ITO 34(2)(4), MUMBAI vs. NILESH ASHOK LOHAR, MUMBAI

The appeal is time barred by 13 days and the Revenue by letter dated 01.05.2018 stated that in Form No.36 the date of receipt of the Ld.CIT(A) order was wrongly mentioned as 26.09.2016 which is the date

On hearing both the sides and perusing the letter filed by the Revenue, we find that the date of communication of the order of Ld.CIT(A) was wrongly mentioned in Form No.36 as 26.09.2016 instead of 19.10.2016. If the date of the communication is taken as 19.10.2016, there is no delay in filing the appeal before the Tribunal as it was filed on 08.12.2016 which is well within the period of 60 days. In the circumstances we admit the appeal.

Coming to the merits of the appeal the Revenue has raised the following grounds: - (I) " On the facts and circumstances of the case and in law learned CIT(A) ignored the fact that as per provision of section 54, the assessee has to construct the residential house within three years or purchase within two years and if the capital gain not utilize required to deposit in any notified capital gain account scheme on or before the due date of filing return of income u/s 139(1) to save him from liability of paying capital gain tax".

Briefly stated the facts are that, the assessee an individual filed return of income on 25.03.2014 declaring income of ₹.4,13,920/-. The assessment was completed on 28.03.2015 u/s. 143(3) of the Act determining the income of the assessee at ₹.54,49,700/-. While completing the assessment the Assessing Officer denied the assessee’s claim for exemption u/s. 54 of the Act and computed the long term capital gain at ₹.50,35,776/-. On appeal the Ld.CIT(A) allowed the claim of the assessee based on the copy of the ledger extract showing the details of payments made by the assessee to the builder.

Before us the Ld. DR referring to the Assessment Order vehemently argued that the Assessing Officer required the assessee to justify the condition laid down in section 54 of the Act and allowability of claim and the assessee did not file any explanation or evidence whatsoever in support of his claim except some payment slips to the builders. The Ld.DR referring to the Para 4.5 and 5.1 of the Assessment Order

However, the Ld. Counsel for the assessee strongly supported the orders of the Ld.CIT(A). Ld. Counsel for the assessee further submitted that the assessee has made total payment of ₹.53,08,125/- from 22.11.2011 to 16.07.2013 for purchase of flat and therefore assessee has rightly claimed exemption u/s. 54 of the Act. He also placed reliance on the decision of the Chennai Bench of the Tribunal in the case of ACIT v. M. Raghuraman [169 ITD 315] and submitted that the Tribunal held that, even where new flat in which assessee had invested entire capital gain was not completed and possession was not given, assessee could not be denied exemption u/s. 54 of the Act.

We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. From a perusal of the Assessment Order, we find that the assessee was required to justify its (A.Y: 2012-13) Shri Nilesh Ashok Lohar claim u/s. 54 of the Act. However, it seems that no explanation has been filed before the Assessing Officer. The Assessing Officer has categorically stated that the assessee neither produced any agreement for purchase of the property or sale deed in proof of assessee purchasing the property. It is the finding of the Assessing Officer that except payment slips assessee cold not produce any documentary evidences to show that the assessee had purchased the property. It is also the finding of the Assessing Officer that even as on the date of completion of assessment the property was not registered in the name of the assessee. He also observed that property was never transferred to the assessee by the builder. These findings have not been rebutted by the assessee with evidences. Even before us no evidences have been filed by the assessee to rebut these findings. We observe that the Ld.CIT(A) allowed the claim of the assessee stating that assessee has made payments to the builder based on the ledger copy furnished by the assessee. When the very acquisition of the property by the assessee was in doubt and no evidences have been furnished to prove that the property was acquired by the assessee the exemption u/s. 54 of the Act cannot be allowed. Therefore, we hold that the assessee failed to prove that he has purchased the property and since the very acquisition of the property is not proved with documentary evidences, we hold that the assessee is not entitled for any (A.Y: 2012-13) Shri Nilesh Ashok Lohar exemption u/s. 54 of the Act. Thus we reverse the order of the Ld.CIT(A) and restore that of the Assessing Officer. Grounds raised by the Revenue are allowed.

In the result, appeal of the Revenue is allowed.