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Income Tax Appellate Tribunal, [ DELHI BENCH : “F” NEW DELHI ]
Before: DR. B. R. R. KUMAR & SH. YOGESH KUMAR U.S.
PER YOGESH KUMAR U.S., JM
This appeal is filed by the assessee against the order dated 03/11/2017 passed by the ld. Commissioner of Income Tax (Appeals)– 38, Delhi [hereinafter referred to CIT (Appeals)] for Assessment Year 2013-14.
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The assessee has raised the following grounds of appeal:-
“1. The Id. Dy. Commissioner of Income Tax,’ Circle- 19(1)&(2), New Delhi (hereinafter referred to as Id. DCIT) has erred in law read with the relevant/pertinent rulings of the competent courts vis-à-vis the facts and features of the case of the assessee/appellant while disallowing the Deduction under section Capital-Asset 54/54F towards long-term duly hacked by acquisition/purchase of new residential property vide Order u/s 143(3) dated 11-03-2016, whereas the Assessee/ Appellant had paid more than the net-consideration out of sale- consideration of old long-term Capital-Asset; and
On the contrary to above, during the course of jurisdictional first appellate proceedings, the Id. Commissioner of Income Tax- Appeals, Delhi-38 (hereinafter referred to as Id. CIT- Appeals) has termed the sale of old property (long-term Capital-Asset) as short- term Capital-Asset without confronting the subject-matter by affording opportunity of hearing to Appellant therefore and such subject matter was neither an issue in the impugned Order u/s 143(3) dated 11-03-2016 issued by the Id. DCIT nor, therefore, a ground of appeal before Id. CIT-Appeal, and, while this subject matter was confronted by the Id. DCIT during the course of assessment proceedings but assessed as long-term Capital-Asset; and
The Ld.CIT(A) in his Order u/s 250(6) dated 03-11-2017 3. (served on 5-1-2018 to the Assessee) for a non-issue in the impugned assessment order u/s 143(3) dated 11-03-2016 by the
3 ITA No. 1524/Del/2018 Puneet Mangla Vs. DCIT Id. DCIT, and, the kl. CIT-Appeals has directed the Id. DCIT to assess the long-term capital-gain as short-term capital-gain; and
The Ld.CIT(A) has not dealt with and has not passed a 4. speaking order about the disallowance of Deduction u/s 54F towards long-term capital-gain by the Id. DCIT, which was the ground of appeal filed by the assessee/appellant before the Ld. CIT- Appeals;
Brief facts of the case are that, the assessee filed return declaring income of Rs. 84,60,680/-by claiming deduction of Rs. 2,64,44,285/- u/s 54F of the Act, the assessee shown income from salary, income from capital gain and income from other sources. The case of the assessee was selected for scrutiny, notice u/s 143(2) and u/s 142(1) were issued. The representative of the assessee attended the assessment proceedings.
The assessment order came to be passed on 11/03/2016 by making addition of Rs. 2,64,44,284/- by way of disallowance u/s 54F of the Act. As against the assessment order dated 11/03/2016, the assessee has preferred an appeal before the CIT(A). The Ld. CIT(A) vide order dated 03/11/2017 dismissed the appeal filed by the assessee.
Aggrieved by the order of the Ld. CIT(A) dated 03/11/2017 the assessee has preferred the present appeal on the grounds mentioned above.
We have heard the parties perused the material available on record and gave our thoughtful consideration.
During the assessment year, the assessee has sold immovable property on 04/02/2013 situated on Unit No 4E, Plaza M/6 Plot No. 6, District Centre Jasola, New Delhi for Rs. 3,55,35,000/-. The said property was purchased
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from India Colonies Pvt. Ltd. for Rs. 76,93,600/-. After the above sale, the assessee invested the sale proceeds in the residential property at Apartment No. 815, DLF Gold Course, DLF Golf Links, Phase-5, Gurgaon, Haryana and part of consideration amounting to Rs. 4,40,62,189/- was paid. It is to be noted that the assessee did not deposit sale proceeds in the capital gains scheme account and filed return for Assessment Year 2013-14 and 07/03/2014 beyond the due date.
In support of the claim for deduction u/s 54F of the Act, the assessee claimed that the entire sale proceeds of Rs. 3,55,35,000/- was invested in a residential property as the assessee has invested total amount of Rs. 4,40,62,189/- from April 2013 to February 2014. The Ld. A.O. was of the opinion that the assessee has not complied with the conditions for claiming exemption u/s 54F of the Act. The assessee was required to either to purchase or construct a residential house on or before 04/02/2016 as the date of sale of capital asset was 04/02/2013.
During the appellate proceedings the Ld.CIT (A) disallowed the deduction u/s 54/54F towards long term capital gain and further the Ld.CIT(A) termed the sale of old property (long term capital asset) as short term capital asset and has directed the A.O. to assess the long term capital gain as short term capital gain vide order impugned. The Ld. Counsel for the assessee submitted that, the Ld.CIT (A) has erred in law by not considering settled position of law in disallowing the deduction u/s 54/54F towards long term capital asset, despite the same was backed by documents to prove purchase of new residential property and the assessee paid more than the net consideration out of the sale consideration of long term capital asset. Further submitted that, on the contrary to the above, during the course of appellate proceedings, the Ld.CIT (A) erroneously termed the sale of old property as short term capital asset and has directed the Ld. A.O. to assess the long term capital gain as
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short term capital gain without affording the opportunity of herein to the assessee.
We find merit and force in the arguments of the Ld. AR . The Ld. CIT(A) has not discussed the reasons and not made proper adjudication of the issues while disallowing the deduction u/s 54F of the Act claimed by the Assessee and not even dealt with the contention and the judicial decisions cited by the assessee. The order of the Ld. CIT(A) is non speaking one. Further the Ld. CIT(A) has termed the sale of old property as short term capital asset and directed the A.O. to assess the long term capital gain as short capital gain without affording opportunity to the assessee which is in violation of natural justice. Therefore, we deem it fit to remand the matter to the file of Ld. CIT(A) for de-novo consideration after providing opportunity of being heard to the assessee.
Thus, the Grounds of appeal No. 1 & 2 of the assessee are allowed for statistical purpose with a direction to Ld. CIT(A) to consider the submissions, documents and the judicial decisions put forth by the assessee and give specific findings on the same and pass appropriate order afresh in accordance with law. Accordingly, the Revised Ground No. 1 & 2 are allowed for statistical purpose.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on : 09 .01.2023.
Sd/- Sd/- (B. R. R. KUMAR) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER
6 ITA No. 1524/Del/2018 Puneet Mangla Vs. DCIT
Dated : 09/01/2023
*R. N, Sr. PS*