2023 (6) TMI 572 - AT - Income Tax

Deduction u/s. 54F - AO disbelieved the Assignment deed as self-serving document entered mainly to justify the untenable claimed u/s. 54F - transfer of lease rights in the said two plots without obtaining the consent from MIDC - HELD THAT - We note that in the case of Thiruvengada Pillai Vs. Navaneethammal Anr 2008 (2) TMI 391 - SUPREME COURT clearly held that there is no provision in the Indian Stamp Act, 1899 prescribes any expiry date for use of a stamp paper, it is only if the purchaser of the stamp paper has no immediate use can seek refund of the value thereof by surrendering such stamp paper to the Collector. From the deed of Assignment it is clear that the said deed of Assignment entered with M/s. Samsun Industries Pvt. Ltd. anticipating the order of MIDC to transfer the leasehold rights in favour of M/s. Samsun Industries Pvt. Ltd. in pursuance of letter dated 18-03-2015. Therefore, we find the arguments of ld. DR as not acceptable in view of the decision of case of Thiruvengada Pillai (supra) and reject his contention that the stamp paper on which the Assignment deed dated 10-04-2015 was executed as invalid. Within one year criteria prior to purchase of residential bungalow - In the present case, Assignment deed dated 10-04-2015 entered by the assessee with M/s. Samsun Industries Pvt. Ltd. for transfer of his leasehold rights on two plots granted by the MIDC, is valid which is entered in pursuance of his application dated 18-03-2015 which resulted into order dated 16-04-2015 passed by MIDC granting consent to transfer assessee s leasehold rights to M/s. Samsun Industries Pvt. Ltd. if the period reckoned from the date of his application to the MIDC on 18-03- 2015 along with the date of Assignment deed on 10-04-2015 agreeing to transfer said leasehold rights to M/s. Samsun Industries Pvt. Ltd., in our opinion, the assessee s case falls under within one year prior to purchase of residential bungalow on 05-05-2015. Decided in favour of assessee. Addition on account of sundry creditor balances - HELD THAT - As the assessee filed unsigned reconciliation of purchases with regard to VAT return / manufacturing trading profit and loss account for the F.Y. 2015-16 which shows the purchases as per manufacturing trading account to an extent. Admittedly, this reconciliation, as that of VAT returns of Quarter 1 to 4 (April, 2015 to March, 2016) were not before the AO, therefore, as the additional evidences in the form of Paper Book-II filed before us for the first time and in the interest of justice, we deem it proper to remand the issue to the file of AO to decide the issue afresh in terms of VAT return and reconciliation of purchases with regard to the said VAT return - Decided in favour of assessee for statistical purpose.

Summary

Issues Involved:
1. Challenge against denial of deduction u/s. 54F of the Act.
2. Challenge against addition of Rs. 5,01,45,330/- on account of sundry creditor balances.

Issue 1: Challenge against denial of deduction u/s. 54F of the Act

The appeal was made by the assessee against the order passed by the National Faceless Appeal Centre, Delhi for the assessment year 2016-17, specifically challenging the denial of deduction u/s. 54F of the Act. The assessee, engaged in manufacturing and trading, claimed the deduction based on the purchase of a residential bungalow and subsequent sale of plots. The AO and CIT(A) questioned the validity of the Assignment deed dated 10-04-2015, stating it was a self-serving document. However, the assessee argued that the deed was valid as consent from MIDC was obtained prior to the execution. The Tribunal, after considering the arguments and the decision of the Hon'ble Supreme Court in a similar case, held that the Assignment deed was valid and allowed the assessee's claim for exemption u/s. 54F of the Act.

Issue 2: Challenge against addition of Rs. 5,01,45,330/- on account of sundry creditor balances

The second issue involved the challenge against the addition of Rs. 5,01,45,330/- on account of sundry creditor balances. The AO questioned the entries related to creditors, which were later rectified in the subsequent year. The CIT(A) upheld the addition under section 68 of the Act, emphasizing that the assessee paid taxes based on the alleged wrong entry. The assessee, through the Chartered Accountant, explained that the entry was a mistake and provided additional evidence to support the claim. The Tribunal noted discrepancies in the AO's findings and the additional evidence submitted by the assessee. Considering the facts and circumstances, the Tribunal remanded the issue back to the AO for fresh consideration in light of the additional evidence provided. As a result, the appeal of the assessee was allowed for statistical purposes.

Separate Judgement by Judges:
No separate judgement was delivered by the judges in this case.