Sh. Harpal Singh, Ludhiana V. ITO, Ludhiana

ITA 893/CHANDI/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3804 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Capital asset; Opportunity of being heard; Revised return
• Section: 54F; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 893/CHD/2016 ASSESSMENT YEAR: 2012-13 SHRI HARPAL SINGH, VS THE ITO, M/S BANGA METALS, WARD-V(2), 435, INDUSTRIAL AREA-B, LUDHIANA. LUDHIANA. PAN: ABTPS8247F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 15.09.2016 DATE OF PRONOUNCEMENT : 19.09.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-2 LUDHIANA DATED 17.05.2016 FOR ASSESSMENT YEAR 2012-13. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. 3. THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS G ROUND NO. 1. SAME IS DISMISSED BEING NOT PRESSED. 2 4. ON GROUND NOS. 2 TO 4, ASSESSEE CHALLENGED THE O RDER OF LD. CIT(APPEALS) IN REJECTING THE CLAIM OF ASSES SEE UNDER SECTION 54F OF THE INCOME TAX ACT. 4(I) THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSE SSEE FILED ITS RETURN OF INCOME FOR A.Y. 2012-13 ON 28.0 9.2012 SHOWING INCOME OF RS. 4,99,362/-. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRADING OF FERROUS & NON FERROUS METALS DURING THE PERIOD UNDER CONSIDERATIO N. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAS SOLD A PLOT DURING TH E YEAR FOR RS. 29,20,000/- AND EARNED LTCG OF RS. 16,37,78 6/-. THE ENTIRE LTCG HAS BEEN CLAIMED TO BE EXEMPT SECTI ON 54F OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF INVES TMENT OF RS.36,00,000/- IN RESIDENTIAL HOUSE. THE AO FURT HER NOTED THAT THE RESIDENTIAL HOUSE HAS BEEN PURCHASED AFTER AVAILING LOAN OF RS. 50,00,000/- FROM M/S INDIA BUL LS HOUSING FINANCE LIMITED. AS PER SECTION 54F OF THE INCOME TAX ACT, IF THE SALE PROCEEDS ARE APPROPRIAT ED FOR ANY OTHER PURPOSE, EXCEPT TO PURCHASE THE PROPERTY AND NEW ASSET IS ACQUIRED OUT OF BORROWINGS, THE ASSESS EE WOULD NOT BE ENTITLED FOR DEDUCTION. THEREFORE, THE ASSESSEE WAS ASKED AS TO WHY THE DEDUCTION U/S 54F MAY NOT BE DISALLOWED TO THE EXTENT OF RS. 25,00,000/- OUT OF TOTAL COST OF RS. 35,54,710/-(1/2 SHARE) AS IT WAS PAID FROM THE LOAN RAISED FROM M/S INDIA BULLS AND THE N ET CONSIDERATION HAS BEEN APPROPRIATED FOR DIFFERENT P URPOSE I.E. UTILISED IN OWN BUSINESS. THE AO WAS NOT SATIS FIED 3 WITH THE APPELLANT'S SUBMISSION. THE AO ALSO NOTED THAT SALE PROCEEDS OF THE CAPITAL ASSET RECEIVED BY THE ASSESSEE WERE UTILIZED OR APPROPRIATED FOR DIFFEREN T PURPOSE I.E. UTILISED IN OWN BUSINESS AND ASSESSEE HAD INSUFFICIENT PERSONAL FUNDS TO ACQUIRE A RESIDENTIA L HOUSE AND THE RESIDENTIAL HOUSE WAS PURCHASED FROM THE LO ANS BORROWED FROM THE BANK, AS ADMITTED BY THE ASSESSEE . THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW TH AT CAPITAL GAINS ACCRUED TO THE ASSESSEE WAS NOT WHOLL Y APPROPRIATED TOWARDS THE PURCHASE OF THE RESIDENTIA L HOUSE WITHIN A SPECIFIED PERIOD, THEREFORE, THE ASS ESSEE WAS NOT ENTITLED TO CLAIM EXEMPTION OF WHOLE CAPITA L GAIN UNDER SECTION 54F OF THE ACT. ACCORDINGLY, THE ASSE SSING OFFICER RECOMPUTED THE INCOME FROM LONG TERM CAPITA L GAIN AND MADE DISALLOWANCE OF RS. 5,83,076/- UNDER SECTION 54F OF THE INCOME TAX ACT,1961. 5. THE ASSESSEE CHALLENGED THE ADDITION OF RS. 5,83,086/- UNDER SECTION 54F OF THE ACT BEFORE LD. CIT(APPEALS) AND ASSESSEE RELIED UPON DECISION OF H ON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V KA PIL KUMAR AGGARWAL 284 CTR 75 (382 ITR 56). THE LD. CIT(APPEALS) DID NOT ACCEPT CLAIM OF THE ASSESSEE A ND DISMISSED THE APPEAL OF THE ASSESSEE. 6. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF THE VIEW MATTER REQUIRES RE-CONSIDERATION AT THE LEVEL OF TH E ASSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT ASSESSEE PURCHASED HOUSE PRIOR TO ON E 4 YEAR OF THE DATE OF SALE OF THE PROPERTY AND SUBMIT TED THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY JUDGEMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI KAPIL KUMAR AGGARWAL 382 ITR 56 (SUPRA) IN WHICH IT WAS HELD AS UNDER : IN ORDER TO AVAIL OF THE BENEFIT UNDER SECTION 54F OF THE INCOME-TAX ACT, 1961, THE ASSESSEE IS REQUIRED TO E ITHER PURCHASE A RESIDENTIAL HOUSE WITHIN A PERIOD OF ONE YEAR BEFOR E OR TWO YEARS AFTER THE DATE ON WHICH TRANSFER TAKES PLACE OR CONSTRUCT A RESIDENTIAL HOUSE WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE. SEC TION 54F OF THE ACT NOWHERE ENVISAGES THAT THE SALE CONSIDERATION OBTAI NED BY THE ASSESSEE FROM THE ORIGINAL CAPITAL ASSET IS MANDATO RILY REQUIRED TO BE UTILISED FOR THE PURCHASE OR CONSTRUCTION OF A H OUSE PROPERTY. NO PROVISION HAS BEEN MADE BY THE STATUTE THAT IN ORDE R TO AVAIL OF THE BENEFIT OF SECTION 54F OF THE ACT, THE ASSESSEE HAS TO UTILISE THE AMOUNT RECEIVED BY HIM ON SALE OF ORIGINAL CAPITAL ASSET F OR THE PURPOSES OF MEETING THE COST OF THE NEW ASSET. FOR THE ASSESSMENT YEAR 2009-10, THE ASSESS EE CLAIMED BENEFIT UNDER SECTION 54F OF THE INCOME-TAX ACT, 1961. THE ASSESSING OFFICER DISALLOWED IT ON THE GROUND THAT THE ASSESSEE HAD N OT ENTIRELY SOURCED THE AMOUNT INVESTED IN HIS NEW ASSET FROM THE CAPIT AL GAINS RECEIPTS. THE COMMISSIONER (APPEALS) CON FIRMED THIS. THE TR IBUNAL ALLOWED THE CLAIM OF THE ASSESSEE. ON APPEALS BY THE DEPAR TMENT : HELD, DISMISSING THE APPEALS, THAT THE INVESTMENT MADE BY THE ASSESSEE WAS WITHIN THE STIPULATED TIME AND MORE TH AN THE CAPITAL GAINS EARNED BY HIM. THEREFORE, THE ASSESSEE WAS E NTITLED TO THE BENEFIT UNDER SECTION 54F OF THE ACT. 7. THE IMPUGNED ORDERS SHOW THAT AUTHORITIES BELOW HAVE NOT DISCUSSED THE ISSUE ON FACTS WITH REGARD T O PURCHASE OF PROPERTY BY ASSESSEE AS IS CLAIMED BY ASSESSEE BEFORE THE TRIBUNAL. THEREFORE, FACTUAL F INDINGS 5 ARE REQUIRED IN THE LIGHT OF DECISION OF HON'BLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF KAPIL KUMAR AGGAR WAL (SUPRA). I, THEREFORE, SET ASIDE THE ORDERS OF AUT HORITIES BELOW AND RESTORE THE MATTER IN ISSUE TO THE FILE O F ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THIS ISSUE IN THE LIGHT OF DECISION OF HON'BLE PUNJAB & HARYANA H IGH COURT IN THE CASE OF KAPIL KUMAR AGGARWAL (SUPRA). THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ASSE SSEE IS DIRECTED TO PRODUCE SUFFICIENT MATERIAL BEFORE ASSESSING OFFICER WITH REGARD TO CLAIM MADE UNDER SECTION 54F OF THE ACT. 8. IN THE RESULT, GROUND NOS. 2 TO 4 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 9. ON GROUND NOS. 5 AND 6, THE ASSESSEE CHALLENGED THE ORDER OF LD. CIT(APPEALS) IN NOT ACCEPTING THE CLAI M OF LOSS OF RS. 6,000/- INSTEAD OF INCOME OF RS. 2,73,6 68/- UNDER THE HEAD SHORT TERM CAPITAL GAINS. THE ASS ESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT CLAIM WAS MA DE THROUGH REVISED RETURN AND REVISED COMPUTATION CHAR T SUBMITTED BEFORE ASSESSING OFFICER ON 31.12.2014 DU RING THE ASSESSMENT PROCEEDINGS BUT IT WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSEE RELIED UPON DECISI ON OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS RAMCO INTERNATIONAL 332 ITR 306. THE LD. CIT(APPEALS) NOTED THAT ASSESSEE HAS NOT FILED ANY 6 REVISED RETURN AND NO ACKNOWLEDGEMENT HAS BEEN PRODUCED, THEREFORE, CLAIM OF THE ASSESSEE WAS REJE CTED. 10. AFTER CONSIDERING RIVAL SUBMISSIONS, I AM OF TH E VIEW MATTER REQUIRES RE-CONSIDERATION AT THE LEVEL OF TH E ASSESSING OFFICER. THE LD. COUNSEL FOR THE ASSESSE E ADMITTED THAT NO REVISED RETURNS HAVE BEEN FILED TO CLAIM LOSS ON ACCOUNT OF SHORT TERM CAPITAL GAIN. HOWEVE R, HE HAS SUBMITTED THAT REVISED COMPUTATION OF INCOME WA S FILED BEFORE ASSESSING OFFICER, COPY OF WHICH IS FI LED AT PAGE 4 OF THE PAPER BOOK. DETAILS OF LOSS SUFFERED BY ASSESSEE WERE SUBMITTED BEFORE ASSESSING OFFICER VI DE LETTER DATED 31.12.2014, COPY OF WHICH IS FILED AT PAGE 6 OF THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSE E ALSO REFERRED TO THE DOCUMENTS ON THIS ISSUE TO SHOW THA T ASSESSEE SUFFERED LOSS UNDER THE HEAD SHORT TERM C APITAL GAIN AND SUBMITTED THAT CLAIM OF THE ASSESSEE WAS NOT ACCEPTED BECAUSE NO REVISED RETURN HAS BEEN FILED. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON DECISION O F THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RAMCO INTERNATIONAL 332 ITR 306 (SUPRA) IN WHICH IT WAS HELD THAT WHEN ASSESSEE HAVING DULY FURNISHED THE DOCUMENTS AND SUBMITTED FORM NO. 10CCB DURING ASSESSMENT PROCEEDINGS, CLAIM OF DEDUCTION UNDER SE CTION 80IB WHICH HAS NOT BEEN CLAIMED IN THE RETURN, DED UCTION IS ADMISSIBLE EVEN IN THE ABSENCE OF REVISED RETURN . SINCE THERE IS NO DETAILED DISCUSSION MENTIONED BY ASSESSING OFFICER IN THE ASSESSMENT ORDER ON THIS I SSUE 7 AND THE DOCUMENTS FILED IN THE PAPER BOOK PRIMA-FAC IE SHOW THAT DETAILS WERE FILED BEFORE ASSESSING OFFIC ER FOR CLAIMING LOSS ON ACCOUNT OF SHORT TERM CAPITAL GAIN AT ASSESSMENT STAGE, THEREFORE, EVEN IF NO REVISED RET URN WAS FILED BY ASSESSEE, CLAIM OF THE ASSESSEE SHOULD HAVE BEEN CONSIDERED BY THE ASSESSING OFFICER. I, ACCORD INGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTO RE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH DIRECTI ON TO RE- DECIDE THIS ISSUE AFTER VERIFYING THE DETAILS SUBMI TTED BY THE ASSESSEE ON HIS RECORD AS IS ARGUED BEFORE ME. THE ASSESSING OFFICER SHALL RE-DECIDE THIS ISSUE IN ACC ORDANCE WITH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. 10(I) IN THE RESULT, GROUND NOS. 5 AND 6 OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D PARTLY FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 19 TH SEPTEMBER,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH