2021 (4) TMI 809 - AT - Income Tax

Admission of additional ground raising a fresh claim - Benefit of section 54F denied - investment made in a new property - proceeds of the original asset was invested in house property in the hands of the son - assessee is unable to execute the sale deed in his favour because of his illness - AR contended that the sale agreement in which the payments have been indicated is a sufficient proof for the purchase of the property - HELD THAT - The assessee has filed additional ground by raising a fresh claim. As contended that the proceeds of the original asset was invested in house property in the hands of the son and investment of sale consideration towards the new residential house property should be alternatively be considered in the hands of the son of the assessee. The assessee had relied on judicial pronouncements that deduction u/s 54F of the I.T.Act should be considered in the name of the son of the assessee by filing proof of investment made by the son of the assessee. The assessee in the additional ground has raised totally a fresh claim. The issue raised in the additional ground goes to the root of the issue and for substantial cause and justice, I admit the same. It is the claim of the assessee that the assessee has transferred the amount of ₹ 33,50,000 to his son and the details of investment made in the new property by the son is to the extent of ₹ 47,18,150. The assessee in support of the above, has also furnished additional evidence as mentioned above. Since I have admitted the additional ground, the additional evidence in support of the additional ground is also admitted. Since the additional ground and the additional evidence are taken on record, the matter needs to be considered de novo by the Assessing Officer. Accordingly, the issue raised in the additional ground is restored to the files of the A.O. A.O. shall consider the claim in the additional grounds. As regards the additional grounds, the assessee shall be entitled to file evidence in support of his case. The assessee is directed to co-operate with the Department and shall not seek unnecessary adjournment. A.O. shall dispose of the matter after affording a reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is partly allowed for statistical purposes.

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Denial of deduction under section 54F of the Income Tax Act.
3. Admission of additional grounds and evidence by the assessee.
4. Reconsideration of the case de novo by the Assessing Officer.

Detailed Analysis:

1. Condonation of Delay:
The appeal was filed with a delay of 4 days. The assessee submitted a petition and an affidavit explaining the delay. Upon perusal, it was concluded that the delay was not due to any negligence on the part of the assessee. Therefore, the delay was condoned, and the appeal was admitted for consideration on merits.

2. Denial of Deduction under Section 54F:
The assessee sold an ancestral property and claimed a deduction under section 54/54F for the investment made in a new property. The Assessing Officer (AO) denied the benefit of section 54F, citing several reasons:
- The cheque for payment was not encashed.
- No corroborative evidence was provided for cash payments.
- The transaction appeared to be structured to claim exemption from capital gains without transferring the property through a registered deed.
- The transaction did not meet the requirements of section 54 and 55 of the Transfer of Property Act, as it was not a registered deed of conveyance.

The AO concluded that the assessee did not purchase a residential property within the specified period to qualify for the deduction under section 54F. Consequently, the AO computed the long-term capital gains without allowing the deduction.

3. Admission of Additional Grounds and Evidence:
The assessee raised additional grounds, claiming that the proceeds from the original asset were invested in a house property in the name of his son. The assessee argued that this investment should be considered for deduction under section 54F. The Tribunal admitted the additional grounds and evidence, noting that the issue raised was substantial and went to the root of the matter. The additional evidence included details of money transfers and investments made in the son's name.

4. Reconsideration of the Case De Novo:
Given the admission of additional grounds and evidence, the Tribunal directed the Assessing Officer to reconsider the case de novo. The AO was instructed to examine the fresh claim and additional evidence, allowing the assessee to present further evidence in support of his case. The AO was also directed to provide a reasonable opportunity of hearing to the assessee and dispose of the matter accordingly.

Conclusion:
The appeal was partly allowed for statistical purposes, with the matter remanded back to the Assessing Officer for fresh consideration based on the additional grounds and evidence presented by the assessee. The Tribunal emphasized the need for a thorough re-examination of the case to ensure justice and equity.

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