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TMI Blog2013 (1) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... ated to the above. AO further observed that in the AY 2000-01, at the opening the assessee had a credit balance of Rs.2,89,185/-, which was a debit balance of Rs.2,06,250 at the end of the year i.e. on 31.3.2000 which is not feasible and acceptable and the AO made the disputed addition with the conclusion that the assessee excessively claimed the indexed cost of construction. In view of above, no hesitation to hold that the AO asked the assessee to produce the accounts pertaining to the expenditure made by the assessee related to a period more than three years prior to the previous year that, i.e. FY 1999-00. Therefore, CIT(A) rightly held that in view of above proviso (b)of Sec 142(1)(iii), the action of the AO was wrong and he rightly deleted the addition. Addition made on account of capital gain - assessee failed to produce any supporting evidence regarding construction of house and deposit of capital gain raised on sale of old house - CIT(A) deleted the addition - Held that:- Deduction u/s 54F is not available for the purchase of plot until a residential house is constructed over it. The intention of the assessee is relevant for this purpose which needs proper examination at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Income Tax(A), Hisar, which was partly allowed on the ground of investment in construction of house out of income from undisclosed sources and making of addition as capital gain to the taxable income of the assessee. However, the Commissioner of Income Tax(A), Rohtak, partly disallowed the appeal pertaining to addition made u/s 68 of the Act by upholding the addition made by the Assessing Officer. Now, the revenue is in appeal before this Tribunal. Ground no.3 4. Apropos ground no.3, ld. DR submitted that the Commissioner of Income Tax(A) erred in law and fact in accepting the additional evidence under Rule 46A(3) of the Income Tax Rules, 1962. The DR further submitted that the Commissioner of Income Tax(A) also erred in allowing exemption u/s 54 of the Act amounting to Rs.12,53,500 negated by the Assessing Officer ignoring the fact that the assessee did not submit any relevant evidence before the Assessing Officer during the course of assessment proceedings despite the fact that the Assessing Officer afforded reasonable opportunity of hearing. He also submitted that the Commissioner of Income Tax(A) admitted the information as additional evidence in terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal evidence is concerned, the Commissioner of Income Tax(A) enjoys the powers provided by the Statute in this regard. The Commissioner of Income Tax(A) rightly relied on the judgment of Hon ble Apex Court in the case of Kanpur Coal Syndicate (supra) and Jute Corporation of India (supra). Ground No.1 8. Apropos ground no.1, the ld. DR submitted that the Assessing Officer after due consideration of the facts and circumstances of the case and careful perusal of the capital account and other documents submitted by the assessee, rightly held that the assessee excessively claimed the indexed cost of construction at Rs.2,23,602/- and the AO rightly disallowed the same. He further submitted that the Commissioner of Income Tax(A) erred in observing that the action of the Assessing Officer was wrong and he deleted the addition on erroneous grounds. 9. The assessee s representative submitted that the Commissioner of Income Tax(A) rightly exercised his jurisdiction because the Assessing Officer did not have jurisdiction to disturb the matters already concluded for AY 2000-01 (Financial Year 1999-2000) as per Proviso (b) to Section 142(1)(iii) of the Act. 10. After careful consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is selling and purchasing various properties without offering financial details of the transaction to the revenue department. 14. The assessee s representative replied that the ld. Commissioner of Income Tax(A) did not decide the issue related to this ground and he directed the Assessing Officer to take appropriate action in AY 2007-08. He further submitted that in view of above directions of the Commissioner of Income Tax(A), this issue needs no adjudication and deserves to be dismissed. 15. After careful consideration and perusal of record, specially para no. 5.1 of the impugned order (as reproduced hereinabove), we observe that the ld. Commissioner of Income Tax(A) directed the Assessing Officer that the issue of investment in purchase and construction of residential building thereon at plot no. 634, HUDA, Hisar will be considered by the Assessing Officer in AY 2007-08. 16. As per copies of the sale deeds available on paper book, it shows that on 9.3.2005, the assessee purchased a plot no. 939 measuring 500 sq yard from Shri Pawan Kumar for a consideration of Rs.11,50,000 and the same was sold to Smt. Kanta Rani for Rs.18,50,000 on 30.3.2007 on which the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, in almost identical circumstances, claim of deduction u/s 54 of the Act was allowed by Hon 'ble Tribunal in the case of reported in 85 TTJ 173 (Jodh), when it was held as under: "The clear-cut of the case of the assessee is that the assessee had invested an amount of Rs.4,01,000. The fact that the purchase price and taking possession of the flat at Lodha Tower, Jodhpur by 30th March, 1996 when the plot at Jaipur was sold on 4th Jan., 1995 for Rs. 5 lakhs, in view of the aforesaid decisions, this amount of Rs. 4,01,000 invested by the assessee in the purchase of flat is to be held exempt under s. 54F. The intention of the assessee from the very beginning was to purchase a flat. When due to certain unavoidable circumstances, the contract did not materialise, it cannot be said that there was any hanky panky on the part of the assessee to avoid payment of tax. The assessee ultimately purchased a flat within two years from the sale of plot. The default committed by the assessee was a technical default that the assessee did not deposit the amount meant for reinvestment in the capital gain account scheme before filing return under s. 139 of the Act. Keeping in view the totali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited by him before furnishing such return in any bank account in accordance with the scheme which the Central Government has prescribed by notification in the official Gazette. In other words, in the instant case, since the plot for the purchase of the new asset had been purchased on 23.12.2005 i.e. after due date of filing of return of income, the assessee according to sub section (2) of section 54 of the Act was obliged to deposit the above capital gain in the specified bank account. However, this was not so done for the reason that the appellant had already purchased another land for construction of residential house prior to the due date of filing of the return. It is submitted that thereafter, the assessee found that, no residential house can be constructed on the above land for the reason that she did not have sufficient funds to meet costs of construction and accordingly, it could not be held that the appellant had violated the conditions specified in section 54(2) of the Act. 5.3 Without prejudice to the aforesaid, it is submitted that even assuming for the sake of an argument that, there is infringement of conditions prescribed in sub section (2) of section 54 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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