TMI Blog2019 (9) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... of facts, circumstances and position of law as discussed herein above, the appeal of the assessee is allowed. - ITA No. 8/CHD/2016 - - - Dated:- 25-9-2019 - Smt. Diva Singh, JM And Smt. Annapurna Gupta, AM For the Assessee : Shri Vishal Mohan For the Revenue : Smt. Chanderkanta, Sr.DR ORDER PER DIVA SINGH The present appeal has been filed by the assessee wherein the correctness of the order dated 09/11/2015 of CAT(A) Shimla pertaining to 2008 09 assessment year is assailed on the following grounds : 1. That in the facts and circumstances of the case the Ld CIT (Appeals) is not justified in upholding the reopening of the case under section 147 read with section 148 o f the Income Tax Act, 1961 . The reopening of the case is bad in law and as such not sustainable in the eyes of law. 2. That in the facts and circumstances of the case the Ld Commissioner of Income Tax ( Appeals) is not justified in upholding the disallowance of deduction under section 54 of the Income Tax Act, 1961 of ₹ 38,61,259/-. 3. That the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o question No. 8. For the sake of completeness the same is reproduced hereunder : 8. During the year the assessee has sold a residential house property on 25/09/2007 for a consideration of ₹ 55,40,000/- and the same amount was invested in house property purchased be the assessee. The copy of allotment letter is being annexed herewith for your kind verification (emphasis supplied) 2.2 The Ld. AR inviting attention to the supporting fact referred to in para 8 highlighted in the reproduction made above referred to paper book page 29 and 30 which is a copy of the allotment letter dated 20/10/2008 addressed by Manager-Customer Services to the assessee. The following contents of the relevant portion of the extract from the aforesaid letter were relied upon to support the claim made : Subject: Allotment of a Unit no. /Apartment no .F1-F10-1004 in the residential project situated in THE VIEWS at Mohali Hills in Sector -105, S.A.S. Nagar, District Mohali, Punjab. Dear Mr.K.D Shreedhar We thank you for registering your interest in allotment of a premium residential complex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired. 2 The assessee is an Advocate. During the year under consideration apart from business/profession income, the assessee has shown income from other sources andincome from short term capital gain. Documents/ informations/details furnished by the assessee have been examined on test check basis and no adverse inference has been found. Case discussed with the counsel of the assessee and after discussions, income returned by the assessee is assessed at ₹ 16675690/-as declared. (emphasis supplied) 2.4 Reading therefrom it was his submission that there is a sanctity and a relevance to be accorded to a recording of an Assessing Officer that he has seen and examined that too after the plethora of evidence available on record to justify the claim that the issue had been considered after giving due time and attention leading to the forming of opinion of being ITA 8 /CHD/2016 A.Y. 2008-09 Page 6 of 15 satisfied. In the light of this factual background, attention was invited to paper book page 40 which is a copy of the notice issued under section 148 dated 28/03/2014. It was his submission that the reopening has been done beyo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e new residential house before the due date. The assessee had neither purchased the new residential house before 30.09.2008 nor he had deposited the capital gain amount in to the capital gain deposit a/c. scheme. Therefore exemption claimed /allowed to him u/s 54 needed in be disallowed. Thus the capital gain amount of ₹ 3861259/- needed to be added back to taxable income and charged to tax. 2.5 In the said background it was his submission referring to the relevant provision namely sub-section (1) of section 54 of the Income Tax Act that the law does not require that it is the same money which has been received on the sale of the asset is required to be invested. The law requires that the assessee within the period of one year before or 2 years after the date on which the transfer took place or has within the period of 3 years after that had constructed one residential house in India. In the facts of the present case, admittedly the assessee had within the period of one year and before the filing of the return had already invested the required amount. It was submitted that had the investment not been made within time, the Revenue may have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was a necessary hurdle for the Revenue in the re-assessment proceedings beyond the 4 years. The relevant extract is reduced hereunder for the sake of completeness: 10. We are of the considered view that Section 149 of the Act governs that field which is not covered by the proviso to Section 147 of the Act. The proviso to Section 147 of the Act is a specific provision laying down a special limitation in cases of assessment made on scrutiny where there has been full and complete disclosure of material facts. In such cases, the limitation is four years. Section 149 of the Act also lays down a limitation of four years even in cases where the income has escaped assessment due to non-disclosure of material facts. However, in case the income escaping assessment is more than ₹ 1,00,000/- (₹ 50,000/- earlier) then the limitation would be six years. Therefore, even under Section 149 of the Act, the notice cannot be issued after four years of the end of the relevant assessment year unless the income escaping assessment is more than ₹ 1,00,000/- in which case the limitation would be six years. After six years obviously no notice could be issued. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not distinguished with. 4. We have heard the rival submissions and perused the material available on record. A perusal of the record shows that in the facts of the present case on account of sale of a specific property, capital gains to the tune of ₹ 38,61,259/- arose to the assessee. The relevant facts relatable to the factum of sale and accrual of amount of capital gains are not being referred to in greater details as there is no dispute amongst the parties on the said issue. The fact that the assessee before the filing of the return i.e. before 30.09.2008 invested an amount of ₹ 49,88,782/- vide cheque No. 765011-I drawn on ICICI Bank for acquiring a residential flat is an admitted fact. The specific cheque was cleared by the Bank on 29.09.2008 is also not in dispute. The fact that said evidence was available to the AO as questionnaires were issued by the AO during the original scrutiny proceedings to justify the claim of deduction u/s 54 of the Act and the reply of the assessee are also facts on record. The fact that sale proceeds were deposited in Canara Bank Account which was probably a joint account of the assessee with his wif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der : 22. It is axiomatic that Section 54(1) of the said Act does not contemplate that the same money received from the sale of a residential house should be used in the acquisition of new residential house. Had it been the intention of the Legislature that the very same money that had been received as consideration for transfer of a residential house should be used for acquisition of the new asset, Section 54(1) would not have allowed adjustment and/or exemption in respect of property purchased one year prior to the transfer, which gave rise to the capital gain or may be in the alternative have expressly made the exemption in case of prior purchase, subject to purchase from any advance that might have been received for the transfer of the residential house which resulted in the capital gain. 4.1 We also find that by way of investing more than ₹ 49.88 lacs odd, the amount for which exemption is sought (₹ 38.61 lacs odd) which was paid to the The View MGF the assessee had done all it could have the position of law which has been well appreciated by the Delhi High Court in CIT Vs R.L. Sood (2000) 245 ITR 727; CIT Vs Kuldeep Singh (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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