TaxTMI 
TaxTMI 
2016 (7) TMI 380
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....015 and 18/05/2015. 3) The learned CIT (A) has erred in dismissing the ground of appeal for charging of interest u/s. 234 B of the I.T. Act, 1961. 4) The learned CIT (A) has erred in dismissing the ground of appeal for initiation of penalty u/s. 271(l)(c) of the I.T. Act, 1961. 5) That on the facts and in the circumstances of the case, the addition confirmed by the learned CIT (A) needs to be deleted. 6) The appellant Crave leave to add, amend, alter, edit, withdraw, modify or change all or any of the grounds of appeal at the time or before the hearing of the appeal. 2. Briefly stated the facts of the case as culled out from the assessment records are that the assessee is an individual engaged in the business of trading of grains under some proprietary concern in the name of M/s D. M. Hirani. E-return of income was filed on 21.9.2011 declaring total income at Rs. 2,63,310/-. It was further revised on 23.9.2011 declaring income at Rs. 6,55,530/- after including long term capital gain of Rs. 4,05,359/-. The only addition was disallowance of deduction claimed u/s 54F of the Act at Rs. 3,06,250/- as the ld. Assessing Officer was of the view that assessee was unable to pr....
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.... reads as under :- 4. During appeal proceedings, appellant filed following submission: "2. At the outset, it is respect/ally submitted that it is not the case for claim for purchase of new residential house but it is the amount given to the parties who have constructed the guest house on the land, which is the subject matter of Long Term Capita! Gain. 3. The appellant along with other five co-owners purchased the various plots from no. 88 to 252 totaling 165 plots situated at Rev. Sur. No 142/1 paiki (142/1 + 143 paiki + 144 paiki) from Jayramdas Premchand Thakker on various dates. The details of purchase is as under; Sl. No. Name of purchaser Date of purchase Purchas e deed Sr. No. Plot No. schedule-A of sale deed Page of paper book 1 Chandraben Vishubhai Hirani 15/12/2003 5479 88 to 125 7 2 Mahendrakumar D. thakker with 15/12/2003 1999 126 to 169 7 3 Ravikumar Vishnubhai Thakker 4 Rajnishkumar D. Hirani Thakker with 16/05/2003 1947 170 to 212 8 5 Hardeshkumar V. Hirani 6 Kavitaben Hardeshkumar Hirani 23/06/2003 2663 213 to 252 8 4. The copy of the purchase d....
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....500000 Rs. 362500 Rs. 225000 Rs. 587500 59 5 Mahendrakumar D. Thakker 12.50 Rs. 750000 Rs. 187500 Rs. 187500 63 6 Hardesh Hirani V. 12.50 Rs. 750000 Rs. 187500 Rs. 125000 Rs. 312500 67 100 Rs. 50,00,000 Rs. 14,81,250 Rs. 8225000 Rs. 23,06250 10) Smt. Mithiben Mohanla! Thakker and Mahendrakuamr D Hirani have credited the above amount received towards cost of construction from various sellers and remaining amount is shown as their income. Copy of their property a/c, statement of income and return receipt for A.Y.2011-12 is also furnished herewith. (Mithiben - page 68 to 70; (Mahendrabhai Page 60 to 63) 11. All the sellers except the appellant has shown the amount given towards cost of construction as cost of transfer in their statement of income and return and same is accepted by the department. 12. The appellant has also mentioned in the statement of income as construction instead of cost of construction. Smt. MKhsben Mohanlal Thakker & Mahendrakumar Dilipbhai Thakker has clearly given in writing that they both have in total received Rs,306250/- from ....
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....hakker, there was no need to make the payment by cash or cheque tor contribution towards cost of construction, (page 4) Copy of Mithiben M Thakkefs account from books of appellant (page 1 to 4) and copy of appellant's account from books of MiLhiben M Thakker is furnished herewith for your kind reference (Page 5 to 8) 4. With regard to payment to Mahendrakumar Dilipbhai, it is to submit that appellant has taken unsecured loan from Mahendrakumar Dilipbhai & the entire outstanding loan including contribution for construction of Rs. 125000 totaling Rs. 908450 is paid by account payee cheque Copy of bank statement of appellant & Mahendrakumar Dilipbhai is furnished herewith (page 9-10) The details of outstanding loan of Mahendrakumar Dilipbhai in books of appellant is as under: Date Outstanding Loan Rs. 31.03.2009 79386 (page 11) 31.03.2009 64175 (page 12) 31.03.2010 699509 (page 13) 31.03.2011 783450 + 125000 =Total 908450 (page 14-15) Journal entry for contribution for commission 31.03.2012 908450 (page 16) 31.03.2013 Nil (page 17) -As the entire outstanding payment of Rs. 90845....
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....here- (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property" .] Explanation.-For the purposes of this section,- [***] [***] "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of [two years] after the date of the transfer of the original asset, or constructs, within the period of three yea....
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....subsection (1), then,- (i) the amount by which- (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and (ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid. Explanation.- [Omitted by the Finance Act, 1992, w.e.f. 1-4-1993.]] 11. After going through the provisions of section 54 F of the Act we observe that basic intent of this section is that if an assessee transfers any capital asset not being a residential house then if investment is made in a residential house subject to fulfillment of certain conditions as envisaged in sec....
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....ed by the AO that appellant has actually not made any investment in new residential property, he has come up with a new story of investment by his relatives: Appellant himself has claimed exemption under section 54F of the Act which is allowable only if part of sale consideration is invested for purchase of new residential property. From the facts of the case, it is clear that appellant has not invested any part of the sale consideration for purchasing new residential house. Still, in order to ensure natural Justice, by order sheet noting dated 27/4/15, AR of the appellant was directed to furnish proof of investments by the relatives and also proof of payment cf the amounts to the relatives by the appellant. After considering details filed by the appellant, it is seen that appellant did not make any payment to the relatives during the relevant previous year and only journal entries were passed crediting their accounts, that too on the last day of the accounting year i.e. 31/3/2011. No details of any payments made by his grandmother of brother in the construction of the guesthouse could be submitted by the appellant. Appellant had filed copies of accounts in this regard but no copie....