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Yashodhar Kumar Jain Versus Asstt. Commissioner of Income Tax, Circle 23 (1) , New Delhi and ACIT, CIRCLE 23 (1) , New Delhi Versus Yoshodhar Kumar Jain

2016 (6) TMI 1075 - ITAT DELHI

Disallowance of exemption claimed u/s. 54 - plot had been purchased on 21.05.2007, well before the date of sale of capital asset - assessee constructed a house on the plot, which was completed on 29.04.2009 - AO observed that assessee’s claim would amount providing him with a window of four years for meeting the conditions of section 54, which was not the intention of the provision - Held that:- The language of section 54 comprehends that the asset transferred should be a residential building, a .....

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s rightly held that the assessee is entitled to the exemption under section 54 of ₹ 25,63,138. Hence, the ld. CIT(A) gave the partial relief on this issue on the right footing. Therefore, we do not find any infirmity in the well reasoned order passed by the Ld. CIT(A) on the restriction of addition in dispute, hence, we uphold the finding of the ld. CIT(A) on this issue. - Decided against assessee - Addition u/s. 40(a)(ia) - failure to deduct tax at source from professional fees paid - .....

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IDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Assessee : None For The Department : Shri Amit Jain, Sr. DR ORDER PER H.S. SIDHU, J.M. These are the cross appeals filed by the Assessee and the Revenue against the common order of the Ld. CIT(A)-XXIII, New Delhi dated 01.12.2011 pertaining to assessment year 2008-09. Since the issue are inter-connected, hence, these appeals were heard together and are being disposed of by this common order for the sake of convenience, by dealin .....

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roperty for ₹ 2,28,97,6757- & there was long term Capital Gain of ₹ 1,33,01,553/-. That out of Capita] Gain of ₹ 1,33,01,553/- "A" has invested ₹ 50,00,000/- in NHIA Bonds & also claimed deduction of ₹ 46,92,004/- as the "A" has purchased a residential plot on 21/05/2007 which is one year before the sale. That of exemption of ₹ 46,92,004/- Ld C.I.T (A) has allowed exemption to the time of ₹ 17,50,674/- which was paid after 18/ .....

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urchase of ownership 5 DDNO. 489411 21.06.2006 260165/- July 2006 Installment 6 DD NO. 007881 28.12.2006 260165/- Jan 2007 Installment 7 DDNO. 154069 18.05.2007 34085G/- Miscellaneous Charges for registration 8 DDNO. 154755 29.06.2007 260165/- June 2007 Installment 9 DD NO. 569097 01.01.2008 2601 65/- Jan 2008 Insallment 10 DD NO. 455955 17.06.2008 260 165/- June 2008 Installment 11 Stamp Papers 612300/- Charges for registration 12 Gnoida Misc. & BanK Charges 17023/- Total Expenses Till Date .....

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trial Authority, which is within one year before the sale of residential house & entire investment may be considered for exemption U/Sec 54 and disallowance of ₹ 29,41,330/- which was paid before 18/05/2007 is uncalled for & unjust as per provisions of Sec 54 of the Income Tax Act. 5. Because the Ld CIT (A) failed to appreciate that legal possession have been granted to the (A) on 18/05/2007 and "A" is entitle to total exemption even if advance against the said plot of la .....

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,28,866/- as against ₹ 46,92,004/- made by the AO on account of disallowance of exemption claimed u/s. 54 of the I.T. Act. (ii) On the facts and on the circumstances of the case the Ld. CIT(A) has erred in deleting the addition made by the AO on account of disallowance u/s. 40(a)(ia) of the Income Tax Act, 1961. (iii) The appellant craves leave to add, alter or amend any of the grounds of appeal before or during the course of the hearing of the appeal. 4. The brief facts of the case are th .....

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from time to time and furnished written submissions and required details. Books of accounts and bills/vouchers etc. were also produced and put to test. Thereafter, the assessed the income of the assessee at ₹ 1,49,51,300/- and made various additions vide his order dated 14.12.2010 passed u/s. 143(3) of the Act. 5. Against the aforesaid assessment order, the Assessee preferred appeal before the Ld. CIT(A), who vide his impugned order dated 1.12.2011 has partly allowed the appeal of the Asse .....

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pose would be served to issue notice again and again to the assessee, therefore, we are deciding the present appeal exparte qua assessee, after hearing the Ld. DR and perusing the records. 7. We have heard the Ld. DR and perused the records available with us, especially the order of the Ld. CIT(A). 7.1 Apropos ground no. 1 which is a common ground raised in both the cross appeals filed by the Assessee and the Revenue relating to restriction of disallowance to ₹ 21,28,866/- as against ͅ .....

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and exemption under section 54 of ₹ 46,92,004/- for purchase of a residential plot. The Assessing Officer required the assessee to show cause why the exemption under section 54 should not be disallowed, as the exemption was allowable only in respect of investment in a residential house, and moreover the plot had been purchased on 21.05.2007, well before the date of sale of capital asset. The assessee explained that he had constructed a house on the plot, which was completed on 29.04.2009, .....

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ndow of four years for meeting the conditions of section 54, which was not the intention of the provision. The deduction claimed under section 54 of ₹ 46,92,004/- was rejected and the long term capital gains recomputed at ₹ 1,30,80,481/-. 7.3. We find that Ld. First Appellate Authority has elaborately discussed the issue in dispute by considering the submissions of the Ld. Counsel of the assessee and adjudicated the same vide para no. 3 to 4.2 at pages 3 to 7 of his impugned order. F .....

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Integral Design 2,50,000 2,55,000 26,675 5,000 2 Jag Mohan 5,000 15,000 1,040 10,000 3 Mohd. Arif (Salary) - 43,200 400/- 43,200 4 Satish Singh 21,854 38,854 2,250 13,000 5 HVS Design House 6,000 16,000 - 10,000 81,200/- (3.1) On the issue of long term capital gains, it was submitted that the residential property at Sun City Heights, Gurgaon, was sold on 01.03.2008, and the investment in the residential plot was made on 21.05.2007, i.e. within the prescribed period of one year before the date o .....

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ial Development Authority (GNIDA) dated 21.04.2009, and a certificate from GNIDA dated 05.05,2011 clarifying that the receipt of 'building plan and documents for occupancy certificate' dated 21.04,2009, comprised the completion certificate. (4) The above submissions have been carefully considered. Vide order sheet entry dated 19.10.2011, the counsels for the appellant were asked to furnish further supporting evidence of construction and completion of the residential house at 70, Cassia N .....

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ork; (vi) Permanent electricity connection obtained in May, 2010 with first bill received for the month of June, 2010. (4.1) The above documents are considered to be adequate evidence of completion of construction of the house within the period of two years from the date of sale, which works out to March, 2010. However, where the purchase of the plot is concerned, the appellant has relied on the Possession Certificate issued by GNIDA on 21.5.2007, which is admittedly within the period of one yea .....

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21.06.2006 260165/- July 2006 Installment 6 DD NO. 007881 28.12.2006 260165/- Jan 2007 Installment 7 DDNO. 154069 18.05.2007 34085G/- Miscellaneous Charges for registration 8 DDNO. 154755 29.06.2007 260165/- June 2007 Installment 9 DD NO. 569097 01.01.2008 2601 65/- Jan 2008 Insallment 10 DD NO. 455955 17.06.2008 260 165/- June 2008 Installment 11 Stamp Papers 612300/- 12 Gnoida Misc. & BanK Charges 17023/- Total Expenses Till Date of Return For Financial Year 2007- 08 4692004/- "* &bu .....

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spans a period of two years before the date of sale. It is the contention of the Assessing Officer that the property should either have been purchased within the period of one year before and two years after the date of transfer, or been constructed within the period of three years after the date of transfer. The Assessing Officer has relied on the judgement of the Gujarat High Court in the case of Smt. Shantaben P. Gandhi vs. CIT [1981] 129 ITR 218, wherein it was held that the exemption under .....

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. Subramanya Bhat [1987] 165 ITR 561, wherein the court held that to get the benefit of section 54,(The assessee must have constructed the new house witter the prescribed period from the date of sale of the old house, but the date o" commencement of construction was not material. , (4.2) I have also taken note of the judgement of the Jurisdictional High Court in the case of CIT vs. Smt. Brinda Kumari [2001] 114 Taxman 266, in which it was held that in the case of allotment of flats under th .....

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name within the prescribed period, and only the date of agreement to purchase is relevant. The language of section 54 comprehends that the asset transferred should be a residential building, and the asset invested in should also be a residential building, and the investment should be made within the time specified therein. The time specified in this case, within one year before and two years after, is the period between 9.3.2007 and 9.3.2010. The investment which is eligible for deduction would .....

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ispute by placing the reliance of the Hon ble Jurisdictional High Court in the case of CIT vs. Smt. Brinda Kumari (2001) 114 Taxman 266, wherein it was held that in the case of allotment of flats under the self financing scheme of Delhi Development Authority, payment of first instalment of the price of the flat within 2 years of sale of original property would entitle the assessee to claim exemption even if construction of the flat was not complete in two years. We further find that the Ld. CIT( .....

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ested it should also be a residential building, and the investment should be made within the time specified therein. The time specified in this case, within one year before and two years after, is the period between 9.3.2007 and 9.3.2010. The investment which is eligible for deduction would therefore, be restricted to ₹ 17,50,674/- on account of plot, and ₹ 8,12,464/- on account of construction. After careful consideration of the letter and spirit of section 54, it was rightly held t .....

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o deletion of addition of ₹ 1,06,200/- made by the AO u/s. 40(a)(ia) of the Act. 8.1 On this issue, the Assessing Officer observed that assessee had claimed deduction of professional fees paid of ₹ 7,09,054/-, but had failed to deduct tax at source from professional fees paid of an amount of ₹ 81,200/- for which details of recipients were not provided, and on ₹ 25,000/- paid to one Ms. Divya Saluja. The assessee was asked to explain why disallowance of these amounts shoul .....

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81,200 + 25,000) to the total income under section 40(a)(ia). 8.2. We find that Ld. First Appellate Authority has elaborately discussed the issue in dispute raised by considering the submissions of the Ld. Counsel of the assessee and adjudicated the same vide para no. 5 at page 7 of his impugned order. For the sake of convenience, we are reproducing the relevant portion of the impugned order i.e. para no. 5 as under:- (5) On the issue of disallowance under section 40(a)(ia), it is verified from .....

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