Income Tax Appellate Tribunal - Amritsar
Aneeta Khanna, , Amritsar. vs Department Of Income Tax on 28 June, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER
AND SH. B.P.JAIN, ACCOUNTANT MEMBER
I.T.A. No.540(Asr)/2011
Assessment year:2007-08
PAN :AFEPK9543Q
The Income Tax Officer, Vs. Smt. Aneeta Khanna,
Ward 3(1), Amritsar. Amritsar.
(Appellant) (Respondent)
Appellant by:Sh.R.L. Chhanalia, DR
Respondent by:Sh. Varinder Wadhwa,CA
Date of hearing:28/06/2012
Date of pronouncement:02/07/2012
ORDER
PER BENCH ;
This appeal of the Revenue arises from the order of the CIT(A), Amritsar, dated 01.09.2011 for the assessment year 2007-08.
2. The Revenue has raised following grounds of appeal:
"1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs.20,20,615/- made by the Assessing Officer, on account of long term capital gain on the contention of the assessee that the assessee being house 2 ITA No.540(Asr)/2011 wife preferred to live in joint family residential building/premises and that she can shift her residence at any time.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has failed to appreciate the fact that the purpose of purchase/sale of the property was to earn profit and not to use it for residential purpose. Hence, section 54F(1) of the Income-tax Act, 1961 is not applicable in this case.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the trading addition of Rs.2,50,030/- made by the A.O. holding that the AO has failed to bring on record any positive and corroborative evidence to disprove the genuineness of the trading results and he also erred in deleting the addition of Rs.1,63,603/- made by the A.O. on account of various business expenses holding that the AO was not justified in making the addition towards the so-called unverifiable and unvouched business expenses.
4. On the facts and in the circumstances of the case, the Ld. CIT(A) further erred in deleting the addition of Rs.84,000/- made on account of house hold expenses holding that the addition on estimate and hypothetical basis cannot survive in the eyes of law.
5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed of."
3. As regards grounds No. 1 & 2, the brief facts are that the assessee purchased a residential house/flat from Delhi Development Authority by making instalments in different years amounting to Rs.2,89,000/-. The same was sold by the assessee at Rs.30,00,000/- during the year. After reducing the indexed cost of acquisition from the sale consideration, capital gain 3 ITA No.540(Asr)/2011 worked out at Rs.20,20,615/- and the assessee claimed an exemption u/s 54 of the Act by purchasing a property as residential house for an amount of Rs.22,78,640/- as per the statement of total income. The chargeable capital gain was worked out nil. The AO after considering the submissions of the assessee was of the view that the property purchased and sold in Delhi was not for residential purpose but to earn profit. Therefore, the AO did not allow the claim of exemption u/s 54 of the Act and added Rs.20,20,615/- to capital gain and taxed the assessee accordingly.
4. Before the Ld, CIT(A), the assessee made submissions which are reproduced in para 5 at pages 4 to 8 of CIT(A) order. The Ld. CIT(A) after considering the reply had gone on a different premise that the assessee had claimed exemption u/s 54F of the Act. The said provisions contained in section 54F have been reproduced by the ld. CIT(A) in para 10 at pages 12 & 13 of his order and reversed the order of the A.O. by considering that the assessee has rightly invested the capital gain u/s 54F(1) of the Act.
5. We have heard the rival contentions and perused the facts of the case. From the perusal of the claim of the assessee as is evident from PB-1 & II being the statement of total income for the impugned year, the assessee had sold the residential house/flat at Vasant Kunj, New Delhi for Rs.30 lacs on 4 ITA No.540(Asr)/2011 which the assessee had computed long term gain of Rs.20,20,615/-. The assessee had purchased a house amounting to Rs.22,78,640/- which is a residential house and the capital gain has been claimed to be exempt u/s 54F of the Act. It appears that the ld. CIT(A) has ignored the findings of the AO as well as the claim of the assessee as is evident from the statement of total income at PB-1 & II mentioned hereinabove. Under section 54 of the Act, the exemption is given when the capital arises from the transfer of any long term capital asset, being a residential house, the income of which is chargeable under the head 'Income from house property'. Whereas under
section 54F, the exemption is given when the capital gain arising from the transfer of any long term gain not being a residential house. It is a residential house, which is a subject matter of long term capital gain u/s 54 of the Act and it is any other asset which is not a residential house which is a matter of capital gain u/s 54 of the Act. There is no finding of the AO that the assessee has claimed exemption u/s 54F of the Act. It is also undisputed that the assessee was the owner of residential house/flat at Delhi at Vasant Kunj which was sold during the impugned year and capital gain of Rs.20,20,615/- was earned by the assessee which was invested by purchase of a residential house at Amritsar for Rs.22,78,640/-. These facts are coming in the order of the ld. CIT(A) in para 10 itself and as per statement of total income of the 5 ITA No.540(Asr)/2011 assessee placed at PB-1 & 2. It will be interest of justice, if the matter is set- aside to the file of the ld. CIT(A), who after considering the provision of section 54 of the Act instead the provisions of section 54F of the Act and will decide the issue afresh by considering the claim and explanation made by the assessee, denovo but by providing sufficient opportunity of being heard to the assessee. Thus ground Nos. 1 & 2 of the revenue are allowed for statistical purposes.
6. As regards ground No.3, the AO made a trading addition of Rs.250030/- being difference between sundry debtors and the sales. 6.1. The Ld. CIT(A) deleted the addition vide para 8 of his order for the reasons that the assessee had submitted the explanation before the A.O. which have not been considered. Moreover, the AO has not rejected the books of account. The assessee has filed the copies of account of all trade creditors to the AO and the AO by issuing notices u/s 133(6) has confirmed the trade creditors and therefore, genuineness of the trade creditors could not be under doubt. Therefore, the AO was not justified in making the trading addition of Rs.250030/- towards difference between debtors and sales.
6.2. We have heard the rival contentions and perused the facts of the case. We concur with the views of the ld. CIT(A) that the books of account of the 6 ITA No.540(Asr)/2011 assessee have not been rejected. The assessee having filed all the copies of account of trade creditors which have been confirmed by the AO by issuing notice u/s 133(6) of the Act. Therefore, the genuineness of the trade creditors cannot be doubted. In the facts and circumstances of the case, we do not find any justification to interfere with the order of the ld. CIT(A), who has rightly deleted the addition in dispute. Accordingly, ground No.3 of the revenue is dismissed.
7. As regards ground No.5, the A.O. made an addition of Rs.84,000/- on account of inadequate household withdrawals. It was submitted before the AO that the assessee was living in a joint family and total withdrawals of different members were shown at Rs.2,04,000/-. The Ld. CIT(A) after considering the submissions of the assessee deleted the addition made by the AO on account of household withdrawals.
7.1. We have heard the rival contentions and perused the facts of the case. We are in complete agreement with the views of the ld. CIT(A) that the A.O. has not considered the withdrawals made by other members of the family, which were on record. There is nothing on record brought by the AO regarding the reasons for inadequate household withdrawals by the assessee. 7 ITA No.540(Asr)/2011 In the facts and circumstances of the case, we find no infirmity in the order of the ld. CIT(A,) who has rightly deleted the addition. Thus, ground No.4 of the revenue is dismissed.
8. Ground No.5 is general in nature and does not require any adjudication.
9. In the result, the appeal of the Revenue in ITA No. 540(Asr)/2011 is partly allowed for statistical purposes.
Order pronounced in the open court on 2nd July, 2012.
Sd/- Sd/-
(H.S. SIDHU) (B.P. JAIN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 2nd July, 2012
/SKR/
Copy of the order forwarded to:
1. The Assessee:Sm. Aneeta Khanna C/o S.S. Mehra Textiles, Amritsar.
2. The Income Tax Officer, Wad-3(1), Amritsar.
3. The CIT(A), Amritsar.
4. The CIT, Amritsar.
5. The SR DR, ITAT, Amritsar.
True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.