Sh. Nand Lal Jain, Chandigarh V. ACIT, Chandigarh

ITA 85/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86217 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Opportunity of being heard; Benefit of exemption
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 85/CHD/2015 ASSESSMENT YEAR: 2008-09 SHRI NAND LAL JAIN, V THE ACIT, L/H SMT. OM WATI JAIN, CENTRAL CIRCLE I, SCO-8, SECTOR 17-E, CHANDIGARH. CHANDIGARH. PAN: AAEPL3824H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISH AN RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 30.03.2015 DATE OF PRONOUNCEMENT : 31.03.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER OF LD. CIT(APPEALS) CENTRAL, GURGAON DATED 15.07.2014 FOR ASSESSMENT YEAR 2008-09 CHALLENGING THE ADDITION OF RS. 4,55,7 56/- MADE BY ASSESSING OFFICER BY DISALLOWING THE BENEFIT UNDER SECTION 54F TO THE ASSESSEE AND TREATING THE SALE OF LAND AT DARIY A TO CAPITAL GAIN TAX. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE CHALLENGED THE DISALLOWANCE OF RS. 4,55,756/- BEFOR E LD. CIT(APPEALS) ON DISALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 54F ON THE SALE OF LAND AT DARIYA. IT WAS SUBMITTE D BEFORE LD. CIT(APPEALS) THT ASSESSING OFFICER DISALLOWED THE C LAIM ALLENGING 2 THAT DETAILS OF UTILIZATION OF THE AMOUNT IN QUESTI ON FOR CONSTRUCTION OF RESIDENTIAL HOUSE WAS NOT FURNISHED WHICH IS FACTUALLY INCORRECT. THE COMPLETE DETAILS REGARDIN G THE PURCHASE OF MATERIAL FOR THE CONSTRUCTION WERE SUBMITTED BEF ORE ASSESSING OFFICER. THE PAYMENTS WERE MADE FOR PURCHASE OF CE MENT, BRICK, WOOD ETC. ALL PAYMENTS WERE MADE THROUGH CHEQUES O NLY. IT WAS SUBMITTED THAT THE BENEFIT UNDER SECTION 54F IS NOT AVAILABLE IF THE ASSESSEE HAS TWO RESIDENTIAL HOUSE S. IN THE PRESENT CASE, ASSESSEE IS OWNER OF ONLY ONE HOUSE A ND THE AMOUNT WAS SPENT FOR ITS CONSTRUCTION ONLY. THE AS SESSEE SPENT THE AMOUNT FOR CONSTRUCTION OF RESIDENTIAL HOUSE NO . 23 SECTOR 9, CHANDIGARH AND ASSESSEE WAS NOT OWNER OF ANY OTH ER RESIDENTIAL PROPERTY EXCEPT ABOVE. COMPLETE DETAIL S OF CONSTRUCTION WERE FILED BEFORE ASSESSING OFFICER. THE ASSESSEE ALSO EXPLAINED HOW THE ASSESSEE INHERITED THE PROPE RTY IN QUESTION WHICH WAS CONSTRUCTED AND WAS SUPPORTED BY ALL THE EVIDENCES. THE LD. CIT(APPEALS) CONFIRMED THE ADDIT ION AND DISMISSED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARA 5.1 AND 6 ARE REPRODUCED AS UNDER : 5.1 1 HAVE CONSIDERED THE ASSESSEE'S SUBMISSION AS WE LL AS THE IMPUGNED ORDER. FRO,R: THE PERUSAL OF DETAILS FU RNISHED BY THE ASSESSEE THE AO OBSERVED THAT A PLOT SITUATED V ILLAGE DURIYA WAS SOLD FOR RS. 5,14,286/-, DECLARING CAPITAL GAIN AT RS. 4,55,758/-. HOWEVER AS ASSESSEE DID NOT FURNISH ED DETAILS OF EXPENDITURE AND AS PER RECORDS, ASSESSEE IS ALREADY IN POSSESSION OF RESIDENTIAL HOUSE THEREFORE CLAIM OF DEDUCTION U/S 54F WAS DISALLOWED. FURTHERMORE ASSESSE E DID NOT FURNISHED ANY EVIDENCE THAT THE SALE CONSIDERAT ION WAS UTILIZED FOR PURCHASE OF A RESIDENTIAL HOUSE. ON THE OTHER HAND, THE ASSESSEE HAS ARGUED THAT AS PER THE PROVISIONS OF SECTION 54F THE BENEFIT UNDER SECTION 54F OF THE IT. ACT, IS NOT AVAILABLE IF THE ASSESSEE HAS TWO RES IDENTIAL HOUSES. IN THE PRESENT CASE HE IS OWNER OF ONLY ONE H OUSE AND THE AMOUNT WAS SPENT FOR ITS CONSTRUCTION ONLY. T HAT A SUM OF RS. 5,69,600/- WAS SPENT FOR THE CONSTRUCTION OF HIS 3 ONLY ONE RESIDENTIAL HOUSE (NO. 23, SECTOR 9, CHANDIGA RH). IT WAS FURTHER STATED THAT THE COMPLETE DETAILS REGARDIN G THE UTILIZATION OF RS. 4,55,758/- WERE DULY FILED BEFORE THE ASSESS ING OFFICER. AS PER PROVISIONS FOR SECTION 54F, NO DEDUCTION IS A DMISSIBLE IN A CASE WHERE THE ASSESSEE IS IN POSSESSION OF MORE THA N ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET. ON A PE RUSAL OF THE NOTARIZED FAMILY SETTLEMENT DEED DATED 27.4.200 7 IT IS SEEN THAT HOUSE NO. 23, SECTOR 9A HAS BEEN BEQUEATH ED TO THE ASSESSEE (37.5%) AND TO SHRI RAJINDER JAIN (62.5%) . THE PROVISIONS CLEARLY ALLOWS DEDUCTION IF THE AMOUNT IS SPENT ON CONSTRUCTION OF A RESIDENTIAL HOUSE WHICH DOES NOT APPEAR BE THE CASE HERE. THE PROFESSED CONSTRUCTION HAS NOT BE EN CLEARLY DEFINED. A CERTAIN CLAIM HAS BEEN MADE SO TH E ASSESSEE WAS REQUIRED TO EVIDENCE HOW AND IN WHAT MAN NER HE WAS ELIGIBLE FOR CLAIMING THE DEDUCTION U/S 54F. THI S HAS NOT BEEN CONVINCINGLY BROUGHT OUT. THUS, I AM INCLINE D NOT TO INTERFERE WITH THE DISALLOWANCE MADE BY THE AO. ASSESSE E FAILS ON THIS GROUND. 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ACCORDIN G TO SECTION 54F(1), THE BENEFIT OF EXEMPTION CAN BE GRANTED TO THE ASSESSEE IF THE ASSESSEE HAS CONSTRUCTED A RESIDENTIAL HOUSE WITHIN THE SPECIFIED PERIOD. THE ASSESSEE CLAIMED THAT ASSESS EE WAS OWNER OF ONE HOUSE ONLY AND THE AMOUNT OF SALE PROCEEDS H AVE BEEN INVESTED IN CONSTRUCTION OF THE SAME PROPERTY. THE CLAIM OF ASSESSEE WAS DECLINED FOR EXEMPTION UNDER SECTION 5 4 BECAUSE THE DETAILS OF EXPENDITURE WERE NOT FURNISHED. LD. COUNSEL FOR THE ASSESSEE HOWEVER SUBMITTED THAT COMPLETE DETAIL S WERE FILED BEFORE THE AUTHORITIES BELOW WHICH HAVE NOT BEEN DI SCUSSED AT ALL AND THAT IT IS A CASE OF SEARCH AND THE PROPERT Y OF THE ASSESSEE HAVE BEEN INSPECTED BY INVESTIGATION WING ALSO WITH REGARD TO RAISING OF THE CONSTRUCTION BY ASSESSEE. THEREFORE, IT IS NOT A CASE OF DEFAULT ON THE PART OF THE ASSESSE E FOR NOT FURNISHING COMPLETE DETAILS WITH REGARD TO CONSTRUC TION. 4 4. CONSIDERING THE SUBMISSION OF LD. COUNSEL FOR TH E ASSESSEE IN THE LIGHT OF THE DETAILS FURNISHED IN THE PAPER BOOK AND DETAILS SUBMITTED BEFORE AUTHORITIES BELOW ALONG WI TH THE REPLY, WE ARE OF THE VIEW THE MATTER REQUIRES RE-CONSIDERA TION AT THE LEVEL OF THE ASSESSING OFFICER. WE, ACCORDINGLY, S ET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE MATTER AND ISSUE TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE- DECIDE THE MATTER IN ISSUE IN THE LIGHT OF THE PRO VISIONS OF SECTION 54F AND THE EVIDENCES FURNISHED BEFORE THEM STRICTLY IN ACC ORDANCE WITH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST MARCH,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH