Shalini Agarwal, Kolkata V. ITO, Ward-45(4), Kolkata, Kolkata

ITA 957/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7593 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Keywords: Sale consideration of property below Jantri Value; Additional evidence
• Section: 143(3); 50C; 54F; 147; 54

Judgement Text

ITA NO. 957/KOL/2017 A.Y. 2013-2014 SHALINI AGARWAL 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 957/KOL/2017 ASSESSMENT YEAR: 2013-2014 SHALINI AGARWAL,................................... .............................APPELLANT MOONGIPA ROADWAYS, 119, COTTON STREET, KOLKATA-700 017 [PAN: ADCPA 9991 M] -VS.- INCOME TAX OFFICER,................................ .........................RESPONDENT WARD-45(4), KOLKATA, 3, GOVERNMENT PLACE, KOLKATA-700 001 APPEARANCES BY: SHRI SUBHAS AGARWAL, ADVOCATE, FOR THE ASSESSEE SHRI C.J. SINGH, SR. D.R. , FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 20, 2018 DATE OF PRONOUNCING THE ORDER : JANUARY 18, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLKATA DA TED 28.02.2017. 2. THE COMMON ISSUE INVOLVED IN GROUNDS NO. 1 & 2 O F THIS APPEAL RELATES TO THE DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 54F AS MADE BY THE ASSESSING OFFICER AMOUNT ING TO RS.99,95,500/- , WHICH IS RESTRICTED BY THE LD. CIT(APPEALS) TO RS .22,01,396/-. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 30.03.2014 DECLARING TOTAL INCOME OF RS.2,76,690/-. IN THE SAI D RETURN, LONG-TERM CAPITAL GAIN ARISING FROM THE SALE OF PROPERTY WAS SHOWN BY THE ASSESSEE ITA NO. 957/KOL/2017 A.Y. 2013-2014 SHALINI AGARWAL 2 AT RS.99,95,500/- AND THE SAME WAS CLAIMED TO BE EX EMPT UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 ON THE BASIS OF THE FOLLOWING WORKING:- SALE CONSIDERATION AS PER SEC. 50C OF I.T. ACT RS.1,36,00,000/ - TOTAL PURCHASE VALUE OF SOLD PROPERTY ON 20.01.2006 RS. 21,02,625/ - LESS: INDEX VALUE OF SOLD PROPERTY RS.21,02,625.852/497 RS. 36,04,500/ - CAPITAL GAIN RS. 99,95,500/ - PURCHASE OF LAND ON 27.02.2012 RS.1,06,04,753/ - COST OF CONSTRUCTION OF RESIDENTIAL HOUSE PROPERTY IN FY 2012-13 RS. 22,67,700/ - DEDUCTION CLAIMED U/S 54F OF THE I.T. ACT, 1961 RS. 99,95,500/ - 4. AS REGARDS THE CLAIM OF THE ASSESSEE FOR EXEMPTI ON UNDER SECTIN 54F IN RESPECT OF LAND PURCHASED FOR RS.1,06,04,753/- F OR CONSTRUCTION OF RESIDENTIAL HOUSE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE EXEMPTION UNDER SECTION 54F WAS CLAIMED BY THE ASSE SSEE FOR CONSTRUCTION OF HOUSE PROPERTY AND THE PURCHASE OF LAND WAS NOT COMING UNDER THE PURVIEW OF CONSTRUCTION OF HOUSE PROPERT Y. HE, THEREFORE, HELD THAT THE ASSESSEE WAS NOT ENTITLED FOR ANY DED UCTION UNDER SECTION 54F IN RESPECT OF INVESTMENT MADE IN PURCHASE OF LA ND. AS REGARDS THE COST OF CONSTRUCTION OF RESIDENTIAL HOUSE PROPERTY AMOUNTING TO RS.22,67,700/- AS CLAIMED BY THE ASSESSEE, THE ASSE SSING OFFICER FOUND THAT EVEN THOUGH THE RELEVANT EVIDENCE IN THE FORM OF BILLS FOR CONSTRUCTION OF HOUSE WAS FURNISHED BY THE ASSESSEE , NO EVIDENCE WAS PRODUCED BY HIM TO SHOW THAT THE CONSTRUCTION OF HO USE WAS COMPLETED WITHIN THE TIME STIPULATED IN SECTION 54F. HE ACCOR DINGLY DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 5 4F IN RESPECT OF COST OF CONSTRUCTION OF RESIDENTIAL HOUSE PROPERTY ALSO AMO UNTING TO RS.22,67,700/- AND DETERMINED THE TOTAL INCOME OF T HE ASSESSEE AT RS.1,02,72,190/- IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 14.03.2016. ITA NO. 957/KOL/2017 A.Y. 2013-2014 SHALINI AGARWAL 3 5. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, THE LD. CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54F IN RESPECT OF INVESTMEN T MADE IN PURCHASE OF PLOT FOR THE CONSTRUCTION OF RESIDENTIAL HOUSE BY R ELYING ON THE CBDT CIRCULAR NO.667 DATED 18.10.1993, WHEREIN IT WAS CL ARIFIED THAT FOR CLAIMING THE DEDUCTION UNDER SECTION 54 AND 54F IN RESPECT OF THE RESIDENTIAL HOUSE TO BE CONSTRUCTED WITHIN THE SPEC IFIED PERIOD, THE COST OF SUCH RESIDENTIAL HOUSE CAN BE TAKEN TO INCLUDE T HE COST OF THE PLOT ALSO. THE LD. CIT(APPEALS), HOWEVER, DID NOT FIND MERIT I N THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54F IN RESPECT OF COST OF CONSTRUCTION OF HOUSE PROPERTY AMOUNTING TO RS.22,6 7,700/- ON THE GROUND THAT THERE WAS NO EVIDENCE FILED BY THE ASSE SSEE TO SHOW THAT THE CONSTRUCTION OF HOUSE WAS COMPLETED BEFORE THE PRES CRIBED DATE AND THE SAME WAS IN HABITUAL CONDITION. HE ACCORDINGLY SUST AINED THE DISALLOWANCE OF RS.99,95,500/- MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 54F TO THE EXTENT OF RS.22,01,396/-. STILL AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBU NAL. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE IN THE FORM OF COMPLETION CERTIFICATE FOR THE RESIDENTIAL HOUSE PROPERTY CONSTRUCTED BY THE ASSES SEE ISSUED BY THE CONCERNED GRAM PANCHAYAT ON 31.03.2014 TO SUPPORT A ND SUBSTANTIATE THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 5 4F IN RESPECT OF THE COST OF CONSTRUCTION OF THE RESIDENTIAL PROPERTY. H E HAS ALSO FILED AN APPLICATION SEEKING ADMISSION OF THE SAID ADDITIONA L EVIDENCE STATING THEREIN THAT THE AUTHORITIES BELOW DID NOT AFFORD S UFFICIENT AND SPECIFIC OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE SAID ADD ITIONAL EVIDENCE. SINCE THE SAID ADDITIONAL EVIDENCE IS A RELEVANT EVIDENCE TO ADJUDICATE UPON THE ITA NO. 957/KOL/2017 A.Y. 2013-2014 SHALINI AGARWAL 4 ISSUE INVOLVED IN THE CASE OF THE ASSESSEE RELATED TO ITS CLAIM FOR DEDUCTION UNDER SECTION 54F IN RESPECT OF THE COST OF CONSTRUCTION OF THE RESIDENTIAL PROPERTY AND EVEN THE LD. D.R. HAS NOT RAISED ANY OBJECTION FOR ADMISSION OF THE SAME, THE ADDITIONAL EVIDENCE FILE D BY THE ASSESSEE IS ADMITTED. AS RIGHTLY CONTENDED BY THE LD. D.R., THE ASSESSING OFFICER IS REQUIRED TO GIVE AN OPPORTUNITY TO VERIFY THE SAID ADDITIONAL EVIDENCE, WHICH IS FILED BY THE ASSESSEE FOR THE FIRST TIME B EFORE THE TRIBUNAL. WE ACCORDINGLY RESTORE THIS ISSUE TO THE FILE OF THE A SSESSING OFFICER FOR DECIDING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UN DER SECTION 54F IN RESPECT OF COST OF CONSTRUCTION OF RESIDENTIAL HOUS E PROPERTY AFRESH IN THE LIGHT OF THE ADDITIONAL EVIDENCE FILED BY THE ASSES SEE. GROUNDS NO. 1 & 2 OF THE ASSESSEES APPEAL ARE ACCORDINGLY TREATED AS AL LOWED FOR STATISTICAL PURPOSES. 7. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE TRIBUNAL, THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUND CLAIMI NG THAT FOR COMPUTING THE DEDUCTION UNDER SECTION 54F, THE ACTUAL NET CON SIDERATION RECEIVED IN RESPECT OF THE ORIGINAL ASSET SHOULD BE TAKEN INTO CONSIDERATION AND NOT THE DEEMED CONSIDERATION AS ADOPTED BY INVOKING THE PROVISIONS OF SECTION 50C. WE HAVE ADMITTED THIS ADDITIONAL GROUN D RAISED BY THE ASSESSEE KEEPING IN VIEW THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LIMITED [229 ITR 383]. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO CONSIDER THE CLA IM OF THE ASSESSEE WHILE RE-COMPUTING THE DEDUCTION ALLOWED TO THE ASSESSEE UNDER SECTION 54F KEEPING IN VIEW THE DECISION OF THIS TRIBUNAL IN TH E CASE OF SMT. CHANDRAKALA DEVI BANSAL VS.- ITO (ITA NO. 2481/KOL /2005 DATED 20.04.2007) AND IN THE CASE OF ACIT VS.- HARMEET K AUR (ITA NO. 1482/KOL/2014 DATED 10.10.2018). 8. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DIRECTING THE ASSESSING OFFICER TO TAX THE CAPITAL GAINS OF RS.77,94,104/- FOR A.Y. 2015-16 BY INITIATING THE P ROCEEDINGS UNDER ITA NO. 957/KOL/2017 A.Y. 2013-2014 SHALINI AGARWAL 5 SECTION 147 ON THE GROUND THAT THE LD. CIT(APPEALS) EXCEEDED HIS JURISDICTION WHILE GIVING THE SAID DIRECTION. 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES ON THIS ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON REC ORD. IT IS OBSERVED THAT THE LD. CIT(APPEALS) AFTER HAVING ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54F TO THE EXTENT OF RS .77,94,104/- AND AFTER HAVING FOUND THAT THE CONSTRUCTION OF THE HOUSE PRO PERTY OF THE ASSESSEE WAS NOT COMPLETED WITHIN THE PRESCRIBED PERIOD, WAS OF THE VIEW THAT THE DEDUCTION ALLOWED UNDER SECTION 54F WAS LIABLE TO B E WITHDRAWN IN ASSESSMENT YEAR 2015-16 IN WHICH THREE YEARS HAD EX PIRED FROM THE DATE OF TRANSFER. HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO TAX THE CAPITAL GAINS OF RS.77,94,104/- IN THE HANDS OF THE ASSESSEE FOR A.Y. 2015- 16 BY INITIATING THE PROCEEDINGS UNDER SECTION 147 OF THE ACT. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE SAID DIRECTION GIVEN BY THE LD. CIT(APPEALS) FOR A.Y. 2015-16, WHICH WAS NO T IN APPEAL BEFORE HIM WHILE DISPOSING OF THE APPEAL OF THE ASSESSEE FOR A .Y. 2013-14 IS BEYOND HIS POWER AND JURISDICTION. ALTHOUGH THE LD. D.R. H AS SOUGHT TO JUSTIFY THE DIRECTION GIVEN BY THE LD. CIT(APPEALS) BY RELYING ON SUB-SECTION (1) OF SECTION 150, WE FIND THAT THE SAID PROVISIONS IS NO T RELEVANT IN THE CONTEXT OF THE POWERS OF THE LD. CIT(APPEALS), SINCE THE SA ID POWERS ARE GOVERNED BY SECTION 251 OF THE ACT, WHICH IS RELEVANT. IN TH E CASE OF R.S. DAVEY VS.- CIT [140 ITR 1035], A SIMILAR ISSUE RELATING TO SCO PE OF POWERS OF FIRST APPELLATE AUTHORITY HAD ARISEN FOR THE CONSIDERATIO N OF HONBLE CALCUTTA HIGH COURT AND IT WAS HELD BY THE HONBLE CALCUTTA HIGH COURT THAT THE LD. CIT(APPEALS) WAS NOT COMPETENT TO GIVE TO THE ASSES SING OFFICER THE DIRECTION IN RESPECT OF AN ASSESSMENT YEAR WHICH WA S NOT IN APPEAL BEFORE HIM. RESPECTFULLY FOLLOWING THE SAID DECISION OF TH E HONBLE JURISDICTIONAL HIGH COURT, WE CANCEL THE DIRECTION GIVEN BY THE LD . CIT(APPEALS) TO THE ASSESSING OFFICER IN RESPECT OF THE ASSESSMENT YEAR 2015-16, WHICH WAS NOT IN APPEAL BEFORE HIM AND ALLOW GROUND NO. 3 OF THE ASSESSEES APPEAL. ITA NO. 957/KOL/2017 A.Y. 2013-2014 SHALINI AGARWAL 6 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 18, 2 019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 18 TH DAY OF JANUARY, 2019 COPIES TO : (1) MS. SHALINI AGARWAL, MOONGIPA ROADWAYS, 119, COTTON STREET, KOLKATA-700 017 (2) INCOME TAX OFFICER, WARD-45(4), KOLKATA, 3, GOVERNMENT PLACE, KOLKATA-700 001 (3) COMMISSIONER OF INCOME TAX (APPEALS)-13, KOLKAT A, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.