Income Tax Appellate Tribunal - Chandigarh
Sh. Harish Sachdeva, Mohali vs Acit, Mohali on 21 November, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
DIVISION BENCH, CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER
AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No.320/Chd/2015
(Assessment Year : 2010-11)
Sh.Harish Sachdeva, Vs. The A.C.I.T.,
Kothi No.85, Phase-9, Circle 6(1),
Mohali. Mohali.
PAN: AEEPS8909L
(Appellant) (Respondent)
Appellant by : Shri Vineet Krishan
Respondent by : Shri S.K. Mittal, DR
Date of hearing : 11.08.2016
Date of Pronouncement : 21.11.2016
O R D E R
PER ANNAPURNA GUPTA, A.M. :
This appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-2, Chandigarh dated 24.2.2015 for assessment year 2010-11.
2. The assessee has raised following grounds of appeal :
"1. That the order passed under section 250(6) by the Ld. Commissioner of Income Tax (Appeals)-2, Chandigarh in Appeal No.396/12-13 dated 24.02.2015 is contrary to law and facts of the case.2
2. That in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) gravelly erred in upholding the action of the Id. Assessing Officer in disallowing the benefit to the appellant under section 54F of Rs.53,63,363/-.
3. That in the in facts and circumstances of the case the Ld. Commissioner of Income Tax (Appeals) gravelly erred in not admitting additional evidence although it goes to the root of the matter and was to support the facts already submitted before the Ld Assessing officer.
4. That the appellant craves to add, amend or alter any ground of appeal before or at the time of hearing of appeal with the permission of the Hon'ble Income Tax Appellate Tribunal, Chandigarh."
3. The only issue in the present appeal relates to disallowance of benefit to the assessee under section 54F of the Income Tax Act, 1961 (in short 'the Act').
4. Brief facts relating to the case are that the assessee had declared long term capital gain on sale of asset in March, 2010 and claimed deduction under section 54F of the Act of Rs.53,63,363/-. The Assessing Officer noticed that on the date of transfer of the asset the assessee owned two residential properties namely House No.85, Phase-9, Mohali and House 939/1. Sector 40, Chandigarh and so was not entitled to deduction under section 54F of the Act. When questioned, the assessee claimed that he had entered into an agreement to sell second residential house namely House No.939/1, Sector 40, Chandigarh before the sale of the original asset and 3 had also received a consideration of Rs.20 lacs for the same. To verify the correctness of claim of the assessee, the Assessing Officer asked him to produce copy of agreement to sell and copy of conveyance deed/sale deed, vide which the property was sold by him alongwith other corroborative evidences, but the assessee could not produce any document to support his claim and so the Assessing Officer disallowed the deduction claimed under section 54 of the Act.
5. Aggrieved by the same the assessee filed an appeal before the Ld. CIT (Appeals). During the course of hearing before the Ld. CIT (Appeals), the assessee submitted additional evidence being the agreement to sell the impugned property dated 3.2.2010 and drew attention to clause-C of the agreement which stated that the seller had delivered the actual physical and vacant possession of the said house to the purchaser w.e.f. the date of the agreement. The assessee pointed out that in view of the fact that the possession of the house was delivered to the purchaser, the sale had got completed and assessee was, therefore, the owner of the only one house property on the date of the sale of this asset on which it had returned long term capital gain and thus, was entitled to deduction under section 54F of the Act. The Ld. CIT (Appeals) dismissed the ground raised by the assessee by holding that in the first place the evidence submitted by the assessee before him was an additional evidence and 4 since no application for admission of the same under Rule 46A of the Act had been filed by the assessee, nor had the assessee explained reasons for non-filing this document before the Assessing Officer, the same could not be considered at this stage. The Ld. CIT (Appeals) further stated that even if the aforesaid document was admitted as evidence, its genuineness was doubtful since it was neither stamped nor registered. Further, the Ld. CIT (Appeals) held that even if the genuineness was accepted, the assessee was still the owner of the said property on the date of transfer of the original asset since as per the provisions of Transfer of Property Act, an immovable property got transferred only on execution of duly stamped sale deed registered by the legal authority. Thus, the Ld. CIT (Appeals) held that the assessee had failed to fulfill the condition specified under section 54F of the Act, of being the owner of only one residential house as on the date of sale of original asset, for the purpose of claiming deduction there-under and, therefore, accordingly, confirmed the order of the Assessing Officer in this regard.
6. Aggrieved by the same, the assessee has come up in appeal before us raising grounds against the denial of admission of additional evidence filed before the Ld. CIT (Appeals) as also the denial of deduction under section 54F of the Act. During the course of hearing b e f o r e u s , t h e a ss e s s e e f i l ed a n a p p l i c a t i on f o r a dm i s s i o n o f 5 additional evidence under Rule 29 of the Appellate Tribunal Rules submitting the following documents as additional evidence :
Sr.No. Particulars 1) Copy of Agreement to sell dated 03.02.2010. 2) Copy of General power of attorney. 3) Copy of Will 4) Copy of Agreement to sell dated 16.10.2010. 7. Further, the assessee submitted through the
application that the documents now filed in the shape of agreement to sell, Power of Attorney and copy of Will in respect of sale of House No.939/1, Sector 40-A, Chandigarh were necessary for deciding the issue at hand and went to the root of the matter to prove the claim of the assessee under section 54F of the Act It was also submitted that the documents were given by the assessee to erstwhile counsel of the assessee who appeared before the Assessing Officer but due to the reasons best known to him, he did not submit the same before the Assessing Officer. The assessee further invited our attention to the decision of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Mukta Metal Works (2011) 336 ITR 555 (P&H) for the proposition that the additional evidence which was necessary for the just decision of the matter and had direct that bearing on the issue could not be declined by the Tribunal to be considered as additional evidence.
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8. The learned counsel for the assessee further placed reliance on the decision of the I.T.A.T. Delhi Bench in the case of Mahavir Prasad Gupta Vs. JCIT (2006) 101 TTJ 1078 and the decision of the I.T.A.T. Bangalore Bench in the case of Smt.Selvi Venkatasubramani Vs.. ITO in ITA No.1052/Bang/2013 dated 7.10.2015 in this regard.
9. In response to the same, the Ld. DR filed his objection to the admission of additional evidence in writing which is reproduced hereunder:
In this case, the assesse has made an application for admission of additional evidence under Rule 29. In this regard, it is submitted that the application so filed by the assesse may kindly be out-rightly rejected as the opening words in the Rule clearly provide that 'the parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal'. It has further been written in the Rule that 'but if the Tribunal requires any document to be produced.........' Thus it is very clear that the assesse can not suo motto furnish any additional evidence. It is only when the Tribunal requires, the additional evidence can be produced. This is all the more clear as in the second part of this Rule, the word 'allow' has been used i.e. if the income tax authorities have decided the case without giving sufficient opportunity to the assesse to adduce evidence, the Tribunal may allow such document to be produced...... . In this case, there is no plea of the assesse that the department had not allowed it sufficient opportunity. Moreover, when no mind has been applied by the Ld. CIT(A) on a piece of document, the Hon'ble ITAT is unable to find out the correctness or incorrectness of the judgment of the lower appellate authority.7
In view of the above factual and legal position, the application filed by the assesse should be straightway rejected.
10. We have heard he rival contentions and find merit in the contention of the assessee that the additional evidences now filed before us being the agreement to sell dated 16.10.2010 of House NO.939/1, Sector 40-A, Chandigarh, copy of Will relating to the same and the General Power of Attorney relating to the same are documents which have a bearing on the pleadings made by the assessee in the present case relating to the sale of the impugned property. In fact, we find that these documents were at the first instance asked by the Assessing Officer also from the assessee to substantiate its claim of sale of impugned property during the impugned year. Therefore, there is no doubt that the documents now being submitted before us are ital to prove the claim of the assessee of deduction under section 54F of the Act. The I.T.A.T. Delhi Bench in the case of Mahavir Prasad Gupta (supra) has while elucidating on the power of the Tribunal in term of Rule 29 to admit fresh evidence, held that it entails an element of discretion which is required to be exercised in a judicious manner and is to be exercised not only in situation where evidence could not be produced before the lower authorities owing to lack of adequate opportunity but also situations where the fresh evidence would enable the Tribunal to pass order or for any other substantial cause. Further, the Jurisdictional High Court 8 in the case of Mukta Metal Works (supra) has also held that the additional evidence necessary for just decision of the matter cannot be declined to be considered as additional evidence. In view of the same, we admit the additional evidence filed by the assessee.
11. Having said so, we now proceed to adjudicate the issue at hand. The learned counsel for the assessee submitted before us that the assessee had been wrongly denied its claim of deduction under section 54F of the Act, since the assessee was the owner of only one property as on the date of the sale of the original asset and that the house property, 939/1, Sector 40A, Chandigarh, being one of the two original houses owned by it, was sold by it before the sale of the original asset. The learned counsel for the assessee drew our attention to the additional evidences now filed before us being the agreement to sell of the impugned property dated 3.2.2010, the General Power of Attorney, the Will and the agreement to sell dated 16.10.2010 of the impugned property. The learned counsel for the assessee stated that the assessee had entered into n agreement to sell the impugned property on 3.2.2010, which was before the date of sale of original asset and by virtue of the agreement to sell, the possession of the property had been delivered to the purchaser. The learned counsel for the assessee referred to clause-C of the agreement to sell in this regard, which reads as under :
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"That the seller has delivered the actual physical and vacant possession of said house to the said purchasers w.e.f. today and will hand over all the documents of said house to the said purchasers for their records at the time of final execution of this sale agreement. The said purchasers have become the absolute owners of said house subject to payments to be made by them."
12. The learned counsel for the assessee further stated that the agreement to sell entered into on 16.10.2010 could not be treated as the date of transfer since the possession stood transferred on the date of agreement to sale itself. The learned counsel for the assessee relied upon the decision of the Delhi Bench of the Tribunal in the case of Smt.Shashi Gupta Vs. ITO in ITA No.609/Del/2012 dated 24.11.2015 in this regard. The learned counsel for the assessee pointed out that in the aforestated case, the I.T.A.T. had held that the registration of transfer in accordance with the agreement to sell cannot be termed as the date of transfer, relying upon the judgment of the Hon'ble Apex Court in the case of Sanjev Lal & Anr. Vs. CIT & Anr. (2014) 365 ITR 389 (SC). The learned counsel for the assessee further pointed out to the findings of the I.T.A.T. rejecting the conclusion of the CIT (Appeals) in that case that the agreement to sell is a mere start of sale and cannot become the act of the sale for section 54 of the Act.
13. The Ld. DR, on the other hand, relied upon the order of the Ld. CIT (Appeals) and stated that as per the provisions of Transfer of Property Act, an immovable property gets transferred only when a duly stamped sale deed is registered by the legal authority. The Ld. DR 10 further stated that the veracity of the documents of agreement to sell had also been doubted by the Ld. CIT (Appeals) and, therefore, cannot be considered for the purpose of granting deduction to the assessee under section 54F of the Act.
14. We have heard the rival contentions and perused the orders of he authorities below and also documents placed before us. Having admitted the additional evidences before us and considering the judgment of the Delhi Bench of the Tribunal in the case of Smt.Shashi Gupta (supra) referred to by the learned counsel for the assessee above, holding the date of agreement to sell as the date of sale of asset, we consider it fit to restore the issue back to the file of the Ld. CIT (Appeals) to examine the documents now produced by the assessee and adjudicate the issue in the light of the decisions cited by the assessee and in accordance with law. We may add that the assessee be granted due opportunity of hearing.
15. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court.
Sd/- Sd/-
(SANJAY GARG) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 21 s t November, 2016
*Rati*
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A)
4. The CIT
5. The DR
Assistant Registrar,
ITAT, Chandigarh
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