2019 (8) TMI 1453 - AT - Income Tax

Reopening of assessment u/s 147 - LTCG addition - exemption u/s 54F - HELD THAT - Two assessee were not represented. DR submitted that disputed issues in both the appeals may be restored to the file of Ld.CIT(A) with the direction to pass speaking orders. In the absence of any assistance from the side of the assessees, we are persuaded by the submissions of the Ld. DR. Accordingly, we set aside the orders of CIT(A) in the case of the two assessee, each dated 07.10.2016 and restore the disputed issues to the CIT(A) with the direction to pass a speaking order afresh in accordance with law, having regard to facts and circumstances of the case, after providing due opportunity to the assessee. Both these appeals filed by the assessee are disposed of in accordance with aforesaid direction. We explicitly clarify that the assessees will be at liberty to approach ITAT for restoration of the appeals in accordance with proviso to Rule 24 of Income Tax Appellate Tribunal Rules, 1963. If the assessee(s) do approach the Tribunal for restoration of the appeals, the matter will be considered in accordance with law as well as facts and circumstances.

Summary

Issues:
Appeals against orders related to provision u/s 54 of the Income Tax Act, 1961.

Analysis:
The judgment involves two separate appeals by different assessees against orders passed by Ld.CIT(A), Karnal, pertaining to the 2007-08 assessment year. The disputed issues in both appeals revolve around the provision u/s 54 of the Income Tax Act, 1961. In one case, an addition of ?86,02,120/- was made towards Long Term Capital Gain (LTCG), while in the other case, an addition of ?1,42,91,610/- was made on account of LTCG. The assessees claimed exemptions u/s 54B and 54F for various investments made, including purchase of agricultural land and construction of residential houses. However, the authorities rejected some of the claims, leading to the addition of undisclosed LTCG amounts to the assessees' income.

In the first case, the assessee's claim for exemption u/s 54B for the purchase of agricultural land in the name of his spouse was rejected. However, the investment made in the purchase of a plot and construction of a residential house was allowed for exemption u/s 54F. The total exemption allowed was ?1,90,77,890/-, and the remaining LTCG amount was added to the assessee's income.

In the second case, the assessee's claim for exemption u/s 54B for the purchase of agricultural land in the name of legal heirs' spouses was rejected. The investment in the construction of residential houses was allowed for exemption u/s 54F, resulting in an exemption of ?90,29,337/-. The remaining LTCG amount was added to the assessee's income.

Both assessees filed appeals before Ld.CIT(A), Karnal, which were dismissed. The appeals were then brought before ITAT, where the assessees were not represented. The ITAT set aside the orders of Ld.CIT(A) and restored the disputed issues to be reconsidered by Ld.CIT(A) with a direction to pass speaking orders. The appeals were partly allowed for statistical purposes.

In conclusion, the judgment addresses the issues related to LTCG and exemptions under sections 54B and 54F of the Income Tax Act, 1961. It highlights the importance of providing accurate information and explanations to claim such exemptions and the process of appeal and reconsideration in case of disputes.