USHA SHARMA,NEW DELHI vs. ITO WARD - 29(1), NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH “H” DELHI
Before: SHRI KUL BHARAT & SHRI M. BALAGANESH
PER KUL BHARAT, A.M.:
The captioned appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-33, New Delhi [‘CIT(A)’ in short] dated 31.07.2019 arising from the assessment order dated 17.03.2016 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) pertaining to Assessment Year 2013-14. The assessee has raised the following grounds of appeal. “1. That the learned A O erred on the facts available on record and added a Short term capital gains (Rs.5,79,583/-) to the appellant's income accrued on sale of one residential property. The Appellant sold one residential property and invested the entire sale proceeds in purchase of two adjacent residential plots and building one single residential house on both of the plots within the prescribed time of three years and accordingly claimed deduction us 54F of Income Tax Act 1961.The learned AO erred on the facts available on record and
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calculated Short Term Capital Gains on building on arbitrary assumptions and erroneously computed the short term capital gain which is against the law . That the learned Commissioner of Income Tax (Appeals)-33, New Delhi also erred on facts and in law by not appreciating the fact that the actual cost of construction which is available on record and ignored the fact that the actual building cost (Rs.36,95,417-) was accepted by A.O. That the learned A.O calculated the Short Term Capital Gains by calculating building cost being balance of the sale consideration after deducting land cost at Circle rate instead of actual land rate available on record which is totally unjustified and bad in law. The learned AO also erred by not considering the building constructed during 2008-09 as Long term capital asset and treated whole building as Short term asset. 2. That the learned A.O erred in law and in facts by not appreciating the fact and considered the land cost at circle rate for calculating Long term Capital Gains instead of deducting actual building cost available on records from the total sale consideration. The Long Term Capital Gains is calculated on assumptions which is totally unjustified and bad in law. That the learned AO and the learned Commissioner of Income Tax (Appeals) -33, New Delhi has erred in law and in facts by not appreciating the facts and added Long Term Capital Gains (Rs.60,96,691/-) by not allowing deduction as claimed by Appellant w/s 54F of Income Tax Act 1961.That the Appellant purchased two adjacent residential plots and constructed one ingle residential house thereon and rightly claimed deduction under section 54F for the Long Term Capital Gains accrued on sale of one residential property and fulfilled all conditions laid as per provisions of Income Tax Act 1961.The Learned Commissioner of Income Tax (Appeals) -33, has erred in law and allowed deduction partly u/s. 54F of Income Tax Act'1961 partly towards one residential house constructed on one plot and ignored the fact that only one house is constructed on the said two adjacent plots.”
At the time of hearing, no one attended the proceedings. It is seen from the record that no one has been attending the proceedings on behalf of the assessee. The notices sent through speed post have been returned back by the postal authority with a remark ‘left’. The assessee has not provided any current address to the Registry therefore, the appeal is taken for hearing in the absence of the assessee.
The facts giving rise to the present appeal are that in this case the assessee had filed its return of income declaring total income at Rs.1,85,290/-. The return was processed under
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Section 143(1) of the Income Tax Act. Subsequently, the case was selected for scrutiny under CASS and the assessment under Section 143(3) of the Act was framed vide order dated 17.03.2016 thereby the Assessing Officer made addition on account Short Term Capital Gain of Rs.5,75,553/- and Long Term Capital Gain of Rs.60,96,691/- disallowing the claim of the assessee for exemption under Section 54F of the Act.
Aggrieved against this, the assessee preferred appeal before the CIT(A) who after considering submissions partly allowed the appeal. Thereby, he sustained the addition of Rs.60,96,961/- and also confirmed the Short Term Capital Gain. However, the ld. CIT(A) allowed exemption under Section 54F in respect of house for which the construction completion certificate was obtained on 17.10.2013. 5. Aggrieved, the assessee is appeal before this Tribunal.
The ld. DR supported the order of the authorities below.
We find that the ld. CIT(A) has given the finding on fact by observing as under: “8.4 I have considered the facts of the case and submission of the Appellant. The first issue is to decide whether the building sold by the Assessee was a long term capital asset or a short term capital asset. It cannot be doubted that the construction on the land cannot be equated with the land as far as age thereof is concerned. As per the arguments of the Assessee construction on the sold property started in year 2008- 09 and the cost was Rs. 70,681/- but no proof has been given that any such construction has taken place in year 2008-09. On these facts and in the circumstances, the construction on the sold property would be considered as short term capital asset. The Assessing Officer was justified in taking the cost of construction at Rs.36,95,417/-. Accordingly, the computation of short term capital gain at Rs.5,79,583/- is confirmed. The second aspect is the computation of long term capital gain in respect of the land. Since, the Assessing Officer has computed the capital gain as long term, there cannot be any dispute. Hence, the computation of long term capital gain in respect of the sold property relating to the land only at Rs.60,96,691/-
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is confirmed. 8.5 The other aspect is the claim of exemption w/s 54F of the IT Act. There is no doubt about the fact that the construction was completed on two plots. The completion certificate was also obtained on two different dates. Even the Inspector of the Assessing Officer reported the construction of separate residential units on the site. On these facts, I hold that the Assessee is not entitled for exemption w/s 54F of the IT Act in respect of the residential house for which the completion certificate was obtained on 30.10.2013 because on that particular date the Assessee was having more than one residential house other than the new asset. Therefore, I hold that the Assessee is entitled for exemption us 54F in respect of the house for which the construction completion certificate was obtained on 17.10.2013. The Assessing Officer is directed to carry out this limited exercise in compliance with this order to compute the exemption.”
The aforesaid finding of the ld. CIT(A) is not controverted by the assessee by placing any cogent material on record. We therefore dismiss the appeal and affirmed the view of the CIT(A).
In the result, the appeal of the assessee is dismissed ex- parte. Order pronounced in the open Court on 14/07/2023
Sd/- Sd/- [M. BALAGANESH] [KUL BHARAT] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: /07/2023 prabhat
