TaxTMI 
TaxTMI 
2023 (3) TMI 316
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....00/- under section 68 of the Income Tax Act, 1961." 3. The facts in brief are that the assessee is stated to be a social activist. She derives income from house property and interest. For AY 2012-13, she e-filed her return declaring income of Rs. 1,37,420/- on 25.10.2013 belatedly as against due date of 31.07.2012. The return was processed under section 143(1) of the Income Tax Act, 1961 (the "Act"). Subsequently the case was selected for scrutiny through CASS. Initially statutory notices issued by the Ld. Assessing Officer ("AO") were not complied with. At last the Ld. AR of the assessee attended the assessment proceedings and filed the details/documents called for which the Ld. AO examined on test-check basis and placed on record. After discussion with the AR of the assessee, the Ld. AO completed the assessment on 23.03.2015 under section 143(3) of the Act computing the total income at Rs. 78,28,410/- including therein among others disallowance of Rs. 37,02,500/- being unexplained cash deposits and disallowance of Rs. 11,49,116/- being capital gain amount not deposited in bank. 4. The assessee filed appeal before the Ld. CIT(A). During appellate proceedings vide order sheet en....
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....unt as under in para 13 of his appellate order: "13. Ground Nos. 2 & 3 are in respect of addition of Rs. 37,02,500/- in respect of unexplained credits in the bank account. The Assessing Officer observed that appellant had maintained three bank accounts with Bank of Maharashtra and there were cash deposits in the same aggregating to Rs. 37,02,500/-. When the appellant was asked to explain the source thereof, the Authorised Representative merely stated that these deposits were made by Shri Virender Singh, husband of appellant. Neither any evidence nor any confirmation from Sh. Virender Singh was filed. The Assessing Officer even issued a notice u/s 133(6) to Sh. Virender Singh but no reply or confirmation has been received from him. It has merely been stated that since the relationship between the husband & wife are not good, no evidence can be furnished. It is a fact that deposits have been made in cash in the account of the appellant. No evidence could be produced by appellant to show that deposits were made by the husband in the bank account. Even the returns of the husband does not show that he was a man of means. Furthermore, the appellant and her husband had already reached a....
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....er of Income Tax, Chennai 111 Taxmann.com 180 (Mad) and Delhi ITAT in the case of Dr. Kushagra Kataria Vs. DCIT 101 Taxmann.com 359 (Del.)." 9. After hearing the Ld. Representative of the parties we have admitted the above additional grounds which are not only of purely legal in nature but they also arise out of the order of the Ld. CIT(A) and are inextricably linked with assessee's ground No. 2. In taking this view we are supported by the principle of law laid down by the Hon'ble Supreme Court in National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC) that where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. 10. Ground No. 1 has touching grievance of the assessee that though vide the notice of hearing sent by the Ld. CIT(A) to the assessee on 23.09.2016 fixing the case for 06.10.2016, the Ld. CIT(A) passed the order one day before i.e. on 05.10.2016. The contention of the assessee is borne out from para 6 ....
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....III, Delhi for Rs. 65,60,000/- on 23.11.2011 aggregating in all to Rs. 1,45,31,600/- leaving capital gain balance of Rs. 33,21,868/- (Rs. 1,78,53,468/- - Rs. 1,45,31,600/-) as on 31.03.2012 i.e. end of the previous year relevant to AY 2012-13. According to the Ld. AO the assessee purchased other two properties in Mayur Vihar, Phase-III on 13.09.2012 and 19.10.2012 for Rs. 35,04,400/- (Rs. 17,52,200/- each) which dates fall after the due date of filing of return under section 139(1) of the Act. Therefore, the balance LTCG amount of Rs. 33,21,868/- was required to be kept in capital gain account with any nationalised bank for claiming exemption under section 54 of the Act. This was not done by the assessee. The Ld. AO issued show cause for denial of exemption, to which the assessee replied that out of total payment of Rs. 35,04,000/- the assessee had paid substantial amount of Rs. 21,72,752/- before the due date of filing the return for the financial year 2012-13 and submitted that the assessee is eligible for exemption under section 54 of the Act and relied on the decision in CIT vs. R. L. Sood (2000) 108 Taxman 227(Delhi). Rejecting the assessee's explanation / submission, the Ld. ....
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.... (2022) 144 taxmann.com 136. Without prejudice, the Ld. AR further contended that since the assessee had already made investment in two properties before the due date of filing belated return under section 139(4) of the Act and paid substantial amount, the exemption under section 54 can not be denied on the ground that balance amount of capital gain has not been deposited in the bank account with nationalised bank and in support cited the decision of Hon'ble Karnataka High Court in CIT vs. K Ramachandra Rao 56 taxmann.com 163; Venkata Dilip Kumar vs. CIT 111 taxmann.com 180 (Mad.) and decision of Delhi Tribunal in Dr. Kushagra Kataria vs. DCIT 101 Taxmann.com 359 (Del.). The Ld. AR also objected to the enhancement made by the Ld. CIT(A) without issuing show cause notice which is the condition precedent as per section 251 of the Act. 15. The Ld. DR supported the order of the Ld. CIT(A)/AO. 16. We have carefully considered the rival submission of the parties and perused the record. The facts are not in dispute. The Ld. AO made the addition of Rs. 11,49,116/- which represents the balance amount of LTCG which the assessee did not deposit in capital gain account scheme with nationalis....
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....the sense that the investment by way of purchase or construction, without resorting to the capital gains account scheme, can be made till the date of belated return under section 139(4) or revised return under section 139(5) as the wordings used in section 54(2) is "section 139, and not section 139(1), which covers all sub-sections of section 139". Thus, where the assessee files belated return under section 139(4) or revised return under section 139(5) in respect of the assessment year in which he transfers old/existing house, he is entitled to deduction under section 54 to the extent of investment in new house upto the date of filing of belated return under section 139(4)/revised return under section 139(5) even though he made no deposits of un-invested capital gain in capital gains account scheme on or before the due date of filing ITR under section 139(1). 18. The decision in Dr. Dharmista Mehta's case (supra) applies squarely to the facts of the assessee's case before us. The Ld. AR has also placed reliance on the decision of Hon'ble Karnataka High Court in CIT vs. K. Ramchandra Rao 56 taxmann.com 163 wherein it is held that if the intention was to invest in either purchase or....
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....subsequent assessment years." 20. The Finance (No. 2) Act, 2014 itself mentions that in sub-section (1), the words "constructed one residential house in India" are substituted for "constructed, a residential house" w.e.f. 1st April, 2015. It is now well settled that where the law specifies the date from which an amendment will take effect, it is such date that is relevant. If it is a substantive law, it can apply only prospectively. The normal rule is that the law which prevails is the law as on 1st April of the assessment year. In Reliance Jute & Industries Ltd. vs. CIT 120 ITR 921 (SC), the Hon'ble Supreme Court observed that what applies is the law of the assessment year for the income of the previous year. This principle of law laid down by the Hon'ble Supreme Court has been reiterated by the Apex Court in CIT vs. Sarkar Builders (2015) 375 ITR 392 (SC). 21. We, therefore, hold that the Ld. CIT(A) misdirected himself in forming his view that the amendment brought by the Finance (No. 2) Act, 2014 in sub-section (1) of section 54 w.e.f. 1st April, 2015 is retrospective being clarificatory in nature and that the amendment restricts the benefit of exemption under section 54 to p....
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..... Therefore, her husband is not providing the requisite information to harass the assessee and that she did not have any details or bank statement etc. of her husband. 25. The Ld. AO held that the assessee did not offer proper explanation as to the nature and source of the above cash deposits and added the same to the income of the assessee under section 68 of the Act. 26. On appeal filed by the assesee before the Ld. CIT(A), the assessee did not get any relief. The Ld. CIT(A) sustained the addition by observing in para 13 of the appellate order as under:- "13. Grounds Nos. 2 & 3 are in respect of addition of Rs. 37,02,500/- in respect of unexplained credits in the bank account. The Assessing Officer observed that appellant had maintained three bank accounts with Bank of Maharashtra and there were cash deposits in the same aggregating to Rs. 37,02,500/-. When the appellant was asked to explain the source thereof, the Authorised Representative merely stated that these deposits were made by Shri Virender Singh, husband of appellant. Neither any evidence nor any confirmation from Sh. Virender Singh was filed. The Assessing Officer even issued a notice u/s 133(6) to Shri Virender S....
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....sessee and relied on the decision of Hon'ble Bombay High Court in Princess Maheshwari Devi of Pratapgarh vs. CIT (1983) 12 Taxman 220 (Bom.). The Ld. AR also submitted that non-compliance to notice under section 133(6) by the husband of the assessee is due to hostility between the husband and wife and urged that no adverse inference be drawn. 29. The Ld. DR supported the orders of the Ld. AO/CIT(A). 30. We have given our careful thought to the issue involved and submission of the parties. We have also perused the material available in the records. Undoubtedly, the onus lies upon the assessee to explain the nature and source of credit entries of Rs. 37,02,500/- appearing in the bank accounts of the assessee during the year. Before the Ld. AO the assessee explained that the cash was deposited by her husband in her bank accounts and furnished his name, address, PAN No. etc.. So the assessee brought on record the identity of the creditor / depositor who had deposited the money in her bank account. The assessee expressed her inability to submit the confirmation of the creditor/depositor due to strained relations between her and her husband. The Ld. AO himself admits in para 5.6 of the....