The ACIT, 3(1), Indore V. Shri Hemant Kumar Neema, Indore

ITA 713/IND/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82659 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 06-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: RAVI SHARDA
• Keywords: Revised return
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER ITA NO.713/IND/2013 A.Y.2009-10 ACIT 3(1), INDORE. VS. SHRI HEMANT KUMAR NEEMA, 45 KESARBAGH ROAD, INDORE (MP). PAN: AAWPN 2874K (APPELLANT) (RESPONDENT) REVENUE BY : SHRI R.A. VERMA, SR.D.R. ASSESSEE(S) BY : SHRI RAVI SHARDA, A.R. /DATE OF HEARING : 08/09/2014 /DATE OF PRONOUNCEMENT: 12/09/2014 / O R D E R PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE EMANATING FR OM THE ORDER OF LEARNED CIT(A)-I INDORE, DATED 10 TH OF SEPTEMBER. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.50,00,000/- MADE BY THE A.O. AFTER REJECTING THE EXEMPTION U/S. 54F BY HOLDING THAT SUCH CLAIM WAS THERE IN THE ORIGINAL RET URN WHEREAS THERE WAS NO SUCH CLAIM IN THE REVISED RETURNS. 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE A.O. WAS DUTY BOUND TO ALLOW LEGITIMATE CLAIM OF DEDUCTION U/S.54F BECAUSE THERE WAS NO LEGITIMATE CLAIM BEFORE THE A.O. AT THE TIME OF ASSESSMENT. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING TO ALLOW THE DEDUCTION U/S.54F TO THE EXTENT OF INVESTMENT MADE IN CONSTRUCTION OF NEW HOUSE WITHOUT VERIFYING THE GENUINENESS OF SUCH CLAIM OF INVESTMENT. ITA NO.713/IND/2013 ACIT-3(1), INDORE VS. SHRI HEMANT KUMAR NEEMA INDORE (M.P.) A.Y.2009-10 - 2 - 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.147/148 DATED 30 TH SEPTEMBER, 2011 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY HAS DECLARED AN INCOME OF RS.15 ,42,370/- AND DISCLOSED A SALE OF PROPERTY SITUATED AT KESHAR BAG H FOR A CONSIDERATION OF RS.7 CRORE TO M/S. BRIJ REAL ESTATE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE MAIN ISSUE RAISED WAS IN RESPECT O F AN INVESTMENT IN RURAL ELECTRIFICATION BOND U/S.54EC OF IT ACT. HOWE VER, THE A.O. HAS RAISED AN OBJECTION THAT THE REC BOND BEING PURCHAS ED BEFORE THE DATE OF SALE, THEREFORE, NOT ELIGIBLE FOR DEDUCTION BECAUSE THE ELIGIBLE DEDUCTION WAS ADMISSIBLE IF THE INVESTMENT IN REC BOND WERE M ADE AFTER THE DATE OF THE SALE. THE ASSESSEE HAS SUBMITTED EVIDENCE AB OUT THE POSSESSION HANDED OVER TO THE PURCHASER IN THE YEAR 2008 AND O N THAT BASIS PLEADED THAT THE INVESTMENT TOWARDS REC BOND WAS ADMISSIBLE . HOWEVER, THE A.O. WAS NOT CONVINCED AND FINALLY HELD THAT THE CL AIM REGARDING THE INVESTMENT OF RS.50 LAC IN REC BOND ON 31.03.2008 W AS NOT ADMISSIBLE. RESULTANTLY, THE ALLEGED ADDITION WAS MADE. THEREAF TER, AN APPLICATION FOR RECTIFICATION WAS MOVED AND VIDE AN ORDER PASSED U/ S.154 DATED 13 TH MARCH 2012 IT WAS HELD BY THE A.O. THAT THE REVISED CLAIM OF DEDUCTION U/S.54F OF RS.71,28,288/- WAS NOT ADMISSIBLE BECAUS E THE SAME WAS NOT CLAIMED AT THE TIME OF FILING OF ORIGINAL RETURN. T HE A.O. HAS HELD THAT IN THE LIGHT OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF GOETZ INDIA LTD. VS. CIT, (2006) 284 ITR 323 (SC) THE CLAIM OF DEDUCTION U/S.54F WAS NOT ALLOWABLE BECAUSE THAT CLAIM WAS NO T MADE AT THE TIME OF FILING OF THE RETURN FOR A.Y. 2009-10. THE APPLICAT ION U/S.154 WAS REJECTED. ITA NO.713/IND/2013 ACIT-3(1), INDORE VS. SHRI HEMANT KUMAR NEEMA INDORE (M.P.) A.Y.2009-10 - 3 - 2.1 WHEN THE MATTER WAS CARRIED BEFORE THE FIRST AP PELLATE AUTHORITY, LEARNED CIT(A) HAS HELD AS UNDER: 6. WHILE APPELLANT FILED APPEAL AGAINST THE AFORESAID ORDER FOR DISALLOWANCE OF RS.50LACS, HE MADE A SEPARATE APPLICATION FOR RECTIFICATION U/S.154 OF THE INCOME TAX ACT, CLAIMING BEFORE THE A.O. THAT EVEN IF CLAIM OF APPELLANT U/S.54EC IS DISALLOWED, CLAIM OF APPELLANT U/S.54F OF THE INCOME TAX ACT FOR INVESTMENT IN CONSTRUCTION ON NEW RESIDENTIAL HOUSE BE ALLOWE D UPTO THE EXTENT OF INVESTMENT MADE THIS YEAR IN CONSTRUCTION OF NEW RESIDENCE. 7. THE A.O. SUMMARILY REJECTED THE APPLICATION U/S.154 FO THE INCOME TAX ACT BY STATING THAT AT THE TIME OF FILING OF RETURN FOR A.Y. 2009-10, THE APPELLANT HAS NOT CLAIMED ANY DEDUCTION U/S.54F. THIS FINDING OF A.O. WAS FACTUALLY INCORRECT, IN SO FAR AS, THE APPELLANT CLAIMED DEDUCTION AGAINST INVESTMENT IN CONSTRUCTION OF NEW RESIDENTIAL HOUSE TO THE EXTENT OF BALA NCE AMOUNT OF CAPITAL GAIN OF RS.18,07,802/- IN THE ORIGINAL RETURN OF INCOME FILED FOR A.Y. 2009-10 AND A.O. HAS ALLOWED SUCH CLAIM IN THIS YEAR BY TAKING THE INCOME RETURNED AT RS.15,42,374/- FROM THE SAME RETURN OF INCOME, ARRIVED AT AFTER ALLOWING SUCH DEDUCTION U/S.54F OF RS.18,07,802/-. 8. EVEN IN A.Y. 2008-09 APPELLANT CLAIMED DEDUCTION U/S.54F OF THE INCOME TAX ACT FOR CONSTRUCTION OF SAME RESIDENTIAL HOUSE PROPERTY AND SUCH CLAIM WAS ALLOWED IN ASSESSMENT BEING MADE U/S.143(3) OF THE INCOME TAX ACT. 9. IN VIEW OF THE AFORESAID FACTS TO THE A.O. WAS DUTY BOUND TO ALLOW LEGITIMATE CLAIM OF DEDUCTION U/S.54F OF THE INCOME TAX ACT TO THE EXTE NT OF INVESTMENT MADE IN CONSTRUCTION OF NEW HOUSE WHICH ACCORDING TO APPEALLNT IS OF RS.54,58,989/- AS PER THE AFFIDAVIT FILED. SUCH CLAIM IS TO BE ALLOWED TO THE EXTENT OF BALANCE CAPITAL GAIN AVAILABLE IN HANDS OF APPELLANT. 3. NOW, THE REVENUE HAS CHALLENGED THE MANNER IN WH ICH THE CLAIM OF DEDUCTION U/S.54F WAS ALLOWED BY LEARNED CIT(A). THE MAIN THRUST OF LEARNED DR WAS THAT LEARNED CIT(A) HAS NOT PROPERLY CONSIDERED THE REASON GIVEN FOR REJECTION OF CLAIM U/S.54EC AND UN DER WRONG PREMISE PROCEEDED TO DECIDE THE CLAIM OF DEDUCTION U/S.54F OF IT ACT. LEARNED DR HAS ARGUED THAT THE CLAIM OF DEDUCTION U/S.54F W AS NOT MADE BEFORE THE A.O., THEREFORE, LEARNED CIT(A) HAS WRONGLY ENT ERTAINED A NEW CLAIM. 4. FROM THE SIDE OF THE ASSESSEE, LEARNED AR, MR. R AVI SHARDA APPEARED AND BY SUPPORTING THE ORDER OF LEARNED CIT (A) HAS ALSO ITA NO.713/IND/2013 ACIT-3(1), INDORE VS. SHRI HEMANT KUMAR NEEMA INDORE (M.P.) A.Y.2009-10 - 4 - INFORMED THAT AN ADDITIONAL GROUND WAS FILED IN THE MONTH OF AUGUST, 2013 IN RESPECT OF A CLAIM OF DEDUCTION U/S.54F BEF ORE THE TRIBUNAL IN RESPECT OF THE ORDER OF THE LEARNED CIT(A). HE HAS PLEADED THAT BEFORE DECIDING THIS APPEAL, THIS ADDITIONAL GROUND MAY BE ALLOWED TO BE ADMITTED. AT THE OUTSET, WE ARE OF THE VIEW THAT TH IS IS AN APPEAL FILED BY THE REVENUE; THEREFORE, THE ASSESSEE WAS NOT LEGALL Y CORRECT TO RAISE AN ADDITIONAL GROUND SPECIALLY WHEN NO CROSS OBJECTION HAS BEEN FILED. WE FIND FORCE IN THIS LEGAL ARGUMENT OF LEARNED DR; HE NCE, DO NOT CONSIDER IT NECESSARY TO ADJUDICATE UPON THIS ADDITIONAL GROUND BEING BEYOND OUR JURISDICTION. FOR RAISING ADDITIONAL GROUND BEFORE THE TRIBUNAL PROCEDURE IS LAID DOWN IN INCOME TAX APPELLATE TRIBUNAL RULES , 1963. HOWEVER, THE CONDITION AS WELL AS THE PROCEDURE BOTH HAVE NO T BEEN FOLLOWED BY THE RESPONDENT-ASSESSEE; HENCE, HEREBY REJECTED. 5. ONE MORE DISCREPANCY HAS BEEN NOTED BY US AFTER HEARING BOTH THE SIDES THAT LEARNED CIT(A) HAS CONSIDERED FEW FACTS WHICH WERE NOT BEFORE THE A.O. IF LEARNED CIT(A) WAS CONSIDERING IT NECES SARY TO APPRECIATE FEW NEW FACTS THEN IT WAS OBLIGATORY ON HIS PART TO GRANT AN OPPORTUNITY TO THE A.O. AND ALSO TO CONFRONT ALL THOSE EVIDENCES W HICH WERE NOT FILED AT THE STAGE OF ASSESSMENT PROCEEDINGS. LEARNED DR HAS SERIOUSLY CONTESTED THAT THE FACTS AS WELL AS THE FIGURES IN RESPECT OF THE CLAIM OF DEDUCTION U/S.54F WERE NOT AT ALL DISCUSSED IN THE ASSESSMENT ORDER, MOREOVER THE REQUISITE EVIDENCE HAS ALSO NOT BEEN EXAMINED/INVES TIGATED BY THE A.O. THEREFORE, LEARNED CIT(A) HAS INFRINGED THE PROVISI ON OF INCOME TAX RULES 46A. CONSIDERING THE VERDICT OF LEARNED CIT(A ) AND THE FACTS AS MENTIONED THEREIN, WE FIND FORCE IN THE ARGUMENT OF LEARNED DR; HENCE, DEEM IT NECESSARY TO RESTORE THIS ISSUE BACK TO THE STAGE OF LEARNED CIT(A) ITA NO.713/IND/2013 ACIT-3(1), INDORE VS. SHRI HEMANT KUMAR NEEMA INDORE (M.P.) A.Y.2009-10 - 5 - TO DECIDE DE NOVO, NEEDLESS TO SAY AFTER PROVIDING AN OPPORTUNITY TO A.O. EITHER BY CALLING A REMAND REPORT OR BY ADOPTING AN Y SUCH PROCEDURE AS LAID DOWN UNDER THE ACT. LEARNED CIT(A) SHALL ALSO GIVE A REASONABLE OPPORTUNITY TO THE ASSESSEE. WE FURTHER DIRECT THAT LEARNED CIT(A) SHALL FIRST DETERMINE THE YEAR OF SALE AS ALSO THE YEAR U NDER WHICH THE CAPITAL GAIN WAS REQUIRED TO BE DECLARED BY THE ASSESSEE AN D AFTER ASCERTAINING THE CORRECT YEAR HE SHALL PROCEED TO EXAMINE THE CL AIM OF DEDUCTION U/S.54 OF IT ACT. SIDE BY SIDE, THE ASSESSEE IS ALSO DIREC TED TO DISCHARGE THE ONUS OF ESTABLISHING THE CORRECTNESS OF THE CLAIM OF SEC TION 54F OF IT ACT. WITH THESE DIRECTIONS, WE HEREBY RESTORE THIS GROUN D; HENCE, TO BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE ONLY. 6. RESULTANTLY, THE APPEAL OF THE REVENUE MAY BE TR EATED AS ALLOWED FOR STATISTICAL PURPOSE ONLY. SD/- SD/- (P.K. BANSAL) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED 12/09/2014 PRABHAT KR. KESARWANI, SR. P.S. / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' # # ( / CONCERNED CIT 4. # # ( ( ) / THE CIT(A), INDORE 5. +,# &' , # # &' , ./ % / DR, ITAT, INDORE 6. ,01 2 / GUARD FILE. / BY ORDER, 3 33 3/ // /.# $4 .# $4 .# $4 .# $4 ( DY./ASSTT.REGISTRAR) ITAT, INDORE