Smt Nupur Joshi, Kolkata V. ITO, Ward 44(1), Kolkata, Kolkata

ITA 748/KOL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1214 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALLONG YADEN ADD L
• Assessee Lawyers: SOUMITRA CHOW DHURY
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Cost of acquisition; Valuation report
• Section: 50C; 54F; 234B; 68; 69; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & HONBLE S HRI S.S.VISWANETHRA RAVI, JM] I.T.A NO. 748/KOL/201 7 ASSESSMENT YEAR : 2009-1 0 SMT. NUPUR JOSHI -VS- ITO, WARD-44(1), KOLKAT A [PAN: ACSPJ 7765 K] [FORMERLY INTERNATIONAL TA XATION, CIR-1(2), KOLKATA] (APPELLANT) (RESPONDEN T) FOR THE APPELLANT : SHRI SOUMITRA CHOW DHURY, ADV. FOR THE RESPONDENT : SHRI SALLONG YADEN, ADD L. CIT DATE OF HEARING : 05.02.2018 DATE OF PRONOUNCEMENT : 28 .03.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-13, KOLKATA [IN SHORT THE LD CI T(A)] IN APPEAL NO.140/CIT(A)- 13/W-44(1)/KOL/2015-16 DATED 20.01.2017 AGAINST THE ORDER PASSED BY THE I.T.O., WARD-44(1), KOLKATA [ IN SHORT THE LD AO] UNDER SEC TION 147/143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30.03.2015 FO R THE ASSESSMENT YEAR 2009-10. 2. THE GROUND NOS. 1 & 10 ARE GENERAL IN NATURE AN D DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 2 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 2 3. THE GROUND NO. 9 IS WITH REGARD TO CHARGING OF I NTEREST U/S 234B OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE AND DOES NOT REQUIRE ANY SP ECIFIC ADJUDICATION. 4. THE GROUND NOS. 2 & 3 RAISED BY THE ASSESSEE WE RE STATED TO BE NOT PRESSED BY THE LD AR AT THE TIME OF HEARING FOR WHICH NECESSARY ENDOR SEMENT WAS MADE IN OUR FILE. ACCORDINGLY, THE GROUND NOS. 2 & 3 ARE DISMISSED AS NOT PRESSED. 5. THE ISSUES TO BE DECIDED IN THIS APPEAL ARE AS U NDER:- A) WHETHER THE LD CITA AND THE LD AO WERE JUSTIFIED IN TREATING THE ASSESSEE AS A RESIDENT INSTEAD OF NON-RESIDENT IN THE FACTS A ND CIRCUMSTANCES OF THE CASE. B) WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING T HE ADDITION MADE TOWARDS CREDIT FOUND IN THE BANK ACCOUNT TO THE TUNE OF RS 71,00,0 00/- IN THE FACTS AND CIRCUMSTANCES OF THE CASE. C) WHETHER THE LD CITA WAS JUSTIFIED IN NOT GIVING ANY DIRECTION WITH REGARD TO ALLOWABILITY OF COST OF CONSTRUCTION OF THE PROPERT Y TRANSFERRED BY THE ASSESSEE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. D) WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING T HE ACTION OF THE LD AO IN DENYING THE EXEMPTION U/S 54 OF THE ACT IN THE FACTS AND CI RCUMSTANCES OF THE CASE. ALL THESE ISSUES ARE INTERCONNECTED AND HENCE ARE T AKEN UP TOGETHER AND DISPOSED OFF TOGETHER FOR THE SAKE OF CONVENIENCE. 6. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS AN INDIVIDUAL AND HAD FILED THE RETURN OF INCOME FOR THE ASST YEAR 2009-10 DECLARIN G TOTAL INCOME OF RS 1,68,000/- BEING INCOME FROM HOUSE PROPERTY. THE ASSESSEE SO LD A RESIDENTIAL HOUSE SITUATED AT NO. 45, BHUPEN BOSE AVENUE, KOLKATA FOR RS 2,21,00, 000/- IN APRIL 2008. BUT THE SALE CONSIDERATION MENTIONED IN THE REGISTERED SALE DEED WAS ONLY RS 1,50,00,000/-. IT WAS STATED THAT THE SUB-REGISTRAR (ADSR-II, KOLKATA) HA D NOT VALUED THE SUBJECT MENTIONED PROPERTY AT THE TIME OF COLLECTING STAMP DUTY AND R EGISTRATION CHARGES. HENCE THERE WAS 3 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 3 NO SCOPE OF ADOPTION OF VALUE U/S 50C OF THE ACT. HOWEVER, THE ASSESSEE HAD RECEIVED RS 2,21,00,000/- FROM THE BUYER OF THE PROPERTY IN TRANCHES AND DEPOSITED THE SAME IN HIS VIJAYA BANK, SHYAMBAZAR BRANCH. THE ASSESSEE A LSO OFFERED RS 2,21,00,000/- AS HIS SALE CONSIDERATION TOWARDS PROPERTY IN THE RETURN. THE ASSESSEE ALSO FILED AN OBJECTION BEFORE THE ADSR-II, KOLKATA ON 17.6.2017 ON THE ISS UE OF NOT PROVIDING CERTIFICATE OF MARKET VALUE AS REQUIRED TO BE MENTIONED IN THE DEE D OF CONVEYANCE. THE LD AR INFORMED THAT NO REPLY WAS RECEIVED IN THIS REGARD BY THE ASSESSEE. THE FOLLOWING FACTS PERTAINING TO THE PROPERTY ARE RELEVANT :- A) THE ASSESSEE BOUGHT THE PROPERTY AT NO.45, BHUPE N BOSE AVENUE , KOLKATA IN FINANCIAL YEAR 1999-2000 FOR RS 55,54,000/- FROM FO UR CO-OWNERS. B) THE ASSESSEE UNDERTOOK CONSTRUCTION ACTIVITIES I N THE SAID PROPERTY DURING FINANCIAL YEAR 2001-02 AND TOTAL COST OF CONSTRUCTION AS PER REGISTERED VALUATION REPORT WAS RS 64,31,517/-. C) THE ASSESSEE SOLD THIS RESIDENTIAL PROPERTY IN A PRIL 2008 FOR RS 2,21,00,000/- AND CONSIDERATION RECEIVED FROM BUYER AND FOUND CREDITE D IN THE VIJAYA BANK, SHYAMBAZAR BRANCH, KOLKATA ARE AS BELOW:- 16.4.2008 - 9,00,000/- 16.4.2008 - 9,00,000/- 16.4.2008 - 6,00,000/- 16.4.2008 - 9,00,000/- 16.4.2008 - 9,00,000/- 16.4.2008 - 9,00,000/- 21.4.2008 - 9,00,000/- 21.4.2008 - 9,00,000/- 21.4.2008 - 9,00,000/- 21.4.2008 - 9,00,000/- 21.4.2008 - 50,00,000/- 21.4.2008 - 9,00,000/- 21.4.2008 - 9,00,000/- 4 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 4 21.4.2008 - 9,00,000/- 21.4.2008 - 9,00,000/- 21.4.2008 - 9,00,000/- 21.4.2008 - 3,00,000/- 21.4.2008 - 21,00,000/- 21.4.2008 - 6,00,000/- 21.4.2008 - 9,00,000/- ----------------- 2,21,00,000/- D) THE SALE CONSIDERATION REFLECTED IN THE SALE DE ED WAS ONLY RS 1,50,00,000/-. THERE WAS NO VALUATION MADE BY THE STAMP VALUATION AUTHOR ITY FOR THE SUBJECT MENTIONED PROPERTY AT THE TIME OF REGISTRATION OF THE SAID SA LE DEED. HENCE THERE IS NO SCOPE FOR DETERMINING THE VALUE U/S 50C OF THE ACT. 6.1. THE ASSESSEE CONSIDERED THE SALE CONSIDERATION AT RS 2,21,00,000/- AND WORKED OUT CAPITAL GAINS ACCORDINGLY. THE ASSESSEE CLAIMED EX EMPTION U/S 54F OF THE ACT IN THE SUM OF RS 1,33,93,317/-. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE ASSESSEE FILED A REVISED COMPUTATION OF INCOME DATED 23.3.20 15. THE ASSESSEE FILED AN AFFIDAVIT DURING THE COURSE OF ASSESSMENT PROCEEDINGS DULY NO TARIZED ON 27.3.2015 THAT SHE HAD RECEIVED TOTAL SALE CONSIDERATION OF RS 2,21,00,000 /- ON SALE OF PROPERTY. 7. THE LD AO OBSERVED THAT THE ASSESSEE OUGHT TO HA VE SHOWN THIS AMOUNT OF RS 2,21,00,000/- IN THE YEAR 2008 AND NOT IN THE YEAR 2015 AND ACCORDINGLY REJECTED THE PLEA OF THE ASSESSEE. ACCORDINGLY, HE PROCEEDED TO TREAT THE EXCESS CREDIT LYING IN THE BANK ACCOUNT OVER AND ABOVE THE SALE CONSIDERATION REFLECTED IN THE SALE DEED AMOUNTING TO RS 71,00,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 7.1. THE LD AO WITH REGARD TO THE CLAIM OF SECTION 54F OF THE ACT OBSERVED THAT THE ASSESSEE VIDE ORIGINAL RETURN CLAIMED AN AMOUNT OF RS 1,33,93,317/- AND VIDE REVISED COMPUTATION FILED DURING THE ASSESSMENT, CLAIMED RS 1,48,33,019/- TOWARDS PURCHASE OF FOUR FLATS BEARING NUMBERS 22A, 22B, 23A AND 23B A T KRISHNACHURA TOWER-2 , NEW 5 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 5 TOWN, KOLKATA WHICH THE AUTHORIZED REPRESENTATIVE O F THE ASSESSEE CONTENDED TO BE A PENT HOUSE. THE LD AO OBSERVED THAT FROM THE PERUS AL OF THE ALLOTMENT LETTER SUBMITTED DURING THE COURSE OF HEARING, IT WAS SEEN THAT THE DIFFERENT FLATS WERE PURCHASED ON DIFFERENT DATES. HENCE THE SAME CANNOT BE CONSIDE RED AS A SINGLE UNIT AND ACCORDINGLY OBSERVED THAT EXEMPTION U/S 54F OF THE ACT CANNOT B E GIVEN TO THE ASSESSEE. HE ALSO OBSERVED THAT IN ORDER TO GIVE THE CLAIM OF SECTION 54F, ONE NEEDS TO UNDERSTAND THE FACT THAT AN INVESTMENT IN RESIDENTIAL FLAT HAS TO BE MA DE FROM THE PROCEEDS OF SALE OF PROPERTY. HOWEVER, IT IS CLEARLY EXPLAINED VIDE PR OVISO TO SECTION 54F, THAT IF AN INDIVIDUAL ALREADY HAS A RESIDENTIAL PROPERTY, THE CLAIM U/S 54F OF THE ACT CANNOT BE AVAILED. HE OBSERVED THAT THE ASSESSEE IS DERIVING INCOME FROM HOUSE PROPERTY AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE PRODUCED A MUNICIPAL TAX RECEIPT OF UNITED KINGDOM (COUNCIL TA X BILL 2007/2008 DATED 24.10.2007) WHICH WAS ADDRESSED TO MR N JOSHI , 2, NARAYRATNA LANE, WEST BENGAL, KOLKATA- 700004, INDIA. THE SAID TAX BILL WAS TOWA RDS THE PROPERTY SITUATED AT 7, FAIRLAWNS, BROWNLOW ROAD, LONDON N11 2DH. THIS CLEA RLY STATES THAT THE ASSESSEE ALREADY HAD A RESIDENTIAL HOUSE IN HER POSSESSION I N LONDON, UK. THUS WHEN THE ASSESSEE IS ALREADY IN POSSESSION OF A RESIDENTIAL HOSUE, THE QUESTION OF CLAIMING DEDUCTION U/S 54F OF THE ACT FOR ANOTHER PROPERTY D OES NOT ARISE. WITH THESE OBSERVATIONS, HE STATED THAT THE ASSESSEE IS NOT EN TITLED FOR CLAIMING DEDUCTION U/S 54F OF THE ACT. 7.2. THE LD AO COMPUTED THE LONG TERM CAPITAL GAINS AT RS 1,50,00,000/- BEING THE SALE CONSIDERATION REFLECTED IN THE SALE DEED WITHO UT GIVING ANY DEDUCTION TOWARDS COST OF ACQUISITION OF THE SAID PROPERTY. THE LD AO IN DEPENDENTLY ADDED A SUM OF RS 71,50,000/- ( INSTEAD OF RS 71,00,000/-) AS UNEXPLA INED CASH CREDIT U/S 68 OF THE ACT AS EXPLAINED SUPRA. 6 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 6 8. BEFORE THE LD CITA, THE ASSESSEE PRODUCED THE PH OTO-COPY OF THE PAY IN SLIP ON ACCOUNT OF TWO CHEQUES (I) CHEQUE NO. 174501 DATED 18.4.2008 DRAWN ON INDIAN OVERSEAS BANK, POSTA BRANCH, KOLKATA FOR RS 50,00,0 00/- AND (II) CHEQUE NO. 987962 DATED 17.4.2008 DRAWN ON DEVELOPMENT CREDIT BANK , SHAKESPEARE SARANI BRANCH, KOLKATA FOR RS 21,00,000/- AGGREGATING TO RS 71,00, 000/- , WHICH ACCORDING TO THE ASSESSEE IS ONLY SALE PROCEEDS OF THE PROPERTY AT 4 5, BHUPEN BOSE AVENUE, KOLKATA 700004 RECEIVED FROM THE BUYERS OF THE PROPERTY NAM ELY AJOY DALCHAND GUPTA AND AMIT DALCHAND GUPTA RESIDING AT GUPTA HOUSE, SANPAR A RAILWAY STATION, NAVI MUMBAI 400905. IT WAS PLEADED THAT THE PLEA OF T HE ASSESSEE HAS BEEN COMPLETELY DISBELIEVED BY THE LD AO WITHOUT MAKING ANY ENQUIRY WITH THE BANKERS TO UNDERSTAND WHICH WOULD HAVE MADE THINGS CLEAR THAT THESE AMOUN TS OF RS 71,00,000/- WERE GIVEN ONLY BY THE BUYERS OF THE PROPERTY. ALTERNATIVELY , IF THE VERIFICATION HAD BEEN CARRIED OUT WITH THE BUYERS , WHOSE ADDRESS WAS VERY MUCH A VAILABLE WITH THE LD AO, THINGS MIGHT HAVE BEEN VERY CLEAR. WITHOUT RESORTING TO A NY VERIFICATION, THE LD AO SIMPLY DISBELIEVED THE VERSION OF THE ASSESSEE. THE ASSES SEE PRODUCED THE LATEST ADDRESSS OF THE BUYERS OF THE PROPERTY BEFORE THE LD CITA. COMMUNI CATION WAS ALSO MADE WITH THE ACIT, CIRCLE 22(1), PIRAMAL CHAMBERS, 9 TH FLOOR, JIJIBHOY LANE, LAIBAUG, PAREL, MUMBAI 400012 WHO IS THE AO OF THE BUYER OF THE P ROPERTY VIDE LETTER DATED 29.8.2016 AND DELIVERED ON 30.8.2016. THEREAFTER 4 REMAINDERS WERE SENT TO THE ADDRESS OF THE BUYER OF THE PROPERTY ON 5.11.2016, 7.11.201 6 , 10.11.2016 AND FINALLY ON 15.11.2016 BUT UNFORTUNATELY THE BUYERS KEPT SILENT WITHOUT RESPONDING TO THE COMMUNICATION OF THE ASSESSEE EVEN AFTER RECEIVING THE LETTERS ADDRESSED TO THEM FOR THE REASON BEST KNOWN TO THEM. 8.1. IT WAS FURTHER PLEADED THAT THE LD AO FAILED T O DEDUCT THE COST OF ACQUISITION OF THE LAND TOGETHER WITH CONSTRUCT COST OF THE BUILDING C OMPRISED OF GROUND PLUS 4 STORIED BUILDING HAVING BUILT UP AREA OF 6750 SQ.FT, VALUAT ION OF WHICH IS ARRIVED AS UNDER:- 7 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 7 8.2. THE ASSESSEE FURTHER PLEADED BEFORE THE LD CIT A FOR GRANT OF DEDUCTION TOWARDS COST OF CONSTRUCTION OF THE PROPERTY THAT WAS SOLD, THE VALUATION OF WHICH IS SUPPORTED BY A REGISTERED VALUATION REPORT FOR RS 64,31,517/-. 8.3. THE ASSESSEE ALSO PLEADED FOR CLAIM OF DEDUCTI ON U/S 54 OF THE ACT AND ALSO STATED THAT THE CLAIM WAS ERRONEOUSLY MADE U/S 54F OF THE ACT IN THE RETURN AND IN THE ASSESSMENT PROCEEDINGS, AS ADMITTEDLY, THE ASSESSEE HAD SOLD BOTH LAND AS WELL AS THE BUILDING TO THE BUYER OF THE PROPERY, WHICH IS QUIT E EVIDENT FROM THE SALE DEED , WHICH IS PART OF THE RECORDS. 8.4. THE LD CITA DIRECTED THE LD AO TO GRANT DEDUCT ION TOWARDS COST OF ACQUISITION DULY INDEXED SUBJECT TO VERIFICATION OF THE QUANTUM THER EON, BUT DID NOT GIVE ANY DIRECTION FOR GRANT OF DEDUCTION TOWARDS COST OF CONSTRUCTION OF THE PROPERTY. THE LD CITA ALSO UPHELD THE ACTION OF THE LD AO WITH REGARD TO CLAIM OF EXEMPTION U/S 54F OF THE ACT. 9. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US O N THE FOLLOWING GROUNDS:- 4. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN NOT ALLOWING THE INDEXED COST OF ACQUISITION OF THE PROPERTY SOLD FR OM THE SALES CONSIDERATION OF RS. 1,50,00,000/- AGAINST ACTUAL SALES CONSIDERATIO N DISCLOSED BY THE ASSESSEE FOR RS. 2,21,00,000/- IN THE REVISED COMPUTATION OF TOTAL INCOME, HE HAS ONLY GIVEN DIRECTION TO AO ALLOW THE COST OF INDEXATION AFTER ASCERTAINING THE TRUTHNESS OF THE CONVENIENCE DEED DATED 26.11.1999 WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 8 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 8 5. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG IN DITTOING THE ORDER OF THE AO AND NOT CONSIDERING THE FACTS THAT THE ASSESSEE HAS MADE INVESTMENT IN PURCHASING A PENT HOUSE AMOUNTING TO RS. 1,33,93,317/- OUT OF THE SALES CONSIDERATION OF THE PROPERTY SOLD DURING THE ASSESSMENT YEAR 2009-10 WHICH IS EXEMPTED U/S 54 OF THE INCOME TAX ACT, THE REFORE THE ASSESSEE NOT LIABLE FOR ANY TAX LIABILITY FOR ANY TAX LIABILITY ON CAPI TAL GAIN, BUT THE AO VINDICTIVELY COMPUTED AS INCOME FORM CAPITAL GAIN AMOUNTING TO R S. 1,50,00,000/- WHICH IS CONFIRMED BY LD. CIT(A), AS SUCH, HIS FINDING IS CO MPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 6. FOR THAT ON THE FACTS OF THE CASE, THE LD. CIT(A ) WAS WRONG THAT THE STATUS OF THE APPELLANT IS RESIDENT IN PLACE OF NON-RESIDE NT INDIAN WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 7. FOR THAT ON THE FACTS OF THE CASE, THE AO WAS WR ONG IN ADDING RS. 71,00,000/- (RS. 71,50,000/- MENTIONED IN AOS ORDER) AS UNEXPL AINED INVESTMENT DEPOSIT IN BANK WHICH IS COMPLETELY ARBITRARY, UNJUSTIFIED AND ILLEGAL. 8. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THAT THE ASSESSEE HAD DISC HARGED ITS ONUS BY FURNISHING ALL THE RELEVANT DOCUMENTS IN CONNECTION WITH SALES CONSIDERATION OF FLAT AS REFLECTED IN THE BANK ACCOUNT AND ALSO PROVED THE I DENTITY AND CREDITWORTHINESS AND GENUINENESS OF PROPERTY SALES, THEREFORE, THE S AID ADDITION U/S 68 AMOUNTING TO RS. 71,00,000/- SHOULD BE DELETED. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS. AT THE OU TSET, WE FIND THAT THE LD AR FILED THE FOLLOWING DETAILS REGARDING THE DATE OF ARRIVAL INT O INDIA AND DEPARTURE FROM INDIA TO PROVE THAT ASSESSEE IS A NON-RESIDENT :- ARRIVAL DATE DEPARTURE DATE NO. OF DAYS 15.6.2005 26.8.2005 (15+31+26) = 72 2006 TO 2008 DID NOT COME TO INDIA 30.5.2009 10.8.2009 (1+30+31+10) = 72 9.6.2010 3.10.2010 (21+31+31+30+3)= 116 11.6.2011 18.8.2011 (19+31+18) = 67 9 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 9 23.2.2013 28.2.2013 5 5.6.2014 21.7.2014 (25+21) = 46 2.6.2015 13.7.2015 (28+13) = 41 8.6.2016 29.6.2016 21 5.7.2017 25.7.2017 20 THE YEAR UNDER APPEAL IS ASST YEAR 2009-10 AND HENC E THE RELEVANT DATE OF ARRIVAL INTO INDIA AND DEPARTURE FROM INDIA DURING THAT YEAR WOU LD BE RELEVANT. FROM THE AFORESAID TABLE, IT COULD BE FOUND THAT THE ASSESSEE HAD NOT COME TO INDIA DURING THE ASST YEAR 2009-10 AT ALL AND HENCE RETAINS THE STATUS OF NON- RESIDENT. WE ALSO FIND FROM THE COPY OF THE PASSPORT SUBMITTED BY THE LD AR THAT THE SAM E WAS ISSUED TO THE ASSESSEE IN LONDON, CLEARLY MENTIONING THE PLACE OF BIRTH AS CA LCUTTA AND PLACE OF ISSUE AS LONDON. THE DATE OF ISSUE OF PASSPORT WAS 2.5.2000. THE DAT E OF EXPIRY OF THE SAID PASSPORT IS 1.5.2020. THE FILE NO. MENTIONED IN THE PASSPORT IS LON/PPT/4020/12226/00. THE ADDRESS MENTIONED IN THE PASSPORT IS AS UNDER:- PRESENT ADDRESS 3, WYLYE HOUSE, ODSTOCK ROAD, SALISBURY DISTRICT GE NERAL HOSPITAL PERMANENT ADDRESS 7, FAIRLANS, BROWNLOW ROAD, LONDON N 11 2DH. ALL THE AFORESAID DOCUMENTS CONCLUSIVELY PROVE THAT THE ASSESSEE IS A NON-RESIDENT INDIAN AND HENCE THE ACTION OF THE LD AO IN TREATIN G THE ASSESSEE AS A RESIDENT IS UNWARRANTED. THE LD AR ARGUED THAT THE ASSESSEE BE ING A NON-RESIDENT , WOULD INTURN HAVE A DIRECT BEARING ON THE MERITS OF THE ADDITION S MADE IN AS MUCH AS THERE IS NO AVENUE FOR THE ASSESSEE TO EARN ANY UNDISCLOSED INC OME IN INDIA. WE HOLD THAT THE EXPLANATION GIVEN BY THE ASSESSEE THAT THE AMOUNT F OUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE IN THE SUM OF RS 71,00,000/- REPRESENT S SALE CONSIDERATION RECEIVED BY THE 10 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 10 ASSESSEE ON SALE OF PROPERTY IS TO BE BELIEVED IN T HE ABSENCE OF ANY OTHER SOURCE FOR THE ASSESSEE OTHER THAN MEAGER RENTAL INCOME. WE ARE IN CLINED TO ACCEPT THIS ARGUMENT OF THE LD AR THAT THE CREDIT OF RS 71,00,000/- REPRESE NTS SALE CONSIDERATION RECEIVED ON SALE OF SUBJECT MENTIONED PROPERTY OVER AND ABOVE THE VA LUE MENTIONED IN THE SALE DEED AT RS 1,50,00,000/-. ACCORDINGLY THE TOTAL SALE CONSI DERATION OF PROPERTY WAS RS 2,21,00,000/- WHICH HAS BEEN RIGHTLY CONSIDERED BY THE ASSESSEE FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS ON SALE OF PROPERTY. IN ANY CASE, WE FIND THAT THE LD AO HAD ERRONEOUSLY ADDED A SUM OF RS 71,50,000/- INSTE AD OF RS 71,00,000/-. WE HOLD THAT THE ASSESSEE BEING A NON-RESIDENT , COULD NOT HAVE ANY OTHER SOURCE OTHER THAN THE SALE OF SUBJECT MENTIONED PROPERTY AND THE RETNAL INCOME FR OM YET ANOTHER PROPERTY WHICH HAS BEEN SUBJECTED TO TAX. IN THE INSTANT CASE, THE A CTION OF THE ASSESSEE IN DEPOSITING THE TWO CHEQUES RECEIVED IN THE SUM OF RS 71,00,000/- ( 50,00,000 + 21,00,000) IN THE SAME VIJAYA BANK ACCOUNT ALONG WITH OTHER SALE PROCEEDS OF RS 1,50,00,000/- COMPRISING OF VARIOUS CHEQUES, GOES TO PROVE THE BONAFIDE INTENTI ON OF THE ASSESSEE IN NOT HIDING ANY AMOUNT FROM THE EYES OF THE INCOME TAX DEPARTMENT. THERE CANNOT BE ANY OTHER SOURCE FOR RS 71 LACS FOR THE ASSESSEE OTHER THAN BEING PA RT AND PARCEL OF SALE PROCEEDS OF THE PROPERTY. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SMT P.K. NOORJAHAN REPO RTED IN (1999) 237 ITR 570 (SC) WHEREIN IT WAS HELD THAT :- 2. THE APPEALS RELATE TO THE ASSESSMENT YEARS 1968-69 AND 1969-70. THE ASSESSEE IS A MUSLIM LADY WHO WAS AGED ABOUT 20 YEARS DURING THE PREVIOUS YEAR RELEVANT FOR THE ASSESSMENT YEAR 1968-69. ON 15-11-1967 SHE HAD PURC HASED 16 CENTS OF LAND IN ERNAKULAM AND THE AMOUNT SPENT BY HER, INCLUSIVE OF STAMP AND REGISTRATION CHARGES, FOR THIS PURCHASE WAS RS. 34,628. ON 27-11-1968, SH E PURCHASED ANOTHER 12 CENTS OF LAND AT ERNAKULAM AND THE TOTAL INVESTMENT FOR THIS PURCHASE WAS RS. 25,902, THE EXPLANATION OF THE ASSESSEE REGARDING THE SOURCE OF THE PURCHASE MONEY FOR THESE INVESTMENTS WAS THAT THE SAME WERE FINANCED FROM OU T OF THE SAVINGS FROM THE INCOME OF THE PROPERTIES WHICH WERE LEFT BY HER MOTHER'S FIRS T HUSBAND. THE SAID EXPLANATION OFFERED BY THE ASSESSEE WAS REJECTED EXCEPT TO THE EXTENT OF RS. 2,000 BY THE ITO WHO MADE AN ADDITION OF RS. 32,628 AS INCOME FROM OTHER SOURCES IN THE ASSESSMENT YEAR 1968-69 AND AN ADDITION OF RS. 25,902 IN THE ASSESS MENT YEAR 1969-70. THE SAID ORDERS WERE AFFIRMED IN APPEAL BY THE AAC. THE TRIBUNAL, H OWEVER, HELD THAT EVEN THOUGH THE EXPLANATION ABOUT THE NATURE AND SOURCES OF THE PUR CHASE MONEY WAS NOT SATISFACTORY BUT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO 11 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 11 EARN THE AMOUNT INVESTED IN THE PROPERTIES AND THAT BY THE STRETCH OF IMAGINATION COULD THE ASSESSEE BE CREDITED WITH HAVING EARNED THIS IN COME IN THE COURSE OF THE ASSESSMENT YEAR OR WAS EVEN IN A POSITION TO EARN IT FOR A DEC ADE OR MORE. THE TRIBUNAL TOOK THE VIEW THAT ALTHOUGH THE EXPLANATION OF THE ASSESSEE WAS LIABLE TO BE REJECTED. SECTION 69 OF THE INCOME-TAX ACT, 1961 ('THE ACT') CONFERRED O NLY A DISCRETION ON THE ITO TO DEAL WITH THE INVESTMENT AS INCOME OF THE ASSESSEE AND T HAT IT DID NOT MAKE IT MANDATORY ON HIS PART TO DEAL WITH THE INCOME AS INCOME OF THE A SSESSEE AS SOON AS THE LATTER'S EXPLANATION HAPPENED TO BE REJECTED. ON THAT VIEW T HE TRIBUNAL ALLOWED THE APPEALS OF THE ASSESSEE AND CANCELLED THE ASSESSMENT MADE BY T HE ITO. THEREAFTER THE TRIBUNAL AT THE INSTANCE OF THE REVENUE REFERRED THE QUESTION A BOVEMENTIONED TO THE HIGH COURT FOR ITS OPINION. THE HIGH COURT HAS AGREED WITH THE SAI D VIEW OF THE TRIBUNAL AND HAS HELD THAT IN THE INSTANT CASE, IT COULD NOT BE SAID THAT THE TRIBUNAL WAS WRONG IN HAVING DIFFERED FROM THE ITO AND THE AAC IN THE MATTER OF EXERCISING JUDICIAL DISCRETION AS TO WHETHER EVEN AFTER REJECTING THE EXPLANATION OF THE ASSESSEE THE VALUE OF THE INVESTMENTS WERE TO BE TREATED AS THE INCOME OF THE ASSESSEE. A CCORDING TO THE HIGH COURT, THE TRIBUNAL HAD NOT COMMITTED ANY ERROR IN TAKING INTO ACCOUNT THE COMPLETE ABSENCE OF RESOURCES OF THE ASSESSEE AND ALSO THE FACT THAT HA VING REGARD TO HER AGE AND THE CIRCUMSTANCES IN WHICH SHE WAS PLACED SHE COULD NOT BE CREDITED WITH HAVING MADE ANY INCOME OF HER OWN AND IN THESE CIRCUMSTANCES, THE T RIBUNAL WAS RIGHT IN REFUSING TO MAKE AN ADDITION OF THE VALUE OF THE INVESTMENTS TO THE INCOME OF THE ASSESSEE. (UNDERLINING PROVIDED BY US) RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THE A FORESAID CASE AND APPLYING THE SAME TO THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE HOL D THAT THE ADDITIONAL AMOUNT CREDITED IN THE BANK ACCOUNT IN THE SUM OF RS 71,00,000/- CO ULD NOT HAVE EMANATED TO THE ASSESSEE OUT OF SOME UNDISCLOSED SOURCES BUT RATHER WOULD HAVE EMANATED ONLY OUT OF SALE PROCEEDS OF THE PROPERTY REQUIRES TO BE BELIEV ED AND NO ADDITION COULD BE MADE THEREON U/S 68 OF THE ACT, WHEN THE ASSESSEE HAD CO NSIDERED THE ENTIRE SUM OF RS 2,21,00,000/- AS SALE CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. HENCE THE QUESTION NOS. 1 & 2 RAISED ABOVE IS ANSWE RED IN FAVOUR OF THE ASSESSEE. 10.1. WE FIND THAT THE ASSESSEE HAD INDEED MADE INV ESTMENT IN PURCHASE OF NEW FLATS IN THE FOLLOWING MANNER:- 12 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 12 WE FIND FROM THE MONEY RECEIPTS ISSUED BY M/S BENGA L SHELTER HOUSING DEVELOPMENT LTD, THE ASSESSEE HAD INVESTED IN A PENT HOUSE HAVI NG INTERCONNECTIONS WITH FLAT NO 22A AND 23A AND BETWEEN FLAT NO. 22B AND 23B. 13 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 13 10.2. WE FIND THAT THE ASSESSEE HAS FURNISHED A CAS H FLOW STATEMENT WHICH IS ENCLOSED IN PAGE 52 OF THE PAPER BOOK CONTAINING THE TOTAL RECE IPTS AND PAYMENTS OF THE ASSESSEE INCLUDING THE PAYMENT MADE BEFORE THE END OF THE PR EVIOUS YEAR I.E 31.3.2009 TOWARDS PURCHASE OF NEW PROPERTY FOR RS 1,60,16,103.50. HENCE THERE IS NO DISPUTE OF INVESTMENT IN NEW PROPERTY TO THE TUNE OF RS 1,60,1 6,103/- DURING THE ASST YEAR 2009- 10 ITSELF, WARRANTING CLAIM OF DEDUCTION U/S 54 OF THE ACT. WE FIND FROM THE COPY OF THE SALE DEED, THAT ASSESSEE HAD SOLD LAND AS WELL AS T HE BUILDING AT 45, BHUPEN BOSE AVENUE, KOLKATA 700004 DURING THE YEAR AND IS ACC ORDINGLY ENTITLED FOR CLAIM OF EXEMPTION U/S 54 OF THE ACT. IN THIS REGARD, WE HO LD THAT THE ENTIRE APPROACH OF THE LD AO IN DENYING THE CLAIM OF DEDUCTION U/S 54F OF THE ACT IS NOT TENABLE AS PER LAW, EVENTHOUGH THE ASSESSEE HAD ERRONEOUSLY CLAIMED U/S 54F IN THE RETURN OF INCOME. FOR THE PURPOSE OF GRANTING EXEMPTION U/S 54 OF THE AC T, THERE IS NO RESTRICTION OF HAVING ONLY ONE HOUSE BY THE ASSESSEE. RELIANCE IN THIS RE GARD IS PLACED ON THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS GITA DUGGAL REPORTED IN (2013) 357 ITR 153 (DEL) AND HONBLE KARNATAKA HIGH COURT IN T HE CASE OF CIT VS D.ANAND BASSAPPA REPORTED IN (2009) 309 ITR 329 (KAR). . HENCE THE ARGUMENTS ADVANCED BY THE LD DR IN THIS REGARD ARE NOT WARRANTED AND HENCE NO T CONSIDERED RELEVANT IN THIS REGARD. 10.3. WE FIND THAT THOUGH THE LD AO HAD NOT GIVEN D EDUCTION TOWARDS COST OF ACQUISITION OF THE PROPERTY THAT WAS THE SUBJECT MATTER OF TRAN SFER, THE SAME WAS DIRECTED TO BE GRANTED BY THE LD CITA SUBJECT TO VERIFICATION BY T HE LD AO ABOUT THE VERACITY OF THE QUANTUM CLAIMED. AGAINST THIS DIRECTION, THE REVEN UE IS NOT IN APPEAL BEFORE US. 10.4. WE FIND THAT THE ASSESSEE HAVING PURCHASED TH E LAND IN THE FINANCIAL YEAR 1999- 2000 HAD CARRIED OUT CONSTRUCTION DURING THE FINANC IAL YEAR 2001-02 WHICH IS SUPPORTED BY THE REGISTERED VALUATION REPORT . THE VALUE AS PER REGISTERED VALUATION REPORT (ENCLOSED IN PAGES 55 TO 76 OF THE PAPER BOOK ) IS RS 64,31,517/-. IT IS NOT IN DISPUTE THAT THE ASSESSEE WAS A NON-RESIDENT EVEN DURING TH E FINANCIAL YEAR 2001-02 WHICH IS 14 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 14 ALSO EVIDENT FROM THE FACT THAT THE PASSPORT WAS IS SUED TO HER IN LONDON ON 2.5.2000. HENCE OUT OF HER EARNINGS IN LONDON, THE CONSTRUCTI ON COST COULD HAVE BEEN MET BY THE ASSESSEE. IN ANY CASE, THERE IS NO DISPUTE WITH RE GARD TO THE SOURCE FOR COST OF CONSTRUCTION CARRIED OUT BY THE ASSESSEE. HENCE W E HOLD THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION TOWARDS COST OF CONSTRUCTION AT RS 64,31, 517/- AND SUBJECT TO INDEXATION BENEFITS. ACCORDINGLY, THE QUESTION NUMBER 3 RAISE D ABOVE IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF THE ASSESSEE. 10.5. WITH REGARD TO THE CLAIM OF DEDUCTION U/S 54 OF THE ACT, WE HAVE ALREADY HELD THAT THE ASSESSEE HAVING REINVESTED A SUM OF RS 1,60,16, 103/- BEFORE 31.3.2009 IS ENTITLED FOR CLAIM OF EXEMPTION U/S 54 OF THE ACT. ACCORDING LY, THE QUESTION NUMBER 4 RAISED ABOVE IS ANSWERED IN THE AFFIRMATIVE IN FAVOUR OF T HE ASSESSEE. 10.6. WE HOLD THAT IF ALL THE AFORESAID FINDINGS AR E CONSIDERED, THERE WOULD BE NO LIABILITY OF CAPITAL GAINS AND HENCE THE GROUNDS RA ISED BY THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 28.03.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BAL AGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 28.03.2018 SB, SR. PS 15 ITA NO.748/KOL/2017 SMT. NUPUR JOSHI A.YR. 2009-10 15 COPY OF THE ORDER FORWARDED TO: 1. SMT. NUPUR JOSHI, 2, NAYRATNA LANE, KOLKATA-700 004. 2. I.T.O, WARD-44(1), KOLKATA [NOW INTERNATIONAL TA XATION-CIRCLE-1(2), KOL], 110, SHANTIPALLY, AAYAKAR BHAWAN POORVA, KOLKATA-700107 . 3..C.I.T.- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S