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06-09-2019, Usha Mahajan, Section 271(1)(c), 54, 139(1), Tribunal Delhi

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4 months 2 weeks ago #10729 by amit
Section - 271(1)(c), 54, 139(1)
Order Date - 06-09-2019
Favouring - Assessee Partly allowed for statistical purposes
Court - Tribunal Delhi
Appellant - Usha Mahajan
Respondent - ITO
Citation - 919Taxpundit58
Appeal No. - ITA.No.231 & 232/Del./2019
Asstt. Year - 2013-2014



Both the appeals by Assessee are directed against different Orders of the Ld. CIT(A)-28, New Delhi, Dated 26.10.2018 for the A.Y. 2013-2014 and Dated 30.10.2018 for the A.Y. 2013-2014, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961.

2. I have heard the Learned Representatives of both the parties and perused the material on record.

3. In ITA.No.231/Del./2018 assessee challenged the addition of Rs.34,23,565/- on account of capital gains. The assessing officer noted that the assessee is an individual deriving income from capital gains and income from other sources during the year. As per computation of income filed by the assessee for the A.Y. 2013-14 under appeal, the assessee has claimed an exemption under section 54 of the I.T. Act amounting to Rs.51,45,226/- on account of investments made out of total long term capital gains earned on sale of Flat for Rs 75 00 Lacs at 673, Ground Floor, Pocket- E, Mayur Vihar, Phase-II, New Delhi. The assessee has invested entire long term capital gains so earned in three separate Flats in Earth Iconic Infrastructure Pvt. Ltd namely - l. EST2-490 for Rs.14,15,722/-, 2. EST2- 489 for Rs.13,32,073/- and 3. K-1003 for Rs.25,00,635/- totaling to Rs.52,48,430/- during the financial year relevant to assessment year as against the long term capital gains of Rs.51,45,226/-. The A.O. noted that claim of assessee is not allowable under section 54 of the I.T. Act, 1961. The A.O. issued show cause notice to the assessee intimating that exemption under section 54 is allowable for purchase of one residential house only. Therefore, more beneficial could be allowed as exempt in favour of the assessee. The assessee, in response thereto, submitted that she has purchased two residential units i.e., Flat Nos.ETS2 489 & ETS2 490 which are located in the same building and adjacent to each other having common facilities which has to be used by both the units. These are on the same floor, attached with each other and have to be used as a single unit. The floor plan of the residential units was submitted before assessing officer. Theassessing officer accepted the explanation of assessee that since both these flats are adjacent to each other, therefore, same were considered as one residential unit. The claim of the assessee for exemption under section 54 totaling to Rs.17,21,661/- ( Rs.8,29,850/- and Rs. 8,91,817/-) amount being paid up-to the date of filing of 1TR i.e. 17.07.2013 was allowed. The A.O. however, held that assessee's claim on payments made towards 3rd Flat No. K-1003 is not allowable under section 54 of the I.T. Act. The assessing officer made calculation of the capital gain accordingly and computed the taxable long term capital gains at Rs.34,23,565/- and made the addition accordingly.

4. This addition was challenged before the Ld. CIT(A). The assessee reiterated the submissions made before the assessing officer. The assessee claimed that the provisions of Section 139(1) includes provisions of Section 139(4) and considering this the date of furnishing the return comes to 31.03.2015 and assessee has paid all the amount before 31.03.2015. The assessee relied upon the Judgment in the case of Nandlal Sharma vs. ITO as reported in 61Taxmann 271 in which several decisions including the Judgment of Hon’ble Punjab & Haryana High Court have been referred to in the case of CIT vs. Ms. Jagriti Aggarwal
[2011] 339 ITR 610 in which it was held that “Section 139(1) includes Section 139(4)”. It was, therefore, noted that if the sale consideration is utilised for the construction or purchase of a new residential house before due date of filling of return under section 139(4), i.e., 31.03.2010. In this case, the same will be eligible for exemption under section 54 of the I.T. Act. The assessee, therefore, pleaded that considering the above fact the claim of assessee is allowable under section 54 of the I.T. Act. The Ld. CIT(A) confirmed the Order of the A.O. with regard to considering two Flats 489 and 490 as one residential unit. However, it was held that assessee would not be entitled for benefit of investment in third Flat i.e., K-1003 and following Section 139(1) of the I.T. Act, dismissed the appeal of assessee.

5. I have heard the Learned Representative of both the parties.

6. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that assessee has made the investment by paying the amounts to the builder up-to March, 2015. Therefore, as per Section 139(4) of the I.T. Act, assessee would be entitled for deduction under section 54 of the I.T. Act. He has relied upon Judgment of Hon’ble Punjab & Haryana High Court in the case of CIT, Rohtak vs. Jagtar Singh Chawla [2013] 259 CTR 388 (P & H) in which it was held as under :

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