Smt. Indira Mohanlal Jain v. Income-tax Officer, 13(3)-4, Mumbai
[Citation -2005-LL-0704-4]

Citation 2005-LL-0704-4
Appellant Name Smt. Indira Mohanlal Jain
Respondent Name Income-tax Officer, 13(3)-4, Mumbai
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 04/07/2005
Assessment Year 1997-98
Judgment View Judgment
Keyword Tags account payee cheque • revenue authorities • additional evidence • capital gain tax • advance payment • new asset • capital gains account scheme • sale of flat
Bot Summary: According to the Assessing Officer the assessee should have invested the capital gain in specifiedcapital gain account before the date of furnishing the return under section139(1) of the Act, such date was 31-8-1997. Counsel for the assessee moved anapplication for permission to adduce additional evidence as well as to raise anadditional ground of appeal. The additional ground of appeal raised by the assessee reads as under. On the strength of this receipt available at page-1 of the paper bookhe submitted that an amount of Rs. 2,50,000 wasutilized by the assessee in acquiring the new assetswithin the time available to the assessee undersection 54(2) of the Act. Admittedly the assessee could not demonstrate before the revenueauthorities below the utilization of capital gain accrued to her on sale offlat in acquiring new assets or depositing the amount in specified accountmeant for capital gain, as per the conditions enumerated in section 54(2) ofthe Act. In our opinion receipt filed before us is anessential document for adjudicating the dispute whether Rs. 2,50,000can be exempted from levy of capital gain tax under section 54 of the Act aspleaded by the assessee in the additional ground ofappeal. Ld. Assessing Officer shall redecidethe claim of assessee in excluding Rs. 2,50,000 only under section 54 of the Act from levy ofcapital gain tax.


MUMBAI BENCH J SMT. INDIRA INCOME TAX OFFICER, v. MOHANLAL JAIN 13(3)-4, MUMBAI July 4, 2005 JUDGMENT Per Rajpal Yadav,Judicial Member. - assessee is inappeal before us against order of ld. CIT(A) XIII,Mumbai dated 26-2-2002 passed for assessment year 1997-98. grievance of assessee relates to denial of benefit under section 54 ofthe Income-tax Act. 2.The brief facts of case are that assessee hadsold residential flat on 27-4-1996 which was purchased on 23-11-1976. Sheworked out capital gain of Rs. 4,54,000 and claimeda deduction under section 54 of Act. Ld. Assessing Officer found that assessee had deposited above amount in saving bankaccount No. 16748 in Dena Bank and did not deposit this amount in specialaccount meant for capital gain. According to Assessing Officer assessee should have invested capital gain in specifiedcapital gain account before date of furnishing return under section139(1) of Act, such date was 31-8-1997. However, she failed to deposit inthe specified account. second condition was that this capital gain amountought to have been utilized in purchasing new assets. According to theAssessing Officer, assessee had purchased flat andpaid advances to M/s. Sambhav Construction, however,such advance payment was made on 4-10-1997, which is subsequent to thestipulated date. In this way both revenue authorities have conclusivelyheld that amount of capital gain was neither utilized for purchase of newassets nor it was deposited in specified capital gain account within thestipulated period, hence, assessee did not fulfil requisite condition enumerated in section 54(2)of Act and benefit is not available to her. 3.Before us ld. counsel for assessee moved anapplication for permission to adduce additional evidence as well as to raise anadditional ground of appeal. additional ground of appeal raised by assessee reads as under. "Onthe facts and in circumstances of case and in law CIT(A) erred indisallowing exemption under section 54 of Rs. 2,50,000 for advanceamount paid towards purchase of new flat within 1 month of sale of oldflat." Inorder to substantiate above ground of appeal ld. counsel submitted that anamount of Rs. 2,50,000 was given as advance to M/s. SambhavConstruction within one month of sale of old asset. He submitted that thisamount was paid through account payee chequebearing No. 30841 dated 24-5-1996 drawn on Dena Bank. Due to some inadvertencethe receipt issued by Builders could not be produced before AssessingOfficer. On strength of this receipt available at page-1 of paper bookhe submitted that amount of Rs. 2,50,000 wasutilized by assessee in acquiring new assetswithin time available to assessee undersection 54(2) of Act. Therefore, this should be exempted from levy ofcapital gain tax. For buttressing his contention he further drew our attentiontowards summary of bank statement for period 1-4-1996 to 31-3-1997 andsubmitted that assessee bepermitted to adduce this additional evidence and amount already utilizedfor acquiring new asset be excluded from capital gain tax. On otherhand, ld. DR relied upon orders of revenue authorities below and submittedthat at this belated stage assessee should not bepermitted to adduce additional evidence and in caseher additional evidence is relied upon then opportunity to AssessingOfficer be granted to verify genuineness of these receipts etc. 4.We have duly considered rival contentions. Admittedly assessee could not demonstrate before revenueauthorities below utilization of capital gain accrued to her on sale offlat in acquiring new assets or depositing amount in specified accountmeant for capital gain, as per conditions enumerated in section 54(2) ofthe Act. However, documentary evidence produced before us in shape ofadditional evidence prima facie indicate that amount of Rs. 2,50,000was utilized in acquiring new asset. This payment was alleged to have beenmade through account payee cheque. No doubt, accordingto Rule 29 of ITAT Rules no party has inherent right to produce any documentsor any evidences as additional evidence. Theopening line of Rule provide that "the parties to appeal shall notbe entitled to produce additional evidence either oral or documentary beforethe Tribunal" - these expression have been used with object whichcontemplates that no party should be allowed to fulfilthe lacuna of its case and to manipulate evidence. However rule furtherempowers Tribunal to permit party for additional evidence in case it isfelt that such evidence is essential for justdecision of controversy. In our opinion receipt filed before us is anessential document for adjudicating dispute whether Rs. 2,50,000can be exempted from levy of capital gain tax under section 54 of Act aspleaded by assessee in additional ground ofappeal. Since payment to builder was made through account payee cheque that payment must have been debited from assessee's account in May 1996 itself, excluding any scopeof manipulation. Therefore, we take this evidence on record. On basis ofthe evidence produced before us we find merit in contention of ld. counsel,therefore, we set aside issue to file of Assessing Officer for freshverification. Ld. Assessing Officer shall redecidethe claim of assessee in excluding Rs. 2,50,000 only under section 54 of Act from levy ofcapital gain tax. addition regarding rest of amount is confirmed. assessee will be at liberty to produce any other evidencein support of her claim, i.e. certificate from bank etc. She is furtherdirected to co-operate with Assessing Officer. Assessing Officer shallgrant due opportunity of hearing to assessee priorto deciding issue. With above observation this appeal is partlyallowed. *** Smt. Indira Mohanlal Jain v. Income-tax Officer, 13(3)-4, Mumbai
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