2019 (6) TMI 391 - AT - Income Tax

Deduction u/s. 54F - denied on the ground that on the date of transfer assessee has more than one residential house - whether the property at Bohri (Borari), Mumbai, i.e., the residential quarter on land measuring 1 Kanal 3 Marlas owned by the assessee, was a residential house as on the date of transfer - HELD THAT - The burden to prove his claim u/s. 54F, is though on the assessee, as well as to meet the evidence gathered or sought to be relied upon by the Revenue. The remission would also meet the assessee s claim of having not been allowed a reasonable opportunity, raised before us per lengthy grounds of appeal, even as he has before us been unable to state or point out any evidence which he wishes to rely upon (or to meet the Revenue s reliance on the Inspector s Report), though could not for want of opportunity. There is no application for admission of additional evidence before the first appellate authority, or even a prayer for admission of additional evidence before us, so that, as we understand, the grievance could only extend to being unable to explain the evidence being relied upon by the Revenue. AO shall decide on the basis of the material on record, issuing definite findings of fact consistent therewith, taking into account the totality of the facts and circumstances, and after allowing the assessee a reasonable opportunity of being heard, and which he shall do in a time-bound manner. Sure, he is to decide the legal issue/s afore-referred as well, i.e., where the same arises in the facts and circumstances of the case. Needless to add, the assessee, on whom the primary burden to prove lies, shall cooperate in the said proceedings. The issue being principally factual, has in any case to be decided on the basis and strength of the evidences, for and against, and not on the basis of presumptions, with the assessee in any case bound to cooperate in the set aside proceedings. We decide accordingly. - Revenue s appeal is allowed for statistical purposes.

Issues Involved:
Assessment under section 144 of the Income Tax Act, 1961 for Assessment Year 2013-14, denial of exemption u/s. 54F on long-term capital gain, ownership of multiple residential properties, claim of dilapidated condition of property, reliance on Inspectors' report, burden of proof on the assessee, remand for further assessment.

Analysis:

1. Assessment under Section 144:
The appellant contested the assessment under section 144 of the Income Tax Act, 1961 for Assessment Year 2013-14. The Commissioner of Income Tax (Appeals) dismissed the appellant's appeal, leading to the appeal before the Appellate Tribunal ITAT Amritsar.

2. Denial of Exemption u/s. 54F:
The core issue revolved around the denial of exemption u/s. 54F on the long-term capital gain arising from the sale of an immovable property. The Revenue contended that the appellant, who sold a plot of land, was not entitled to the claim as he owned multiple residential properties on the date of transfer.

3. Ownership of Multiple Residential Properties:
The Revenue denied the exemption claim based on the appellant's ownership of multiple residential properties, including a flat in Gurgaon, a residential quarter in Mumbai, and a residential house in New Delhi. The appellant argued that one of the properties was erroneously listed, and the property in Mumbai was in a dilapidated condition, not suitable for habitation.

4. Claim of Dilapidated Condition of Property:
The appellant claimed that the property in Mumbai was in a dilapidated condition, which was disputed by the Revenue based on past wealth-tax returns showing it as self-occupied. The appellant failed to provide satisfactory evidence supporting the dilapidated condition claim during the proceedings.

5. Reliance on Inspectors' Report:
The Revenue relied on an Inspectors' report to support their case, which the appellant argued was not confronted to him, thus challenging its reliability. The Tribunal highlighted the importance of confronting such reports and the need for substantial evidence to prove the appellant's case.

6. Burden of Proof on the Assessee:
The Tribunal emphasized that the burden of proof lies with the assessee to substantiate claims and meet evidence gathered by the Revenue. The appellant's failure to provide concrete evidence regarding the property's condition and the demolition raised doubts on the validity of the claim.

7. Remand for Further Assessment:
In the interest of justice and to avoid a miscarriage of justice, the Tribunal remitted the matter back to the Assessing Officer for further assessment. The AO was directed to provide a reasonable opportunity to the assessee to present his case, considering all evidence and facts to reach a fair decision.

8. Conclusion:
The Tribunal allowed the Revenue's appeal for statistical purposes, highlighting the need for a thorough assessment based on concrete evidence and fair opportunities for both parties. The decision aimed at ensuring a just resolution and adherence to legal principles in determining the eligibility for exemptions under the Income Tax Act.

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