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TMI Blog2019 (9) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the appeal are allowed. Denial of deduction u/s 54F - reason for rejection was that the property has been registered in the name of the assessee only, however, the payment towards the installments have been made to HUDA from the accounts of the parents of the assessee - HELD THAT:- CIT(A) has clearly held that as the impugned asset sold is a short term capital asset there is no benefit of provision of section 54 and 54F is available to the assessee. However, as we have already held that impugned asset is a long term capital asset and the capital gain earned by the assessee is a long term capital gain and therefore, now the assessee after all other conditions are satisfied is eligible for claim of deduction u/s 54/54F of the Act. Therefore, we set aside ground No. 3 of the appeal to the file of the ld CIT(A) with a direction to decide about the claim of the assessee. Accordingly, ground No. 3 of the appeal is restored back to the file of the ld CIT(A). - ITA No.4157/Del/2016 - - - Dated:- 23-9-2019 - Shri Bhavnesh Saini, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Sandeep Kumar, CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This deed conveyance made the 12th day of December 2011 between the Haryana Urban Development Authority acting through the Estate Officer (Hereinafter called the vendor of the One Part and Smt. Bhawna Sharma w/f Munish Sharma through CPA Sh. Anand Parkash Patni S/o Sh Laxmi Narain R/o 160, SFS Flats, Gulmohar Encalve, New Delhi-110049 (hereinafter called the transferee) of the Other Part. WHEREAS the land hereinafter described and intended to be hereby conveyed urns owned by the vendor in full proprietary rights: AND WHEREAS the vendor has sanctioned the scale of the said site to the transferee in pursuance of his application dt 20.10.2011 made under Sub regidation (i) of regulation 5 of Haryana Urban Development (Disposal of Land and Building) regulations 1978 (hereinafter referred to as the said mies/regulations): to be used as a site of Residential Purpose in the Urban area of Gurgaon AND WHEREAS the vendor has fixed the tentative price of the land at ₹ 11,84,040/- (Rupees Eleven Lac Eighty Four Thousand Forty only). AND WHEREAS the vendor reserves the right to enhance the tentative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his is further established by the fact that the assessee had to seek the permission for transfer of the above said property from HUDA before it could be transferred as the ownership still lay with HUDA. 3.1.4 HUDA was paid further amounts for the said plot after the deed of conveyance and before the sale of said plot by assessee. The total amount paid by assessee towards the acquisition of the plot was ₹ 41,77,715/-. 3.1.5 Confronted with the above, the assessee through its representative letter dated 29.01.2016 submitted that: the assessee became the owner of the property by making a payment of₹ 3,15,700/-to Mr. Amar Nath Gupta on 17.12.2002 who was the allottee of the plot. Thereafter, HUDA has recorded the assessee as the allottee in place of the previous owner and raised installment demands on the assessee and issued the receipts in the name of the assessee. The conveyance deed was registered in the name of the assessee on 27.12.2011 after HUDA had received the tentative sale price of the plot subject to payment of enhancements as and when raised by it. The date of the ownership of the property may be taken t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopment Authority - Whether to be treated as construction for the purposes of capital gains 1. Sections 54 and 54F provide that capital gains arising on transfer of a longterm capital asset shall not be charged to tax to the extent specified therein, inhere the amount of capital gain is invested in a residential house. In the case of purchase of a house, the benefit is available if the investment is made within a period of one year before or after the date on which the transfer took place and in case of construction of a house, the benefit is available if the investment is made within three years from the date of the transfer. 2. The Board had occasion to examine as to whether the acquisition of a flat by an allottee under the Self-Financing Scheme (SFS) of the D.D.A. amounts to purchase or is construction by the D.D.A. on behalf of the allottee. Under the SFS of the D.D.A., the allotment letter is issued on payment of the first instalment of the cost of construction. The allotment is final unless it is cancelled or the allottee withdraws from the scheme. The allotment is cancelled only under exceptional circumstances. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 17 lakhs by the mother of the assessee. Thus, the assessment order u/s 143(3) of the Act was passed on 03.02.2016 determining the total income of the assessee at ₹ 7672290/-. The assessee aggrieved with the order of the ld AO preferred an appeal before of the ld CIT(A). 4. The ld CIT(A) further held as under:- 4. Findings/ Determination I have examined the facts at hand and have duly heard the counsel. Ground nos. 1 and 4 are general. Ground nos. 2 and 3 are connected and are being disposed off in a consolidated manner. The dispute in this case is (i) Whether the property was a short-term capital asset or a long-term capital asset. ? (ii) Whether the appellant was eligible for benefit u/s 54F? (iii) Whether the appellant was eligible for benefit u/ s 54 ? 4.1 The AO notes at paras 2, 3 till 3.1.8 as follows:- 2. The assessee had claimed a deduction of ₹ 66,93,638/- u/s 54 of the IT Act, in the return filed of a plot of land bearing no. 72 in Sector-43, Gurgaon which was sold, on 28.03.2013 for a. total consideration of ₹ 1,18,50,000/ after claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to ₹ 41,77,712/- and the sale consideration of ₹ 1,18,50,000/- is brought to tax by making an addition of ₹ 76, 72,288/ - to the returned income of rupees NIL. 4.2 The AO further notes from paras 3.3.4 till para 5 as follows:- 3.3.4 Facts of the case The property has been registered as per the conveyance deed, in the name of Ms. Bhawna Sharma (the assessee) only. The payments towards the installments have been made to HUDA from the accounts of the parents also. Only an amount of ₹ 24,78,500/- has been paid from the account no 32661641151 which as per the statemen t of account stood, in. the name of Mr, Mu.ni.sh Sharma. husband, of the assessee to which the name of the assessee Mrs. Bhawna Sharma has been added hand written . It cannot be said with certainty whether the funds in the account belonged to the assessee as her name is added manually to the name of account holder Mr. Munish Sharma. The total consideration claimed to have been paid to HUDA is of ₹ 41,77, 712/-. Under the circumstances, the assessee can be the owner of the property as a donnee i.e. through gift but then section 64 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) W/frere the assessee purchases, within the period of 30[two yearsJ after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head Income from house property , other than the new asset, 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 such new asset as pro vided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head Capital gains relating to long term capital assets of the previous year in which such residential house is purchased, or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ......................... 5. Hence, the total income of the assessee is assessed u/s 143(3) at ₹ 76, 72,290/- after rounding off of ₹ 76. 72.287/7 ^-. - 28SA of the IT Act, 1961, Interest u/s 234A/234B/234C/234D is charged as applicable. Necessary forms are issued in the context. Penalty proceedings u/s 271(l)(c) are being initiated separately for concealment and filing of inaccurate particulars of income 4.3 The appellant had sold an asset being residential plot of 220 sq. mts. Bearing plot no 72 at sector 43, Gurgaon for a consideration of ₹ 1,18,50,000/- vide sale deed dated 28.03.2013. Thus, the date of sale of asset is established as 28.03.2013.] 4.4 The computation of total income by the appellant as in the return of income is follows:- Income from Capital Gain (Chapter IV E) Long Term Capital Gain Plot No. 72 Sec 43 Gurgaon 28.03.2013 11850000 Sales Consideration Less . indexed co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellant got possession of the property bearing plot no, 72 at Sector 43, Gurgaon vide sale deed/ conveyance deed Vasika no 27259, on 27.12.2011. Thus, the date of acquisition of the asset in question is established as 27.12.2011. 4.6 The property in question bearing plot no. 72, Sector 4.3, Gurgaon was allotted by HUDA as per reallotment letter no. 8871 dated 27.12.2002 to the appellant. The appellant is trying to read date of allotment as date of possession. This is not the case. As per the accompanying Form C of HUDA dated 31.05.2002, at paras 4,5,6 and 7 it has been elaborated as follows:- 4. In case you refuse to accept this allotment you, shall communicate your refusal by a registered letter within 30 days from the date of issue of this allotment letter, failing which this allotment shall stand cancelled and the earnest money deposited by you shall he forfeited, to authority and. you shall have no claim for damages. 5. In case you accept this allotment please send you acceptance by registered post alongwith an amount of ₹ 177606.00 within 30 days from the date of issue of this allotment letter, which toget ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was paid by the assessee. This is further established by the fact that the assessee had to seek the permission for transfer of the above said prope3rty from HUDA' before it could, be transferred, as the ownership still lay with HUDA. 3.1.4 HUDA was paid, further amounts for the said plot, after the deed, of conveyance and. before the sale of said plot by assessee. The total amount paid by assessee towards the acquisition of the plot was ₹ 41,77,715/- 4.8 Provisions of Section 54(1) read as follows: - 54.[(1)] [Subject to the provisions of sub-section (2). where, in the case of an assesseeb being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset, being buildings or Slands appurtenant thereto, and being a residential housed, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of 9jone year before or two years after the date on which the transfer took place purchased 10], or has within a period of three years after that date 11 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 the original asset, is chargeable under the head Income from house property .] Explanation.-For the purposes of this section.- net consideration 29. in relation to the transfer of a capital asset, means the full value of the consideration received, or accruing as a result of the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty Act. This view is fortified by the decisions of the Tribunal/Hon hie High Courts in following cases a. Praveen Gupta vs ACIT (137 TTJ 307) (ITAT Delhi) b. CIT vs Laxmi Devi Ratani (2005) 198 CTR(MP) 336 c. CIT vs Tata Services ltd. 122 ITR 594 d. CIT vs Vijay Flexible Containers. 186 ITR 693 (Bom.) e. CIT vs Mormasji Man Charji Vaid 168 CTR(Guj.)(FB) 565 f. Arundhati Balkrishna vs CIT (1982) 29 CTR (Guj.) 85 g.Shri Vembu Vaidyanathan, Mumbai ITA NO.5749/Mum/2013 h. DCIT Vs Deepak Shashi Bhusan Roy (ITAT Mumbai) i. CIT Vs K Ramakrishanan 48 taxmann.com 55 (Delhi), 225 Taxman 123, 363 ITR 59 j. Ms. Madhu Kaul v. CIT [2014] 363 ITR 54/225 Taxman 86 Punjab and Haryana High Court. k.Anita D Kanjani vs. ACIT (ITAT Mumbai) I.T.A. No.2291 /Mum/2015 1. CIT v. S R Jeyashankar (2015) 373 ITR 120 9Mad HC) m. CIT v. A Suresh Rao (2014) 223 Taxmann 228 (Kar HC) n.Vinod Kumar Jain v. CIT (2012) 344 ITR 501 (P H_HC) o.CIT v. Jitendra Mohan (2007) 165 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the Constitution, tax can be levied only if it is authorized by law. The taxing authority cannot collect or retain tax that is not authorized. Any retention of tax collected, which is not otherwise payable, would be illegal and unconstitutional. 2. The Supreme Court of India in CIT v. Shelly Products and another 261 ITR 367 held that if the assessee has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of income-tax or is not income within the contemplation of law, the assessee may bring the same to the notice of the assessing officer, which if satisfied, may grant the assessee necessary relief and refund the tax paid in excess, if any. 3- In CIT v. Bharat General Reinsurance Co. Ltd. 81 ITR 303 (Del), this court held that merely because the assessee wrongly included the income in its return for a particular year, it cannot conferjurisdiction on the department to tax that income in that year even though legally such income did not pertain to that year. 4. The Bombay High Court in Balmukund Acharya vs DCIT, CIT and UOI 310 ITR 310 held that Tax can be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equer with an inbuilt idea of fairness to taxpayers. 6. The ld DR vehemently supported the order of the ld AO and ld CIT(A). 7. We have carefully considered the rival contentions and also perused the orders of the lower authorities. The first issue that needs to be decided is whether the asset sold by the assessee is a long term capital asset‟ or short term capital asset‟. The brief controversy between the assessee and the revenue is that the revenue says that date of conveyance deed by Haryana Development Authority in favour of the assessee made on 27.12.2011 shall be considered as the date of acquisition of asset and such asset is sold on 28.03.2013 , the impugned asset is held for less than 36 months, it is a short term capital assets. The assessee says that the assessee was transferred allotment letter from original allottee of land by HUDA on 31.05.2002 and therefore, from the date of allotment itself the assessee held the property for more than 36 months, hence the long term capital asset. Now the above issue is clearly covered in favour of the assessee by the decision of the Hon‟ble Bombay High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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