SANJAY SHIVAJIRAO DODKE,PUNE vs. INCOME-TAX OFFICER, WARD - 2(2), PUNE

ORDER

PER DR. DIPAK P. RIPOTE, AM:

1. The Ld CIT(A) erred in confirming the disallowance of claim of deduction made under section 54F of the I T Act to the extent of Rs.64,69,033/- without appreciating the facts of the case properly. 2(i). The Ld CIT(A) erred in enhancing the total income determined by the Ld AO. 2(ii). The Ld CIT(A) erred in holding that completion of construction of house is necessary for allowance of deduction under section 54F. for A.Y. 2012-13 Sanjay ShivajiraoDodke(A)

2(iii). The Ld CIT(A) grossly erred in enhancing the assessee’s total income entirely on the basis of presumptions and surmises and without considering the facts and circumstances of the case carefully. 3. The above grounds of appeal are without prejudice to one another.

4. The appellant craves leave to furnish Additional Evidence which may be relevant to the above Grounds of Appeal in course of the appeal proceedings.

5. The appellant craves leave to amend or alter any of the above Grounds of Appeal or to add new Grounds of Appeal during the course of appeal proceedings.”

2. Brief facts of the case are that the assessee sold a property in which his share was 50%. The assessee claimed deduction under section 54F of the Act by showing that he purchased land from his own brother, and a family HUF made construction thereon. The relevant portion of the ld.CIT(A) order is reproduced here as under: “The important fact in this regard is that this purchase of land from his own brother/HUF was not registered and the position continues even today. The claim was made only on the basis of a Sathe Khat which is an unregistered document. Not only that when the assessee was requested by the AO to furnish evidences in support of construction including purchase of construction materials etc. it was just stated that the material was transferred from the family firm through withdrawal from capital account. This entire story has been cooked with one and only motive of making false claim u/s 54F of the I.T.Act so that the appellant does not become liable for payment of any tax. This entire transaction is nothing but a collusive transaction for the purpose of defrauding the revenue which cannot be permitted. By not registering the alleged acquisition of land the appellant is not only fooling the Income Tax Department but also defrauding the state government by not paying stamp duty. Not only that during the assessment proceedings as well as appellate proceedings no further evidences such as approval of plan by local authority, occupation certification, electricity and water connection and evidences in for A.Y. 2012-13 Sanjay ShivajiraoDodke(A) support of utilization of any construction materials were filed, which further falsifies the claim made by the appellant. 6.1 As regards the AO’s action in partially allowing deduction u/s 54F of the I.T.Act to the extent of cost of land, the same is also not proper as because the deduction can be allowed u/s 54F of the I.T.Act only with regard to purchase/construction of a residential house and not for purchase of land. As the provision is absolutely clear on this point therefore AO was not justified in allowing the claim to the extent of amount shown for purchase of land. 6.2 The case laws relied upon by the appellant in the written submission are not at all relevant to the facts of the case and they are distinguishable on facts. 6.3 In the light of aforesaid discussion on the facts of the case as well as provision of sec 54F of the I.T.Act, I am of the considered opinion that the appellant is not entitled to any deduction u/s 54F of the I.T.Act as the appellant has failed to discharge his onus with regard to claim so made. Therefore the entire amount of deduction claimed u/s 54F of the I.T.Act to the tune of Rs.1,44,77,935/- is directed to be disallowed and the income is to be enhanced accordingly.”

3. We have gone through the orders of the Lower Authorities, submission of the Ld. Department Representative and written submission of the Appellant assessee.We find that the sole issue is regarding eligibility of assessee for deduction under section 54F of the Act. The appellant assessee has claimed that he has constructed the residential property at Survey No.92, Hissa No.2, 3 Warje Tal-Haveli, Dist- Pune – 411058, for which he has claimed deduction under section 54F of the Act. The appellant also filed the copy of Valuation Report dated 05.12.2021 during the proceedings as additional evidence. However, the appellant has not filed copy of Purchase Deed for the said for A.Y. 2012-13 Sanjay ShivajiraoDodke(A)

land i.e.at Survey No.92, Hissa No.2, 3 Warje Tal-Haveli, Dist- Pune – 411058. We direct the appellant assessee to file Copy of Registered Purchase Deed for the said land i.e. Survey No.92, Hissa No.2, 3 Warje Tal-Haveli, Dist- Pune – 411058 before the Assessing Officer.

3.1. The appellant assessee has filed certain documents which were admittedly not filed before the lower authorities. Therefore, in the interest of justice, we set-aside the entire issue of eligibility of deduction under section 54F of the Act to the file of the Assessing Officer. The assessee will file all necessary evidences/documents before the Assessing Officer(AO). We direct the AO to give an opportunity of being heard to the assessee, accordingly, we set-aside the issue to the file of the Assessing Officer for the limited purpose of verification of eligibility of the assessee for deduction under section 54F of the Act. Therefore, the grounds raised by the assessee are allowed for statistical purpose.