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2024 (5) TMI 1098 - AT - Income TaxLTCG - denying exemption u/s 54F - absence of any corroborative evidence establishing the investment in the new house property by the assessee - Admission of additional evidence by assessee HELD THAT - Though the assessee fails to produce bills / vouchers of construction activity, the claim of deduction u/s 54F cannot be denied without considering the relevant documents which are furnish before us as additional evidence u/r 29 of the ITAT Rules. Since, such additional evidence is not before the CIT(A), there is no occasion for him to decide the issue, considering the information emanating from such documents. Thus in the interest of principle of natural justice, the matter should be restored back to the file of Ld. CIT(A) for fresh adjudication. Assessee appeal is partly allowed for statistical purpose.
Issues Involved:
1. Ex-parte order by CIT(A) without allowing opportunity to the appellant. 2. Denial of exemption u/s 54F of the Income Tax Act, 1961. Summary: Issue 1: Ex-parte Order by CIT(A) The assessee contended that the CIT(A), NFAC, Delhi, erred in passing an ex-parte order without allowing an opportunity to the appellant, despite an adjournment application filed on 25.10.2023. The order was passed on 07.12.2023, one day before the requested adjournment date of 08.12.2023. The CIT(A) provided multiple opportunities for the appellant to present submissions, but the appellant failed to comply, leading to the dismissal of the appeal for non-prosecution. The CIT(A) cited judicial pronouncements, including CIT Vs. B.N. Bhattachargee & Ors. and Estate of Late Tukojirao Holkar Vs. CWT, to justify the dismissal. Issue 2: Denial of Exemption u/s 54F The assessee claimed an exemption u/s 54F for Rs. 53,86,108/- on the grounds of reinvestment in house property. The AO observed a transaction of land sale for Rs. 1,08,00,000/- on 07.03.2014, which was not reflected in the return of income. The AO requested details of the sales transaction and exemption claimed u/s 54F. The assessee provided calculations showing the sale amount, indexed cost, and investment in house property. However, the AO was not satisfied with the proof of investment in house property amounting to Rs. 68,58,900/-, leading to an addition of Rs. 54,13,892/- under capital gains by rejecting the exemption claim u/s 54F. The CIT(A) upheld the AO's decision, noting the appellant's failure to furnish vital evidence such as bank statements, purchase deeds, and construction-related receipts. The CIT(A) concluded that the appellant did not satisfactorily prove eligibility for the deduction u/s 54F. Tribunal's Decision: The Tribunal considered the rival submissions and additional evidence submitted by the assessee, including a valuation report and municipal permissions. The Tribunal noted that the assessee had shown the investment in the balance sheet but failed to substantiate it with corroborative evidence. The Tribunal referred to similar cases, such as Govind Gangadhar Sabane vs. ITO and Pawan Aggarawal vs. DCIT, where exemptions u/s 54F were allowed despite the absence of bills/vouchers, provided there was other supporting evidence. The Tribunal concluded that the additional evidence submitted was not considered by the CIT(A) and, in the interest of natural justice, restored the matter to the CIT(A) for fresh adjudication. The assessee was to be afforded reasonable opportunities to present necessary evidence. Conclusion: The appeal was partly allowed for statistical purposes, with the matter remanded to the CIT(A) for reconsideration, ensuring the assessee is given a fair opportunity to substantiate the claim for exemption u/s 54F.
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