Shankar Lal Kumawat Vs ITO (ITAT Jaipur)
Section 271F penalty valid for not filing Return if Total Income before section 54 exemption exceeds maximum amount not chargeable to income-tax
Section 139(1)(b) provides that every person, being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. Further, by way of sixth proviso, it has been specifically provided that the total income has to be computed without given effect to the provisions of section 54 and the same read as under:
“Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificia l juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the provisions of clause (38) of section 10 or section 10A or section 10B or section 10BA or section 54 or section 54B or section 54D or section 54EC or section 54F or section 54G or section 54GA or section 54GB or Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. ”
In the instant case, the assessee’s total income without giving effect to the provision of section 54 come to Rs 9,37,280/- which exceeds the maximum amount not chargeable to tax. The assessee was therefore required to furnish his return of income and in absence of any reasonable cause shown by the assessee for such failure to file his return of income, the penalty u/s 271F is hereby confirmed.
Section 54/54F exemption cannot be denied for Purchase of residential house property in the name of wife
It was also held that merely for the reason that the new residential house property has been purchased by the assessee in the name of his wife, the same cannot be basis for the denial of deduction claimed under Section 54 or Section 54F of the Income Tax Act, 1961.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
PER BENCH:
These are three appeals filed by the assessee against the order of ld. CIT(A)-03, Jaipur dated 04.10.2018 for A.Y 2008-09.
2. In ITA No. 1390/JP/2018, the limited issue involved is denial of deduction claimed by the assessee u/s 54 of the I.T. Act.
3. Briefly stated, the facts of the case are that the assessee has sold a residential house situated at Plot No. 184, Maruti Nagar, Airport Road, Sanganer, Jaipur vide sale deed dated 29.11.2017 for a consideration of Rs. 10,00,000/- which was valued by the Sub-Registrar (Stamps) at Rs. 10,84,691/-. The assessee did not file his return of income. Subsequently, notice u/s 148 was issued on 30.03.2015 and in response to the said notice, the assessee filed his return of income on 14.01.2016 wherein he has claimed indexed cost of acquisition, indexed cost of construction and transfer expenses amounting to Rs. 2,47,411/- and deduction u/s 54 amounting to Rs. 8,37,280/- against the deemed sale consideration u/s 50C amounting to Rs. 10,84,691/-. The Assessing Officer allowed the deduction amounting to Rs. 2,47,411/-. However, deduction u/s 54 was denied by the Assessing Officer. As per Assessing Officer, the fresh investment in the plot situated at Plot No. 184, Maruti Nagar, Airport Road, Sanganer, Jaipur for Rs. 7,16,638/- was made by the assessee in the name of his wife and secondly, no documentation has been submitted in support of cost of construction thereon. Accordingly, the deduction claimed u/s 54 amounting to Rs. 8,37,280/- was denied by the Assessing Officer. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the action of the Assessing Officer. Against the said findings, the assessee is in appeal before us.
4. During the course of hearing, the ld. AR submitted that the assessee has purchased the plot of land for Rs. 7,16,638/- in the name of his wife and such investment was made out of the sale proceeds from sale of the original house property. In support, the reliance was placed on the Coordinate Bench decision in case of Shri Vivek Jain, Jaipur vs. DCIT, Circle-07, Jaipur (in ITA No. 139/JP/2016 dated 08.12.2017) and following other decisions:-
