Divyesh Babulal Shah, Ahmedabad vs Assessee

आयकर अपील सं./I.T.A. No.2317/Ahd/2012 ( नधा रण वष / Assessment Year : 2009-10) Divyesh Babulal Shah बनाम/ The ITO 6/B, Harihar Society Vs. Ward-13(4) B/h. Navgujarat College Ahmedabad Ashram Road, Ahmedabad-380 014 थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : ACCPS 5043 B (अपीलाथ% /Appellant) .. (&'यथ% / Respondent)

अपीलाथ% ओर से / Appellant by : Shri S.N. Divatia, A.R. &'यथ% क) ओर से/Respondent by : Shri Dinesh Singh, Sr.DR

ु वाई क) तार,ख / सन Date of Hearing 16/04/2015 घोषणा क) तार,ख /Date of Pronounce ment 15/05/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-XXI, Ahmedabad ('CIT(A)' in short) dated 16/08/2012 pertaining to Assessment Year (AY) 2009-10. The Assessee has raised the following grounds of appeal:-

1. The order passed u/s.250 on 16-08-2012 for A.Y. 2009-10 by CIT(A)-

XXI, Abad, confirming denial of the exemptions claimed u/s.54F and 54(2) totalling to Rs.54,08,831 is wholly illegal, unlawful and against the principles of natural justice.

ITA No.2317/Ahd/2012 Divyesh Babulal Shah vs. ITO Asst.Year - 2009-10 -2-

2. The Ld.CIT(A) has grievously erred in law and or on facts in not considering, fully and properly the explanations furnished and the evidence produced by the appellant as well as passing a cryptic, non- reasoned order. The Ld.CIT() has failed to appreciate that though the appeal was adjourned to 21-8-2012 in response to the adjournment application filed on 19-7-2012 instead, the impugned order was passed on 16-8-2012 in total disregard to the said adjournment granted. The Ld.CIT(A) ought to have allowed the appellant further opportunity of CIT(A) ought to have allowed the appellant further opportunity of personal hearing because he had not opted for written submissions.

3. The Ld.CIT(A) has grievously erred in law and or on facts in confirming the denial of the exemptions u/s.54(2) of Rs.31,93,831 and u/s.54F of Rs.22.15 lacs.

4. That in the facts and circumstances of the case as well as in law, the ld.CIT(A) ought not to have denied the exemptions u/s.54(2) of Rs.31,93,831 and u/s.54F of Rs.22.15 lacs. The ld.CIT(A) has grievously erred in upholding that the appellant had failed to complete the construction of a new residential property within the prescribed time and to utilize the amounts deposited in CGA scheme so that there was failure to comply with the conditions specified in section 54.

5. Without prejudice to above and in the alternative, when the ld.CIT(A) has upheld that the amount of rS.22,15,000 should be charged in A.Y. 2012- 13, the capital gains could not be charged in A.Y. 2009-10.

It is therefore prayed that the additions totaling to Rs.54,08,831 on account of denial of exemptions u/s.54 and 54F made by the AO and confirmed by CIT(A) should be deleted.

2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 21/12/2011, thereby the Assessing Officer (AO in short) made disallowance in respect of exemption claimed of Rs.31,93,981/- on long- term capital gain and disallowance in respect of exemption claimed of Rs.22,15,000/- on long-term capital gain. Against this, the assessee filed ITA No.2317/Ahd/2012 Divyesh Babulal Shah vs. ITO Asst.Year - 2009-10 -3-

an appeal before the ld.CIT(A), who after considering the submissions, partly allowed the appeal.

3. At the outset, the ld.counsel for the assessee submitted that before the ld.CIT(A), the assessee had filed an application for seeking adjournment of hearing. However, the ld.CIT(A) proceeded to dispose of the appeal. He further submitted that the order of the ld.CIT(A) has not considered the written submissions and passed the order in a cryptic way. The ld.counsel for the assessee drew our attention towards page Nos.39 and 40 of the paper-book, wherein the application for seeking adjournment is enclosed.

3.1. On the contrary, ld.Sr.DR supported the order of the authorities below and submitted that the written submissions so filed by the assessee were duly considered.

4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the assessee had raised before the ld.CIT(A) the following grounds of appeal:-

"1) the Ld.AO has grievously erred in law and or on facts in denying the exemptions u/s.54(2) of Rs.31,93,831 and u/s.54F of Rs.22.15 lacs.

2) the Ld.AO has grievously erred in law and or on facts in denying the exemption u/s.54F of Rs.22.15 lacs.

3) without prejudice to above and in the alternative, the ld.AO has failed to appreciate that even presuming for the sake of argument that ITA No.2317/Ahd/2012 Divyesh Babulal Shah vs. ITO Asst.Year - 2009-10 -4-

the conditions specified in section 54 and 54F were not satisfied, the amounts claimed as exempt could not be brought to tax in AY 2009-10.

Thus, the AO had erred both with regard to not only the year of chargeability but also the amounts which could be brought to tax in case of failure to fulfill the conditions of exemption u/s.54 and 54F."

5. Ground No.1 before the ld.CIT(A) was that the AO erred in law and or on facts denying the exemptions u/s.54(2) of Rs.31,93,831 and u/s.54F of Rs.22.15 lacs. We find that the ld.CIT(A) had decided the issue in respect of first addition of Rs.31,93,831/- in para-4.3 of his order, by observing as under:-

"4.3. Before me similar submissions were made as mae before the AO. I have perused the order of AO, submissions made by the appellant. It is an admitted fact, even by the appellant, that the construction of new house property was not completed within the time 3 years from the date of transfer of long term capital assets. Section 54 is very clear that the new house property shall be completed within 3 years from the date of transfer of long term capital assets. The action of the AO disallowing the sum Rs.3193831 is upheld. Ground 1 is dismissed."

5.1. Similarly, the ld.CIT(A) had decided the issue in respect of second addition of Rs.22.15 lacs in concluding para-5 of his order, by observing as under:-

"5....... On the second ground of disallowing the sum of Rs.2215000 I agree with the contention of the AO that such sum was not utilized within time allowed u/s.54. The action of AO disallowing the sum of Rs.2215000 is upheld."

5.2. In respect of Ground No.3, the ld.CIT(A) had decided the issue in para-6.2 of his order, by observing as under:-

ITA No.2317/Ahd/2012 Divyesh Babulal Shah vs. ITO Asst.Year - 2009-10 -5-

"6.2. The language of the proviso is clear that an amount of Rs.2215000 shall be charged as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires i.e. AY 2012-13. The 3rd ground is allowed."

6. From the above, it is evident that the ld.CIT(A) has not controverted to the written submissions of the assessee made vide letter dated 28/06/2012. Under these facts, we are unable to confirm the order of the ld.CIT(A), therefore without entering into the merit of the case, we hereby set aside the order of the ld.CIT(A) and restore all the grounds of appeal to the file of ld.CIT(A) for decision afresh. The ld.CIT(A) is hereby directed to pass a speaking order after giving reasonable opportunity of being heard to both the parties. Thus, grounds raised by the assessee are allowed for statistical purposes.

7. In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the Court on Friday, the 15th day of May, 2015 at Ahmedabad.

Sd/- Sd/- (जी.डी.अ वाल) (कुल भारत) उपा य या यक सद य ( G.D. AGARWAL ) ( KUL BHARAT ) VICE PRESIDENT (AZ) JUDICIAL MEMBER

Ahmedabad; Dated 15/ 05 /2015 ट,.सी.नायर, व. न.स./T.C. NAIR, Sr. PS ITA No.2317/Ahd/2012 Divyesh Babulal Shah vs. ITO Asst.Year - 2009-10 -6-

आदे श क! " त$ल%प अ&े%षत/Copy of the Order forwarded to :

1. अपीलाथ% / The Appellant

2. &'यथ% / The Respondent.

3. संबं6धत आयकर आयु8त / Concerned CIT

4. आयकर आयु8त(अपील) / The CIT(A)-XXI, Ahmedabad

5. 9वभागीय & त न6ध, आयकर अपील,य अ6धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड< फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स'या9पत & त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 28.4.15 (dictation-pad 8+ pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ..11.5.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......15.5.15

7. Date on which the file goes to the Bench Clerk.....................15.5.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................