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TMI Blog2019 (12) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... ption u/s.54F in respect of investment made for booking of residential bungalow in the scheme of Shivalik Lake View, and accordingly, confirmed the addition of Rs. 13,46,203/-. 2 The Learned Commissioner of Income Tax (Appeals)-13, Ahmedabad has erred in law and on facts of the case in confirming the addition of Rs. 27,94,000/- made by the Assessing Officer in respect of cash deposited in bank account by the Appellant. 3 Your appellant prays to reserve the right to add, alter, amend and/or withdraw any of the above grounds of appeal. 2. The 1st issue raised by the assessee is that the learned CIT (A) erred in confirming the order of the AO by not allowing the exemption under section 54F of the Act for the investment made in the residential bungalow amounting to Rs. 13,46,203.00 only. 3. The facts in brief are that the assessee in the present case is an individual and non-resident Indian. His (the assessee) brother Shri Vijay Bhai Hathi Singh Shah is the power of attorney holder on behalf of the assessee. The brother of the assessee Shri Vijay Bhai Hathi Singh Shah is a partner in a partnership firm namely M/s Bhikubhai Infrastructure LLP ( in short "BI LLP") which is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. In view of the above, the AO treated the entire transaction for claiming the exemption under section 54F of the Act as a colourable device by using dubious methods for tax evasion. Accordingly, the AO was of the view that such planning involving the tax evasion cannot be permitted in view of the judgment of the Hon'ble Supreme Court in the case of Mcdowell & Co. Ltd. Vs Commercial Tax Officer reported in 154 ITR 148. Accordingly the learned AO denied the benefit of the exemption provided under section 54F of the Act and added to the total income of the assessee. Aggrieved assessee preferred an appeal to the learned CIT (A). 4. The assessee before the learned CIT (A) submitted that he has not filed the income tax return under the provisions of section 139 of the Act as he was under the belief that his income is not chargeable to tax. 4.1 The purpose of the provisions of section 54F of the Act was to make the investment in the residential property which has been done in the case on hand. But the sale deed was executed as the new residential property was under the construction. The assessee also claimed that the provisions of section 54F of the Act are the beneficial pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned AR in support of his claim filed the copy of the sale deed which is placed on record. The learned AR reiterated the submissions as made before the authorities below. 7. On the other hand, the learned DR supported the view taken by the authorities below by reiterating the findings contained in the respective orders. 8. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion we find that the benefit of exemption claimed by the assessee under section 54F of the Act was denied by the lower authorities mainly on 2 grounds. Firstly, the construction was not completed within the time permitted under the provisions of section 54F of the Act. Secondly, the entire transaction for sale of the land and the alleged investment in the property for claiming the exemption under section 54F of the Act is a colourable device which is impermissible under the provisions of law. 8.1 Admittedly, the property was finally acquired by the assessee as evident from the copy of the sale deed which is available on record. Now the question arises whether the assessee can be denied the benefit of the provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed benefit under section 54F. The Assessing Officer disallowed the claim of exemption under section 54F on the ground that the construction of villas was not completed within the stipulated time allowed under section 54F. The Tribunal held that it was true that the agreement for construction entered by the assessee with the builder gave an outer date, which went beyond the three year period from the date of sale of the shares. However, the assessee had done what all it could do for acquiring the villa by paying the whole of the price. The Tribunal, accordingly, allowed claim of exemption. Held that the issue is already covered by the decision of this Court in the case of CIT v. Sambandam Udaykumar [2012] 345 ITR 389/19taxmann.com 17/206 Taxman 150. Since the Tribunal has followed the said decision of this Court, no substantial question of law would arise for consideration in the present appeal." In addition to the above we also note that the Revenue in the case of the coowner as discussed above has accepted the claim made by the assessee in the assessment framed under section 147 read with section 143(3) of the Act. The courts have held that once the claim in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of the assessee. We find force in this contention of the assessee, because section (2) of section 50C contemplates that in case assessee raises an objection of the value on which stamp duty was paid, then in order to find fair market value of the asset, reference would be made to the DVO , since in the case of co-owner such reference was made on the same piece of land. The same value ITA No.2444/Ahd/2016 determined by the AO in the case of co-owner ought to be adopted in the case of the assessee. We allow the appeal of the assessee and remit the issue to the file of the AO with direction to the ld.AO to compute the capital gain assessable in the hands of the assessee on transfer of the above land by adopting full sale consideration equivalent to the amount determined by the DVO in the case of co-owner. With this direction, we allow this ground of appeal." In view of the above, we hold that the impugned transaction cannot be treated as colourable device adopted by the assessee to escape from the income tax liability. Accordingly we are of the opinion that the principles laid down in the case of McDowells (supra) cannot be applied in the case on hand. In view of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been brought on records suggesting that the cash withdrawn from the bank has been utilized for some other purposes other than the deposit of cash as alleged by the authorities below. The onus was of the Revenue to reject the contention of the assessee based on cogent reasons that the cash was not deposited out of the cash withdrawal from the bank. But the Revenue failed to do so. Thus in the absence of any documentary evidence, we can safely presume that the cash withdrawn from the bank was available with the assessee which was subsequently deposited with the bank. Therefore, we cannot treat the same as undisclosed income of the assessee. In view of the above, we are of the opinion that there cannot be any addition on account of deposit of cash in the saving bank account of the assessee by treating the same as undisclosed income. Hence the ground of appeal of the assessee is allowed. In the result the appeal of the assessee is allowed. Coming to the ITA No. 1968/AHD/2018, an appeal by the assessee The assessee has raised the following grounds of appeal: 1. The Learned Commissioner of Income Tax (Appeals)-13, Ahmedabad has erred in law and on facts of the case in holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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