Sh. Harmesh Kumar Kalsi, Mohali V. ITO, Mohali

ITA 925/CHANDI/2018

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5951 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH SR DR
• Assessee Lawyers: N K SAINI
• Keywords: Set aside; Capital Gains
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC,CHANDIGARH , BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. ITA NO. 925/CHD/2018 / ASSESSMENT YEAR : 2009-10 SHRI HARMESH KUMAR KALSI, D-129, INDUSTRIAL AREA, PHAASE-7, MOHALI. THE ITO, WARD 6(3), MOHALI. ./ PAN NO: AHKPK6895Q / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI N.K.SAINI # ! ' / REVENUE BY : SHRI MANJIT SINGH, SR.DR $ % ! &/ DATE OF HEARING : 24.12.2018 '()* ! &/ DATE OF PRONOUNCEMENT : 24.12. 2018 DATE OF RELEASE OF ORDER : 21.01.2019 !/ ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 16.05.2018 OF THE COMMISSIO NER OF INCOME TAX (APPEALS)-I, [HEREINAFTER REFERRED TO AS CIT(A)], LUDHIANA. 2. THIS IS SECOND ROUND OF APPEAL BEFORE US. THE IS SUE RAISED IN THIS APPEAL IS RELATING TO THE ELIGIBILIT Y OF THE ASSESSEE TO CLAIM EXEMPTION U/S 54 OF THE ACT IN RE SPECT OF THE AMOUNT CAPITAL GAINS INVESTED IN RESIDENTIAL PROPER TY. THE ASSESSEE SOLD HIS PROPERTY ON 01.09.2008 FOR A SUM OF RS. 65 LACS AND PURCHASED A RESIDENTIAL PLOT FOR A SUM OF RS. 28 LACS INCLUDING STAMP DUTY THEREUPON AND CLAIMED EXEMPTIO N U/S 54 OF THE ACT PLEADING THAT THE SAID PROPERTY/PLOT WAS PURCHASED FOR RESIDENTIAL PURPOSES. THE AO, HOWEVER , DENIED ITA-925/CHD/2018 PAGE 2 OF 4 THE CLAIM OF THE ASSESSEE OBSERVING THAT THE PROPER TY IN QUESTION WAS A PLOT AND NOT A RESIDENTIAL HOUSE. 3. THE MATTER WENT UP TO THE LEVEL OF THE TRIBUNAL. THE TRIBUNAL VIDE ITS ORDER DATED 24.09.2015 PASSED IN ITA 1035/CHD/2013 OBSERVED THAT THE STATUTE HAS GIVEN THREE YEARS TO AN ASSESSEE TO CONSTRUCT A RESIDENTIAL HOU SE. THAT IF THE ASSESSEE CONSTRUCTS A RESIDENTIAL HOUSE WITHIN THREE YEARS FROM THE DATE OF TRANSFER OF THE PROPERTY PURSUANT TO WHICH THE CAPITAL GAIN HAS ACCRUED TO THE ASSESSEE, THEN THE ASSESSEE IS TO BE ALLOWED EXEMPTION U/S 54 OF THE ACT. THE TRI BUNAL, THEREFORE, OBSERVING THAT SINCE INTENTION OF THE AS SESSEE TO CONSTRUCT A RESIDENTIAL HOUSE WITHIN THREE YEARS OF THE DATE OF CONSTRUCTION WAS NOT CONSIDERED/EXAMINED BY THE AO, RESTORED THE MATTER TO THE FILE OF THE AO TO EXAMINE THE ADD ITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE REGARDING INTENT ION OF THE ASSESSEE TO CONSTRUCT RESIDENTIAL HOUSE ON THE PLOT IN QUESTION. 4. IN THE SET ASIDE PROCEEDINGS, THE AO REFERRING T O CERTAIN EVIDENCES LIKE KHASRA GIRDAWARI AND THE REPORT OF T HE MUNICIPAL COUNCIL OBSERVED THAT THE ASSESSEE HAD NO T APPLIED FOR SANCTION OF ANY PLAN ETC. AND THAT THE ASSESSEE HAD FAILED TO PROVE THAT IT HAD CONSTRUCTED THE RESIDENTIAL HO USE ON THE PROPERTY WITHIN THREE YEARS AND ACCORDINGLY, DISALL OWED THE CLAIM OF THE ASSESSEE. 5. THE LD. CIT(A) CONFIRMED THE ORDER OF THE AO. 6. NOW BEFORE THIS BENCH, LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT AS PER THE DIRECTIONS OF THE TRIBUNA L, WHAT WAS TO BE SEEN BY THE AO WAS THE INTENTION OF THE ASSES SEE TO ITA-925/CHD/2018 PAGE 3 OF 4 CONSTRUCT A RESIDENTIAL HOUSE ON THE PROPERTY. HE HAS SUBMITTED THAT THE ASSESSEE HAS INFACT CONSTRUCTED A RESIDENTIAL HOUSE ON THE PROPERTY WITHIN THREE YEAR S. THE NEXT LIMB OF THE ARGUMENT OF THE LD. COUNSEL IS THAT EVE N IF THE ASSESSEE COULD NOT CONSTRUCT THE HOUSE WITHIN THREE YEARS, IN THE FIRST YEAR I.E. IN THE YEAR OF TRANSFER OF PROP ERTY, WHAT IS TO BE SEEN IS THE INVESTMENT MADE IN THE PROPERTY AND THE INTENTION OF THE ASSESSEE TO CONSTRUCT A RESIDENTIA L HOUSE. 7. THE LD. DR ON THE OTHER HAND, HAS RELIED UPON TH E FINDINGS OF THE LOWER AUTHORITY AND HAS SUBMITTED T HAT SINCE THE ASSESSEE COULD NOT FURNISH RELIABLE EVIDENCE TH AT THE RESIDENTIAL HOUSE HAS BEEN CONSTRUCTED ON THE PLOT IN QUESTION, HENCE THE ASSESSEE HAS BEEN RIGHTLY DENIE D THE CLAIM OF EXEMPTION U/S 54 OF THE ACT. 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO GONE THROUGH RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS RELIED UPON THE COPY OF KHASRA GIRDAWARI TO SHOW THAT IN T HE GIRDAWARI, THE HALKA PATWARI ( VILLAGE REVENUE OFF ICIAL) HAS MENTIONED THE DETAIL OF PROPERTY AS BOUNDARY WALL A ND HOUSE. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE HAS INVIT ED OUR ATTENTION TO A PHOTOGRAPH SHOWING ONE ROOM CONSTRUC TED OVER A PROPERTY. HOWEVER, IN MY VIEW, THE AFORESAID EVID ENCE IS NOT SUFFICIENT TO HOLD THAT THE ASSESSEE HAS BUILT A RE SIDENTIAL HOUSE ON THE PROPERTY IN QUESTION. I, THEREFORE, R ESTORE THIS MATTER TO THE FILE OF THE AO TO VERIFY, AFTER IDENT IFYING THE PROPERTY IN QUESTION, AS TO WHETHER A RESIDENTIAL H OUSE HAS BEEN CONSTRUCTED BY THE ASSESSEE ON THE AFORESAID P ROPERTY, IF IT IS FOUND SO, THEN TO ALLOW THE CLAIM OF THE ASSE SSEE. SO FAR ITA-925/CHD/2018 PAGE 4 OF 4 AS THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESS EE THAT EVEN IF THE ASSESSEE HAS NOT CONSTRUCTED THE HOUSE OVER THE PROPERTY, THE CLAIM IS TO BE REJECTED AFTER PASSING OF THREE YEARS IS CONCERNED, I AM NOT CONVINCED WITH THE AFO RESAID AVERMENT OF LD. COUNSEL FOR THE ASSESSEE. NO EVIDE NCE HAS BEEN PLACED ON THE FILE TO SHOW THAT THE ASSESSEE R EALLY INTENDED TO CONSTRUCT THE PROPERTY BUT DUE TO SOME EXTRAORDINARY CIRCUMSTANCES BEYOND THE CONTROL OF T HE ASSESSEE, THE ASSESSEE COULD NOT CONSTRUCT THE PROP ERTY. UNDER THE CIRCUMSTANCES, IT CANNOT BE SIMPLY ASSUME THAT THERE WAS REALLY ANY INTENTION OF THE ASSESSEE TO C ONSTRUCT THE PROPERTY. HOWEVER, AS OBSERVED ABOVE, IF ON THE PL OT, EVEN AS ON TODAY, THE PROPERTY IS FOUND CONSTRUCTED WITH A RESIDENTIAL HOUSE, TAKING INTO CONSIDERATION THE BENEFICIAL PRO VISIONS OF THE STATUTE PROMOTING HOUSING, THE ASSESSEE WILL BE ALLOWED THE ELIGIBLE BENEFIT AS PER LAW. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24.12.2018. SD/- ( ) (SANJAY GARG) / JUDICIAL MEMBER DATED: 21.01. 2019 POONAM (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ / / CIT 4. $ / ( )/ THE CIT(A) 5. -01 2 , & 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7% / GUARD FILE (+ $ / BY ORDER, 8 # / ASSISTANT REGISTRAR