TaxTMI 
TaxTMI 
2021 (6) TMI 137
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....ng Officer while giving appeal effect to the CIT(A) order by not correctly appreciating the order of the CIT(A) wherein the said exemption was allowed to the assessee in para 5.10.15. Thus the exemption u/s 54 should be allowed to the assessee. 2. The CIT(A) erred in law and on facts in confirming the disallowance of exemption u/s 54 of the Act in the year under consideration on the basis of non-fulfillment of the condition imposed by the CIT(A in his order though no such condition is prescribed under the Act for claiming the said exemption and ignoring that the CIT(A) is not empowered to impose such condition. Thus the exemption u/s 54 should be allowed to the assessee." 4. The only effective ground raised by the assessee in this appeal is against the disallowance of claim of exemption u/s 54 of the Income Tax Act, 1961 ('the Act'). 5. Facts giving rise to the present appeal are that the assessment u/s 143(3) of the Act was concluded vide order dated 27.02.2014 at an income of Rs. 4,55,84,363/- against the returned income of Rs. 27,37,571/-. The Assessing Officer disallowed the claim made u/s 54 of the Act in respect of capital gain arising out of the sale transaction of the p....
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....s of purchase of new asset. For the sake of clarity, section 54 of the Act is reproduced as under:- Profit on sale of property used for residence 54. "(1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has 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, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new....
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.... 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 : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid." 12. We find that Ld.CIT(A) in original proceedings, which has been challenged in ITA No.5559/Del/2018 had decided the appeal by observing as under:- ".....I find that the insufficient material taken to account could be the reason for such conclusion on the part of the AO. But when the full gamut of the facts as brought out by the AR during the appellate proceeding is considered, the situation turns different and the intentio....
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....6.2017 was issued to the assessee for producing the requisite document completion certificate as mentioned above. To which, no compliance was made and further, no copy was received in the office in the stipulated time given by the Ld. CIT(A) for proving the facts in favour of the assessee; rather assessee filed a letter dated 09.01.2018 for passing of the appeal effect. However, the assessee was given intimated to furnish the requisite documents but did not comply in respect to the same. In respect to the above, no relief can be given to the assessee in light of non production of the requisite documents necessary for the same. Therefore, in pursuance to the order of the CIT(A) and directions thereto, the net taxable income of the assessee remains as assessed u/s 143(3) of the Act, i.e. income of Rs. 4,55,84,363/-." 14. From the finding of the Assessing Officer, it is clear that one part of the direction was considered and another part regarding re-opening of the assessment or taxability of the correct Assessment Year was not considered. In our considered view, the Assessing Officer has failed to give appeal effect and Ld.CIT(A) mechanically sustained the finding of the Assessi....