ASHWANI KUMRA,CHANDIGARH vs. ASSISTANT COMMISSIONER OF INCOME TAX, CHANDIGARH

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013- 14 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 15-05-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s. 147 of the Act on 29-03-2022. The sole issue that arises for our consideration is computation of capital gains. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The assessee has also filed written submissions which have duly been considered while adjudicating the appeal.

Proceedings before lower authorities 2.1 The assessee’s case was reopened and notice u/s 148 was issued on 31-03-2021. It was noted by Ld. AO that regular return of income as filed by the assessee was processed u/s 143(1). However, pursuant to receipt of information that the assessee sold certain immovable property for Rs.58.81 Lacs which was not declared in the regular return of income, the opinion of escapement of income was formed by Ld. AO and the case was reopened. The assessee furnished same return of income but failed to respond to various hearing notices as issued by Ld. AO. The assessee merely furnished copy of bank statement, capital gains computation, sale and purchase deed etc. On the basis of these documents, Ld. AO framed the impugned assessment against the assessee. 2.2 It transpired that the assessee sold a plot of land situated at Panchkula on 19-03-2013 for Rs.58.81 Lacs. The assessee claimed indexed cost of acquisition from the year 2009 onwards for Rs.11.63 Lacs. On remaining Long Term CapitalGains (LTCG) of Rs.47.17 Lacs, the assessee claimed deduction u/s 54 for Rs.26 Lacs towards purchase of another propertywhichwas situated at SCF No.333, Motor Market and Commercial Complex, Manimajra, Chandigarh. The net LTCG were thus computed at Rs.21.11 Lacs. However, in another statement, the assessee claimed cost of improvement for Rs.20.28 Lacs for which no supporting documents were furnished by the assessee. The assessee furnished 6 receipts, out of which 5 receipts pertained to installment payment, enhanced compensation payment and extension fees payment which, by no stretch of imagination, could be considered as cost of improvement and accordingly, the same was denied to the assessee. 2.3 Towards claim of deduction u/s 54, the assessee pleaded that it purchased a property situated at SCF No.333, Motor Market and Commercial Complex, Manimajra, Chandigarh for Rs.130 Lacs. Against the same, the assessee claimed deduction for 20% for residential element in the said property. However, field enquiries by Ld. AO revealed that Motor Market and Commercial Complex at Manimajra, Chandigarh did not have any residential house. The properties termed as Shop-cum-flat were predominantly commercial in nature and therefore, impugned deduction u/s 54 was inadmissible. In support of its claim of deduction u/s 54, the assessee quoted the decision of Chandigarh Tribunal in the case of Smt. Meenu Bansal (ITA No.627/Chd/2017 dated 08-10-2018) which was held to be distinguishable and in the context of revisionary jurisdiction u/s 263 which was not the case here. Therefore, deduction u/s 54 was denied to the assessee. 2.4 Finally, Ld. AO computed Long Term Capital Gains of Rs.47.17 Lacs and re-computed the total income of the assessee. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. Our findings and Adjudication 3. It emerges that the assessee has sold certain property at Panchkula on 19-03-2013 for Rs.58.81 Lacs. The said plot was purchased by the assessee on 02-01-2009 for Rs.7.95 Lacs. The indexed cost of the property has already been allowed by Ld. AO.