN THE SALE DEED WAS ITA NO. 6640/DEL/2015 4 EXECUTED BY THE ASSESSEE, WHICH IN THE INSTANT CASE IS 30.05.2011 AND THE CASE LAW CITED BY THE ASSESSEE IS NOT APPLICABLE IN THE PRESENT CASE BECAUSE IT IS BASED ON DIFFERENT FOOTINGS. 5. AFTER HEARING BOTH THE SIDES AND PERUSING THE EN TIRE MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE OBSERVE THAT THE LD.CIT(A) HAS DONE A GOOD REASONED ORDER WHICH READS AS UNDER : 4.3. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT OR DER AND SUBMISSIONS THEREOF. FOLLOWING FACTS HAVE EMERGED; 1. THE ASSESSEE IS A HALF CO-OWNER OF A PLOT ATC-141 7, PALAM VIHAR, WHICH WAS SOLD AT RS.1,04,10,000/- (ASSESSEE SHARE BEING RS.52,05,000) VIDE SALE DEED REGISTERED ON 30 TH MAY, 2011. 2. THAT THE ASSESSEE HAS PURCHASED A RESIDENTIAL FLA T AT CB6A, MUNIRKA, NEW DELHI ON 9TH APRIL, 2010 VIDE SALE DEED DATED 9 TH APRIL 2010 FOR AN AMOUNT OF RS.30 LAKHS AND MADE INVESTMENT IN FIXTUR ES IN THE FLAT AT RS.14 LAKHS. TOTAL COST INCLUDING STAMP DUTY COMES TO RS.4 4.5 LAKHS. 3. THE APPELLANT HAS CLAIMED THAT SINCE THE COST OF ACQUISITION OF A RESIDENTIAL FLAT WAS RS. 44,50,000 AND THAT THIS EX CEEDED THE LONG TERM CAPITAL GAIN OF RS. 43,48,820 THAT AROSE ON SALE OF RESIDENTIAL PLOT (AFTER INDEXATION), THE WHOLE GAIN WAS CLAIMED AS EXEMPT U NDER SECTION 54 F OF THE INCOME TAX ACT, 1961. {4.4} IN ORDER TO EXAMINE THE CLAIM OF THE APPELLAN T, LETS GO TO THE PROVISIONS OF THE SECTION 54F OF THE ACT. 54F. (1) [SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDE D FAMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPI TAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERR ED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ON E YEAR BEFORE OR [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFER TOOK PL ACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONS TRUCTED, A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL ITA NO. 6640/DEL/2015 5 GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOL LOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, IN THE INSTANT CASE THE DATE OF SALE OF THE ASSET I S 30/05/2011. THEREFORE, IN ORDER TO GET EXEMPTION UNDER SECTION 54F OF THE ACT, THE APPELLANT SHOULD HAVE INVESTMENT IN A RESIDENTIAL PROPERTY ON OR AFTER 30/05/2010. APPELLANT HAS PURCHASED THE FLAT ON 09/04/2010, WHI CH IS CLEARLY BEYOND THE PERIOD APPLICABLE UNDER SECTION 54F OF THE ACT. THE APPELLANT HAS CLAIMED THAT HE HAS APPROACHED SEVERAL BROKERS FOR THE SALE OF THE PROPERTY AND THAT ONE OF SUCH BROKER HAS CREDITED T HE ACCOUNT OF THE APPELLANT AN AMOUNT OF RS.5 LAKH TOWARDS SECURITY D EPOSIT IN LIEU OF FUTURE SALE OF THIS PROPERTY AND THAT THE SECURITY DEPOSIT WAS RECEIVED AGAINST THIS PROPERTY ON 06/04/2011. THEREFORE - THE DATE OF SALE OF THE PROPERTY SHOULD BE TREATED AS ON 06/04/2011 AND NOT THE ACTU AL SALE DEED I.E 30/05/2011. THE APPELLANTS CLAIM IS NOT JUSTIFIED B ECAUSE OF THE FOLLOWING REASONS; 1. THAT THE MONEY RECEIVED BY THE APPELLANT ON 06/0 4/2011 WAS ON ACCOUNT OF SECURITY DEPOSIT AGAINST THE PROPERTY AN D NOT ON ACCOUNT OF ANY SALE ADVANCE. 2. THAT THE AMOUNT RECEIVED WAS FROM SH SANJAY KUMA R, WHO IS NOT EVEN THE EVENTUAL PURCHASER OF THE PROPERTY. 3. THAT THE AMOUNT ACTUALLY IS SOME SORT OF AN ARRA NGEMENT BETWEEN THE PROPERTY BROKER AND THE APPELLANT SO THAT THE A MOUNT RECEIVED BY HIM SHALL BE ADJUSTED AGAINST THE FUTURE SALE PROCEEDS. 4. THAT IT IS A COMMON PRACTICE THAT THE BROKERS GI VE SOME MONEY TO THE PROPERTY OWNER DESIROUS OF SALE OF THE PROPERTY SO THAT THE PROPERTY IS SOLD THROUGH THAT PARTICULAR BROKER ONLY. BUT BY AN Y STRETCH OF IMAGINATION, SUCH MONEY WHICH IS APPROPRIATELY DESC RIBED BY THE APPELLANT ITSELF DEPOSITS CANNOT BE CONSTRUED AS A DVANCE SALE CONSIDERATION WHEN THE BUYER WAS NOWHERE IN SIGHT O N 06/04/2011. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, APPELLANT CANNOT CLAIM EXEMPTION UNDER SECTION 54F AS THE CONDITIONS LAID DOWN IN THE ACT IS NOT FULFILLED BY THE ASSESSEE. ITA NO. 6640/DEL/2015 6 FROM THE ABOVE FINDING OF THE LD. CIT(A) IS CLEAR T HAT THE ASSESSEE HAD BOUGHT NEW PROPERTY BEYOND ONE YEAR PRIOR TO THE SALE OF O RIGINAL ASSET AGAINST WHICH THE ASSESSEE WANTED TO TAKE DEDUCTION U/S. 54F. TH E LANGUAGE OF THE ACT IS VERY CLEAR THAT THE ASSESSEE SHOULD PURCHASE/INVEST IN NEW HOUSE WITHIN ONE YEAR PRIOR TO THE DATE OF SALE OF ORIGINAL ASSET. T HE ASSESSEE HAS SOLD THE PROPERTY ON 30.05.2011 ON THE DATE THE SALE DEED WA S EXECUTED AND PURCHASED PROPERTY AT CB-6A, MUNIRKA ON 09.04.2010 WHICH IS BEYOND ONE YEAR AS PRESCRIBED U/S. 54F FOR GETTING DEDUCTION U /S. 54F. THEREFORE, THE LOWER AUTHORITIES ARE JUSTIFIED IN REJECTING THE CL AIM OF ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.01.19. SD/- SD/- (H.S. SIDHU) (L.P. SA HU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22.01.2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI