DEEPAK SATAGOUDA PATIL,BELGAVI vs. INCOME TAX OFFICER, WARD - 1(3), BELGAUM

This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals), Hubballi [‘the CIT(A)’] dated 20.03.2019 for the assessment year 2012-13.

At the outset, there is a delay of 37 days in filing the present appeal. The appellant had filed a condonation petition stating that the delay had occurred on account of appellant suffering from severe back pain and undergoing rest on the medical advice. The averments made in the affidavit remain uncontroverted by the Revenue. In the circumstances, I am of the considered opinion that it is a fit case for 37 days. Hence, delay is condoned. Now, I proceed to dispose of the case on merits. 3. Briefly, the facts of the case are that the appellant is an individual deriving income under the head “Income from other sources”. The Return of Income for the assessment year 2012-13 was filed on 05.09.2012 declaring total income of Rs.4,31,618/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1(3), Belgaum (‘the Assessing Officer’) vide order dated 27.10.2014 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at a total income of Rs.45,50,630/-. The factual matrix of the case is as under : The appellant had received a compensation from acquisition of land of Rs.92,94,788/- after claiming indexed cost of acquisition of Rs.16,61,609/-, capital gains of Rs.71,32,618/- against which deduction u/s 54 on account of construction of new house of Rs.67,01,000/- claimed and balance capital gains of Rs.4,31,618/- was offered to tax. During the course of assessment proceedings, the appellant could not substantiate the cost of improvement to the extent of Rs.10,52,000/- but, could substantiate a sum of Rs.7,54,000/-. In the circumstances, the Assessing Officer computed the indexed cost of Rs.11,90,925/- against Rs.16,61,809/- claimed by the appellant. As regards the claim for deduction on account of construction of new house u/s 54, the appellant could not substantiate the cost of construction of new house of Rs.32,96,000/-. However, the Assessing Officer had restricted the cost of construction of new house at the rate of 1500 per sq. ft. and also restricted the deduction u/s 54 of Rs.32,55,000/-. 4. Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A) who vide impugned order dismissed the appeal ex-parte. 5. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 6. It is contended that the compensation received by the appellant for compulsory acquisition of land is exempt from tax u/s 10(10BC) of the Act. Without prejudice to the above, it is contended that the Assessing Officer should not have excluded the cost of acquisition of land while arriving the cost of new house for exemption u/s 54 of the Act.