COMMISSIONER OF INCOME TAX vs. SUNIL SACHDEVA

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ITA/183/2016HC Punjab & HaryanaPHHC01110372201624 August 2016Bench: MR. JUSTICE M.M. AGGARWAL,MR. JUSTICE AVNEESH JHINGAN3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. Regarding the first issue, the Court noted the ITAT's finding of fact that the assessee had instructed the bank on 30.07.2008 to transfer money from his savings account to the Special Capital Gain Account, and the bank transferred it the next day. The Court held that this did not raise a substantial question of law as it was a factual finding and not perverse. For the second issue, the Court found that the premise of the question was erroneous. The company had only lent money to the assessee to enable him to purchase the property, and the investment was indeed made by the assessee. Therefore, the appeal was dismissed on both counts.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Faridabad against an order of the Income Tax Appellate Tribunal (ITAT) concerning Assessment Year 2008-09. The ITAT had allowed a deduction under Section 54F of the Income Tax Act, 1961. The revenue's primary contention was that the assessee had not complied with the requirement of depositing the amount under Section 54F by the due date, filing the return under Section 139(1). Additionally, the revenue argued that the exemption was wrongly allowed as the investment in a residential house was made by a company in which the assessee was a director, not by the assessee individually. The High Court noted a delay of 980 days in re-filing the appeal, which was condoned.

What were the issues?

1. Whether on the facts and circumstances of the case, the learned ITAT was right in law in allowing deduction u/s 54F of the Income Tax Act, 1961, despite the assessee having not complied with the requirement of depositing the amount under Section 54F by the due date, namely before filing of the return under Section 139(1) of the Income Tax Act, 1961. 2. Whether on the facts and circumstances of the case, the learned ITAT was right in law in allowing exemption of Rs.55,70,800/- on account of investment made in residential house by the company in which the assessee is one of the directors and not by the assessee (individual) as provided in law. Assessee's arguments: Not recorded. Revenue's arguments: For issue (i), the revenue argued that the amount was deposited one day late (31.07.2008 instead of 30.07.2008) into the Special Capital Gain Account. For issue (ii), the revenue contended that the investment was made by a company, not the individual assessee, thus disqualifying the exemption under Section 54F.

Which sections of the Income-tax Act were involved?

Section 54F,Section 139(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sr. No.105 ITA No.183 of 2016 (O&M) Date of decision: 24.08.2016 The Commissioner of Income Tax, Faridabad ....Appellant versus Sunil Sachdeva ....Respondent CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, CHIEF JUSTICE HON'BLE MR. JUSTICE DEEPAK SIBAL * * * * Present:- Mr. T.K. Joshi, Advocate for the appellant. * * * * S.J. VAZIFDAR,

CHIEF JUSTICE (ORAL)

C.M. No.14404-CII of 2016 For the reasons stated in the application, the delay of 980 days in re-filing the appeal is condoned. CM stands disposed of. C.M. No.14405-CII of 2016 CM is allowed as prayed for. ITA No.183 of 2016 This is an appeal against the order of Tribunal in respect of the Assessment Year 2008-09. 2. According to the appellant the following substantial questions of law arise:- (i) “Whether on the facts and circumstances of the Jyoti Sharma 2016.08.27 15:11 I attest to the accuracy and authenticity of this document Chandigarh

ITA No.183 of 2016 (O&M) -2- case learned ITAT was right in law in allowing deduction u/s 54F of the Income Tax Act, 1961 despite the assessee having not complied with the requirement of depositing the amount under Section 54F of the Income Tax Act, 1961 by the due date, namely before filing of the return under Section 139(1) of the Income Tax Act, 1961. (ii) Whether on the facts and circumstances of the case the learned ITAT is right in law in allowing exemption of Rs.55,70,800/- on account of investment made in residential house by the company in which the assessee is one of the directors and not by the assessee (individual) as provided in law.” 3. With reference to the first question, the alleged non-compliance of the provisions of Section 54F of the Income Tax Act, 1961 is that the amount was paid into the Special Capital Gain Account maintained by the respondent-assessee with the same branch of the Bank after a delay of one day, namely, on 31.07.2008 instead of on 30.07.2008. The Tribunal has recorded a finding of fact that the assessee had infact on the same day i.e. 30.07.2008 instructed the Bank to transfer the money from his saving account to Special Capital Gain Account maintained by him with the same branch. This finding of fact cannot be said to be perverse. As a matter of fact, the Bank transferred the money on the very next day. It is not the revenue's case that separate instructions were given on the next day either in writing or orally to the Bank to transfer the amount to the Special Capital Gain Account. Therefore, the same does not raise a substantial question of law. The appeal in this regard is dismissed. 4. The second question proceeds on the erroneous basis that the investment in the residential houses was made by the assessee. The Company had only lent money to the assessee to enable him to Jyoti Sharma 2016.08.27 15:11 I attest to the accuracy and authenticity of this document Chandigarh

ITA No.183 of 2016 (O&M) -3- purchase the property. 5. In these circumstances, the appeal is dismissed. (S.J. VAZIFDAR) CHIEF JUSTICE (DEEPAK SIBAL) JUDGE August 24, 2016 Jyoti 1 (i) Whether speaking/reasoned No (ii) Whether reportable No Jyoti Sharma 2016.08.27 15:11 I attest to the accuracy and authenticity of this document Chandigarh

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