TaxTMI 
TaxTMI 
2013 (8) TMI 322
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.... Act, 1961 on Long Term Capital Gains of Rs.7,49,591/- (Kotak Contra Scheme). 2. That on the facts and in the circumstances of the case and under the provisions of law, the CIT(A) has erred in upholding the addition of Rs.11,65,784/- u/s 69C of the Income Tax Act, 1961 for low withdrawals for household expenses estimating the monthly expenditure of Rs.1,25,000/- on surmises and conjectures. 3. The Assessing Officer has also erred in charging interest u/s 234B of the Income Tax Act, 1961 Rs.4,22,015/-. 4. Any other ground that may be taken up with the permission of the Hon'ble Tribunal. 2. The appeal of the assessee was earlier dismissed for non prosecution vide order dated 8.3.2010 which was recalled for hearing on merits vide order of the Tribunal dated 2.3.2012. 3. The brief facts of the case are that the assessee filed return of income declaring income of Rs.47,88,579/- which included short term capital gains of Rs.31,04,005/-. The case of the assessee was selected for scrutiny. During assessment proceedings, the Assessing Officer observed that assessee had declared income from capital gains on sale of house property at New Friends Colony, New Delhi and had claimed an amoun....
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....ent dated 9.2.2006. The Assessing Officer after going through the said agreement observed that the total sale consideration was Rs.3,05,75000/- and the payments were to be made as per annexure-3 attached with the agreement and these were linked to the stage of construction and were spread over a period of 36 months. The Assessing Officer further observed that as per clause 9.1 the issuance of occupation certificate for the building/complex was to be the conclusive evidence about building/complex of having been fully completed in accordance with the plans and specifications. From the inference of these clauses, the Assessing Officer inferred that the ownership of apartment will be conferred to the assessee only on the date of issuance of occupation certificate and since the date of completion was 36 months and therefore the assessee cannot be said to have invested in the house property within the stipulated period and thus was not entitled to the exemption of capital gain u/s 54 of the Act. 5. The Assessing Officer further observed that the assessee was living in a joint family and assessee had withdrawn only Rs.1,22,612/- towards household expenses. On enquiries, the assessee furn....
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....he had taken an advance of Rs.10 lakhs. However, before the execution of sale deed, the assessee cancelled the deal and paid a sum of Rs.15 lakhs against the said advance of Rs.10 lakhs. Therefore, Rs.5 lakhs were paid as cancellation charges and the property was sold to another buyer at a higher price. This expenditure was necessary as otherwise the assessee was bound by earlier agreement. Therefore, it was argued that the same represented necessary expenditure which was incurred for effecting the sale of said house property. It was further contended that amount was paid through Account Payee cheque. Regarding brokerage of Rs.2.50 lakhs paid to Shri Rajat Kapoor, the Ld AR argued that amount was paid by cheque and even if the amount was paid for settlement of earlier agreement as alleged by the Assessing Officer even then the amount represented necessary expenditure for effecting the present deal. Therefore, it was claimed that expenditure was genuine and as per law. Our attention was invited to paper book pages 22 to 23 where a copy of receipt issued by Shri Ashok K. Singhal was placed. Our attention was also invited to paper book page 27 where a copy of affidavit signed and file....
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....nataka High Court. 2. ACIT v. Sudhakar Ram 49 SOT 90 (Mum.) 3. CIT v. Hilla JB Wadia (1995) 216 ITR 376. (Mumbai High Court) 11. In view of the above arguments, the Ld AR submitted that assessee necessarily complied with the conditions for exemption u/s 54F of the Act. 12. In respect of addition made u/s 69C of the Act regarding low withdrawals, the Ld AR argued that Assessing Officer made the addition on the basis of surmises and conjectures only. It was submitted that assessee was living in his own house with his son and on an average Rs.27,500/- per month were withdrawn which was quite reasonable and Assessing Officer had not given any justification on the basis of which he arrived at the figure of Rs.1,25,000/- per month. It was further argued that in the immediately preceding year, the withdrawals were to the tune of Rs.3,62,868/- and the assessment was completed u/s 143(3)of the Act and there was no addition on this account. Reliance in this respect was placed on the following case laws with the proposition that no addition u/s 69C can be done by just estimation on account of non withdrawal, 1. Yadu Hari Dalomia v. CIT 126 ITR 48. 2 S.K. Gupta v. DCIT 62 TTJ 666 3 MP M....
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....ts were made by cheques to these persons and were duly acknowledged through receipts wherein the payees has admitted of having received these payments. The Assessing Officer and Ld CIT(A) did not agree with the contentions of the assessee because of non production of original agreements, however, the fact remains that payments were actually made through cheques and were acknowledged by payees to the fact that they received the cheques for settlement and service charges respectively for the same property. Regarding allegation of Assessing Officer that the expenses belonged to earlier deal does not matter so long the expenses were in respect of same property on which capital gain was declared. Further Ld CIT(A) had certain doubts regarding the fact that an amount of Rs.3 lakhs was paid on 8.1.2004 which was before the agreement date of 7.6.2004. However, as the expenditure necessarily represented cost incurred by the assessee for effecting the sale of property as without settlement of earlier deal, the assessee was not in a position to execute the sale deed. Without terminating the agreement to sell with Mr. Ashok K Singhal, the assessee could not have sold this property to any other....
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..... In view of the above, we hold that the assessee was eligible for exemption u/s 54 of the Act. In view of the above findings ground No.1(A) (i) & (ii) of the appeal are allowed. 18. As regards ground No.1(B) and 1(C) we find that Assessing Officer disallowed the claim of assessee regarding long term capital gain and short term capital gain due to non availability of statements/certificates. Before us the assessee has filed complete details of capital gains vide paper book pages 31 to 49 and has also filed transaction statements issued by different mutual fund and these statements were also before the Assessing Officer. The Ld AR has argued that Assessing Officer disallowed the claim of assessee without proper verification. The Ld CIT(A) also did not consider the claim of assessee in the absence of transaction statement of Kotak Contra Fund. Therefore, in the interest of justice we deem it necessary that matter be re-adjudicated by the Assessing Officer who on the basis of evidence to be submitted by assessee will arrive at the taxability of units of mutual funds. Therefore Ground No. 1(B) & 1 (C) are allowed for statistical purposes. 19. As regards ground No.2 regarding addition....