TaxTMI 
TaxTMI 
2021 (2) TMI 1076
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....antial evidence to claim the deduction u/s 54F, thus the 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 a....
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....ation Report of Registered Valuer in support cost of Construction in house property carried out by it. However, 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 wher....
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.... construction, within the time limit prescribed and the said fact is confirmed by registered valuer, there is no reason to not consider the same. Had there 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, t....
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....sections are referred u/s 54(2), viz. 139 and 139(1) in two different sentences. In the first sentence with reference to appropriation of un-utilised amount of capital gain, section 139 is referred without mentioning 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....
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....this respect, we noticed that the valuation report furnished by the assessee on 25/02/2015 which is at page No. 20-30 of the paper book and in this regard, it was submitted by the assessee that the exemption U/s 54F of the Act was claimed by the assessee towards cost 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 no....
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.... case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme30 which the Central 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 c....
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.... objects and paralyses the purpose of the beneficial enactment. In this regard, we may refer to the decision of the apex court in Kunal Singh v. Union of India." The court also referred the judgement of State of Maharashtra v. Santosh Shankar charyato discuss the well-known principle of construction of statutes 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 th....
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....ightly allowed by the Id. CIT(A)". The Coordinate Bench of the ITAT Jaipur also in the case of Shri Arvind Jain Vs. ITO in ITA No. 825/JP/2016 dated 20.06.2018, wherein it was observed as follows: "Following the decision of Hon'ble Punjab and Haryana High Court in case of CIT vs. Ms. Jaggruti Agarwal (supra), decision of 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 specif....
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....of investors of money: (i) Identity of persons who have advanced the money: The same is proved beyond doubt as money has been received by assessee from his mother and no outsider. (ii) Genuineness of transactions: Once identity is proved, genuineness is said to be proved if transaction has taken place through banking channels, confirmations have been furnished wherein investors 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. A....
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....(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. Considering the totality of facts and circumstances of the case, we are of the view that the 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. For reaching to the above conclusion, 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 i....