Usha Sharma, New Delhi V. ITO WARD - 29(1), New Delhi

ITA 8126/DEL/2019

AI Insights

The case involves Usha Sharma, the appellant, who contested the assessment order passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2013-14. The AO had added Short Term Capital Gains and Long Term Capital Gains to the appellant's income, which arose from the sale of a residential property. The appellant argued that the gains were incorrectly calculated and that she was entitled to exemptions under Section 54F of the Act, as she had reinvested the sale proceeds in residential plots within the prescribed time. However, both the CIT(A) and the Tribunal upheld the AO's assessment, leading to the dismissal of the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121730 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 07-06-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 09-10-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 54F; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI M. BALAGANESH, ACCOUNTANT MEMBER I.T.A. No.8126/DEL/2019 Assessment Year 2013-14 Usha Sharma 363/5, Govind Puri Kalka ji New Delhi. Vs. ITO Ward-29(1) New Delhi TAN/PAN: APYPS7146E (Appellant) (Respondent) Appellant by: None Respondent by: Shri Gurpreet Shah Singh, Sr.DR Date of hearing: 08 06 2023 Date of pronouncement: 14 07 2023 O R D E R PER KUL BHARAT, A.M.: The ca pti one d appeal fi l ed b y t he assessee i s di rect ed agai nst t he order of t he ld. Commi ssioner of I nco me Tax (Appeal s) - 33, Ne w Del hi [ ‘CI T( A) ’ in s hort ] dated 31. 07. 2019 ar isi ng f r o m the assess me nt or der dated 17. 03.20 16 passed b y the Assessing Off i cer (AO) under Sect i on 143( 3) of t he I nco me Tax Act, 1961 (t he Act ) pert ai ni ng to Assess ment Year 2013- 14. The assessee has raised the fol lowi ng gr ounds of appe al . “ 1 . T h a t t h e l e a rn e d A O e r r e d o n t h e f a c t s a v a i l a bl e o n r e c o r d a n d a d d e d a S h o r t t e r m c a p i t a l g a i n s ( R s . 5 , 7 9 , 5 8 3 / - ) t o t h e a p p e l l a n t ' s i n c o m e a c c ru e d o n s a l e o f o n e r e s i d e n t i a l p r o p e r t y . T h e A p p e l l a n t s o l d o n e r e s i d e n t i a l p r o p e r t y a n d i n v e s t e d t h e e n t i r e s al e p r o c e e d s in p u r c h a s e o f t w o a d j a c e n t r e s i d e n t i a l p l o t s a n d b u i ld i n g o n e s i n g l e r e s i d e n t i a l h o u s e o n b o t h o f t h e p l o t s w i t h i n t h e pr e s c r i b e d t i m e o f t h r e e y e a r s a n d a c c o r d i n g l y c l a i m e d d e d u c t i o n u s 5 4F o f I n c o m e T a x A c t 1 9 6 1 . T h e l e a r n e d A O e r r e d o n t h e f a c t s a v a i l a b le o n r e c o r d a n d I.T.A. No.8126/Del/2019 2 c a l c u l a t e d S h o r t T e r m C a p i t a l G a i n s o n b u i l d i n g o n a r b i t r a r y a s su m p t i o n s a n d e r ro n e o u s l y c o m p u t e d t h e s h o r t t e r m c a p i t a l g a i n w h i c h i s a g a i n s t t h e l a w . T h a t t h e l e a r n e d C o m m i s si o n e r o f I n c o m e T a x ( A p p e a l s ) - 3 3 , N e w D e l h i a l s o e r r e d o n f a c t s a n d i n l a w b y n o t a p p r e c i a t i n g t h e f a c t t h a t t h e a c t u a l c o st o f c o n s tr u c t i o n w h i c h i s a v a i l a b l e o n r e c o r d a n d i g n o r e d t h e f a c t t h a t t h e ac t u a l b u i l d i n g c o s t ( R s . 3 6 , 9 5 , 4 1 7 - ) w a s a c c e p t e d b y A . O . T h a t t h e l e a r ne d A . O c a l c u l a t e d t h e S h o r t T e r m C a p i t a l G a i n s b y c a l c u l a t i n g b u i l d i ng c o s t b e i n g b a l a n c e o f t h e s a l e c o n s i d e r a t i o n a f t e r d e d u c t i n g la n d c o s t a t C i r c l e r a t e i n s t e a d o f a c t u a l l a n d r a t e a v a i l a b l e o n r e c o rd w h i c h i s t o t a l l y u n j u s t i f i e d a n d b a d i n l a w . T h e l e a r n e d A O a l s o e r re d b y n o t c o n s i d e r i n g t h e b u i l d i n g c o n s t r u c t e d d u ri n g 2 0 0 8 -0 9 a s L o n g t e r m c a p i t a l a s s e t a n d t r e a t e d w h o l e b u i l d i n g a s S h o r t te r m a s s e t . 2 . T h a t t h e l e a r n e d A . O e r r e d i n l a w a n d i n f a c t s by n o t a p p r e c i a t i n g t h e f a c t a n d c o n s i d e r e d t h e l a n d c o s t a t c i r c l e r a te f o r c a l c u l a t i n g L o n g t e r m C a p i t a l G a i n s i n s t e a d o f d e d u c t i n g a c t u a l b u i ld i n g c o s t a v a i l a b l e o n r e c o rd s f r o m t h e t o t a l s a l e c o n s i d e r a t i o n . T h e Lo n g T e r m C a p i t a l G a i n s i s c a l c u l a t e d o n a s su m p t i o n s w h i c h i s t o t a l l y u n j u s t i f i e d a n d b a d i n l a w . T h a t t h e l e a rn e d A O a n d t h e l e a r n e d C o m m i s si o n e r o f I n c o m e T a x (A p p e a l s ) - 3 3 , N e w D e l h i h a s e r r e d i n l a w a n d in f a c t s b y n o t a p p r e c i a t i n g t h e f a c t s a n d a d d e d L o n g T e r m C a p i t a l G a in s ( R s . 6 0 , 9 6 , 6 9 1 / - ) b y n o t a l l o w i n g d e d u c t i o n a s c l a i me d b y A p p e l l a n t w / s 5 4 F o f I n c o m e T a x A c t 1 9 6 1 . T h a t t h e A p p e l l a n t p u r c ha s e d t w o a d ja c e n t r e s i d e n t i a l p l o t s a n d c o n s t r u c t e d o n e i n g l e r e s i d e nt i a l h o u s e t h e r e o n a n d r i g h t l y c l a i m e d d e d u c t i o n u n d e r s e c t i o n 5 4 F f o r t h e L o n g T e r m C a p i t a l G a i n s a c c r u e d o n s a l e o f o n e r e s i d e n t i a l p ro p e r t y a n d f u l f i l l e d a l l c o n d i t i o n s l a i d a s p e r p r o v i s i o n s o f I n c o m e Ta x A c t 1 9 6 1 . T h e L e a r n e d C o m m i s s i o n e r o f I n c o m e T a x ( A p p e a l s ) - 3 3 , ha s e r r e d i n l a w a n d a l l o w e d d e d u c t i o n p a r t l y u / s . 5 4 F o f I n c o m e T a x A c t ' 1 9 6 1 p a r t l y t o w a rd s o n e r e s i d e n t i a l h o u s e c o n s t r u c t e d o n o n e p lo t a n d i g n o re d t h e f a c t t h a t o n l y o n e h o u s e i s c o n s t r u c t e d o n t h e s a i d t w o a d j a c e n t p l o t s . ” 2. At t he ti me of hear ing, no one at t ended t he pr oceedi ngs. I t is seen fro m t he recor d t hat no one has been at t endi ng t he pr ocee din gs on behalf of t he assessee. The not ices se nt thr ough speed post h ave been r et ur ned back b y the p ostal aut hori t y wit h a remar k ‘l ef t’ . The assessee has not pr ovi ded an y cur rent add ress to t he Regi st r y t heref ore, t he appeal i s t ake n f or heari ng in t he absence of t he assessee. 3. The f acts gi vi ng r i se to the present appeal are t hat i n this case t he assessee had f il ed i t s r et ur n of i nc o me decl aring tot al inco me at Rs. 1, 85, 290/ -. The re turn was pr ocessed unde r I.T.A. No.8126/Del/2019 3 Secti on 143(1) of t he I nco me Ta x Act. Subseque nt l y, the case was sel ect ed f or s crut i n y under C ASS and t he assessment under Secti on 143( 3) of t he Act was fra med vide order dated 17. 03. 2016 thereb y t he Assessi ng Offi cer made additio n on account S hort Te r m C api t al Gai n of Rs. 5, 75, 553/ - and L ong Ter m Capi tal Gai n of Rs. 60, 96, 691/ - disall owing t he cl ai m of the assessee for exe mpt ion under Sec ti on 54F of t he A ct . 4. Aggri eved agains t t his, t he assessee prefer red appeal bef ore t he CI T( A) who aft er consi deri ng sub mi ssions partl y al lowe d the appeal . Ther eb y, he sust ai ned t he a ddi ti on of Rs.60,9 6, 961/ - a nd al so confi r me d t he S hort Ter m Capit al Gain. Ho we ver, t he ld. CIT( A) al l owe d exe mpt i on unde r S ecti on 54F in r espect of house for w hi ch t he c onstr uct io n co mpleti on cert if icat e was obt ai ned on 17.10.20 13. 5. Aggri eved, the assessee i s appeal bef ore t his Tribunal . 6. The l d. DR suppor t ed t he or der of the aut hori t ies bel ow. 7. We fi nd t hat t he l d. CI T( A) has gi ven t he fi ndi ng on f act b y obser vin g as under : “ 8 . 4 I h a v e c o n s i d e re d t h e f a c t s o f t h e c a s e a n d s ub m i s s i o n o f t h e A p p e l l a n t . T h e f i r s t i s s u e i s t o d e c i d e w h e t h e r t h e b u i l d i n g s o l d b y t h e A s s e s s e e w a s a l o n g t e r m c a p i t a l a s s e t o r a s h o r t te r m c a p i t a l a s s e t . I t c a n n o t b e d o u b t e d t h a t t h e c o n s t r u c t i o n o n t h e l a n d c a n n o t b e e q u a t e d w i t h t h e l a n d a s f a r a s a g e th e r e o f i s c o n c e rn e d . As p e r t h e a r g u m e n t s o f t h e A s s e s s e e c o n s t r u c t i o n o n t h e s o l d p ro p e r t y st a r t e d i n y e a r 2 0 0 8 - 0 9 a n d t h e c o s t w a s Rs . 7 0 , 6 8 1 / - b u t n o p ro o f h a s be e n g i v e n t h a t a n y s u c h c o n s t r u c t i o n h a s t a k e n p l a c e i n y e a r 2 0 0 8 - 0 9 . O n t h e s e f a c t s a n d i n t h e c i r c u m s t a n c e s , t h e c o n s t r u c t i o n o n t h e s o l d p ro p e r t y w o u l d b e c o n s i d e r e d a s s h o r t t e r m c a p i t a l a s s e t . T h e A s s e s s in g O f f i c e r w a s j u s t i f i e d i n t a k i n g t h e c o s t o f c o n s t r u c t i o n a t R s .3 6 , 9 5 ,4 1 7 / - . A c c o r d i n g l y , t h e c o m p u t a t i o n o f s h o r t t e r m c a p i t a l g a i n a t R s . 5 , 7 9 , 5 8 3 / - i s c o n f i r m e d . T h e s e c o n d a sp e c t i s t he c o m p u t a t i o n o f l o n g t e r m c a p i t a l g a i n i n r e s p e c t o f t h e l a n d . S i n ce , t h e A s s e s s i n g O f f i c e r h a s c o m p u t e d t h e c a p i t a l g a i n a s l o n g t e r m , t h e r e c a n n o t b e a n y d i s p u t e . H e n c e , t h e c o m p u t a t i o n o f l o n g t e r m c ap i t a l g a i n in r e s p e c t o f t h e s o l d p ro p e r t y r e l a t i n g t o t h e l a n d on l y a t R s . 6 0 ,9 6 ,6 9 1 / - I.T.A. No.8126/Del/2019 4 i s c o n f i r m e d . 8 . 5 T h e o t h e r a sp e c t i s t h e c l a i m o f e x e m p t i o n w / s 5 4 F o f t h e I T A c t . T h e r e i s n o d o u b t a b o u t t h e f a c t t h a t t h e c o n s t r u c ti o n w a s c o m p l e t e d o n t w o p l o t s . T h e c o m p l e t i o n c e r t i f i c a t e w a s a l s o o b t ai n e d o n t w o d i f f e r e n t d a t e s . E v e n t h e I n sp e c t o r o f t h e A s s e s s i n g O f f i c e r r e p o r t e d t h e c o n s t r u c t i o n o f s e p a r a t e r e s i d e n t i a l u n i t s o n t h e si t e . O n t h e s e f a c t s , I h o l d t h a t t h e A s s e s s e e i s n o t e n t i t l e d f o r e x e m p t i on w / s 5 4 F o f t h e IT A c t i n r e s p e c t o f t h e r e s i d e n t i a l h o u s e f o r w h i c h th e c o m p l e t i o n c e r t i f i c a t e w a s o b t a i n e d o n 3 0 .1 0 . 2 0 1 3 b e c a u s e o n th a t p a r t i c u l a r d a te t h e A s s e s s e e w a s h a v in g m o r e t h a n o n e r e s i d e n t i a l ho u s e o t h e r t h a n t h e n e w a s s e t . T h e r e f o r e , I h o l d t h a t t h e A s s e s se e i s en t i t l e d f o r e x e m p t i o n u s 5 4 F i n r e s p e c t o f t h e h o u s e f o r w h i c h t h e c o n s t ru c t i o n c o m p l e t i o n c e r t i f i c a t e w a s o b ta i n e d o n 1 7 . 1 0 .2 0 1 3 . T h e A s s e s s in g O f f i c e r i s d i r e c t e d t o c a r r y o u t t h i s l i m i t e d e x e r c i s e i n c o m pl i a n c e w i t h t h i s o r d e r t o c o m p u t e t h e e x e m p t i o n . ” 8. The af oresaid fi ndi ng of the l d. CI T(A) is not cont r overted b y t he assessee by placi ng an y cogent materi al o n recor d. We theref ore di smiss t he appeal and aff ir med t he vi ew of t he CIT( A) . 9. I n t he resul t, the appeal of t he assessee i s dismi ssed ex- part e. Order pronounced in the open Court on 14/07/2023 Sd/- Sd/- [M. BALAGANESH] [KUL BHARAT] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: /07/2023 prabhat