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Income Tax Appellate Tribunal, “SMC- 1” Bench, New Delhi
Before: N.K. SAINI
Appellant by : Sh. Ved Jain, Adv & Sh. Ashish Chaddha, Adv Respondent by : Shri. Ramanjaneyulu, Sr. DR Date of hearing : 30-11-2016 Date of pronouncement : 0 -02-2017 O R D E R PER N.K. SAINI, A.M. : This is an appeal by the assessee against the order dated 13.7.2016 of CIT (A)-34, New Delhi. Following grounds have been raised in this appeal:-
“1. On the facts and circumstances of the case, the order passed by the learned CIT(A) is bad, both in the eyes of law and on the facts. 2. (i) On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in not admitting the additional evidences filed by the assessee during the appellate proceedings. (ii) Without prejudice to the above, the learned CIT(A) has erred both on facts and in law in adjudicating the issue on the basis of the architect’s certificate, being the additional evidence filed by the assessee, despite the fact that he himself has denied to admit the said additional evidence.
3. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the disallowance of exemption under Section 54 amounting to Rs.9,51,174/- claimed by the assessee. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in holding that the revised claim is not admittable, despite the fact that no such revised claim was ever made by the assessee. (ii) That the learned CIT(A) has erred both on facts and in law in misinterpreting the proposition laid down in the decision of the Apex Court in the case of Goetze (India) Ltd. 284 ITR 323. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the disallowance, despite the fact that the assessee fulfilled all the conditions to be eligible to get exemption under Section 54 of the Act. (ii) That the learned CIT(A) has erred in not adjudicating the issue that the disallowance was made by the AO by not construing the conditions laid down in Section 54 of the Act properly and confusing the same with the conditions under Section 54F of the Act.”
From the above grounds, it would be clear that only grievance of the assessee relates to the confirmation of disallowance of Rs. 9,51,174/- by denying the exemption under section 54 of the Income Tax Act (hereinafter referred to as the Act).
Facts of the case in brief are that the assessee filed a return of income on 30.9.2011 declaring an income of Rs. 20,30,970/-, subsequently the assessee filed a revised return on 31.3.2013 declaring an income of Rs. 28,21,116/- which was processed under section 143(1) of the Act and thereafter the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee had declared a long term capital gain of Rs. 9,51,174/- by selling property no. B-38A Majlis Park, Delhi and further claimed deduction of Rs. 9,51,174/- u/s 54 of the Act. The AO asked the assessee to furnish the substantial evidence as regards to the claim of the deduction under section 54 of the Act. The assessee submitted that he purchased residential property bearing no. 2 Lakkad Mandi, Shri Ganga Nagar, Rajasthan for a sum of Rs. 30,00,000/-. The assessee also furnished copy of purchase deed relating to the purchase of above mentioned property. The AO, however, did not allow the claim of the assessee by observing that the assessee was not entitled for claim of deduction under section 54 of the Act in view of the following reasons:-
1.
The assessee claimed deduction u/s 54 of I.T.Act, 1961 by submitting that he purchased a residential property bearing no.2 Lakkad Mandi, Shri Ganga Nagar, Rajasthan for a sum of Rs.30,00,000/-. From the perusal of the details filed by the assessee, it is seen that the above mentioned property is not a residential house, whereas it is a plot of land open from four sides. The assessee was confronted with this fact of the case. The assessee vide letter dated 27.1.2014 admitted himself that his investment in purchase of property bearing no.2 Lakkad Mandi, Shri Ganga Nagar, Rajasthan does not qualify the conditions laid down for the claiming deduction u/s 54 of I.T.Act, 1961.
2. As per the provisions of section 54F(1), the deduction u/s 54 is available if the assessee within a period of three years after the date on which the transfer took place constructed a residential house (new asset). The assessee claimed construction of residential house at 3/51, West Punjabi Bagh, Delhi and submitted that the construction was completed in the mid of 2013. On the other hand the assessee is claiming the property no. 3/51, West Punjabi Bagh, Delhi as self occupied property and has already claimed it as self occupied residential house property in the A.Y.2010-11. The assessee, in this case has not constructed a residential house because the assessee has already claimed this house i.e. 3/51, West Punjabi Bagh, Delhi as his residential house. Further, more the assessee has failed to substantiate his claim of construction of a residential house and deduction u/s 54 with substantial evidence.
3. The assessee owns more than one residential house other than the new asset. As per the statement of affairs filed by the assessee as on 31.03.2011 the assessee is having following residential properties: (i) 550 Sq yard, Siraspur Delhi (ii) A-14 & A-15, Giriraj Nikunj, Vrindhawan
(iii) House No-3/51, West Punjabi Bagh (iv) House no-333, Baddi”