Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

Latest Case Laws

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2018 (2) TMI 668

ng the sale transaction, the assessee stayed in India and incurred other expenses of ₹ 3 lakhs towards airfare, fooding & lodging expenses. We find that the assessee did not produce any documentary evidence either before the AO or the CIT-A in support of the claim of towards lodging, fooding and travelling expenditure incurred by the assessee during the said transaction. However, the CIT-A considering the submissions of assessee has restricted the same to ₹ 1.50 lakhs i.e. 50% of ₹ 3 lakhs under the head ‘other expenses’. It is quite, reasonable and justified in the facts and circumstances of the case. Therefore, our interference is uncalled for on this issue. We uphold the order of the CIT-A in restricting the same on this issue. Therefore, the ground no. 1 relating to other expenses is dismissed. - Addition towards claim of exemption u/s. 54EC - Held that:- Section 54EC mandates that investment in specified bonds to be made within prescribed time by the assessee either out of sale proceeds of capital asset or out of any other means. In the present case, admittedly the assessee had not made any investments in the specified bonds as per provisions of section 5 .....

X X X X X X X

Full Text of the Document

X X X X X X X

erein the search team found cash of ₹ 51.50 lakhs roughly and 20,000 Pounds Sterling from the assessee. But, for not providing any supporting evidence and documents in respect of source of said cash a warrant of authorization u/s. 132(1) of the Act was issued. The said warrant was executed on the assessee at NSCBI Airport, Kolkata and returned an amount of ₹ 2,19,000/- to the satisfaction and seized amount of ₹ 49,00,000/- and 20,000 Pound Sterling was handed over to AD, Directorate of Enforcement, Kolkata on 27-01-11. 5. According to AO, as per the statement recorded u/s. 131 of the Act the assessee was coming from Phagwara, Dist: Jalandhar, Punjab by Flight No. SG 212, Delhi to Kolkata. The said cash amount found in the search & seizure operation was relating to sale proceeds of an ancestral land measuring 18 Marlas situated in Phagwara, Punjab @ ₹ 4.25 lakhs per Marlas and the said amount was received by the assessee in cash from sale of said property through through property dealer, Shri Avtar Singh. A statement of Shri Avtar Singh was recorded u/s. 131 of the Act, wherein he stated that the assessee sold an ancestral land measuring 18 Marlas to Shri .....

X X X X X X X

Full Text of the Document

X X X X X X X

n London and India is approx. ₹ 50,000/- and lodging expenses in India is normally @ ₹ 7,000/- per day. So, in the case of his client, lodging expenses comes to Rs.l,05,0001- ( i.e., ₹ 7,000 x 15) and fooding expenses in hotels comes to approx. ₹ 75,000/- for 15 days. For visiting here and there, cab hire charges was approx. ₹ 70,000/-'. The submission of the AR is not tenable for several reasons. First, no documentary evidence is furnished in support of such claims. The AR is also not sure of the actual amount of expenditure, if any incurred and he has only made some guesstimate of figures like "approx.". Second, lodging and fooding charges have been estimated for 15 days, for the period of assessee's stay in India from J 7th January, 2011 to 2nd February, 2011. It is evident from record of proceedings that the assessee landed in New Delhi Airport on 17th January,2011 and conveyance of the sold out property was given to the purchaser on 24th January 2011 after receipt of the entire sale consideration of ₹ 76,50,000/- in the forenoon of 24th January itself, all these happened within a period of 7 days only. So the period commenc .....

X X X X X X X

Full Text of the Document

X X X X X X X

e on account of lack of documentary evidence. However, it is noted that in the statement recorded u/s 131 of the IT Act, 1961 on 27.1.2011 i.e. during the search proceedings itself, the appellant had stated that the cash found on him was out of sale proceeds of land which was carried out through Shri Avtar Singh, broker. In the subsequent statement dated 28.1.2011, he stated that he had paid brokerage of ₹ 1.5 lakhs to Shri Avtar Singh. The appellant is a citizen of UK and had few local contacts at Phagwara, Punjab. Therefore, it is quite reasonable to expect that he would be carrying out land deal through some broker. In fact, involvement of Shri Avtar Singh as a broker in the land deal has been confirmed by the ADIT(lnv.), Jalandhar also. Thus, it is not disputed, that the deal was done through the broker, who must have Charged brokerage. It is true, that the appellant could not produce documentary evidence for brokerage. However, it is quite common that for such transaction no proper bills or other documentary evidence is maintained by the parties. The land sold was for ₹ 76.5 lakhs and brokerage of ₹ 1.5 lakhs which comes to around 2%. It is common knowledge t .....

X X X X X X X

Full Text of the Document

X X X X X X X

the sale of said ancestral property. The CIT-A ought to have allowed the entire expenses of ₹ 3 lakhs. The assessee came to India to complete transaction of sale of ancestral landed property and the said expenditure were incurred during his stay in India i.e the period of sale of said property. The assessee is entitled to claim the remaining expenditure of ₹ 1.5 lakhs towards other expenses and prayed to allow ground no.1 raised by the assessee. 9. On the other hand, the ld.DR argued that the break-up of other expenses and supporting evidences towards such claim were not given by the assessee before the AO & CIT-A. The assessee only produced some calculation and on that basis sought allowance without there being any evidence. For non submission of evidence the AO has rightly disallowed the same and relied on the order of AO. 10. Heard rival submissions and perused the material on record. We find that the facts relating to the issue in hand are that the assessee came to India to complete the sale transaction of the said ancestral property. During the sale transaction, the assessee stayed in India and incurred other expenses of ₹ 3 lakhs towards airfare, foodin .....

X X X X X X X

Full Text of the Document

X X X X X X X

-term capital asset (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45,' (b) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45 : Provided that the investment made on or after the 1st day of April, 2007 in the long-term specified asset by an assessee during any financial year does not exceed fifty lakh rupees. ] [Emphasis added] 16. In light of the .....

X X X X X X X

Full Text of the Document

X X X X X X X

e Income Tax Act, 1961 amounting to ₹ 40,00,000/- was made by the assessee. The assessee has claimed the said exemption based on his intention to invest in such bonds however, the section 54EC(1) of the act specifically provides that exemption can be allowed 'provided' that he investment has been made within a period of six months from the date of transfer of the capital asset. In the instant case, it is evident that no investment as required u/s. 54 C was made by the assessee. " In this regard, I would like to draw the attention of your honour towards the dates of incidents and facts of the case. The appellant sold the property on 24th January 2011 and received the sale proceeds on 24th January 2011. The appellant while coming to Kolkata from Delhi after selling the land was brought under the proceedings of section ,132A of the Income Tax Act, 1961 on 26th January 2011 and on the same day the whole amount of the sate proceed was seized by the officials and taken away from the appellant. Ultimately the amount received by the appellant from the sale proceeds was taken over and the appellant had nothing in his hands. However the appellant while computing the capita .....

X X X X X X X

Full Text of the Document

X X X X X X X

ing anywhere else but, was in the account of the Government it elf. As such being the amount being ultimately used for the welfare of the country (as the amount was in Government's account) the benefit U/s. 54EC should be provided to the appellant. Further, we would like to submit that from the reading of section 54EC of the Income Tax Act 1961 it can be said that the exemption would be allowed to the assessee only when the amount of capital gain derived from the transfer of capital asset is invested in the long term specified asset. To clear it more, we can state that to make the investment in the specified asset the assessee will require cash realized from the transfer of the asset. In the instant case it was impossible for the appellant to make payments in specified bonds and in natural justice law cannot compel anybody to do the impossible which your honour clearly exist in the present case. It is to be noted that a taxing statue or any other statute has to be construed reasonably and every effort should always be made to ascertain the intention of the parliament from the words employed and, as far as possible, an interpretation which lead to absurdity should be avoided. If .....

X X X X X X X

Full Text of the Document

X X X X X X X

e stock-in-trade. The CBDT appreciated the impossibility of the assessee being able to invest the amount in specified assets within six months from the date of transfer. This interpretation of the CBDT supports the assessee s claim that where the consideration is received much after the date of transfer and it is not possible to invest the same within 6 months of the date of transfer, the period of 6 months must be reckoned from the date of receipt of consideration. Keeping in consideration the above decisions given by the Hon ble courts and the facts of the case and in the present circumstances the exemption of section 54EC is justified and must be allowed as the appellant was not in possession of the consideration received but claiming the exemption in his computation clearly shows his intention of investment. The Ld. Assessing Officer was not justified in not considering the facts of the case and ignored the fact that the appellant was not having the cash with himself and was prevented to make the investment in the specified bonds and vehemently and wrongly disallowed the exemption without considering the merits of the case. 14. The CIT-A considering the submissions of the asses .....

X X X X X X X

Full Text of the Document

X X X X X X X

llow the ground nos. 2 & 3 by treating the sum of ₹ 40 lakhs as if invested in the Bonds. 16. On the other hand, the ld.DR submits that in order to claim exemption u/s. 54EC of the Act, the assessee must show the investment made as per provisions of relevant section. The assessee failed to show any investment before the AO and CIT-A for claim of exemption and submission of as seized amount is being in the Government account and it should be treated invested in bonds, which is not tenable at all in the facts and circumstances of the present case. He relied on the orders of the AO & CIT-A. He urged to dismiss grounds 2 and 3 raised by the assessee. 17. Heard rival submissions and perused the material on record. It is an admitted fact that the amount in question to the extent of ₹ 49,00,000/- was seized by the IT Authority. The facts in respect of sale of land, search & seizure operation, issuance of notice u/s. 153A of the Act and filing of return for the A.Y under consideration are undisputed. It is also not disputed that the amount of sale of said land was lying in the custody and in the account of Government. We find that in response to notice issued u/s. 1 .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||