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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Saktijit DeyDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the revenue against the order of the ld. CIT(A)-10, New Delhi dated 04.12.2018.
Following grounds have been raised by the revenue:
“1. Whether Ld. CIT(A) was justified in admitting the additional evidences filed by the assessee during appellate proceedings despite the fact that the assessee was given more than adequate opportunity to submit the documentary evidences in his support during the assessment proceedings and the additional evidences pertain to factual grounds.
Whether Ld. CIT(A) was justified in accepting the claim u/s 54F made by assessee during the appellate proceedings without examining the conditions prescribed for availing the claim and
ITA No. 2087/Del/2019 2 Sanjeev Bhalerao despite the fact that the assessee did not provide any documentary evidence to substantiate the mandatory conditions required for availing the claim u/s 54F.
Whether Ld. CIT(A) was justified in accepting the claim of assessee made during the appellate proceedings with respect to sale of art effect i.e. miniature paintings amounting to Rs. 2,50,00,000/- on his account solely whereas as per the vouchers submitted, it was a combined sale made by assessee together with his spouse, Ms. Archana Choudhary and thus, the claim exempt income amounting to Rs. 2,50,00,000/- is unsubstantiated.”
3, The assessee filed return of income on 30.03.2012 declaring income of Rs.3,42,84,720/-. It was noticed that the assessee had claimed exemption of Rs.2.50 crores u/s 10 of the Income Tax Act, 1961 in respect of sale of paintings being not in the nature of capital asset. As per provisions of Section 2(14)(ii)(d), the paintings were excluded from the definition of “personal effects” w.e.f. 01.04.2008. Hence, paintings are capital asset and transfer of the same are subject to capital gain u/s 45 of the Income Tax Act, 1961. The Assessing Officer has taxed this income owing to non-submission of details.
The ld. CIT(A) has deleted the addition holding that the facts on record clearly establish that the plea of claiming exemption of sale proceeds from art effects was before the Assessing Officer at the time of original assessment proceedings as in the letter dated 10.01.2014, details with regard to investment of Rs.2,70,00,000/- in respect of investment in residential house property no. P-12, Hauz Khas Enclave, New Delhi was provided to the Assessing Officer and it was claimed that since sale consideration of art effects has been utilized towards purchase of above property, the capital gain be treated
ITA No. 2087/Del/2019 3 Sanjeev Bhalerao exempt. In the remand report, it has specifically been submitted that additional documents such as copy of bank account statement indicating the transaction of sale of paintings and investment in residential property, affidavit affirming that assessee is entitled for exemption u/s 54F in respect of capital gain in sale of art effects and receipt of payment made to M/s Exclusive Residences India towards purchase of property No. P- 12, Hauz Khas Enclave, New Delhi, have been examined and found to be in order. The ld. CIT(A) held that no adverse comments/evidences have been brought on record to controvert the claim of the appellant that he is entitled for section 54F of the Act.
The ld. CIT(A) deleted the addition holding further, that keeping in view the extant provisions of section 54F, it has been claimed by the assessee that appellant has made an investment of Rs.2,70,00,000/- in the purchase of property No. P-12, Hauz Khas Enclave, New Delhi, and no other residential property has been purchased after 3 years of purchase of above property. It has also observed by the ld. CIT(A) that on the date of such transfer of capital asset, appellant was not in the possession of any other identical house property and the new residential property was purchased on 08.09.2011 within a year from the date of such transfer of capital asset. After examining the submissions made before him, the ld. CIT(A) has found them to be in order and held that the assessee is entitled to claim exemption u/s 54F in respect of sale of art effects. Since, the investment in the property (Rs.2.70 Cr.) is more than the amount of sale consideration received (Rs.2.50 Cr), the entire capital gain is eligible for exempt from tax.
ITA No. 2087/Del/2019 4 Sanjeev Bhalerao 6. Since, the facts could not be contradicted before us, considering the facts on record, we hereby decline to interfere with the order of the ld. CIT(A).
In the result, the appeal of the revenue is dismissed. Order Pronounced in the Open Court on 28/01/2022.
Sd/- Sd/- (Saktijit Dey) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 28/01/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR