YASHWANT GANESH KULKARNI,PUNE vs. INCOME-TAX OFFICER, WARD - 3(2), PUNE

आदेश आदेश / ORDER आदेश आदेश

PER D. KARUNAKARA RAO, AM :

This appeal is filed by the assessee against the order of CIT(A)-3, Pune, dated 22-11-2017 for the A.Y. 2013-14.

“1. On the facts and in the circumstances of the case and in law the Ld.CIT(A) was not justified in upholding the addition of Rs.1,58,25,000/- made by the A.O. on account of sale consideration received by assessee on account of sale of Land which was subject to Long Term Capital Gain and computation was submitted before A. O. Both the authorities erred in not considering and appreciating the submissions made before them. The order of assessment and that of the Ld. CIT(A) be set aside for denovo consideration. 2. On the facts and in the circumstances of the case and in law the sale of Rs. 1,58,25,000/- which was the asset of the HUF of the assessee also belonged to the said HUF. The authorities were not justified in treating the submissions of the appellant as 'afterthought' to deny the exemption claimed u/s 54F of the Act. The status of HUF as per personal law of the assessee was not created by him but was out of his statutory rights. That cannot

be denied to it. The status of HUF being separate and independent statutory position the said HUF was entitled for exemption u/s 54F of the Act.

individual and is engaged in the business of Food processing of

fruits and vegetables. Assessee filed the return of income declaring

total income of Rs.54,94,550/- and reported earning of capital

gains and investment of the same partly in the new residential

house at Pristine Fontana, Bavdhan, Pune and claimed exemption u/s.54F of the Act in respect of said reinvestment. Contents of Para 7 of the assessment order are relevant. At the end of the assessment proceedings, the AO determined the income at Rs.1,50,94,550/-. In the assessment, the allowability of exemption u/s.54F of the Act was the bone of contention.

Giving brief facts of this issue, Ld. Counsel for the assessee submitted that the assessee owns a house at Vatsal Apartment, Mayur Colony, Pune and the same is held in the name of the assessee-individual. Further, assessee also has a share of property in the flat located at Pristine Fontana, Bavdhan, Pune. During the year under consideration, assessee sold agricultural lands at Nashik for a sum of Rs.1,58,25,000/-. Out of the same, Rs. 91 lakhs was reinvested in another house again located near Mayur Colony, Pune (new asset). In the return of income, assessee claimed deduction u/s.54F of the Act in respect of the investment of Rs.91 lakhs made in this year. However, the AO denied the said exemption on the ground that assessee already owns more than one residential house other than the new asset. Discussion given in Para Nos. 6 and 7 of the assessment order is relevant. Aggrieved with the order of AO assessee filed an appeal before the CIT(A).

to confirm the same as per the discussion given in Para Nos. 5.3.2

to 5.3.5 of his order.

present appeal before the Tribunal with the grounds extracted

above.

ownership of the flat at Pristine Fontana, Bavdhan, Pune was the

dominant issue in the debate. It is the claim of the assessee’s counsel

that the said residential house is not owned by the assessee in his

individual capacity. The flat is registered in the name of the assessee

and his wife but in their capacity as HUF. The said flat was purchased

out of the HUF funds. Elaborating the same, Ld. Counsel for the

assessee submitted that the HUF has agricultural lands and the said

amount gave rise to agricultural income. The said HUF income was

shared among the co-parceneries. Out of HUF income, the said income

was given by his brother-kartha by depositing in the bank account of

the assessee. The same constitutes the source for purchase of the flat

at Pristine Fontana, Bavdhan, Pune. From these facts and perspective,

the said flat do not belong to the assessee individual. Therefore, the

assessee is entitled to claim deduction u/s.54F of the Act in respect of

the investment of Rs.91 lakhs.

of the order of CIT(A), Ld. DR for the Revenue submitted that there are

number of lacunae in the above explanation of the assessee. The facts

about furnishing the return of income by the HUF, earning of

agricultural income by HUF and transferring of the same to the bank

accounts of the HUF, facts relating to the undertaking of the

agricultural activities in the said HUF lands etc., were not demonstrated

by the assessee. Therefore, when an exemption is claimed, the onus is

on the assessee to discharge the same by furnishing the credible

evidences/explanation in support of his claims.

house at Pristine Fontana, Bavdhan, Pune belongs to the assessee

individual or HUF, as mentioned in the court, we find this issue

requires remanding to the file of AO. Ld. Counsel for the assessee

submitted that he shall file relevant data relating to the issue discussed

above before the AO in the remand proceedings. He also mentioned that

in case assessee failed to do so, the AO may repeat the additions by way

of denial of exemption u/s.54F of the Act in respect of the new asset

purchased during the year under consideration. Accordingly, we

remand the issue to the file of AO and set aside grounds to the file of AO

for fresh adjudication. Needless to say, AO shall grant reasonable

opportunity of being heard to the assessee in accordance with the set

principles of natural justice. Thus, grounds raised by the assessee are

allowed for statistical purposes.

purposes.

Order pronounced in the open court on this 26th day of March, 2018.

Sd/- Sd/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) �याियक �याियक सद�य �याियक �याियक सद�य सद�य /JUDICIAL MEMBER लेखा सद�य लेखा लेखा सद�य लेखा सद�य सद�य / ACCOUNTANT MEMBER सद�य

पुणे Pune; �दनांक Dated : 26th March, 2018 सतीश

आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत

अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. 3. The CIT(A)-3, Pune 4. CIT-3, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B Bench” Pune; 5. गाड� फाईल / Guard file. 6.

आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार

स�यािपत �ित //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune