SAURABH KHANNA,RAJ NAGAR EXTENSION GHAZIABAD V. INCOME TAX OFFICER, GHAZIABAD

ITA 3022/DEL/2024

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The case involves Saurabh Khanna, the appellant, who contested the addition of Rs.14,71,000 as capital gains by the Income Tax Officer, Ghaziabad, which was upheld by the Commissioner of Income Tax (Appeals). The appellant argued that the assessment was conducted in an ex-parte manner without proper notice or consideration of his submissions, leading to a mechanical and incorrect application of facts. The Tribunal found merit in the appellant's argument regarding the capital gains and accepted the lower amount declared by him, supported by documentary evidence. However, it required further verification regarding the exemption claimed under section 54F, which pertains to the reinvestment of capital gains in a new asset.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312709 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: RAGHAV GOEL; CHARTERED ACCOUNTANT
• Keywords: Capital asset; Sale consideration of property below Jantri Value; Capital Gains; Initiation of penalty proceedings; Benefit of exemption
• Section: 147; 148; 142(1); 271(1)(c); 54F; 50C

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.3022/िदʟी/2024 (िन.व. 2012-13) ITA No.3022/DEL/2024 (A.Y.2012-13) Saurabh Khanna, K-101, Ajnara Integrity Raj Nagar Extension, Raj Nagar, Ghaziabad, UP 201017 PAN: AHKPK-4565-H ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward 2(2)(4), CGO Complex 1, Ghaziabad, Uttar Pradesh ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Raghav Goel, Chartered Accountant ŮितवादीȪारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 03/02/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 29/04/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 16.05.2024, for assessment year 2012-13. 2. The solitary issue raised by the assessee in this appeal is addition of Rs.14,70,00/- on account of capital gains sustained by the CIT(A). 3. The ld. Counsel for the assessee has filed written submissions and placed reliance on the same assailing addition of Rs.14,71,000/- confirmed by the CIT(A). The ld. Counsel for the assessee submitted that the Assessing Officer (AO) in an ex- 2 ITA No.3022/Del/2024 (AY 2012-13) parte proceedings made addition of Rs.14,71,000/- on account capital gains arising of sale of immovable property. The ld. Counsel submits that the assessment order has been passed by the AO in a mechanical manner without proper application of mind and without recording correct facts. The ld. Counsel pointed that in the opening line of assessment order the AO has recorded that in this case information has been received from SRO-II, Ghaziabad under ‘No PAN’ category, where as in the cause title PAN of the assessee has been mentioned. Further, the assessment has been made u/s. 147 of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) without service of notice u/s. 148 of the Act to the assessee. Aggrieved, by the assessment order dated 22.11.20196 passed u/s. 144/147 of the Act, the assessee filed appeal before the CIT(A). The CIT(A) again without affording opportunity of making submissions to the assessee and without recording proper facts in a cryptic order dismissed appeal of the assessee. Hence, present appeal by the assessee. 4. Per contra, Shri Sanjay Kumar representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. 5. Both sides heard. The solitary issue raised by the assessee in ground no. 1 and 2 of appeal is against addition of Rs.14,71,000/- on account of capital gains arising from sale of immovable property. The relevant facts as emanating from the documents placed on record by the assessee are: During the period relevant to assessment year under appeal, the assessee sold shop no. II-06 (2nd Floor), Rajnagar, Ghaziabad for a consideration of Rs.9,00,000/- on 24.02.2012. While filing Return of Income the assessee disclosed Stamp Duty Value Rs.14,71,000/- as deemed sale consideration in accordance with provisions of section 50C of the Act. The assessee had purchased shop on 10.07.2006 for a consideration of Rs.9,44,280/- and after claiming benefit in indexation as permissible under the 3 ITA No.3022/Del/2024 (AY 2012-13) provisions of the Act, disclosed Long Term Capital Gain (LTCG) of Rs.42,754/-. The assessee had also purchased one residential house i.e. Flat No.K-101, Ajnara Integrity Rajnagar Extension, Ghaziabad for a total consideration of Rs.25,80,000/- vide registered sales deed 06.04.2016. The assessee claimed benefit of exemption u/s. 54F of the Act on the Long Term Capital Gain from the sale of shop and thus, declared NIL LTCG in return of income. 5.1. The contention of the assessee is that no notice u/s. 148 of the Act has ever been served on the assessee. The AO in an ex-parte proceedings made addition of Rs.14,71,000/-. A perusal of the assessment order reveals that notice u/s. 148 of the Act was issued to the assessee on 30.03.2019 and the same was allegedly served upon the assessee. Thereafter, the AO issued notices u/s. 142(1) of the Act on 22.05.2019 and 18.07.2019. However, it is not emanating from the assessment order the mode of service of aforesaid notices and as to when the notices were served on the assessee. Since, the notices were purportedly never served on the assessee. The assessee had no occasion to furnish the details as sought by the AO. The AO in an ex-parte proceedings made addition of Rs.14,71,000/- on account of LTCG. 6. The assessee filed appeal against the said assessment order before the CIT(A). As per contentions of the assessee, the assessee in response to notice dated 22.07.2020 made detailed submissions on 27.07.2020 through online official portal of the Department vide acknowledgment no. 27072013361409. Subsequently, another notice dated 03.08.2020 was issued by the CIT(A). In response to the said notice, the assessee vide reply dated 05.08.2020 made submissions online vide acknowledgment no.05082013370273. The assessee thereafter, in response to notice dated 04.11.2022 submitted relevant information on 05.11.2022 vide 4 ITA No.3022/Del/2024 (AY 2012-13) acknowledgment no.781031911051122. A perusal of the impugned order reveals that the submissions of the assessee were not considered, even there is no reference to the submissions by the assessee in the impugned order. In fact, the impugned order is cryptic and the CIT(A) without taking cognizance of the replies filed by the assessee dismissed appeal and upheld the additions made by AO. 7. The assessee has placed before us a copy of registered sale deed dated 24.02.2012 vide which shop (2nd Floor) was sold for a consideration of Rs.9,00,000/- . The said sale deed is at pages 43 to 64 of the paper book. The assessee has also placed on record at pages 65 to 82 of paper book a copy of registered sale deed dated 10.07.2006 vide which the assessee had purchased Shop no. II-06(2nd Floor) situated at ‘Shoppers Square’, R-14/8, Raj Nagar, Ghaziabad. The assessee has also placed on record at pages 83 to 115 of paper book a copy of registered sale deed dated 06.04.2016 vide which the assessee has purchased Flat No. K-101, Tower Kemel, Ajnara Integrity, Raj Nagar Extension, Ghaziabad. The fact of sale of shop and purchase of flat is established from the documents placed on record by the assessee. For the purpose of computation of capital gains, under the provisions of section 50C of the Act the assessee has adopted stamp value rate, whereas, the actual consideration received by the assessee is much less. Considering the facts supported by documentary evidences on record, I find merit in the submissions of the assessee and accept capital gain of Rs.42,754/- declared by the assessee. 8. Further, I find that the assessee has purchased a new capital asset i.e. a residential flat and has claimed benefit of exemption u/s. 54F of the Act. As per the provisions of section 54F of the Act for claiming benefit of exemption u/s. 54F of the Act, the assessee was required to purchase new asset within a period of one year before or two years after the date on which transfer of long term capital asset 5 ITA No.3022/Del/2024 (AY 2012-13) took place. In the present case it is emanating from documents on record that the assessee had sold shop in February 2012 and purchased residential flat in April 2016. The contention of assessee is that though the registered sale deed was executed in April 2016, the assessee had booked the flat in December 2010 (23.12.2010) and had made substantial payment for the same in Financial Year 2011-12. I deem it appropriate to restore this issue to the AO for verification of payments made by the assessee for purchase of flat. If substantial payment is made during the relevant period or within two years from the date of sale of Shop and subject to other conditions laid down u/s. 54F of the Act being satisfied, the benefit of section 54F of the Act be allowed to the assessee. 8. In the result, assessee partly succeeds on grounds no. 1 and 2 of appeal. 9. In ground no. 3 of appeal, the assessee has assailed initiation of penalty proceedings u/s. 271(1)(c) of the Act. Challenge to penalty proceedings at this stage is pre-mature. Hence, ground no. 2 of appeal is dismissed 10. In the result, appeal of the asssessee is partly allowed in the terms aforesaid. Order pronounced in the open court on Tuesday the 29th day April, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 29.04.2025 NV/- 6 ITA No.3022/Del/2024 (AY 2012-13) ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "