9911796707
TMI Blog2019 (11) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Hence income on account of commission received from the Insurance Company was already offered to tax for the assessment year 2007-08, the same cannot be taxed for the year under consideration. Accordingly to that extent the assessment order is required to be rectified under section 154 and the amount of commission shall be deleted from the total income of the assessee. Rejecting the claim of deduction u/s 54 - house was constructed within a short period - HELD THAT:- Assessee s house construction could not be completed within a short span of two months and it took more than that time, once the construction could have been completed within three years from the date of sale of existing asset, the claim of the assessee is eligible. The AO has not conducted any enquiry to dispute the claim of existence of the residential house. Once the house was actually constructed after purchasing of the plot of land, then the construction is possible only after the said purchase vide sale deed dated 4th February, 2008. Hence once the assessee has brought on record the evidence to show that the house was in existence and the plot of land was purchased vide registered sale deed, then in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of property. The proceedings under section 147/148 were dropped by the AO on 09.03.2010 when the assessee explained in reply to the said notice that the assessee has invested the sale proceeds in purchase of residential plot and construction of house and consequently claimed deduction under section 54 of the IT Act. The AO was satisfied with the said explanation and consequently dropped the proceedings under section 147/148 of the IT Act. Whereafter, the Commissioner of Income Tax invoked the provisions of section 263 and observed that the proceedings dropped by the AO are erroneous and prejudicial to the interests of the revenue as after issuing notice under section 148 the AO ought to have completed the assessment instead of dropping the proceedings when there was no illegality in the notice issued under section 148. Thus the ld. CIT vide order dated 7th March, 2012 directed the AO to re-issue the notice under section 148 and complete the reassessment proceedings. Consequently the AO again initiated the proceedings under section 147/148 and passed the assessment order under section 143(3) read with section 263 of the IT Act. In the return of income filed in response to the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in case of Goetze India Ltd vs. CIT, 284 ITR 323 (SC) as well as decision in case of NTPC vs. CIT, 229 ITR 383 (SC) and submitted that even if the AO has no jurisdiction to accept the claim of the assessee, there is no bar for the appellate authority to entertain the claim. Thus the ld. Counsel has submitted that the AO is duty bound to assess the correct income to tax and shall not take the advantage of any mistake committed by the assessee in offering wrong income to tax. 4. On the other hand, the ld. D/R has submitted that the assessee has declared this income in the return of income filed under section 139 and, therefore, except the revised return of income, the assessee is not allowed to reduce the returned income while filing the return in response to notice under section 148 of the Act. She has relied upon the orders of the authorities below. 5. Having considered the rival submissions as well as the relevant material on record, it is noted that so far as the double taxation of the said income of ₹ 30,670/- is concerned, there is no dispute that the assessee had already offered the said income to tax for the assessment year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The assessee has sold a residential house at Kota during the year under consideration and also claimed to have purchased a plot of land at Mohali (Punjab) for a consideration of ₹ 10,00,000/- and stamp duty of ₹ 70,000/- total amounting to ₹ 10,70,000/-. The assessee also claimed that she has constructed a house on the said land through a builder and incurred the expenditure on construction of the house of ₹ 7,50,000/-. The AO has denied the claim on the ground that the assessee has failed to establish that the house was constructed within the stipulated time period provided under section 54 of the Act. The AO has also doubted the source of the fund for construction of the house. The assessee challenged the action of the AO before the ld. CIT (A) but could not succeed. 7. Before us, the ld. Counsel for the assessee has submitted that the assessee produced the sale deed by which the assessee has purchased the residential plot of land at Mohali as well as an agreement entered into with the Developer who has constructed the house. The assessee has also produced the Valuation Report in support of the cost of construction. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, it is clear that there is an withdrawal by the assessee of ₹ 8,00,000/- on two days and, therefore, the said amount of ₹ 8,00,000/- withdrawn by the assessee from her bank account clearly explained the cost of construction of house incurred by the assessee. Thus the said ground of the AO is contrary to the record and fact that the assessee has duly withdrawn the cash from the bank to meet the construction expenditure. Further, it is to be noted that the assessee is required to complete the construction of the house within a period of three years after the date of sale. Therefore, even if it is presumed that the assessee s house construction could not be completed within a short span of two months and it took more than that time, once the construction could have been completed within three years from the date of sale of existing asset, the claim of the assessee is eligible. The AO has not conducted any enquiry to dispute the claim of existence of the residential house. Once the house was actually constructed after purchasing of the plot of land, then the construction is possible only after the said purchase vide sale deed dated 4th February, 2008. Hence once the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
