Abodh Borar, Faridabad v. ITO, Faridabad

ITA 5114/DEL/2016 | 2013-2014
Pronouncement Date: 18-11-2019 | Result: Allowed

Appeal Details

RSA Number 511420114 RSA 2016
Assessee PAN AAQPB2015A
Bench Delhi
Appeal Number ITA 5114/DEL/2016
Duration Of Justice 3 year(s) 1 month(s) 20 day(s)
Appellant Abodh Borar, Faridabad
Respondent ITO, Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 18-11-2019
Assessment Year 2013-2014
Appeal Filed On 28-09-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER I.T.A. NO.5114/DEL/2016 ASSESSMENT YEAR: 2013-14 ABODH BORAR H. NO.99 SECTOR-9 FARIDABAD. VS. ITO WARD-1(1) FARIDABAD. TAN/PAN: AAQPB 2015A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VED JAIN ADV. SHRI ASHISH GOEL CA & MRS. SURABHI GOYAL CA RESPONDENT BY: SHRI P.S. JHUINGALENG SR.D.R. DATE OF HEARING: 12 09 2019 DATE OF PRONOUNCEMENT: 18 11 2019 O R D E R PER AMIT SHUKLA JM THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 21.07.2016 PASSED BY LD. CIT (APPEALS) FARIDABAD FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE A.Y. 2013-14. IN THE GROUNDS OF APPEAL FOLLOWING GROUNDS HAVE BEEN RAISED:- 1.ON THE FACTS & CIRCUMSTANCES OF THE CASE THE OR DER PASSED BY THE LEARNED CIT (A)IS BAD BOTH IN THE EYE OF LAW A ND ON THE FACTS. 2. A) THAT HAVING REGARD TO FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN LAW AND FACTS IN CONFI RMING THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 54F OF RS.24 12 480/-& DEDUCTION U/S 54 OF RS.28 77 944/- WITHOUT TAKING I NTO CONSIDERATION OF THE FACTS THAT THE ASSESSEE HAD IN VESTED THE I.T.A. NO.5114/DEL/2016 2 LONG TERM CAPITAL GAIN ON PURCHASE OF RESIDENTIAL P LOT AND REMAIN INVESTED FOR MORE THAN THREE YEARS. B) THAT THE LD. CIT (A) HAD NOT CONSIDERED THE FACT THAT THE ASSESSEE HAS BEEN ALLOTTED A RESIDENTIAL PLOT BY TH E BUILDER BUT DUE TO POSSESSION OF THE PLOT WAS GIVEN BY THE BUIL DER AFTER EXPIRY OF THREE YEARS FROM DATE OF CAPITAL GAIN HEN CE IT WAS NOT POSSIBLE FOR THE ASSESSEE TO COMPLETE THE CONSTRUCT ION BEFORE THE TIME STIPULATED FOR CLAIMING EXEMPTION U/S 54 AND 5 4F OF THE INCOME TAX ACT 1961. IT IS PRAYED THAT DISALLOWANCE OF DEDUCTION CLAIMED U/S 54F OF RS.24 12 480/- & DEDUCTION U/S 54 OF RS.28 77 944/- IS UNJUSTIFIED UNWARRANTED AND BAD IN LAW WHICH IS L IABLE TO BE DELETED BE DELETED. 1. THAT THE APPELLANT BEGS LEAVE AND RESERVES THE RIGH T TO ALTER OR ADD TO THE GROUNDS OF APPEAL. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN I NDIVIDUAL AND HAD FILED HER RETURN OF INCOME OF RS.29 47 390/-. I N THE RETURN THE ASSESSEE HAS CLAIMED AN EXEMPTION OF RS.52 90 424/- ON ACCOUNT OF THE CAPITAL GAIN ARISE N TO HER DURING THE YEAR UNDER SECTION 54 AND 54F OF THE ACT . THE ASSESSEE HAD SOLD TWO PROPERTIES AGAINST WHICH SHE HAD CLAIMED DEDUCTION OF RS. 24 12 480/- U/S 54F; AND D EDUCTION OF RS. 28 77 944/- U/S 54. THE ENTIRE CAPITAL GAIN WAS INVESTED IN A RESIDENTIAL PLOT IN OMAXE CHANDIGARH EXTENSION. ASSESSEE HAS MADE PAYMENT OF RS. 54 36 000/- TO OMA XE ON VARIOUS DATES STARTING FROM 22.03.2011 TO 23.06.201 1. IT WAS FURTHER STATED THAT POSSESSION OF PLOT WAS OFFERED BY THE DEVELOPER ONLY ON 11.09.2015. ASSESSING OFFICER DIS ALLOWED THE SAME ON THE GROUND THAT THE ASSESSEE HAS NOT COMPLE TED THE CONSTRUCTION OF THE RESIDENTIAL HOUSE WITHIN THE PE RIOD OF 3 I.T.A. NO.5114/DEL/2016 3 YEARS SO FROM THE DATE WHEN THE CAPITAL GAIN HAS AR ISEN TO HER. 3 THE CIT (A) HAS CONFIRMED THE ORDER OF THE ASSE SSING OFFICER ON SAME REASONING. 4. BEFORE US IT WAS SUBMITTED BY THE AR OF TH E ASSESSEE THAT THE ASSESSEE HAS MADE AN INVESTMENT OF RS.54 3 6 000/- IN ACQUIRING A RESIDENTIAL PROPERTY AT CHANDIGARH F ROM OMAXE CHANDIGARH EXTENSION DEVELOPERS PVT. LTD. BY 23.06. 2011 AS AGAINST EXEMPTION OF RS.52 90 424/- CLAIMED BY HER. THE ASSESSEE HAS FILED COPY OF THE ALLOTMENT LETTER. TH E ASSESSEE ALSO SUBMITTED THE COPY OF AGREEMENT DATED 05.06.20 11 ENTERED INTO BY THE ASSESSEE WITH THE DEVELOPER. AS REGARD THE CONSTRUCTION HE SUBMITTED THAT THE SAME COULD NOT B E DONE AS THE DEVELOPER COULD NOT TRANSFER THE POSSESSION TO THE ASSESSEE DESPITE THERE BEING A CLEAR CONDITION IN T HE AGREEMENT THAT THE POSSESSION WILL BE GIVEN WITHIN A PERIOD OF 18 MONTHS FOR THE DATE OF THE ALLOTMENT LETTER. THU S THE REASON FOR DELAY IN CONSTRUCTION WAS BEYOND ASSESSE ES CONTROL. IT WAS SUBMITTED BY THE LD. AR THAT THE TO TAL COST WAS RS.63 03 005/- AND THE SAME STOOD PAID AND HENCE TH E ASSESSEE HAD DISCHARGED ALL HER OBLIGATION. FURTHER THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE HAD MAD E INVESTMENT IT IS ONLY BECAUSE OF THE CONSTRUCTION B EING NOT DONE WITHIN A PERIOD OF 3 YEARS THE BENEFIT OF SEC TION 54/54F HAS BEEN DENIED. THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF COORDINATE BENCH OF THE ITAT IN THE CASE OF VARUN SETH VS. I.T.A. NO.5114/DEL/2016 4 ACIT ITA NO.1388/DEL/2019 DATED 14.05.2019 WHERE ON SIMILAR FACTS IT WAS HELD THAT THE ASSESSEE HAVING UTILIZED THE AMOUNT IN THE ACQUISITION OF THE LAND THE INTENTION OF THE STATUTE AS PROVIDED IN SECTION 54 HAS BEEN STAND SA TISFIED AS THE DELAY IN CONSTRUCTION WAS BY REASON BEYOND THE CONTROL OF THE ASSESSEE. THE LD. AR ALSO RELIED UPON THE FOLLO WING JUDGMENT: 1. CIT VS. SH. S. SUDHAKAR (HUF) IN TC (A) NO.692 OF 2 015 DATED 25.08.2015 2. ITAT CHENNAI IN THE CASE OF SMT. VA THARABAI VS. DC IT ITA NO.1894 (MDS) OF 2011 DATED 12.01.2012. 5. IN REPLY THE LD. DR PLACED RELIANCE ON THE ORDER PASSED BY THE AO AND THE CIT (A). 6. WE HAVE HEARD THE RIVAL SUBMISSION AND PERU SED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS PASSE D BY THE AUTHORITIES BELOW AND THE PAPER BOOK FILED BY THE A SSESSEE. THE ONLY ISSUE IN THE APPEAL IS THE DENIAL OF DEDUC TION CLAIMED BY THE ASSESSEE UNDER SECTION 54 AND 54F OF THE ACT. IT IS AN UNDISPUTED FACT THAT FIRSTLY THE ASSESSEE HAS EARNED CAPITAL GAIN AND HAS INVESTED THE SAME IN PURCHASE OF A RESIDENTIAL PLOT; SECONDLY THE ASSESSEE HAS MADE A TOTAL INVESTMENT OF RS.63 03 005/- WHICH IS MORE THAN THE EXEMPTION OF RS.52 90 424/- CLAIMED BY HER; AND LASTLY THE ASSESSEE MADE THIS INVESTMENT WITHIN THE PRESCRIBED PERIOD. THIS PAYMENT WAS MADE TO THE DEVELOPER OMAXE CHANDI GARH I.T.A. NO.5114/DEL/2016 5 EXTENSION DEVELOPERS PVT. LTD. CONSEQUENT TO THAT THE DEVELOPER ISSUED ALLOTMENT LETTER AND ALSO ENTERED INTO AN AGREEMENT DATED 05.07.2011. AS PER THE AGREEMENT TH E DEVELOPER WAS SUPPOSED TO HAND OVER THE POSSESSION OF PLOT WITHIN 18 MONTHS FROM THE DATE OF ALLOTMENT LETTER. HOWEVER THE DEVELOPER DID NOT DELIVER THE POSSESSION. HENCE THE ASSESSEE COULD NOT COMPLETE THE CONSTRUCTION WITHIN THE PRESCRIBED PERIOD OF 3 YEARS. THIS DELAY IN CONSTRU CTION WAS NOT ATTRIBUTABLE TO THE ASSESSEE. THUS THE AO AND THE CIT (A) HAVE DENIED THE EXEMPTION IN VIEW OF THE PROVISION OF SECTION 54 AND 54F OF THE ACT. FURTHER THE AO AND THE CIT (A) BOTH HAVE IGNORED THE FACT THAT THE ASSESSEE HAS MADE A FULL PAYMENT TO THE DEVELOPER AND SUCH PAYMENT WAS MORE THAN THE AMOUNT OF THE DEDUCTION CLAIMED BY THE ASSESSEE . SINCE THE DELAY WAS NOT ON THE PART OF THE ASSESSEE BUT O N THE PART OF THE DEVELOPER AND THUS IT WAS BEYOND THE CONTROL OF THE ASSESSEE. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT BENEFIT OF DEDUCTION CANNOT BE DENIED TO THE ASSESS EE. OUR VIEW IS SUPPORTED BY THE JUDGMENT OF COORDINATE BEN CH OF THE ITAT IN THE CASE OF VARUN SETH VS. ACIT ITA NO.1388/DEL/2019 DATED 14.05.2019 WHEREIN IT HAS B EEN HELD AS UNDER:- 9. THE REAL ISSUE IN THE PRESENT CASE IS THAT NEW RESIDENTIAL HOUSE HAS NOT BEEN CONSTRUCTED WITHIN A PERIOD OF T HREE YEARS FROM THE DATE OF THE TRANSFER OF THE RESIDENTIAL PR OPERTY WHICH RESULTED IN THE LONG-TERM CAPITAL GAIN. ON THIS ISS UE THE ASSESSEES CONTENTION HAS BEEN THAT INSPITE OF HAVI NG MADE PAYMENT FOR THE PLOT THE JAYPEE (DEVELOPER) FAILED TO OFFER POSSESSION AND EXECUTE SALE DEED EVEN UP TILL THE E XPIRY OF THREE I.T.A. NO.5114/DEL/2016 6 YEARS FROM THE DATE OF SALE OF PROPERTY BY HIM BEC AUSE OF REASONS BEYOND HIS CONTROL WHICH CANNOT BE DISPUTED . THIS VITAL FACT ASSUMES GREAT SIGNIFICANCE AS ASSESSEE HAD TAK EN ALL THE STEPS TO MAKE THE INVESTMENT FOR THE PURCHASE OF HO USE AND ALSO ASSESSEE HAD DEPOSITED 25 10 000/- IN THE CAPITAL GAIN ACCOUNT WITH PNB SO AS TO CONSTRUCT THE HOUSE. THIS UNEQUIV OCALLY DEMONSTRATE THAT ASSESSEE REALLY INTENDED TO CONSTR UCT THE NEW RESIDENTIAL HOUSE THEREON. IT WAS BASED ON THIS BON AFIDE INTENTION ASSESSEE HAD CLAIMED EXEMPTION UNDER SECTION 54 OF THE ACT. WITHOUT THE PURCHASE OF LAND HOUSE COULD NOT HAVE BEEN CONSTRUCTED. THE FIRST STEP WAS TO PURCHASE THE LAN D WHICH WAS DONE. THEREAFTER THE DEVELOPER WAS TO HANDOVER THE PLOT SO THAT ASSESSEE COULD HAVE CONSTRUCTED THE HOUSE WITHIN TI ME ALLOWED OF 2 YEARS. HOWEVER NO STEP COULD BE PUT FORWARD THER EAFTER BECAUSE POSSESSION OF LAND WAS NOT GIVEN BY THE DEV ELOPER FOR REASONS BEYOND THE CONTROL OF THE ASSESSEE. IF AN A SSESSEE SELLS HIS HOUSE PROPERTY AND UTILISES THE MONEY FOR ACQUI RING A PLOT FOR THE CONSTRUCTION OF THE HOUSE AND IF FACTS AND CIRC UMSTANCES POINT OUT THAT ASSESSEE INTENDED TO CONSTRUCT THE HOUSE WHICH HAS BEEN FOUND SO THEN IT IS CLEAR THAT HE WANTS TO AV AIL EXEMPTION AS PROVIDED UNDER THE LAW. NOW IF THE DEVELOPER AFTER RECEIVING THE MONEY COULD NOT FULFILL THE OBLIGATION WITHIN TIME THEN CAN ASSESSEE BE HELD RESPONSIBLE FOR NOT COMPLYING THE LAW. 10. THE HONBLE SUPREME COURT IN THE CASE OF SANJEE V LAL VS. CIT [2014] 365 ITR 389 (SC) HAS LAID DOWN THE PURPOSIVE INTERPRETATION OF SECTION 54 TO GIVE A LIBERAL APPR OACH TO THE ASSESSEE WHO CLEARLY INTENDED TO CLAIM BENEFIT OF S ECTION 54. THEIR LORDSHIPS HELD THAT SECTION 54 IS A BENEFICIAL PROV ISION AND IS TO BE CONSTRUED KEEPING IN VIEW THE INTENTION OF THE L EGISLATURE TO GIVE RELIEF IN THE MATTER OF PAYMENT OF TAX ON THE LONG-TERM CAPITAL GAIN RELEVANT OBSERVATION OF THEIR LORDSHIPS READS AS UNDER: - 22. IN ADDITION TO THE FACT THAT THE TERM 'TRANSFER' H AS BEEN DEFINED UNDER SECTION 2(47) OF THE ACT EVEN IF LOOKED AT THE PROVISIONS OF SECTION 54 OF THE ACT WHICH GIVES RELIEF TO A PERSON WHO HAS TRANSFERRED HIS ONE RESIDE NTIAL HOUSE AND IS PURCHASING ANOTHER RESIDENTIAL HOUSE EITHER BEFORE ONE YEAR OF THE TRANSFER OR EVEN TWO YEARS A FTER I.T.A. NO.5114/DEL/2016 7 THE TRANSFER THE INTENTION OF THE LEGISLATURE IS TO GIVE HIM RELIEF IN THE MATTER OF PAYMENT OF TAX ON THE LONG - TERM CAPITAL GAIN. IF A PERSON WHO GETS SOME EXCESS AMOUNT UPON TRANSFER OF HIS OLD RESIDENTIAL PREMISES A ND THEREAFTER PURCHASES OR CONSTRUCTS A NEW PREMISES WITHIN THE TIME STIPULATED UNDER SECTION 54 OF THE ACT THE LEGISLATURE DOES NOT WANT HIM TO BE BURDENED WITH TAX ON THE LONG-TERM CAPITAL GAIN AND THEREFORE RELIE F HAS BEEN GIVEN TO HIM IN RESPECT OF PAYING INCOME-TAX ON THE LONG-TERM CAPITAL GAIN. THE INTENTION OF THE LEGISLATURE OR THE PURPOSE WITH WHICH THE SAID PROVISION HAS BEEN INCORPORATED IN THE ACT IS ALSO VERY CLEAR T HAT THE ASSESSEE SHOULD BE GIVEN SOME RELIEF. THOUGH IT HAS BEEN VERY OFTEN SAID THAT COMMON SENSE IS A STRANGE R AND AN INCOMPATIBLE PARTNER TO THE INCOME-TAX ACT AND IT I S ALSO SAID THAT EQUITY AND TAX ARE STRANGERS TO EACH OTHER ST ILL THIS COURT HAS OFTEN OBSERVED THAT PURPOSIVE INTERPRETATION SH OULD BE GIVEN TO THE PROVISIONS OF THE ACT. IN THE CASE OF OXFORD UNIVERSITY PRESS V. CIT [2001] 3 SCC 359 THIS COURT HAS OBSERVED THAT A PURPOSIVE INTERPRETATION OF THE PRO VISIONS OF THE ACT SHOULD BE GIVEN WHILE CONSIDERING A CLAIM FOR E XEMPTION FROM TAX. IT HAS ALSO BEEN SAID THAT HARMONIOUS CON STRUCTION OF THE PROVISIONS WHICH SUB-SERVE THE OBJECT AND PURPO SE SHOULD ALSO BE MADE WHILE CONSTRUING ANY OF THE PROVISIONS OF THE ACT AND MORE PARTICULARLY WHEN ONE IS CONCERNED WITH EX EMPTION FROM PAYMENT OF TAX. CONSIDERING THE AFORE STATED OBSERVATIONS AND THE PRINCIPLES WITH REGARD TO THE INTERPRETATION OF STATUTE PERTAINING TO THE TAX LAWS ONE CAN VERY WELL INTERPRET THE PROVISIONS OF SECTION 54 RE AD WITH SECTION 2(47) OF THE ACT I.E. THE DEFINITION OF 'TRANSFER' WHICH WOULD ENABLE THE APPELLANTS TO GET T HE BENEFIT UNDER SECTION 54 OF THE ACT. 11. IF WE APPLY THE LAW AS CLARIFIED BY THE HONBLE APEX COURT ON THE FACTS OF THE INSTANT CASE THEN WE ARE OF THE O PINION THAT THE AMOUNT UTILIZED BY THE ASSESSEE IN THE ACQUISITION OF LAND SHOULD BE CONSTRUED AS AMOUNT INVESTED IN PURCHASE/ CONSTR UCTION OF RESIDENTIAL HOUSE. THE INTENTION OF THE STATUTE AS PROVIDED IN SECTION 54 HAS BEEN FULLY SATISFIED BY THE ASSESSEE IN THE PRESENT I.T.A. NO.5114/DEL/2016 8 CASE. THUS ON THE FACTS OF THE PRESENT CASE WE HO LD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 54 OF THE ACT AND AO IS DIRECTED TO ALLOW THE EXEMPTION US/ 54. 7. RESPECTFULLY FOLLOWING THE ABOVE DECISION WHICH IS APPLICABLE ON THE FACTS OF THE PRESENT CASE ALSO W E HOLD THAT ASSESSEE IS ENTITLED TO THE EXEMPTION CLAIMED BY HE R AND DIRECT THE AO TO DELETE THE DISALLOWANCE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER 2019. SD/- SD/- [N.K. BILLAIYA] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 18 TH NOVEMBER 2019 PKK: