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P. Bhagya Lakshmi L/R of Late P. Dilip Kumar, Hyderabad and others Versus DCIT, Central Circle – 6 Hyderabad and others

2015 (7) TMI 768 - ITAT HYDERABAD

Disallowance of claim u/s 54F - Held that:- CIT (A) while rejecting assessee’s claim of deduction u/s 54F has relied upon the order passed by him in group cases of Mohd. Aleemunddin and others, which in turn has been set aside by the Coordinate Bench in the order under reference, we consider it appropriate to remit the issue relating to the assessee’s claim of deduction u/s 54F to the file of the AO with similar direction. Facts and issues being materially same in A.Y 2008-09, except for the amo .....

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unt was received by the assessee in case of transaction with Shri V. Ramachandra Rao in the financial year 1999-2000 and in case of Shri Jagat Singh in financial years 1995-96 to 1997-98. Thus when the amount in question was received long back, we fail to understand how they can be taxed in the impugned A.Y, even assuming that the said transaction ultimately fructified in the impugned A.Y. Even, otherwise also the ld DR apart from making submissions has not brought any material on record to cont .....

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0 lakhs was made at the hands of the assessee relying upon the statement of Mali Florex that it has paid the amount of ₹ 5.00 lakhs to the assessee and Shri Syed Naseer as commission towards sale of land. Though, the AO had mentioned that the amounts were paid through cheques, but as per discussion made by the ld CIT (A), it appears, that Mali Florex in course of the assessment proceedings stated that the amounts were paid through bearer cheques. As it appears, before making the addition, .....

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nnot be sustained - Decided in favour of assessee. - ITA No.1383 & 1384 /Hyd/2010,ITA No.1396/Hyd/2010,ITA No.1381 & 1382/Hyd/ 2010,ITA No.1395/Hyd/2010 - Dated:- 17-7-2015 - Shri B. Ramakotaiah & Shri Saktijit Dey, JJ. For the Petitioner : Shri T. Chaitanya Kumar For the Respondent : Shri Rajat Mitra, DR ORDER Per Bench: These sets of six appeals in case of two different assessees (four by the assessees and two by the Department) are against two separate orders of the ld CIT (A)-I Hyder .....

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of assessee is in relation to disallowance of claim u/s 54F. Since facts relating tothe aforesaid issue are common for both the appeals, and the substantive order passed by the ld CIT (A) is for A.Y 2007-08, for the sake of convenience, we will refer to the facts involved in A.Y 2007-08. 3. Briefly the facts relating to the issue in dispute are, the deceased assessee was an individual. A search and seizure operation u/s 132 of the I.T. Act was conducted in the business premises of Radha Realty g .....

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illage in survey Nos.262 to 264 from one Shri Ram Chandra Rao. Against the amount received for sale of the land, it was noticed by the AO, assessee has claimed deduction towards incidental expenses amounting to ₹ 12.00 lakhs. When the AO called upon the assessee to furnish evidence in support of the expenditure claimed, assessee submitted that he had wrongly claimed the amount as incidental expenditure on sale of land, , actually the amount of ₹ 12.00 lakhs was utilised for construct .....

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ook after the affairs and transactions of the land, they had authorised assessee and Shri Syed Naseer to act as their agents in attending the Court Matters and also to sell the land on their behalf. The lands were sold during the year under consideration to DLF group of companies. AO observed that the original landlords who have received the sale consideration from DLF have declared capital gain on the sale proceeds. From the order of the Loka Adalat passed by the Hon'ble District Judge, R.R .....

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m capital asset in the hands of the assessee. In this connection, he observed that the assessee himself in the return filed has shown the amount as commission/business income. On the aforesaid reasoning, AO ultimately held that the assessee is not entitled for claim of exemption u/s 54F of the Act and accordingly disallowed the deduction claimed of ₹ 12.00 lakhs. Being aggrived of such disallowance, assessee preferred appeals before the first appellate authority. 5. In course of hearing be .....

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e Loka Adalat has considered the compromise petition of the vendee and defendants and one amongst the defendant is also the present assessee. On going through the compromise petition, the ld CIT (A) found that the assessee along with another defendant Shri Syed Naseer has executed various sale deeds in favour of the defendant No.10 to 19. Such sale deeds were executed based on the power of attorney held by the assessee along with Shri Syed Naseer. 6. Further it was found by the ld CIT (A) that i .....

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pted assessee s claim that the amount received was towards transfer of a capital asset. However, while considering assessee s claim of exemption u/s 54F, the ld CIT (A) observed that the assessee has not produced any evidence to substantiate his claim that he has incurred the expenditure for construction of the house as per the conditions of section 54F. He, therefore, upheld the addition of an amount of ₹ 12.00 lakhs made by the AO on account of disallowance of assessee s claim of deducti .....

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us a plan of the house property claimed to have been constructed by the assessee on which exemption u/s 54F was claimed. The ld AR also submitted that in case of Mohd. Aleemunddin and others group cases, the ITAT has restored the matter back to the file of the AO for deciding afresh assessee s claim of exemption u/s 54F. He, therefore, submitted that the issue may be restored to the file of the AO for deciding assessee s claim of exemption u/s 54F. 8. We have considered the submissions of the pa .....

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of the order of the ld CIT (A), it is evident that he has rejected assessee s claim basically for the reason that no evidence regarding utilization of sale proceeds in construction of a new house property has been produced, either at the stage of assessment or before him. For this purpose, he also relied upon an order passed by him in case of Mohd. Aleemunddin and others. However, Counsel for the assessee has asserted before us that not only the assessee had constructed a new house property by .....

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we find that group of cases pertaining to the assessees -qua the owners of the lands adjoining to the lands of the assessees, were disposed of by this Tribunal by holding as under- 5. We have heard both the parties and perused the material on record. The provisions of section 54F are that if the assessee being a individual or HUF, the capital gain arises from transfer of any long term capital asset not being a residential house and the assessee has, within a period of one year before or two year .....

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claim made by them u/s. 54F is in accordance with law. In view of this, considering the arguments of the assessees counsel, as there is lack of enquiry from the side of the Assessing Officer in the interest of justice, we remit back the issue to the file of the Assessing Officer for fresh examination. However, we make it clear that the assessee shall co-operate with the Assessing Officer by placing necessary evidence to suggest that construction has been completed as prescribed in the provision .....

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eir claims. The Assessing Officer shall afford reasonable opportunity of hearing to the assessees. Since facts and circumstances of the case before us in these appeals are exactly same, as those considered by the Tribunal in its order dated 31.8.2012, and one of us, i.e. Accountant Member is author and signatory of the said order dated 31.8.2012, we are inclined to follow the decision of the coordinate bench. We accordingly set aside the orders of the CIT(A) in these cases as well and remit the .....

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Coordinate Bench in the order under reference, we consider it appropriate to remit the issue relating to the assessee s claim of deduction u/s 54F to the file of the AO with similar direction. Facts and issues being materially same in A.Y 2008-09, except for the amount of deduction of ₹ 51,00,000/-, following our decision for A.Y 2007-08, we also restore the issue relating to assessee s claim of deduction u/s 54F to the file of the AO for deciding afresh after due opportunity of being hea .....

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roceedings, AO on the basis of information on record found that the assessee has received an amount of ₹ 11.50 lakhs as commission from Shri V. Ramachandra Rao during the financial year 1999-2000 in respect of lands sold during the A.Y under consideration to DLF Group of companies. AO opined that though the commission of ₹ 11.50 lakhs was received by the assessee during financial year 1999-2000, but since the sale transaction of the property was finalized during the A.Y under conside .....

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ilarly, he found that the assessee has received an amount of ₹ 2,19,000 as commission from Shri Jagat Singh during financial year 1995-96 to 1997-98 in respect of land which were sold in the impugned A.Y to the DLF Group of companies. On the basis of the reasoning on which he treated commission amount of ₹ 11.50 lakhs as the income of the assessee, AO also treated the amount of ₹ 2,19,000 as the assessee s income of the assessee under the year consideration. Being aggrieved of .....

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rther he noticed that the land which was sold to DLF was under various litigation. He noted that assessee along with Shri Syed Naseer was the original GPA and irrevocable power of attorney holder in the said land and in pursuance of the same he had entered into transaction with Shri V. Ramachandra Rao. The land transaction with DLF is different than the land transaction of the assessee with Shri V. Ramachandra Rao. He also observed that the incidents of transaction was also in different year. He .....

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the addition. As far as the amount of ₹ 2,19,000 received from Shri Jagat Singh is concerned, the ld CIT (A) again observed that not only the amount was received in the financial year 1995-96 to 19997-98, but the transaction for which the amount was received is different from the transaction in relation to the land sold to the DLF. Accordingly he deleted the addition. 13. We heard both the parties. After perusal of the materials on record, we do not find any infirmity in the order of the .....

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ubmissions has not brought any material on record to controvert the factual finding of the ld CIT (A) that the transactions for which the assessee received the commission is different from the transaction with DLF. In view of the aforesaid, we do not find any reason to interfere with the order of the ld CIT (A) in deleting the addition of ₹ 11.50 lakhs and ₹ 2,19,000. Accordingly the ground raised by the Department is dismissed. 14. The next issue raised by the Department is against .....

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ompanies. It was also noticed that M/s Mali Florex had claimed that the above payments were made through cheques. When this fact was confronted to the assessee, he denied of having received any payment from M/s Mali Florex. AO, however, considering the facts that M/s Mali Florex had shown the payment in the name of the assessee, added amount of ₹ 2.50 lakhs protectively at the hands of the assessee. Assessee challenged the addition in the appeal filed before the CIT (A). Ld CIT (A) after c .....

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document No.8379/2007 dated 22.08.2007 as advances. It was also submitted by the company that the payment to the assessee and Shri Syed Naseer amounting to ₹ 5.00 lakhs was made through bearer cheques. The ld CIT (A) also observed that on examination of the sale deed No.8379/2007, it was found that the payment of ₹ 2,48,12,500 was in fact made to Demi Realtors and not to the assessee and Shri Syed Naseer as claimed by the said company. Thus on consideration of the aforesaid facts, t .....

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ould be seen, addition of ₹ 2.50 lakhs was made at the hands of the assessee relying upon the statement of Mali Florex that it has paid the amount of ₹ 5.00 lakhs to the assessee and Shri Syed Naseer as commission towards sale of land. Though, the AO had mentioned that the amounts were paid through cheques, but as per discussion made by the ld CIT (A), it appears, that Mali Florex in course of the assessment proceedings stated that the amounts were paid through bearer cheques. As it .....

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f ₹ 2.50 lakhs, the addition cannot be sustained. Moreover, on perusal of the order passed by the ITAT Hyderabad Bench in case of Mali Florex Ltd for A.Y 2008-09 in ITA No.891/Hyd/2011 dated 28.09.2012, it is seen that while considering the issue relating to addition of the amount of ₹ 5.00 lakhs representing the payment made to the assessee and Shri Syed Naseer, the Coordinate Bench deleted the addition made at the hands of M/s Mali Florex being conscious of the fact that the said a .....

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of our decision in the preceding paragraphs, there is no need to adjudicate Ground Nos.3 & 4 separately. ITA Nos. 1381 & 1382/Hyd/2010:A.Y 2007-08 & 2008-09 2. The only issue which is common in both the appeals of Shri Syed Naseer relates to disallowance of claim of deduction u/s 54F amounting to ₹ 37,50,000 and ₹ 60,00,000 for A.Y 2007- 08 and 2008-09 respectively. On perusing the assessment orders and CIT(A) s order, we find that facts relating this issue are identical .....

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