Praveen Gupta, New Delhi V. DCIT Circle- International Taxation (1)(3)(1), New Delhi

ITA 7304/DEL/2019

AI Insights

The case involves Praveen Gupta, a non-resident individual, who appealed against the order of the Learned Commissioner of Income Tax (Appeals)-42, New Delhi, pertaining to the Assessment Year 2016-17. The dispute centered on the computation of Long Term Capital Gain from the sale of a flat, where the assessee argued for indexation from the date of each installment payment starting from 2007, while the department applied indexation from the date of the ownership transfer agreement in 2010. The Tribunal dismissed the appeal, supporting the department's interpretation based on the Explanation III to Section 48 of the Income Tax Act and the precedent set by the Hon'ble Delhi High Court in Gulshan Malik vs. CIT.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 113366 (ITAT-DELHI)
• Duration Of Justice: 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 11-10-2022
• Assessment Year: misc
• Appeal Filed On: 03-12-2022
• Other Referred Cases: Gulshan Malik vs. CIT (2014) 223 Taxman 243, Goetze (India) Ltd. vs. CIT (284 ITR 323)
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 54; 54F; 48

Judgement Text

I.T.A.No.7304/Del/2019 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D” NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER आ .अ.स ं /.I.T.A No.7304/Del/2019 /Assessment Year: 2016-17 Praveen Gupta B-90, Vinoba Kunj, Sector-9, Rohini, New Delhi. ब म Vs. ACIT Circle 8(1), New Delhi. PAN No. ALMPG0092P अ Appellant /Respondent िनधा रतीक ओरसे /Assessee by None राज वक ओरसे /Revenue by Shri Sanjay Kumar, Sr. DR स ु नवाईक तारीख/ Date of hearing: 12.10.2022 उ ोषणाक तारीख/Pronouncement on 13.12.2022 आदेश /O R D E R PER SAKTIJIT DEY, J.M. This is an appeal by the assessee against order dated 04.07.2019 of Learned Commissioner of Income Tax (Appeals)-42, New Delhi pertaining to Assessment Year 2016-17. 2. When the appeal was called for hearing none appeared on behalf of the assessee to represent the case. Perusal of record reveals, on earlier dates when the appeal came up for hearing the assessee was absent despite issuance of notice of hearing in the I.T.A.No.7304/Del/2019 2 address given in the appeal memo. Since, the assessee has been given multiple opportunities of representation, which he has failed to avail. We proceed to dispose off the appeal ex-parte qua the assessee after hearing Learned Departmental Representative and based on materials available on record. The grounds raised by the assessee are as under: 1. “On the facts and circumstances of the case and in law the Ld.CIT(Appeals) was incorrect and unjustified in making an addition of Rs.4,12,812.00 in Long Term Capital Gain on the ground that as the builder buyer agreement was dated 19.07.2010 thus indexation to be done from financial year 2010-2011 though the flat payments were being made since April 2007. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in making an addition of Rs.4,12,812.00 on account of long term capital gain. 3. That having regard to the facts and circumstances of the case the Ld.CIT(A) has erred in not allowing indexation of the full value of property on the date of payment of EMI. 4. That on the facts and circumstances of the case the Assessing Officer was wrong, incorrect and unjustified in issuing penalty notice under section 271(1)(c). 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 3. Briefly the facts are, the assessee is a non-resident individual. For the assessment year under dispute the assessee filed his return of income declaring income of Rs.2,16,680/-. In course of assessment proceedings, the Assessing Officer noticed that in the I.T.A.No.7304/Del/2019 3 year under consideration the assessee had sold an immovable property i.e. a flat in Sector-78, Faridabad jointly owned with his wife and assessee declared 50% of the capital gain amounting to Rs.56,371/- as income. On examining the computation of capital gains the AO noticed that the assessee had made payment for purchase of the said flat in installments from financial year 2007-08 to 2014-15. Whereas, the assessee has taken indexation for each installment since 2007 as the cost of acquisition for the year in which the installment was paid. The Assessing Officer was of the view that as per the Explanation III to Section 48 of the Act, the cost inflation index would be the year in which the asset was held by the assessee. 4. Keeping in view such provision, the Assessing Officer called upon the assessee to furnish a copy of the registered deed of transfer issued by the builder to demonstrate the date on which the asset was possessed by the assessee. On going through the agreement dated 19.07.2010, the Assessing Officer was of the view that the date of agreement has to be treated as the date of acquisition of the asset both for the purpose of deciding whether the gain is long term or short term and for indexation benefit as well. Thereafter, relying upon the decision of the Hon’ble Delhi I.T.A.No.7304/Del/2019 4 High Court in case of Gulshan Malik vs. CIT (2014) 223 Taxman 243. The Assessing officer held that the date of acquisition for capital gain purposes will be the date of the agreement of transfer of ownership between the builder and the buyer and not the date of issue of the allotment letter. Accordingly, he held that for all payments made prior to 19.07.2010, the cost inflation index for financial year 2010-11 will apply. Thus, apportioning 50% of the cost of acquisition to assessee’s share, the Assessing Officer computed long term capital gain at Rs.4,16,183/-. Further, as regards assessee’s claim of deduction under section 54 of the Act, the Assessing Officer referring to the decision of the Hon’ble Supreme Court in case of Goetze (India) Ltd. vs. CIT (284 ITR 323) held that such claim of the assessee not made in the return of income, cannot be allowed. Without prejudice, he observed that deduction under section 54 and 54F is available only in case the sale proceeds are used for purchase and/or construction of a residential house. Whereas, the assessee has invested in purchase of land. Against the assessment order so passed the assessee preferred appeal before learned Commissioner (Appeals). However, he did not find merit in any of the grounds raised by the assessee, accordingly, dismissed the appeal. I.T.A.No.7304/Del/2019 5 5. We have considered the submissions of learned Departmental Representative and perused the materials on record. 6. As could be seen from the discussion of the departmental authorities in their respective orders, the assessee has claimed indexation benefit from the fast installment paid towards purchase of flat in pursuance to allotment letter issued by the builder. However, the agreement between the assessee and the builder for transfer of ownership rights was excluded on 19.07.2010 whereas, the assessee has claimed the indexation benefit from 2007. The departmental authorities have allowed indexation benefit from the date of transfer of ownership agreement by relying upon a decision of the Hon’ble Jurisdictional High Court in case of Gulshan Malik vs. CIT (supra). The assessee has failed to bring on record any material or legal proposition to controvert the finding of the departmental authorities or to demonstrate inapplicability of the ratio laid down in case of Gulshan Malik vs. CIT (supra). Thus, in absence of any rebuttal by the assessee, we do not find any reason to interfere with the decision of the Ld. Commissioner (Appeals) on the issue. Grounds raised are dismissed. I.T.A.No.7304/Del/2019 6 7. In the result, the appeal is dismissed. Order pronounced in the open court on 13/12/2022 Sd/- Sd/- (G.S. PANNU) (SAKTIJIT DEY) PRESIDENT JUDICIAL MEMBER Dated: 13.12.2022 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi