IN INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA No. 893/CHD/2016 Assessment Year: 2012-13 Shri Harpal Singh, Vs ITO, M/s Banga Metals, Ward-V(2), 435, Industrial Area-B, Ludhiana. Ludhiana. PAN: ABTPS8247F (Appellant) (Respondent) Appellant by : Shri Sudhir Sehgal Respondent by : Shri S.K.Mittal, DR Date of Hearing : 15.09.2016 Date of Pronouncement : 19.09.2016 ORDER This appeal by assessee has been directed against order of ld. CIT(Appeals)-2 Ludhiana dated 17.05.2016 for assessment year 2012-13. 2. I have heard ld. Representatives of both parties and perused material on record. 3. ld. counsel for assessee did not press ground No. 1. Same is dismissed being not pressed. 2 4. On ground Nos. 2 to 4, assessee challenged order of ld. CIT(Appeals) in rejecting claim of assessee under section 54F of Income Tax Act. 4(i) brief facts in this case are that assessee filed its return of income for A.Y. 2012-13 on 28.09.2012 showing income of Rs. 4,99,362/-. assessee was engaged in business of trading of Ferrous & Non ferrous Metals during period under consideration. During course of assessment proceedings AO noticed that assessee has sold plot during year for Rs. 29,20,000/- and earned LTCG of Rs. 16,37,786/-. entire LTCG has been claimed to be exempt section 54F of Income Tax Act, 1961 on account of investment of Rs.36,00,000/- in residential house. AO further noted that residential house has been purchased after availing loan of Rs. 50,00,000/- from M/s India Bulls Housing Finance Limited. As per section 54F of Income Tax Act, if sale proceeds are appropriated for any other purpose, except to purchase property and new asset is acquired out of borrowings, assessee would not be entitled for deduction. Therefore, assessee was asked as to why deduction u/s 54F may not be disallowed to extent of Rs. 25,00,000/- out of total cost of Rs. 35,54,710/-(1/2 share) as it was paid from loan raised from M/s India Bulls and net consideration has been appropriated for different purpose i.e. utilised in own business. AO was not satisfied 3 with appellant's submission. AO also noted that sale proceeds of capital asset received by assessee were utilized or appropriated for different purpose i.e. utilised in own business and assessee had insufficient personal funds to acquire residential house and residential house was purchased from loans borrowed from bank, as admitted by assessee. Therefore, Assessing Officer was of view that capital gains accrued to assessee was not wholly appropriated towards purchase of residential house within specified period, therefore, assessee was not entitled to claim exemption of whole capital gain under section 54F of Act. Accordingly, Assessing Officer recomputed income from long term capital gain and made disallowance of Rs. 5,83,076/- under section 54F of Income Tax Act,1961. 5. assessee challenged addition of Rs. 5,83,086/- under section 54F of Act before ld. CIT(Appeals) and assessee relied upon decision of Hon'ble Punjab & Haryana High Court in case of CIT V Kapil Kumar Aggarwal 284 CTR 75 (382 ITR 56). ld. CIT(Appeals) did not accept claim of assessee and dismissed appeal of assessee. 6. After considering rival submissions, I am of view matter requires re-consideration at level of Assessing Officer. ld. counsel for assessee submitted that assessee purchased house prior to one 4 year of date of sale of property and submitted that issue is covered in favour of assessee by judgement of Hon'ble Punjab & Haryana High Court in case of Shri Kapil Kumar Aggarwal 382 ITR 56 (supra) in which it was held as under : In order to avail of benefit under section 54F of Income-tax Act, 1961, assessee is required to either purchase residential house within period of one year before or two years after date on which transfer takes place or construct residential house within period of three years after that date. Section 54F of Act nowhere envisages that sale consideration obtained by assessee from original capital asset is mandatorily required to be utilised for purchase or construction of house property. No provision has been made by statute that in order to avail of benefit of section 54F of Act, assessee has to utilise amount received by him on sale of original capital asset for purposes of meeting cost of new asset. For assessment year 2009-10, assessee claimed benefit under section 54F of Income-tax Act, 1961. Assessing Officer disallowed it on ground that assessee had not entirely sourced amount invested in his new asset from capital gains receipts. Commissioner (Appeals) con firmed this. Tribunal allowed claim of assessee. On appeals by Department : Held, dismissing appeals, that investment made by assessee was within stipulated time and more than capital gains earned by him. Therefore, assessee was entitled to benefit under Section 54F of Act . 7. impugned orders show that authorities below have not discussed issue on facts with regard to purchase of property by assessee as is claimed by assessee before Tribunal. Therefore, factual findings 5 are required in light of decision of Hon'ble Punjab & Haryana High Court in case of Kapil Kumar Aggarwal (supra). I, therefore, set aside orders of authorities below and restore matter in issue to file of Assessing Officer with direction to re-decide this issue in light of decision of Hon'ble Punjab & Haryana High Court in case of Kapil Kumar Aggarwal (supra). Assessing Officer shall give reasonable sufficient opportunity of being heard to assessee and assessee is directed to produce sufficient material before Assessing Officer with regard to claim made under section 54F of Act. 8. In result, ground Nos. 2 to 4 of appeal of assessee are allowed for statistical purposes. 9. On ground Nos. 5 and 6, assessee challenged order of ld. CIT(Appeals) in not accepting claim of loss of Rs. 6,000/- instead of income of Rs. 2,73,668/- under head short term capital gains . assessee submitted before ld. CIT(Appeals) that claim was made through revised return and revised computation chart submitted before Assessing Officer on 31.12.2014 during assessment proceedings but it was not accepted by Assessing Officer. assessee relied upon decision of Hon'ble Punjab & Haryana High Court in case of CIT Vs Ramco International 332 ITR 306. ld. CIT(Appeals) noted that assessee has not filed any 6 revised return and no acknowledgement has been produced, therefore, claim of assessee was rejected. 10. After considering rival submissions, I am of view matter requires re-consideration at level of Assessing Officer. ld. counsel for assessee admitted that no revised returns have been filed to claim loss on account of short term capital gain. However, he has submitted that revised computation of income was filed before Assessing Officer, copy of which is filed at page 4 of Paper Book. Details of loss suffered by assessee were submitted before Assessing Officer vide letter dated 31.12.2014, copy of which is filed at page 6 of Paper Book. ld. counsel for assessee also referred to documents on this issue to show that assessee suffered loss under head short term capital gain and submitted that claim of assessee was not accepted because no revised return has been filed. ld. counsel for assessee relied upon decision of Hon'ble Punjab & Haryana High Court in case of Ramco International 332 ITR 306 (supra) in which it was held that When assessee having duly furnished d o c u me n t s and submitted form No. 10CCB during has not been claimed in return, deduction is ad missible even in absence of revised return . Since there is no detailed discussion mentioned by Assessing Officer in assessment order on this issue 7 and documents filed in Paper Book prima-facie show that details were filed before Assessing Officer for claiming loss on account of short term capital gain at assessment stage, therefore, even if no revised return was filed by assessee, claim of assessee should have been considered by Assessing Officer. I, accordingly, set aside orders of authorities below and restore this issue to file of Assessing Officer with direction to re- decide this issue after verifying details submitted by assessee on his record as is argued before me. Assessing Officer shall re-decide this issue in accordance with law by giving reasonable sufficient opportunity of being heard to assessee. 10(i) In result, ground Nos. 5 and 6 of appeal of assessee are allowed for statistical purposes. 11. In result, appeal of assessee is allowed partly for statistical purposes. Order pronounced in Open Court. Sd/- (BHAVNESH SAINI) JUDICIAL MEMBER Dated : 19 t h September,2016. Poonam Copy to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT,DR Assistant Registrar, I TAT Chandigarh Harpal Singh v. ITO, Ward-V(2), Ludhiana