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 ITO vs. Vikram A. Pradhan (ITAT Mumbai)

Income Tax Officer, Ward 41(4), Room No. 206, 2nd floor, B-Block, Civic Centre, New Delhi
May, 14th 2015
                                                           ITA NO.5036/Del/2013


                IN THE INCOME TAX APPELLATE TRIBUNAL
                      DELHI BENCH "H", NEW DELHI
               BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER
                                  AND
                SHRI J.S. REDDY, ACCOUNTANT MEMBER
                       I.T.A. No. 5036/DEL/2013
                              A.Y. : 2009-10
Income Tax Officer,                          Sh. Tapash Kumar Chaterjee,
Ward 41(4),                            VS. A-502, Defence Officers
                 nd
Room No. 206, 2 floor,                       Apartments, Sector-4,
B-Block, Civic Centre,                       Plot 33, Dwarka,
New Delhi                                    New Delhi ­ 110 075
                                             (PAN: AIPC9760B)
(APPELLANT)                                    (RESPONDENT)

         Department by                :    Sh. J.P. Chandraker, Sr. DR
          Assessee by                 :    Ms. Gini Gandhi, CA


                      Date of Hearing : 08-05-2015
                      Date of Order       : 12-05-2015
                             ORDER
PER H.S. SIDHU : JM
     This appeal by the Revenue is directed against the Order of the
Ld. Commissioner of Income Tax (Appeals)-XXX, New Delhi                  dated
03.6.2013 pertaining to assessment year 2009-10 on the following
grounds:-

            "On the facts and in the circumstances of the case, the

            Ld. CIT(A) has erred in


            1. Deleting of Rs. 26,85,470/- on account of capital Gain
              claimed as exempt which was never disclosed to the
              Department and treating revised computation of
              assessment proceedings after detecting the same by
              Department as revised return.


                                      1
                                                              ITA NO.5036/Del/2013


                2. Deleting    of additions of Rs. 10,25,000/- made on
                  account of unexplained cash deposit.
                3. Accepting   additional    evidence    without       granting
                  extension of time to AO for submission of report called
                  for which is in contravention of Rule 46A.

                The appellant craves the right to alter, amend, add or
                substitute the grounds of appeal."

2.    The brief facts of the case are that the Return declaring
income of Rs. 5,38,479/- was filed on 21.8.2009.The case was
selected for scrutiny through CASS/AIR. Notice u/s. 143(2) fixing the
case for 15.9.2010 was issued. Again notice u/s. 143(2) was issued
on 4.10.2011/23.11.2011 on 30.11.2011 and on the said date
assessee's counsel appeared before the                 AO and filed the part
details.        In this case the assessee is an        Army Officer and filed
return     of    income   declaring   only    salary    income.    During    the
assessment proceedings AO found that the assessee has sold one
plot of land and booked a flat claiming full exemption on account of
capital gain. Assessee has not disclosed it in his return of income
tax. The assessee was asked to file copies of purchase and sale
deeds of properties, details of banks and entries from where
transactions took place, share of ownership of assessee and his wife,
date of payments to builder and matching entries in bank
statements, receipts copies from builder and statement of affairs to
ascertain the genuineness of the assessee's claim for exemption on
account of capital gain. AO has found that only 69120/- has been
paid by the assessee and the lease deed was in the name of the
assessee and Mrs. Bharmar Chatterjee wife of the assessee as co-
owner.      The assessee furnished two bank accounts One Punjab
National Bank and another ICICI Bank.             According to the AO the
payments and receipts on account of sale and purchase of property

                                       2
                                                        ITA NO.5036/Del/2013


did not matches with the schedules / date / amount of payments,
which establishes that the assessee is either hiding another bank
accounts or not filing the true and correct position regarding sales
and purchase. AO further observed that the assesssee could not
prove the nexus between sale of property and investment of those
fund within the time limit prescribed to claim exemption u/s. 54F.
AO asked the assessee to provide the possession letter / electricity /
water bill of the property as under section 54F of the I.T. Act. As per
AO the completion of construction should be completed within three
year of transfer of original asset that is from 1.4.2008 to 31.3.2011
but the assessee failed to submit any proof of completion of the
property before the AO. Assessee has also not provided the current
status of the property, its stage of completion and whether he is still
owner of it or not. Assessee did not submit the statement of affairs,
therefore, AO observed that it is not possible to know how many
other properties he had invested in. Since assessee provided only a
part of sale deed of plot, therefore, it was not possible to know other
detail such as history of plot.   In view of above, AO completed the
assessment by making various additions u/s. 143(3) of the Act vide
order dated 28.12.2014.




3.   Being aggrieved with the assessment order dated 28.12.2014,
assessee appealed before the Ld. CIT(A), who vide impugned order
dated 3.6.2013 has partly allowed the appeal of the Assessee.

4.   Now the Revenue is aggrieved against the impugned order and
filed the present appeal before the Tribunal.

5.   Ld. Sr. DR relied order of the AO.         On the other hand, Ld.
Counsel of the assessee relied upon the order of the Ld. CIT(A).




                                    3
                                                        ITA NO.5036/Del/2013


6.    We have heard both the counsel and perused and considered
the relevant record available with us specially the impugned orders
passed by the Revenue Authorities.

6.1   With regard to ground no. 1 regarding deletion of addition of
Rs. 26,85,470/- on account of capital gain claimed as exempt which
was never disclosed to the Department and treating the revised
computation which was filed by the assessee during the course of
assessment proceedings after detecting the same by Department as
revised return.    We find that Ld.       First Appellate Authority has
concluded that the addition of Rs. 26,85,470/- on account of capital
gains is not justified and is excessive. Ld. CIT(A) has observed that
total gain computation was as under:-

      Sale consideration                                Rs. 41,76,000
      Less: Indexed cost of acquisition                 Rs. 13,59,081
                                                        Rs. 28,16,919

Less: Exemption u/s. 54F on account of investment
Of Rs. 56,74,279/-                                Rs. 28,16,919

Capital gain                                                     NIL

                  And / or

Capital gain computation of assessee's share was as under:-

      Sale consideration                              Rs. 20,88,000

Less: Indexed cost of acquisition                     Rs. 6,79,540

                                                      Rs. 14,08,460

Less : Exemption u/s. 54F on account of investment
      Of Rs. 30,56,000                             Rs. 14,08,460
      Capital gain                                         Nil




                                    4
                                                              ITA NO.5036/Del/2013


6.2   Ld. CIT(A) has observed that the case is righty covered u/s.
49(1) of the I.T. Act. The cost of acquisition which is indexed is taken
to be cost to the previous owner.

6.3   The assessee had made the total payment within the time
frame u/s. 54F of and therefore, transfer should be deemed to have
taken place. The exemption u/s. 54F is allowable in the light of the
following judgments :

           -    CIT vs. Sardarmal Kothari [2008] 302 ITR 286 (Mad.)
           -    CIT vs. Sambandam Udaykumar (2012) 81 CCH 151
                Kar. HC
           -    Commissioner of Income Tax vs. RL Sood.

           "Held that merely because the builder failed to hand over
           possession of the flat to the assessee within the period,
           the assessee cannot be denied the benefit of the said
           benevolent provision".

6.4   Keeping    in   view   of   the       facts   and   circumstances      and
precedents, we find that Ld. CIT(A) has passed a reasonable order
on this issue by deleting the addition of Rs. 26,85,470/-, which does
not need any interference on our part, hence, we uphold the same
by dismissing the ground no. 1 raised by the Revenue.

7.    With regard to ground no. 2 regarding deletion of addition of

Rs. 10,25,000/- made on account of unexplained cash deposit is

concerned, we find that Ld. CIT(A) has observed that the opening

cash as on 1.4.2008 should be deemed as acceptable. He observed

that gift from mother is fully substantiated as copies of her income

tax returns of last and relevant year alongwith document evidence


                                        5
                                                       ITA NO.5036/Del/2013


of source is rightly produced.   Ld. CIT(A) further noted that the cash

withdrawn from the bank is evidenced by the Bank statement. We

find considerable cogency in the finding of the Ld. CIT(A) that gift

from mother-in-law does not seem very excessive. Considering she

owns a agricultural land as is substantiate with the documentary

evidence.     Therefore, the conclusion drawn by the Ld. CIT(A) is

quite right in deleting the addition of Rs. 10,25,000/- on account of

unexplained cash.


7.1   Keeping in view of the facts and circumstances, we find that
Ld. CIT(A) has passed a well reasoned order on this issue by deleting
the addition of Rs. 10,25,000/-,         which does not need any
interference on our part, hence, we uphold the same by dismissing
the ground no. 2 raised by the Revenue.

8.    With regard to ground no. 3 regarding accepting additional

evidence without granting extension of time to AO for submission of

the Remand Report, which is in contravention of Rule 46A is

concerned, we find that Ld. CIT(A) has called the Remand Report

from the ITO, Ward 41(4), Delhi vide his office letter dated

26.2.2013, but till the date of appellate order i.e. 3.6.2013, the AO

did not give his Remand Report which is more than 3 months. In

this regard, Ms. Gini Gandhi, CA/ AR of the Assessee also persuaded

the AO for remand report but could not get it too and then Ms. Gini

Gandhi requested for disposal of this Appeal.       In this regard, the

assessee's submissions before the Ld. CIT(A) were as under:-

                                   6
                                                          ITA NO.5036/Del/2013


      "Please dispose of the appeal after giving the opportunity for

      hearing and on the basis of the submissions attached along

      with the written submission earlier given dated 26-02-2013. It

      is brought to your goodself that the appellant's A.R had last

      hearing with you on 26-02-2013, where after you had directed

      for remand report from the concerned A.O. The Concerned

      Assessing Officer send letter for clarifications vide letter dated

      18-03-2013 and thereafter vide letter dated 09-05-2013 giving

      date of hearing for 29-03-2013 and 20-05-2013 respectively.

      The replies of the same were given vide letters dated 08-04-

      2013 and 20-05-2013. In spite of continuous perusal with the

      concerned officer the remand report has not been sent till date

      to your office. The appellant is really facing financial difficulties

      as he has already deposited a portion of tax due and his

      account is also attached by the income tax department against

      the demand due. Because the appellant has been cooperative

      in filing submissions your goodself may consider the same on

      merits and decide accordingly."




8.1   We find that Ld. CIT(A) has concluded that the appeal be

disposed off on the records available as it has been around 3

months and no report has been received fill date and further there

does not seem to be any delay from the assessee during remand

proceedings. From the above, we do not find any violation on the

                                     7
                                                       ITA NO.5036/Del/2013


part of the Ld. CIT(A) under Rule 46A.      In the background of the

aforesaid facts and circumstances, we find that Ld. CIT(A) has

passed a well reasoned order on the issue in dispute, which does

not need any interference on our part, hence, we uphold the same

by rejecting the ground no. 3 raised by the Revenue.


9.    In the result, the appeal of the Revenue is dismissed.

      Order pronounced in the Open Court on 12/05/2015.

      Sd/-                                               Sd/-

[J.S. REDDY]                                      [H.S. SIDHU]
ACCOUNTANT MEMBER                              JUDICIAL MEMBER

Date 12/5/2015
"SRBHATNAGAR"
Copy forwarded to: -
1.    Appellant -

2.    Respondent -
3.    CIT
4.    CIT (A)
5.    DR, ITAT


                            TRUE COPY
                                                  By Order,




                                                  Assistant Registrar,
                                                  ITAT, Delhi Benches




                                   8
    ITA NO.5036/Del/2013




9

 
 
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