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Facts
The assessee challenged an order confirming an addition of Rs. 43,35,000/- by denying deduction under Section 54. The issue arose because the new residential house was purchased in the name of the assessee's brother. The assessee claimed the investment was made by him, and the original flat was jointly purchased with his mother.
Held
The CIT(A) held that the assessee had not reinvested the sale consideration from the immovable property for the purchase of a new residential house, thus not entitling them to exemption under Section 54. The Tribunal noted that the CIT(A) had not considered or adjudicated the facts presented by the assessee.
Key Issues
Whether the assessee is eligible for deduction under Section 54 when the new residential house was purchased in the name of his brother, and whether the assessment proceedings were illegal due to non-issuance of notice under Section 143(2).
Sections Cited
54, 143(2), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH MUMBAI
Before: HON’BLE SHRI SANDEEP GOSAIN
Assessee by Shri Manish Seth Revenue by Shri Vithal Machindra Bhosale, Sr. DR Date of Hearing 16.12.2024 Date of Pronouncement 19.12.2024 आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 15.07.2024, passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / (‘Ld. CIT(A)’), for the assessment year 2018-19. The assessee has raised the following grounds of appeal:
1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming the addition of Rs.43,35,000/- in the hands of the assessee by not allowing deduction u/s 54 of 2 Vilas Raju Mehabubani, Mumbai the Income Tax Act 1961, as the new residential house was purchased in the name of Vikas Raju Mehabubani, being brother of the appellant. a. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) ought to have considered that the full investment of Rs. 40,00,000/- in the new residential house purchased is made by the appellant and not by his brother Vikas Raju Mehabubani b. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) ought to have considered that the original flat which was sold was purchased by appellant jointly with his mother Saroj Raju Mehabubani. The appellant purchased new residential house in the name of his brother Vikas Raju Mehabubani jointly with his mother Saroj Raju Mehabubani and to that extent the deduction u/s 54 is allowable since section 54 does not specify that the new residential house should have been purchased in the name of the assessee but it only specifies that the assessee should have invested in the new residential house which your appellant has done 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) ought to have considered that non issuance of notice u/s 143(2) makes the assessment proceeding illegal and void ab-ınitio. 3. The assessee craves Your Honour leave to add, alter or amend or delete any of the above grounds.
2. Ground No.1 raised by the assessee relates to challenging the order of Ld. CIT(A) in confirming the additions in the hands of the assessee by not allowing deduction u/s 54 of the Act, as the new residential house was purchased in the name of Vikas Raju being the brother of the assessee.
3. In order to substantiate this ground, Ld. AR reiterated the same arguments as was raised by him before the revenue 3 Vilas Raju Mehabubani, Mumbai authorites and also drawn my attention towards statement of facts filed before the Bench which contains sequence of events, wherein it has been specifically mentioned that after selling the flat, the assessee purchased new residential flat in the name of his brother i.e Vikas jointly with Saroj Raju for Rs. 40,00,000/-.
4. Whereas, on the contrary Ld. CIT(A) has held that the assessee has not reinvested the sale consideration received from sale of immovable property in purchase of new residential house, therefore not entitle for exemption u/s 54 of the Act.
5. The fact remains that Ld. CIT(A) has not considered or specifically dealt with or adjudicated the facts and the contentions of the Ld. AR to the effect that he had purchased new residential flat in the name of his brother Vikas jointly with Saroj Raju for a consideration of Rs. 40,00,000/-.
6. Since in my considered view, main defence / plea raised by the assessee remained un-adjudicated, therefore I am of the view that the present grounds needs to be sent back to the file of CIT(A) with a direction to adjudicate the same on merits. After, considering the above factual and legal position. Thus the Bench feels that the ends of justice would be met only if the matter is restored back to the file of the CIT(A) to decide the matter afresh. Thus the appeal of the assessee is restored to the file of CIT(A) to decide it afresh 4 Vilas Raju Mehabubani, Mumbai by providing opportunity of hearing to both the parties. The assessee shall not seek any adjournment on frivolous grounds and remain cooperative during the course of proceedings and the appeal of the assessee is thus allowed for statistical purposes.
7. Before parting, I make it clear that my decision to restore the matter back to the file of the CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the CIT(A) independently in accordance with law.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.