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Income Tax Appellate Tribunal, DELHI BENCH “SMC”, NEW DELHI
Before: SHRI R. K. PANDA
Assessee by : None Department by : Shri Atiq Ahmed, Sr. DR Date of hearing : 30-07-2018 Date of pronouncement : 31-08-2018 O R D E R
PER R. K. PANDA, AM :
This appeal filed by the assessee is directed against the order dated 23.12.2014 of CIT(A), Ghaziabad relating to assessment year 2009-10.
This appeal was earlier dismissed by the Tribunal for want of prosecution. Subsequently, the Tribunal vide order dated 04.06.2018 recalled its earlier order. Hence this is a recalled matter. 3. None appeared on behalf of the assessee at the time of hearing despite service of notice. Therefore, this appeal is being decided on the basis of material available on record and after hearing the ld. DR. 4. Facts of the case, in brief, are that the assessee is an individual and filed her return of income on 31.08.2010 declaring total income of Rs.1,05,076/-.
The case of the assessee was selected for scrutiny on the basis of information that the assessee had sold the property which was not declared in the return of income. On being questioned by the Assessing Officer, the assessee submitted as under :-
“….5. That the assessee owned GDA allotted residential plot no.11-B-122, Vaishali, Ghaziabad since 1984 and get it registered from March, 2008 although the possession was taken thereof before 1994. She has disposed off the said plot for a sum of Rs.30,60,000/- in July, 2008. The assessee has also purchased a new residential house in October, 2008 bearing no.R-7/d-14, Raj Nagar, Ghaziabad for Rs.20,40,000/- inclusive of stamp duty and made additional constructions thereon involving a sum of Rs.7,00,000/- appx. thereon within a period of 2 years.
That the assessee has purchased the residential plot no.B-II-122, Vaishali, Ghaziabad in 1984 for Rs.97,740/- plus 9,975/- and further paid to GDA Rs.2,02,000/- on 08.07.2008. The assessee has also incurred a sum of Rs.16,000/- on registration of lease deed thereof on 04.06.1994. Hence, the total cost of the said residential plot arrives at Rs.3,25,915/-.
That the indexed cost the above residential above comes at Rs4,80,450/- and the sale proceeds are for Rs.30,60,000/-. Hence, there is Long Term Capital Gains for Rs.25,79,550/- whereas the assessee has already invested a sum of Rs.27,40,000/- on the acquisition of the new asset.”
5. The Assessing Officer observed from the above submission that the assessee purchased a house at ground floor for Rs.19,10,000/- and incurred stamp duty expenses of Rs.1,23,700/- and other expenses all totaling to Rs.20,40,000/-. It was also claimed to have made additional construction of Rs.7,00,000/- within a period of two years i.e. upto October, 2010. The Assessing Officer observed from the computation statement that apart from making investment of Rs.20,40,000/- in purchase of new residential house at R- 7/D-14, Raj Nagar Ghaziabad, the assessee has invested an amount of Rs.50,000/- in the new house upto 31.03.2009 and Rs.6,50,000/- invested between 01.04.2009 to 31.03.2010. The Assessing Officer asked the assessee to substantiate the investment made in the new assets with complete details i.e. area constructed, copy of map/sanctioned plan, month-wise investment made in new property, etc. From the various details along with the valuation report submitted by the assessee, the Assessing Officer noticed that the assessee has neither declared any sale of property in the return of income nor investment in the new assets for claiming exemption u/s 54F of the I.T. Act. The Assessing Officer noted that the return was not filed before the due date of filing of the return and the said return has filed as late as 30.03.2010. Further, the assessee did not furnish any map and construction plan etc. Considering the fact that neither the net consideration received on sale of property was utilized before the specified due date nor the amount was deposited in the capital gain account, the Assessing Officer, determined the long term capital gain at Rs.7,82,494/- after allowing the claim of deduction of Rs.16,85,991/- from the total capital gain of Rs.24,68,485/- by taking a lenient view by considering the investment of Rs.50,000/- as additional investment towards investment in a new house property. The Assessing Officer further made addition of Rs.1,01,430/- on account of disallowance of certain expenses and suppressed receipt.
6. Before the ld. CIT(A), the assessee challenged the disallowance of Rs.7,82,494/- being addition to the new house and the allowability of the same u/s 54F of the I.T. Act. She also challenged the addition of Rs.1,01,430/-.
However, the ld. CIT(A) was not satisfied with the explanation given by the assessee and upheld the action of the Assessing Officer by observing as under :-
“7.1 Addition of Rs.7,82,494/- This addition made by the Assessing Officer is on sound footing. He has cogently brought out that the sale of old asset and investment in new asset was not reflected in return of income. The Assessing Officer has allowed deduction of Rs.2040000/- as cost of asset purchased and further a sum of Rs. 50000/- on improvement. The claim of the assessee that he had invested further an amount of Rs.7,00,000/- in improvement is not substantiated by details and proof of expenditure. Therefore, the decision of the Assessing Officer in denying against capital gain, the deduction u/s 54(F) as regards cost of improvement of Rs.700,000/- in the new asset is justified as the appellant has failed to prove that this amount was spent or that it was deposited in Capital Gain Account Scheme. Therefore, the action of the Assessing Officer calls for no interference. The addition is sustained. 7 2 The second addition is of Rs.101430/- which comprises disallowance 30% of expenses (Rs. 80100/-) in absence of any proof in support of expenses claimed and addition of Rs. 30330/- on account of suppressed receipts which the assessee had admitted during the assessment. On facts and circumstances of the case, I find both additions are justified. The additions are sustained and objections of the appellant are rejected.”
7. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :-
“1. That the assessment order passed U/S 143(3) of the Act is wrong, unjustified and arbitrary.
2. That the Learned lower authorities have erred in law and on facts, making a disallowance of exemption claimed by the appellant of investment on addition/remodeling for Rs.650,000 in the new residential property before the filing of belated return for the Assessment year 2009-10 on the pretext of non-deposit of the amount of Long Term Capital Gains in the Capital Gain Deposit Scheme before the due date of filing return U/S 139(1) of the Act.
That the Learned lower authorities have erred in law and on facts making an additional disallowance of expenditure of Rs.101,430/- against the job work/repairs receipts of Rs.350,255/-.
That the observations of the learned lower authorities are inconsistent with the facts and legal position of the case.
That without prejudice to above grounds, the appellant reserves her right to add or delete one or more grounds.”
I have considered the contention of the ld. DR and perused the material available on record. So far as the first issue is concerned, I find the Assessing Officer disallowed the claim of deduction u/s 54F amounting to Rs.6,50,000/- towards construction in the new house on the ground that the assessee was not able to substantiate the same by furnishing requisite details to support her claim.
I find the ld. CIT(A) upheld the action of the Assessing Officer since nothing was produced before him to substantiate the same. Even before the Tribunal also, nothing was produced as none appeared on behalf of the assessee at the time of hearing. Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding incurring of expenditure towards construction of the house and to explain the source thereof.
Needless to say, the Assessing Officer shall decide the issue in accordance with law after giving due opportunity of being heard to the assessee. I hold and direct accordingly. The first issue raised by the assessee in the grounds of appeal is accordingly allowed for statistical purposes.
So far as the second issue is concerned i.e. addition of Rs.1,01,430/-, I find the Assessing Officer made the disallowance in absence of any proof for expenses claimed and on account of suppression of receipt which the assessee had admitted during the assessment proceedings. I, therefore, do not find any infirmity in the order of the ld. CIT(A) in rejecting the claim of the assessee and upholding the addition made by the Assessing Officer. The second issue raised by the assessee in the ground of appeal is accordingly dismissed.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on this 31st August, 2018.