MANPREET KAUR vs. COMMISSIONER OF INCOME TAX PATIALA

Whether Reporters of local papers may be allowed to see the judgment?

To be referred to the Reporters or not?

Whether the judgment should be reported in the Digest? Present: Mr. Deepak Aggarwal, Advocate for the appellant. Ms. Savita Saxena, Advocate for the respondent.

Aggrieved by the order, the assessee filed appeal before the Tribunal. Vide order dated 17.5.2013, Annexure A.3, the Tribunal partly allowed the appeal. The issue of penalty under Section 271(1)(c) on disallowance of exemption claimed under Section 54 amounting to ` 8,52,979/- was upheld. Hence the instant appeal by the assessee.

We have heard learned counsel for the parties.

Learned counsel for the assessee-appellant submitted that there 2015.09.14 10:50 integrity of this document High Court Chandigarh assessee had failed to produce bills or vouchers, proof of construction, the date of completion of construction in the absence of which levy of penalty was justified.

After hearing learned counsel for the parties, we do not find any merit in the appeal.

The Tribunal while affirming the findings of the Assessing Officer and the CIT(A) had recorded that the assessee had failed to produce bills or vouchers. She had also failed to produce any proof of construction and the date of completion of construction during the assessment proceedings. Merely reflecting the expenditure incurred on construction in the balance sheet alongwith the income tax return was not sufficient to establish the claim. It was noticed in para 16 as under:- “16. The third addition made in the hands of the assessee was on account of disallowance of exemption claimed under section 54 of the Act. The assessee in the return of income had claimed deduction under section 54F of the Act which during the course of assessment proceedings was revised to the claim of deduction under section 54 of the Act. The assessee had claimed to have invested ` 8,32,000/- in the purchase of plot on 2.6.2005 and in respect of investment in construction of the property at ` 24,30,000/-. The Assessing Officer allowed the investment made in plot at ` 8,23,000/- as allowance under section 54 of the Act. However, the exemption claimed in respect of expenditure incurred on construction was denied by the Assessing Officer as the assessee had failed to furnish any evidence in respect of the same during the assessment proceedings. The balance long term capital gains was brought to tax by the Assessing Officer. The CIT(appeals) upheld the additions as the assessee had failed to discharge the onus to submit the requisite proof in respect of expenditure made on GURBAX SINGH 2015.09.14 10:50 integrity of this document High Court Chandigarh construction of house. Merely because the amount spent on expenditure made on construction of the property was reflected in the balance sheet filed alongwith the return of income does not establish the claim of the assessee as the assessee had failed to produce bills or vouchers or any proof of construction, date of completion, proof of construction during the assessment proceedings. The additional evidence was furnished by the assessee before the CIT(Appeals). Penalty under Section 271(1) (c) of the Act had been levied on account of said disallowance made under section 54 of the Act. We find no merit in the claim of the assessee that it is not exigible to levy of penalty under section 271(1)(c) of the Act on the aforesaid disallowance as the claim made by the assessee vis a vis the cost of construction in the immovable property was found to be a false claim and the assessee has failed to discharge the onus of establishing that it had undertaken the aforesaid construction of the immovable asset. Merely because the assessee had reflected certain amount of expenditure claimed to be on account of construction of property in its balance sheet does not entitle the assessee to the claim of deduction under section 54 of the Act being the amount spent on construction of the asset on sale of residential property. In the entirety of the facts and circumstances where the claim of the assessee was found to be false, the assessee is liable to penalty under section 271(1)(c) of the Act. Upholding the order of the CIT(appeals) we confirm levy of penalty under section 271(1)(c) of the Act on account of disallowance of deduction claimed under section 54 of the Act. Thus ground Nos. 1 and 2 raised by the assessee are allowed and ground No.3 raised by the assessee is dismissed.”

The assessee had failed to substantiate the averments made in the appeal in support of her claim. The findings recorded by the authorities are pure findings of facts. Learned counsel for the assessee was unable to GURBAX SINGH 2015.09.14 10:50 integrity of this document High Court Chandigarh point out any illegality or perversity in the said findings which may call for interference by this Court. The judgments cited by the learned counsel for the appellant being based on individual fact situation involved therein do not come to the rescue of the appellant. Thus, no advantage can be derived by the appellant from the said pronouncements. No substantial question of law arises. The appeal stands dismissed. (Ajay Kumar Mittal) Judge August 17, 2015 (Shekhar Dhawan) 'gs' Judge GURBAX SINGH 2015.09.14 10:50 integrity of this document High Court Chandigarh