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Facts
Two appeals were filed by the assessee concerning assessment years 2011-12 and 2012-13, arising from orders of the Commissioner of Income Tax (Appeals). The cases involved a survey u/s 133A of the IT Act, where sale deeds of land were found, leading to an assessment of long-term capital gain. The original assessment was in the individual's name, but it was directed to be taxed in the hands of the HUF.
Held
The Tribunal noted that the cost of acquisition and the claim for deduction u/s 54F were not properly considered by the lower authorities due to non-submission of details by the assessee. The findings of the CIT(A) in the individual's case and the assessee's case were contradictory. Therefore, the Tribunal decided to remand the matter back to the AO to decide the issue of allowability of cost of acquisition and deduction u/s 54F.
Key Issues
Whether the cost of acquisition and deduction u/s 54F were correctly disallowed by the lower authorities, and whether the matter should be remanded to the AO for fresh consideration.
Sections Cited
133A, 147, 143(3), 148, 54F
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Income Tax Appellate Tribunal, JAIPUR BENCHES, “B” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 515 & 528/JPR/2024
ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. These two appeals are filed by the assessee and are arising out of the order of the Learned Commissioner of Income Tax (Appeals)-4, Jaipur both dated 29.11.2023 [ Here in after referred as “Ld. CIT(A)”] for the assessment years 2011-12 & 2012-13 respectively, which in turn arise from the orders dated 24.12.2018
Since the facts of these cases are identical and of the same assessee, we have heard these cases together with the consent of the parties and passing the order together. For the present discussion the bench feels that as facts are similar and grounds are similar therefore, for the present discussion the facts and grounds are taken from the folder of Sh. Suchet Singh Yadav HUF in and this case is taken as lead case for deciding the issue raised in these appeals. the assessee has raised following:- “1. On the facts and circumstances of the case and in law also Ld. Lower authorities grossly erred in not considering order of ld. CIT(A) and order of Honorable ITAT in the case of Suchet Singh Yadav.
2. On the facts and circumstances of the case and in law also Ld. Lower authorities grossly erred in taking and confirming cost of acquisition at Rs. 91,200/-.
3. On the facts and circumstances of the case and in law also Ld. Lower authorities grossly erred in not giving the deduction u/s 54F ignoring the directions of Ld. CIT(A) in appeal order that the deduction should be granted in the status of HUF after examining the facts & also ignoring the fact that assessee has made investment in the house out of HUF funds & have also claimed the deduction in the computation of income HUF.
4. That the appellant craves his indulgence to add, amend, alter or delete any or all of the ground of appeal at any time before decision of appeal.”
& 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO 2.2 In the assessee has raised following:- “1. On the facts and circumstances of the case and in law also Ld. Lower authorities grossly erred in not considering order of ld. CIT(A) and order of Honorable ITAT in the case of Suchet Singh Yadav.
2. On the facts and circumstances of the case and in law also Ld. Lower authorities grossly erred in taking and confirming cost of acquisition at Rs. 91,200/-.
On the facts and circumstances of the case and in law also Ld. Lower authorities grossly erred in not giving the deduction u/s 54F ignoring the directions of Ld. CIT(A) in appeal order that the deduction should be granted in the status of HUF after examining the facts & also ignoring the fact that assessee has made investment in the house out of HUF funds & have also claimed the deduction in the computation of income HUF.
4. That the appellant craves his indulgence to add, amend, alter or delete any or all of the ground of appeal at any time before decision of appeal.”
3. At the outset of hearing, the Bench observed that there is delay of 79 days in filing of the present appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay. The prayer of the assessee reads as under :
“ In this case the due date to file the appeal was 28.01.2024 but filed on dated 18.04.2024. Your honour’s the delay was because of long illness of Shri Suchet Singh, Karta of HUF. He was suffering from back pain and was advised complete bed rest from 04-january-2024 to 08-April-2024, copy of medical certificate & affidavit are attached herewith for kind perusal and verification.
& 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO It is therefore most respectfully prays that the delay of 79 days in filing the appeal may kindly be condoned in the interest of justice and the appeal may kindly be admitted.” 3.1 In support of the contentions so raised the Authorized person has filed an affidavit to support the contentions raised in the prayer for condonation of delay in filing the appeals.
3.2 The ld. AR of the assessee appearing in this appeal submitted that the assessee is serious on the duties and the delay of 79 days is on medical exigencies resulted the delay, which was beyond control. The bench noted that the assessee being HUF and his authorized signatory was suffering from medical illness and was advised rest and that resulted delay in filling the present appeal by 79 days. The reasons are supported by the evidence and affidavit filed by the assessee. 3.3. During hearing, the ld. DR objected to assessee’s prayer for condonation of delay. But at the same time did not object to the facts so argued by the ld. AR of the assessee.
3.4 We have heard both the parties and perused the materials available on record. The Bench Noted that the reasons advanced by assessee for condonation of delay of 79 days are sufficient to condone the delay and it has merit based on the affidavit and & 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO evidence so placed on record. Thus, we concur with the submission of the assessee and condone the delay of 79 days in filing the appeal by the assessee as the assessee has sufficient cause. We also get support from the decision of the apex court in the case of Collector, Land & Acquisition Vs. Mst. Katiji& Others 167 ITR 471(SC) wherein it was directed the other courts to consider the liber approach in deciding the petition for condonation as the assessee is not going to achieve any benefit for the delay in fact the assessee is at risk.
The brief fact as culled out from the records is that survey u/s 133A of the IT Act, 1961 was carried out at the business premises of the assessee firm M/s Ganpati Plaza on 29/30.08.2013. While survey proceedings some sale deed / sale agreements were found at the business premises at M/s Ganpati Plaza in which the assessee is also a partner. These sale deeds / sale agreements were impounded. Perusal of these sale deed / sale agreement revealed that the assessee sold pieces of land situated in khasara no 698 near Jilani Mata Mandir, Behror during the F.Y. 2010-11, 2011-12, 2012-13 and 2013-14. Ld. A.O. made an assessment u/s 143(3) at Rs 1,53,11,568/- on a/c of long-term & 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO capital gain, on sale of plots consideration of Rs. 1,59,60,000/-. In the hands of Shri Suchet Singh in Individual capacity. That order was challenged before the ld. CIT(A), who directed the AO while deleting the addition of Rs. 1,53,11,568/- in the hands of individual that the long term capital gain in the hands of individual capacity is not chargeable into his hands but is to be taxed in the case of the HUF. As direction notice u/s. 148 of the Act was issued to the HUF assessee on 28.03.2018 and in response the assessee has filed the return of income declaring total income at Rs. 1,56,630/-. During the proceeding the assessee did not produced supporting evidence regarding indexed cost of sale of land and deduction claimed u/s. 54F of the Act. Therefore, ld. AO based on the direction of the ld. CIT(A) taxed the long term capital gain based on the information available at Rs. 60,33,400/- in the return of income and accordingly assessed the income at Rs. 61,90,030/-.
Aggrieved by the above order of the Assessing Officer the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised by the assessee, the relevant finding of the ld. CIT(A) is as under:-
& 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO “6.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the order for the year under consideration. The contention/submissions of the appellant are being discussed and decided as under:- 6.3 The appellant has made contention that Ld A.O. also erred in taking cost of acquisition @ Rs. 66.68 per square yard (Total at Rs. 91200/- for 1367.69 square yards) as on 01.04.1981 as against Rs. 100/- per square yard as claimed by the assessee in the computation of income. The Id. AO has mentioned in assessment order that he has taken cost of acquisition as per copy of sale deed obtained from DIG Stamps. 6.4 The learned assessing officer has mentioned in the assessment order that the cost of acquisition has been worked out as per the copy of sale deed obtained from DIG stamps. It is the appellant who has not complied with and responded to various notices during the assessment proceedings as mentioned in the assessment order. The appellant has not substantiated the working of the cost of the purchase of the land at the rate of Rs. 100 p.s.y. claimed by him with the support of documentary evidences. There is no basis to upheld the cost of acquisition worked out by the appellant. This ground of appeal is treated as dismissed in above terms.
8.3 The appellant has made contention that ld. AO also erred in not allowing the deduction u/s 54F as claimed by the assessee in the return of income. Hon’ble CIT(A) & Hon’ble ITAT have also given instruction for the same in their respective orders. It is important in this case to note that initially the assessment was done in the hands of the individual assesse and it was the argument and claim of the appellant that the assessment needs to be done in the hands of the HUF however now in the assessment in the case of the HUF the appellant has claimed the deduction of the section 54F of the Act whereas the claimed investment has been done by the individual assessee. When the land sold by the HUF could not be assessed in the hands of the individual then how the investment done by the individual makes the HUF entitled for deduction under section 54F. Further, why the construction and the ownership is not in the name of HUF also has not been clarified by the appellant. Judicial exception from law cannot be claimed us a matter of right and acceptance of deviation depends upon cogent reasoning and justification made along with supporting evidences behind such reasoning and justification for the deviation. 8.4 The individual assess could have constructed the residential house for his own purposes. The appellant has not proved that the property & 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO was constructed by the individual on the direction of the HUF and the same funds which were received by the HUP from selling of the property have been used by the individual in purchase and construction of the property. The appellant has not shown that there was a partition in the HUF that the assets of the HUF were distributed amongst its co- parceners as otherwise the individual assesse could not have received the funds and could not have invested the same in the residential house which is in his individual name and not in the time of the HUF. 8.5. On perusal of valuation report submitted in appeal, it is seen that it is not mentioned on what basis the valuer decided the construction expenditure made during the period of Dec 2010 to Dec 2011. The details of bills & voucher regarding expenses of labour, material purchase, contractor etc. are not mentioned in the valuation report. It appears the valuation report is prepared only for convenience of appellant. Since the construction was done when the deduction under section 54F was claimed the appellant was required to show the investment with the support of bills and vouchers and payment evidences and not with the support of valuation report as the document like valuation report are used in the scenarios like when the original evidence is are not available the matter being very old etc. The appellant is required to prove the actual amount invested as per section 54F whereas the valuation report gives only the approximation of the valuation of the property and not even the actual dates and periods of the expenditure. Whereas such factors are very crucial for the purposes of section 54F wherein a specific time band is also provided for the period of investment. The appellant has not shown that the investment in the house was done during that period and not before that and not after that. It is a settled legal principle that exemption provisions are to be interpreted strictly and the claimant is required to satisfy the provisions in letter and spirit which the appellant has not done at all. In view of the above discussion, this ground of appeal is dismissed.”
6. The assessee aggrieved from the finding so recorded by the ld. CIT(A) has preferred the present appeal on the grounds as stated herein above. To the support the contention raised the ld. AR of the assessee filed the following evidence:-
& 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO S. No. Particulars Page No. 1. Copy of order of CIT(A) in the case of Sh. Suchet Singh 1-32 Yadav dated 26.02.2016 for A.Y. 2011-12. 2. Copy of order of Hon’ble ITAT, Jaipur Bench in the case 33-39 of Sh. Suchet Singh Yadav, dated 24.10.2017 for A.Y. 2011-12. 3. Copy of ITR and computation of income 40-41 4. Copy of valuation report 42-49
The ld. AR of the assessee in addition to the paper book so filed submitted that when the capital gain is assessed in hands of the HUF entity instead of the individual the relevant benefit u/s. 54F claimed by the assessee coupled with the cost of acquisition cannot be denied to the assessee. To drive home to this contention the ld. AR of the assessee also relied upon the finding so recorded in the case of Shri Suchet Singh Yadav (Individual) which reads as under : “6.5 I have already given a finding that the land sold belongs to the HUF of the appellant and therefore, any profit / gains made on sale of such land have to be assessed in the hands of the HUF. Accordingly, the issue of deduction u/s. 54F of the IT Act has to be examined by the AO, while assessing income in the hands of the HUF.” But, while deciding the issue by the ld. AO held that the assessee has not submitted any details. Whereas the ld. CIT(A) has taken a complete different view of the matter stating that ; 8.3 The appellant has made contention that ld. AO also erred in not allowing the deduction u/s 54F as claimed by the assessee in the return of income. Hon’ble CIT(A) & Hon’ble ITAT have also given instruction & 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO for the same in their respective orders. It is important in this case to note that initially the assessment was done in the hands of the individual assesse and it was the argument and claim of the appellant that the assessment needs to be done in the hands of the HUF however now in the assessment in the case of the HUF the appellant has claimed the deduction of the section 54F of the Act whereas the claimed investment has been done by the individual assessee. When the land sold by the HUF could not be assessed in the hands of the individual then how the investment done by the individual makes the HUF entitled for deduction under section 54F. Further, why the construction and the ownership is not in the name of HUF also has not been clarified by the appellant. Judicial exception from law cannot be claimed us a matter of right and acceptance of deviation depends upon cogent reasoning and justification made along with supporting evidences behind such reasoning and justification for the deviation.
Thus, there are contradicting view on the issue and thus, the ld. AR of the assessee prayed the assessee may be given one chance to clarity all the facts before the ld. CIT(A) as there was non submission of the relevant details before the ld. AO and therefore, prayed to give one chance before the ld. AO.
The ld. DR is heard who has relied on the findings of the lower authorities and submitted that this is the second round of litigation and if the assessee’s request is accepted it would be third round of litigation. The ld. DR also submitted that the when the investment is made by the individual how the deduction be given to
We have considered the rival contentions, perused the material available on record. The bench noted that this is the second round of litigation wherein the finding recorded by the ld. CIT(A) in the case of the assessee with that of the ld. CIT(A) in the case of individual assessee are contradictory. As regards the issue of allowing cost of acquisition and deduction u/s. 54F of the Act the ld. AO did not consider due to non-submission of the details by the assessee. Whereas ld. CIT(A) has given the different finding without commenting upon the records of the assessee. Thus, the bench feels that the issue of allowability of the cost of acquisition and deduction u/s. 54F of the Act needs to be examined based on the merits of the case. Even the assessee when objected by the ld. DR about the allowability of the claim of cost of acquisition stated that the assessee has filed the valuation report and regards the deduction u/s. 54F of the Act the investment made by the assessee the matter is required to be examined based on the provision of section 54F of the Act and therefore, we considered it deem fit that & 528 /JPR/2022 Sh. Suchet Singh Yadav vs. ITO the assessee be given a fair chance to represent the merits of the case and therefore, we considered it fit to remand the matter back to the file of the ld. AO with a direction to decide the issue of allowability of cost of acquisition and allowability of deduction u/s. 54F of the in accordance with the law and at the same time considering the non-submission of the details by the assessee we considered it fit to levy the cost to the assessee for each of the year for an amount of Rs. 1000/- each to be deposited in the “Prime Minister Relief fund” and necessary receipt be provided to the ld. AO when the ld. AO start the set aside proceedings.
The fact of the case in is similar to the case in and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in this appeal No. 528/JPR/2024 are equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 515/JPR/2024 for the Assessment Year 2011-12 shall apply mutatis mutandis in the case of Shri
In the result, the appeals of the assessee in and 528/JP/2024 are allowed for statistical purposes. Order pronounced in the open court on 29/08/2024 Sd/- Sd/- ¼ jkBkSM deys’k t;arHkkbZ ½ ¼ lanhi xkslkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 29/08/2024 *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Sh. Suchet Singh Yadav, Alwar. 2. izR;FkhZ@ The Respondent- ITO, Behror. 3. vk;dj vk;qDr@ CIT vk;dj vk;qDr@ CIT(A) 4. 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. xkMZ QkbZy@ Guard File {ITA Nos. 515 & 528/JPR/2024} 6. vkns'kkuqlkj@ By order,
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