TMI Blog2019 (3) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 40 lakh was spent towards cost of improvement/development. Therefore, assessee’s claim cannot be allowed on mere face value. However, for enabling the assessee to justify its claim by furnishing credible supporting evidence, we are inclined to restore the issue to the file of the Assessing Officer for de novo adjudication after due opportunity of being heard to the assessee. This ground is allowed for statistical purposes. Deduction claimed u/s 54 - disallowance of claim as flat was purchased in financial year 2003–04 relevant to assessment year 2004–05 and secondly, the investment made towards purchase of new flats was not out of assessee’s own funds - CIT(A) hold that the investment in new flat has been made by the assessee within the period stipulated under section 54 - HELD THAT:- The provision of section 54(1) allows deduction from taxation of capital gain in a case where the assessee has invested in purchase of new house before one year from the date of transfer of the original asset. Thus, at that stage, the capital gain has not accrued to the assessee. If the reasoning of the departmental authorities that the assessee has to invest the capital gain in purchase o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91, after claiming deduction under section 54 of the Income Tax Act, 1961 (for short the Act ). Assessment in the case of assessee was originally completed under section 144 of the Act determining the total income at ₹ 69,66,219. Against the assessment order so passed, the assessee carried appeal before the first appellate authority and thereafter to the Tribunal. The Tribunal vide order dated 14th February 2013, restored the matter back to the Assessing Officer for de novo adjudication. In pursuance to the directions of the Tribunal, the Assessing Officer took up the assessment proceedings afresh. In the course of assessment proceedings, the Assessing Officer while verifying the computation of long term capital gain by the assessee noticed that it has claimed deduction of an amount of ₹ 40 lakh under section 48(1) of the Act towards cost of development/improvement. When the Assessing Officer called upon the assessee to furnish the necessary details to justify the claim of cost of development, as alleged by the Assessing Officer, the assessee could not furnish the required details and sought adjournment time and again. Accordingly, the Assessing Officer disallowed asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the property from the original owner (copy of sale deed at page 235 of the paper book) for a consideration of ₹ 18 lakh, it appears that the property purchased by the assessee was a plot admeasuring 420 sq.mtrs. Whereas, sale deed dated 12th July 2004, under which the assessee sold the property mentions the existence of a house constructed over an area of 6,500 sq.ft. Therefore, assessee s claim that it has constructed a house over the plot of land cannot be discarded at the threshold. However, the onus of demonstrating incurring of expenditure for construction of the building lies entirely upon the assessee. The assessee has to furnish credible evidence to demonstrate that after purchase of the plot the assessee has constructed the building and the actual amount of expenditure incurred by it towards construction of the building. Once the assessee brings all the evidences on record to justify its claim, the onus shifts to the Assessing Officer to consider allowability of assessee s claim qua the evidences furnished. It is relevant to observe, except furnishing the photograph of the building the assessee has not furnished any other evidence even at this stage also to support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Dated 07.10.2009, Bombay High Court]; ii) Kapil Kumar Agarwal v/s. ACIT - [(2014) 63 SOT 22 (Del - Trib.) (URO)] Now Affirmed in: CIT v/s. Kapil Kumar Agarwal - [(2016) 382 ITR 56 (P H)]; iii) I.T.O. v/s. K. C. Gopalan - [(2000) 162 CTR (Ker) 5661; iv) CIT v/s. Anandraj - [(2016) 284 CTR 84 (Kam)]; v) Bombay Housing Corporation v/s. ACIT - [(2002) 81 lTD 545 (Mum)]; vi) Mrs. Prema P. Shah v/s. I.T.O. - [(2006) 100 lTD 60 (Mum)]; vii) DCIT v/s. Gaylord Investment Trading P. Ltd. - [(2008) 21 SOT 407 (Mum)]; viii) Ishar Singh Chawla v/s. DCIT - [(2010) 130 TTJ (Mum.) (UO) 108]; ix) Yatin Prakash Telang v/s. ITO - [(2018) 171 lTD 705 (Mum.)]; x) Mr. Harmeet Gandhi v/s. ITO - [I.T.A. No. 286 / M / 09, Order Dated 30.04.20 10]; xi) Neelam Handa v/s. ITO - [I.T.A. No. 384 / Del / 16, Order Dated 13.05.2016]; xii) Ajit Vaswanit v/s. DCIT - [(2001) 117 Taxman 123 (Del) (Mag)]; xiii) Muneer Khan v/s. ITO - [(2010) 41 SOT 504 (Hyd. - Trib.)]; xiv) J. V. Krishna Rao v/s. DCIT - [(2012) 54 SOT 44 (Hyd. - Trib.)]; xv) Smt. Pushpa Devi Tirbrewala v/s. ITO - [(2013) 58 SOT 41 (Flyd. - Trib.)]; xvi) Gopilal Laddha v/s. ACIT - [(2014) 62 SOT 59 (Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he stipulated time. In the facts of the present case, undisputedly, the investment in purchase of new house has been made within the period stipulated under section 54(1) of the Act. Moreover, investment made in purchase of new house amounts to ₹ 68,84,388, whereas, the net long term capital gain computed by the Assessing Officer himself without allowing assessee s claim of cost of development/improvement is ₹ 58,13,728. Therefore, the quantum of investment made by the assessee towards purchase of new house is much more than the long term capital gain computed by the Assessing Officer. That being the case, the provision of section 54(2) of the Act does not apply. There being no pre condition under section 54(1) of the Act providing for investment of the long term capital gain in purchase of new house for claiming deduction under section 54 of the Act, the departmental authorities cannot import such restriction/condition to the statutory provision. The decisions cited by the learned Authorised Representative clearly support this view. In fact, the Hon ble P H High Court in CIT v/s Kapil Kumar (supra) has clearly and categorically held that section 54 of the Act does not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
