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TMI Blog2020 (11) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... act ignoring the fact that, the learned Assessing Officer infact has not allowed any such exemption in the assessment. 5. The learned CIT(A) erred in not considering the amount of Rs. 55 lakhs which was retained by the Commissioner in the PD account despite an application made by the appellant U/s.132B of the act, thereby preventing the appellant from making any investment, for exemption under section 54F of the Act and therefore such amount retained by the commissioner should also have been considered for exemption U/s.54F of the act. 6. The learned 011(A) erred ignoring the position of law that unless a valid notice is issued under the provisions of section 143(2) of the Act there be an assessment s.143(3) of the Act and therefore the present assessment wherein no notice has been issued on the return filed for the A.Y.2013-14 is bad in law. 7. The learned CIT(A) erred in ignoring the position of law that once the appellant objects to an invalid notice, no shelter can be taken under the provisions of section 292BB of the Act. 8. The learned CIT(A) erred in confirming the levy of interest u/s 234B of Rs. 5,03,880/- ignoring the fact that cash of Rs. 55 Lakhs seized was layi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions: * Assessee deposited Rs. 44 lakh on 06/11/2012 * On the very same day the entire amount of Rs. 44 lakh was transferred to a fixed deposit account * The above fixed deposit was closed on 04/06/2013 and the maturity proceeds of Rs. 45,71,038/- was deposited in the capital gains account scheme. * On 04/06/2013, assessee withdrew sum of Rs. 20,00,025/-and again on 10/06/2013 another sum of Rs. 19,005/-was withdrawn. 5. Assessee claimed to have deposited Rs. 44,00,000/- in capital gains account scheme, in support of which, copies of passbook were filed. Ld.AO submitted that passbook reveald withdrawal of the said amount and kept in FD on same date of deposit. Ld.AO noticed that, subsequently on 04/06/2013 assessee deposited a sum of Rs. 45,17,038/- in his bank account and on same date withdrew Rs. 20,00,025/-. Ld.AO noticed that assessee again withdrew sum of Rs. 90,005/- on 10/06/2030. 6. Ld.AO, thus concluded that, assessee was not intending to utilise the amount for purpose of purchase/construction of residential property due to frequent transferring of amount from one account to another through transfer. The Ld.AO observed that in the instant case assessee frequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of assessment records observed as under: "8.4 In the instant case the notice u/s 143(2) of IT Act was issue on 19.11.2013 for the A.Y. 3 3-14. The only error in the notice was that the AO has mentioned the date of filing of Income Tax Return as 3 1.07.2013 which ought to have been on 31.07.2012. The proviso of section 143(2) of IT Act provides that no notice under clause (ii) shall be served on the assessee after the expiry of 6 months from the end of financial year in which the return is furnished Identical issues were adjudicated in the appellant's own case for the A.Y' 2007-08, A.Y. 08-09, A.Y.0910, A.Y. 2010-11 & A.Y. 2011-12." 11. On merits, assessee submitted before Ld.CIT(A) that, Rs. 44 Lacs was deposited in capital gains account scheme on 06/11/2012 and was converted into fixed deposit. Assessee submitted that, said capital gains FD account was closed and sum of Rs. 20,00,025/- was withdrawn through NEFT on 04/06/2013 and sum of Rs. 90,005/- was withdrawn on 10/06/2013. Assessee submitted that, withdrawals were meant for giving advance for purchase of site, that did not materialize, and that major portion of withdrawal, amounting to Rs. 19 lakh, was deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate it before deciding merits of the case. Ground No.6-7: 17. Ld.AR submitted that, assessee filed its return of income for year under consideration on 30/07/2013, and accordingly, assessing officer issued notice under section 143(2) of the Act, on 19/11/2013 with wrong date of filing of return. He placed reliance on page 55 of paper book wherein, impugned notice has been placed. Ld.AR submitted that, this notice refers to return of income dated 31/07/2012 for assessment year 2013-14, therefore, is not a proper notice. Ld.AR submitted that, scrutiny assessment was completed for assessment year 2012-13, under section 143(3). The Ld.AR thus submitted that, no notice under section 143(2) was issued for return of income filed on 13/07/2013 pertaining to year under consideration. It was submitted that 143(2) notice issued in respect of non existing return for year under consideration is liable to be quashed. He placed reliance on decision of orderable Supreme Court in case of Hon'ble Supreme Court in case of Hotel Bluemoon reported in (2010) 188 Taxmann.com 113 . 18. On the contrary, Ld.CIT.DR submitted that, it is typographic mistake, which automatically stands covered under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly Grounds 6-7 raised by assessee stands dismissed. 22. Ground No.3-5 are in respect of not considering deposit of Rs. 44,00,000/- in capital gains account scheme. 23. Ld.AR submitted that, during year under consideration, assessee sold property for sum of Rs. 1,04,00,000/-. He submitted that, purchaser registered sale deed for a sum of Rs. 44,00,000/- as per sub registrar value but paid entire consideration of Rs,1,04,00,000/- as mentioned in Agreement to Sell dated, 14/10/2012 in following manner: Rs. 1 lakh by cheque on 01/09/2012 Rs. 1 lakh by cheque on 14/10/2012 Rs. 55 lakh by cash on 14/10/2012 Rs. 5 lakh by cash on 17/10/2012 Rs. 42 lakh by DD on 17/10/2012 24. Ld.AR submitted that, assessee declared long term capital gain at 'nil', after claiming indexed cost of acquisition of Rs. 6,90,120/- and claimed exemption of Rs. 97,09,800/- under section 54F, consisting of Rs. 44 lakh kept in capital gains account and 55 lakh held in PD account by income tax Department. 25. The Ld.AR submitted that, Sale Deed was registered on 17/10/2012, and on same date search was conducted at premises of assessee. Pursuant to search, statement of assessee was recorded, in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreements. Ld.AR submitted that, assessee had good intention of investing in residential plot for construction, but failure on behalf of vendors to whom, in good faith, assessee paid money for acquiring plot, could not be attributed to assessee, for denying legitimate claim of exemption under section 54F. 30. On the contrary, Ld.Sr.DR submitted that, all contentions argued by Ld.AR has not been substantiated before authorities below, as has been observed by Ld.CIT(A). We have perused submissions advanced by both sides in light of records placed before us. 31. Date on which capital gain was effected was 17/10/2012. As per section 54F, time period allowed for making purchase, if it is done after the date of transfer is 2 years, and if it is construction, would be 3 years. Assessee admittedly purchased vacant site on 17/10/015 in the present facts and as per section 54F, time limit prescribed for construction of a house is within a period of 3 years from the date of transfer. 32. Before us Ld.AR submitted that assessee entered into purchase deeds, which led to withdrawal of certain amount payable as advance from capital gains account. However monies were re-deposited into the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Ld.AO is not in accordance with provisions of section 54F(4) as discussed hereinabove. We are therefore of the opinion that, assessee is eligible to claim exemption under section 54F, to the extent the amount was deposited as on 31/03/2013 i.e before the end of financial year relevant to assessment year under consideration i.e Rs. 44,00,000/-. 37. We also note that assessee has claimed that advance of Rs. 4,84,020/- was paid to telecom employees co-operative society with an intention to purchase site, and that, said amount was refunded back, since BDA did not allot the site. Ld.AR brought to our notice specific ground no.3, raised in respect of the same, as assessee is denied said amount as deduction under section 54F. We note that Ld.CIT(A) rejected assessee's contention only on the ground that no details were filed in respect of cancellation of deed with BDA. We note that this claim was made before Ld.AO during assessment proceedings. At the outset we also note that Ld.Ar fairly admitted that assessee is not eligible for deduction of Rs. 44,00,000/-. However, he submitted that the advance given proves that assessee was genuinely perusing investment in a new asset as requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays down the procedure for application and release of assets seized under section 132 or requisition under section 132A of the act. As per the provisions of clause (i) of section 132B(1), such assets have to be applied for recovery of any existing liability under the income tax act, the expenditure tax act, the wealth tax act, the gift tax act and the interest tax act and the liability determined on completion of the search and seizure assessment, including any penalty levied interest payable in connection with such assessment. The balance, if any, remaining after such adjustment, has to be forthwith released to the person from whose custody such asset was seized in accordance with the provisions of section 132B(3). On such release of money (lying in PD account), the Government is also under obligation to pay interest in accordance with the provisions of section 132B (4). 6.2 There is no provision either in the capital gains account scheme or in the section 132B of the Act to consider it mutually. In the instant case, this amount of Rs. 55 lakh was seized from the Bank locker of the Appellant and it was never to be part of consideration of the sale property mentioned in the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other dues are determined and it cannot be said or equated with the amount of prepaid taxes. The charging of interest is mandatory and are chargeable whenever there is incidence of the same. Therefore, no appeal can lie against the order charging interest if there is an in Siddons, unless it concerns are perceived an apparent non application of mind. The AO is accordingly directed to levy interest applicable as per law after taking into consideration the filing of this appellate order. Accordingly, these grounds are dismissed." From the above observation of Ld.CIT(A), it is found that provisions of section 132B of the Act governs the manner of utilisation of funds seized by the Department. If the amount seized and kept in PD account is more than the liability payable by assessee, then the assessee is entitled to interest also as per the provisions of section 132B of the Act. Accordingly, this amount cannot be treated as equal and to advance tax for purpose of computing interest under section 234B of the act. We, therefore do not find any infirmity in the observations of Ld.CIT(A). Accordingly, this ground raised by assessee stands dismissed. In the result appeal filed by as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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