MUKUNDA PRASAD MISRA,CUTTACK, ODISHA vs. ASST. COMMISSIONER OF INCOME TAXC, CIRCLE-2(1), CUTTACK, CUTTACK, ODISHA

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ITA 281/CTK/2023Status: DisposedITAT Cuttack29 November 2023AY 2015-164 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the deposit in the capital gains account scheme is permissible for capital gains arising from the sale of land, especially since the assessee had paid tax on this deposit in a subsequent year. Therefore, the addition made by the AO was not justified.

What were the facts?

The assessee, a retired judicial officer, sold two properties and claimed deductions under Section 54EC and by depositing amounts in the capital gains account scheme. The AO allowed proportionate deduction for the land sale, disallowing the deposit in the capital gains account scheme for the balance amount.

What were the issues?

Whether the deposit in the capital gains account scheme is eligible for deduction for capital gains arising from the sale of land, and if the proportionate deduction was correctly applied by the AO.

Which sections of the Income-tax Act were involved?

Section 54EC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH CUTTACK

Before: SHRI GEORGE MATHAN

Hearing: 29/11/2023Pronounced: 29/11/2023

O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 27.06.2023, passed in DIN & Order No.ITBA/NFAC/S/250/2023- 24/1053972764(1) for the assessment year 2015-2016.

2.

It was submitted by the ld. AR that the assessee is a retired Judicial Officer. The assessee has filed his return of income for the relevant assessment year declaring Long Term Capital Gain of Rs.1,51,156/- and the total income of Rs.10,25,280/-. It was the submission that during the relevant assessment year the assessee has sold two properties one being a land at Bhubaneswar, Khurda for Rs.50 lakhs and another being a flat at Bidanasi, Cuttack for Rs.45,00,000/-. It was the submission that on the sale of the properties the assessee had claimed deduction u/s.54EC of the Act and also deduction on account of his deposit in the capital gains account scheme of 1988 with State Bank of India. It was the submission that the ld. AO held that the assessee having not invested the entire 54EC bonds, the proportionate deduction was only allowable. It was the submission that assessee’s deposit in the capital gains account scheme of 1988 was not considered by the AO. It was the submission that the land having sold of Rs.60 lakhs, the cost of acquisition was Rs.3,33,721/- and the capital gains on the said sale was Rs.56,66,279/-. Out of the said amount the assessee has deposited Rs.50 lakhs in NHAI bond and has claimed deduction u/s.54EC. Out of the balance of Rs.6,66,279/-, the assessee had deposited an amount of Rs.5,15,123/- in the capital gain amount scheme of 1988 with the State Bank of India. It was the further submission that out of the flat sold for Rs.45 lakhs, the cost was adopted at Rs.27,49,123/- and the capital gains were determined at Rs.17,50,877/- and the assessee had deposited the entire amount of Rs.17,50,877/- in the capital gain account scheme of 1988 with State Bank of India. It was the submission that thus, the total amount deposited in the capital gain account scheme of 1988 with SBI was an amount of Rs.22,66,000/-. It was further the submission that as the assessee had not invested in any capital asset for the assessment year 2018-2019, the assessee had paid 20% of the said amount of Rs.22,66,000/- as capital gains tax to an extent of Rs.4,53,200/-. The ld. AR placed before me the copy of the tax paid in the assessment year 2018-2019 for Rs.4,53,200/-. It was the submission that thus the assessee having generated a total capital gains of Rs.74,17,156/- on the sale of two capital assets and the assessee having invested Rs.50 lakhs u/s.54EC NHAI bonds and the balance having been Rs.22,66,000/- in the capital gain account scheme of 1988 with SBI. The capital gain liable to be taxed only on Rs.1,51,156/-, which has been disclosed by the assessee. It was the prayer that the order of the CIT(A) and that of the AO may be reversed. 3. in reply, ld.Sr. DR vehemently supported the order of the AO & ld. CIT(A). It was the submission that in regard to sale of flat there was no issues raised by the AO and the ld.CIT(A), insofar as the capital gains of Rs.17,50,877/- on the sale of flat had rightly been invested by the assessee in the long term capital gain account scheme 1988 with the State Bank of India. It was the submission that in respect of sale of land the assessee had invested only Rs.50 lakhs out of the capital gains of Rs.56,66,279/- and consequently the proportionate capital gains has been brought to tax by the AO and the same has been upheld by the ld. CIT(A). It was the submission that the benefit of the deposit in the long term capital gain account is not available in respect of capital gains arising out of the sale of land. It was the submission that the order of the AO and that of the ld. CIT(A) is liable to be upheld.

4.

I have considered the rival submissions. As has been pointed out by the ld. Sr. DR the issue in dispute is in regard to the capital gains that has given rise on the sale of land at Bhubaneswar, Khurda. Admittedly, the capital gains that has arisen is of Rs.56,66,279/-. Out of the said amount, there is no dispute that the assessee has invested Rs.50 lakhs in the specified bond being the NHAI bond. In respect of the amount of Rs.6,66,279/-, which is the balance capital gains, admittedly, the said

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