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TaxTMI 
TaxTMI 
TaxTMI 
2021 (2) TMI 1076
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....claim so disallowed deserves to be deleted. 2. On the facts and the circumstances of the case ld. CIT(A) has grossly erred in confirming the addition of Rs. 11,38,750/- made by ld.AO on the allegation that assessee had earned from the undisclosed sources without considering the submission made and evidence adduced, thus addition so made of Rs. 11,38,750 deserves to be deleted. 2.1 That the Ld. CIT(A) has further erred in confirming the addition by ignoring the explanation of assessee that these deposits were received by assessee on behalf his mother as a gift duly supported by necessary document such as gift deed etc., thus addition so made deserves to be deleted. 3. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal." 2. Rival contentions have been heard and record perused. Brief facts of the case are that assessee is an individual and for the year under appeal had income below basic exemption limit and therefore no return of income was filed u/s 139(1) of the Income Tax Act,1961 (the Act). Case of assessee was reopened vide issuance of notice u/s 148 of the Act. In response to ....
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...., Ld. AO recomputed the cost of acquisition claimed by assessee and also disallowed the exemption claimed by assessee by alleging as under: (1) Cost of acquisition was not claimed by assessee while computing capital gain at the time of filing return of income- In this regard, it is submitted that cost could not be claimed in computation by mistake as even otherwise, there was no income chargeable to tax under the head "Capital Gains", since assessee had already invested entire capital gain amount in construction of new property. Subsequently a letter was filed claiming cost of acquisition (APB 13-14). Your honours would appreciate that cost of acquisition has to be allowed in all cases where asset was purchased by assessee for consideration, therefore non-claiming of cost in computation cannot be viewed adversely. Moreover, ld. AO rejected the cost claimed by assessee without providing any reason. Further, ld. AO estimated the cost of land at Rs. 2880/- on the basis of information regarding land rates, sought by him from DG (Stamps) in some other case where land was not situated in the village of assessee. It is noteworthy here that land sold by assessee was located in village ....
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....ere been any doubts about the authenticity of the valuation report, the ld.AO could have summoned the registered valuer else referred the matter to the DVO for valuation but without having any authority to comment upon the technical matter, ld. AO has made observations on the valuation report submitted by the assessee. It is settled law that once the valuation report of the registered valuer is submitted and AO has not referred, such report should be accepted. Further, with regards to allegation that assessee has withdrawn cash to the tune of Rs. 4,00,000/- only till 31.07.2011, which was not invested in construction by that date and nor was deposited in bank account notified under Capital Gain Account Scheme. In this regard, it is submitted that section 54(1) provides that if capital gain earned by assessee is invested within a period of one year before or two years after the date on which the transfer took place, purchased or has within a period of three years after that date, constructed one residential house in India, then exemption u/s 54 shall be available in respect of capital gain in accordance with clause (i) and (ii) thereof. Further, provisions of section 54(2) provi....
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....g any sub section. While in the second sentence with reference to deposition of amount in capital gain account, section 139(1) is specifically mentioned, which means that even when nothing in deposited in capital gain account, exemption u/s 54 can be availed if the full amount of capital gain is utilized within time limit u/s 139(4) as section 139 mentioned in the act for that purpose includes all subsections. However, if the amount is not actually utilized within the time limit, exemption can't be claimed by depositing the amount after due date mentioned u/s 139(1). If the assessee wants to deposit the amount in capital gain account, the deposition has to be within the time limit mentioned u/s 139(1). Reliance is placed on the following judicial pronouncements: (i) CIT vs Jagriti Agarwal (2011) 203 Taxman 203 (P& H) (ii) Kishore H. Galiya v. ITO ITA No.7326/ Mum/2010 (iii) ACIT Vs. Maya Devi Sharma in ITA No. 71/JP/15 dated 25.07.2017 (relevant Para 5.4 at page 24 of the order) (iv) Shri Arvind Jain Vs. ITO in ITA No. 825/JP/2016 dated 20.06.2018 In view of above, it is humbly prayed that since assessee has made investment in construction of house property within the s....
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....st of construction of house property and in support of claim of expenditure being incurred, the assessee had furnished valuation report from the registered valuer and according to which the value of construction was shown at Rs. 4,03,920/-. Undoubtedly, according to the said report, it was clearly mentioned that the valuation was carried out by the registered valuer on 25/02/2015 but the same was prepared as per the construction rates prevailing in the year 2011 as the construction work was completed in the year 2011 itself. The said fact is clearly mentioned in the valuation report itself but the same was overlooked by both the revenue authorities. The valuer has determined the cost of construction on 30/07/2011 which is at page No. 20 of the paper book and the year of construction was certified by the valuer as 2010-11 which is mentioned at page No. 22 of the paper book. The fact of construction being carried out has not been doubted by the lower authorities, thus, so far as the assessee has invested capital gain for construction within the time limit prescribed and the said fact has also been confirmed by the registered valuer, therefore, there was no reason to not consider the ....
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....Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset." On perusal of above, it is evident that to be eligible for claiming exemption u/s 54: (1) Full amount of the capital gain has to be invested by assessee in purchase/ construction of new residential house property within the time limit prescribed u/s 54(1); (2) If assessee has not invested full amount of capital gain within one year before the date of transfer and not even upto the due date of filing return, the same is to be deposited in accordance with Capital Gain Accounts Scheme within time limit u/s 139(1), which can be subsequently utilized within 2 years for purchase or within 3 years for construction of new house property. (3) Further, assessee can also claim exemption, if the capital gain is utilized within the time limit u/s 139(4) even though nothing is deposited in the capital gain account within ....
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....atutes that the Legislature engrafted every part of the statute for a purpose. The legislative intention is that every part of the statute should be given effect. The Legislature is deemed not to waste its words or to say anything in vain and a construction which attributes redundancy to the Legislature will not be accepted except for compelling reasons. Further, Hon'ble Court referred judgement of Apex court in the case of Bhavnagar University v. Palitana Sugar Mill P. Ltd. wherein it is held that it is the basic principle of construction of statute that statutory enactment must ordinarily be construed according to their plain meaning and no words should be added, altered or modified unless it is plainly necessary to do so to prevent a provision from being unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statute. Paras 24 and 25 of the Bhavnagar University v. Palitana Sugar Mill P. Ltd. are as follows: 24. True meaning of a provision of law has to be determined on the basis of what it provides by its clear language, with due regard to the scheme of law. 25. Scope of the legislation on the intention of the Legislature cannot be enl....
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....f Hon'ble Gauhati High Court in case of CIT vs. Rajesh Kumar Jalan (supra) as well as the decision of the Coordinate Bench of this Tribunal in case of Virendra Singh vs. ITO(supra), we hold that when the assessee has acquired the new asset being residential house before the due date of filing the return of income U/s 139(4) of the Act then the substantial condition of acquiring the new asset within the stipulated period of 2 year /3 years from the date of transfer of the existing asset has been complied with and accordingly, the assessee is eligible for deduction U/s 54 of the Act. The addition made by the AO on this account is deleted. In the result, the appeal of the assessee is allowed." Keeping in view the facts and circumstances of the case, we are of the view that the assessee has made investment in construction of house property within the specified time, therefore, we direct the A.O. to allow exemption U/s 54F of the Act to the assessee. We direct accordingly. 9. The next ground raised by the assessee relates to challenging the order of the ld. CIT(A) for upholding the addition of Rs. 11,38,750/- on account of cash deposits made in the bank account of the assessee. 1....
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....nvestors accept lending money and no other corroborative material has been brought on record by AO to prove that transaction is not genuine. (iii) Creditworthiness of investors: This is proved if on the basis of financial capacity of investors and further evidenced by acceptance of advancing money by them. Your goodself would appreciate that in the instant case, assessee has proved all the three conditions, i.e. (i) Identity (ii) Genuineness and (iii) creditworthiness of person from whom cash is explained to have been received. He relied on the following decisions: (i) Nek Kumar vs. Assistant Commissioner of Income Tax reported in 274 ITR 575 (ii) of M/s Lovely Exports Pvt. Ltd. reported in 216 CTR 195 (iii) 283 ITR 377 (Raj.) Barkha Synthetics Ltd. Vs. ACIT (iv) 159 ITR 78 (SC) Orissa Corpn. (P) Ltd 11. On the other hand, the ld DR has relied on the order of the ld. CIT(A). 12. We have considered the rival contentions and carefully gone through the orders of the authorities below. From the record we noticed that the assessee had deposited a sum of Rs. 3,08,750/- and Rs. 8,30,000/- in his bank account maintained with Canara Bank on 14/03/2011. During the course of ass....
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....onclusion, we draw strength from the decision of the Hon'ble Jurisdictional High Court in the case of Nek Kumar vs. Assistant Commissioner of Income Tax reported in 274 ITR 575, wherein the Hon'ble High Court has held as under:- Donor having given an affidavit and also filed a declaration that she has given the gift to the assessee and there being no material evidence whatsoever to show that the money was deposited by the assessee or by any relative in the bank from where it came back to the assessee, the gift cannot be treated as non-genuine and, therefore, addition was not justified. The decision of Hon'ble Supreme Court in the case of M/s Lovely Exports Pvt. Ltd. reported in 216 CTR 195 which is squarely applicable in the present case as the assessee has filed the necessary copy of bank pass book of mother and affidavit furnished by her in confirmation of the fact that she has given sum of Rs. 12,35,000/- to her. In the case of Barkha Synthetics Ltd. Vs. ACIT 283 ITR 377 (Raj.), the Hon'ble Court has held as under: Held: The principle relating to burden of proof concerning the assessee is that where the matter concerns the money receipts by way of share application from inv....