Vijay Gulabdas Broker, Pune V. Income-tax Officer, Pune

ITA 984/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5241 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Tangible material
• Section: 143(3); 54F; 147; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 984 /P U N/201 7 / ASSESSMENT YEAR : 20 09 - 10 SHRI VIJAY GULABDAS BROKER, 99, NATIONAL CO - OP HSG SOCIETY, BANER ROAD, PUNE 411007 . / APPELLANT PAN: AAVPB4896Q VS. THE INCOME TAX OFFICER , WARD 2 (4) , PUNE . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SHRI PANKAJ GARG / DATE OF HEARING : 1 0 . 0 7 .201 9 / DATE OF PRONOUNCEMENT: 19 . 0 8 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 2 , PUNE , DATED 27 . 0 1 .201 7 RELATING TO ASSESSMENT YEAR 20 09 - 10 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE AS SESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: - ITA NO. 984 /P U N/20 1 7 SHRI VIJAY G BROKER 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW: 1 . THE CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF THE ASSESSEES CLAIM FOR EXEMPTION U/S 54F ON GROUNDS THAT SUB SECTION (IV) OF SECTION 54 WAS APPLIC ABLE ONLY WHEN THE ASSESSEE WAS UNABLE TO APPROPRIATE THE AMOUNT SOUGHT AS DEDUCTION TOWARDS PURCHASE / CONSTRUCTION OF THE NEW ASSET AND THAT THE ASSESSEE HAD PURCHASED HOUSE PROPERTY BY PAYING ENTIRE CONSIDERATION. THE APPELLANT PLEADS THAT ITS CLAIM IS VALID AND OUGHT TO BE ALLOWED. 3. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND OF APPEAL WHICH READS AS UNDER: - 1] THE ASSESSEE SUBMITS THAT THE REOPENING U/S 148 IS NOT BASED ON ANY NEW TANGIBLE MATERIAL AND ACCORDINGLY, THE REOPENING U/S 148 IS BA D IN LAW AND THE CONSEQUENTIAL REASST. ORDER PASSED U/S 147 IS NULL AND VOID. 4. THE ADDITIONAL GROUND OF APPEAL RAISED BY ASSESSEE INVOLVES LEGAL ISSUE AND DOES NOT REQUIRE INVESTIGATION OF FACTS, HENCE THE SAME IS ADMITTED FOR ADJUDICATION. 5. THE ISSU E RAISED IN THE PRESENT APPEAL IS AGAINST DEDUCTION CLAIMED UNDER SECTION 54F OF THE ACT. 6 . BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD SOLD A PIECE OF LAND AND HAD SHOWN INCOME FROM LONG TERM CAPITAL GAINS. T HE ASSESSING OFFICER NOTED THAT NET SALE CONSIDERATION WAS 7.38 CRORES, OUT OF WHICH THE ASSESSEE HAD PURCHASED RESIDENTIAL PROPERTY I.E. FLAT IN ROCKCLIFF, BANDRA, MUMBAI WORTH 7.60 CRORES. THE ASSESSEE HAD SOURCED SUM OF 1,26,93,638/ - FROM THE NE T CONSIDERATION RECEIVED OUT OF LAND SOLD DURING THE YEAR AND CLAIMED EXEMPTION OF 1,23,16,193/ - . FURTHER, THE ASSESSEE HAD CLAIMED EXEMPTION OF 48,51,325/ - AGAINST INVESTMENT IN CAPITAL GAIN ACCOUNT SCHEME. THE ASSESSING OFFICER FURTHER NOTED THAT T HE ENTIRE SALE ITA NO. 984 /P U N/20 1 7 SHRI VIJAY G BROKER 3 CONSIDERATION WAS UTILIZED FOR THE PURPOSE OF PURCHASE OF NEW FLAT AND HENCE, NO AMOUNT WAS LEFT TO BE APPROPRIATED AND SO THE ASSESSEE COULD NOT AVAIL THE DEDUCTION UNDER SECTION 54F(4) OF THE ACT AT 48,51,325/ - . CONSEQUENTLY, REASONS FO R REOPENING THE ASSESSMENT WERE RECORDED AND NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT. IN REPLY, THE ASSESSEE SUBMITTED LETTERS STATING THAT THE RETURN OF INCOME ORIGINALLY FILED ON 06.11.2009 MAY BE TREATED AS SUBMITTED IN RESPONSE TO NOTICE ISSUED UNDER SECTION 148 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED THAT THE AMOUNT WHICH WAS DEPOSITED IN CAPITAL GAIN ACCOUNT SCHEME WAS UTILIZED FOR CONSTRUCTION OF HABITABLE HOUSE WAS NOT ACCEPTED ON THE GROUND THAT THE ENTIRE SALE CONSIDERATION WAS UTILIZED FOR MAKING PAYMENTS TO THE CO - OPERATIVE SOCIETY AND THERE BEING NO AMOUNT LEFT TO BE APPROPRIATED, THE ASSESSEE WAS NOT ENTITLED TO THE AFORESAID CLAIM MADE UNDER SECTION 54F(4) OF THE ACT. HENCE, AN ADDITION OF 48 ,51,325/ - WAS MADE IN THE HANDS OF ASSESSEE. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 7 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE YEAR UNDER APPEAL IS ASSESSME NT YEAR 2009 - 10, WHEREIN THE ASSESSEE SOLD LAND AT THANE FOR 7.46 CRORES ON 01.06.2008. THE TOTAL LONG TERM CAPITAL GAINS ARISING ON THE SAID SALE OF LAND WAS 7.16 CRORES. IN ASSESSMENT YEAR 2008 - 09, THE ASSESSEE HAD SOLD ANOTHER LAND AND THE GAIN AR ISING THEREFROM WAS 6.50 CRORES. FURTHER, THE ASSESSEE PURCHASED A N OLD FLAT IN MUMBAI FOR 7.60 CRORES ON 24.12.2008 ALONG WITH OTHER REGISTRATION CHARGES TOTALING ABOUT 8 CRORES. THE CAPITAL GAINS OF ASSESSMENT YEAR 2008 - 09 WAS ADJUSTED AGAINST P URCHASE COST OF NEW FLAT AND THE BALANCE AVAILABLE WAS ABOUT 1.23 ITA NO. 984 /P U N/20 1 7 SHRI VIJAY G BROKER 4 CRORES. THE SAID SUM WAS CLAIMED AS INVESTMENT BY THE ASSESSEE AGAINST THE LONG TERM CAPITAL GAINS OF 7.16 CRORES ARISING IN ASSESSMENT YEAR 2009 - 10. IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THIS FACT HAS NOT BEEN DISPUTED BY THE ASSESSING OFFICER. 8 . NOW, COMING TO THE NEXT INVESTMENT OF 50 LAKHS IN CAPITAL GAINS ACCOUNT SCHEME, WHICH WAS AFTER 31.03.2009. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT AT 48,51,325/ - . INITIALLY, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT AND THE SAID CLAIM OF ASSESSEE WAS ACCEPTED. HOWEVER, REASONS FOR REOPENING THE ASSESSMENT WERE RECORDED UNDER SECTION 148 OF THE ACT W ITHIN FOUR YEARS ON THE GROUND THERE WAS EXCESS CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT AND THE ADDITION WAS MADE IN THE HANDS OF ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THERE IS NO MERIT IN THE AFORESAID ADD ITION IN THE HANDS OF ASSESSEE AS THE SAID DEDUCTION WAS CLAIMED WITHIN PROVISIONS OF THE ACT AND IN ANY CASE, THE ASSESSEE HAD UTILIZED THE SAME FOR RENOVATING THE FLAT PURCHASED BY IT AND THE SAID CLAIM SHOULD BE ALLOWED IN THE HANDS OF ASSESSEE. 9 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED STRONG RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 10 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF PRESENT CASE, THE FACTS HAVE TO BE SEEN IN SERIATIM I.E. IN ASSESSMENT YEAR 2008 - 09 THE ASSESSEE SELLS ONE PROPERTY, WHICH IS A PIECE OF LAND AND THE GAIN ARISING THEREFROM WAS 6.50 CRORES. FURTHER, IN ASSESSMENT YEAR 2009 - 10 ITA NO. 984 /P U N/20 1 7 SHRI VIJAY G BROKER 5 I.E. THE YEAR UNDER APPEAL, THE ASSESSEE SOLD ANOTHER LAND AT THANE FOR 7.46 CRORE S ON 01.06.2008 AND THE TOTAL LONG TERM CAPITAL GAINS WERE 7.16 CRORES. AGAINST BOTH THESE LANDS SOLD BY ASSESSEE, THE ASSESSEE PURCHASED AN OLD FLAT IN MUMBAI ON 24.12.2008 AND THE TOTAL INVESTMENT ALONG WITH REGISTRATION CHARGES WORKS OUT TO 8 CRORE S. THE ASSESSEE FIRST CLAIMS THE DEDUCTION ON ACCOUNT OF PROPERTY SOLD IN ASSESSMENT YEAR 2008 - 09 AND THE BALANCE WHICH WAS AVAILABLE FOR CLAIMING THE DEDUCTION UNDER SECTION 54F OF THE ACT WAS ONLY 1.23 CRORES ON ACCOUNT OF INVESTMENT IN NEW FLAT. THE SAID CLAIM HAS BEEN MADE BY ASSESSEE AND ALLOWED BY AUTHORITIES BELOW AND NOT DISPUTED. FURTHER, THE ASSESSEE DEPOSITED 50 LAKHS IN CAPITAL GAINS ACCOUNT SCHEME AFTER 31.03.2009, WHICH ADMITTEDLY, IS OUT OF SALE PROCEEDS OF PLOT OF LAND SOLD IN ASSESSM ENT YEAR 2009 - 10. THE ASSESSEE FURTHER CLAIMED THE DEDUCTION UNDER SECTION 54F OF THE ACT AT 48,51,325/ - . FIRST OF ALL, WE FIND NO MERIT IN THE RE - ASSESSMENT ORDER PASSED IN THE HANDS OF ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD NO FUNDS TO MAKE THE AFORESAID INVESTMENT IN THE CAPITAL GAINS ACCOUNT SCHEME. AS AGAINST LONG TERM CAPITAL GAINS OF 7.16 CRORES ARISING OUT OF THIS YEAR, THE ASSESSEE HAD ONLY CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT AT 1.23 CRORES AS THE BALANCE INVESTMENT WAS SH OWN TO BE MADE OUT OF PLOT OF LAND SOLD IN ASSESSMENT YEAR 2008 - 09 AND THE CAPITAL GAINS ARISING THEREFROM. SO, THE ASSESSEE HAD AMPLE FUNDS AVAILABLE WITH IT TO MAKE THE AFORESAID DEPOSITS IN CAPITAL GAINS ACCOUNT SCHEME. FURTHER, IT MAY ALSO BE POINTED OUT THAT THE ASSESSEE HAS WITHDRAWN THE SAID AMOUNT FROM THE CAPITAL GAINS ACCOUNT SCHEME FOR MAKING IMPROVEMENTS TO THE FLAT PURCHASED BY IT, AGAINST WHICH IT HAD CLAIMED THE AFORESAID DEDUCTION UNDER SECTION 54F OF THE ACT, IN SUCCEEDING YEAR. ACCORDIN GLY, WE HOLD THAT THERE WAS NO MERIT IN THE DENIAL OF AFORESAID DEDUCTION CLAIMED UNDER SECTION 54F OF THE ACT. REVERSING ITA NO. 984 /P U N/20 1 7 SHRI VIJAY G BROKER 6 THE ORDER OF CIT(A), WE ALLOW THE CLAIM OF ASSESSEE. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 11 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 19 TH DAY OF AUGUST , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / J UDICIAL MEMBER / PUNE ; DATED : 19 TH AUGUST , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 2 , PUNE ; 4. THE PR. CIT - 2 , PUNE ; 5. 6. , , / DR B , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE