2023 (1) TMI 130 - AT - Income Tax

Disallowance of claim for deduction u/s 54B as well as 54F - HELD THAT - It is an admitted fact that the appellant had not deposited the unutilized sale consideration under the capital gains deposits scheme as prescribed under subsection (2) of section 54B of the Act. We also find that the agreement for purchase of new agricultural land was entered into on 28.06.2010 which is also beyond due date for filing the return of income and, therefore, the above fact clearly would go to show that the appellant had not utilized any portion of the sale consideration towards purchase of new agricultural land and the ratio of decision of the Hon ble Bombay High Court in the case of Humayun Suleman Merchant 2016 (9) TMI 70 - BOMBAY HIGH COURT has been rightly applied by the ld. CIT(A). Deduction u/s 54F - CIT(A) has clearly set out the fact vide para 9 of his impugned order. On perusal of the said para 9 of the impugned order, it is clear that only amount of Rs.4,00,000/- was utilized before due date for filing of the return of income for purchase of residential house and the entire balance consideration was paid on 27.07.2010, 28.08.2010 and 12.02.2011 which is clearly beyond due date for filing the return of income for the assessment year 2009-10 and it is undisputed fact that unutilized consideration was not deposited under the capital gains deposits scheme, as stipulated time under sub-section (4) of section 54F - CIT(A) had rightly restricted the deduction to the extent of investment made in construction of new house till the date of construction of the house property and the ratio of the decision of the Hon ble Bombay High Court (supra) is squarely applicable. Therefore, we find that the order of the ld. CIT(A) is well reasoned and based on the proper appreciation of facts and legal position governing the issue on hand. Accordingly, we do not find any reason to interfere with the order of the ld. CIT(A). Thus, the ground of appeal no.3 filed by the assessee stands dismissed.

Summary

Issues Involved:
1. Delay in filing the appeal and condonation of the delay.
2. Assessment of income, addition of Long Term Capital Gain, and treatment of the same.
3. Charging of interest under sections 234A, 234B, and 234C.
4. Penalty proceedings under section 271(1).
5. Disallowance of deduction under sections 54B and 54F of the Income Tax Act.

Detailed Analysis:

Issue 1: Delay in filing the appeal and condonation of the delay
The appellant filed an appeal against the order of the ld. CIT(A) dated 21.03.2018 for the assessment year 2009-10, with a delay of 04 days. The appellant attributed the delay to the health issue of the authorized representative. The delay was condoned by the Appellate Tribunal as it was found to be unintentional and beyond the control of the assessee.

Issue 2: Assessment of income, addition of Long Term Capital Gain, and treatment of the same
The Assessing Officer assessed the total income of the appellant at Rs.77,00,000/-, making an addition of Rs.75,24,000/- on account of Long Term Capital Gain from the sale of lands. The appellant disputed this assessment, claiming that the addition should be deleted. However, the AO found that the appellant had not offered the capital gains for taxation and had failed to provide supporting evidence for deductions under sections 54B and 54F. The ld. CIT(A) partly allowed the appeal, disallowing the claim of deduction under section 54B but allowing a deduction of Rs.5,50,000/- under section 54F.

Issue 3: Charging of interest under sections 234A, 234B, and 234C
The Assessing Officer charged interest under sections 234A, 234B, and 234C. The appellant contended that there was no default as per the said sections. However, the Tribunal did not find merit in this argument and dismissed the ground of appeal related to this issue.

Issue 4: Penalty proceedings under section 271(1)
The appellant argued that there was no concealment of income and requested the dropping of penalty proceedings under section 271(1) initiated by the Assessing Officer. However, this issue was not specifically addressed in the judgment, indicating that it might not have been a significant factor in the final decision.

Issue 5: Disallowance of deduction under sections 54B and 54F of the Income Tax Act
The appellant challenged the disallowance of deduction under sections 54B and 54F of the Act. The ld. CIT(A) upheld the disallowance of the claim under section 54B but allowed a deduction of Rs.5,50,000/- under section 54F. The Tribunal agreed with the decision of the ld. CIT(A) and dismissed the appeal filed by the assessee.

In conclusion, the Appellate Tribunal upheld the decision of the ld. CIT(A) regarding the disallowance of deductions under sections 54B and 54F, and the appeal filed by the assessee was dismissed. The judgment provided detailed reasoning for each issue raised by the appellant, ultimately leading to the dismissal of the appeal.