ACIT, Noida v. Sh. Vikas Singh, Noida

ITA 855/DEL/2011 | 2005-2006
Pronouncement Date: 18-11-2011 | Result: Dismissed

Appeal Details

RSA Number 85520114 RSA 2011
Assessee PAN ATZPS0968F
Bench Delhi
Appeal Number ITA 855/DEL/2011
Duration Of Justice 9 month(s) 7 day(s)
Appellant ACIT, Noida
Respondent Sh. Vikas Singh, Noida
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 18-11-2011
Date Of Final Hearing 03-11-2011
Next Hearing Date 03-11-2011
Assessment Year 2005-2006
Appeal Filed On 11-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO.855/DEL/2011 ASSESSMENT YEAR : 2005-06 ASSTT. COMMISSIONER OF INCOME TAX CIRCLE NOIDA. VS. SHRI VIKAS SINGH B-160 SECTOR 44 NOIDA. PAN : ATZPS0968F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SAMIT BAJAJ ADVOCATE REVENUE BY : MRS. PRATIMA KAUSHIK SR.DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECTE D AGAINST THE ORDER PASSED BY THE CIT (A) DATED 3 RD NOVEMBER 2010 FOR ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THAT THE LEARNED CIT (A) HAS ERRED IN LAW ON FACTS BY HOLDING THAT THE ASSESSEE WAS ENTITLED FOR EXEMPTION U/S 54F BY DEPOSITING AND SURPLUS UNAPPROPRIATED FUND INTO CAPITAL GAIN SCHEME. 2. THAT THE LEARNED CIT (A) HAS ERRED IN LAW AND ON F ACTS BY NOT APPRECIATING THE FACT THAT THE ASSESSEE HAD ALREADY APPROPRIATED THE CONSIDERATION TOWARDS PURCHASE OF FLAT AND BALANCE NOT APPROPRIATED FUND WAS LIABLE TO BE TAXED AS THERE WAS NO SCOPE FOR FURTHER INVESTMENT WHEN THE ASSESSEE W AS ALREADY OWING TWO RESIDENTIAL PROPERTIES IN HIS NAME. 3. THAT THE ORDER OF THE LEARNED CIT (A) BEING ERRONEOUS IN LAW AND ON THE FACTS DESERVES TO BE SET ASIDE AND THE ORDER OF THE A.O. BE RESTORED. ITA NO.855/DEL/2011 2 2. A RESIDENTIAL PLOT WAS SOLD BY THE ASSESSEE ON 5 TH FEBRUARY 2005 FOR A SUM OF ` 47 52 000/- ON WHICH NET CAPITAL GAIN WAS SHOWN AT ` 24 43 364/-. OUT OF SALE CONSIDERATION THE ASSESSEE INVE STED A SUM OF ` 19 30 000/- IN PURCHASE OF FLAT ON 19 TH FEBRUARY 2005 AND DURING THE FINANCIAL YEAR UNDER CONSIDERATION A SUM OF ` 16 LAC WAS PUT IN A FDR ON 1 ST MARCH 2005 UNDER CAPITAL GAINS SCHEME. IN THIS MAT TER THE ASSESSEE HAD SHOWN TOTAL INVESTMENT OF ` 35 30 000/- OUT OF TOTAL CAPITAL GAINS AMOUNTING TO ` 34 43 364/- AND NET LON G-TERM CAPITAL GAIN WAS SHOWN AT NIL. THE ASSESSING OFFICER REQUIRED THE ASSESSE E TO EXPLAIN AS TO WHY EXEMPTION U/S 54F SHOULD BE GIVEN ON THE AMOUNT DEPOSITED AS FDR UNDER CAPITAL GAINS SCHEME. VIDE REP LY DATED 21 ST JANUARY 2007 IT WAS SUBMITTED THAT AS THE ENTIRE AMO UNT OF NET CONSIDERATION WAS NOT UTILIZED BY THE ASSESSEE FOR PURCHA SE OR CONSTRUCTION OF NEW HOUSE BEFORE FURNISHING THE DATE O F RETURN OF INCOME IT HAD BEEN DEPOSITED BEFORE THE DUE DATE OF FURNISHING THE RETURN IN CAPITAL GAINS ACCOUNT SCHEME AND PROOF OF SUCH DEPOSIT WAS ALSO ENCLOSED AND THUS THE AMOUNT SO DEPOSITED IS ALSO E LIGIBLE FOR EXEMPTION AND THIS DEPOSIT IS IN ACCORDANCE WITH SECTI ON 54F. LD. ASSESSING OFFICER AFTER REPRODUCING THE SECTION 54F HAS OBSERVED THAT AS PER PROVISIONS OF SECTION 54F THE ASSESSEE CAN PURCHASE A RESIDENTIAL HOUSE WITHIN ONE YEAR FROM THE DATE OF TR ANSFER OF LONG-TERM CAPITAL ASSET. IN THE PRESENT CASE THE ASSESSEE HAD SOLD A PLOT ON 5 TH FEBRUARY 2005 AND HAD PURCHASED RESIDENTIAL FLAT ON 19 TH FEBRUARY 2005 AND THEREFORE WHATEVER IS INVESTED BY THE ASSESSEE IN PURCHASE OF RESIDENTIAL FLAT IS ALLOWABLE AND DEPOSITED IN CAP ITAL GAIN DEPOSIT SCHEME WILL NOT BE ELIGIBLE TO BE EXEMPTED U/S 54F AS THE ASSESSEE HAD ALSO ACQUIRED A NEW ASSET. ACCORDING TO THE ASSESSING OFFICER FURTHER REQUIREMENT TO MAKE ELIGIBLE SUCH DEPOSIT U/S 54F IS THAT THE ASSESSEE SHOULD NOT PURCHASE ANY RESIDENTIAL HOUSE OTHER TH AN NEW ASSET WITHIN A PERIOD OF ONE YEAR CONSTRUCT ANY RESIDEN TIAL HOUSE OTHER THAN NEW ASSET WITHIN A PERIOD OF THREE YEARS AFTER TH E DATE OF TRANSFER ITA NO.855/DEL/2011 3 OF ORIGINAL ASSET AND AS THE ASSESSEE WAS NOT HAVING OPTION TO PURCHASE OR CONSTRUCT HOUSE AS HE OWNED ONE RESIDENTIAL FLAT ON THE DATE OF TRANSFER OF ASSET AND HAD ACQUIRED NEW ASSET ON 19 TH FEBRUARY 2005 THEREFORE THE CAPITAL GAIN WAS TO BE CHARGED AS PER SECTION 54F (1) (B) AND IN THIS MANNER THE ASSESSING OFFICER HAD R ESTRICTED THE CLAIM OF THE ASSESSEE TO ` 13 98 356/- AS PER FOLLOWING FORMULA:- COST OF NEW HOUSE/FLAT X CAPITAL GAIN NET SALE CONSIDERATION = 19 30 000 X 34 43 000/- 47 52 000/- = RS.13 98 356/- 3. IN THIS MANNER THE ASSESSING OFFICER HAS WORKED OUT A N ADDITION OF ` 20 45 004/- AFTER REDUCING THE AFOREMENTIONED AMOUNT OF ` 13 98 356/- FROM THE CLAIM OF EXEMPTIONS MADE BY THE ASSESSEE OF A SUM OF ` 34 43 000/-. AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) WHO HAS ALLOWED THE CLAIM OF THE ASSESSEE RE LYING UPON THE STATUTORY LANGUAGE. THE DEPARTMENT IS AGGRIEVED HEN CE IN APPEAL. 4. AFTER NARRATING THE FACTS RELYING UPON THE OBSERV ATIONS OF THE ASSESSING OFFICER IT WAS PLEADED BY THE LEARNED DR THAT THE ASSESSEE HAD UTILIZED THE PART OF THE AMOUNT OF THE NET SALE CONSIDERATION OF RESIDENTIAL PLOT IN PURCHASE OF FLAT ON 19 TH FEBRUARY 2005. THEREAFTER THE ASSESSEE WAS NOT ELIGIBLE TO GET ANY FURTHER EXEMPTI ON U/S 54F DESPITE THE DEPOSIT MADE UNDER CAPITAL GAINS SCHEME AC COUNT. THUS IT WAS PLEADED BY THE LEARNED DR THAT CIT (A) HAS WRO NGLY ALLOWED THE RELIEF TO THE ASSESSEE AND THE ORDER OF THE CIT (A) ON THIS ISSUE SHOULD BE REVERSED. ITA NO.855/DEL/2011 4 5. ON THE OTHER HAND RELYING UPON THE LANGUAGE OF SECTION 54F IT IS THE CASE OF THE LEARNED AR THAT THE RELIEF HAS RIGHTL Y BEEN GIVEN BY THE CIT (A) AND HIS ORDER SHOULD BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. IT WILL BE APPROPRIAT E TO REPRODUCE SECTION 54F:- CAPITAL GAI CAPITAL GAI CAPITAL GAI CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NO T TO BE CHARGED N ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARG ED N ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARG ED N ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARG ED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. 54F. 54F. 54F. 54F. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (4) WHERE IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HIN DU UNDIVIDED FAMILY THE CAPITAL GAIN ARISES FROM THE TRANSFER OF AN Y LONG-TERM CAPITAL ASSET NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET) AND THE ASSE SSEE 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 YEARS AFTER THAT DATE CONSTRUCTED A RESIDENTIAL H OUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET) THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION THAT IS TO SAY ( A ) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET THE WHOL E OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; ( B ) IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN TH E SAME PROPORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION SHALL NOT BE CHARGED UNDER SECTION 45 : PROVIDED PROVIDED PROVIDED PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY WHERE ( A ) THE ASSESSEE ( I )OWNS MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE N EW ASSET ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR ( II )PURCHASES ANY RESIDENTIAL HOUSE OTHER THAN THE NEW AS SET WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER O F THE ORIGINAL ASSET; OR ( III ) CONSTRUCTS ANY RESIDENTIAL HOUSE OTHER THAN THE NEW AS SET WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; AND ( B ) THE INCOME FROM SUCH RESIDENTIAL HOUSE OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE O RIGINAL ITA NO.855/DEL/2011 5 ASSET IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUS E PROPERTY.] EXPLANATION. FOR THE PURPOSES OF THIS SECTION NET CONSIDERATION IN RELATION TO THE TRANSFER OF A CAP ITAL ASSET MEANS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET AS REDUCED BY ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNE CTION WITH SUCH TRANSFER. (2) WHERE THE ASSESSEE PURCHASES WITHIN THE PERIOD OF 7 [TWO YEARS] AFTER THE DATE OF THE TRANSFER OF THE ORIGINAL ASS ET OR CONSTRUCTS WITHIN THE PERIOD OF THREE YEARS AFTER SUCH D ATE ANY RESIDENTIAL HOUSE THE INCOME FROM WHICH IS CHARGEABL E UNDER THE HEAD INCOME FROM HOUSE PROPERTY OTHER THAN THE NE W ASSET THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSF ER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE ( A ) OR AS THE CASE MAY BE CLAUSE ( B ) OF SUB-SECTION (1) SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELA TING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH RESIDENTIAL HOUSE IS PURCHASED OR CONSTRUCTED. (3) WHERE THE NEW ASSET IS TRANSFERRED WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE OR AS THE CASE MAY BE ITS CONSTRUCTION THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE ( A ) OR AS THE CASE MAY BE CLAUSE ( B ) OF SUB-SECTION (1) SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS R ELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH NEW ASSET IS TRANSFERRED.] (4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSE T BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139 SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETU RN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DA TE APPLICABLE IN THE CASE OF THE 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 A ND UTILISED IN ACCORDANCE WITH ANY SCHEME WHICH THE CENTRAL GOVER NMENT MAY BY NOTIFICATION IN THE OFFICIAL GAZETTE FRAME IN TH IS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUC H DEPOSIT ; AND FOR THE PURPOSES OF SUB-SECTION (1) THE AMOUNT I F ANY ALREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR C ONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHAL L BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED PROVIDED PROVIDED PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTI ON IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONSTR UCTION OF ITA NO.855/DEL/2011 6 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 TRANSFER 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 UTILISED BY THE ASSESSEE FOR THE PURCHAS E OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB- SECTION (1) BEEN THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE O F THE TRANSFER OF THE ORIGINAL ASSET EXPIRES ; AND ( II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UNUTILISE D AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. EXPLANATION. [ OMITTED BY THE FINANCE ACT 1992 W.E.F. 1-4- 1993. ] 7. SUB-SECTION (4) OF SECTION 54F DESCRIBES THAT WHAT WIL L BE THE DEEMED COST OF NEW ASSETS. IT DESCRIBE THAT THE AMOUNT OF NET CONSIDERATION WHICH IS NOT APPROPRIATED BY THE ASSESSEE T OWARDS PURCHASE OF NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF ORIGINAL ASSET TOOK PLACE OR WHICH IS N OT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF NEW ASSET BEFORE TH E DATE OF FURNISHING THE RETURN OF INCOME U/S 139 SHALL BE DEPOSI TED BY HIM BEFORE FURNISHING SUCH RETURN IN AN ACCOUNT IN ANY BA NK OR INSTITUTION AS MAY BE SPECIFIED IN AND UTILIZED IN ACCORDANCE WIT H ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY BY NOTIFICATION I N THE OFFICIAL GAZETTE FRAMED IN THIS BEHALF AND SUCH RETURN SHALL B E ACCOMPANIED BY PROOF OF SUCH DEPOSIT AND IF IT IS SO DONE THEN F OR THE PURPOSES OF SUB-SECTION (1) OF SECTION 54F THE AMOUNT IF ANY A LREADY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET. PROVISO DEFINES THAT IN SPITE OF SUCH DEPOSIT IF THE SAID AMOUNT IS NOT UTILISED WHOLLY OR PARTLY FOR THE P URCHASE OR ITA NO.855/DEL/2011 7 CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFI ED THEN HOW AND WHEN IT CAN BE TAXED. SUB-SECTION (1) OF SECTION 54 F GRANTS EXEMPTION TO THE ASSESSEE FROM THE LONG-TERM CAPITAL GAIN ARISING OUT OF SALE OF ANY ASSET OTHER THAN RESIDENTIAL HOUSE AND SUCH EXEMPTIO N IS GRANTED TO THE ASSESSEE IF HE AFTER THE DATE ON WHICH THE TRANSF ER TOOK PLACE HAS PURCHASED OR HAS WITHIN A PERIOD OF THREE YEARS AFT ER THAT DATE CONSTRUCTED A RESIDENTIAL HOUSE WHICH U/S 54F HAS TO B E UNDERSTOOD AS NEW ASSET. THEREFORE THE SUM AND SUBSTANCE OF SUB-SE CTION (4) OF SECTION 54F READ WITH SUB-SECTION (1) IS THAT THE C OST OF NEW ASSET IS A DEEMED COST OF AN AMOUNT WHICH HAS ALREADY BEEN UTI LIZED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF NEW ASSET PLUS THE AMOUNT DEPOSITED AS PER REQUIREMENTS OF SUB-SECTION (4) OF SECTION 54F. THE FACTS IN THE PRESENT CASE ARE NOT DISPUTED. THE AMOUNT DEPOSITED BY THE ASSESSEE IN CAPITAL GAINS SCHEME IS ALSO A DEEMED COST OF NEW ASSET. IN CASE OF NON-UTILIZATION OF SUCH D EPOSIT THE AMOUNT WILL BE TAXABLE AS PER PROVISO TO SUB-SECTION (4 ) OF SECTION 54F. 8. IN VIEW OF THE ABOVE DISCUSSION WE FIND NO I NFIRMITY IN THE ORDER OF THE CIT (A) VIDE WHICH THE NECESSARY RELIEF HAS BEE N GIVEN TO THE ASSESSEE. WE DECLINE TO INTERFERE AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.20 11. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 18.11.2011. DK ITA NO.855/DEL/2011 8 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES