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Income Tax Appellate Tribunal, RAIPUR BENCH, AT RAIPUR
Before: HON’BLE SHRI RAVISH SOOD & SHRI G. D. PADMAHSHALI
॥ आयकर अपीलीय न्यायाधिकरण, रायपुर न्यायपीठ, रायपुर में ॥ (Through Virtual Hearing) IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, AT RAIPUR BEFORE HON’BLE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपऩलसं. / ITA No. 87/RPR/2019 निर्धारण वर्ा / Assessment Year : 2013-2014 Mohammad Akhtar Khan Ibrahim Bada, Nr Masjid Titurdih, Raipur, (C.G.) . . . . . . . अपऩलधथी / Appellant बनाम / V/s. Income Tax Officer Ward-2(1), Bhilai (C.G.) . . . . . . .प्रत्यथी / Respondent द्वारा / Appearances Assessee by : Shri R. B. Doshi Revenue by : Shri Gitesh Kumar सपिवधई की तधरऩख / Date of conclusive Hearing : 16/11/2022 घोर्णध की तधरऩख / Date of Pronouncement : 16/11/2022 आदेश / ORDER PER G. D. PADMAHSHALI, AM; The assessee by the present appeal challenges the order of Commissioner of Income Tax (Appeals), Raipur [for short “CIT(A)”] dt. 26/04/2017 passed u/s 250 of the Income-tax Act, 1961 [for short “the Act”] confirming the order of assessment passed u/s 143(3) by the Income Tax Officer, Ward-2(1) Raipur [for short “AO”] for the assessment year 2013-14 [for short “AY”] 2. The grounds raised in the appeal memo are; ITAT-Raipur Page 1 of 8
Mohammad Akhtar Khan ITA No 87/RPR/2019 AY 2013-14 “1. Ld. CIT(A) erred in holding that, appellant is not entitled for deduction u/s 54F and in confirming addition of Rs. 46,15,000/- made by the AO denying deduction u/s 54F. The appellant is entitled to claim deduction u/s 54F. The addition made by AO and confirmed by ld. CIT(A) is illegal, arbitrary and not justified.
The appellant reserves the right to add, amend or modify any of the ground/s of appeal.”
Before proceeding for adjudication, it is pertinent to make note that, the appellant through written submission has raised an additional ground and prayed for admission thereof which reads as under; “Without prejudice to ground no. 1 of appeal, the land sold by appellant being jointly owned by co-owners, the AO was not justified in adding the entire capital gain in the hands of the appellant alone. The addition made by the AO is excessive and unreasonable”.
The facts borne out of the records are; 4.1 The assessee is an individual and a commission agent maintaining regular books of account u/s 44AA which are subjected to audit u/s 44AB of the ITAT-Raipur Page 2 of 8
Mohammad Akhtar Khan ITA No 87/RPR/2019 AY 2013-14 Act, has for AY 2013-14 e-filed his return of income [for short “ROI”] on 18/03/2014 declaring total income of ₹5,22,840/- which was processed summarily u/s 143(1) and then subsequently subjected for scrutiny u/s 143(2) of the Act. During the course of assessment proceedings, the Ld. AO vouching the undisclosed profit/gain arisen from sale of property called upon the assessee to explain the concealment, where upon the assessee recomputed his taxable income by offering to tax the identified gain arisen to him from sale of property after claiming exemption u/s 54F thereagainst showcasing the construction of first floor to the existing building owned by him. The Ld. AO however, not concurring with the submission and contention of the appellant, rejecting the claim of 54F culminated the assessment in the light of decision of Hon’ble High Court of Punjab & Haryana in “Jagwinder Singh Vs CIT” reported at 50 taxmann.com 145.
ITAT-Raipur Page 3 of 8
Mohammad Akhtar Khan ITA No 87/RPR/2019 AY 2013-14 4.2 In an appeal before the first appellate authority [for short “FAA”], the assessee reproduced his submission and reiterated all his contention to establish his entitlement for claim u/s 54F against the extension of existing building, however the Ld. CIT(A) finding no merits or basis in the claim put forth confirmed the action of Ld. AO in the absence of evidence establishing the construction of new residential house for entitlement of claim u/s 54.
4.3 Aggrieved by the action of the tax authorities below [for short “TAB”], the appellant is in appeal before us on the grounds of appeal laid in preceding para 2 herein before.
During the course of hearing, the learned representative for the assessee [for short “AR”] in support of additional ground raised taken us through the agreements/sale deed placed at page 13 to 29 of the paper book and submitted that, taxing the income solely in the hands of the assessee would be injustice when the records clearly exhibits that the impugned ITAT-Raipur Page 4 of 8
Mohammad Akhtar Khan ITA No 87/RPR/2019 AY 2013-14 property prior to sale was held by the assessee jointly with one of the family member. Insofar as the claim of 54F is concerned, the Ld. AR contended that, construction of new floor itself brings into existing a new asset having comprised of separate bedroom, hall and kitchen etc., although same was constructed on existing building/house and there is no bar in claiming exemption u/s 54F of the Act. The learned representative of the department [for short “DR”] on the other hand heavily relied on the orders of Ld. TAB.
We have heard the rival contentions of both the parties; and subject to the provisions of rule 18 of “ITAT Rules”, perused the material placed on record, case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to parties present.
We shall deal with first ground first, and doing so it shall suffice to state that, the claim of 54F made against construction of additional floor to the existing ITAT-Raipur Page 5 of 8
Mohammad Akhtar Khan ITA No 87/RPR/2019 AY 2013-14 building comprising of separate bedroom, dining hall, kitchen etc., is no more res integra in the light of decision of special bench in the case of “ACIT Vs T. N. Gopal” ITA No 231/MDS/2008 and para 5 thereof reads as under; “Section 54F exempts tax on long term capital gains arising from transfer of any long term capital asset (not being a residential house) invested in a residential house. This exemption cannot be availed if there is a house in existence on the date of transfer. In the facts of the present case, I find that the assessee was the joint owner of the house property along with his brother on the date of transfer and he utilized the long term capital gain for construction of additional floor in the same house. The Hon'ble Jurisdictional High Court in the case of CIT v. V. Pradeep Kumar and Anr. 290 ITR 90 (Mad.) has held that a mere extension of the existing building will not give benefit to the assessee under Section 54F of the Act. The case of the assessee clearly comes within the ken of the ratio of the aforesaid decision. The decision in the case of CIT v. P.V. Narasimhan 181 ITR 101 (Mad), as relied by the ld. Counsel was considered in the case of Pradeep Kumar (supra). In view of the decision of the Jurisdictional
ITAT-Raipur Page 6 of 8
Mohammad Akhtar Khan ITA No 87/RPR/2019 AY 2013-14 High Court which is of binding nature, I agree with the view taken by the learned Judicial Member.
Respectfully following the same, we find no infirmity with the action of Ld. TAB in disallowing the claim of 54F in the absence of investment into new residential property; ergo the ground number 1 of the appeal memo stands dismissed.
The additional ground raised by the appellant through written submission relates to claim of joint ownership in the impugned property from the sale of which gain was arisen and is brought to tax by the Ld. TAB. Admittedly, this issue was neither raised before the Ld. AO nor before the Ld. FAA, but is raised for the first time before the Tribunal for admission which Ld. DR opposed the admission submitting that the assessee has not revised its return of income making the aforesaid claim and in view of the decision of the Hon'ble Supreme Court in the case of “Goetz India Ltd., Vs. CIT”, 284 ITR 323, such plea cannot be entertained at the instance of the assessee. ITAT-Raipur Page 7 of 8
Mohammad Akhtar Khan ITA No 87/RPR/2019 AY 2013-14 5. In view of the decision of the Hon'ble Supreme Court in the case of “National Thermal Power Co. Ltd., Vs CIT”, reported in 229 ITR 383, we are mindful to voice that, the appellant is entitled to urge question of law on the basis of facts already available on record and the issue raised have substantial bearing on the tax liability of the assessee, and for the reason we deem fit to remand the file back to the Ld. AO for a limited purpose of this ground.
Resultantly, the appeal of the appellant is partly DISMISSED and party ALLOWED FOR STATISTICAL PURPOSES in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Wednesday 16th day of November, 2022.
-S/d- -S/d- RAVISH SOOD G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 13th day of December, 2022. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT, Raipur (C.G.-India) 4. The CIT(A), Raipur (C.G.-India) 5. DR, ITAT, Raipur Bench, Raipur. 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order, वररष्ठदनजीसदिव / Sr. Private Secretary आयकरअपीलीय न्य य दिकरण, पुणे / ITAT, Pune. ITAT-Raipur Page 8 of 8