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TMI Blog2016 (7) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... vement which the assessee was entitled to deduction from the sale consideration. This fact gets further proved when we looked into the income-tax return of other co-owners who have claimed deduction as cost of improvement incurred towards construction of the immovable property which has been sold thereafter. However, assessee failed to claim the deduction of ₹ 3,06,250/- as cost on improvement rather it was claimed as deduction u/s 54F of the Act at the time of filing of revised return. In these circumstances, we are of the considered view that assessee is not eligible for any deduction u/s 54F of the Act as there has been no investment in a residential property and also the claim of the assessee for getting deduction of ₹ 306,250/- incurred towards cost of construction, to be reduced from the sale consideration of ₹ 7,50,000/- shown, cannot be entertained as it was not claimed in the return of income and certainly one cannot get the benefit of rightful claim if it has not been put forth in the return of income and in the given case assessee has changed the stories for getting deduction of ₹ 3,06,250/- and has miserably failed to make proper claim at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore ld. CIT(A) was dismissed. 4. Now the assessee is in appeal before the Tribunal. 5. Ld. AR submitted that assessee received 1/6th share of sale consideration at ₹ 7,50,000/- and after reducing the index cost at ₹ 38391/-, long term capital gain worked out at ₹ 7,11,609/-. Against the long term capital gain of ₹ 7,11,609/-, deduction u/s 54F of the Act was claimed for investment in a residential property vide agreement dated 31.3.2011 at ₹ 3,06,250/- towards purchased residence from assessee s brother and grand mother and ld. AR further submitted that the said purchase deed could not be registered due to the death of assessee s father and, therefore, assessee should have been allowed the claim u/s 54F of the Act. 6. On the other hand, ld. DR supported the orders of lower authorities. 7. We have heard the rival contentions and perused the material on record. Assessee has raised various grounds of appeal ranging from 1 to 6 but the solitary grievance revolves against the action of ld. CIT(A) for confirming the addition of ₹ 3,06,250/- made by ld. Assessing Officer by not allowing deduction 54F of the Act for investment in residential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajnishkumar D. Hirani Thakker with 16/05/2003 1947 170 to 212 8 5 Hardeshkumar V. Hirani 6 Kavitaben Hardeshkumar Hirani 23/06/2003 2663 213 to 252 8 4. The copy of the purchase deed of the appellant bearing no. 1947 dated consideration of ₹ 25000/-is furnished herewith. (Page 38 to 42), 5. The appellant along with other co-owners were granted .permission for construction on the said plots bearing no. from 88 to 252 by Dhanera Municipality on 22/07/20.05 vide permission no,27 and completion certificate from Dhanera Municipality was also, obtained on 20/04/2006. (Page 8) 6. The appellant and other co-owners constructed Guest house (Ground 1st Floor), kitchen, restaurant shop and tubewell etc. on the said land. (Page I to 13.) 7. The total area of plot i.e. 6160.87 Sq.mt. and construction of 650 Sq.mt. constructed on the above said 165 plots were sold for ₹ 60,00,000/- to seven persons and details of the payment given by purchasers to va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 187500 ₹ 187500 63 6 Hardesh Hirani V. 12.50 ₹ 750000 ₹ 187500 ₹ 125000 ₹ 312500 67 100 ₹ 50,00,000 ₹ 14,81,250 ₹ 8225000 ₹ 23,06250 10) Smt. Mithiben Mohanla! Thakker and Mahendrakuamr D Hirani have credited the above amount received towards cost of construction from various sellers and remaining amount is shown as their income. Copy of their property a/c, statement of income and return receipt for A.Y.2011-12 is also furnished herewith. (Mithiben - page 68 to 70; (Mahendrabhai Page 60 to 63) 11. All the sellers except the appellant has shown the amount given towards cost of construction as cost of transfer in their statement of income and return and same is accepted by the department. 12. The appellant has also mentioned in the statement of income as construction instead of cost of construction. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 187967.60 (page3) In AY 2011-12, the outstanding balance of ₹ 187967.60 was adjusted by the appellant towards his cost of construction to be paid to Smt. Mithiben M Thakker by passing journal entry. There being outstanding debit balance of Smt. Mithiben M Thakker, there was no need to make the payment by cash or cheque tor contribution towards cost of construction, (page 4) Copy of Mithiben M Thakkefs account from books of appellant (page 1 to 4) and copy of appellant's account from books of MiLhiben M Thakker is furnished herewith for your kind reference (Page 5 to 8) 4. With regard to payment to Mahendrakumar Dilipbhai, it is to submit that appellant has taken unsecured loan from Mahendrakumar Dilipbhai the entire outstanding loan including contribution for construction of ₹ 125000 totaling ₹ 908450 is paid by account payee cheque Copy of bank statement of appellant Mahendrakumar Dilipbhai is furnished herewith (page 9-10) The details of outstanding loan of Mahendrakumar Dilipbhai in books of appellant is as under: Date Outstanding Loan Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with in accordance with the following provisions of this section, that is to say,- ( a ) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45 ; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: [Provided that nothing contained in this sub-section shall apply where- (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in subsection (1), then,- ( i ) the amount by which- (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invested by his grandmother and brother which was subsequently repaid by the appellant and therefore appellant has claimed these expenses of ₹ 3,06,250/- against the capital gain earned on the sale of plot of land. No such explanation was given by the appellant before the AC and in fact it was claimed that he has actually purchased a new residential property from his grandmother and brother. Appellant even produced an agreement on ₹ 100 stamp paper. Before the AO, appellant gave the explanation for explaining his eligibility for exemption under section 54F of the Act. Now, once it is proved by the AO that appellant has actually not made any investment in new residential property, he has come up with a new story of investment by his relatives: Appellant himself has claimed exemption under section 54F of the Act which is allowable only if part of sale consideration is invested for purchase of new residential property. From the facts of the case, it is clear that appellant has not invested any part of the sale consideration for purchasing new residential house. Still, in order to ensure natural Justice, by order sheet noting dated 27/4/15, AR of the appellant was directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income assessee has claimed deduction u/s 54F of the Act for ₹ 3,06,250/- claiming the same as investment in residential house but when the matter came up before ld. CIT(A) the facts relating to the impugned claim of ₹ 3,06,250/- were put forth by the assessee through which it was made clear that ₹ 3,06,250/- was actually the cost of improvement which the assessee was entitled to deduction from the sale consideration. This fact gets further proved when we looked into the income-tax return of other co-owners who have claimed deduction as cost of improvement incurred towards construction of the immovable property which has been sold thereafter. However, assessee failed to claim the deduction of ₹ 3,06,250/- as cost on improvement rather it was claimed as deduction u/s 54F of the Act at the time of filing of revised return. It was incumbent on the assessee that if the claim of deduction u/s 54F was not correct then he could have revised the return before completion of assessment proceedings to put forth his claim under the right provisions of the Act which he failed. More so even during the course of assessment proceedings also, assessee submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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