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TMI Blog2018 (3) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... AR at the time of hearing for which necessary endorsement was made in our file. Accordingly, the Ground Nos. 2 & 3 are dismissed as not pressed. 5. The issues to be decided in this appeal are as under:- a) Whether the ld CITA and the ld AO were justified in treating the assessee as a 'Resident' instead of 'Non-Resident' in the facts and circumstances of the case. b) Whether the ld CITA was justified in upholding the addition made towards credit found in the bank account to the tune of Rs. 71,00,000/- in the facts and circumstances of the case. c) Whether the ld CITA was justified in not giving any direction with regard to allowability of cost of construction of the property transferred by the assessee, in the facts and circumstances of the case. d) Whether the ld CITA was justified in upholding the action of the ld AO in denying the exemption u/s 54 of the Act in the facts and circumstances of the case. All these issues are interconnected and hence are taken up together and disposed off together for the sake of convenience. 6. The brief facts of this issue is that the assessee is an individual and had filed the return of income for the Asst Year 2009-10 declaring total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion made by the Stamp valuation authority for the subject mentioned property at the time of registration of the said sale deed. Hence there is no scope for determining the value u/s 50C of the Act. 6.1. The assessee considered the sale consideration at Rs. 2,21,00,000/- and worked out capital gains accordingly. The assessee claimed exemption u/s 54F of the Act in the sum of Rs. 1,33,93,317/-. During the course of assessment proceedings, the assessee filed a revised computation of income dated 23.3.2015. The assessee filed an affidavit during the course of assessment proceedings duly notarized on 27.3.2015 that she had received total sale consideration of Rs. 2,21,00,000/- on sale of property. 7. The ld AO observed that the assessee ought to have shown this amount of Rs. 2,21,00,000/- in the year 2008 and not in the year 2015 and accordingly rejected the plea of the assessee. Accordingly, he proceeded to treat the excess credit lying in the bank account over and above the sale consideration reflected in the sale deed amounting to Rs. 71,00,000/- as unexplained cash credit u/s 68 of the Act. 7.1. The ld AO with regard to the claim of section 54F of the Act observed that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- and (ii) Cheque No. 987962 dated 17.4.2008 drawn on Development Credit Bank , Shakespeare Sarani Branch, Kolkata for Rs. 21,00,000/- aggregating to Rs. 71,00,000/- , which according to the assessee is only sale proceeds of the property at 45, Bhupen Bose Avenue, Kolkata - 700004 received from the buyers of the property namely Ajoy Dalchand Gupta and Amit Dalchand Gupta residing at GUPTA House, Sanpara Railway Station, Navi Mumbai - 400905. It was pleaded that the plea of the assessee has been completely disbelieved by the ld AO without making any enquiry with the bankers to understand which would have made things clear that these amounts of Rs. 71,00,000/- were given only by the buyers of the property. Alternatively, if the verification had been carried out with the buyers , whose address was very much available with the ld AO, things might have been very clear. Without resorting to any verification, the ld AO simply disbelieved the version of the assessee. The assessee produced the latest addresss of the buyers of the property before the ld CITA. Communication was also made with the ACIT, Circle 22(1), Piramal Chambers, 9th Floor, Jijibhoy Lane, Laibaug, Parel, Mumbai - 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house amounting to Rs. 1,33,93,317/- out of the sales consideration of the property sold during the assessment year 2009-10 which is exempted u/s 54 of the Income Tax Act, therefore the assessee not liable for any tax liability for any tax liability on capital gain, but the AO vindictively computed as income form capital gain amounting to Rs. 1,50,00,000/- which is confirmed by Ld. CIT(A), as such, his finding is completely arbitrary, unjustified and illegal. 6. For that on the facts of the case, the Ld. CIT(A) was wrong that the status of the appellant is "Resident" in place of 'Non-Resident Indian' which is completely arbitrary, unjustified and illegal. 7. For that on the facts of the case, the AO was wrong in adding Rs. 71,00,000/- (Rs. 71,50,000/- mentioned in AO's order) as unexplained investment deposit in bank which is completely arbitrary, unjustified and illegal. 8. For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have considered that the assessee had discharged its onus by furnishing all the relevant documents in connection with sales consideration of flat as reflected in the bank account and also proved the identity and credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the ld AR that the credit of Rs. 71,00,000/- represents sale consideration received on sale of subject mentioned property over and above the value mentioned in the sale deed at Rs. 1,50,00,000/-. Accordingly the total sale consideration of property was Rs. 2,21,00,000/- which has been rightly considered by the assessee for the purpose of computation of capital gains on sale of property. In any case, we find that the ld AO had erroneously added a sum of Rs. 71,50,000/- instead of Rs. 71,00,000/-. We hold that the assessee being a non-resident , could not have any other source other than the sale of subject mentioned property and the retnal income from yet another property which has been subjected to tax. In the instant case, the action of the assessee in depositing the two cheques received in the sum of Rs. 71,00,000/- ( 50,00,000 + 21,00,000) in the same Vijaya Bank Account along with other sale proceeds of Rs. 1,50,00,000/- comprising of various cheques, goes to prove the bonafide intention of the assessee in not hiding any amount from the eyes of the income tax department. There cannot be any other source for Rs. 71 lacs for the assessee other than being part and parcel of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said view of the Tribunal and has held that in the instant case, it could not be said that the Tribunal was wrong in having differed from the ITO and the AAC in the matter of exercising judicial discretion as to whether even after rejecting the explanation of the assessee the value of the investments were to be treated as the income of the assessee. According to the High Court, the Tribunal had not committed any error in taking into account the complete absence of resources of the assessee and also the fact that having regard to her age and the circumstances in which she was placed she could not be credited with having made any income of her own and in these circumstances, the Tribunal was right in refusing to make an addition of the value of the investments to the income of the assessee. (underlining provided by us) Respectfully following the ratio laid down in the aforesaid case and applying the same to the facts and circumstances of this case, we hold that the additional amount credited in the bank account in the sum of Rs. 71,00,000/- could not have emanated to the assessee out of some undisclosed sources but rather would have emanated only out of sale proceeds of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l before us. 10.4. We find that the assessee having purchased the land in the financial year 1999- 2000 had carried out construction during the financial year 2001-02 which is supported by the registered valuation report . The value as per registered valuation report (enclosed in pages 55 to 76 of the paper book ) is Rs. 64,31,517/-. It is not in dispute that the assessee was a non-resident even during the financial year 2001-02 which is also evident from the fact that the passport was issued to her in London on 2.5.2000. Hence out of her earnings in London, the construction cost could have been met by the assessee. In any case, there is no dispute with regard to the source for cost of construction carried out by the assessee. Hence we hold that the assessee is entitled for deduction towards cost of construction at Rs. 64,31,517/- and subject to indexation benefits. Accordingly, the question number 3 raised above is answered in the affirmative in favour of the assessee. 10.5. With regard to the claim of deduction u/s 54 of the Act, we have already held that the assessee having reinvested a sum of Rs. 1,60,16,103/- before 31.3.2009 is entitled for claim of exemption u/s 54 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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