2020 (7) TMI 173

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....ely incorrect and untenable. 2 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding addition of Rs. 35,73,050/- representing the claim of deduction under section 54F of the Act. 2.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once the entire capital gain was duly invested by the appellant for purchase of a residential plot for construction of residential house, there was no valid justification to hold that appellant is not entitled to claim of deduction under section 54F of the Act. 2.2 That the finding that appellant had purchased land in the name of wife and therefore, appellant is not entitled to claim of deduction is also based on factual misconception and untenable. 2.3That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the land was purchased in the joint name of the appellant and his wife and therefore, there was no justification to hold that appellant was not entitled to claim of deduction under section 54F of the Act. 2.4Furthermore, the fact that appellant had handed over the possession of the plot of ....

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....gains arising on this transaction was shown at Rs. 35,73,050/-, against this the assessee had claimed deduction u/s 54 of the Income Tax Act, 1961 amounting to Rs. 70 lacs on account of investment in house property. The Assessing Officer observed that the assessee provided only a copy of the buyer agreement for purchase of plot and no other document or evidence regarding investment made in a residential house was furnished. The Assessing Officer accordingly asked the assessee to justify a claim of deduction u/s 54 of the Income Tax Act. No reply was furnished by the assessee. The Assessing Officer accordingly held that the assessee was not eligible for deduction u/s 54 of the Income Tax Act and that the capital gains amounting to Rs. 35,73,050/- was chargeable of tax. This amount was accordingly added to the total income of the assessee. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. As regards Ground No 1 to 1.1 the Ld. AR submitted that the assessee is a retired government employee of BSNL and his son and daughter-in-law are practicing doctors. In this regard the Ld. AR pointed out....

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....ed. 6. The Ld. DR submitted that the Assessing Officer and the CIT(A) rightly observed that no evidence with regard to the cash deposits made out of agricultural income of HUF and past savings were furnished by the assessee during the Assessment proceedings as well as appellate proceedings before the CIT(A). There was no explanation was filed at the stage of assessment proceedings. In fact, no evidence of agricultural income was shown in any return filed was furnished by the assessee. Thus, the CIT(A) rightly confirmed the addition. 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has not maintained books of account and it's an admitted position. The other relevant fact is that the assessee has not mentioned the agricultural income while filing the returns. But during the course of assessment proceedings, the assessee produced the evidence of holding of agriculture land and confirmation from brother regarding receipt of Rs. 2,00,000/- on 02.03.2013 as share in the agriculture income of HUF. As regards to explanation for Rs. 49,900/-, the same was submitted as family savings by the assessee. ....

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....Rs. 35,73,050/- on following basis: i) The assessee had entered into a buyer agreement for purchase of land in the name of his wife. ii) The agreement was signed with the buyer on 13.12.2014 i.e. after the filling of return on 30.07.2014 - Therefore, the amount utilized by him towards construction of house deposited in an account in a specified bank or institution, till that date only can be allowed as deduction u/s 54 of the IT Act. It is also a fact on record that the assessee had not utilized any amount towards purchase of plot by that date and no amount was utilized towards construction of house or deposited in an account in a specified bank or institution till the date of actually filing the return of income iii) That assessee had failed to construct the residential property within a period of three years from the date of sale of original asset. In fact the construction had not yet started as the assessee could not take possession of the plot under reference. In view of these facts also the assessee is not eligible for deduction u/s 54 of the Income Tax Act. The Ld. AR relied upon the following decisions: • CIT Vs. Kamal Wahal 351 ITR....