TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 451
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.....1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no specific relevant, reliable and tangible material on record to form a "reason to believe" that income of the appellant had escaped assessment and in view thereof the proceedings initiated are illegal, untenable and therefore unsustainable. 2.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that even otherwise there was no failure on the part of assessee to disclose fully and truly all material facts necessary for assessment and as such action u/s. 147 was in excess of jurisdiction; 2.3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that reasons recorded mechanically without application of mind do not constitute valid reasons to believe for assumption of jurisdiction u/s. 147 of the Act. 2.4 That in absence of any valid approval obtained under section 151 of the Act, initiation of proceedings u/s. 147 of the Act and assessment framed u/s. 147/143(3) of the Act are invalid and deserve to be quashed as such. 2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in sustai....
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....r the instant assessment year either under section 139(1)of the Act or under section 139(4) of the Act. 4. Facts of the case in brief are that the proceedings under section 147 of the Act were initiated in this case, on the basis of possession of certain information that the assessee had deposited cash of Rs. 29,87,000/- in saving bank account maintained with Central Bank of India, Rania during the year under consideration. In response the assessee furnished the copy of Income Tax Return filed on 26/10/2018. The A.O. asked the assessee to explain the source of the above said deposits. In response the assessee submitted as under: ....That the plots are sold on 22.03.2011 and whole consideration has been deposited in saving account with Central Bank of India, Rania on the following dates:- Date Amount 23.03.2011 19,00,000/- 25.03.2011 10,87,000/- 29,87,000/- This amount was transferred in capital gain scheme account No. 31421713928 on 19.09.2011. Later on the amount was utilized to purchase house on 15.11.2011 at New Delhi from Parmod Bhatia... 4.1. The A.O. observed that the assessee had sold the residential property for sale consideration of Rs. 29,87,000/- ....
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....i). vii) Ashok Kapasiawala Vs. ITO Ward 7(1) Sural (ITD No. 2692/hd/2016... 4.4. The A.O. however did not find merit in the submissions of the assessee and made the addition of the impugned amount by observing as under: i) If the assessee was required to purchase the new residential property and proposes to make the payments after the due date of filing of return of income, the payments required to made after that date for the new residential house, should be deposited in capital gain scheme account with the nationalized bank before the due date of filing of the return of income. The subsequent payments for the new residential house are then required to be made from such capital gain scheme account. But the assessee failed to do so. ii) The assessee failed to comply with the statutory provisions of section 139(1) and filed only the Income-tax return in compliance to notice u/s. 148 of the Income-tax Act, 1961. iii) The case law referred by the assessee has been perused. These are entirely different from the facts of the assessee's case. In the Judgments reported by the assessee it was held that subsection (4) of section 139 has to be read alongwith sub-section (1) and,....
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....s. 29,87,000/-. In view of the above, the assessee is not entitled to claim the exemption of capital gain u/s. 54F of the Income-tax, of Rs. 29,87,000/- and the same is the long term capital gain of the assessee and is taxed accordingly. 5. Being aggrieved the assessee carried the matter to the Ld. CIT(A) who reproduced the statement of facts and extract of assessment order in para 3 of the impugned order. The submission of the assessee had been incorporated by the Ld. CIT(A) in para 4 at page No. 6 to 50 of the impugned order, for the cost of repetition the same is not reproduced herein. 5.1. The Ld. CIT(A) after considering the submissions of the assessee sustained the addition made by the A.O. by observing in para 5 of the impugned order as under: "5. Appellate Decision:-I have carefully considered the facts of the case, assessment order and submission of the appellant alongwith case laws and find that: In the instant case the assessee deposited a sum of Rs. 29,87,000/- in the capital gain account scheme on 17.09.2011 which was utilized to purchase residential house on 15.11.2011 at New Delhi. The AO held that the assessee had not furnished a return of income for the insta....
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....n the time prescribed under section 139(1) of the Act. It was contended that the assessee deposited the amount of Rs. 29,87,000/- after selling the residential plot for Rs. 29,87,000/- and the total indexed cost of the said property sold was Rs. 7,99,875/- thus the assessee earned LTCG of Rs. 21,87,125/- which was claimed to be exempt by virtue of the provisions of Section 54F of the Act. It was submitted that the assessee deposited the amount of net consideration in the capital gain account scheme, therefore, the A.O. was not justified in disallowing the claim of the assessee and the Ld. CIT(A) wrongly sustained the action of the A.O. The reliance was placed on the following case laws: * Smt. Tupel Raja Iyengar Shakuntala Vs. The ITO, Ward-7(2)(4), Bangalore in ITA No. 64/Bang/2019 vide order dt. 10/05/2019 of SMC "A" Bench of Bangalore. * Bhagwan Swroop Pathak Vs. ITO, Ward-1(3), Gurgaon in ITA No. 2754/Del/2019 vide order dt. 05/03/2020 of 1(2) + SMC Bench New Delhi. * CIT Vs. Jagtar Singh Chawla [2013] 259 CTR 388 (P&H) * CIT Vs. Ms. Jagriti Aggarwal [2011] 339 ITR 610 (P&H) 8. In his rival submissions the Ld. Sr. DR reiterated the observations made by the authorities ....
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....herefore, clear that the AO was satisfied about the sale/purchase of the said properties and the investment benefit available to the assessee under section 54 of the Act. In the remand report, the AO has only remarked that there is a claim for exemption under section 54 of the Act and that no return of income has been filed by the assessee for Assessment Year 2009-10. In my view, this remark by the AO cannot be a factor to deny the assessee its legitimate claim for exemption under section 54 of the Act. There is no prohibition under the Act on the assessee in claiming exemption under section 54 of the Act in case it has not filed a return of income. Such a legal claim can be put forth at any stage of assessment/appellate proceedings and should be considered on merits in the light of the details/documents/corroborative evidence filed in this regard. Having considered the entire material on record on this issue and taking into account the peculiar facts and circumstances of the case on hand, I am of the considered view that the assessee is entitled to exemption under section 54 of the Act and therefore the entire sale consideration of Rs. 46,65,000/- assessed by the AO is hereby dele....