Sudhir Tukaram Deshpande, Aurangabad V. Assistant Commissioner of Income-tax,

ITA 72/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88906 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 07-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.72/PN/2014 (ASSESSMENT YEAR : 2008-09) SHRI SUDHIR TUKARAM DESHPANDE, PROP. M/S BHARAT ELECTRIC POLE MAG. CO., PARABRAHMA, NEAR DEOGIRI BANK, NEW SHREYA NAGAR, AURANGABAD 431 002. PAN : ADSPS3717E . APPELLANT VS. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 2, AURANGABAD. . RESPONDENT ASSESSEE BY : NONE DEPARTMENT BY : MR. RAJESH DAMOR DATE OF HEARING : 17-12-2014 DATE OF PRONOUNCEMENT : 21-01-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), AURANGABA D DATED 06.11.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 22.1 0.2010 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL :- 1] ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCE S OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DISALLOWING THE DEV ELOPMENT EXPENSES OF RS.2,50,000/- OUT OF THE TOTAL EXPENSES CLAIMED AT RS.3,00,000/-, FOR WANT OF EVIDENCE OF EXPENSES INCURRED BEFORE 26 YEARS OLD A ND CONSIDERING THE COST OF LAND AND WITHOUT CONSIDERING AREA OF LAND. APPELLAN T RELY UPON THE HON. GUJARAT HIGH COURT'S DECISION IN THE CASE OF CIT VS GURBACHAN SINGH JUNEJA (215 CTR 509). THEREFORE, WHEN REVENUE IS SHOWN TO HAVE BEEN EARNE D AND IS RECOGNIZED FOR THE PURPOSE OF TAXING THE SAME, T HE ASSOCIATED AND MATCHING COST WOULD ALSO HAVE, TO BE ALLOWED AS A DEDUCTION THEREFROM. CONSIDERING FACTS INTO TOTALITY, EXPENSES CLAIMED BY THE APPELL ANT AT RS.3,00,000/-MAY ITA NO.72/PN/2014 PLEASE BE ALLOWED WHILE WORKING LONG TERM CAPITAL G AIN, INSTEAD OF RESTRICTED BY CIT(A) AT RS.50,000/-. 2] ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DENYING THE EXEMPTI ON CLAIMED UNDER THE PROVISION OF SECTION 54F OF THE I T ACT, IN RESPECT OF INVESTMENT OF LONG TERM CAPITAL GAIN IN PURCHASE OF TWO FLATS ON 18-06-2008 & 27-06-2008, SITUATED ON 3 RD FLOOR AND 4 TH FLOOR AT A-WING, 'BRAHMAPUTRA ANNEX', SHREYA NAGAR OF AURANGABAD, WHICH IS USED AS UNIT FOR RESIDENTIAL P URPOSE. THEREFORE, EXEMPTION AS CLAIMED U/S.54F OF THE I T ACT, MAY PL EASE BE ALLOWED AND ADDITION MADE BY A.O AND ENHANCED BY CIT(A), MAY PL EASE BE DELETED. 3] ON THE FACTS AND IN THE PREVAILING CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF INVOKING THE PROVISION OF SECTION 50C OF THE I T ACT BY A.O, WHILE CALCULA TING LONG TERM CAPITAL GAIN ON SALE OF LAND, EVEN THOUGH APPELLANT HAS INVESTED ENTIRE SALE PROCEEDS AND CAPITAL GAIN IN PURCHASE OF TWO RESIDENTIAL FLATS W HICH ARE USED AS A UNIT FOR RESIDENTIAL PURPOSES FOR ALL THE FAMILY MEMBERS OF THE APPELLANT AND HENCE, ACTION OF INVOKING OF SECTION 50C OF THE I T ACT BY THE ASSESSING OFFICER AS WELL AS BY THE CIT(A) IS NOT LEGALLY TENABLE. THUS, 'WHEN APPELLANT INVESTED ENTIRE SALE PROCEEDS AND LONG TERM CAPITAL GAIN' IN PURCHASE OF NEW FLATS FOR RESIDENTIAL PURPOSES, INVOKING OF PROVISION OF SECT ION 50C OF THE I T ACT, UNDER SUCH SITUATION IS NOT TENABLE. THEREFORE, IT IS REQ UESTED THAT FINDING AND ACTION OF THE A.O. & CIT(A), MAY PLEASE BE VACATED AND DUE RELIEF MAY PLEASE BE GRANTED. 3. AT THE TIME OF HEARING, NONE APPEARED AND NOR AN Y ADJOURNMENT WAS SOUGHT ON BEHALF OF THE APPELLANT-ASSESSEE INSPITE OF NOTICE FOR HEARING HAVING BEEN SENT THROUGH RPAD BUT THE SAME WAS RETURNED WI TH REMARKS UNCLAIMED AND THE OTHER SIDE, LD. DEPARTMENTAL REPRESENTATIV E APPEARED ON BEHALF OF THE RESPONDENT-REVENUE. THEREFORE, HAVIN G REGARD TO THE RULE 24 OF THE APPELLATE TRIBUNAL RULES, 1963, THE APPEAL IS B EING DISPOSED-OFF AFTER HEARING THE RESPONDENT ON MERITS AND EX-PARTE QUA T HE ASSESSEE-APPELLANT. 4. ON THE BASIS OF THE ORDERS OF THE AUTHORITIES BE LOW, IT TRANSPIRES THAT THE ONLY GRIEVANCE OF THE ASSESSEE IS NON-ACCEPTANCE BY THE INCOME-TAX AUTHORITIES OF ASSESSEES CLAIM FOR LAND DEVELOPMEN T EXPENDITURE TO THE EXTENT OF RS.2,50,000/-. IT IS SEEN THAT ASSESSEE SOLD AG RICULTURAL LAND DURING THE YEAR UNDER CONSIDERATION AND WHILE COMPUTING THE CAPITAL GAINS HE CLAIMED A DEDUCTION FOR DEVELOPMENT EXPENDITURE OF RS.3,00,00 0/- INCURRED ON SUCH LAND. THE SAID PLEA WAS REJECTED BY THE ASSESSING OFFICER ON THE GROUND OF ABSENCE OF REQUISITE EVIDENCE BUT THE ASSESSING OFFICER ALL OWED AN AD-HOC DEDUCTION OF ITA NO.72/PN/2014 RS.30,000/- ON THIS COUNT. THE CIT(A) HAS ALSO AFF IRMED THE STAND OF THE ASSESSING OFFICER THAT THERE WAS NO EVIDENCE PRODUC ED BY THE ASSESSEE IN RESPECT OF THE SAID EXPENDITURE BUT INSTEAD OF RS.3 0,000/- HE ALLOWED THE CLAIM TO THE EXTENT OF RS.50,000/-. NOT BEING SATISFIED WITH THE ORDER OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. HAVING PERUSED THE ORDERS OF THE AUTHORITIES BEL OW, WE FIND THAT THERE IS NO JUSTIFICATION TO DEVIATE FROM THE SAME AS THE CL AIM OF THE ASSESSEE IS REJECTED FOR LACK OF APPROPRIATE EVIDENCE. THE SAM E POSITION CONTINUES EVEN BEFORE US AND THEREFORE, WE FIND NO MERIT IN THE GR OUND OF APPEAL NO.1 RAISED BY THE ASSESSEE, WHICH IS HEREBY DISMISSED. 6. THE DISPUTE WITH REGARD TO THE GROUNDS OF APPEAL NO.2 & 3 RELATE TO ASSESSEES CLAIM FOR DEDUCTION U/S 54F OF THE ACT O N ACCOUNT OF THE CAPITAL GAINS EARNED. THE ASSESSEE CLAIMED A DEDUCTION WIT H RESPECT TO INVESTMENT IN A NEW RESIDENTIAL HOUSE, WHICH WAS ALLOWED BY TH E ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, IN THE COURSE OF APPELLATE PROCEEDINGS, THE CIT(A) OBSERVED THAT THE DEDUCTION U/S 54F OF THE ACT WAS INCORRECTLY ALLOWED BY THE ASSESSING OFFICER AND TH EREFORE, HE ISSUED AN ENHANCEMENT NOTICE TO THE ASSESSEE IN TERMS OF SECT ION 251 OF THE ACT. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, CIT(A) DIREC TED THAT THE CLAIM OF DEDUCTION U/S 54F OF THE ACT ALLOWED BY THE ASSESSI NG OFFICER AT RS.3,50,202/- BE REVERSED. AGAINST SUCH A CLAIM, ASSESSEE HAS PR EFERRED AN APPEAL BEFORE THE TRIBUNAL. 7. WE FIND THAT THE MANNER IN WHICH THE CLAIM HAS B EEN REJECTED BY THE CIT(A) DOES NOT REQUIRE ANY INTERFERENCE AS THERE I S NO MATERIAL FOR US TO DEVIATE FROM THE ULTIMATE CONCLUSION OF THE CIT(A). AS A CONSEQUENCE, IN GROUNDS OF APPEAL NO.2 & 3 ASSESSEE ALSO FAILS AS N EITHER IS THERE ANY ITA NO.72/PN/2014 APPEARANCE BY THE ASSESSEE NOR ANY OTHER SUBMISSION S PUT-FORTH SO AS TO REQUIRE ANY INFERENCE IN THE ULTIMATE CONCLUSION OF THE CIT(A). 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY, 2015. SD/- SD /- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 21 ST JANUARY, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), AURANGABAD; 4) THE CIT, AURANGABAD; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE