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TMI Blog2015 (5) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the residential house thereon then the aggregate cost should be considered for determining the quantum of deduction U/S 54F provided that the acquisition of plot and also the construction thereon are completed within the period specified in the section. The assessee purchased the land on 28.12.2007 and construction was undertaken on this land which was completed within a period of 3 years as required under the provisions of section 54F of the Act. - Decided in favour of assessee. Addition on account of share transaction - no details were filed during the assessment proceedings in respect of purchase and sale of shares and therefore the above amount was added back to the appellant's income as per AO - CIT(A) deleted the addition - Held that:- the purchase and sale of shares has been made through the bank account of the assessee, securities transactions tax has been paid on the transactions, all the payments have been made and received through cheque and the transactions have been confirmed by the brokers by way of the ledger accounts, the disallowance made by the AO was not justified, and therefore it was rightly deleted by the ld CIT (A). - Decided against revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that in the e-Return filed by the assessee on 30.7.2008, he declared total income of ₹ 16,59,450/-. The case was selected for scrutiny through CASS. The assessee is an individual and is the Director of M/s Anand NVH Products P Ltd. and M/s Kromex International Pvt. Ltd. and has shown income under the head salary, Capital Gain and Income from other sources . As per computation of income filed by the assessee, assessee has shown Nil income under the head Long Term Capital Gain after claiming the deduction u/s. 54F of the Act amounting to ₹ 2,68,21,050/-. As per an AIR information received by the AO, the assessee made payments to the tune of ₹ 17,47,917/- through credit card and has made a share transaction of ₹ 95,38,589/- during the year under consideration. In the assessment order, the AO notes that none appeared on 23.11.2010, 25.11.2010 and notice to the assessee to attend the proceeding on 06.12.2010, giving the final opportunity to appear or the assessee was informed that ex-parte assessment will be made for non compliance of this notice. On failure of the assessee to turn-up, the AO completed the assessment u/s. 143(3) of the Act and made the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. According to the ld DR, the CIT (Appeal), erred while deciding this issue in favour of the assessee by accepting these contentions. 10. The ld DR further submitted that the key issue that is to be decided whether the assessee constructed a residential house prior to 11.12.2010 (i.e 3 years from the date of capital gain accrued to him on account of sale of shares on 12.12.2007. According to the ld DR upon a close examination and analysis of the evidence placed on record, vide Paper Book dated 06.03.2013 and subsequent Paper Book dated, 30.O1.2015 there are several infirmities and incongruities in the evidence adduced by the assessee. According to him much emphasis has been placed upon the Architect s Certificate dated 05.04.2011 which is available on page 62 of the Paper Book dated 30.01.2015. It has been certified by the ld AR in the paper book that the same was available before the lower authorities i.e. Assessing Officer as well as CIT(A). However, it was pointed out by the ld DR that as per the original assessment records the said certificate was not filed during the assessment proceedings. Further, according to him, it is also not mentioned in the submissions filed befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m that the property was purchased in 2007 and construction has been completed in the month of September, 2010, which evidence alone does not support assessee s claim that property was constructed by September, 2010. The ld DR has submitted that the assessee has also placed reliance upon the assessment order of Joint purchaser of the plot who had also claimed exemption u/s 54F namely Smt. Inderjeet Kaur Anand and Savneet Kaur Anand referred to Page 48 to 57 of PB dated 30.01.2015. In this regard, it was submitted by the ld DR that an oversight in a particular assessment proceeding cannot be relied upon in the present proceeding to argue that similar view is required to be taken. 11. In view of the aforesaid contention, according to ld DR it would be evident that the house has not been constructed prior to 11.12.2010. And there is no evidence of payments being made by the assessee to various contractors and suppliers. According to him there are numerous incongruities and infirmities in the bills submitted by the assessee. According to him, the assessee has not brought on record the MCD's sanction plan and the completion certificate and thus additional evidence which was not av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record and the report of the AO and the ITI, the disallowance made by the AO on account of deduction claim u/s 54F is not as per law. And in the light of the Certificate issued by the Counsel for the assessee dated 30.01.2015 in the paper book, wherein it has been clearly stated that no new evidence is adduced in the Paper Book for the first time before us so, we are not inclined to disbelieve the said certificate issued by the Ld. Counsel of the assessee that the Architect s Certificate dated 05.04.2011, was filed before the authorities below which is annexed at page No.62 in its Paper Book-II, which is reproduced below:- Sharad Trivedi Architects Sector-C, Block-1, H.No. 1066, Vasant Kunj, New Delhi - 110 070 Ph: 9811580135 Ref: CERT/E-15/PUSP/R001 Dated : 05/04/2011 To Mrs. Savneet Kaur Anand Others E-15, Puspanjali Vill : Bijwasan, New Delhi - 110 061 This is to certify on basis of site-inspection and the records made available by the owners, that construction work for the residential building on (Khasra No. 6//11/2, 6//20/3, 7/15,7/1 min 7/27 of village Bijwasan) Plot No. E-15, Puspanjali, Village Bijwasan, New Delhi belonging to Ms. Savne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in the case of CIT Vs. Sambandam Udaykumar 2012 - TIOL- 217 - HC - KAR - IT has held as under.- The intention of the legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are 'purchased' or 'constructed'. For such purpose, the capital gain realized should have been invested in a residential house. The condition precedent for claiming benefit under the said provision is the capital gain realized from sale of capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house. If after making the entire payment, merely because a registered sale deed had not been executed and registered in favour of the assessee before the period stipulated, he cannot be denied the benefit of section 54F of the Act. Similarly, if he has invested the money in construction of a residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. All the transactions were through bank account. A perusal of Copy of bank account (paper book -ii page No.101-113) reveals that the details of the share transactions have been submitted by the assessee has been looked into by both the authorities below and corroborated the aforesaid fact. The contention of the AO in the assessment order that no details regarding the investment in shares have been filed by the assessee need to be seen in the light of all these evidences which was adduced before the appellate authority support the contention of the assessee that no opportunity was granted to him to adduce these evidence by the AO. All the payments for purchase of shares has been made from the bank account of the assessee and therefore, it cannot be said that the source for investment of funds in purchase of shares is not explained. Copy of ledger accounts of Satguru Capital and Finance (P) Ltd. Parasram Holdings (P) Ltd. has been filed by the assessee which were duly sent to the AO. The AO has not brought any facts on record to show that the above purchases or sales of shares were not from the bank account of the assessee. We find that securities transactions tax of ₹ 15,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord by the AO in their respective scrutiny assessment order. No evidences have been brought on record by the AO to show that the expenditure was either personal in nature or not related to the business. We concur with the observation of the ld CIT (A) that in the absence of any findings or evidence on record to show that the expenditure was incurred by the assessee was for non business purposes and also in view of the fact that the payments have been made through cheques by the companies in which the assessee is a director and also in view of the fact that the above expenditure has been accepted by the department in the assessments of these companies in which the assessee is a director, the disallowance made by the AO is not based on facts and it cannot be said that the credit card expenses were not incurred on behalf of the companies for business purpose in which the assessee was a director. However the ld CIT(A) have considered the fact that some personal expenditure could also have been incurred by the assessee, so the disallowance made by the AO was rightly restricted to 5% of credit card expenses of ₹ 17,47,917/-. The remaining disallowance was rightly deleted by the ld ..... 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