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2016 (4) TMI 70 - ITAT JAIPUR

2016 (4) TMI 70 - ITAT JAIPUR - TMI - Disallowance of claim of deduction u/s 54F - transactions done by Shri Ram Gopal Bansal as a Karta of the HUF OR in his individual capacity - Held that:- The assessee has been consistent in its approach in terms of treatment and disclosure of the purchase and sale and subsequent purchase of the properties. It so happened that in the agreements, the name of Shri Ram Gopal Bansal has been mentioned wherein all the relevant facts taken together leads to the con .....

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ot Shri Ram Gopal Bansal HUF.

In the instant case, if itís the case of the Revenue that capital gains on sale of the property is liable for taxation in hands of assessee HUF even though the sale agreement talks about the individual, in our view, the Revenue should equally allow the relief from such taxation where the assessee fulfills all required conditions except that the name in the purchase agreement is that of individual and not assessee HUF. It t is not in dispute that the sale .....

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laim the necessary relief u/s 54 of the Act in respect of investment in plot of land and subsequent construction of house thereon. - Decided in favour of assessee

Addition on account of excess cash deposit over the cash withdrawal in the account maintained by the assessee - Held that:- It is noted that the bank statement of both the bank a/cs maintained by the assessee which includes the opening and closing balances were available with the AO. Secondly the details of the agricultural .....

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igated and capable of giving yield which was supported by copy of Kasra Girdhawari and Jamabandi as well as sale contract notes. Further it is noted that in the past the assessee has been consistently showing the agriculture income. Keeping the entirely of the facts and circumstances of the case, income is hereby directed to be treat as agricultural income and not as income from other sources - Decided in favour of assessee - ITA No.895/JP/14 - Dated:- 12-2-2016 - SHRI R.P. TOLANI, JM & SHRI .....

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ious other reasons and hence the same may kindly be quashed. (2) The ld. CIT(A) has erred in law as well as on the facts of the case in confirming the action of the AO in assessing the income under the head long term capital gain on sale of property at Jaipur on 01.07.2010 at ₹ 48,22,427/- as against NIL income declared by the assessee by confirming the action of the AO in: (a) Not allowing or denying the claim of deduction u/s 54F in respect of investment in house property at Chomu of  .....

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cash credit. The addition so made and confirmed by the CIT(A) is totally contrary to the provisions of law and facts and hence the same may kindly be deleted in full. (4) The ld. CIT(A) further erred in law as well as on the facts of the case in confirming the action of the AO in treating the agriculture income of ₹ 2,35,320/- as income from other sources and making addition for the same. Hence the addition so made and confirmed by the CIT(A) is totally contrary to the provision of law an .....

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lity of charging of any such interest. Hence the interest so charged being contrary to the provisions of law and facts may kindly be deleted in full. 2. Firstly the grounds No. 1 & 6 are not pressed during the course of hearing. Hence, the same are dismissed as not pressed. 3. Regarding ground no.2, the facts as apparent from the records are that the assessee has sold one property situated at Manuwa Ji Ka Bagh, Jaipur on 01.07.2010 for sale consideration of ₹ 50 lacs. After claiming de .....

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d by way of sale agreement dated 22.12.2010 for ₹ 8,01,000/- in the name of Shri Ram Gopal Bansal and not Ram Gopal Bansal HUF. On this plot, it constructed a residential house investing ₹ 50,50,276 and thus reflecting a total investment of ₹ 58,51,276 in its balance sheet. As per AO, the capital gain liability was in respect of Ram Gopal Bansal HUF where as the plot has been purchased and construction has been made by Shri Ram Gopal Bansal (Individual). Accordingly the AO disa .....

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eved, the assessee carried the matter in appeal before the ld CIT(A) who has denied both the claims of the assessee. The relevant findings are reproduced as under: As regards rejection of excess claim of ₹ 68,905/- in respect of cost of construction of room and boundary wall, the assessee claimed total expenses for ₹ 2,18,905/- (1,52,685/- + 66,220/-). This expenses was stated to be incurred in F.Y. 2009-10 and 2010-11. However, The AO noted that in the sale deed the compound wall an .....

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sue of the AO no interference is called. On careful consideration of relevant facts, it may be noted the assessee earlier purchased property in the name of Shri Ram Gopal Bansal and the investment was stated to be made from the funds of Shri Ram Gopal Bansal HUF. The assessee has shown such purchases in the books of accounts, in the case of Shri Ram Gopal Bansal HUF and the same property now been sold and in the sale deed, name of Shri Ram Gopal has only been mentioned. The funds so received are .....

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ri Ram Gopal Bansal HUF. The appellant case is that the funds received from the sale of property though registered in the name of Shri Ram Gopal Bansal but shown in the case of Shri Ram Gopal Bansal HUF has been used and that deduction u/s 54F should be allowed. However, the fact is that the assessee has purchased the property and constructed the house which is not in the name of Shri Ram Gopal Bansal HUF and in such circumstances the jurisdictional High Court in the case of Kalya vs. CIT, D.B. .....

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essee and his legal heirs and it shall curtail the revenue of the Govt. which the law does not permit. The finding of the Hon ble Court is also of the binding nature. Therefore the finding of the AO rejecting the claim of deduction u/s 54F amounting to ₹ 58,51,276/- and taxing the long term gain for ₹ 48,22,487/- is confirmed. 2.2 During the course of hearing, the ld. AR submitted that the fact which is not considered by both the lower authorities is that the registered deed through .....

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After sale of this HUF property, assessee HUF purchased the residential plot of land as per sale agreement dated 22.12.2010 for ₹ 8,01,000/- and the possession of the plot is handed over to the assessee HUF. The purchase of the land is duly declared in the balance sheet of the assessee HUF as on 31.03.2011. The payment towards land value and subsequent construction thereon is made from the funds of the HUF and reflected in the balance sheet of assessee HUF as on 31.03.2011, as on 31.03.20 .....

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ssee HUF has purchased the land and constructed the house thereon out of its own fund and the same is duly reflected in its balance sheet, the condition of section 54 is satisfied and therefore the AO be directed to allow the claim of deduction u/s 54 to the assessee in computing the capital gain. Further if the property purchased is treated that of the individual then the sale of the property should also be treated the property of individual and no capital gain should be assessed in the hands o .....

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commodation and therefore only because of technical reasons, the benefit cannot be denied, if in substance it satisfies the condition of section 54. It is for this reason in various cases it is held that if the investment is made in the name of wife or son or close relatives and the funds for such investment has gone from the assessee, benefit of section 54/54B/54EC/54F should be allowed to the assessee. For this proposition, reliance is placed on the following cases: • CIT vs. Kamal Wahal .....

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of the Appellant. 1. In this case the land sold and land purchased was different name i.e. the land sold was in the name of assessee and land purchased in the name of Son and Daughter-in-law In this case the land sold and land purchased both were in the same name is Ram Gopal Bansal 2. This is the case of nonmaintenance of books of accounts. This is the cse of maintenance of books of accounts regularly and transaction duly reflected in the books nd B/s from so many years. 3. This is the case of .....

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he funds of HUF and shown in the B/s of HUF as also admitted by the Karta in his statements recorded by the AO during the course of assessment proceedings. However the ld. AO has escaped those facts in his order. In view of the above, when the funds of the HUF has been utilized for purchase of the residential plot and construction thereon, simply because in the same agreement reference of the HUF is not there could not mean that the investment in the residential house is not made by the HUF. Hen .....

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provisions of deduction provisions are very clear and given the fact that the assessee HUF has not purchased the house in its name, the deduction is rightfully denied to the assessee HUF. 2.4 We have heard the rival contentions and perused the material available on record and the facts which emerge are as follows: i. The property, in respect of which the capital gain was offered to tax, was initially purchased and then sold in the name of Shri Ram Gopal Bansal and not in the name of Ram Gopal B .....

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and deposited in its bank account and the possession of the property was handed over by Shri Ram Gopal Bansal HUF. The Revenue has also not disputed these facts. The resultant capital gains were offered to tax in the hands of Shri Ram Gopal Bansal HUF which has been accepted by the Revenue. iv. Further, the subsequent purchase of plot of land and construction of house on the said plot of land was in the name of Shri Ram Gopal Bansal and the funds for purchase of land and construction of house t .....

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Ram Gopal Bansal has been mentioned wherein all the relevant facts taken together leads to the conclusion that all these transactions have been effectively done by Shri Ram Gopal Bansal as a Karta of the HUF and not in his individual capacity. Secondly, the provisions of section 45 and section 54 of the Act should be read in a harmonious manner and the Revenue has to take a holistic view of matter wherein all the facts should be considered in totality rather in a piecemeal approach. In the inst .....

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s and when such transactions were shown in the HUF status, the department has no occasion either to interfere or not to accept the same. Its a cardinal principle of taxation that tax should be levied and collected from the assessee who is legally liable for such taxes. It is also cardinal principle of tax administration and enforcement that where Revenue is ceased of the matter that a particular transaction is not taxable or the assessee has failed to claim certain relief/deduction which he is e .....

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t of individual and not assessee HUF. Thirdly, it is not in dispute that the sale consideration has been deposited in the bank account of Ram Gopal Bansal HUF and the same has been utilized for purchase of plot of land and the construction of house thereon by utilizing the funds withdrawn from the bank account of Shri Ram Gopal Bansal HUF. The said facts is clearly apparent from the statement recorded by the AO of Shri Ram Gopal Bansal during the course of assessment proceedings which has been t .....

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x in hands of the assessee HUF. The said decision is therefore distinguishable on facts hence cannot come to the aid of the Revenue. Lastly, the decisions as quoted by the ld AR, where the investment in the new property has flown from the sale consideration of original property and even though it has been registered in joint names, support the case of the assessee. In entirety of the facts and circumstances of the case and respectfully following the decisions as referred supra, the assessee shou .....

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in respect of investment in plot of land and subsequent construction of house thereon. and claim of ₹ 68,905 is denied. 3. Regarding ground no.3, the assessee has challenged the action of ld. CIT(A) who has confirmed an addition of ₹ 5,39,500/- on account of excess cash deposit over the cash withdrawal in the account maintained by the assessee. 3.1 The ld. AR has submitted that, the assessee as on 31-03-2010 was having cash balance of ₹ 2,08,829/- and debtors of ₹ 2,91,3 .....

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0/- added by the AO thus, the source of ₹ 5,39,500/- is fully explained and the addition made by the AO is uncalled for. The observation of the ld. CIT(A) was wrong because the B/s as well as issue of agriculture income was before him and when the CIT(A) has also power to examine the issue. The ld. CIT(A) has nowhere denied that the B/s and figure of B/s of both the year is wrong. Hence the addition made by the AO as well as confirmed by the CIT(A) was on their own suspicion, which is not .....

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of ₹ 5,39,500/- in the hands of the assessee. Hence the ground No. 3 is allowed. 4. In ground no.4, the assessee has challenged the addition of ₹ 2,35,320/- which is treated by the AO as income from other sources as against agricultural income offered by the assessee. 4.1 The assessee has submitted that the fact of having agricultural income is evident from the Jamabandi and Khasra Girdawari filed before the AO. The crop grown were directly sold to contractor vide sale contract rate .....

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/- 2004-05 1,94,401/- 2003-04 1,94,401/- 2002-03 2,96,683/- The AO has not brought any material evidence on record to establish that the assessee has some other source of income which is disclosed as agricultural income. Rather the evidence filed by the assessee has not been disproved by the AO. In this there are thousand trees of Amwla. The addition so made by the AO by treating the agricultural income as income from other sources is without any basis and material on record. The AO be, therefor .....

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