Raman Singal, Chandigarh V. Addl. CIT, R-I, Chandigarh

ITA 861/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6063 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 31-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KULTEJ SINGH BAINS CIT DR
• Assessee Lawyers: N K SAINI ITP
• Keywords: Cost of acquisition; Benefit of exemption; Revised return; Capital Gains
• Section: 143(3); 54F; 154; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 861/CHD/2019 / ASSESSMENT YEAR : 2007-08 M/S RAMAN SINGAL, 185, INDUSTRIAL AREA, PHASE-II, CHANDIGARH ! THE ADDL . CIT, RANGE-1, CHANDIGARH ' # ./PAN NO: AEFPS6310F '$/ APPELLANT &' '$ /RESPONDENT ()*+ /ASSESSEE BY : SHRI N.K.SAINI, ITP *+ / REVENUE BY : SHRI KULTEJ SINGH BAINS, ADDL. CIT DR , -*) .# /DATE OF HEARING : 07.01.2020 /0 *) .# / DATE OF PRONOUNCEMENT : 29.01. 2020 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 29.03.2019 OF THE COMMISSIONER OF INCOM E TAX (APPEALS)-1, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT (A) ]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED CIT(A) HAS ERRED IN FACTS AND LAW IN REJECTING THE APPLICATION OF THE ASSESSEE FILED UNDER SECTION 154 WHEREIN ASSESSEE HAS CONTENDED THAT WHILE ADJUDICATING THE APPEAL, SUBSTANTIAL ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 2 ARGUMENT OF THE ASSESSEE HAS NOT BEEN ADJUDICATED BY THE LEARNED CIT(A). 2. THE APPELLANT CRAVES LEAVE FOR ANY ADDITION, DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE DISPOSAL OF APPEAL . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') WA S FRAMED BY THE ASSESSING OFFICER VIDE ORDER DATED 13.10.2009 FOR T HE ASSESSMENT YEAR UNDER CONSIDERATION, WHEREIN, THE ASSESSING OFFICER HAVING DENIED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 54F OF THE AC T AND HAS COMPUTED THE CAPITAL GAINS AT RS. 29,34,143/- AS AGAINST RS . 10,60,286/- DECLARED BY THE ASSESSEE. 4. BEING AGGRIEVED BY THE ABOVE ORDER OF THE ASSESS ING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE AS SESSEE BEFORE THE LD. CIT(A) INTER ALIA HAD ALSO TAKEN THE FOLLOWING GROU NDS OF APPEAL:- 1. A) THAT THE LD. A.O. IS NOT JUSTIFIED IN CALCULATING THE LONG TERM CAPITAL GAIN AT RS. 29,37,143/- AS AGAINST RS. 10,60,286/- DECLARED IN THE REVISED RETURN UNDER THE FACTS & CIRCUMSTANCES OF THE CASE AND THUS DENYING THE BENEFIT OF EXEMPTION U/S. 54-F AND ALSO BROUGHT FORWARD UNABSORBED CAPITAL LOSS. 5. THE LD. CIT(A) DECIDED THE AFORESAID GROUNDS AGA INST THE ASSESSEE OBSERVING AS UNDER:- ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 3 3.2 HELD: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND RECTIFICATION APPLICATION, ASSESSMENT ORDER AND THE ORDER OF THE LD.CIT (A), BEFORE ADJUDICATING THE RECTIFICATION APPLICATION, LET'S P ERUSE THE RELEVANT PORTION OF THE LD.CIT(A)-1, CHANDIGARH ORDER. VIDE ORDER DATED 21.01.2011 IN APPEAL NO. 207/P/09-10, THE LD. CIT(APPEALS), CHANDIGARH HAS DISCUSSED THE MATTER IN DETAIL AS UNDER:- 'GROUND NO.1: ADDITION OF RS. 29,37,143/- .. 7 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND MATERIAL ON RECORD. AFTER PERUSAL O F THE ORDER OF THE AO AND REPLY OF THE APPELLANT I FIND THAT IN THE A.Y 2005-06 APPELLANT SOLD INDUSTRIAL S HED NO. 84, INDUSTRIAL AREA I PANCHKULA FOR A SALE CONSIDERATION OF RS,40,00,000/- AND AFTER DEDUCTING INDEXED COST OF ACQUISITION OF RS.10,62,857/- LTCG WAS SHOWN AT RS. 29,37,143/-. THIS LTCG WAS SET OFF AGAINST THE PURCHASE OF ONE RESIDENTIAL HOUSE AT PANCHKULA AMOUNTING TO RS. 15,20,000/- AND ONE RESIDENTIAL HOUSE AT BADDI (HP) AMOUNTING TO RS. 12,96,000/- AND LTCG OF RS. 1,21,143/- WAS SET OFF AGAINST THE LONG TERM CAPITAL LOSS. 8. THE ABOVE EXEMPTION HAS BEEN WRONGLY CLAIMED BY THE APPELLANT BECAUSE AS PER SECTION 54F EXEMPTION IS AVAILABLE ONLY FOR ONE RESIDENTIAL HOUSE. THIS VIEW HAS BEEN HELD IN THE CASE OF ITO VS SUSHILA M JHAVERI (ITAT, MUM-SB) 1087 ITD 327, WHERE HON'BLE TRIBUNAL HELD THAT EXEMPTION U/S 54/54F IS ALLOWABLE IN RESPECT OF ONE RESIDENTIAL HOUSE. 9 HOWEVER, IN THE A.Y.2006-07 THE RESIDENTIAL HOUSE AT PANCHKULA, THE APPELLANT REVERSED THE EXEMPTION U/S 54F CLAIMED AGAINST THE ABOVE HOUSE I N ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 4 THE RETURN FOR THE A.Y 2007-08. THUS, THE FLAT WAS SOLD WITHIN THREE YEAR FROM ITS PURCHASE. 10 WHERE THE NEW RESIDENTIAL HOUSE WHICH HAS BEEN PURCHASED/CONSTRUCTED (IN RESPECT OF WHICH EXEMPTIO N UNDER SECTION 54F HAS BEEN CLAIMED) IS TRANSFERRED WITHIN A PERIOD OF 3 YEARS FROM THE DATE OF ITS PURCHASE/CONSTRUCTION, THE AMOUNT EXEMPTED (DEDUCTED) EARLIER UNDER SECTION 54F WILL BE DEEMED TO BE LONG-TERM CAPITAL GAINS CHARGEABLE TO TAX IN THE PREVIOUS YEAR IN WHICH THE TRANSFER IS EFFECTED COMPUTATION CAPITAL GAIN IN THE A.Y 2007-08 11. APPELLANT RECOMPUTED THE LTCG FROM SALE OF INDUSTRIAL SHED 84, I A, PANCHKULA AND CLAIMED EXEMPTION U/S 54F AMOUNTING TO RS. 12,96,000/- AGAINST THE PURCHASE OF FLAT AT BADDI(HP) AND BALANCE CAPITAL GAIN HAS BEEN SET OFF AGAINST THE B /F CAPITAL LOSS. 12. WITH RESPECT TO ABOVE FLAT AT BADDI, AO OBSER VED THAT 'IN THE RETURN OF INCOME FILED FOR THE ASSTT YEAR 2005-06, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F ON FLAT NO. 306, LLLRD FLOOR OF JASMINE CATEGORY I N BLOCK 7, PHASE I AT AMARAVATI APARTMENTS NEAR HOUSING BOARD, PHASE III BADDI. THE LETTER OF INTEN T OF AMARAVATI AGGARWAL BUILDERS (P) LTD DATED 22.10.2005 AND SCHEDULE OF PAYMENT IS ALSO ATTACHED ALONG WITH THE RETURN OF INCOME. THE LETTER OF INTE NT AND THE SCHEDULE OF PAYMENT REVEALS THAT OUT OF THE TOTAL COST OF FLAT AMOUNTING TO RS. 12,96,000/- ONL Y AN AMOUNT OF RS. 1,94,000/- HAS BEEN PAID. THE REST OF THE 8 INSTALLMENTS ARE TO BE PAID BI-MONTHLY AND TH E LAST INSTALLMENT IS TO BE PAID AT THE TIME OF POSSESSION. THUS, AS PER SCHEDULE OF PAYMENT, THE TENTATIVE PAYMENTS ARE TO BE MADE WITHIN A PERIOD O F 15 MONTHS. IN SUCH A SITUATION AS PER SUB SECTION O F SECTION (4) OF SECTION 54F OF THE INCOME TAX ACT, 1961, THE AMOUNT WHICH HAS NOT BEEN UTILIZED FOR TH E PURCHASE OF NEW ASSET BEFORE THE FURNISHING OF RETU RN ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 5 OF INCOME U/S 139 SHALL BE DEPOSITED BY HIM IN A CAPITAL GAIN SCHEME BEFORE THE DUE DATE OF FILING O F RETURN AND THE RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT. AS PER THE MATERIAL ON RECORD, THE ASSESSEE HAS NOT FURNISHED ANY DETAILS REGARDING INVESTMENT IN THE CAPITAL GAIN SCHEME. ALSO, THE RETURN OF INCOME FOR THE ASSTT. YEAR 2005-06 DOES N OT CONTAIN ANY EVIDENCE OF DEPOSIT IN THE CAPITAL GAIN SCHEME. IN VIEW OF FOREGOING FACT, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 54F OF THE INCOME TAX AC T, 1961 FOR AN AMOUNT OF RS. 12,96,000/- AS IT HAS NEITHER BEEN APPROPRIATED TOWARDS THE COST OF NEW ASSET NOR HAS THE AMOUNT BEEN DEPOSITED IN CAPITAL GAIN SCHEME. 13. IT IS THEREFORE QUITE CLEAR THAT THE APPELLANT IS NEITHER ENTITLED FOR EXEMPTION OF RS. 15,20,000/- B EING THE PROPERTY SOLD WITHIN THREE YEAR OF ITS ACQUISIT ION NOR THE EXEMPTION OF RS. 12,96,000/- DUE TO NON DEPOSIT OF UNUTILIZED AMOUNT IN CAPITAL GAIN ACCOUNTS. THUS, THE AO HAS RIGHTLY CALCULATED LTCG AT RS. 29,37,143/-(RS. 15,20,000/- + RS. 12,96,000) .' 6. APART FROM THE ABOVE GROUNDS, CERTAIN ADDITIONS MADE BY THE ASSESSING OFFICER ON OTHER ISSUES WERE DELETED BY T HE CIT(A) AND CERTAIN OTHER ADDITIONS WERE CONFIRMED. THE DEPARTM ENT AGAINST THE ACTION OF THE CIT(A) IN DELETING THE CERTAIN ADDITI ONS FILED APPEAL BEARING ITA NO. 544/CHD/2011. THE ASSESSEE AVAILIN G HIS RIGHT OF CROSS OBJECTIONS ALSO FILED CROSS OBJECTIONS (C.O. NO.55/ CHD/2011) AGITATING THE ACTION OF THE CIT(A) IN CONFIRMING CERTAIN ADDI TIONS. HOWEVER, THE ASSESSEE DID NOT TAKE THE ISSUE RELATING TO THE AFO RESAID DENIAL OF DEDUCTION U/S 54F OF THE ACT IN THE CROSS OBJECTION S BEFORE THE TRIBUNAL, ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 6 RATHER, THE ASSESSEE FILED AN APPLICATION U/S 154 O F THE ACT TO THE CIT(A) PLEADING THAT THE LD. CIT(A) WHILE ADJUDICATING THE APPEAL DID NOT CONSIDER THE SUBSTANTIAL ARGUMENTS OF THE ASSESSEE IN RESPECT OF THE ISSUE OF DENIAL OF DEDUCTION. THE LD. CIT(A) HAS DISMISSE D THE APPLICATION OF THE ASSESSEE OBSERVING THAT THE CIT(A) HAS DISCUSSE D THE ISSUE IN DETAIL AFTER CAREFUL CONSIDERATION OF THE RIVAL SUBMISSION S AND THE MATERIAL ON RECORD AND THAT IT WAS NOT A FIT CASE FOR EXERCISE OF JURISDICTION U/S 154 OF THE ACT. THE RELEVANT PART OF THE ORDER OF THE C IT(A) PASSED ON THE APPLICATION U/S 154 OF THE ACT IS REPRODUCED AS UN DER:- 3.2.1 BEFORE, DELVING INTO THE MERIT OF THE ISSU E AT HAND, IT IS PERTINENT TO UNDERSTAND THE SCOPE AND AMBIT OF SECT ION 154 OF THE ACT AS HAS BEEN ELABORATED UPON IN VARIOUS NOTE D JUDICIAL PRONOUNCEMENTS. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG-DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVAB LY BE TWO OPINIONS. MOREOVER, POINT WHICH IS NOT EXAMINED ON FACT OR IN LAW CANNOT BE DEALT WITH AS MISTAKE APPARENT FROM R ECORD. THE SAME VIEW IS HELD IN THE CASE OF CIT V. HERO CYCLES (P.) LTD. [1997] 94 TAXMAN 271 (SC) THAT -'RECTIFICATION CAN ONLY BE MADE WHEN GLARING MISTAKE OF FACT OR LAW HAS BEEN C OMMITTED BY THE OFFICER PASSING THE ORDER AND IT BECOMES APP ARENT FROM THE RECORD. RECTIFICATION IS NOT POSSIBLE IF THE QU ESTION IS DEBATABLE. MOREOVER, THE POINT WHICH IS NOT EXAMINE D ON FACT OR IN LAW CANNOT BE DEALT WITH AS MISTAKE APPARENT ON THE RECORD.' 3.2.2 FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THE LD. CIT (A) HAS DISCUSSED THE ISSUE IN DETAIL AFTER CAREFUL CONSIDERATION OF THE RIVAL CONTENTIONS AND MATERIAL ON RECORD AND AFTER PERUSAL OF THE ORDER OF THE AO AND REPLY OF THE APP ELLANT. IT IS TO REITERATE THAT THE RECTIFICATION CAN ONLY BE MAD E WHEN ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 7 GLARING MISTAKE OF FACT OR LAW HAS BEEN COMMITTED B Y THE OFFICER PASSING THE ORDER AND IT BECOMES APPARENT FROM THE RECORD AND THE POINT WHICH IS NOT EXAMINED ON FACT OR IN LAW C ANNOT BE DEALT WITH AS MISTAKE APPARENT ON THE RECORD. HENCE, APPLICATION SUBMITTED BY THE APPELLANT THAT SUBSTANTIAL ARGUMENTS OF THE ASSESSEE HAS NOT BEEN ADJUDICATED UPON BY THE THEN LEARNED CIT (A) IS REJECTED. THE GROUND OF APPEAL NO.1 (A) IS DISMISSED. 4. IN THE RESULT, THE RECTIFICATION APPLICATION IS REJ ECTED . IT IS PERTINENT TO MENTION HERE THAT THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTIONS OF THE ASSESSEE HAVE BEEN DECI DED VIDE ORDER DATED 30.1.2014 OF THE TRIBUNAL. THE ASSESSEE DID NOT OPT TO TAKE THE GROUND RELATING TO THE DENIAL OF DEDUCTION U/S 54F OF THE ACT EITHER BY WAY OF APPEAL AGAINST THE ORDER OF THE CIT(A) OR IN THE CR OSS OBJECTIONS FILED AGAINST THE APPEAL OF THE DEPARTMENT WHICH WERE DI SPOSED OF BY WAY OF COMMON ORDER OF THE TRIBUNAL DT 30.1.2014. 7. AFTER THE DECISION OF THE APPEAL AS WELL AS THE CROSS OBJECTIONS OF THE ASSESSEE ON 30.1.2014, THE ASSESSEE FILED THE RECTIFICATION APPLICATION BEFORE THE LD. CIT(A) MUCH AFTER THE PA SSING OF THE ORDER WHICH WAS DECIDED BY THE CIT(A) ON 29.3.2019. FROM THE SEQUENCE OF THE EVENTS, IT IS APPARENT THAT INITIALLY THE ASSES SEE DID NOT CHOOSE TO CONTEST THE DISMISSAL OF DEDUCTION U/S 54F OF THE A CT EITHER BY WAY OF APPEAL OR BY WAY OF CROSS OBJECTIONS IN SPITE OF TH E FACT THAT THE ASSESSEE PREFERRED CROSS OBJECTIONS ON OTHER ISSUES . THE ORDER OF THE ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 8 CIT(A), THEREFORE, ON THE ISSUE UNDER CONSIDERATION HAD BECOME FINAL. THE APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTIO NS OF THE ASSESSEE WERE DECIDED ON 30.1.2014, THEREFORE, THE ORDER OF THE ASSESSING OFFICER AS WELL AS ORDER OF THE CIT(A) MERGED WITH THE ORDE R OF THE TRIBUNAL DATED 30.1.2014. 8. NOW, THE ASSESSEE THROUGH RECTIFICATION APPLICAT ION U/S 154 OF THE ACT WANTS TO PLAY SECOND INNINGS WHICH IS NOTHING B UT ABUSE OF THE PROCESS OF LAW. EVEN OTHERWISE, THE ASSESSEE HAS BE EN GIVEN OPPORTUNITY BY THE LD. CIT(A) AND THE ASSESSEE, IF WAS AGGRIE VED FROM THE SAID ORDER, COULD HAVE FILED AN APPEAL AGAINST THE SAID ORDER OF THE CIT(A) AND EVEN COULD HAVE RAISED THE ISSUE THROUGH CROSS OBJECTIONS ALONG WITH OTHER GROUNDS WHICH ULTIMATELY HAVE BEEN DECID ED BY THE TRIBUNAL VIDE ORDER DATED 30.1.2014. 9. EVEN, THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT U NDER THE PROVISIONS OF SECTION 154 OF THE ACT, A MISTAKE APP ARENT ON RECORD CAN BE RECTIFIED. HOWEVER, THE PROVISIONS OF SECTION 15 4 ARE NOT MEANT FOR RE-ARGUMENT OF THE CASE ON MERITS. IN VIEW OF THIS , EVEN OTHERWISE, THE APPLICATION OF THE ASSESSEE U/S 154 OF THE ACT HAS RIGHTLY BEEN DISMISSED BY THE LD. CIT(A). WE, THEREFORE, DO NOT FIND ANY M ERIT IN THE APPEAL OF THE ASSESSEE AND THE SAME IS ACCORDINGLY DISMISSED. ITA NO. 861-CHD-2019 SHRI RAMAN SINGHAL, CHANDIGARH 9 IN THE RESULT THE APPEAL OF THE ASSESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.01.2020. SD/- SD/- ( . . / N.K. SAINI) ( ! ' / SANJAY GARG) #$% / VICE PRESIDENT &' / JUDICIAL MEMBER DATED : 29.01.2020 .. 2*&)3454) / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. &' '$ / THE RESPONDENT 3. , 6) / CIT 4. , 6) ( )/ THE CIT(A) 5. 47 &)8 , . 8 , 9:;< / DR, ITAT, CHANDIGARH 6. ;= - / GUARD FILE