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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI
Before: SHRI G.S.PANNU & SHRI RAVISH SOODShri Anup Madhu Karnik,
ORDER PER G.S.PANNU,A.M:
The captioned appeal filed by the assessee pertaining to assessment year 2010-11 is directed against an order passed by CIT(A)-32, Mumbai dated 10/06/2014, which in turn, arises out of an order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) dated 05/03/2013.
The only issue in this appeal is with regard to assessee’s claim for exemption under section 54 of the Act amounting to Rs.41,71,320/-.
(AY. 2010-11) 3. At the time of hearing, it was noticed that on the earlier date of hearing an application for adjournment was moved by the assessee, in terms of which the matter was adjourned for today. However, on the appointed date of hearing, i.e., today, neither the assessee nor any representative appeared on behalf of the assessee and, therefore, in terms of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963 the appeal of the assessee is disposed of ex-parte qua the appellant and after hearing the respondent Revenue, on merits.
In brief, the relevant facts are that the assessee is an individual carrying on the business of retailing of drugs and medicines and for the assessment year under consideration, he, inter-alia, declared long term capital gain on sale of residential property of Rs.41,72,320/-. In the return of income assessee claimed exemption of the above capital gain under section 54 of the Act, on the ground that he has purchased a new residential house. The Assessing Officer denied the claim of the assessee, which has been further sustained by the CIT(A) and accordingly, assessee is in further appeal before us.
After hearing the Ld. Departmental Representative and perusing the orders of the authorities below, the following position emerges. Factually speaking, it is revealed that assessee has sold a residential property on 01/03/2010 for a total consideration of Rs.80,00,000/- and after claiming indexation benefit, the resulting net long term capital gain was determined at Rs.41,72,320/-. In the return of income, assessee claimed exemption under section 54 of the Act for the aforesaid amount of capital gain claiming that a new residential property was purchased within two years from the date of sale of the old residential property. However, in the course of assessment
(AY. 2010-11) proceedings, assessee claimed that exemption was with respect to a new residential house constructed at his native place. The Assessing Officer required the assessee to substantiate the claim of construction of a new house with evidence, viz, expenditure bills and Architect’s approval, etc. The assessee explained that an application to the Gram Panchayat office of the village was made on 25/05/2010, seeking permission for construction of a new residential house and it was claimed that the construction had stated thereafter. The Assessing Officer was not satisfied and in fact, disregarded the assessee’s plea that the construction started from 25/05/2010, because the copy of application seeking permission from the Gram Panchayat submitted by the assessee was dated 25/05/2012 and not 25/05/2010. The Assessing Officer has also referred to another communication issued by the Sarpanch dated 06/06/2012, which was the permission granted for building the new house/repair of an old house. Therefore, the Assessing Officer concluded that the construction could not have been started by the assessee prior to 06/06/2012. With regard to the expenditure on construction, the Assessing Officer noted that assessee did not file the primary documents such as bills/vouchers, etc. and merely furnished certain estimates of expenditure. For the said reasons, the Assessing Officer denied the claim of exemption claimed by the assessee under section 54 of the Act. The CIT(A) further noted that even the bank statements of the assessee did not reveal any amount paid towards construction. The CIT(A) also took note of certificate produced by the assessee from Gram Panchayat dated 17/10/2012 stating that amount of Rs.42,00,000/- was spent for construction of the building. The CIT(A) noted that the said document could not be taken as an evidence of construction in the light of other facts emerging from the record. The CIT(A) emphasized that the permission to undertake construction was dated 06/06/2012 and subsequent to that there is no evidence of incurring of expenditure on construction of building and, therefore, the claim of the assessee was rejected by him.
In the above background, we find that the concurrent conclusion arrived at by the lower authorities is based on the factual appreciation of the affairs of the assessee. Before us, there is no material which would enable us to infer contrary to what has been concluded by the lower authorities and, therefore, we hereby affirm the order of the CIT(A) denying the claim of exemption under section 54 of the Act.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court in the presence of Departmental Representative at the conclusion of hearing on 24/05/2017.