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2015 (5) TMI 422 - ITAT DELHI

2015 (5) TMI 422 - ITAT DELHI - TMI - Disallowance of exemption u/s 54F - assessee had purchased land on which construction was done subsequently - Held that:- The essence of the said provision is whether the assessee who received capital gains has invested in a residential house. Once it is demonstrated that the consideration received on transfer has been invested either in purchasing a residential house or in construction of a residential house even though the transactions are not complete in .....

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t of residential house and therefore if the amount of capital gain for the purposes of section 54F is appropriated towards purchase of plot and also towards construction of the residential house thereon then the aggregate cost should be considered for determining the quantum of deduction U/S 54F provided that the acquisition of plot and also the construction thereon are completed within the period specified in the section. The assessee purchased the land on 28.12.2007 and construction was undert .....

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nk account of the assessee, securities transactions tax has been paid on the transactions, all the payments have been made and received through cheque and the transactions have been confirmed by the brokers by way of the ledger accounts, the disallowance made by the AO was not justified, and therefore it was rightly deleted by the ld CIT (A). - Decided against revenue.

Addition on payment made through credit card - business purpose - Held that:- We concur with the observation of the l .....

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n facts and it cannot be said that the credit card expenses were not incurred on behalf of the companies for business purpose in which the assessee was a director. However the ld CIT(A) have considered the fact that some personal expenditure could also have been incurred by the assessee, so the disallowance made by the AO was rightly restricted to 5% of credit card expenses of ₹ 17,47,917/-. The remaining disallowance was rightly deleted by the ld CIT (A). - Decided against revenue. - ITA .....

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trary to facts and law. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 2,68,21,050/- on account of exemption u/s. 54F claimed by the assessee. (3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 95,38,589/- on account of share transactions. (4) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting t .....

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vt. Ltd. and has shown income under the head salary, Capital Gain and Income from other sources . As per computation of income filed by the assessee, assessee has shown Nil income under the head Long Term Capital Gain after claiming the deduction u/s. 54F of the Act amounting to ₹ 2,68,21,050/-. As per an AIR information received by the AO, the assessee made payments to the tune of ₹ 17,47,917/- through credit card and has made a share transaction of ₹ 95,38,589/- during the ye .....

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der of the Assessing Officer, assessee appealed before the Ld. CIT(A), who vide his order dated 02.5.2012 has partly allowed the appeal of the assessee. 5. Now the Revenue is in appeal before us. 6. Ground No.1 and 5 are general in nature, so it is dismissed. 7. Ground No.2 is regarding deletion of addition of ₹ 2,68,21,050/- on account of exemption u/s 54F of the Income Tax Act, 1961 (herein after the Act ). 8. Ld. DR, Gaurav Dudeja relied upon the order of the AO and as per him, the rele .....

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its return of income an exemption u/s 54F was claimed in respect of purchase of agricultural land by contending it as an investment in a residential house. The Assessing Officer however did not allow the claim for exemption by holding that the assessee purchased an agricultural land and did not "construct a residential house" and therefore the exemption is not available. According to the AO, the reason for such a finding was (a) the sale deed dated 28.12.2007 describes the immovable pr .....

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ation was issued by MCD dated 24.10.1994 declaring certain areas in and around Bijwasan village as residential area; and photograph of the house and Inspector's Spot verification Report dated 20.01.2012 which allegedly substantiated that a house had been constructed on the said land within the period of 3 years. According to the ld DR, the CIT (Appeal), erred while deciding this issue in favour of the assessee by accepting these contentions. 10. The ld DR further submitted that the key issue .....

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laced upon the Architect s Certificate dated 05.04.2011 which is available on page 62 of the Paper Book dated 30.01.2015. It has been certified by the ld AR in the paper book that the same was available before the lower authorities i.e. Assessing Officer as well as CIT(A). However, it was pointed out by the ld DR that as per the original assessment records the said certificate was not filed during the assessment proceedings. Further, according to him, it is also not mentioned in the submissions .....

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ught on record for the first time before us apart from being a self serving document and it should not be admitted. The ld DR pointed out to page 59 of paper book date 30.01.2015and submitted that the final bill for electricity works is dated 20.07.2011 much beyond the end date of 11.12.2010 which according to the ld DR belies the claim of the assessee. Further the ld DR took our attention to page 58 of the paper book Dated 30.01.2015 and submitted that the bill of the architect i.e. "Guild .....

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is no bill towards work relating to wooden frame for doors and windows and shutters. According to him, at page 139 of paper book dated 06.03.2013. It has been emphasized in written submission dated 18.08.2011 that MCD has sanctioned plan for construction of a house. However, the assessee has willfully not brought the same on record. Further, upon completion of a house the completion certificate is issued by MCD which would validate the construction date of a house property. The assessee has als .....

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ompleted in the month of September, 2010, which evidence alone does not support assessee s claim that property was constructed by September, 2010. The ld DR has submitted that the assessee has also placed reliance upon the assessment order of Joint purchaser of the plot who had also claimed exemption u/s 54F namely Smt. Inderjeet Kaur Anand and Savneet Kaur Anand referred to Page 48 to 57 of PB dated 30.01.2015. In this regard, it was submitted by the ld DR that an oversight in a particular asse .....

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s not brought on record the MCD's sanction plan and the completion certificate and thus additional evidence which was not available before lower authorities is being brought on record before us for the first time and therefore, it would be in the interest of justice that the appeal is remanded back to the Assessing Officer for considering the issue afresh. 12. On the contrary, Ld. Sr Counsel, Sh Ajay Vohra for the assessee has relied upon the order of the Ld. CIT(A) and took us through the p .....

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4 declaring certain areas in an around the land purchased by the assessee as residential/commercial and also details regarding the construction made on the above land along with photograph of the house built in his property. During the remand proceedings, an ITI was deputed by the AO to visit the premises of the assessee. The ITI in his report has stated that the property was in the joint ownership of the assessee along with his other family members. The property tax receipts were also in the na .....

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shares and had invested in the same property had been granted exemption under section 54F by the AO in their respective cases. This was verified by the AO from the assessment orders in the case of the other joint owners Smt. Inderjeet Kaur Anand and Smt. Savneet Kaur Anand. The facts discussed above clearly show that the capital gains which were received by the assessee had been duly invested in purchase of land and construction of the residential house thereon. In view of the findings above and .....

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ect s Certificate dated 05.04.2011, was filed before the authorities below which is annexed at page No.62 in its Paper Book-II, which is reproduced below:- Sharad Trivedi Architects Sector-C, Block-1, H.No. 1066, Vasant Kunj, New Delhi - 110 070 Ph: 9811580135 Ref: CERT/E-15/PUSP/R001 Dated : 05/04/2011 To Mrs. Savneet Kaur Anand & Others E-15, Puspanjali Vill : Bijwasan, New Delhi - 110 061 This is to certify on basis of site-inspection and the records made available by the owners, that con .....

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at house was constructed before 2008-2010 and it was occupied when it was inspected and report submitted vide 05.04.2011. We find that other than the averments made before us, no evidence was adduced by the Revenue before us so that we can take a different view. We find that in the instant case, the material on record discloses that the assessee had invested the entire amount of Long Term Capital Gain (LTCG) within the period prescribed by law i.e. 3 years from the date of realization of sale pr .....

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has taken possession of the residential building and is living in the said premises. The object of enacting section 54 of the Act i.e., to encourage investment in a residential building and in our view that is fulfilled. In the instant case, it is seen that the assessee had purchased land on which construction was done subsequently. CBDT Circular No. 667 dated 18.10.1993 states that the cost of land is an integral part of the cost of residential house and therefore if the amount of capital gain .....

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required under the provisions of section 54F of the Act. The Hon'ble Karnataka High Court in the case of CIT Vs. Sambandam Udaykumar 2012 - TIOL- 217 - HC - KAR - IT has held as under.- "The intention of the legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are 'purchased' or 'constructed'. For such purpose, the capital gain realized .....

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e benefit of section 54F of the Act. Similarly, if he has invested the money in construction of a residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle the assessee from claiming the benefit under section 54F of the Act. The essence of the said provision is whether the assessee who received capital gains has invested in a residential house. Once it is demonstrate .....

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id discussions, we find no infirmity in the impugned order of the ld CIT(A) and has passed a well reasoned order, which does not need interference from our part, hence, we uphold the same. Therefore, the ground No.2 raised by the Revenue is rejected. 15. With regard to ground No.3 regarding deletion of addition of ₹ 95,38,589/- on account of Share transactions is concerned, we find that the AO while making the addition on account of share transaction of ₹ 95,38,589/- had observed tha .....

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copy of the ledger account in respect of the transaction in shares which were made through a share broker namely Sh. Parasram Holding, so the details regarding the share transactions were perused by the AO while preparing the remand report. A perusal of the details show that the share transactions were entered into through brokers namely M/s. Satguru Capital and Finance Ltd. and Sh. Parasram Holdings (P) Ltd. The assessee had entered into purchases of shares of ₹ 86,77,297/- and sales of s .....

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he AO in the assessment order that no details regarding the investment in shares have been filed by the assessee need to be seen in the light of all these evidences which was adduced before the appellate authority support the contention of the assessee that no opportunity was granted to him to adduce these evidence by the AO. All the payments for purchase of shares has been made from the bank account of the assessee and therefore, it cannot be said that the source for investment of funds in purc .....

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y the assessee through M/s. Satguru Capital and Finance (P) Ltd; and Securities Transaction tax of ₹ 7,489/- on purchases of shares of ₹ 51,06,685/- and sale of shares of ₹ 8,84,925/- has been made by Sh. Parasram Holdings (P) Ltd. The assessee has also submitted its copy of account of purchase and sale of shares as existing in the books of account of M/s. Satguru Capital and Finance (P) Ltd. and Sh. Parasram Holdings (P) Ltd. We find that the purchase and sale of shares has be .....

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same. Therefore, the ground No.4 raised by the Revenue is rejected. 16. With regard to ground No.4 regarding deletion of addition of ₹ 16,50,521/- on account of payment made through credit card is concerned, we find that AO has made the said addition on the ground that no detail has been filed by the assessee. During the course of appellate proceedings, the assessee had filed evidences regarding the payment made through credit card. These evidences were sent to the AO for his report. The .....

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