Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: SMT DIVA SINGH & SH.L.P.SAHU
PER SMT. DIVA SINGH, JUDICIAL MEMBER
1. The present appeal has been filed by the assessee assailing the correctness of the order dated 22.12.2015 of CIT(A)-2, Gurgaon pertaining to 2007-08 assessment year on the following grounds:-
“That the order of Ld. CIT (Appeals) is against law and facts.
2. That the Ld. CIT (Appeals) erred in confirming the addition of Long term capital gains of Rs. 605990/- by ignoring all the facts and evidences filed by the appellant. 3. That the Ld. CIT (Appeals) erred in treating the long term capital gains in the hands of appellant in his individual capacity, whereas the agricultural land sold belongs to HUF of the appellant. 4. That the Ld. CIT (Appeals) erred in not allowing the benefit of Sec. 54F to the appellant for the amount invested in the construction of residential house. 5. That the appellant craves leave to add or alter any of the Grounds of Appeal.”
I.T.A .No.-963/Del/2016
The relevant facts of the case are that in response to the AIR information that the assessee had sold his share in immovable property at Rs.56,77,500/- on 06.05.2006, the assessee was required to furnish its return. Accordingly, notice u/s 148 was issued. In response thereof, the assessee filed its return declaring an income of Rs.29,990/-. Scrutiny proceedings were started pursuant to issuance of notice u/s 143(2) & 142(1) etc. wherein the assessee was required to furnish the calculation of capital gain on sale of land. The specific land sold by the assessee measured 14 kanal 16.5 marla which was situated at Shanti Nagar, Rewari was stated to be sold vide sale deed No.901 dated 10.05.2006 for an amount of Rs.56,77,500/-wherein the assessee’s share came to Rs.6,30,833/-. The AO relying upon Section 2(14) of the Act which defines “capital asset” and referring to sub clause (iii)(a) and (b) thereof and the CBDT notification under section 2(IA)(c) proviso, clause (ii)(b) noted that Urbanization of areas-specifies the areas falling outside the local limits of municipality or cantonment board, F.No.164/3/87-ITAT Dated 06.01.1994 had notified the area of Rewari City as “Areas upto a distance of 5 kms from the municipal limits in all directions” concluded that the specific land sold lies within the municipality limits of Rewari City. Accordingly, he held that it is covered under the definition of capital asset and hence the sale proceeds of the land are liable for Capital Gains Tax u/s 45 of the Income Tax Act, 1961. Information u/s 133(6) was called for from the office of the Deputy Commissioner cum Registrar, Rewari on 05.11.2012 to supply the copy of the purchase/ sale deed of agriculture land registered during the period 01.04.1980 to 31.03.1982. The Dy. Commissioner cum Registrar, Rewari supplied the sale/purchase deed registered on 19.06.1980. The agriculture land measuring 8 Kanal 12 Marla was sold on 19.06.1980 for a total consideration of Rs.25,000/- which gave per Marla rate of the land @ Rs.145.34/- or Page 2 of 5
I.T.A .No.-963/Del/2016
per Acre rate @ 2907/-. By applying this rate of Rs.145.34 per marla, the cost of acquisition of the share of the land sold by the assessee comes to Rs.4,789/- (32.95 marla x Rs.145.34). Accordingly, an opportunity was given to the assessee vide office letter dated 12.11.2012 asking him to show cause as to why the cost of acquisition of the land sold should not be taken at Rs.145.34 per marla on the basis of information supplied by the Dy.
Commissioner cum Registrar, Rewari. The assessee in reply relied upon the certificate of the Tehsildar which was not accepted by the AO.
In appeal before the First Appellate Authority, the Ld. AR filed fresh evidence under Rule 46A claiming that the proceeds of the ancestral land sold had been invested in construction of residential house and deduction u/s 54F was claimed. The valuation Report filed it was stated was filed as a fresh evidence as the assessee was not aware of the deduction u/s 54F of the Act. Admitting the fresh evidence the claim was rejected by the CIT(A). Aggrieved the assessee is in appeal.
The Ld. AR submitted that in support of its claim not only Certificate of a Government Registered Valuer alongwith site plan sanctioned by the Competent Authority was filed even evidence of construction of residential house was filed. It was also submitted that the fact of construction of residential house has been accepted even by the AO in the case of the family members of the assessee itself and the CIT(A), Rohtak in appeal No.341/RTK/12-13 vide order dated 15.07.2015 has accepted in the case of Bhagwan Dass Saini, a co-sharer (brother) in ancestral agricultural land. The said order was heavily relied upon. It was further submitted that apart from that the assessee also raised the following plea before the CIT(A):- “The 3rd ground of appeal is against making the addition of capital gain in the hands of individual whereas the agriculture land sold was that of HUF. The Page 3 of 5
I.T.A .No.-963/Del/2016 agriculture land in question was ancestral agriculture land and as such belongs to HUF. The appellant had inherited the above agriculture land from his father who also had inherited the same from forefathers and as such if any capital gain remains to be taxed, the same should have been taxed in the hands of HUF and not in the hands of individual.”
In the circumstances, it was his submission that the CIT(A) guided by the fact that the assessee had also claimed that the funds were invested in FDR etc. misdirected himself.
It was submitted that the assessee being unaware of the deduction available had not been able to place full and complete facts on record. Accordingly he also sought an opportunity to file additional evidences addressing the issues. Considering the same, the Ld. Sr. DR stated that in such an eventuality the issue may be restored to the AO as he would not be able to address it at this stage. Accordingly it was a common stand of the parties before the Bench that it would be appropriate to restore the issue back to the file to the AO as admittedly facts have not been addressed in the proper prospective. The said submission of the parties is found to be borne out from record. As admittedly the ancestral property sold under consideration belonged to six family members and the assessee’s share of the property was only one sixth of the same. The proceeds for the very same ancestral property is stated to be invested in residential property within the time frame permissible under law. Accordingly in the peculiar facts and circumstances of the case, we deem it appropriate to set aside the impugned order and restore the issue back to the AO with the direction to pass a speaking order in accordance with law denovo. The assessee would be at liberty to place fresh evidences in support of its claim, if so deemed appropriate.
I.T.A .No.-963/Del/2016
In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open court on 10th of June, 2016.