Sh. Nand Lal Jain, Chandigarh vs Assessee

Shri Nand Lal Jain, V The ACI T, L/h Smt. Om Wati Jain, Central Circle I, SCO-8, Sector 17-E, Chandigarh. Chandigarh.

PAN: AAEPL3824H

(Appellant) (Respondent)

Appellant by : Shri Vineet Krishan Respondent by : Shri S.K. Mittal

Date of Hearing : 30.03.2015 Date of Pronouncement : 31.03.2015

PER BHAVNESH SAINI,JM

This appeal by assessee is directed against the order of ld.

CIT(Appeals) Central, Gurgaon dated 15.07.2014 for assessment

year 2008-09 challenging the addition of Rs. 4,55,756/- made by

Assessing Officer by disallowing the benefit under section 54F to

the assessee and treating the sale of land at Dariya to capital

gain tax.

2. Briefly the facts of the case are that the assessee

challenged the disallowance of Rs. 4,55,756/- before ld.

CIT(Appeals) on disallowing the claim of deduction under section

54F on the sale of land at Dariya. It was submitted before ld.

CIT(Appeals) tht Assessing Officer disallowed the claim allenging 2

that details of utilization of the amount in question for

construction of residential house was not furnished which is

factually incorrect. The complete details regarding the purchase

of material for the construction were submitted before Assessing

Officer. The payments were made for purchase of cement, brick,

wood etc. All payments were made through cheques only. It

was submitted that the benefit under section 54F is not

available if the assessee has two residential houses. In the

present case, assessee is owner of only one house and the

amount was spent for its construction only. The assessee spent

the amount for construction of residential house No. 23 Sector

9, Chandigarh and assessee was not owner of any other

residential property except above. Complete details of

construction were filed before Assessing Officer. The assessee

also explained how the assessee inherited the property in

question which was constructed and was supported by all the

evidences. The ld. CI T(Appeals) confirmed the addition and

dismissed the appeal of the assessee. His findings in para 5.1

and 6 are reproduced as under :

"5.1 1 have considered the assessee's submission as well as the impugned order. Fro,r: the perusal of details furnished by the assessee the AO observed that a plot situated Village Duriya was sold for Rs. 5,14,286/-, declaring capital gain at Rs. 4,55,758/-. However as assessee did not furnished details of expenditure and as per records, assessee is already in possession of residential house therefore claim of deduction u/s 54F was disallowed. Furthermore assessee did not furnished any evidence that the sale consideration was utilized for purchase of a residential house.

On the other hand, the assessee has argued that as per the provisions of Section 54F the benefit under Section 54F of the IT. Act, is not available if the assessee has two residential houses. In the present case he is owner of only one house and the amount was spent for its construction only. That a sum of Rs. 5,69,600/- was spent for the construction of his 3

only one residential house (No. 23, Sector 9, Chandigarh). It was further stated that the complete details regarding the utilization of Rs. 4,55,758/- were duly filed before the Assessing Officer.

As per provisions for section 54F, no deduction is admissible in a case where the assessee is in possession of more than one residential house, other than the new asset. On a perusal of the notarized family settlement deed dated 27.4.2007 it is seen that House No. 23, Sector 9A has been bequeathed to the assessee (37.5%) and to Shri Rajinder Jain (62.5%). The provisions clearly allows deduction if the amount is spent on construction of a residential house which does not appear be the case here. The professed construction has not been clearly defined. A certain claim has been made so the assessee was required to evidence how and in what manner he was eligible for claiming the deduction u/s 54F. This has not been convincingly brought out. Thus, I am inclined not to interfere with the disallowance made by the AO. Assessee fails on this ground.

3. We have heard ld. Representatives of both the parties and

perused the material available on record. According to Section

54F(1), the benefit of exemption can be granted to the assessee

if the assessee has constructed a residential house within the

specified period. The assessee claimed that assessee was owner

of one house only and the amount of sale proceeds have been

invested in construction of the same property. The claim of

assessee was declined for exemption under section 54 because

the details of expenditure were not furnished. Ld. counsel for

the assessee however submitted that complete details were filed

before the authorities below which have not been discussed at

all and that it is a case of search and the property of the

assessee have been inspected by Investigation Wing also with

regard to raising of the construction by assessee. Therefore, it

is not a case of default on the part of the assessee for not

furnishing complete details with regard to construction. 4

4. Considering the submission of ld. counsel for the assessee

in the light of the details furnished in the Paper Book and

details submitted before authorities below along with the reply,

we are of the view the matter requires re-consideration at the

level of the Assessing Officer. We, accordingly, set aside the

orders of authorities below and restore the matter and issue to

the file of Assessing Officer with direction to re-decide the

matter in issue in the light of the pro visions of Section 54F and

the evidences furnished before them strictly in accordance with

law by giving reasonable sufficient opportunity of being heard to

the assessee.

5. In the result, appeal of the assessee is allowed for

statistical purposes.

Order pronounced in the Open Court on 31 s t March,2015.

Sd/- Sd/-

(T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31 s t March,2015. 'Poonam' Copy to:

The Appellant, The Respondent, The CIT(A), The CIT,DR

Assistant Registrar, ITA T Chandigarh