THE ITO-1(3), Bhopal V. SHRI HARISH MARAN, Bhopal

ITA 764/IND/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5714 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-03-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 06-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Keywords: Condonation of delay
• Section: 54B; 54

Judgement Text

ITO VS. HARISH MARAN ITA NO. 764/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIB UNAL, INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER .../ I.T.A. NO. 764/IND/2016 / ASSESSMENT YEAR: 2012-13 INCOME TAX OFFICER 1(3) BHOPAL :: / APPELLANT VS HARISH MARAN BHOPAL PAN AOPM 1145J :: / RESPONDENT ! ' # $ / REVENUE BY SHRI MOHD. JAVED - DR %& ' # $ / ASSESSEE BY SHRI SUMIT NEMA ' ( ' &) DATE OF HEARING 15.3.2017 *+,- ' &) DATE OF PRONOUNCEMENT 2 0 .3.2017 / O R D E R PER SHRI C.M. GARG, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE LEARNED CIT(A)-1, BHOPAL, DATED 24.2.2016 IN FI RST APPEAL NO. CIT(A)-I/BPL/IT-685/14-15 FOR THE ASSESSMENT YEAR 2 012-13. ITO VS. HARISH MARAN ITA NO. 764/IND/2016 2 APPLICATION OF THE REVENUE FOR CONDONATION O F DELAY IN FILING THE APPEAL 2. WE HAVE HEARD BOTH THE SIDES AND ALSO PERUSED TH E RELEVANT MATERIAL ON RECORD. THE LEARNED DR SUBMITTED THAT T HE DELAY OCCURRED IN FILING THE APPEAL IS BONAFIDE AND IS TO TALLY BECAUSE OF THE FACT THAT THE CONCERNED ASSESSING OFFICER INADVERTE NTLY OMITTED TO FILE THE APPEAL WITHIN THE PRESCRIBED TIME LIMIT BE FORE THE TRIBUNAL DUE TO PRE-OCCUPATION WITH SOME OTHER WORKS. THE LE ARNED DR SUBMITTED THAT THE PRINCIPAL COMMISSIONER OF INCOME -TAX-1, BHOPAL, HAS FILED AN APPLICATION DATED 1.7.2016 BEF ORE THE TRIBUNAL FOR CONDONATION OF DELAY, SUPPORTING THE ABOVE FACT . THE LEARNED DR, THEREFORE, SUBMITTED THAT SINCE THE DELAY OCCURRED WAS NOT INTENTIONAL, THEREFORE, THE DELAY MAY BE CONDONED A ND THE APPEAL OF THE REVENUE MAY KINDLY BE ADMITTED FOR HEARING ON M ERITS. 3. ON THE OTHER HAND, THE LEARNED ASSESSEES REPRES ENTATIVE (AR) SUBMITTED THAT WHEN THE DELAY IS NOT DUE TO BONAFID E REASONS BEYOND THE CONTROL OF THE REVENUE THEN THE DELAY CA NNOT BE CONDONED. THUS, THE APPLICATION AS WELL AS THE APPE AL OF THE ASSESSEE MAY KINDLY BE DISMISSED. ITO VS. HARISH MARAN ITA NO. 764/IND/2016 3 4. ON CAREFUL CONSIDERATION OF THE ABOVE SUBMISSION S OF THE PARTIES, WE OBSERVE THAT SINCE THE CONCERNED ASSESS ING OFFICER INADVERTENTLY OMITTED TO FILE THE SAID APPEAL WITHI N THE PRESCRIBED TIME LIMIT, WHICH FACT HAS ALSO BEEN SUPPORTED BY T HE LEARNED PRINCIPAL COMMISSIONER IN HIS APPLICATION DATED 1.7 .2016 FOR CONDONATION OF DELAY, WE ARE SATISFIED THAT THE DEL AY IN FILING THE APPEAL WAS DUE TO BONAFIDE REASON WHICH WAS BEYOND THE CONTROL OF THE REVENUE. THEREFORE, THE DELAY IN FILING THE APP EAL DESERVES TO BE CONDONED AND WE CONDONE THE SAME. CONSEQUENTLY, THE APPEAL OF THE REVENUE IS ADMITTED FOR HEARING ON MERITS AND T HE APPLICATION FOR CONDONATION OF DELAY IS ALLOWED. 5. THE SOLE EFFECTIVE GROUND RAISED BY THE REVENUEAPP ELLANT READS AS FOLLOWS :- WHETHER O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, L D. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 54 B OF IT ACT AS THE PURCHASE OF NEW ASSET WAS IN THE NAME OF ASS ESSEES WIFE AND NOT THE ASSESSEE. 3. THE FACTS, IN NUTSHELL, ARE THAT THE RETURN OF INCO ME WAS FILED BY THE ASSESSEE ON 31.7.2013 SHOWING TOTAL INCOME O F RS.3,95,720/- AND AGRICULTURAL INCOME OF RS. 1,02,2 35/-. DURING ITO VS. HARISH MARAN ITA NO. 764/IND/2016 4 THE YEAR THE ASSESSEE HAD SOLD LAND FOR A TOTAL CON SIDERATION OF RS.2 CRORES. OUT OF THE SALE CONSIDERATION OF THE ABOVE PROPERTY, THE ASSESSEE AND HIS WIFE SMT. LALI MARAN HAVE PURCHASE D AGRICULTURAL LAND. THE ASSESSING OFFICER FOUND THAT THE PROPERTY WAS SOLD BY THE ASSESSEE ON 2.7.2011 AND 27.7.2011. AS PER PROVISIO NS OF SECTION 54B OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ) THE ASSESSING OFFICER OBSERVED THAT IF THE AMOUNT IS NOT UTILISED FOR PURCHASE/CONSTRUCTION OF NEW PROPERTY TILL THE DUE DATE OF SUBMISSION OF THE RETURN OF INCOME, IT SHOULD BE DE POSITED IN CAPITAL GAIN DEPOSIT ACCOUNT SCHEME. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAS NOT PURCHASED THE PR OPERTY WITHIN THE STIPULATED PERIOD OR DEPOSITED THE MONEY IN THE ABOVE CAPITAL GAIN DEPOSIT ACCOUNT SCHEME. INSTEAD, A PART OF THE LAND WAS PURCHASED IN THE NAME OF THE ASSESSEES WIFE SMT. L ALI MARAN OUT OF THE SAID PROCEEDS. THE LEARNED ASSESSING OFFICER, T HEREFORE, HELD THAT EXEMPTION ON THE AMOUNT INVESTED BY THE ASSESS EES WIFE WAS NOT GOVERNED BY SECTION 54B OF THE ACT. THE ASSESSI NG OFFICER, THEREFORE, WORKED OUT THE TAXABLE LONG TERM CAPITAL GAIN OF ITO VS. HARISH MARAN ITA NO. 764/IND/2016 5 RS.60,99,023/- AND ADDED THE SAME TO THE TOTAL INCO ME OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE ABOVE TREATMENT OF THE AS SESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE L EARNED CIT(A). THE LEARNED CIT(A), AFTER CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE, DELETED T HE ADDITION MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS :- 5 .4 THUS, LOOKING TO THE FACTS OF THE CASE, IT IS SE EN THAT THE APPELLANT HAD SOLD HIS LAND IN JULY, 2011 AND PURCHASED FURTHER LAND IN JULY AND OCTOBER 2011. T HE PAYMENT IN RESPECT OF ALL THE LANDS PURCHASED WAS MADE BY THE APPELLANT WITHIN A SPAN OF THREE MONTHS FROM THE SALE PROCEEDS WHICH WERE DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT. THEREFORE, THERE WAS NO NEED TO DEPOSIT THE MONEY IN THE CAPITAL GAINS ACCO UNT SCHEME. IN VIEW OF THE FACT THAT THE POWER OF ATTOR NEY WAS TAKEN BY THE APPELLANT FROM THE SELLER, THE LAN D WAS PURCHASED IN THE NAME OF THE APPELLANTS WIFE. ITO VS. HARISH MARAN ITA NO. 764/IND/2016 6 EVEN THOUGH THE LAND WAS PURCHASED IN THE WIFES NAME YET ALL THE PAYMENTS WERE MADE BY THE APPELLANT FROM HIS BANK ACCOUNT. THE APPELLANT HAS RELIED ON SEVERAL CASE LAWS AND JUDICIAL DECISIONS IN HIS FAVOUR. THEREFORE, IN VIEW OF THE ABOVE AND THE CASE LAWS CITED ABOVE, THE CONTENTION OF THE APPELL ANT IS ACCEPTED AND THIS GROUND OF APPEAL IS ALLOWED. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD OF THE TRIBUNAL. AT THE VERY OUTSET, WE OBSERVE THAT THE A SSESSING OFFICER HAS NOT DISPUTED THE FACT OF SALE AND PURCHASE OF A GRICULTURAL LAND AND HE HAS ONLY RESTRICTED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 54B OF THE ACT TO RS.1,30,00,000/- IN RESPECT O F TWO LANDS PURCHASED BY THE ASSESSEE. THE MAIN ALLEGATION OF T HE ASSESSING OFFICER IS THAT THE ASSESSEE HAS NOT PURCHASED THE PROPERTY WITHIN THE TIME PERIOD AVAILABLE TO HIM AS PER THE PROVISI ONS OF THE ACT AND HE HAS NOT DEPOSITED THE AMOUNT IN THE CAPITAL GAIN S ACCOUNT SCHEME. IT IS ALSO THE ALLEGATION OF THE ASSESSING OFFICER THAT THE PROPERTY WAS PURCHASED IN THE NAME OF THE ASSESSEE S WIFE, SMT. ITO VS. HARISH MARAN ITA NO. 764/IND/2016 7 LALI MARAN, OUT OF THE SALE PROCEEDS WHICH DOES NOT COMPLY WITH THE REQUIREMENTS OF SUSTAINABLE CLAIM U/S 54B OF THE AC T. 6. DURING THE COURSE OF ARGUMENTS BEFORE US, THE LE ARNED COUNSEL FOR THE ASSESSEE, PLACING RELIANCE ON THE DECISION OF THE HON'BLE M.P. HIGH COURT DATED 16.2.2017 IN ITA NO. 118/2016 IN T HE CASE OF PCIT VS. BALMUKUND MEENA, SUBMITTED THAT ON THE FAC TS AND CIRCUMSTANCES OF THE CASE, THE HON'BLE HIGH COURT H AS UPHELD THE ORDER OF THE TRIBUNAL DISMISSING THE APPEAL OF THE REVENUE. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER ELABORATED THE IF THE FUNDS USED FOR PURCHASE OF PROPERTY WERE FLOWN FROM THE A CCOUNT OF THE ASSESSEE THEN IT MAKES NO DIFFERENCE IF THE ASSESSE E DOES NOT INCLUDE HIS NAME IN PURCHASE DEED OF THE LAND WHICH WAS PURCHASED BY UTILISING THE SALE PROCEEDS OF THE LAN D SOLD. 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE (IN SHORT LEARNED DR) STRONGLY SUPPORTED THE ACTI ON OF THE ASSESSING OFFICER. HOWEVER, HE COULD NOT CONTROVERT THE FACT THAT THE HON'BLE JURISDICTIONAL HIGH COURT, REFERRING TO THE JUDGMENT OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F CIT VS. GURNAM SINGH; REPORTED IN (2008) 170 TAXMANN 160 (P &H), HELD ITO VS. HARISH MARAN ITA NO. 764/IND/2016 8 THAT THE ASSESSEE HAS PURCHASED THE AGRICULTURAL LA ND, THEREFORE, HE IS ENTITLED TO DEDUCTION U/S 54B OF THE ACT. 8. ON CAREFUL CONSIDERATION OF THE RATIO OF THE DEC ISION OF THE HON'BLE M.P. HIGH COURT IN THE CASE OF BALMUKUND ME ENA (SUPRA) WHEN WE ANALYSE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE FIND THAT IN THE PRESENT CASE UNDISPUTEDLY THE A SSESSEE PURCHASED THE LAND AS PER TABULATION MENTIONED BY T HE LEARNED CIT(A) IN PARA 4 OF THE IMPUGNED ORDER. FROM THIS TABLE IT IS CLEARLY DISCERNIBLE THAT THE ASSESSEE PURCHASED THREE AGRIC ULTURAL LANDS IN HIS NAME AND TWO AGRICULTURAL LANDS IN THE NAME OF HIS WIFE SMT. LALI MARAN. THE TOTAL AMOUNT OF INVESTMENT WAS MORE THAN RS. 2 CRORES. THEREFORE, THE FIRST CONCLUSION OF THE LEAR NED CIT(A) IS CORRECT THAT THE ASSESSEE HAS SOLD HIS LAND ON 2.7. 2011 AND 27.7.2011 AND PURCHASE OF LAND HAS BEEN MADE BY HIM DURING THE PERIOD FROM JULY, 2011 AND OCTOBER, 2011 ITSELF. T HEREFORE, THERE WAS NO NEED TO DEPOSIT THE MONEY IN THE CAPITAL GAI N DEPOSIT ACCOUNT SCHEME. 9. SO FAR AS THE NEXT CONCLUSION OF THE LEARNED CIT (A) IS CONCERNED, WE FURTHER OBSERVE THAT IT WAS EXPLAINED BY THE ASSESSEE ITO VS. HARISH MARAN ITA NO. 764/IND/2016 9 BEFORE THE AUTHORITIES BELOW THAT THE PURCHASE OF L AND IN THE WIFES NAME WAS DUE TO THE REASON THAT THE SELLER HAD EXEC UTED POWER OF ATTORNEY IN RESPECT OF THESE TWO LANDS IN FAVOUR OF THE ASSESSEE AFTER RECEIVING THE COMPLETE PAYMENT AND TRANSFERRING POS SESSION IN FAVOUR OF THE ASSESSEE ON 22.3.2013. THEREFORE, WHE N THE SALE PROCEEDS DEPOSITED IN THE BANK ACCOUNT OF THE ASSES SEE WERE USED TOWARDS PURCHASE OF THESE LANDS, FOR WHICH REGISTER ED SALE DEED WAS EXECUTED IN THE NAME OF HIS WIFE, THEN IT COMPLIED WITH THE PROVISIONS OF THE ACT FOR CLAIMING DEDUCTION U/S 54 B OF THE ACT. THEREFORE, THE CONCLUSION RECORDED BY THE ASSESSING OFFICER WAS NOT SUSTAINABLE. 10. IN VIEW OF ABOVE-NOTED FACTS AND CIRCUMSTANCES , WE FIND THAT THE REGISTERED SALE DEEDS OF TWO LANDS WERE EXECUTE D BY THE ASSESSEE, A POWER OF ATTORNEY HOLDER OF THE ORIGINA L SELLER, IN THE NAME OF HIS WIFE AND THE FUNDS DEPOSITED BY THE ASS ESSEE WERE USED FOR PURCHASE OF THESE LANDS IN THE NAME OF THE ASSE SSEES WIFE. THEREFORE, IN VIEW OF THE RATIO LAID DOWN BY THE HO N'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BALMUKUND MEENA (SUPRA), WE ARE INCLINED TO HOLD THAT EVEN IF THE LAND WAS P URCHASED IN THE ITO VS. HARISH MARAN ITA NO. 764/IND/2016 10 WIFES NAME, IT COMPLIED WITH THE REQUIREMENTS OF T HE RELEVANT PROVISIONS OF THE ACT FOR CLAIMING DEDUCTION U/S 54 B OF THE ACT. THEREFORE, THE CONCLUSION RECORDED BY THE LEARNED C IT(A) FOR GRANTING RELIEF TO THE ASSESSEE IS JUSTIFIED AND CO RRECT AND, HENCE, WE UPHOLD THE SAME. ACCORDINGLY, THE SOLE GROUND OF TH E REVENUE BEING DE VOID OF MERIT IS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 20 TH MARCH, 2017. SD/- SD/- $) ! ! (O.P.MEENA) (C.M. GARG) ACCOUNTANT MEMBER J UDICIAL MEMBER MARCH 20 TH 2017. DN/