Sri M.N. Dharmavaratha, Bangalore V. DCIT, Bangalore

ITA 760/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8536 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-03-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 28-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANOJ D PUKHALE
• Keywords: Capital Gains
• Section: 54; 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER ITA NO.760 /BANG/200 9 (ASST. YEA R -2005-06) SHRI M.N DHARMAVRATHA, 7, GREENSHIELD, II BLOCK, GUBBALALA, DODDAKALLASANDRA, KANAKAPURA MAIN ROAD, BANGALORE-560 062. . APPELLANT VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-18(2), BANGALORE. . RESPONDENT APPELLANT BY : SHRI MANOJ D PUKHALE, ADVOCATE RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI, ADDL. CO MMISSIONER OF INCOME-T AX O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE FOR THE ASSES SMENT YEAR 2005-06. THE APPEAL IS DIRECTED AGAINST THE ORDE R PASSED BY THE CIT(A)-V AT BANGALORE DATED 26.02.2009 AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 144 OF THE INCOME-TAX ACT 1961. ITA NO.760/B/09 2 2. THE ASSESSEE IS REGULARLY ASSESSED TO INCOME-TAX . THE ASSESSEE HAD FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSM ENT YEAR ADMITTING AN INCOME OF RS.10,55,640/-. THE ASSESSI NG OFFICER COMPLETED THE ASSESSMENT U/S 144 ON A TOTAL INCOME OF RS.45 LAKHS. THIS AMOUNT OF RS.45 LAKHS REPRESENTED THE SALE PRO CEEDS OF ASSESSEES PROPERTY RECEIVED IN THE RELEVANT PREVIO US YEAR. FOR THE REASON THAT THE ASSESSEE HAS FAILED TO FURNISH NECE SSARY DETAILS, THE ASSESSING OFFICER TREATED THE ENTIRE AMOUNT OF SALE CONSIDERATION OF RS.45 LAKHS AS INCOME FROM OTHER SOURCES AND BROUGH T TO TAX WITHOUT GIVING ANY DEDUCTION. 3. IN FIRST APPEAL, THE CIT(A) PERUSED THE PHOTO CO PY OF THE RETURN OF INCOME FILED BY THE ASSESSEE BEFORE THE ASSESSIN G AUTHORITY AND THE DETAILS OF COMPUTATION MADE OUT FOR TOTAL INCOME. AS PER THE COMPUTATION, THE COST OF THE BUILDING AND LAND AS O N 28.3.1994 WAS AT RS.15,41,310/- AND THE PROPERTY WAS SOLD ON 4.8.04, FOR A CONSIDERATION OF RS.45 LAKHS. AFTER PROVIDING FOR BENEFIT OF INDEXATION, THE ASSESSEE WORKED OUT THE CAPITAL GAI NS AT RS.15,53,518/- WHICH WAS AGAIN REINVESTED IN A RESIDENTIAL HOUSE A T JAYANAGAR. THE STATEMENT ALSO SHOWED INVESTMENT MADE IN PURCHASE O F AGRICULTURAL LAND. IN VIEW OF THESE DETAILS PLACED BEFORE HIM, THE CIT(A) DIRECTED ITA NO.760/B/09 3 THE ASSESSING OFFICER TO WORK OUT THE CAPITAL GAINS AFTER CONSIDERING ALL THE ABOVE DETAILS AND THE MATERIALS AND REDO TH E ASSESSMENT IN ACCORDANCE WITH LAW. 4. THE ASSESSEE IS AGGRIEVED AND, THEREFORE, THIS S ECOND APPEAL BEFORE US. 5. THE GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL READ AS BELOW : (I) THE CIT(A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD MADE REINVESTMENT, THUS SATISFYING THE CONDITIONS OF SEC. 54 OF THE ACT. (II) THE CIT(A) OUGHT TO HAVE CALLED FOR THE DETAILS AND ALSO CALLED FOR THE REPORT INSTEAD OF SUMMARILY REJECTING THE CLAIM OF THE APPELLANT. (III) THE CIT(A) OUGHT TO HAVE ALLOWED THE PAYMENT OF COMMISSION WHICH IS PAID TO THE BROKER. (IV) WITHOUT PREJUDICE, THE CIT(A) OUGHT TO HAVE APPRECIATED THAT PAYMENT OF ITA NO.760/B/09 4 COMMISSION IS COMMON WITHOUT WHICH NO PERSON WOULD ASSIST IN A SALE TRANSACTION. 6. THERE IS A DELAY OF 92 DAYS IN FILING THIS APPEA L BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED A PETITION FOR CO NDONING THE DELAY ON MEDICAL GROUNDS SUPPORTED BY AN AFFIDAVIT. WE ARE SATISFIED THAT THE DELAY IN FILING THE APPEAL WAS CAUSED FOR REASONS B EYOND THE CONTROL OF THE ASSESSEE AND THE ASSESSEE WAS NOT NEGLIGENT IN FILING THE APPEAL. THEREFORE, THE DELAY CAUSED IN FILING THIS APPEAL I S CONDONED AND THE APPEAL IS ADMITTED ON THE ROLLS OF THE TRIBUNAL. 7. NOW COMING TO THE GROUNDS RAISED BY THE ASSESSEE , THE MAIN GRIEVANCES ARE RELATING TO THE NON AVAILABILITY OF DEDUCTION U/S 54, FOR INVESTMENT MADE IN THE RESIDENTIAL HOUSE PROPERTY A ND FURTHER NOT GIVING THE DEDUCTION OF COMMISSION INCURRED FOR TR ANSACTING THE SALE. 8. AFTER HEARING BOTH SIDES, WE FIND THAT THE ASSE SSING OFFICER WAS NOT JUSTIFIED IN PASSING A DUMB ORDER BY TREATI NG THE ENTIRE SALE CONSIDERATION OF RS.45 LAKHS AS TAXABLE INCOME UNDE R THE HEAD INCOME FROM OTHER SOURCES. OF COURSE, THE CIT(A) HAS BEEN KIND ENOUGH TO CONSIDER ALMOST ALL THE CONTENTIONS OF THE ASSESSEE IN A FAIR MANNER. ITA NO.760/B/09 5 BUT STILL, WE FIND THAT CLAIM OF DEDUCTION RAISED B Y THE ASSESSEE U/S 54 AND THE CLAIM FOR DEDUCTION OF COMMISSION ARE STRON G POINTS TO BE CONSIDERED AND IF PROVED TO BE ALLOWED IN FAVOUR OF THE ASSESSEE. THIS FILE IS REMITTED BACK TO THE ASSESSING OFFICER FOR DECIDING THESE TWO DEDUCTIONS. THE ASSESSING OFFICER IS DIRECTED TO M ODIFY THE ASSESSMENT BUT WITHOUT DILUTING ANY OF THE RELIEFS GRANTED BY THE CIT(A). 9. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON WEDNESDAY, THE 3RD DAY OF MARCH, 2010, AT BANGALORE. SD/- SD/- (SHAILENDRA KUMAR YADAV) (DR. O.K NARAYA NAN) JUDICIAL MEMBER VICE PR ESIDENT VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF 7..GF, ITAT, NEW DELHI. BY ORD ER ASST. REGISTRAR, ITAT, BANGALOR E. ITA NO.760/B/09 6