Shri Alpesh Navinbhai Barot, Ahmedabad V. The Income Tax Officer, Ward-3(3)(1), Ahmedabad

ITA 927/AHD/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0882 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-07-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 19-11-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NAMITA KHURANA
• Keywords: Capital asset; Capital Gains
• Section: 139; 54B; 54F; 139(1); 139(4); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I .T .A . No .9 27 /A h d / 20 23 ( A s se ss m e nt Y e a r : 20 15- 16 ) Sh r i A l pe s h N a v in b hai B a r ot , 1, M oto B a r o t va s, N r . R ad he K r i sh na M an di r , T h a lt ej , Ah me da ba d - 3 80 05 9 Vs .I nc o m e Ta x O f fic er , War d- 3 ( 3 ) (1 ) , A h m e d a ba d [ P A N N o. B U N P B 1 01 7Q ] (Appellant) .. (Respondent) Appellant by : None Respondent by: Ms. Namita Khurana, Sr. DR D a t e of H ea r i ng 02.07.2024 D a t e of P r o no u n ce me nt 22.07.2024 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order 21.09.2023 passed for Assessment Year 2015-16. 2. The Assessee has taken the following grounds of appeal:- “1. The appellant humbly submits that the Ld CIT(A) has erred in law as well on facts while passing the Order by not granting benefit under Section54, that the appellant has utilized all the consideration received from the sale of Land for the construction of the residential house before the filling of the return under Section139 and thereby denying the exemption under Section54F of the Act.” 3. At the time of hearing before us, when the case was called up for hearing, none appeared on behalf of the assessee. Further, we observe that in the previous five occasions, the Authorized Representative of the assessee has sought adjournment. However, today none appeared on behalf of the assessee ITA No. 927/Ahd/2023 Shri Alpesh Navinbhai Barot vs. ITO Asst.Year –2015-16 - 2– when the matter was called up for hearing and no application for adjournment was also filed before us. Accordingly, we are proceeding to hear the case on merits, on the basis of material available on record. 4. The only ground in appeal is directed against order of Ld. CIT(Appeals) confirming the disallowance of exemption under Section 54F of the Act for a sum of Rs.1,74,62,500/-. The brief fact of the case is that the assessee filed the return of income for the Assessment year (AY) 2015-16 on 31.03.2017 declaring a total income of Rs 25,37,500/-. The case was selected for scrutiny. During the course of assessment proceedings, the AO found that the appellant sold a non-agricultural land bearing T.P. Survey No. 50, F.P. No. 193 Old Survey No. 169/1+2/2 and Survey No. 170/2 situated at Thaltej, Tal & Dist. Ahmedabad for total sale consideration of Rs. 8,00,00,000/-. The assessee held 25% share in the property and received a sum of Rs. 2,00,00,000/- as his share of the property from the purchaser. The AO found that the appellant claimed a deduction of Rs. 1,74,62,500/- under Section 54B of the Act. The assessee informed the AO during the course of assessment that there was a mistake in filing the return of income and the deduction was claimed under Section 54B of the Act instead of 54F of the Act, due to oversight. The AO found that the sale of the asset took place on 21.08.2014 for a consideration of Rs. 8,00,00,000/- and the assessee claimed exemption of Rs. 1,74,62,500/- being expenses incurred for construction of residential house before filing of return under Section 139(4) of the Act. The AO found that the mandate under sub Section (4) of Section 54F of the Act is that the amount not utilized towards the purchase of the flat has to be deposited before the due date of filing of return of return of income under Section 139(1) of the Act, in a specified bank account. In the case of the assessee, AO found that the entire amount of capital ITA No. 927/Ahd/2023 Shri Alpesh Navinbhai Barot vs. ITO Asst.Year –2015-16 - 3– gains on sale of asset which is not utilized and has not been deposited in a specified bank account before due date of filing of return under Section 139(1) of the Act. Therefore, AO held that since the assessee has not deposited the amount, the assessee is not enabled to claim exemption under Section 54F of the Act. Further, the AO found that the appellant has submitted bills in respect of construction of the new property which pertains to the period after the end of the period of 3 years from the date of sale of property. The AO held that the appellant has not submitted any evidence which shows that the construction of the property was completed within 3 years from the date of sale of the property. The AO also held that the appellant has nor submitted any evidence that he does not own more than one property as on the date of sale of the property. Therefore, the claim of exemption of Rs. 1,74,62,500/- under Section 54F of the Act was not allowed by the AO. 5. In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee on the ground that the assessee has failed to invest the capital gain on sale of property under consideration either for purchase of new property before the due date of filing of return of income and nor has the assessee deposited the unutilised/un- appropriated consideration in special capital gains account within the time prescribed under Section 139 (1) of the Act. The Ld. CIT(Appeals) observed that Section 54F lays down that the amount which is not utilised by the assessee for the purchase or construction of new asset before the date of furnishing of return of income under Section 139 shall be deposited by him in a specified capital gains account, however, this exercise was not done by the assessee. Further, Ld. CIT(Appeals) also observed that the assessee has not submitted any evidence which shows that the construction of the new property was completed within 3 years from the date of sale of the property. Therefore, ITA No. 927/Ahd/2023 Shri Alpesh Navinbhai Barot vs. ITO Asst.Year –2015-16 - 4– on facts, Ld. CIT(Appeals) observed that the assessee has grossly failed to establish any of the conditions laid down for claim of exemption under Section 54F of the Act. Accordingly, while dismissing the appeal of the assessee, Ld. CIT(Appeals) made the following observations: “5.2 Where, however, an assessee is unable to utilize the net sale consideration received on the transfer of the long term capital asset before the date of filing the return, sub-section (4) of section 54F provides that exemption from the capital gains tax under Section 45 of the Act would still be available, provided that the assessee deposits the unutilized/ unappropriated consideration in the Special Capital Gains Account and the amounts so deposited shall be deemed to be cost of the new asset. In the case of the appellant, it is seen that the appellant did not utilize the same within the time prescribed u/s 139(1). Section 54F clearly lays down that the amount which is not utilised by the appellant for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the appellant for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf. Therefore, the deposit should not be later that the due date applicable for furnishing the return of income under sub-section (1) of section 139 of the Act. Further, the AO also found that the appellant had not submitted any evidence which shows that the construction of the property was completed within 3 years from the date of sale of property. The AO also held that the appellant has nor submitted any evidence that he does not own more than one properties on the date of sale of the property. Therefore, I find that the appellant has not establish with satisfactory evidences before the AO that the claim of exemption of Rs 1,74,62,500 u/s 54F of the Act was allowable. The appellant has failed to fulfill more than one condition to claim exemption u/s 54F of the Act. Even in the appeal proceedings, the appellant did not respond and furnish necessary evidences to prove his claim of deduction u/s 54F of the Act. In view of the above, the appeal on this ground is dismissed. 6. Conclusion: in the result, appeal of the appellant is dismissed.” 6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals) confirming the additions made by the assessing officer. We observe that despite granting several dates of hearing and adjournments at the request of the Counsel for the assessee, none has appeared on behalf of the assessee to argue matter. Therefore, on the basis of material available on record, we are of the considered view that the assessee has not been able to establish that it has satisfied any of the conditions stipulated in Section 54F of the Act for the claim of exemption with respect to capital gains made on sale of ITA No. 927/Ahd/2023 Shri Alpesh Navinbhai Barot vs. ITO Asst.Year –2015-16 - 5– property. Neither has the assessee deposited the unutilised/un-appropriated portion of capital gains made on sale of property in the specified capital gains account before the due date of filing of return under Section 139(1) of the Act and nor has the assessee been able to establish that the construction of the new property was completed by the assessee within the period of 3 years from the date of sale of property as mandated by Section 54F of the Act. In addition to the above, Ld. CIT(Appeals) has also observed that the assessee has not been able to establish that the assessee did not own more than one property as on the date of the sale of such property, against which exemption under Section 54F of the Act has been sought to be claimed. Accordingly, looking into the facts placed before us, we find no infirmity in the order of Ld. CIT(Appeals) so as to call for any interference. 7. In the result, the appeal of the assessee is dismissed. This Order pronounced in Open Court on 22/07/2024 Sd/- Sd/- (NARENDRA PRASAD SINHA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/07/2024 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad