RAM GOPAL BANSAL(HUF), Jaipur V. ITO, Jaipur

ITA 895/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5479 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 26-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH JCIT DHK
• Keywords: Unexplained cash credit; Application of stay
• Section: 143(3); 54B; 54F; 131; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.895/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SHRI RAM GOPAL BANSAL (HUF) VILLGE BEELPUR VIA CHANDWAJ, TEHSIL AMER, JAIPUR CUKE VS. THE INCOME TAX OFFICER, WARD 7(3), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AANHR 6680 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) S HRI SHRAWAN KUMAR GUPTA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22 / 12 /2015 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12 /02/2016 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-III, JAIPUR DATED 11.12.2014 WHEREIN THE ASSESSEE HAS T AKEN THE FOLLOWING GROUNDS OF APPEAL:-. (1) THAT THE IMPUGNED ASSESSMENT ORDER U/S 143(3) DATED 07.11.2013 IS BAD IN LAW AND ON FACTS OF THE CASE FOR WANT OF JURISDICTION AN D FOR VARIOUS OTHER REASONS AND HENCE THE SAME MAY KINDLY BE QUASHED. (2) THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON THE F ACTS OF THE CASE IN CONFIRMING THE ACTION OF THE AO IN ASSESSING THE INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN ON SALE OF PROPERTY AT JAIPUR ON 01.07.2010 AT RS. 48,22,427/- AS AGAINST NIL INCOME DECLARED BY THE ASSESSEE BY CONFIRMING T HE ACTION OF THE AO IN: ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 2 (A) NOT ALLOWING OR DENYING THE CLAIM OF DEDUCTION U/S 54F IN RESPECT OF INVESTMENT IN HOUSE PROPERTY AT CHOMU OF RS. 58,51, 276/- ON THE GROUND THAT PURCHASE OF PLOT ON WHICH THE CONSTRUCTION IS MADE NOT IN THE NAME OF ASSESSEE HUF. (B) ALLOWING THE DEDUCTION ON ACCOUNT OF INDEXED COST OF IMPROVEMENT T RS. 1,50,000/- AGAINST RS. 2,18,905/- CLAIMED BY THE AS SESSEE. (3) THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON T HE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 5,39,500/- ON ACCOUN T OF BY TREATING THE EXCESS OF CASH DEPOSIT IN THE BANK ACCOUNT OVER THE CASH W ITHDRAWALS AS UNEXPLAINED CASH CREDIT. THE ADDITION SO MADE AND CONFIRMED BY THE CIT(A) IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS AND HEN CE THE SAME MAY KINDLY BE DELETED IN FULL. (4) THE LD. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON T HE FACTS OF THE CASE IN CONFIRMING THE ACTION OF THE AO IN TREATING THE AGR ICULTURE INCOME OF RS. 2,35,320/- AS INCOME FROM OTHER SOURCES AND MAKING ADDITION FOR THE SAME. HENCE THE ADDITION SO MADE AND CONFIRMED BY THE CIT (A) IS TOTALLY CONTRARY TO THE PROVISION OF LAW AND FATS N HENCE THE SAME MAY KINDLY BE DELETED IN FULL. (5) FURTHER ALTERNATIVELY AND WITHOUT PREJUDICE THE ABOV E GROUNDS OF APPEAL IT IS ALSO PRAYED THAT IF ADDITION OF GOA 3 IS SUSTAINED THEN THE SETOFF OF THE AGRICULTURE INCOME MY KINDLY ALLOWED WHETHER INCOME FROM AGRICULTURE INCOME TREATED FROM OTHER SOURCES OR NOT. (6) THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CHARGING OF INTEREST U/S 24B, 234C & 234D AS CONSEQUENTIAL IN NATURE. TH E APPELLANT TOTALLY DENIES IT LIABILITY OF CHARGING OF ANY SUCH INTEREST. HENC E THE INTEREST SO CHARGED BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS MAY KIN DLY BE DELETED IN FULL. 2. FIRSTLY THE GROUNDS NO. 1 & 6 ARE NOT PRESSED DU RING THE COURSE OF HEARING. HENCE, THE SAME ARE DISMISSED AS NOT PRESSED. 3. REGARDING GROUND NO.2, THE FACTS AS APPARENT FRO M THE RECORDS ARE THAT THE ASSESSEE HAS SOLD ONE PROPERTY SITUATED AT MANUWA J I KA BAGH, JAIPUR ON ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 3 01.07.2010 FOR SALE CONSIDERATION OF RS. 50 LACS. AFTER CLAIMING DEDUCTION ON ACCOUNT OF INDEXED COST AT RS. 27,573/-, INDEXED CO ST OF BOUNDARY WALL AND ROOM FOR RS.1,52,685/- AND RENOVATION EXPENSES ON SALE OF RS. 66,220/- (TOTALING TO RS. 2,18905/-), CLAIMED THE RESULTANT CAPITAL GAIN AMOU NTING TO RS. 47,53,522/- TO BE EXEMPT U/S 54F OF THE IT ACT. HOWEVER, THE AO NOTE D THAT THE DEDUCTION U/S 54F HAS BEEN CLAIMED IN RESPECT OF CONSTRUCTION MADE ON A PLOT MEASURING 455 SQ. YRDS SITUATED AT ASHOK VIHAR EXTENSION AT CHOMU, W HICH WAS PURCHASED BY WAY OF SALE AGREEMENT DATED 22.12.2010 FOR RS. 8,01,000/- IN THE NAME OF SHRI RAM GOPAL BANSAL AND NOT RAM GOPAL BANSAL HUF. ON THIS PLOT, IT CONSTRUCTED A RESIDENTIAL HOUSE INVESTING RS 50,50,276 AND THUS R EFLECTING A TOTAL INVESTMENT OF RS 58,51,276 IN ITS BALANCE SHEET. AS PER AO, THE C APITAL GAIN LIABILITY WAS IN RESPECT OF RAM GOPAL BANSAL HUF WHERE AS THE PLOT H AS BEEN PURCHASED AND CONSTRUCTION HAS BEEN MADE BY SHRI RAM GOPAL BANSAL (INDIVIDUAL). ACCORDINGLY THE AO DISALLOWED CLAIM OF DEDUCTION AMOUNTING TO R S. 47,53,522/-U/S 54F OF THE IT ACT. FURTHER, THE AO NOTED THAT IN THE SALE DEED, IT WAS MENTIONED THAT THE COMPOUND WALL AND THE ROOM ON THE PLOT WAS 30 YEARS OLD. AC CORDINGLY THE AO HELD THAT SUCH INVESTMENT IS SHOWN SIMPLY ON ESTIMATE BASIS W ITHOUT ANY DOCUMENTARY EVIDENCE AND ACCORDINGLY THE AO DISALLOWED CLAIM OF RS. 68,905/- AND RESTRICTED SUCH DEDUCTION TO RS. 150000/- AS AGAINST RS 218,90 5/- CLAIMED BY THE ASSESSEE. 2.1 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATT ER IN APPEAL BEFORE THE LD CIT(A) WHO HAS DENIED BOTH THE CLAIMS OF THE ASSES SEE. THE RELEVANT FINDINGS ARE REPRODUCED AS UNDER: AS REGARDS REJECTION OF EXCESS CLAIM OF RS. 68,905/ - IN RESPECT OF COST OF CONSTRUCTION OF ROOM AND BOUNDARY WALL, THE ASSESSE E CLAIMED TOTAL EXPENSES FOR RS. 2,18,905/- (1,52,685/- + 66,220/-). THIS EXPENS ES WAS STATED TO BE INCURRED IN F.Y. 2009-10 AND 2010-11. HOWEVER, THE AO NOTED TH AT IN THE SALE DEED THE COMPOUND WALL AND ROOM WAS STATED TO BE 30 YEARS O LD. ACCORDINGLY THE AO HELD THAT SUCH INVESTMENT WAS SHOWN SIMPLY ON ESTIMATE B ASIS AND ACCORDINGLY RESTRICTED SUCH DEDUCTION FOR RS. 1,50,000/-. ON TH E OTHER HAND THE APPELLANT CASE IS THAT CLAIM OF CONSTRUCTION OF RS. 2,18,905/- WAS VERIFIABLE FROM BALANCE SHEET. HOWEVER, DURING THE APPELLATE PROCEEDINGS, THE APPE LLANT HAS NOT FILED ANY EVIDENCE AS TO HOW SUCH INVESTMENT WAS VERIFIABLE F ROM THE BALANCE SHEET. THEREFORE, IN RESPECT OF FINDING ON THIS ISSUE OF T HE AO NO INTERFERENCE IS CALLED. ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 4 ON CAREFUL CONSIDERATION OF RELEVANT FACTS, IT MAY BE NOTED THE ASSESSEE EARLIER PURCHASED PROPERTY IN THE NAME OF SHRI RAM GOPAL BA NSAL AND THE INVESTMENT WAS STATED TO BE MADE FROM THE FUNDS OF SHRI RAM GOPAL BANSAL HUF. THE ASSESSEE HAS SHOWN SUCH PURCHASES IN THE BOOKS OF ACCOUNTS, IN THE CASE OF SHRI RAM GOPAL BANSAL HUF AND THE SAME PROPERTY NOW BEEN SOLD AND IN THE SALE DEED, NAME OF SHRI RAM GOPAL HAS ONLY BEEN MENTIONED. THE FUNDS SO RECEIVED ARE ALSO SHOWN IN THE ACCOUNTS OF SHRI RAM GOPAL BANSAL HUF. IN THIS CONTEXT, IT MAY BE NOTED THAT SUCH TRANSAC TIONS WERE SHOWN BY THE ASSESSEE AT HIS OWN IN THE HUF STATUS AND WHEN SUCH TRANSACTIONS WERE SHOWN IN THE HUF STATUS, THE DEPARTMENT HAS NO OCCASION EITH ER TO INTERFERE OR NOT TO ACCEPT THE SAME. HOWEVER, THE MAIN DISPUTE IS REGARDING ALLOWABILIT Y OF DEDUCTION U/S 54F ON THE INVESTMENT MADE IN CONSTRUCTION ON THE PLOT WHICH I S IN THE NAME OF SHRI RAM GOPAL BANSAL AND NOT IN THE NAME OF SHRI RAM GOPAL BANSAL HUF. THE APPELLANT CASE IS THAT THE FUNDS RECEIVED FROM THE SALE OF PR OPERTY THOUGH REGISTERED IN THE NAME OF SHRI RAM GOPAL BANSAL BUT SHOWN IN THE CASE OF SHRI RAM GOPAL BANSAL HUF HAS BEEN USED AND THAT DEDUCTION U/S 54F SHOULD BE ALLOWED. HOWEVER, THE FACT IS THAT THE ASSESSEE HAS PURCHASED THE PROPERT Y AND CONSTRUCTED THE HOUSE WHICH IS NOT IN THE NAME OF SHRI RAM GOPAL BANSAL H UF AND IN SUCH CIRCUMSTANCES THE JURISDICTIONAL HIGH COURT IN THE CASE OF KALYA V S. CIT, D.B. IT APPEAL NO. 112 OF 2012 & D.B. CIVIL MISC. STAY APPLICATION NO. 1180 O F 29012 HAS HELD THAT DEDUCTION U/S 54B IS AVAILABLE ONLY IF THE LAND IS PURCHASED BY THE ASSESSEE HIMSELF. THE HONBLE JURISDICTIONAL HIGH COURT IN THIS CASE HAS C LEARLY HELD THAT THE WORD ASSESSEE USED IN THE INCOME TAX ACT NEEDS TO BE G IVEN A LEGAL INTERPRETATION AND NOT A LIBERAL INTERPRETATION AS ALSO THAT IF THE WORD ASSESSEE IS GIVEN IN LIBERAL INTERPRETATION, IT WOULD BE TANTAMOUNT TO G IVEN A FREE HAND TO THE ASSESSEE AND HIS LEGAL HEIRS AND IT SHALL CURTAIL THE REVENU E OF THE GOVT. WHICH THE LAW DOES NOT PERMIT. THE FINDING OF THE HONBLE COURT IS AL SO OF THE BINDING NATURE. THEREFORE THE FINDING OF THE AO REJECTING THE CLAIM OF DEDUCTION U/S 54F AMOUNTING TO RS. 58,51,276/- AND TAXING THE LONG TE RM GAIN FOR RS. 48,22,487/- IS CONFIRMED. 2.2 DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE FACT WHICH IS NOT CONSIDERED BY BOTH THE LOWER AUTHORITIES IS THAT TH E REGISTERED DEED THROUGH WHICH THE PROPERTY UNDER CONSIDERATION WAS PURCHASE D AND THEREAFTER SOLD, BOTH ARE IN THE NAME OF SHRI RAM GOPAL BANSAL. THERE I S NO REFERENCE OF THE WORD HUF IN BOTH THESE DEEDS. HOWEVER, AS THE FUNDS FOR PUR CHASE OF THIS PROPERTY HAS ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 5 COME FROM HUF, THE PROPERTY IS DECLARED IN THE BALA NCE SHEET OF HUF AND ACCEPTED BY THE DEPARTMENT. ON SALE OF THIS PROPER TY, THOUGH THERE IS NO REFERENCE OF THE WORD HUF IN THE SALE DEED, THE CAP ITAL GAIN IS DECLARED BY THE HUF AND ALSO ASSESSED BY THE AO IN HUF. AFTER SALE OF THIS HUF PROPERTY, ASSESSEE HUF PURCH ASED THE RESIDENTIAL PLOT OF LAND AS PER SALE AGREEMENT DATED 22.12.2010 FOR RS. 8,01,000/- AND THE POSSESSION OF THE PLOT IS HANDED OVER TO THE ASSESS EE HUF. THE PURCHASE OF THE LAND IS DULY DECLARED IN THE BALANCE SHEET OF THE A SSESSEE HUF AS ON 31.03.2011. THE PAYMENT TOWARDS LAND VALUE AND SUBSEQUENT CONST RUCTION THEREON IS MADE FROM THE FUNDS OF THE HUF AND REFLECTED IN THE BALA NCE SHEET OF ASSESSEE HUF AS ON 31.03.2011, AS ON 31.03.2012 AND AS ON 31.03.20 13 AND ALSO IN THE STATEMENT OF THE KARTA RECORDED U/S 131 DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, ONLY BECAUSE IN THE SALE AGREEMENT, THER E IS NO REFERENCE THE HUF WOULD NOT MAKE THE PURCHASE OF THE LAND AND CONST RUCTION THEREON AS THE INDIVIDUAL PROPERTY OF SHRI RAM GOPAL BANSAL. IF THIS ANALOGY IS ACCEPTED THEN THE PROPERTY WHICH IS SOLD DURING THE YEAR UNDER CONSID ERATION IS ALSO NOT ASSESSABLE IN THE HANDS OF THE HUF. IN THESE CIRCUMSTANCES WH EN THE ASSESSEE HUF HAS PURCHASED THE LAND AND CONSTRUCTED THE HOUSE THEREO N OUT OF ITS OWN FUND AND THE SAME IS DULY REFLECTED IN ITS BALANCE SHEET, TH E CONDITION OF SECTION 54 IS SATISFIED AND THEREFORE THE AO BE DIRECTED TO ALLOW THE CLAIM OF DEDUCTION U/S 54 TO THE ASSESSEE IN COMPUTING THE CAPITAL GAIN. FURTHER IF THE PROPERTY PURCHASED IS TREATED THAT O F THE INDIVIDUAL THEN THE SALE OF THE PROPERTY SHOULD ALSO BE TREATED THE PROPERTY OF INDIVIDUAL AND NO CAPITAL GAIN SHOULD BE ASSESSED IN THE HANDS OF HUF. IT IS NOT A CCEPTABLE TO ADOPT TWO WAYS/TREATMENT FOR SAME FACTS. IT IS A WELL SETTLED LAW THAT SUBSTANCE RULE OVER T HE FORM. FURTHER, ANY PROVISION IN THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTIN G GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THE RESTRICTION O N IT TOO HAS TO BE SO CONSTRUED AS TO ADVANCE THE OBJECTIVE OF THE PROVISION AND NOT TO FRUSTRATE IT. THE OBJECTIVE OF SECTION 54 IS TO PROMOTE THE CONSTRUCTION OF NEW RESIDENTIAL HOUSES TO MEET THE NEED OF HOUSE ACCOMMODATION AND THEREFORE ONLY BECAUSE OF TECHNICAL REASONS, THE BENEFIT CANNOT BE DENIED, IF IN SUBSTA NCE IT SATISFIES THE CONDITION OF SECTION 54. IT IS FOR THIS REASON IN VARIOUS CASES IT IS HELD THAT IF THE INVESTMENT IS MADE IN THE NAME OF WIFE OR SON OR CLOSE RELATIVES AND THE FUNDS FOR SUCH INVESTMENT HAS GONE FROM THE ASSESSEE, BENEFIT OF S ECTION 54/54B/54EC/54F ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 6 SHOULD BE ALLOWED TO THE ASSESSEE. FOR THIS PROPOS ITION, RELIANCE IS PLACED ON THE FOLLOWING CASES: CIT VS. KAMAL WAHAL 214 TAXMAN 287/86 DTR 37 (DEL.) DIT (IT) AND ANOTHER VS. MRS. JENNIFER BHIDE 349 IT R 80 (KARN.) CIT VS. RAVINDER KUMAR ARORA 75 DTR 406 (DEL.) CIT VS. V. NATRAJAN 287 IR 271 (MAD.) CIT VS. GURNAM SING 327 ITR 278 (P&H) FURTHER, THE LD AR SUBMITTED THAT THE DECISION OF H ONBLE RAJASTHAN HIGH COURT IN CASE OF KALYA (ITA NO. 112/2012) CITED BY THE LD. C IT(A) IS TOTALLY DIFFERENT FROM THE FACTS OF THE CASE OF THE APPELLANT AS SUBMITTED BEL OW: SL.NO. CASE OF KALYA CASE OF THE APPELLANT. 1. IN THIS CASE THE LAND SOLD AND LAND PURCHASED WAS DIFFERENT NAME I.E. THE LAND SOLD WAS IN THE NAME OF ASSESSEE AND LAND PURCHASED IN THE NAME OF SON AND DAUGHTER-IN-LAW IN THIS CASE THE LAND SOLD AND LAND PURCHASED BOTH WERE IN THE SAME NAME IS RAM GOPAL BANSAL 2. THIS IS THE CASE OF NON- MAINTENANCE OF BOOKS OF ACCOUNTS. THIS IS THE CSE OF MAINTENANCE OF BOOKS OF ACCOUNTS REGULARLY AND TRANSACTION DULY REFLECTED IN THE BOOKS ND B/S FROM SO MANY YEARS. 3. THIS IS THE CASE OF U/S 54B THIS IS THE CASE OF U/S 54 4 IN THIS CASE FUNDS OR INVESTMENT HAS BEEN DONE FOR TRANSFER FROM ONE PERSONS TO ANOTHER PERSONS IN THIS CASE FUNDS OR INVESTMENT HAS NOT BEEN DONE OR TRANSFER FROM ONE PERSONS TO ANOTHER PERSONS. THE SAME IS DONE IN THE SAME NAME. IN SECTION 54B EXEMPTION IS GIVEN FOR PURCHASE OF L AND AND IN SEC. 54, EXEMPTION IS GIVEN FOR CONSTRUCTION OF RESIDENTIAL HOUSE NOT FOR PURCHASE OF LAND. AND IT IS NOT DISPUTED THAT THE RESIDENTIAL HOUSE HAS BEEN CONSTR UCTED FROM THE FUNDS OF HUF AND SHOWN IN THE B/S OF HUF AS ALSO ADMITTED BY THE KARTA IN HIS STATEMENTS RECORDED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER THE LD. AO HAS ESCAPED THOSE FACTS IN HIS ORDER. IN VI EW OF THE ABOVE, WHEN THE FUNDS OF THE HUF HAS BEEN UTILIZED FOR PURCHASE OF THE RE SIDENTIAL PLOT AND CONSTRUCTION THEREON, SIMPLY BECAUSE IN THE SAME AGREEMENT REFER ENCE OF THE HUF IS NOT THERE ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 7 COULD NOT MEAN THAT THE INVESTMENT IN THE RESIDENTI AL HOUSE IS NOT MADE BY THE HUF. HENCE THE CLAIM U/S 54 DISALLOWED BY THE AO I S UNJUSTIFIED AND HE MAY BE DIRECTED TO ALLOW THE CLAIM TO THE ASSESSEE. SO FAR AS THE CLAIM OF CONSTRUCTION AT RS. 2,18,905 /- IS CONCERNED THE SAME IS VERIFIABLE FROM THE BALANCE SHEET. THE AO AS WELL AS LD. CIT(A) HAS NO BASIS TO ESTIMATE SUCH COST AT RS.1,50,000/-. HENCE THE AO BE DIRECTED TO ALLOW THE INDEXED COST OF CONSTRUCTION AT RS. 2,18,905/- AS C LAIMED BY THE ASSESSEE. 2.3 THE LD DR RELYING UPON THE ORDER OF LD CIT(A) H ELD THAT THE PROVISIONS OF DEDUCTION PROVISIONS ARE VERY CLEAR AND GIVEN THE F ACT THAT THE ASSESSEE HUF HAS NOT PURCHASED THE HOUSE IN ITS NAME, THE DEDUCTION IS RIGHTFULLY DENIED TO THE ASSESSEE HUF. 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE FACTS WHICH EMERGE ARE AS FOLLOWS: I. THE PROPERTY, IN RESPECT OF WHICH THE CAPITAL GAIN WAS OFFERED TO TAX, WAS INITIALLY PURCHASED AND THEN SOLD IN THE NAME OF SH RI RAM GOPAL BANSAL AND NOT IN THE NAME OF RAM GOPAL BANSAL HUF. ACCORDINGLY, BOTH INITIAL PURCHASE AND CONSEQUENT SALE OF THAT PROPERTY WAS IN THE NAME OF SHRI RAM GOPAL BANSAL AND NOT SHRI RAM GOPAL BANSAL HUF. II. THE INITIAL PURCHASE OF THE SAID PROPERTY AND THE S UBSEQUENT SALE THEREOF WAS SHOWN AND REFLECTED IN THE BOOKS OF ACCOUNTS AND BA LANCE SHEET OF SHRI RAM GOPAL BANSAL HUF AND NOT RAM GOPAL BANSAL WHICH IS ON RECORD AND NOT DISPUTED BY THE REVENUE. III. THE CONSIDERATION FOR SALE OF SAID PROPERTY WAS REC EIVED BY SHRI RAM GOPAL BANSAL HUF AND DEPOSITED IN ITS BANK ACCOUNT AND TH E POSSESSION OF THE PROPERTY WAS HANDED OVER BY SHRI RAM GOPAL BANSAL H UF. THE REVENUE HAS ALSO NOT DISPUTED THESE FACTS. THE RESULTANT CAPITA L GAINS WERE OFFERED TO TAX IN THE HANDS OF SHRI RAM GOPAL BANSAL HUF WHICH HAS BE EN ACCEPTED BY THE REVENUE. IV. FURTHER, THE SUBSEQUENT PURCHASE OF PLOT OF LAND AN D CONSTRUCTION OF HOUSE ON THE SAID PLOT OF LAND WAS IN THE NAME OF SHRI RAM G OPAL BANSAL AND THE FUNDS FOR PURCHASE OF LAND AND CONSTRUCTION OF HOUSE THER EON ARE WITHDRAWN FROM THE BANK ACCOUNT OF SHRI RAM GOPAL BANSAL HUF. THE REVENUE HAS ALSO NOT DISPUTED THESE FACTS. AT THE SAME TIME, IT IS IN RE SPECT OF THIS INVESTMENT AND RELATED DEDUCTION WHICH IS SUBJECT MATTER OF DISPUTE BEFORE US. ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 8 2.5 THE ABOVE UNDISPUTED FACTS SHOW CLEARLY THAT TH E ASSESSEE HAS BEEN CONSISTENT IN ITS APPROACH IN TERMS OF TREATMENT AN D DISCLOSURE OF THE PURCHASE AND SALE AND SUBSEQUENT PURCHASE OF THE PROPERTIES. IT SO HAPPENED THAT IN THE AGREEMENTS, THE NAME OF SHRI RAM GOPAL BANSAL HAS B EEN MENTIONED WHEREIN ALL THE RELEVANT FACTS TAKEN TOGETHER LEADS TO THE CON CLUSION THAT ALL THESE TRANSACTIONS HAVE BEEN EFFECTIVELY DONE BY SHRI RAM GOPAL BANSAL AS A KARTA OF THE HUF AND NOT IN HIS INDIVIDUAL CAPACITY. SECONDLY, THE PROVISIONS OF SECTION 45 AND SECTION 54 OF THE ACT SHOULD BE READ IN A HARMONIOUS MANNER AND THE REVENUE HAS TO TAKE A H OLISTIC VIEW OF MATTER WHEREIN ALL THE FACTS SHOULD BE CONSIDERED IN TOTAL ITY RATHER IN A PIECEMEAL APPROACH. IN THE INSTANT CASE WHETHER THE SALE CON SIDERATION HAS BEEN BROUGHT TO TAX IN HANDS OF RAM GOPAL BANSAL HUF, THE SUBSEQUEN T CLAIM OF RELIEF U/S 54 SHOULD HAVE BEEN ALLOWED TO THE ASSESSEE KNOWING FU LLY WELL THAT BOTH THE ORIGINAL PURCHASE/SALE AGREEMENTS AND SUBSEQUENT PU RCHASE AGREEMENT, THE NAME HAS BEEN MENTIONED AS RAM GOPAL BANSAL AND N OT SHRI RAM GOPAL BANSAL HUF. HERE, WE DO NOT AGREE WITH THE OBSERVATIONS OF THE LD CIT(A) THAT SUCH TRANSACTIONS WERE SHOWN BY THE ASSESSEE AT HIS OWN IN THE HUF STATUS AND WHEN SUCH TRANSACTIONS WERE SHOWN IN THE HUF STATUS, THE DEPARTMENT HAS NO OCCASION EITHER TO INTERFERE OR NOT TO ACCEPT THE SAME. IT S A CARDINAL PRINCIPLE OF TAXATION THAT TAX SHOULD BE LEVIED AND COLLECTED FROM THE AS SESSEE WHO IS LEGALLY LIABLE FOR SUCH TAXES. IT IS ALSO CARDINAL PRINCIPLE OF TAX A DMINISTRATION AND ENFORCEMENT THAT WHERE REVENUE IS CEASED OF THE MATTER THAT A PARTIC ULAR TRANSACTION IS NOT TAXABLE OR THE ASSESSEE HAS FAILED TO CLAIM CERTAIN RELIEF/ DEDUCTION WHICH HE IS ELIGIBLE FOR, THE REVENUE SHOULD TAKE NECESSARY CORRECTIVE STEPS SO THAT CORRECT AMOUNT OF TAXES ARE BROUGHT TO TAX. IN THE INSTANT CASE, IF ITS THE CASE OF THE REVENUE THAT CAPITAL GAINS ON SALE OF THE PROPERTY IS LIABLE FOR TAXATION IN HANDS OF ASSESSEE HUF EVEN THOUGH THE SALE AGREEMENT TALKS ABOUT THE INDI VIDUAL, IN OUR VIEW, THE REVENUE SHOULD EQUALLY ALLOW THE RELIEF FROM SUCH T AXATION WHERE THE ASSESSEE FULFILLS ALL REQUIRED CONDITIONS EXCEPT THAT THE NA ME IN THE PURCHASE AGREEMENT IS THAT OF INDIVIDUAL AND NOT ASSESSEE HUF. THIRDLY, IT IS NOT IN DISPUTE THAT THE SALE CONSIDE RATION HAS BEEN DEPOSITED IN THE BANK ACCOUNT OF RAM GOPAL BANSAL HUF AND THE SAME H AS BEEN UTILIZED FOR PURCHASE OF PLOT OF LAND AND THE CONSTRUCTION OF HO USE THEREON BY UTILIZING THE FUNDS WITHDRAWN FROM THE BANK ACCOUNT OF SHRI RAM G OPAL BANSAL HUF. THE SAID FACTS IS CLEARLY APPARENT FROM THE STATEMENT RECORD ED BY THE AO OF SHRI RAM ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 9 GOPAL BANSAL DURING THE COURSE OF ASSESSMENT PROCEE DINGS WHICH HAS BEEN TOTALLY IGNORED BY THE LOWER AUTHORITIES. FOURTHLY, WE HAVE GONE THROUGH THE DECISION OF HON BLE RAJASTHAN HIGH COURT IN CASE OF KALYA VS. CIT WHICH HAS BEEN RELIED UPON BY THE LD CIT(A). IN THAT CASE, THE LAND SOLD WAS IN THE NAME OF APPELLANT AND LAND WHI CH WAS SUBSEQUENTLY PURCHASED WAS IN THE NAME OF HIS SON AND DAUGHTER-I N-LAW. IN THE INSTANT CASE, PROPERTY SOLD AND SUBSEQUENTLY PURCHASED IS IN NAME OF RAM GOPAL BANSAL AND THE ENTIRE TRANSACTION HAS BEEN EFFECTIVELY DONE BY AND BROUGHT TO TAX IN HANDS OF THE ASSESSEE HUF. THE SAID DECISION IS THEREFORE D ISTINGUISHABLE ON FACTS HENCE CANNOT COME TO THE AID OF THE REVENUE. LASTLY, THE DECISIONS AS QUOTED BY THE LD AR, WHERE THE INVESTMENT IN THE NEW PROPERTY HAS FLOWN FROM THE SALE CONSIDERATION OF O RIGINAL PROPERTY AND EVEN THOUGH IT HAS BEEN REGISTERED IN JOINT NAMES, SUPPOR T THE CASE OF THE ASSESSEE. IN ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE C ASE AND RESPECTFULLY FOLLOWING THE DECISIONS AS REFERRED SUPRA, THE ASSESSEE SHOUL D BE ELIGIBLE TO CLAIM THE NECESSARY RELIEF U/S 54 OF THE ACT OF RS 58,51,276 IN RESPECT OF INVESTMENT IN PLOT OF LAND AND SUBSEQUENT CONSTRUCTION OF HOUSE THEREO N. 2.6 REGARDING CLAIM OF RS. 68,905/- IN RESPECT OF C OST OF CONSTRUCTION OF ROOM AND BOUNDARY WALL, WE HAVE GONE THROUGH THE ORDER O F THE LD. CIT(A) AND ARE OF THE VIEW THAT NO INTERFERE IS CALLED FOR. 2.7 HENCE GROUND NO.2 IS PARTLY ALLOWED WHERE THE A SSESSEE IS ALLOWED RELIEF UNDER SECTION 54 OF THE ACT OF RS 58,51,276 IN RESP ECT OF INVESTMENT IN PLOT OF LAND AND SUBSEQUENT CONSTRUCTION OF HOUSE THEREON. AND CLAIM OF RS 68,905 IS DENIED. 3. REGARDING GROUND NO.3, THE ASSESSEE HAS CHALLENG ED THE ACTION OF LD. CIT(A) WHO HAS CONFIRMED AN ADDITION OF RS. 5,39,500/- ON ACCOUNT OF EXCESS CASH DEPOSIT OVER THE CASH WITHDRAWAL IN THE ACCOUNT MA INTAINED BY THE ASSESSEE. 3.1 THE LD. AR HAS SUBMITTED THAT, THE ASSESSEE AS ON 31-03-2010 WAS HAVING CASH BALANCE OF RS. 2,08,829/- AND DEBTORS OF RS.2, 91,380/- TOTALING TO 5,00,209/-. THE CLOSING CASH BALANCE AS ON 31.-3.2-11 REMAINED AT RS. 11647/- AND DEBTORS AT RS. NIL LEAVING THE NET CASH AVAILABILITY OF RS. 4, 88,562/- (500209-11647) WITH THE ASSESSEE. FURTHER DURING THE YEAR, ASSESSEE DECLARE D AN AGRICULTURAL INCOME OF RS.2,35,320/- WHICH IS RECEIVED IN CASH. THUS THE TOTAL AVAILABILITY OF THE FUNDS ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 10 WITH THE ASSESSEE IS RS. 7,23,882/- (488562 + 23532 0) VIDE B/S OF AY. 2010-11 TO 2012-13 WHICH IS MUCH MORE THAN RS. 5,39,500/- ADDE D BY THE AO THUS, THE SOURCE OF RS. 5,39,500/- IS FULLY EXPLAINED AND THE ADDITION MADE BY THE AO IS UNCALLED FOR. THE OBSERVATION OF THE LD. CIT(A) WA S WRONG BECAUSE THE B/S AS WELL AS ISSUE OF AGRICULTURE INCOME WAS BEFORE HIM AND WHEN THE CIT(A) HAS ALSO POWER TO EXAMINE THE ISSUE. THE LD. CIT(A) HAS NOW HERE DENIED THAT THE B/S AND FIGURE OF B/S OF BOTH THE YEAR IS WRONG. HENCE THE ADDITION MADE BY THE AO AS WELL AS CONFIRMED BY THE CIT(A) WAS ON THEIR OWN SU SPICION, WHICH IS NOT PERMISSIBLE IN LAW. HENCE THE ADDITION SO MADE MAY KINDLY BE DELETED IN FULL. 3.2 WE HAVE CONSIDERED THE SUBMISSION OF THE LD. AR AND IT IS NOTED THAT THE BANK STATEMENT OF BOTH THE BANK A/CS MAINTAINED BY THE ASSESSEE WHICH INCLUDES THE OPENING AND CLOSING BALANCES WERE AVAILABLE WIT H THE AO. SECONDLY THE DETAILS OF THE AGRICULTURAL INCOME WERE ALSO APPARE NT FROM THE RETURN FILED BY THE ASSESSEE. KEEPING IN VIEW THE FACTUAL POSITION AND EXPLANATION OF THE ASSESSEE, WE HEREBY DELETE THE ADDITION OF RS. 5,39,500/- IN THE HANDS OF THE ASSESSEE. HENCE THE GROUND NO. 3 IS ALLOWED. 4. IN GROUND NO.4, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 2,35,320/- WHICH IS TREATED BY THE AO AS INCOME FROM OTHER SOU RCES AS AGAINST AGRICULTURAL INCOME OFFERED BY THE ASSESSEE. 4.1 THE ASSESSEE HAS SUBMITTED THAT THE FACT OF HAV ING AGRICULTURAL INCOME IS EVIDENT FROM THE JAMABANDI AND KHASRA GIRDAWARI FIL ED BEFORE THE AO. THE CROP GROWN WERE DIRECTLY SOLD TO CONTRACTOR VIDE SALE CO NTRACT RATE IN WHICH ALL THE DETAILS ARE MENTIONED. IF THE AO WAS HAVING ANY D OUBT ABOUT THE SAME HE COULD HAVE MADE PHYSICAL INQUIRY BY DEPUTING THE INSPECTO R BECAUSE THE LAND WAS NOT MUCH FAR FROM THE JAIPUR. THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IS COMPARABLE WITH THE EARLIER YEARS AS CAN BE SEEN FR OM THE FOLLOWING TABLE: ASSESSMENT YEAR AGRICULTURAL INCOME (IN RS.) 2011-12 2,35,320/- 2010-11 3,49,650/- 2009-10 1,22,365/- 2008-09 24,000/- 2007-08 1,02,687/- 2006-07 3,83,683/- 2005-06 1,98,605/- 2004-05 1,94,401/- ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 11 2003-04 1,94,401/- 2002-03 2,96,683/- THE AO HAS NOT BROUGHT ANY MATERIAL EVIDENCE ON REC ORD TO ESTABLISH THAT THE ASSESSEE HAS SOME OTHER SOURCE OF INCOME WHICH IS D ISCLOSED AS AGRICULTURAL INCOME. RATHER THE EVIDENCE FILED BY THE ASSESSEE H AS NOT BEEN DISPROVED BY THE AO. IN THIS THERE ARE THOUSAND TREES OF AMWLA. TH E ADDITION SO MADE BY THE AO BY TREATING THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES IS WITHOUT ANY BASIS AND MATERIAL ON RECORD. THE AO BE, THEREFORE , DIRECTED TO ACCEPT THE AGRICULTURAL INCOME AS DECLARED BY THE ASSESSEE. T HUS THE AO NOWHERE DISPUTED OR DISPROVED THAT THE ASSESSEE HAS NOT OWNED AGRICU LTURE LAND IN HIS OWN NAME. THE SAID LANDS WERE IRRIGATED AND CAPABLE FOR GIVIN G YIELD WHICH ARE SUPPORTED BY THE COPY OF KHASRA GIRDAWARI AND JAMABANDI AND SALE CONTRACT NOTE. THE ASSESSEE MIGHT NOT HAVE KEPT ANY EVIDENCE WHATSOEVER TO SHOW THAT ANY AGRICULTURE ACTIVITY ON THE SAID LAND WAS DONE, ITS PRODUCTIVI TY IS SUPPORTED BY THE DOCUMENTARY EVIDENCE OF AND HOLDING STATED ABOVE, W HEREIN THE NAME OF CROP HAVE BEEN MENTIONED THE FACTS OF SALE AVAILABLE PR ESUPPOSES THE AGRICULTURE LAND WITH THE ASSESSEE WHICH COULD DEMONSTRATE THE AVAIL ABILITY OF AGRICULTURE INCOME. 4.2 WE HAVE CAREFUL CONSIDERED THE MATTER. AS PER T HE LD. CIT(A) NO INDEPENDENT EVIDENCE IS FILED WHICH MAY INDICATE TH AT AGRICULTURE INCOME TO SUCH EXTENT WAS DERIVED BY THE ASSESSEE. THE CASE OF TH E ASSESSEE IS THAT THE LAND WAS IRRIGATED AND CAPABLE OF GIVING YIELD WHICH WAS SUP PORTED BY COPY OF KASRA GIRDHAWARI AND JAMABANDI AS WELL AS SALE CONTRACT NOTES. FURTHER IT IS NOTED THAT IN THE PAST THE ASSESSEE HAS BEEN CONSISTENTLY SHOW ING THE AGRICULTURE INCOME. KEEPING THE ENTIRELY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, INCOME OF RS. 2,36,320/- IS HEREBY DIRECTED TO BE TREAT AS AGRIC ULTURAL INCOME AND NOT AS INCOME FROM OTHER SOURCES. HENCE THE GROUND NO. 4 IS ALLOW ED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 12 /02/ 2016 SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO ( R.P.TOLANI ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 12 JAIPUR DATED:- 12/ 02 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RAM GOPAL BANSAL, JAIPUR 2. THE RESPONDENT- THE ITO, WARD 7(3), JAIPUR 3. THE CIT(A)-III, JAIPUR 4. THE CIT-III, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO 895/JP/14) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO.895/JP/14 RAM GOPAL BANSAL HUF VS. ITO WARD 7(3), JAIPUR 13 SL. NO. DATE INITIAL 1 DATE OF DICTATION 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DISPATCH OF THE ORDER