B.Pulam Raju(HUF), Kakinada V. The Addl. CIT, Range-4, Visakhapatnam, Visakhapatnam

ITA 678/VIZ/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2031 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Capital asset; Benefit of exemption
• Section: 54F; 142(1); 54

Judgement Text

ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.678/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) B. PULLAM RAJU (HUF) KAKINADA VS. ADDL. CIT, RANGE - 4 , VISAKHAPATNAM [PAN: AADHB 5249K ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI M.K. SETHI, DR / DATE OF HEARING : 19.02.2016 / DATE OF PRONOUNCEMENT : 18.03.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A), VISAKHAPATNAM DATED 27.8.2013 AND IT PERTAI NS TO THE ASSESSMENT YEAR 2009-10. ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 2 2. DURING THE COURSE OF HEARING, THE LD. A.R. OF TH E ASSESSEE SUBMITTED THAT THERE WAS A DELAY OF 5 DAYS IN FILIN G APPEAL BEFORE THE TRIBUNAL. THE A.R. FURTHER SUBMITTED THAT DURING T HE PERIOD, THE KARTA OF HUF, SHRI B. PULLAM RAJU WAS ILL, THEREFORE, IT WAS NOT POSSIBLE TO FILE THE APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT. THE A .R. FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED AN AFFIDAVIT STATING THE REASONS FOR DELAY IN FILING THE APPEAL. THEREFORE, REQUESTED T O CONDONE THE MARGINAL DELAY OF 5 DAYS IN FILING THE APPEAL. ON THE OTHER HAND, THE LD. D.R. DID NOT RAISE ANY OBJECTIONS. HAVING CONSIDERED THE RIV AL SUBMISSIONS AND ALSO PERUSAL OF THE AFFIDAVIT FILED BY THE ASSESSEE , WE FIND THAT THE DELAY OF 5 DAYS IN FILING THE APPEAL IS NEITHER INTENTION AL NOR DELIBERATE. HENCE, BY EXERCISING POWERS VESTED WITH THE TRIBUNA L UNDER SECTION 253(5) OF THE INCOME TAX ACT, 1961, WE CONDONE THE DELAY OF 5 DAYS IN FILING THE APPEAL, ADMIT THE APPEAL AND PROCEED TO DISPOSE OF THE APPEAL ON MERITS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS HUF FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 31.7.2009 DECLARING TOTAL INCOME OF ` 43,07,689/-, BESIDES AGRICULTURAL INCOME OF ` 4,90,000/-. THE CASE WAS SELECTED FOR SCRUTINY UNDE R CASS AND ACCORDINGLY, NOTICES U/S 143(2) AND 142(1) OF THE I NCOME TAX ACT, 1961 ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 3 (HEREINAFTER CALLED AS 'THE ACT') WERE ISSUED. IN RESPONSE TO THE NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEA RED FROM TIME TO TIME AND FURNISHED THE BOOKS OF ACCOUNTS AND OTHER DETAILS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTICED THAT THE ASSESSEE HAS SOLD TWO PROPERTIES A ND CLAIMED EXEMPTION U/S 54 AND 54F OF THE ACT FOR REINVESTMEN TS IN PURCHASE OF TWO FLATS AT BANGALORE. THEREFORE, ISSUED A SHOW CA USE NOTICE AND ASKED TO EXPLAIN WHY THE EXEMPTION CLAIMED U/S 54F OF THE ACT SHALL NOT BE DISALLOWED. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT DURING THE FINANCIAL YEAR RELEVANT TO ASSESSME NT YEAR 2009-10, IT HAS SOLD TWO PROPERTIES I.E. ONE VACANT SITE AT RESAPUVANIPALEM, VISAKHAPATNAM AND ANOTHER RESIDENT IAL HOUSE PROPERTY AT M.V.P. COLONY. THE ASSESSEE FURTHER SU BMITTED THAT IT HAS COMPUTED THE LONG TERM CAPITAL GAIN AS PER THE LAW AND CLAIMED EXEMPTION U/S 54 OF THE ACT TOWARDS SALE OF RESIDEN TIAL HOUSE PROPERTY AND PURCHASE OF ANOTHER RESIDENTIAL HOUSE PROPERTY. SIMILARLY, IT HAS CLAIMED EXEMPTION U/S 54F OF THE ACT, FOR SALE OF L ONG TERM CAPITAL ASSET OTHER THAN RESIDENTIAL HOUSE PROPERTY AND REINVESTE D THE PROCEEDS IN PURCHASE OF RESIDENTIAL HOUSE PROPERTY. THE ASSESSI NG OFFICER AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, A LLOWED EXEMPTION U/S 54 OF THE ACT TOWARDS SALE OF RESIDENTIAL HOUSE PROPERTY AT M.V.P. ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 4 COLONY AND PURCHASE OF ANOTHER RESIDENTIAL FLAT AT BANGALORE. HOWEVER, RESTRICTED THE EXEMPTION TO THE EXTENT OF RS. 29,00 ,000/- LAKHS AND DISALLOWED THE BALANCE AMOUNT OF RS. 6,00,000/- IN THE ABSENCE OF SUPPORTING DOCUMENTS. THE ASSESSING OFFICER, FURTHE R DISALLOWED THE EXEMPTION CLAIMED U/S 54F OF THE ACT FOR THE REASON THAT AS ON THE DATE OF SALE, THE ASSESSEE OWNED MORE THAN ONE RESIDENTI AL HOUSE AND AS PER SECTION 54F(1)(II&III) OF THE ACT THE ASSESSEE IS N OT ELIGIBLE FOR EXEMPTION. 4. AGGRIEVED BY THIS ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE REITERATED ITS SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER. THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER WAS ERRED IN N OT ALLOWING THE EXEMPTION U/S 54F OF THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT AS REGARDS THE AMOUNT SPENT TOWARDS ADDITIONAL WORK FO R THE PROPERTIES PURCHASED AT BANGALORE, THE BUILDER HAS ISSUED A CO NFIRMATION LETTER STATING THAT THE ASSESSEE HAS PAID AN AMOUNT OF ` 10 LAKHS TOWARDS FURTHER IMPROVEMENT TO THE PROPERTY. THEREFORE, TH E ASSESSING OFFICER WAS NOT CORRECT IN IGNORING THE CONFIRMATION LETTER FILED BY THE ASSESSEE WHILE DISALLOWING THE CLAIM U/S 54F OF THE ACT. THE CIT(A) AFTER CONSIDERING THE EXPLANATIONS FURNISHED BY THE ASSES SEE, DIRECTED THE ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 5 ASSESSING OFFICER TO ALLOW THE EXEMPTION CLAIMED U/ S 54F OF THE ACT. HOWEVER, THE CIT(A) CONFIRMED THE ASSESSING OFFICER S ACTION, DISALLOWING THE AMOUNT SPENT TOWARDS ADDITIONAL WOR K DONE FOR THE TWO FLATS AT BANGALORE. WHILE DOING SO, THE CIT(A) HELD THAT THE CONFIRMATION LETTER FILED BY THE ASSESSEE DATED 20.2.2011 IS VAG UE, AS THE BUILDER DID NOT SPECIFY THE NATURE OF WORK DONE FOR THE FLATS. THE CIT(A) FURTHER HELD THAT ON PERUSAL OF THE CONFIRMATION LETTER ISS UED BY THE BUILDER, IT WAS SIMPLY STATED THAT THE ASSESSEE HAS PAID ADVANC E OF ` 10 LAKHS TOWARDS PURCHASE OF RESIDENTIAL FLATS 401 & 502. IN THE ABSENCE OF SPECIFIC INFORMATION REGARDING NATURE OF ADDITIONAL WORK DONE, THE BENEFIT OF EXEMPTION U/S 54F OF THE ACT CANNOT BE A LLOWED. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE CIT(A) WAS ERRED IN DENYING THE BENEFIT OF EXEMPTION U/S 54F FOR ` 10 LAKHS TOWARDS ADDITIONAL WORK DONE FOR THE FLATS AT BANGALORE. TH E A.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNISHED A CONFIRM ATION LETTER FROM THE BUILDER AND BUILDER STATED THAT HE HAS CARRIED OUT ADDITIONAL WORKS FOR THE TWO FLATS, THEREFORE, ASSESSING OFFICER AND CIT (A) WAS NOT CORRECT IN DENYING THE BENEFIT OF EXEMPTION FOR ` 10 LAKHS U/S 54F OF THE ACT. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORTED THE ORDER OF CIT(A). ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 6 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF EXEMPTION U/S 54F OF THE ACT FOR ` 10 LAKHS, ON THE GROUND THAT THE ASSESSEE HAS NOT PROVED THE PURPOSE FOR WHICH THE AMOUNT WAS SPENT. THE ASSESS ING OFFICER WAS OF THE OPINION THAT THE CONFIRMATION LETTER ISSUED BY THE BUILDER WAS VAGUE IN NATURE AND IT DID NOT SPECIFY THE NATURE OF ADDI TIONAL WORK CARRIED OUT FOR THE FLATS. IT WAS THE CONTENTION OF THE ASSESS EE THAT IT HAS CARRIED OUT ADDITIONAL WORKS FOR THE TWO FLATS FOR WHICH IT HAS PAID RS. 10 LAKHS. THE ASSESSEE FURTHER STATED THAT IT HAS OBTAINED CO NFIRMATION LETTER FROM THE BUILDER AND THE BUILDER CONFIRMED HAVING SPENT ` 10 LAKHS TOWARDS ADDITIONAL WORKS CARRIED OUT IN THE FLATS. WE HAVE GONE THROUGH PAPER BOOK CONTAINING SALE DEED COPIES OF THE FLATS PURCH ASED AND CONFIRMATION LETTER OBTAINED FROM THE BUILDER. ON P ERUSAL OF THE CONFIRMATION LETTER ISSUED BY THE BUILDER, WE FIND THAT THE CONFIRMATION LETTER DATED 20.2.2011 ISSUED BY THE BUILDER STATES THAT THE ASSESSEE HAS PAID ADVANCE TOWARDS PURCHASE OF TWO RESIDENTIAL FL ATS. THE SUBSEQUENT CONFIRMATION LETTER DATED 11.11.2011 ISSUED BY THE BUILDER CLEARLY STATES THAT HE HAD CARRIED OUT ADDITIONAL WORKS OF ` 12,66,515/- FOR TWO FLAT NOS. 401 & 502 IN SRI RAMA ACROPOLIS APARTMENTS, BA NGALORE. IN THE SAID CONFIRMATION LETTER, THE BUILDER STATED THAT H E HAS INCURRED AN ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 7 AMOUNT OF ` 8,23,000/- FOR FLAT NO.401 & ` 4,43,515/- FOR FLAT NO.502 AND THE AMOUNT SPENT WAS APPROPRIATED OUT OF THE AMOUNT PAID BY THE ASSESSEE ON 20.7.2009 AND 24.7.2009. ON FURTHER VER IFICATION OF THE LEDGER EXTRACT SUBMITTED BY THE BUILDER, IT WAS NOT ICED THAT THE ASSESSEE HAS PAID AN AMOUNT OF ` 29 LAKHS TOWARDS FLAT NO.401 AND ` 25 LAKHS TOWARDS FLAT NO.502. AS PER SAID LEDGER ACCOUNTS, T HE TOTAL COST INCLUDING REGISTRATION AND ADDITIONAL WORKS INCURRED FOR THE FLAT IS ` 29 LAKHS FOR FLAT NO.401 & ` 25 LAKHS FOR FLAT NO.502. AS AGAINST THIS, THE ASS ESSEE HAS CLAIMED EXEMPTION OF ` 35 LAKHS FOR FLAT NO.401 & ` 29 LAKHS FOR FLAT NO.502. THE ADDITIONAL AMOUNT OF ` 10 LAKHS STATED TO BE INCURRED TOWARDS ADDITIONAL WORK FOR FLAT NO.401 & 502 WAS N OT SUPPORTED BY ANY EVIDENCE AND ALSO PROOF OF PAYMENT. THE ASSESSEE C OULD NOT ABLE TO SUBSTANTIATE THE CLAIM WITH ANY DOCUMENTARY EVIDENC ES. THE CONFIRMATION LETTER ISSUED BY THE BUILDER DATED 20. 2.2011 ONLY SPEAKS ABOUT ADVANCES. THE SUBSEQUENT CONFIRMATION LETTER ISSUED BY THE BUILDER DATED 11.11.2011 CLEARLY STATED THE ADDITIO NAL WORKS CARRIED OUT FOR THE TWO FLATS AND AS PER THE CONFIRMATION LETTE R A SUM OF RS. 12,66,515/- ONLY HAS BEEN INCURRED AND THIS ADDITIO NAL AMOUNT OF ` 10 LAKHS CLAIMED BY THE ASSESSEE IS NOT MENTIONED. THE CIT(A) CONSIDERING THE DETAILS FURNISHED BY THE ASSESSEE, DENIED THE B ENEFIT OF EXEMPTION U/S 54F OF THE ACT. WE DO NOT SEE ANY ERROR OR INF IRMITY IN THE ORDER ITA NO.678/VIZAG/2013 B. PULLAM RAJU (HUF), KAKINADA 8 PASSED BY THE CIT(A). THEREFORE, WE INCLINED TO UP HOLD THE ORDER OF CIT(A) AND REJECT THE GROUND RAISED BY THE ASSESSEE . 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18 TH MAR16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 18.03.2016 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SHRI B. PULLAM RAJU (HUF), D.NO. 2-24-1, SRINAGAR, KAKINADA 2. / THE RESPONDENT THE ADDL. CIT, RANGE-4, VISAKHA PATNAM 3. + / THE PRINCIPAL CIT-2, VISAKHAPATNAM 4. + ( ) / THE CIT (A), VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM