ITO, Ward-3,, v. Niranjanpal Singh,,

ITA 714/DEL/2003 | 1990-1991
Pronouncement Date: 21-01-2011 | Result: Allowed

Appeal Details

RSA Number 71420114 RSA 2003
Assessee PAN UGUST2003A
Bench Delhi
Appeal Number ITA 714/DEL/2003
Duration Of Justice 7 year(s) 11 month(s) 3 day(s)
Appellant ITO, Ward-3,,
Respondent Niranjanpal Singh,,
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 21-01-2011
Date Of Final Hearing 18-01-2011
Next Hearing Date 18-01-2011
Assessment Year 1990-1991
Appeal Filed On 17-02-2003
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A NO. 714/DEL/03 ASSTT. YEAR 2006-07 INCOME-TAX OFFICER WARD-3 BULLANDSHAHR VS. SHRI NIRANJANPAL SINGH R/O AZEEMPURA BHOOR BULLANDSHAHR (APPELLANT) (RESPONDENT) APPELLANT BY: MS. BANITA DEVI NAOREM SR. DR RESPONDENT BY: DR. RAKESH GUPTA ADVOCATE MS. POONAM AHUJA ADVOCATE ORDER PER RAJPAL YADAV JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A) DATED 21.11.2002 PASSED FOR ASSTT. YEAR 1990-91. TH E SOLITARY GROUNDS OF APPEAL TAKEN BY THE REVENUE READ AS UNDER :- THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING THE AO TO ALLOW DEDUCTION U/S 54/54B IF THE SAME IS ADMISSIBL E IN ACCORDANCE WITH THE PROVISIONS OF I.T. ACT IGNORING THE FACT THAT NO CL AIM U/S 54/54B WAS MADE BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND THE CLAIM MADE FOR THE FIRST TIME DURING THE APPELLATE PROCEEDINGS IS NOT ALLOWABLE IN VIEW OF THE HONBLE S.C. JUDGEMENT REPORTED IN III ITR-1 THERE FORE THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THAT OF THE AO RESTORED ON THIS ISSUE. SINCE THE ITA NO. 714/DEL/03 ASSTT. YEAR 1990-91 2 DEPARTMENT HAD NOT ACCEPTED THE EARLIER ORDER OF CI T(A) DATED 8.12.99 AND PREFERRED SECOND APPEAL BEFORE ITAT HENCE TO KEEP T HE ISSUE ALIVE A SECOND APPEAL IS BEING FILED AGAINST THIS ORDER. 2. IT TRANSPIRES THAT RESPONDENT SHRI NIRANJANPAL S INGH EXPIRED DURING THE PENDENCY OF APPEAL AND NOTICE UPON HIM COULD NO T BE SERVED. THE TRIBUNAL GRANTED NUMBER OF OPPORTUNITIES TO THE REV ENUE FOR IMPLEADING THE LEGAL REPRESENTATIVE AS WELL AS EFFECTING THE S ERVICE OF NOTICE UPON THE HEIRS BUT THE REVENUE FAILS TO DO SO. ULTIMATE LY THE APPEAL WAS DISMISSED FOR WANT OF PROSECUTION ON 3 RD MAY 2005. THE REVENUE WAS GIVEN A LIBERTY TO GET ITS APPEAL REVIEWED AS AND W HEN IT IS ABLE TO LAY ITS HANDS ON THE DETAILS OF LEGAL HEIR AND BRING THEM O N THE RECORD AFTER EFFECTING SERVICE OF NOTICE UPON THEM. 3. A MISCELLANEOUS APPLICATION BEARING NO. 440/D/06 WAS FILED BY THE REVENUE CONTENDING THEREIN THAT SHRI CHETAN RAJ SI NGH IS THE SON OF LATE SHRI NIRANJAN PAL SINGH . HE IS LEGAL REPRESEN TATIVE. THIS APPLICATION WAS ALLOWED AND THE APPEAL IS RESTORED TO ITS ORIGI NAL NUMBER BY THE TRIBUNAL VIDE ITS ORDER DATED 24 TH JULY 2009. THE TRIBUNAL HAS DIRECTED THE REGISTRY TO SUBSTITUTE THE NAME OF LEGAL HEIRS AS RESPONDENT IN THE ARRAY OF PARTIES. 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE WA S CO-OWNER OF A LAND ALONGWITH 5 OTHER PERSONS SITUATED AT BHOOR BU LANDSHAHR ITA NO. 714/DEL/03 ASSTT. YEAR 1990-91 3 MEASURING TO 31214 SQ. YARDS. THIS LAND WAS SOLD TO M/S. KONARK BUILDERS FOR A CONSIDERATION OF 45 54 000/-. ACCORD ING TO THE AO THE SHARE OF THE ASSESSEE IN THE LAND IS 1/8 TH . HE ALLEGED TO HAVE RECEIVED THE SALE PROCEEDS IN THIS RATIO. THE AGREEMENT TO S ALE WAS ENTERED ON 5 TH JULY 1989. NO RETURN WAS FILED BY THE ASSESSEE IN ASSTT. YEAR 1990-91. A NOTICE U/S 148 OF THE ACT WAS ISSUED ON 12 TH JULY 1994 REQUIRING THE ASSESSEE TO FURNISH THE RETURN OF INCOME FOR THIS A SSTT. YEAR WITHIN 30 DAYS OF THE RECEIPT OF THE NOTICE. ACCORDING TO THE AO NUMBER OF NOTICES WERE ISSUED AND SERVED U/S 142 (I) AND HE PASSED AN ASST. ORDER U/S 144 OF THE INCOME TAX ACT READ WITH SECTION 147 ON 14 TH MARCH 1997. HE DETERMINED THE TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS 2 40 810/- 5. DISSATISFIED WITH THE ASSTT. ORDER ASSESSEE CAR RIED THE DISPUTE IN APPEAL BEFORE THE LD. CIT(A) VIDE APPEAL NO. 204/97 -98/GZB-BSR. THIS APPEAL HAS BEEN DECIDED BY THE LD. CIT(A) ON 7.12.9 9. LD. CIT(A) WHILE UPHOLDING THE PASSING OF ORDER U/S 144 HAS OBSERVED THAT IF ANY DEDUCTION U/S 54/54B IS ALLOWABLE TO THE ASSESSEE T HEN THAT BE ALLOWED. THE RELEVANT OBSERVATION AT THE END OF PAGE 1 OF TH E CITS ORDER READ AS UNDER :- THE FACTS OF THIS CASE ARE SIMILAR TO THAT OF HIS BROTHER SHRI HUKAMPAL SINGH WHERE APPEAL HAS BEEN DECIDED BY THE UNDERSIGNED VI DE ORDER DATED 8 TH FEBRUARY 1999 IN APPEAL NO. 167A/97-98 GZB BSR. TH E DECISION TAKEN THEREIN WOULD ALSO APPLY THIS CASE. IT HAS BEEN HEL D THEREIN THAT ASSTT. FRAMED U/S 144 WAS JUSTIFIED. IT HAS FURTHER BEEN HELD THA T LAND STOOD TRANSFERRED TO M/S KONARK BUILDERS ON THE DATE OF AGREEMENT ACCORD INGLY AO WAS JUSTIFIED IN ITA NO. 714/DEL/03 ASSTT. YEAR 1990-91 4 TAXING IT AS CAPITAL GAIN TAX IN THE YEAR UNDER CON SIDERATION. IT HAS FURTHER BEEN DIRECTED THEREIN THAT IF ANY DEDUCTION U/S 54/54B I S ALLOWABLE TO THE ASSESSEE THEN ASSESSEE WOULD PUT FORWARD THE DETAILS AND AO WILL EXAMINE THEN AND IF THE NECESSARY CONDITIONS PRESCRIBED UNDER THE ACT A RE COMPLETE THE ADMISSIBLE DEDUCTION WOULD BE ALLOWED TO THE ASSESS EE. 6. THE AO HAS PASSED THE FRESH ASSESSMENT ON 31 ST JULY 2001. HE DENIED THE DEDUCTION TO THE ASSESSEE BY OBSERVING A S UNDER :- ALSO THE ASSESSEE HAS NOT MADE ANY CLAIM U/S 54/54 F DURING THE ORIGINAL ASSESSMENT PROCEEDINGS THEREFORE NO SUCH CLAIM ADMISSIBLE AT THIS STAGE. FURTHER HONBLE SUPREME COURT HAS OBSERVED I N JUDGMENT REPORTED IN III ITR-1 THAT DEDUCTION U/S 54/54B NOT MADE BY ASS ESSEE DURING THE ASSESSMENT PROCEEDINGS AND THE CLAIM MADE FOR THE F IRST TIME DURING THE APPELLATE PROCEEDING IS NOT ALLOWABLE . 7. DISSATISFIED WITH THE ORDER OF THE AO ASSESSEE CARRIED THE MATTER IN APPEAL. LD. CIT(A) HAS DISPOSED OFF THE APPEAL O F ASSESSEE WITH FOLLOWING DIRECTIONS :- 2. IN THIS CASE THE GROUNDS OF APPEAL FACTS OF T HE CASE OBSERVATIONS OF THE AO AND THE FINDINGS OF THIS LD. AR ARE THE SAME AS THEY ARE IN THE CASE OF SHRI HARPAL SINGH FOR THE SAME ASSESSMENT YEAR. HO WEVER THE UTI8LISATION OF CONSIDERATION DIFFERS WHICH AS FOLLOWS :- A.Y. SALE CONSIDERATION INVESTMENT REMARKS 89-90 74 020.25 50 000/- ADVANCE FOR PLOT ON 29.3.90 90-91 3 15 395.15 3 58 000/- HOUSE CONSTRUCTION 30 000/- FINAL PAYMENT OF PLO T 91-92 1 68 543.64 3 5 0 000/- HOUSE CONSTRUCTION AS IS EVIDENT FROM THE ABOVE CHART THE AMOUNT OF I NVESTMENT GIVEN IN COL-3 HAS BEEN UTILIZED WITHIN THE TIME ALLOWED THE BENE FIT U/S 54F IS AVAILABLE TO THE APPELLANT. THE AO IS DIRECTED TO RE-WORK OUT TH E CAPITAL GAIN ITS UTILIZATION AND THEN WORK OUT THE UN-UTILISED NOT CONSIDERATION IF ANY FOR THE PURPOSE OF BRINGING THE SAME TO TAX . 3. THE APPEAL IS DISPOSED OFF WITH THE ABOVE DIRECT IONS. ITA NO. 714/DEL/03 ASSTT. YEAR 1990-91 5 8. WITH THE ASSISTANCE OF LD. REPRESENTATIVE WE HA VE GONE THROUGH THE RECORD CAREFULLY. THE APPEAL WAS INSTITUTED IN 2003. ALMOST 8 YEARS HAVE EXPIRED. THE REVENUE COULD NOT SUBMIT THE COMP LETE LIST OF LEGAL REPRESENTATIVE AS ALSO COULD NOT ASCERTAIN THE EXAC T STATUS OF THE LD. CITS ORDER DATED 8.12.1999. 9. LD. DR WAS UNABLE TO INFORM US WHETHER ANY APPEA L WAS FILED AGAINST THIS ORDER OR NOT. IF FILED WHAT HAD HAPPEN ED TO THAT APPEAL? THE ADJOURNMENTS WERE GIVEN ON A NUMBER OF OCCASIONS. F ACED WITH THIS SITUATION WE PROCEED TO DISPOSE OFF THIS APPEAL WIT H THE HELP OF LIMITED INFORMATION AVAILABLE TO US. LD. CIT(A) IN ITS ORDE R DATED 8.12.1999 RELIED UPON HIS ORDER PASSED IN THE CASE OF NIRANJAN PALS BROTHER HUKAMPAL SINGH. IN THE CASE OF HUKAMPAL SINGH APPEAL BEARING NO. 951/D/2000 WAS FILED BY THE REVENUE. THIS APPEAL HAS BEEN DISM ISSED BY THE TRIBUNAL VIDE ORDER DATED 21 ST AUGUST 2003 AND THE ORDER READ AS UNDER :- THE ONLY ISSUE ARISING OUT OF THIS APPEAL IS WHETH ER THE CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO ALLOW DEDUCTION U/S 54/54B IF T HE SAME IS ADMISSIBLE IN ACCORDANCE WITH THE PROVISIONS OF INCOME-TAX ACT IG NORING THE FACT THAT SUCH CLAIM WAS NOT MADE BEFORE THE AO. 2. AFTER HEARING BOTH THE PARTIES I FIND THAT THIS ISSUE IS NOW COVERED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE O F NATIONAL THERMAL POWER CORPORATION 229 ITR 383 WHEREIN IT HAS BEEN HELD THAT A LEGAL CLAIM CAN BE MADE FOR THE FIRST TIME BEFORE THE APPELLATE AUTHORITY EVEN THOUGH SUCH CLAIM WAS NEVER MADE BEFORE THE AO. RESPECTFULLY FO LLOWINGS THE SAME THE ISSUE IS DECIDED AGAINST THE REVENUE. THE ORDER OF THE CIT(A) IS THEREFORE UPHELD. ITA NO. 714/DEL/03 ASSTT. YEAR 1990-91 6 IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. 10. ON DUE CONSIDERATION OF ALL THESE FACTS WE ARE OF THE OPINION THAT AO HAS NO JURISDICTION IN THE SECOND ROUND OF ASSTT . ORDER TO SAY THAT DEDUCTION U/S 54/54B IS NOT ADMISSIBLE TO THE ASSES SEE BECAUSE HE HAS NOT CLAIMED IT IN THE ORIGINAL RETURN. THIS ASPECT HAS BEEN CONSIDERED BY THE LD. CIT(A). HE DIRECTED THE AO TO EXAMINE THE D ETAILS AND THEN COMPUTE THE DEDUCTION. THE AO WAS SUPPOSED TO PASS THE ASSTT. ORDER AS PER THE DIRECTION OF HIGHER APPELLATE AUTHORITY INSTEAD OF NEGATING SUCH DIRECTIONS. LD. CIT(A) IN THE SECOND ROUND HAS ARRIVED AT A CONCLUSION THAT ASSESSEE HAS UTILIZED CERTAIN PORTI ON OF SALE CONSIDERATION FOR THE PURPOSE OF CONSTRUCTION OF HO USE AND BENEFIT U/S 54F IS AVAILABLE TO HIM. HE FURTHER DIRECTED THE AO TO VERIFY THIS CLAIM AND RESTRICT THE DEDUCTION TO THE EXTENT CAPITAL GA IN HAS UTILIZED BY THE ASSESSEE. IN THE GROUND OF APPEAL EXTRACTED ABOVE IT REVEALS THAT REVENUE IS TAKING THE GROUND AS IF TAKEN AGAINST TH E ORIGINAL ORDER OF LD. CIT(A). PRIME FACIE IT APPEARS TO US THAT ISSUE IN DISPUTE IS COVERED BY THE ORDER OF SHRI HUKAM PAL SINGH PASSED BY THE IT AT. HOWEVER WE HAVE NOT BEEN APPRISED BY THE PARTIES EXACT STATUS OF THE ORDER OF THE LD. CIT(A) DATED 8.12.99. ITA NO. 714/DEL/03 ASSTT. YEAR 1990-91 7 11. AFTER TAKING INTO CONSIDERATION THE TOTALITY OF THE CIRCUMSTANCE WE ARE OF THE VIEW THAT ENDS OF JUSTICE WOULD MEET IF WE DISPOSE OFF THIS APPEAL WITH THE FOLLOWING DIRECTIONS:- I) THE MATTER IS RESTORED TO THE FILE OF AO. HE WIL L ASCERTAIN WHETHER ANY APPEAL WAS FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) DATED 8.12.1999 BEFORE THE TRIB UNAL. II) THE AO SHALL ASCERTAIN THE STATUS OF THAT APPEA L IF ANY FILED. IF THE APPEAL HAS BEEN ALLOWED AND ORDER OF THE LD. CI T(A) HAS BEEN VACATED THEN ASSESSEE WILL NOT GET ANY BENEFIT IN PURSUANCE TO THE LD. CIT(A)S ORDER DATED 8.12.1999 OR IMPUGNED HEREIN. III) IN CASE NO APPEAL WAS FILED OR ORDER OF LD. CI T(A) DATED 8.12.1999 NOT DISTURBED THEN DISPUTE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT PASSED IN THE CASE OF HUKAM PAL SINGH . THE AO HAS TO GIVE EFFECT THE O RDER OF THE LD. CIT(A) DATED 8.12.99. HE CANNOT DENY THE EX EMPTION TO THE ASSESSEE BY OBSERVING THAT SUCH CLAIM WAS NO T MADE IN THE ORIGINAL RETURN. HE IS BOUND TO FOLLOW THE D IRECTION OF THE LD. CIT(A) AND GIVE DUE BENEFIT TO THE ASSESSEE . 12. AS FAR AS THE SECOND ORDER OF THE LD. CIT(A) DA TED 21 ST NOVEMBER ITA NO. 714/DEL/03 ASSTT. YEAR 1990-91 8 2002 IMPUGNED IN THE PRESENT APPEAL IS CONCERNED WE DO NOT FIND ANY ERROR IN THIS ORDER. BUT THESE DIRECTIONS ARE SUBJE CT TO THE OUTCOME OF THE FIRST ROUND OF THE LITIGATION. THE AO SHALL COMPLY THIS ORDER IF THE ORDER OF THE LD. CIT(A) PASSED ON 8.12.99 WAS NOT DISTURBED BY THE HIGHER AUTHORITY. 13. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY 2011. SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST JANUARY 2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT