YOGA SIKKA (UPPAL),MORADABAD vs. ITO, WARD-1(1), MORADABAD
What did the Tribunal hold?
The Tribunal restored the issue to the Assessing Officer to verify a newly produced construction completion certificate. The AO was directed to decide the exemption afresh, considering investment in land as part of construction cost.
What were the facts?
The assessee sold jewellery and claimed exemption under Section 54F for investment in a residential house. The Assessing Officer denied the exemption, stating only land was purchased, not a house. The CIT(A) confirmed the addition due to lack of corroborative evidence of construction.
What were the issues?
Whether investment in land for constructing a residential house qualifies for exemption under Section 54F, and the admissibility of newly produced evidence before the Tribunal.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’, NEW DELHI
Before: SH. N. K. BILLAIYA
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals], Moradabad, dated 30.08.2017 for Assessment Year 2014-15.
The only grievance of the assessee is that the CIT(A) erred in confirming the addition made by the Assessing Officer on account of long term capital gain on sale of jewellery amounting to Rs.4,88,902/-.
Facts on record show that during the year under consideration the assessee sold 22 carat jewellery of 383.32 grams for Rs.10 lacs. The indexed cost of acquisition was taken at Rs.511098/- which resulted into long term capital gain of Rs.4,88,902/-.
The assessee claimed the same as exempt u/s. 54F of the Act being investment made in a residential house property. However, the claim of exemption was denied by the Assessing Officer who was of the opinion that that the assessee has not purchased any residential house but has purchased only land. Accordingly the addition of Rs.4,88,902/- was made.
Assessee agitated the matter before the CIT(A) and the claim of exemption was reiterated. The CIT(A) dismissed the appeal of the assessee by observing that there was no corroborative evidence of construction/ completion of a house to prove the bonafide intention of construction and without proof the benefit of section 54F cannot be given.
Before me the counsel for the assessee stated that cost of investment in land is also eligible for the benefit of section 54F of the Act.
The counsel produced a completion certificate issued by Nagar Nigam Moradabad. It is the say of the counsel that this certificate conclusively confirms that construction of building in the plot was completed on 10.10.2016 which is well within stipulated period of three years from the sale of jewellery subject to capital gain for the purpose of availing exemption u/s 54F of the Act.
The DR strongly supported the findings of the CIT(A) and stated that this certificate was never produced before the lower authorities.
I have given a careful consideration to the orders of the authorities below. There is no dispute that the assessee has invested the full sale consideration received on the sale of jewellery in the purchase of the plot of land. It is also not in dispute that before the lower authorities the assessee could not adduce any evidence. The certificate from municipal corporation, Moradabad has been furnished for the first time. In the interest of justice I restore this issue to the files of the Assessing Officer.
The Assessing Officer is directed to verify the certificate of construction issued by Municipal Corporation, Moradabad and decide the issue afresh as
per provisions of law, keeping in mind that the cost of investment in land is also part of cost of construction of the residential house to avail the exemption u/s. 54 F Act. Needless to mention the Assessing Officer shall give a reasonable opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee is treated as allowed for statistical purpose.
Order pronounced in the open court on 21.05.2019.
Sd/- (N.K.BILLAIYA) ACCOUNTANT MEMBER Dated: 21.05.2019 Neha Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT NEW DELHI
Date of dictation 20.05.2019
Date on which the typed draft is placed before the 20.05.2019 dictating Member Date on which the typed draft is placed before the Other Member
Date on which the approved draft comes to the Sr. PS/PS
Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
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- Renu Arun Talwar, Mumbai vs Circle 17(1), MumbaiITA 204/MUM/2026[2012-13]Status: Disposed16 Oct 2026AY 2012-13
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