2019 (3) TMI 497 - AT - Income Tax

Benefit of Section 54F denied - assessee did not substantiate that sale proceeds have been invested in residential property within the stipulated time - contention of the assessee that the land in question is not capital asset as the land is more than 8 km. away from Municipal limit of Sonipat rejected - whether Land sold by assessee was not agricultural land, but, it was a capital asset as per Section 2(14)? - application for admission of the additional evidence was not filed before Tribunal - HELD THAT - The assessee appeared at the later stage of the assessment proceedings and filed the written submissions, which have been considered by the assessing officer. The assessee produced the valuation report and some other documents at appellate stage, on which, Learned CIT(A), called for the remand report. A.O. as well as the CIT(A) have given sufficient opportunity of being heard to the assessee. Therefore, there is no merit in the contention of Learned Counsel for the Assessee that no proper opportunity have been granted to the assessee at any stage. Assessee submitted that the CIT(A) should have admitted the additional evidence. At this stage also, Assessee filed copy of the Certificate of Architects dated 4th February, 2019 and some bills of building material, which are not attested and no application have been filed for admission of the additional evidence. No reasons have been explained as to why the same were not produced before the authorities below. Departmental Representative, therefore, rightly contended that the same papers cannot be admitted at this stage, since, no request have been made by assessee for admission of the additional evidences by filing a proper application and no reasons have been explained why these documents were not filed before the authorities below. The Certificate of the Architects dated 4th February, 2019 and bills of building material cannot be taken into consideration. The request of the Assessee to entertain these documents is, therefore, rejected. During the course of arguments Learned Counsel for the Assessee did not point out any error in the Orders of the authorities below that the land sold by the assessee was not capital asset. The assessee also failed to prove that sale proceeds were invested in residential house within the time prescribed under the Law. Therefore, assessee failed to substantiate any of the grounds raised in the present appeal. - Decided against assessee.

Issues:
1. Challenge against the Order of Ld.CIT(A) and Ld. A.O.
2. Addition of &8377; 20,59,064/-
3. Claim of Exemption u/s.54F of the Income Tax Act, 1961
4. Adequacy of opportunities provided by Ld. A.O.

Analysis:

Issue 1: Challenge against the Order of Ld.CIT(A) and Ld. A.O.
The appeal was directed against the Order of Ld.CIT(A) for the A.Y. 2010-2011. The assessing officer initiated reassessment proceedings as the assessee had not filed the return of income. The assessing officer calculated long term capital gain at &8377; 20,59,064/- and completed the assessment. The assessee challenged the addition before the Learned CIT(A) and requested admission of additional evidence. The assessing officer mentioned in the remand report that sufficient opportunities were provided to the assessee during the assessment stage. The Learned CIT(A) found that the land sold was a capital asset and not agricultural land. The contention that sale proceeds were invested in residential property was not substantiated, leading to the dismissal of the appeal.

Issue 2: Addition of &8377; 20,59,064/-
The assessing officer determined the long term capital gain at &8377; 20,59,064/- based on the sale of land by the assessee. The contention that the sale proceeds were invested in a residential property was not supported by relevant documents. The assessing officer and the Learned CIT(A) provided ample opportunities for the assessee to substantiate their claims, but the evidence presented by the assessee was deemed insufficient and unreliable.

Issue 3: Claim of Exemption u/s.54F of the Income Tax Act, 1961
The assessee claimed exemption u/s.54F of the Income Tax Act, stating that the sale proceeds were invested in a residential house. However, the assessee failed to provide supporting documents for the construction of the house. The assessing officer and the Learned CIT(A) found that the claim was not substantiated, resulting in the dismissal of the appeal.

Issue 4: Adequacy of opportunities provided by Ld. A.O.
The assessing officer and the Learned CIT(A) were found to have granted sufficient opportunities for the assessee to present their case. The assessing officer had taken up the assessment proceedings multiple times, and the assessee had opportunities to provide necessary documents and evidence. The contention that proper opportunities were not granted to the assessee was rejected. The request to admit additional evidence at a later stage was also rejected due to lack of proper application and explanation for not submitting the documents earlier.

In conclusion, the appeal of the assessee was dismissed as the claims regarding the nature of the land sold and the investment of sale proceeds were not adequately substantiated, and the provided opportunities were deemed sufficient by the authorities.

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