Lakshmi Narayan Agarwal, Kolkata v. Income Tax Officer -ward37(3), Kolkata, Kolkata

ITA 1/KOL/2014 | 2004-2005
Pronouncement Date: 19-10-2016

Appeal Details

RSA Number 123514 RSA 2014
Assessee PAN ACVPA3271C
Bench Kolkata
Appeal Number ITA 1/KOL/2014
Duration Of Justice 2 year(s) 9 month(s) 17 day(s)
Appellant Lakshmi Narayan Agarwal, Kolkata
Respondent Income Tax Officer -ward37(3), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 19-10-2016
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 19-10-2016
Date Of Final Hearing 29-08-2016
Next Hearing Date 29-08-2016
Assessment Year 2004-2005
Appeal Filed On 01-01-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENC H KOLKATA BEFORE SHRI K. NARASIMHA CHARY JM & DR. A.L.SAINI AM ./ ITA NO.01/KOL/2014 ( / ASSESSMENT YEAR :2004-2005) LAKSHMI NARAYAN AGARWAL SPARSH4 TH FLOOR 35/8 PODDOPUKUR ROAD KOLKATA- 700020 VS. THE INCOME TAX OFFICER WARD-37(3) KOLKATA- 700001 ./ ./PAN/GIR NO. : ACVPA 3271 C ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI A.K.TIBREWAL FCA /REVENUE BY : SUBHRO DAS JCIT / DATE OF HEARING : 07/10/2016 /DATE OF PRONOUNCEMENT 19/10/2016 / O R D E R PER DR.ARJUN LAL SAINI AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINI NG TO THE ASSESSMENT YEAR 2004-2005 IS DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXIV IN APPEA L NO.1219/CIT(A)- XXIV/SET-ASIDE/37(3)/12-13 DATED 19.12.2012 WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S.147/14 3(3) OF THE INCOME TAX ACT (IN SHORT THE ACT) DATED 29.12.2010. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEES INCOME TAX RETURN FOR ASSESSMENT YEAR 2004-05 WAS A SSESSED BY AO U/S.143(3) OF THE ACT. SUBSEQUENTLY THE AO DETECTE D THAT THE ASSESSEE INVESTED IN A PROPERTY AND NOT SHOWN THE AMOUNT OF CAPITAL GAIN OF RS.13 45 760/-. THEREFORE THE AO PRESUMED THAT THE RE WAS AN EXCESS CLAIM OF RS.13 45 760/- U/S.54F OF IT ACT. HENCE B ELIEVING THE REASON THAT INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT FO R THE YEAR THE AO ITA NO.01/14 2 HAS ISSUED NOTICE U/S.148/147 OF THE IT ACT. THE AO OBSERVED THAT THE ASSESSEE HAS INVESTED IN A PROPERTY AND THUS CLAIME D THE EXCESS AMOUNT OF RS.13 45 760/- AS AN EXEMPTION U/S.54F OF THE AC T. THEREFORE BASED ON THE ABOVE REASONING THE AO ADDED RS.13 45 760/- TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED FROM THE ORDER OF THE ASSESSING OFFICE R THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHO HAS ALSO CONFIRMED THE ADDITION MADE BY THE AO OBSERVING AS UNDER :- 3.3 THE ADDITIONAL EVIDENCES SENT TO THE A.O. FOR REMAND REPORT. THE A.O. SENT THE REMAND REPORT ON 16.09.13 WHICH W AS RECEIVED ON 17.09.2013 WHICH IS AS UNDER:- 'IN COMPLIANCE THE A.R. OF THE ASSESSEE APPEARED A ND MADE SUBMISSION STATING THAT AS PER I. T. ACT EXEMPTION U/S. 54F IS AVAILABLE IF THE ASSESSEE INVESTED THE CONSIDERATIO N OF L. T. CAPITAL GAIN AMOUNT FOR A RESIDENTIAL PROPERTY ONE YEAR BEF ORE OR 3 YEAR AFTER THE LONG TERM CAPITAL GAIN AND THE I. T. ACT NOWHERE STATED THAT THE CONSIDERATION OF L..T. CAPITAL GAIN SHOULD BE APPROPRIATED FOR PURCHASING OF RESIDENTIAL PROPERTY WHICH WAS TH E REASON FOR THE INITIATING SUCH PROCEEDING U/ S. 148 OF THE ACT. IN THE INSTANT CASE PROCEEDINGS FOR REASSESSMENT WAS INITIATED STATING THAT THE ASSESSEE INVESTED IN A PROPERTY BY NOT APPROPRIATIN G THE AMOUNT OF CAPITAL GAIN. ASSESSEE SUBMITTED SOME CASE LAWS TO DEFEND HIS CASE I.E. IN SUPPORT OF HIS CLAIM. I HAVE GONE THRO UGH THE SUBMISSION OF THE ASSESSEE THE RECORDED REASONS FOR INITIATIN G PROCEEDINGS U/S. 148 AND ASSESSMENT ORDER U/S. 143(3}/147 DATED 29.1 2.2010. CONSIDERING THE ABOVE SUBMISSION AND FACTS OF THE C ASE IT IS APPEARED THAT THERE IS NO SUCH IRREGULARITY IN THIS SUBMISSION OF THE ASSESSEE.' 3.4 THE ADDITIONAL EVIDENCES ADMITTED UNDER RULE 46 A OF THE I. T. RULES AFTER GIVING PROPER OPPORTUNITY TO THE A.O. T HE COPY OF THE REMAND REPORT GIVEN TO THE A/R FOR REJOINDER. THE A /R FILED REJOINDER WHICH IS AS UNDER:- 'IN THE SAID REMAND REPORT THE LEARNED ASSESSING O FFICER STATED ''THAT THERE IS NO IRREGULARITY IN THE SUBMISSION O F THE ASSESSEE' BASED ON OUR SUBMISSIONS AND OTHER DOCUMENTARY EVID ENCES AND EXAMINATION OF BOOKS OF ACCOUNTS FOR THE FINANCIAL YEAR 2002-03 & 2003-04. ' ITA NO.01/14 3 OUR SUBMISSION IS THAT.- 'THE LEARNED ASSESSING OFFICER WAS WRONG IN DENYING THE DEDUCTION U/ S. 54F WITHOUT ASSIGNING ANY REASON FOR THE SAME AT THE TIME OF PASSING THE ASSESSMENT ORDER U/S. 147/143(3). HE DI D NOT MENTION A WORD ON LONG TERM CAPITAL GAIN AND DEDUCTION U/S. 54F IN HIS SAID ASSESSMENT ORDER. THE LEARNED ASSESSING OFFICER HAS FINALIZED HIS ASS ESSMENT ORDER U/S. 147/143(3) ON 29.12.2010 IN HURRY WITHOUT GIVI NG PROPER ATTENTION TO THE MERIT OF THE ASSESSMENT. HOWEVER THE LEARNED ASSESSING OFFICER AT THE TIME OF PASSING HIS ASSESSMENT ORDER U/ S. 143 DATED 17.11.2006 HAS ME NTIONED IN THE 2ND AND 3RD PARAGRAPHS ON HIS ORDER THAT THE ASSESS EE HAS EARNED LONG TERM CAPITAL GAIN OF RS. 13 45 760/- AND CLAIM ED DEDUCTION U/S. 54F BY INVESTING THE SAME IN THE RESIDENTIAL P ROPERTY. THE COPY OF THE SAID ASSESSMENT ORDER U/S 143(3) IS ENCLOSED FOR YOUR READY REFERENCE. THE LEARNED ASSESSING OFFICER IN HIS REMAND REPORT DATED 17.09.2013 HAS CLEARLY MENTIONED THAT:- 'I HAVE GONE THROUGH THE SUBMISSION OF THE ASSESSEE THE RECORDED REASONS FOR INITIATING PROCEEDINGS U/S. 148 AND ASS ESSMENT ORDER U/S. 143(3)/147 DATED 29.12.2010. CONSIDERING THE A BOVE SUBMISSION AND FACTS OF THE CASE IT IS APPEARED TH AT THERE IS NO SUCH IRREGULARITY IN THIS SUBMISSION OF THE ASSESSE E. ' THE ASSESSEE HAS CLAIMED THE DEDUCTION U/ S. 54F FO R THE AMOUNT INVESTED IN THE RESIDENTIAL FLAT DURING THE PERIOD I.E. ONE YEAR BEFORE AND TWO YEAR AFTER THE DATE OF TRANSFER OF L ONG TERM CAPITAL ASSET AS PER THE TIME LIMITS STIPULATED IN THE SAID SECTION. THEREFORE WE REQUEST YOU TO PLEASE ALLOW THE EXEMPTION OF RS. 13 45 760/ - TO OUR CLIENT AS PROVIDED IN SECTION 54F OF INCOME TAX ACT 1961. 3.5 I CAREFULLY CONSIDERED THE ASSESSMENT ORDER SU BMISSION OF THE APPELLANT ADDITIONAL EVIDENCES FILED BY THE APPELL ANT AND COPY OF THE REMAND REPORT AND ITS REJOINDER. I FOUND THAT T HE CAPITAL GAINS ARISE OF RS. 13 45 760/- OUT OF SALES OF SHARES OF VARIOUS COMPANIES. THE APPELLANT SHOWN THE INVESTMENT IN FL AT. THE APPELLANT GIVEN THE ADVANCES TO THE M/S. TOLLY NIRM AN PRIVATE LTD. ON GOING THROUGH THE DETAILS AND EVIDENCE FILE D BY THE APPELLANT I FOUND THAT THE APPELLANT TAKEN THE POS SESSION AFTER 10TH JANUARY 2007. TOLLY NIRMAN PVT. LTD. WRITTEN A LET TER TO THE APPELLANT WHICH IS AS UNDER:- 'THE COMPANY HAS MADE ARRANGEMENT FOR DELIVERY OF P OSSESSION OF THE ABOVE MENTIONED FLAT ALONG WITH ONE COVERED CAR PARKING SPACE TO YOU. THE KEYS OF THE SAID FLAT ARE LYING WITH TH E SITE-SUPERVISOR. ITA NO.01/14 4 ON PRODUCTION. OF THIS LETTER THE SAID SITE-SUPERV ISOR WILL HANDOVER YOU THE KEYS OF THE FLAT. YOU ARE THEREFORE REQUES TED TO KINDLY ISSUE A LETTER (COPY OF WHICH IS ENCLOSED) REGARDING YOUR OBTAINING DELIVERY OF THE PEACEFUL POSSESSION. YOU SHALL ABIDE BY THE FOLLOWING TERMS AND CONDITIO NS:- 1) DO NOT CUT/BREAK OR DAMAGE ANY CONCRETE MEMBER ( I.E COLUMN BEAM AND SLAB) OTHERWISE STRUCTURAL FAILURE MAY/ S HALL OCCUR IN FUTURE. 2) DO NOT CHANGE THE DB POSITION AND ELECTRICAL LAY OUT WITHOUT PRIOR INTIMATION. 3) NO SPLIT UNIT/A. C UNIT OR RELATED PIPELINE TO B E FIXED OUTSIDE THE FLAT AREA. OUT DOOR UNIT OF THE SPLIT A.C. TO BE FI XED INSIDE THE BALCONY ONLY. 4) BALACONY INTERNAL PAINTING COLOUR TO BE WITH WHI TE ACRYLIC AND ALL GRILLS COLOUR TO BE BALCK (MATT FINISH) 5) ALL BALCONY GRILLS AT UPPER PART TO BE MAINTAINE D AS PER OUR DRAWING. 6) DO NOT CARRY ANY HEAVY MATERIAL IN THE ELEVATOR. 7) DO NOT MAKE ANY ELEVATOR / WINDOWS/ SEWERAGE LIN ES/PIPELINES. ADDITION/ ALTERATION IN OUTER ELEVATOR/WINDOWS / SE WERAGE LINES/PIPELINES. FROM THE ABOVE LETTER IT ESTABLISHED THAT THE APPEL LANT TAKES POSSESSION AFTER 10.01.2007. THE REGISTRATION OF TH IS PROPERTY ALSO HELD ON 23.02.2007. THE EXEMPTION U/S. 54F ENTITLED :- 'SUBJECT TO THE PROVISIONS OF SUB-SECTION (4) WHER E IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDE D FAMILY THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-T ERM CAPITAL ASSET NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SE CTION 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 YE ARS AFTER THAT DATE CONSTRUCTED A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET) THE CAPITAL GAIN SHA LL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SE CTION THAT IS TO SAY:- (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN T HE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45; ITA NO.01/14 5 (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE N OT CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET SO MUCH OF THE CAPIT AL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION A S THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION SHALL NOT BE CHARGED UNDER SECTION 45. FROM THE ABOVE IT PROVED THAT THE FLAT WAS COMPLET ED ON 10.01.2007 AND THE APPELLANT ALSO NOT TAKEN THE POS SESSION OF THE FLAT BEFORE 10.01.2007. HENCE IT ESTABLISHED THAT THE APPELLANT PURCHASED THE FLAT BEYOND 2 YEAR FROM THE CAPITAL G AIN ARISED. THE CASE LAW RELIED UPON BY THE APPELLANT ARE NOT RELAT ED TO THE PURCHASE OF PROPERTY WITHIN STIPULATED TIME. HENCE THE APPELLANT IS NOT ENTITLED THE EXEMPTION U/S. 54F OF THE I. T. AC T. THEREFORE I CONFIRM THE ADDITION MADE BY THE A.O. OF RS.13 45 7 60/- BY REJECTING THE CLAIM U/S 54F OF THE I. T. ACT. THIS GROUND OF APPEAL IS NOT ALLOWED. NOT BEING SATISFIED WITH THE ORDER OF CIT(A) THE A SSESSEE IS IN FURTHER APPEAL BEFORE US. 4. ALTHOUGH IN THIS APPEAL THE ASSESSEE HAS RAISED MUL TIPLE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING THE SO LITARY GRIEVANCE OF THE ASSESSEE HAS BEEN CONFINED TO THE ISSUE THAT RE ASSESSMENT U/S.147/148 WAS WITHOUT JURISDICTION ILLEGAL AND W ITHOUT ANY TANGIBLE MATERIAL. 5. LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT REOPE NING U/S.147 OF THE ACT AND BELIEF OF THE AO THAT THE INCOME HAS ES CAPED ASSESSMENT IS ENTIRELY WRONG. THE AO BELIEVED THAT THE ASSESSEE I NVESTED IN PROPERTY AND CAPITAL GAIN THEREOF RS.13 45 760/- ( EXCESS EX EMPTION CLAIMED BY THE ASSESSEE U/S 54F OF THE ACT) AS ESCAPED ASSESSM ENT. THE DOCUMENTS AND THE PAPERS RELATING TO THE ADDITION U NDER CONSIDERATION WERE AVAILABLE BEFORE THE AO AT THE TIME OF ORIGINA L ASSESSMENT U/S.143(3) HENCE THE AO DID NOT BRING ANY NEW OR COGENT EVIDENCE ON RECORD TO SHOW THAT THE INCOME HAS ESCAPED ASSESSME NT. IT IS MERELY A ITA NO.01/14 6 CHANGE OF OPINION BECAUSE THE ENTIRE INFORMATION WA S AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT AND THEREFORE BASED O N THE FACT OF OPINION THE ASSESSMENT CANNOT BE REOPENED. HOWEVER THE ASS ESSEE DID NOT RAISE THIS GROUND PROPERLY BEFORE THE LD. CIT(A). I N ADDITION TO THIS THE LD. AR HAS RELIED ON THE FOLLOWING JUDGMENTS :- (1). MAHESH PAL ARORA VS. ITO: ITA NO. 206/KOL/2016 : HON`ABLE ITAT HAS OBSERVED THE FOLLOWINGS: 7.2 WE ALSO FIND FROM THE PROVISIONS OF SECTION 54 F(4) OF THE ACT THAT IN ANY CASE THE CLAIM OF EXEMPTION U/S. 54F CO ULD NOT BE DISTURBED IN A.Y 2005-06 EVEN IF THE CONSTRUCTION O F RESIDENTIAL HOUSE HAS NOT BEEN COMPLETED BY THE ASSESSEE WITHIN 3 YEARS FROM THE DATE OF TRANSFER. FOR THE SAKE OF CONVENIENCE THE PROVISIONS OF SECTION 54F(4) OF THE ACT IS REPRODUCED HEREIN BELO W:- CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. ) 54F (1) *** *** *** *** *** *** (A) *** *** *** *** *** *** (B) *** *** *** *** *** *** (2) TO (3) *** *** *** *** *** *** (4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS NO T APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE O F THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON W HICH TRANSFER OF THE ORIGINAL ASSET TOOK PLACE OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF I NCOME UNDER SECTION 139 SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF 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 UTILIZED IN ACCORDANCE WITH ANY SCHEME 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 D EPOSIT; AND FOR THE PURPOSES OF SUB-SECTION (1) THE AMOUNT IF ANY ALREADY UTILIZED BY THE ASSESSEE FOR THE PURCHASE O R CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMO UNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET: PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SU B-SECTION IS NOT UTILIZED WHOLLY OR PARTLY FOR THE PURCHASE O R CONSTRUCTION ITA NO.01/14 7 OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB -SECTION (1) THEN - (I) THE AMOUNT BY WHICH- (A) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRA NSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSET AS PROVIDED IN CLAUSE (A) OR AS THE CASE MAY BE CLAUSE (B) OF SUB-SECTION (1) EXCEEDS (B) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HAD THE AMOUNT ACTUALLY UTILIZED BY THE ASSESSEE FOR TH E PURCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUBSECTION (1) BEEN THE COST OF THE NEW ASSET SHAL L BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF TH E TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UNUTILIZED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. 7.3 WE ALSO FIND THAT THE DECISION OF THE HONBLE D ELHI HIGH COURT AS RELIED UPON BY THE ASSESSEE IN THE CASE OF CIT V S. KULDIP SINGH (SUPRA) IS WELL PLACED WHEREIN IT HAS BEEN HELD AS UNDER:- THE BASIC PURPOSE BEHIND SECTION 54 IS TO ENSURE THAT THE ASSESSEE IS NOT TAXED ON THE CAPITAL GAINS IF HE R EPLACES HIS HOUSE WITH ANOTHER HOUSE AND SPENDS MONEY EARNED ON THE CAPITAL GAINS WITHIN THE STIPULATED PERIOD [PARA 12 ] THE VIEW TAKEN GETS SUPPORT FROM SUB-SECTION (2) TO SECTION 54. THE AFORESAID SUB-SECTION REQUIRES THE ASSESSEE TO DEPOSIT UNSPENT AMOUNT NOT UTILIZED BY THE ASSESSEE FOR PURCHASE OR CONSTRUCTION OF A NEW ASSET BEFORE THE DATE OF FURNISHING OF RETURN IN A SPECIFIED ACCOUNT. IT FU RTHER STATES THAT THE AMOUNT IF ALREADY UTILIZED FOR PURCHASE O R CONSTRUCTION OF THE NEW ASSET THE AMOUNT SO DEPOSI TED WILL BE DEEMED TO BE COST OF A NEW ASSET SUBJECT TO THE PROVISO. THE WORD PURCHASE IS USED IN SUBSECTION (2) AND I NDICATES THAT THE SAID WORD IS NOT RESTRICTED OR CONFINED TO REGISTERED SALE DEED OR EVEN POSSESSION BUT HAS A WIDER CONNOT ATION. THE PROVISO SUPPORTS THE AFORESAID INTERPRETATION AND STIPULATES THAT THE AMOUNT DEPOSITED BUT NOT UTILIZ ED WHOLLY OR PARTLY FOR PURCHASE OR CONSTRUCTION OF NEW ASSET WI THIN THE SPECIFIED PERIOD WILL BE CHARGED TO TAX UNDER SECTI ON 45 IN THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FR OM THE DATE OF TRANSFER OF ORIGINAL ASSET EXPIRED. THE PER IOD OF THREE YEARS IS STIPULATED AS THIS IS LONGER PERIOD SPECIF IED IN THE SUBSECTION (1) TO SECTION 54. IT IS ONLY THE BALANC E AMOUNT WHICH IS NOT UTILIZED WHICH IS TO BE BROUGHT AND CH ARGED TO TAX. THE ENTIRE AMOUNT OF SALE CONSIDERATION OR THE CAPITAL GAINS IS NOT TO BE BROUGHT TO TAX BUT THE UNSPENT AMOUNT/FIGURE IS TAXED. [PARA 13] ITA NO.01/14 8 IN VIEW OF THE AFORESAID POSITION NO SUBSTANTIAL QUESTION OF LAW ARISES AND THUS THE PRESENT APPEAL IS DISMISSED . [ PARA 14] 7.4 HENCE WE ARE CONVINCED THAT THERE IS NO CASE F OR THE LD.AO TO DISTURB THE CLAIM OF EXEMPTION U/S. 54F OF THE ACT IN A.Y 2005-06. ACCORDINGLY THE BASIC REASON ON AN ISSUE FOR WHICH THE ASSESSMENT WAS RE-OPENED FAILS. HENCE ANY ADDITION MADE OTHER THAN THE REASON FOR WHICH THE ASSESSMENT WAS REOPENED WOULD ALSO AUTOMATICALLY FAIL AS THE ASSUMPTION OF JURISDICTIO N ITSELF FAILS ON THE PART OF THE LD.AO. THIS ISSUE IS NOW WELL SETTLED B Y THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . JET AIRWAYS (I) LTD REPORTED IN 331 ITR 236 BOM.) 8. RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PR ECEDENTS WE HAVE NO HESITATION TO QUASH THE RE-ASSESSMENT PROCEEDING S ON THE GROUND THAT THERE WAS NO TANGIBLE MATERIAL WITH THE LD.AO FOR INITIATION OF RE-ASSESSMENT PROCEEDINGS. WE ALSO FI ND THAT IN VIEW OF PROVISIONS OF SECTION 54F(4) R.W. PROVISO THEREON THERE IS NO SCOPE FOR MAKING ANY ADDITION IN A.Y 2005-06. HENCE THER E COULD NOT BE ANY REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSES SMENT FOR THE A.Y 2005-06. ACCORDINGLY GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE ARE ALLOWED. THE ASSESSEE ALSO RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS :- I) DHADDA EXPORTS VS. ITO [2015] 58 TAXMANN.COM 17 6 (RAJASTHAN); II) CIT VS. M/S EIH LTD. ITA NO.6 OF 2014 (CALCUTT A HIGH COURT); III) SHREE SAYAN VIBHAG SAHAKARI VS. DCIT [2016] 6 9 TAXMANN.COM 245 (GUJARAT) IV) CIT VS. KELVINATOR OF INDIA LTD. [2010] 187 TA XMAN 312 (SC) AND V) CIT VS. M/S TELAIJAN TEA CO. LTD. ITA NO.49 OF 2008 (CAL HC) THE SUM AND SUBSTANCE OF ALL THE JUDGMENTS CITED AB OVE IS THAT LD. AO MERELY REVIEWED THE ASSESSMENT ORDER AND TRIED TO A RRIVE AT DIFFERENT CONCLUSION THAT INCOME HAS BEEN ESCAPED ASSESSMENT WITHOUT BRINING ANY TANGIBLE MATERIAL ON RECORD. 6. ON THE OTHER HAND LD. DR FOR THE REVENUE HAS VE HEMENTLY STATED THAT NOTICE ISSUED U/S.147/148 WAS CORRECT BECAUSE IT HAS BEEN ISSUED BY THE AO AFTER RECORDING VALID REASONS AND AFTER TAKI NG PRIOR APPROVAL OF THE ITA NO.01/14 9 ADDITIONAL COMMISSIONER OF INCOME TAX. THE LD. DR A LSO SUBMITTED THAT THE THERE WAS NO INFORMATION AVAILABLE BEFORE THE A O AT THE TIME OF ORIGINAL ASSESSMENT ORDER. IN ADDITION TO THIS LD. DR HAS PRIMARILY REITERATED THE STAND TAKEN BY THE AO WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 7. HAVING HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD WE ARE OF THE VIEW THAT THERE IS A MERIT IN THE SUBMISSIONS OF THE LD. AR AS THE PROPOSITION CANVASSED BY THE LD. AR OF THE ASSESSEE ARE SUPPORTED BY FACTS NARRATED ABOVE. LD. AR HAS C LEARLY STATED THAT LD. AO HAS REVIEWED THE ASSESSMENT ORDER WHICH IS NOT A LLOWED UNDER THE ACT. THE LD. AO DID NOT BRING ANY TANGIBLE MATERIAL ON RECORD TO SHOW THAT THE INCOME HAS ESCAPED ASSESSMENT. THEREFORE CONSI DERING THE ABOVE FACTUAL POSITION AND THE CASE LAW WE ALLOW THE APP EAL FILED BY THE ASSESSEE. 8. AS THE ISSUE OF VALIDITY OF RE-ASSESSMENT HAS BEEN HELD IN FAVOUR OF THE ASSESSEE OTHER GROUNDS RAISED BY THE ASSESSEE ON M ERITS NEED NOT BE ADJUDICATED UPON AS THEY WOULD BECOME INFRUCTUOUS. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19/1 0/2016. SD/ - (NARASIMHA CHARY) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 19/10/2016 & ()* /PRAKASH MISHRA . / PS ITA NO.01/14 10 / COPY OF THE ORDER FORWARDED TO : / BY ORDER / ( ASSTT. REGISTRAR) & ' / ITAT 1. / THE APPELLANT- LAKSHMI NARAYAN AGARWAL 2. / THE RESPONDENT- ITO WARD-37(3) 3. 4 ( ) / THE CIT(A) KOLKATA. 4. 4 / CIT 5. 56 7 8 8 / DR ITAT KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//