TaxTMI 
TaxTMI 
2020 (11) TMI 307
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....d an exemption of Rs. 24,88,408/- under the provisions of section 54F of the act ignoring the fact that, the learned Assessing Officer infact has not allowed any such exemption in the assessment. 5. The learned CIT(A) erred in not considering the amount of Rs. 55 lakhs which was retained by the Commissioner in the PD account despite an application made by the appellant U/s.132B of the act, thereby preventing the appellant from making any investment, for exemption under section 54F of the Act and therefore such amount retained by the commissioner should also have been considered for exemption U/s.54F of the act. 6. The learned 011(A) erred ignoring the position of law that unless a valid notice is issued under the provisions of section 143(2) of the Act there be an assessment s.143(3) of the Act and therefore the present assessment wherein no notice has been issued on the return filed for the A.Y.2013-14 is bad in law. 7. The learned CIT(A) erred in ignoring the position of law that once the appellant objects to an invalid notice, no shelter can be taken under the provisions of section 292BB of the Act. 8. The learned CIT(A) erred in confirming th....
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....bstantiate the claim under section 54F made to the extent of Rs. 97,09,880/-. From details filed, Ld.AO noticed that assessee entered into following transactions: * Assessee deposited Rs. 44 lakh on 06/11/2012 * On the very same day the entire amount of Rs. 44 lakh was transferred to a fixed deposit account * The above fixed deposit was closed on 04/06/2013 and the maturity proceeds of Rs. 45,71,038/- was deposited in the capital gains account scheme. * On 04/06/2013, assessee withdrew sum of Rs. 20,00,025/-and again on 10/06/2013 another sum of Rs. 19,005/-was withdrawn. 5. Assessee claimed to have deposited Rs. 44,00,000/- in capital gains account scheme, in support of which, copies of passbook were filed. Ld.AO submitted that passbook reveald withdrawal of the said amount and kept in FD on same date of deposit. Ld.AO noticed that, subsequently on 04/06/2013 assessee deposited a sum of Rs. 45,17,038/- in his bank account and on same date withdrew Rs. 20,00,025/-. Ld.AO noticed that assessee again withdrew sum of Rs. 90,005/- on 10/06/2030. 6. Ld.AO, thus concluded that, assessee was not intending to utilise the amount for purpose of purch....
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.... 143(2) of the Act, assessment proceedings are bad in law. Assessee placed reliance on decision of Hon'ble Supreme Court in case of ACIT vs Hotle Bluemoon reported in (2010) 188 taxmann 113. Ld.CIT (A) after perusal of assessment records observed as under: "8.4 In the instant case the notice u/s 143(2) of IT Act was issue on 19.11.2013 for the A.Y. 3 3-14. The only error in the notice was that the AO has mentioned the date of filing of Income Tax Return as 3 1.07.2013 which ought to have been on 31.07.2012. The proviso of section 143(2) of IT Act provides that no notice under clause (ii) shall be served on the assessee after the expiry of 6 months from the end of financial year in which the return is furnished Identical issues were adjudicated in the appellant's own case for the A.Y' 2007-08, A.Y. 08-09, A.Y.0910, A.Y. 2010-11 & A.Y. 2011-12." 11. On merits, assessee submitted before Ld.CIT(A) that, Rs. 44 Lacs was deposited in capital gains account scheme on 06/11/2012 and was converted into fixed deposit. Assessee submitted that, said capital gains FD account was closed and sum of Rs. 20,00,025/- was withdrawn through NEFT on 04/06/2013 and sum of Rs. 90....
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....at, legal issue has been raised by assessee in Ground No.7-8, wherein assessment order passed by Ld.AO has been challenged for non issuance of notice under section 143(2). As this issue leads to root cause of this appeal, it is necessary to adjudicate it before deciding merits of the case. Ground No.6-7: 17. Ld.AR submitted that, assessee filed its return of income for year under consideration on 30/07/2013, and accordingly, assessing officer issued notice under section 143(2) of the Act, on 19/11/2013 with wrong date of filing of return. He placed reliance on page 55 of paper book wherein, impugned notice has been placed. Ld.AR submitted that, this notice refers to return of income dated 31/07/2012 for assessment year 2013-14, therefore, is not a proper notice. Ld.AR submitted that, scrutiny assessment was completed for assessment year 2012-13, under section 143(3). The Ld.AR thus submitted that, no notice under section 143(2) was issued for return of income filed on 13/07/2013 pertaining to year under consideration. It was submitted that 143(2) notice issued in respect of non existing return for year under consideration is liable to be quashed. He placed reliance on decisio....
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....uming jurisdiction by Ld.AO, within period of limitation, as observed by Hon'ble Supreme Court in case of Hotel Bluemoon (supra). In our view, decision of Hon'ble Supreme Court in case of Hotel Bluemoon will not come in support of assessee in the present facts. Accordingly Grounds 6-7 raised by assessee stands dismissed. 22. Ground No.3-5 are in respect of not considering deposit of Rs. 44,00,000/- in capital gains account scheme. 23. Ld.AR submitted that, during year under consideration, assessee sold property for sum of Rs. 1,04,00,000/-. He submitted that, purchaser registered sale deed for a sum of Rs. 44,00,000/- as per sub registrar value but paid entire consideration of Rs,1,04,00,000/- as mentioned in Agreement to Sell dated, 14/10/2012 in following manner: Rs. 1 lakh by cheque on 01/09/2012 Rs. 1 lakh by cheque on 14/10/2012 Rs. 55 lakh by cash on 14/10/2012 Rs. 5 lakh by cash on 17/10/2012 Rs. 42 lakh by DD on 17/10/2012 24. Ld.AR submitted that, assessee declared long term capital gain at 'nil', after claiming indexed cost of acquisition of Rs. 6,90,120/- and claimed exemption of Rs. 97,09,800/- under section 54F, ....
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.... in PD account, he could not carry out construction, as there was no money left. 29. Ld.AR submitted that, assessee filed all relevant details in relation to exemption claimed by assessee u/s.54F, and subsequent withdrawals and deposits of monies into capital gains account scheme, due to multiple cancellations of agreements. Ld.AR submitted that, assessee had good intention of investing in residential plot for construction, but failure on behalf of vendors to whom, in good faith, assessee paid money for acquiring plot, could not be attributed to assessee, for denying legitimate claim of exemption under section 54F. 30. On the contrary, Ld.Sr.DR submitted that, all contentions argued by Ld.AR has not been substantiated before authorities below, as has been observed by Ld.CIT(A). We have perused submissions advanced by both sides in light of records placed before us. 31. Date on which capital gain was effected was 17/10/2012. As per section 54F, time period allowed for making purchase, if it is done after the date of transfer is 2 years, and if it is construction, would be 3 years. Assessee admittedly purchased vacant site on 17/10/015 in the present facts and as per sect....
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....mount so deposited has been utilised for construction or purchase of house would arise only in assessment year 2016-17. 36. In the present facts of the case, we note that assessing officer has examined the withdrawals/deposits found in the capital gains account scheme during the year under consideration. In our view such action by Ld.AO is not in accordance with provisions of section 54F(4) as discussed hereinabove. We are therefore of the opinion that, assessee is eligible to claim exemption under section 54F, to the extent the amount was deposited as on 31/03/2013 i.e before the end of financial year relevant to assessment year under consideration i.e Rs. 44,00,000/-. 37. We also note that assessee has claimed that advance of Rs. 4,84,020/- was paid to telecom employees co-operative society with an intention to purchase site, and that, said amount was refunded back, since BDA did not allot the site. Ld.AR brought to our notice specific ground no.3, raised in respect of the same, as assessee is denied said amount as deduction under section 54F. We note that Ld.CIT(A) rejected assessee's contention only on the ground that no details were filed in respect of cancellation of de....
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....he search not been taken place, said sum would not have been disclosed by assessee. He therefore placed reliance on observations of Ld.CIT(A). We have perused submissions advanced by both sides in light of records placed before us. 42. We note that Ld.CIT(A) rejected assessee's submissions by observing as under: "6.1. Section 132B of the I T act lays down the procedure for application and release of assets seized under section 132 or requisition under section 132A of the act. As per the provisions of clause (i) of section 132B(1), such assets have to be applied for recovery of any existing liability under the income tax act, the expenditure tax act, the wealth tax act, the gift tax act and the interest tax act and the liability determined on completion of the search and seizure assessment, including any penalty levied interest payable in connection with such assessment. The balance, if any, remaining after such adjustment, has to be forthwith released to the person from whose custody such asset was seized in accordance with the provisions of section 132B(3). On such release of money (lying in PD account), the Government is also under obligation to pay interest in acc....