Smt. Vilasben Bhailalbhai patel, Baroda V. The DCIT.,Cent.Circle-2, Baroda

ITSSA 36/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2657 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 09-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Corroborative evidences
• Section: 143(3); 54B; 54F; 153A; 139(1); 54; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I SANDEEP GOSAIN , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SMT. VILASBENBHAILALBHAI PATEL, 1, PRITHVAN SOCIETY, OPP. TUBE COMPANY, OLD PADRA ROAD, VAODARA PAN: AGXPP8106H (APPELLANT) VS THE DEPUTY CIT , CENTRAL CIRCLE - 2 , VADODARA (RESPONDENT) REVENUE BY : S H RI SAMIR T EKRIWAL , CIT - D . R. ASSESSEE BY: SHRI MANISH SHAH , A.R. DATE OF HEARING : 02 - 0 3 - 2 020 DATE OF PRONOUNCEMENT : 03 - 03 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOUN TANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2010 - 11 , ARI SES FROM ORDER OF THE CIT(A) - 12, AHMEDABAD DATED 24 - 11 - 2 017 , IN PROCEEDINGS UNDER SECTION 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWIN G GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEAL) - 12, AHMEDABAD, HAS ERRED IN CONFIRMING DISALLOWANCE MADE BY THE LD AO OF EXEMPTION TO THE EXTENT OF RS.7,00,0 00/ - U/S 54B OF THE ACT CLAIMED IN THE RETURN OF INCOME,ON THE GROUND THAT AMOUNT OF RS.7,00,000/ - HAS BEEN PAID FOR PURCHASE OF NEW CAPITAL ASSET BEFORE THE DATE OF TRANSFER OF ORIGINAL CAPITAL ASSET. YOUR APPELLANT SUBMITS THAT AFORESAID PAYMENTS OF RS.7 ,00,000/ - ARE IN RESPECT OF THE LAND(NEW ASSET) PURCHASED AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET. WHILE THESE PAYMENTS OF I T (SS) A NO . 36 / A HD/20 18 A SS ESSMENT YEAR 2010 - 11 I.T (SS) .A NO. 3 6 /AHD/20 18 A.Y. 2010 - 11 PAGE NO SMT. VILASBENBHAILALBHAI PATEL VS. IT O 2 RS.7,00,000/ - WERE MADE BEFORE TRANSFER OF THE ORIGINAL ASSETFI.E. ASSET BEING SOLD),IT IS SUBMITTED THAT THE REQUIREMENT OF 54B IS TO PURCHASE NEW ASSET WITHIN A PERIOD OF 2YEARS AFTER DATE OF TRANSFER OF ORIGINAL ASSET.THE SECTION DOES NOT STIPULATE THAT THE ENTIRE PAYMENT SHOULD BE MADE AFTER TRANSFER OF ORIGINAL ASSET. THE STIPULATION IS ONLY REGARDING ACQUISITION OF THE NE W CAPITAL ASSET WITHIN THE STIPULATED TIME FRAME WHICH YOUR APPELLANT HAS FULFILLED. HENCE, YOUR APPELLANT PRAYS YOUR HONOR TO HOLD SO AND KINDLY DIRECT THE ID. AO TO DELETE THE IMPUGNED DISALLOWANCE OF RS.7,00,000/ - . 3 . THE ASSESSEE HAS ALSO RAISED ADDI TION GROUND OF APPEAL AS FOLLOWS : - 1. THE LD. ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN DISALLOWING EXEMPTION OF RS.7,00,000/ - OUT OF THE TOTAL CLAIM OF RS.57,17,538/ - U/S.54B OF THE I.T. ACT, 1961 WITHOUT APPRECIATING THE FACT THAT NO INCRIMINA TING MATERIAL IN RESPECT OF CLAIM U/S.54B WAS FOUND DURING THE COURSE OF SEARCH PROCEEDING, AND HENCE, CLAIM OF EXEMPTION U/S.54B CANNOT BE DISTURBED IN 153A PROCEEDINGS WITHOUT ANY REFERENCE TO INCRIMINATING MATERIAL. 4 . IN RESPECT OF ADDITIONAL GROUND OF APPEAL FILED BY THE ASSESSEE, WE CONSIDER THAT HON BLE SUPREME COURT IN THE CASE OF NTPC VS. CIT 229 ITR 383 OBSERVED THAT IF ANY ISSUE IS GOING TO AFFECT THE TAXABILITY OF ASSESSEE, THE ASSESSEE COULD BE PERMITTED TO RAISE THAT PLEA EVEN FOR THE FIRS T TIME BEFORE THE SECOND APPELLATE AUTHORITY. THEREFORE, T HE ADDITIONAL GROUND OF APPEAL FILED BY THE ASSESSEE I S ADMITTED AND WE TAKE UP FOR ADJUDICATION THE ADDITIONAL GROUND OF APPEAL AS BELOW . 5 . THE FACT IN BRIEF IS THAT A SEARCH U/S. 132 OF THE ACT WAS CARRIED ON 9 TH JAN, 2013 IN RASHMIKANT BHATT GROUP CASES INCLUDING THE CASE OF THE ASSESSEE. DURING THE COURSE OF ASSES SMENT, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS SHOWN CAPITAL GAIN OF RS. 57,17,538/ - FROM SALE OF D HARAPURA LAND AND SAME W AS CLAIMED AS EXEMPT U/S. 54B OF THE ACT. ON VERIFIC ATION, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED EXEMPTION U/S. 54B OF THE ACT ON PURCHASING OF THE NEW AGRICULTURAL LAND AT KANZAT. THE ASSESSING OFFICER HAS FURTHER NOTICED FROM THE DET AIL OF PAYMENT MADE TOWARDS PURCHASE OF THE SAID AGRICULTURAL LAND FURNISHED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS THAT ASSESSEE HAD MADE PAYMENT OF RS. 7 LACS I.T (SS) .A NO. 3 6 /AHD/20 18 A.Y. 2010 - 11 PAGE NO SMT. VILASBENBHAILALBHAI PATEL VS. IT O 3 TOWARDS PURCHASE OF SAID LAND BEFORE THE DATE OF SALE OF DHA RAPURA LAND. THE AS SESSING OFFICER OBSERVED THAT AS PER SECTION 54B OF THE ACT , THE ASSESSEE HAS TO PURCHASE NEW AGRICULTURAL LAND WITHIN TWO YEARS AFTER THE DATE OF TRANSFER OF CAPITAL ASSET AND INVESTMENT MADE BEFORE THE DATE OF TRANSFER OF ORIGINAL ASSET CANNOT BE ALLOWED AS EXEMPTION U /S. 54B OF THE ACT. THE ASSESSING OFFICER HAS ALSO STATED THAT SECTION 54B IS DIFFERENT FROM SECTION 54 OF THE ACT. THE SECTION 54 & SECTION 54F HAS CLEARLY SPECIFIED THAT INVESTMENT CAN BE MADE BEFORE ONE YEAR OR TWO YEARS AFTER THE DATE O F TRANSFER OF CAPITAL ASSET. BUT SECTION 54B DOES NOT MENTION THAT NEW ASSET CAN BE PURCHASED BEFORE THE DATE OF TRANSFER. THEREFORE, CLAIM OF EXEMPTION TO THE EXTENT OF RS. 7 LACS WAS DISALLOWED. 6 . AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A) AND THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE . 7 . DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COU N SEL HAS VEHEMENTLY CONTENDED THAT NO INCRIMINATING MATERIAL WAS FOUND THEREFORE NO DISALLOWANCE U/S. 54B OF THE ACT CAN BE MADE IN THE CASE OF THE ASSESSEE. THE LD. COUNSEL HAS PLACED RELIANCE ON T H E DECISION OF HON BLE GUJARAT HIGH COUR T IN THE CASE OF PR. CIT - 4 SAUM Y A CONSTRUCTION PVT. LTD. (2017) 81 TAXMAN.COM 292 (GUJ) DATED 14 TH MARCH, 2016. ON THE OTHER HA ND, LD. DEPARTMENTAL REPRESENTATIVE HAS CONTENDED THAT THIS ISSUE WAS NOT RAISED BEFORE THE LD. CIT(A) THEREFORE THIS WAS NOT EXAMINED BY THE LOWER AUTHORITIES AND HE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES. I.T (SS) .A NO. 3 6 /AHD/20 18 A.Y. 2010 - 11 PAGE NO SMT. VILASBENBHAILALBHAI PATEL VS. IT O 4 8 . WE HAVE HEARD BOTH THE SIDES AND PERU SED THE MA TERIAL ON RECORD CAREFULLY. IT IS N OTICED THAT ASSESSEE HAS SHOWN CAPITAL GAIN OF RS. 57 , 17 , 538/ - FROM SALE OF DARAPURA LAND AND CLAIMED FULL AMOUNT OF SALE CONSIDERATION EXEMPTION U/S. 5 4B OF THE ACT TO THE AMOUNT OF R S. 57 , 17 , 538/ - . DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO FILE THE SUPPORTING EVIDENCES WITH RESPECT TO THE CLAIM OF EXEMPTION U/S. 54B OF THE ACT . A S PER THE SUBMISSION MADE BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS GIVEN FULL DETAIL OF PAYMENT MADE BY CHEQUES ON DIFFERENT DATES FOR PURCHASE OF THE NEW AGRICULTURAL LAND. ON VERIFICATION OF THE DETAIL FILED BY THE ASS ESSEE, THE ASSESSING OFFICER OBSERVED THAT A PAYMENT TO THE AMOUNT FOR R S. 7 LACS TOWARDS PURCHASE OF NEW A SSET WAS MADE BEFORE THE DATE O F TRANSFER OF EXISTING CAPITAL ASSET. THE ASSESSEE HAS FILED RETURN OF INCOME U/S. 1 53A OF THE ACT TO THE AMOUNT OF RS. 14 , 75 , 110/ - AN D THE SAME INCOME WAS DECLARED IN THE ORIGINAL RETURN OF INCOME FILED U/S. 139(1) OF THE AC T ON 27 TH OCTOBER, 2010. IT IS CLEARLY DEMONSTRATED FROM THE FINDING OF THE ASSESSING OFFICER THAT AS PER THE RETURN OF INCOME THE ASSESSE E HAS SHOWN LONG TERM CAPITAL GAIN OF RS. 57 , 17 , 538/ - FROM SALE OF LAND AGAINST WHICH THE ASSESSEE HAS CLAIMED EXEMPT ION U/S. 54B OF THE ACT . IT IS ALSO CLEAR FROM THE FINDINGS OF THE LOWER AUTHORITIES ON VERIFICATION OF THE SUBMISSION OF THE ASSESSEE MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT PAYMENT OF RS. 7 LACS WAS MADE FOR PURCHASING OF NEW ASSETS BEFORE THE DATE OF TRANSFER OF CAPITAL ASSET. IT IS CLEARLY ESTABLISHED FROM THE FINDING OF THE ASSESSING OFFICER REPORTED IN THE ASSESSMENT ORDER THAT IMPUGNED ADDITION WAS NOT MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH . AFTER CONSIDERING THE JUDICIAL PRONOUNCEMENT REFERRED BY T H E LD. I.T (SS) .A NO. 3 6 /AHD/20 18 A.Y. 2010 - 11 PAGE NO SMT. VILASBENBHAILALBHAI PATEL VS. IT O 5 COUNSEL OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF SAUMYA CONSTURCTION PVT. LTD. SUPRA WHEREIN IT IS HELD THAT IF NO INCRIMINATING MATERIAL DURING SEA RCH FOUND NO ADDITION CAN BE MADE ON THE BASIS OF MATERIAL COLLECTED AFTER SEARCH. IN THE LIGHT ABOVE FACTS AND DECISION OF J URISDICTIONAL HIGH C OURT AS CITED ABOVE, W E CONSIDER THAT ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEDUCTION TO THE EXTENT O F R S. 7 LACS ON THE BASIS OF SUBMISSION MADE BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND SAME WAS NOT BASED ON ANY INCRIMIN ATING MATERIAL, THEREFORE, THE IMPUGNED ADDITION WAS BAD IN LAW . SINCE WE HAVE QUASHED THE ASSESSMENT RELEVANT T O THE ISSUE IN APPEAL TO THE EXTENT OF RS. 7 LACS AS ABOVE, THEREFORE , WE DO NOT FIND ANY NEED TO ADJUDICATE THE GROUND OF APPEAL OF THE ASSESSEE ON MERIT. ACCORDINGLY , THE APPEAL OF THE ASSESSEE IS ALLOWED. 9 . IN THE RESULT, THE APPEAL OF THE ASSES SEE IS ALLOWED AS PER TERMS AND CONDITIONS MENTIONED ABOVE . ORDER PR ONOUNCED IN THE OPEN C OURT ON 03 - 03 - 20 20 SD/ - SD/ - ( SANDEEP GOSAIN ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD : DATED 03 /03 /2020 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. I.T (SS) .A NO. 3 6 /AHD/20 18 A.Y. 2010 - 11 PAGE NO SMT. VILASBENBHAILALBHAI PATEL VS. IT O 6 BY ORDER/ , / ,