DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), PUNE, PUNE vs. SMT LATA PRAKASH POPHALE, PUNE

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ITA 566/PUN/2023Status: DisposedITAT Pune27 June 2023AY 2017-185 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) found that the assessee had actually claimed deduction under Section 54, not Section 54F, and that all necessary documents were filed before the AO. The Tribunal upheld the CIT(A)'s decision, agreeing that the assessee satisfied the conditions for Section 54 deduction.

What were the facts?

The assessee claimed deduction under Section 54F for the sale of a property and purchase of a new one, also claiming cost of improvement. The Assessing Officer disallowed the deduction and cost of improvement, stating the assessee owned other residential houses and the bills were for construction, not improvement.

What were the issues?

Whether the assessee was eligible for deduction under Section 54 or 54F, and whether the cost of improvement was substantiated.

Which sections of the Income-tax Act were involved?

Section 54,Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE „A‟ BENCHES :: PUNE

For Respondent: Shri Ramnath P Murkunde, DR
Hearing: 14/06/2023Pronounced: 27/06/2023

O R D E R

Per PARTHA SARATHI CHAUDHURY, JM:

1.

This appeal preferred by the assessee emanates from the order of National Faceless Appeal Centre [NFAC], Delhi (for short, „CIT(A)‟), dated 10.03.2023 for A.Y.2017-18 as per the following grounds of appeal:- “1. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in admitting new evidences/ documents without giving opportunity to the Assessing Officer.

2. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in violating the provisions of Rule 46A of the Income Tax Rules, 1962.

3. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in condoning the delay without there being a reasonable cause for the same.

4. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the assessee did not claim the deduction u/ s. 54F but u/ s. 54 of the income Tax Act, 1961. 5. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the residential house of the assessee was old & hence to make in livable, 'Cost Of Improvement' must have been done by the assessee without there being any documentary evidence.”

2.

At the time of hearing, none appeared for the assessee. The case was discussed considering the materials available on record and the submissions of the ld.DR were recorded and the case was heard on merits. This appeal is time barred by 01 day. We have heard the submissions of the ld.DR and are convinced that, such delay had occurred due to circumstances beyond control and is neither deliberate nor intentional on the part of the Department. Having condoned the delay, matter was heard on merits.

3.

The relevant facts of the case are that assessee is an individual, filed her return of income on 04.08.2017 declaring total income of Rs.23, 16,870/-. The case of the assessee was selected for scrutiny and notices u/s. 142(1) & 143(2) were issued by the Assessing Officer (AO). In response, the assessee filed capital gains/loss statement, balance sheet, bank account and evidence of investment in capital gains scheme etc. The AO made the additions by observing as under:- i) During the year under consideration the assessee sold property at Gultekdi, Pune and purchased a new property at Anand Nagar Sahakar Gruharachana Sanstha on 9.07.2016 and claimed deduction u/s.54F of Act after claiming indexed

Smt. Lata Prakash Pophale cost of improvement. iii) As per balance sheet, assessee has two residential houses other than the property sold and claimed deduction u/s.54F of the Act. The AO noted that assessee failed to file explanation to justify cost of improvement and deduction claimed u/s.54F of Act. The bills for cost of improvement uploaded by the assessee relates to construction of bungalow and not for cost of improvement. Some of the bills are in the name of her husband. Therefore, the AO disallowed the cost of improvement of Rs.30,42,000/- and also disallowed the claim u/s.54F of Act as the assessee had two other residential houses apart from the new property purchased. Accordingly, the AO calculated the LTCG of Rs.2,57,99,682/- on sale of above mentioned property and added the same to the total income of the assessee and passed order u/s.144 of the Act.

4.

The ld. CIT(A) had given a finding on this issue that the claim of the assessee was deduction u/sec. 54 of the Act of Rs. 2,26,33,135/- as evident from ITR and computation of income filed for the A.Y. 2017-18 by the assessee and the AO had wrongly held that assessee had claimed deduction u/sec. 54F of the Act. Therefore, the adjudication conducted by the AO was on a wrong premise. Accordingly, the ld. CIT(A) in detailed order from para 7.4 onwards examined all the documents/evidences required to claim deduction

Smt. Lata Prakash Pophale u/sec. 54 of the Act and all those documents/evidences had been filed by the assessee before the AO as well. After examining all those details, the ld. CIT(A) held that the assessee had satisfied the conditions for claiming deduction u/sec. 54 of the Act, and hence, the matter was allowed in favour of the assessee.

5.

We observe from the documents/materials filed on record that the assessee had never claimed deduction u/sec. 54F, but had rather claimed deduction u/sec. 54 as rightly held by the ld. CIT(A). The requisite details for claiming deduction u/sec. 54 had also been filed before the AO and accordingly, on examination of all those documents, the deduction was allowed by the ld. CIT(A). We do not find any infirmity with the findings of the ld. CIT(A). We also observe that there were no additional evidences entertained by the ld.CIT(A) on this issue and rather all those evidences had been filed even at the level of ld. Assessing Officer. Further, ld.DR fairly conceded that it is a case of deduction claimed u/sec. 54 and not 54F of the Act. In view thereof, the findings of the ld. CIT(A) are upheld and the grounds of appeal filed by the Revenue are dismissed.

6.

In the result, appeal of the Revenue is dismissed.

Order pronounced in open Court on 27th June, 2023.

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