SHRI BALVEER RAM,JAIPUR vs. INCOME TAX OFFICER, WARD-4-2, JAIPUR

The hearing of the appeals was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic.

Both these appeals are related to each other, therefore, for the sake of convenience, a common order is being passed.

4. Firstly we take quantum appeal being for the A.Y. 2010-11. In this appeal, the assessee has raised following grounds of appeal:

That order of learned lower authorities are against principles of natural justice. Appellant was not confronted with the material used against the appellant and was not given opportunity of rebuttal.

That further submission shall be made at the time of hearing.

Having considered the rival contentions and carefully perused the material placed on record. From perusal of the record, we observed that the 3 & 1140/JP/2019 Balveer Ram Vs ITO assessee had sold residential property situated at C-64 (South Part) 4-C, Macheda, Sikar Road, Jaipur on 28/10/2009 for Rs. 971000/- and the details of receipt of sale consideration are as under:- S. No. Amount (Rs. Remarks 1. 21000/- Advance received in cash 2. 400000/- Cheque No. 624912 dated 28/10/2009 3. 230000/- Cheque No. 501201 Dt 28/10/2009 4. 320000/- Cash at the time of registry Total 971000/- We noticed that after sale of property, the assessee invested Rs. 6,11,250/- [Rs. 350000/- was withdrawn from Bank Account on 03/11/2009 and rest Rs. 261250/- was paid out of amount received from selling of residential property (i.e. 320000/- cash received at the time of Registry) for construction of House Property situated at C-502, 4C Scheme, Loha Mandi Road, VKI Area, Jaipur. For construction of house, the contract was awarded @ Rs. 750/- per Sq. Ft. for 815 Sq. Ft. thus total amount of Rs. 611250/- was paid.

We also noticed that the assessee submitted copy of construction agreement for construction of residential house, which is at page No. 10-12 of Paper Book. Contract of construction of house was awarded to M/s Balaji Construction and the contract was awarded @ Rs. 750/-per Sq. Ft. for 815 Sq. Ft. thus total amount of Rs. 6,11,250/- was paid. The assessee paid Rs. 3,50,000/- withdrawn from bank account on 03/11/2009 and rest Rs. 2,61,250/- was paid out of amount received 4 & 1140/JP/2019 Balveer Ram Vs ITO from selling of residential Property (i.e 320000/- cash received at the time of Registry. In this regard, the assessee submitted affidavit, valuation report & photographs of the Construction of the said property and the assessee tried to prove the source and supporting evidences. In this regard, we draw strength from the decision of the Hon’ble Supreme Court in case of CIT v. Daulatram Rawatmull [1964] 53 ITR 574 & Umacharan Shaw & Bros. v. CIT (1959) 37 ITR 271 (SC) wherein it was held that "even if circumstances raise a suspicion, suspicion cannot take the place of evidence".

We also observed from perusal of the record, that the claim is not disputed but the Section under which claimed deduction is disputed. That the CIT(A) allowed the Claim U/s 54F instead of Section 54. The basic conditions for claiming Deduction U/s 54 of Income Tax Act is as under:- i) The benefit of section 54 is available only to an individual or HUF. ii) The asset transferred should be a long-term capital asset, being a residential house property. iii) Within a period of one year before or two years after the date of - transfer of old house, the -taxpayer should - acquire- another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. In case of compulsory acquisition the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional).

We also observed from perusal of the affidavit sworn by the assessee that he had sold a plot on 28/10/2009 and total amount of property was received at Rs. 9,71,000/- an after sale of property the assessee invested Rs. 6,11,250/-. The assessee also submitted that he has no residential house on the date of transfer of the original asset.

It is important to mention here that the sale deed was executed for sale of residential plot on 28/10/2009 and the assessee had given contract for construction of the house on 12/11/2009. It is a trite law that the benefit of 6 & 1140/JP/2019 Balveer Ram Vs ITO Section 54 is available only to an individual or HUF when the asset transferred should be a long-term capital asset, being a residential house property and sold within a period of one year before or two years after the date of - transfer of old house, the -taxpayer should - acquire- another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. In case of compulsory acquisition the period of acquisition or construction will be determined from the date of receipt of compensation (whether original or additional). In the present case, the sale deed was executed on 28/10/2009 and the construction was started within one year from the date of sell. Therefore, considering the totality of facts and circumstances of the case, the assessee is entitled to get benefit of deduction of Rs. 6,11,250/- U/s 54 of the Act and we allow the claim of Rs. 6,11,250/- U/s 54 of the Act to the assessee. We order accordingly.

Now we take for the A.Y. 2010-11.