AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 1075
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rs. 17,50,6747- Rs.29,41,330/- 2. Because the following observations of the Ld CIT (A) in the order are against the provisions of Sec 54 of the Income Tax Act. Assessee sold house property for Rs. 2,28,97,6757- & there was long term Capital Gain of Rs. 1,33,01,553/-. That out of Capita] Gain of Rs. 1,33,01,553/- "A" has invested Rs. 50,00,000/- in NHIA Bonds & also claimed deduction of Rs. 46,92,004/- as the "A" has purchased a residential plot on 21/05/2007 which is one year before the sale. That of exemption of Rs. 46,92,004/- Ld C.I.T (A) has allowed exemption to the time of Rs. 17,50,674/- which was paid after 18/05/2007 and balance Rs. 29,41,330 has been reduced as the same amount was paid before one year. Details of Purchase of Residential Plot -Rs. 46,92,004/- at Plot No.70 Cassia Nodosa Estate CHI-03, Greater Noida. U.P S.no. DD/Ch. No. Date Amount Re marks 1 DO NO. 264708 31.03.2006 1900000/- Anuradha Singh (Purchase of ownership) 2 DD NO. 488245 28.03.2006 136000/- Bank Transfer Charges to G Noida 3 DD NO. 488247 28.03.2006 285000/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ld. CIT(A) has erred in deleting the addition made by the AO on account of disallowance u/s. 40(a)(ia) of the Income Tax Act, 1961. (iii) The appellant craves leave to add, alter or amend any of the grounds of appeal before or during the course of the hearing of the appeal." 4. The brief facts of the case are that the assessee filed his return of income at Rs. 1,01,53,098/- electronically transmitted on 20.9.2008 followed by ITR-V on 25.9.2008. The return was processed u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred the Act) on the same income. On selection of case for scrutiny, notice u/s. 143(2) of the Act was issued on 14.9.2009. Subsequently, notice u/s. 142(1) of the Act was also issued. In compliance thereto, the Authorised Representatives of the Assessee appeared before the AO from time to time and furnished written submissions and required details. Books of accounts and bills/vouchers etc. were also produced and put to test. Thereafter, the assessed the income of the assessee at Rs. 1,49,51,300/- and made various additions vide his order dated 14.12.2010 passed u/s. 143(3) of the Act. 5. Against the aforesaid assessment order, the Assessee preferred ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4 applied only to purchase of a new property, whereas the period of 'three years after' applied to construction of a new house. He held that the assessee's claim would amount providing him with a window of four years for meeting the conditions of section 54, which was not the intention of the provision. The deduction claimed under section 54 of Rs. 46,92,004/- was rejected and the long term capital gains recomputed at Rs. 1,30,80,481/-. 7.3. We find that Ld. First Appellate Authority has elaborately discussed the issue in dispute by considering the submissions of the Ld. Counsel of the assessee and adjudicated the same vide para no. 3 to 4.2 at pages 3 to 7 of his impugned order. For the sake of convenience, we are reproducing the relevant portion of the impugned order i.e. para no. 3 to 4.2 as under:- "(3). During the appellate proceedings, the counsels for the appellant filed written submissions, wherein it was explained that the first list submitted of TDS on professional fees had not been correctly compiled. It was submitted that the discrepancy of Rs. 81,200/- had arisen on account of the following entries:- S.No. Old List Correct list TDS ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....adequate evidence of completion of construction of the house within the period of two years from the date of sale, which works out to March, 2010. However, where the purchase of the plot is concerned, the appellant has relied on the 'Possession Certificate' issued by GNIDA on 21.5.2007, which is admittedly within the period of one year before the date of sale of the capital asset (9.3.2008), but on verification, the appellant submitted the following dates of payments for purchase of the residential plot as under:- S.no. DD/Ch. No. Date Amount Re marks 1 DO NO. 264708 31.03.2006 1900000/- Anuradha Singh (Purchase of ownership) 2 DD NO. 488245 28.03.2006 136000/- Bank Transfer Charges to G Noida 3 DD NO. 488247 28.03.2006 285000/- January 2006 Installment 4 DD NO. 973306 21.04.2006 1000007- Purchase of ownership 5 DDNO. 489411 21.06.2006 260165/- July 2006 Installment 6 DD NO. 007881 28.12.2006 260165/- Jan 2007 Installment 7 DDNO. 154069 18.05.2007 34085G/- Miscellaneous Charges for registration 8 DDNO. 154755 29.06.2007 260165/- June 2007 Installmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of flats under the self financing scheme of the Delhi Development Authority, payment of the first instalment of the price of the flat within 2 years of sale of original property would entitle the assessee to claim exemption even if construction of the flat was not complete in two years. The Delhi High Court in the case of Balraj vs. CIT [2002] 123 Taxman 290, and in the case of CIT vs R. L Sood [2000] 108 Taxman 227, has held that there is no requirement that a new house must be registered in the assessee's name within the prescribed period, and only the date of agreement to purchase is relevant. The language of section 54 comprehends that the asset transferred should be a residential building, and the asset invested in should also be a residential building, and the investment should be made within the time specified therein. The time specified in this case, within one year before and two years after, is the period between 9.3.2007 and 9.3.2010. The investment which is eligible for deduction would therefore, be restricted to Rs. 17,50,674/- on account of plot, and Rs. 8,12,464/- on account of construction. After careful consideration of the letter and spirit of section 54, it i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sue, the Assessing Officer observed that assessee had claimed deduction of professional fees paid of Rs. 7,09,054/-, but had failed to deduct tax at source from professional fees paid of an amount of Rs. 81,200/- for which details of recipients were not provided, and on Rs. 25,000/- paid to one Ms. Divya Saluja. The assessee was asked to explain why disallowance of these amounts should not be made under section 40(a)(ia) of the Income Tax Act, 1961. The assessee submitted a fresh list of professional fees paid of a total amount of Rs. 6,40,854/- and explained that the salary paid to Ms. Divya Saluja of Rs. 25,000/-, and salary paid to Shri Mohd. Arif of Rs. 43,200/-, were wrongly included in professional fees. The Assessing Officer considered the explanation filed to be an afterthought and not supported by evidence, and he added the amount of Rs. 1,06,200/- (81,200 + 25,000) to the total income under section 40(a)(ia). 8.2. We find that Ld. First Appellate Authority has elaborately discussed the issue in dispute raised by considering the submissions of the Ld. Counsel of the assessee and adjudicated the same vide para no. 5 at page 7 of his impugned order. For the sake of conven....