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2019 (10) TMI 342
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.... whether the ld. CIT (A) was justified in giving relief to the assessee by accepting additional evidence contrary to Rule 46A and without appreciating the fact that the assessee was represented by an Authorized Representative during the course of assessment proceedings and in spite of repeated opportunities as per the order sheet the documents furnished before CIT (A) were not furnished before the AO nor was time sought to furnish these documents on account of alleged illness of the assessee or his son. 3. On the facts and in the circumstances of the case, whether the ld. CIT (A) was justified in accepting the claim of the assessee without examining the legality of the claim of allowing deduction u/s 54F of the Act of Rs. 1,02,92,495/- to the assessee even though the Valuation Report submitted by the assessee clearly states that the property is under joint ownership and the share is not divided, and so the decision of CIT (A) is contrary to the finding of the Hon'ble Jurisdictional High Court order in the case of Kalyan vs. CIT & Other (251 CTR 174 (Raj.). 4. On the facts and in the circumstances of the case, whether the ld. CIT (A) was justified in deleting the d....
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....he assessee. 2. The assessee is an Individual and filed his return of income for the year under consideration on 26.03.2013 declaring total income at Rs. 2,41,740/- including long term capital gain of Rs. 1,51,821/-. Subsequently, the AO initiated the proceedings under section 147/148 of the I.T. Act on the basis of information received from the Investigation Wing regarding the deduction claimed by the assessee under section 54F and 54B of the IT Act as well as unexplained cash deposit in the bank, by issuing a notice under section 148 on 28th March, 2014. During the year under consideration, the assessee sold land situated at village Sukhiya, Patwar Halka Kalyanpura, Tehsil Sanganer, Jaipur bearing Khasra No. 142 admeasuring 1.21 hectares to M/s. Triveni Propcon Pvt. Ltd. for a consideration of Rs. 2,43,11,000/- vide Sale Deed dated 4th May, 2011. The AO while passing the reassessment order disallowed the claim of deduction under section 54F as well as 54B of the IT Act on the ground that despite the show cause notice issued to the assessee neither the assessee nor his Authorized Representative appeared and no details as required were filed by the assessee. Thus the AO held tha....
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....4B of the Act. Therefore, the AO disallowed the claim of the assessee while passing the reassessment order. On appeal before the ld. CIT (Appeals), the assessee has produced the additional evidence along with the application under Rule 46A of the IT Rules. The details of the additional evidence have been produced by the ld. CIT (A) at pages 5 to 7 of the impugned order are as under :- S.No. Particulars Page No. Additional Evidences 1. Payment voucher of Construction expenses amounting to Rs. 1,80,000/- incurred in F.Y. 2003-04 on the land sold. 1-2 2. Payment voucher Brokerage paid on sale of land Rs. 1,66,667/- to Shri Babu Singh along with his identity proof. 3-4 3. Payment voucher Brokerage paid on sale of land Rs. 1,66,667/- to Shri Raju Choudhary along with his identity proof. 5-6 4. Payment voucher Brokerage paid on sale of land Rs. 1,66,667/- to Shri Mahendra Singh along with his identity proof. 7-8 5. Valuation Report of the House constructed dated 20.03.2013 (Rs. 1,02,92,495) and bills related to construction for which claim u/s 54F has been made. 9-78 6. Purchase Deed of Agriculture land (R....
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....at time. The assessee has filed new evidence u/s 46A of the Act before the L/d CIT (A)-5, Jaipur which is referred to Assessing Officer for verify. Assessee has invested into construction of a residential house property at land owned by him (inherited from his father). The amount of Rs. 1,02,92,495/- was invested on the construction of house, in support of construction of house, assessee has produced Valuation Report by registered valuer. The following documentary evidence is produced by the assessee which are as under :- a) Shri Bhanwar Lal Chaudhary, Contractor of the furniture, POP Pain and colours has been given statement on 16/06/2017 and also produced affidavit, agreement and bill/vouchers which enclosed for kind reference. b) Shri Manoj Chaudhary, Plumber and Sanitary fitting etc has been given statement on 18/08/2017 and he is also produced affidavit, agreement, ledger and bill/vouchers etc. which is enclosed for kind reference. c) Shri Madhu Sudan, Electricity Fitter has been given statement on 18/08/2017 and he is also produced affidavit, agreement, ledger and bill/vouchers etc. which is enclosed for kind reference. d) Shri Mad....
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.... Punjab & Haryana High Court in case of Jai Narayan vs. ITO, 306 ITR 335 (P&H) as well as the decision of Hon'ble Jurisdictional High Court in case of Kalya vs. CIT & Others, 251 CTR 174 (Raj.). 7. On the other hand, the ld. A/R of the assessee has submitted that the AO has objected to the claim of the assessee on the ground that the new agricultural land has been purchased by the assessee in the names of his son and daughter-in-law and not in the name of the assessee himself. Whereas there are decisions on this point including the decision of Hon'ble Jurisdictional High Court is subsequent to the decision in case of Kalya vs. CIT (supra) relied upon by the AO wherein the Hon'ble High Court has held that merely because the land was purchased in the name of the family members would not disentitle the assessee for claiming deduction under section 54B of the Act. In support of his contention, the ld. A/R relied upon the decision of the Hon'ble Jurisdictional High Court in cases of Shri Laxmi Narayan vs. CIT, L/H Shri Shravan Lal Meena vs. ITO and Shri Mahadev Balai vs. ITO dated 07.11.2017 in DB IT Appeal Nos. 20/2016, 118/2017 and 136/2017 respectively. Thus the ld. A/R has submit....
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.... has been recorded in the Sale Deed dated 4th May, 2011 whereby the assessee sold the existing land as under :- This fact as recorded in the Sale Deed is not in dispute and therefore, it is apparent that the land sold by the assessee was converted to non-agricultural use vide order dated 23.08.2010 as per section 90-B of Rajasthan Land Revenue Act, 1956. Therefore, the condition precedent for allowing the deduction under section 54B of the Act is not satisfied in this case as the land was not being used for agricultural purpose during the two years immediately preceding to the date of sale as this land was converted to non-agricultural use for about 9 months prior to the date of sale. What was sold by the assessee was a residential land and not an agricultural land. Therefore, the said claim of deduction under section 54B is not available to the assessee on transfer of the residential land. We further note that the ld. CIT (A) while allowing the claim of assessee has observed in para 5.5.4 as under :- " 5.5.4. A plain reading of this section reveals that the first and foremost condition for claiming exemption u/s 54B is that the land being sold should have been used by ....
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....d. CIT (A). 11. We have considered the rival submissions as well as the relevant material on record. We find that the vouchers regarding the claim of cost of construction of boundary wall were produced by the assessee before the ld. CIT (A) which were also forwarded to the AO for submitting the remand report after examination of the additional evidence filed by the assessee. The AO in the remand report has not commented upon the correctness of the vouchers produced by the assessee in support of the cost of construction of the boundary wall. The ld. CIT (A) has decided this issue in para 6 as under :- "6. Vide ground no. c, the appellant has contended that theAO was not justified in disallowing cost of improvement amounting to Rs. 3,05,184/-. The AO noted that the assessee had claimed Rs. 3,05,184/- being cost of improvement incurred in respect of property sold. Since the assessee could not furnish any documentary evidence, therefore, the AO disallowed the same and added back to the total income of the assessee. The appellant has submitted before me that he incurred development expenses of Rs. 1,80,000/- on the land sold, for construction of boundary wall on the land, in....
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....A) has decided the issue in para 7 as under :- "7. Vide ground no. d, the appellant contended that the AO was not justified in disallowing expenditure incurred on transfer of Rs. 4,86,000/-. The AO noted that the assessee had claimed expenditure on transfer to the tune of Rs. 4,86,000/-. The AO disallowed this expenses by stating that expenditure on transfer is supposed to incurred by purchaser and since no evidence furnished by the assessee to substantiate his claim, the same cannot be allowed. Hence, the AO made an addition of Rs. 4,86,000/- on this account. The appellant contested the AO's action by stating that is a widely accepted fact that even seller pays brokerage to the brokers who have facilitated the transaction. It was submitted that assessee had paid brokerages to this parties totaling to Rs. 5,00,000/-; this outflow of money is also taken into consideration in the Fund Flow Statement. Thus, it was claimed that the assessee is entitled to claim the transfer expenses of Rs. 4,86,000/-. During the course of appellate proceedings, the appellant furnished copies of Payment vouchers of Brokerage paid on sale of land Rs. 1,66,667/- each to Shri Babu Singh, Shri Raju....
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....ea of the assessee by placing reliance on various decisions which are distinguishable on the facts of the case. Thus the ld. A/R has submitted that the reopening is not valid and liable to be quashed. 15. On the other hand, the ld. D/R has submitted that in the return of income the assessee has made a wrong claim of deduction under sections 54F as well as 54B of the Act which were subsequently came to the notice of the AO based on the information received from the Investigation Wing. The AO has also conducted an enquiry and during the pre-initiation of reassessment proceedings enquiry the assessee has not responded and filed any evidence in support of the claim. Therefore, such an enquiry conducted by the AO which constitutes a tangible material to form the belief that the income assessable to tax has escaped assessment. She has relied upon the order of the ld. CIT (A) on this issue. 16. We have considered the rival submissions as well as the relevant material on record. The original return of income was filed by the assessee on 26th March, 2013 which was processed under section 143(1) of the IT Act and subsequently the AO reopened the assessment by recording the reasons as u....
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....ings the assessee has not produced any documentary evidence in support of the claim and only in the appellate proceedings before the ld. CIT (A), the assessee first time produced the documentary evidence. Therefore, in these peculiar facts of the case, we do not find any defect or illegality in the initiation of proceedings under section 147/148 of the Act. The AO has done his best prior to initiating the proceedings under section 147/148 by conducting an enquiry in respect of the claim of deduction of Rs. 2.41 crores against the sale consideration of Rs. 2.43 crores. At the time of reopening of the assessment, the AO is not supposed to establish the correctness of the reasons, if prima facie the reasons recorded by the AO lead to the formation of belief that income assessable to tax has escaped assessment. Accordingly, we do not find any substance or merit in the cross objection filed by the assessee. The same is dismissed. 17. In the result, appeal of the department is partly allowed whereas cross objection of the assessee is dismissed. Order is pronounced in the open court on 23/08/2019. ============= Document 1 "यह कि उारोà....