2021 (10) TMI 860 - AT - Income Tax

Exemption u/s 54 - denial of deduction as assessee has not furnished any documentary evidence to substantiate the claim that any amount was invested for purchase of new residential property - on one hand assessee submitted that she had purchased the land utilising the entire consideration received on the sale of property and on the other hand, she submitted that once the amount was realised from the firm, she will invest in purchase of new residential house immediately - HELD THAT - Perusal of record reveals that initially counsel of the assessee appeared on a number of occasion and sought adjournment. After some time the counsel rescued herself from the case and informed the Bench that the assessee intends to engaged other counsel. However, none appeared on behalf of the assessee. This appeal is pending since 2016 and is in the category of more than five years old cases. In these circumstances, we have no option left except to decide the appeal after hearing the submission of ld.Sr.DR for the Revenue and the material available on record. We have also gone through the orders of Lower Authorities and various documents filed on record. We find that no documentary evidence to substantiate the claim that any amount was invested for purchase of new residential house except a certificate of builder wherein the assessee is a partner that assessee booked a residential flat. No number of residential unit, cost of new residential property or any other details of scheduled of payment is furnished. In our view, the assessee failed to substantiate the claim before the Lower Authorities as well as before the Tribunal. Therefore, we do not find any merit in the grounds of appeal raised by the assessee.

Summary

Issues:
1. Disallowance of exemption claimed u/s 54F of the Income Tax Act.
2. Denial of exemption u/s 54F due to absence of registered purchase deed.
3. Claiming exemption u/s 54F for investing in new residential premises.
4. Denial of exemption u/s 54F in absence of registered sale deed or possession of the property.
5. Taxation of resulting capital gain if exemption u/s 54F is denied.
6. Justification of interest levy under sections 234A/234B/234C & 234D.
7. Initiation of penalty proceedings under section 271(1)(c) of the Act.

Analysis:
1. The appeal by the assessee challenged the orders of the Commissioner of Income Tax (Appeals)-II regarding the disallowance of exemption claimed under section 54F of the Income Tax Act for the assessment year 2013-14.
2. The Assessing Officer noted the sale of a property jointly owned by the assessee, where the assessee claimed deduction under section 54 for investing in a new property. The AO required proof of purchase of the new property, which the assessee failed to provide, leading to the denial of the claim.
3. The assessee contended that the investment made for purchasing a new residential property should be considered as fulfilling the conditions for exemption under section 54F. However, the AO denied the claim on the grounds of lack of evidence.
4. On appeal, the assessee provided detailed submissions and evidence of investment in a new project for a residential house. The assessee argued that due to technical hindrances, the construction was delayed, but the entire sale consideration was invested in the new property.
5. The Tribunal noted the absence of concrete evidence to substantiate the claim of investment in a new residential property, apart from a certificate from the builder. The Tribunal found the evidence presented insufficient to prove the claim, leading to the dismissal of the appeal.
6. The Tribunal dismissed the appeal due to the lack of documentary evidence supporting the investment claim for a new residential property, as required under section 54F of the Act.
7. The decision to dismiss the appeal was announced on 14th September 2021 during a virtual court hearing, after considering the submissions of the Senior Departmental Representative for the Revenue and reviewing the available records.