Income Tax Appellate Tribunal - Chandigarh
Sh. Nand Lal Jain, Chandigarh vs Assessee on 31 March, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCH 'A' CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND SHRI T.R.SOOD, ACCOUNTANT MEMBER
ITA No. 85/CHD/2015
Assessment Year: 2008-09
Shri Nand Lal Jain, V The ACI T,
L/h Smt. Om Wati Jain, Central Circle I,
SCO-8, Sector 17-E, Chandigarh.
Chandigarh.
PAN: AAEPL3824H
(Appellant) (Respondent)
Appellant by : Shri Vineet Krishan
Respondent by : Shri S.K. Mittal
Date of Hearing : 30.03.2015
Date of Pronouncement : 31.03.2015
O R D E R
PER BHAVNESH SAINI,JM This appeal by assessee is directed against the order of ld. CIT(Appeals) Central, Gurgaon dated 15.07.2014 for assessment year 2008-09 challenging the addition of Rs. 4,55,756/- made by Assessing Officer by disallowing the benefit under section 54F to the assessee and treating the sale of land at Dariya to capital gain tax.
2. Briefly the facts of the case are that the assessee challenged the disallowance of Rs. 4,55,756/- before ld. CIT(Appeals) on disallowing the claim of deduction under section 54F on the sale of land at Dariya. It was submitted before ld. CIT(Appeals) tht Assessing Officer disallowed the claim allenging 2 that details of utilization of the amount in question for construction of residential house was not furnished which is factually incorrect. The complete details regarding the purchase of material for the construction were submitted before Assessing Officer. The payments were made for purchase of cement, brick, wood etc. All payments were made through cheques only. It was submitted that the benefit under section 54F is not available if the assessee has two residential houses. In the present case, assessee is owner of only one house and the amount was spent for its construction only. The assessee spent the amount for construction of residential house No. 23 Sector 9, Chandigarh and assessee was not owner of any other residential property except above. Complete details of construction were filed before Assessing Officer. The assessee also explained how the assessee inherited the property in question which was constructed and was supported by all the evidences. The ld. CI T(Appeals) confirmed the addition and dismissed the appeal of the assessee. His findings in para 5.1 and 6 are reproduced as under :
"5.1 1 have considered the assessee's submission as well as the impugned order. Fro,r: the perusal of details furnished by the assessee the AO observed that a plot situated Village Duriya was sold for Rs. 5,14,286/-, declaring capital gain at Rs. 4,55,758/-. However as assessee did not furnished details of expenditure and as per records, assessee is already in possession of residential house therefore claim of deduction u/s 54F was disallowed. Furthermore assessee did not furnished any evidence that the sale consideration was utilized for purchase of a residential house.
On the other hand, the assessee has argued that as per the provisions of Section 54F the benefit under Section 54F of the IT. Act, is not available if the assessee has two residential houses. In the present case he is owner of only one house and the amount was spent for its construction only. That a sum of Rs. 5,69,600/- was spent for the construction of his 3 only one residential house (No. 23, Sector 9, Chandigarh). It was further stated that the complete details regarding the utilization of Rs. 4,55,758/- were duly filed before the Assessing Officer.
As per provisions for section 54F, no deduction is admissible in a case where the assessee is in possession of more than one residential house, other than the new asset. On a perusal of the notarized family settlement deed dated 27.4.2007 it is seen that House No. 23, Sector 9A has been bequeathed to the assessee (37.5%) and to Shri Rajinder Jain (62.5%). The provisions clearly allows deduction if the amount is spent on construction of a residential house which does not appear be the case here. The professed construction has not been clearly defined. A certain claim has been made so the assessee was required to evidence how and in what manner he was eligible for claiming the deduction u/s 54F. This has not been convincingly brought out. Thus, I am inclined not to interfere with the disallowance made by the AO. Assessee fails on this ground.
3. We have heard ld. Representatives of both the parties and perused the material available on record. According to Section 54F(1), the benefit of exemption can be granted to the assessee if the assessee has constructed a residential house within the specified period. The assessee claimed that assessee was owner of one house only and the amount of sale proceeds have been invested in construction of the same property. The claim of assessee was declined for exemption under section 54 because the details of expenditure were not furnished. Ld. counsel for the assessee however submitted that complete details were filed before the authorities below which have not been discussed at all and that it is a case of search and the property of the assessee have been inspected by Investigation Wing also with regard to raising of the construction by assessee. Therefore, it is not a case of default on the part of the assessee for not furnishing complete details with regard to construction. 4
4. Considering the submission of ld. counsel for the assessee in the light of the details furnished in the Paper Book and details submitted before authorities below along with the reply, we are of the view the matter requires re-consideration at the level of the Assessing Officer. We, accordingly, set aside the orders of authorities below and restore the matter and issue to the file of Assessing Officer with direction to re-decide the matter in issue in the light of the pro visions of Section 54F and the evidences furnished before them strictly in accordance with law by giving reasonable sufficient opportunity of being heard to the assessee.
5. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 31 s t March,2015.
Sd/- Sd/-
(T.R.SOOD) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 31 s t March,2015.
'Poonam'
Copy to:
The Appellant, The Respondent, The CIT(A), The CIT,DR Assistant Registrar, ITA T Chandigarh