CHANDRAKANT HIMATLAL SHAH, MUMBAI V. ITO 20(1)(2), MUMBAI

CO 14/MUM/2015

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1500 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S K MAHAPATRA
• Keywords: Capital asset; Cost of acquisition
• Section: 143(3); 54

Judgement Text

MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI . , , BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER ITA NO. : 6725 /MUM/20 1 3 (ASSESSMENT YEAR :200 9 - 1 0 ) INCOME TAX OFFICER 20 (1) (2) , ROOM NO. 606, 6 TH FLOOR, PIRAMAL CHAMBERS, MUMBAI - 400 012 VS MR. CHANDRAKANT HIMATLAL SHAH , 602, POONAM PEARL, NEAR HIMACHAL BUILDING , JUHU LANE, ANDHERI WEST, MUMBAI - 400 026 .: PAN: A A HPS 2361 R (APPELLANT (RESPONDENT) APPELLANT BY : SHRI S K MAHAPATRA RESPONDENT BY : SHRI VIJAY MEHTA SHRI ANUJ KIS NADWAL A CROSS OBJECTION 14/MUM/2015 ARISING OUT OF ITA NO. : 7507/MUM/2013 , AY 200 9 - 1 0 MR. CHANDRAKANT HIMATLAL SHAH, 602, POONAM PEARL, NEAR HIMACHAL BUILDING, JUHU LANE, ANDHERI WEST, MUMBAI - 400 026 .: PAN: A AHPS 2361 R VS INCOME TAX OFFICER 20(1)(2), ROOM NO. 606, 6 TH FLOOR, PIRAMAL CHAMBERS, MUMBAI - 400 012 (APPELLANT CROSS OBJECTOR (RESPONDENT) APPELLANT CROSS OBJECTOR BY : SHRI VIJAY MEHTA SHRI ANUJ KIS NADWAL A RESPONDENT BY : SHRI S K MAHAPATRA /DATE OF HEARING : 28 - 0 7 - 201 5 / DATE OF PRONOUNCEMENT : 30 - 10 - 201 5 ORDER , . . : PER AMIT SHUKLA, J M : THE A FORESAID APPEAL BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE AGAINST IMPUGNED ORDER DATED 11 . 0 9 .201 3 MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 2 PASSED BY CIT(A) - 3 1 , MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143(3) FOR THE ASSESSMENT YEAR 200 9 - 1 0 . WE WILL FIRST DEAL WITH REVENUES APPEAL, VID E WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : 1. TH E L D CIT (A) ERRED O N THE FACTS AND CIRCUMSTANCES OF THE CASE IN ALLOWING THE DEDUCTION U/S 54 OF THE I.T ACT, 1961. 2. THE LD. CIT(A) ERRED IN ACCEPTING THE DATE OF REGISTRATION OF DEED OF RECTIFICATION I.E. 19.04.2008 AS THE DATE OF PURCHASE OF NEW PROPERTY CONSIDERING THE SAME TO BE WITHIN 1 YEAR BEFORE THE SALE OF CAPITAL ASSET. 3. THE LD. CIT(A) ERRED TO APPRECIATE THAT THE DATE OF REGISTRATION OF AGREEMENT I.E. 31.01.2007 SHALL BE CONSIDERED FOR JUD GING THE ELIGIBILITY OF DEDUCTION U/S 54. 4. THE LD. CIT(A) ERRED IN NOT INTERPRETING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF R.L. SOOD - 245 ITR 727 WHEREIN IT WAS HELD THAT FOR THE PURPOSE OF SECTION 54, THE DATE OF AGREEMENT TO PURCH ASE SHOULD BE TAKEN AS THE DATE OF PURCHASE. 2. BRIEF FACTS ARE THAT, THE ASSESSEE IS A N INDIVIDUAL WHO HAS SOLD PROPERTY , WHEREIN HE WAS 50% OWNER ALONG WITH THE OTHER CO - OWNER, SMT. SUREKHA C SHAH, FOR AN AMOUNT OF RS. 34,02,147/ - . THE SAID SALE PROCEEDS HAVE BEEN INVESTED IN THE PURCHASE OF A NEW FLAT TO THE EXTENT OF RS. 30,07,775/ - AND CONSEQUENTLY EXEMPTION HAS BEEN CLAIMED U/S 54 . AO NOTED THAT PURCHASE AGREEMENT FOR NEW FLAT WAS 31.01.2007 AND OLD FLAT WAS SOLD ON 06.04.2009. HENCE, THE WINDOW PERIOD IN WHICH THE ASSESSEE SHOULD HAVE MADE THE INVESTMENT WAS BETWEEN 06.04.2008 AND MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 3 05.04.2011 TO CLAIM THE EXEMPTION U/S 54 . IN RE SPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAD SUBMITTED AND STATED AS UNDER : - ASSESSEE HAS RE - INVESTED THE SALE PROCEEDS OF THE SAID FLAT IN NEW RESIDENTIAL PREMISES SITUATED AT ANDHERI, MUMBAI. ASSESSEE HAD ENTERED INTO AGREEMENT FOR PURCHASE OF THE NEW PREMISES IN JANUARY, 2007. THE SAID BUILDING WAS UNDER CONSTRUCTION. ASSESSEE HAD BOOKED THE FLAT ON 14 TH FLOOR. PAYMENT FOR THE ACQUISITION OF SAID PREMISES WAS BEING DONE AS PER CONSTRUCTION (SLAB - WISE). IN APRIL, 2008, DUE TO INADEQUATE APPROVALS O BTAINED BY THE BUILDER, ASSESSEE WAS OFFERED FLAT ON 13 TH FLOOR INSTEAD OF 14 TH FLOOR. DEED OF RECTIFICATION WAS ENTERED BETWEEN THE BUILDER AND THE ASSESSEE ON 19 TH APRIL, 2008. THEREAFTER, ASSESSEE CONTINUED TO MAKE FURTHER PAYMENTS. LAST PAYMENT WAS MADE ON 2 ND DECEMBER, 2008. ASSESSEE HAS RECEIVED THE POSSESSION OF THE SAID NEW FLAT ON 22 ND JANUARY, 2009. HENCE, ASSESSEE IS ENTITLED TO DEDUCTION U/S 54 AS PURCHASE OF NEW FLAT IS WITHIN 1 YEAR FROM THE DATE OF SALE OF OLD ASSET. HOWEVER, THE AO REJECTED THE ASSESSEES EXPLANATION AND DISALLOWED THE CLAIM OF EXEMPTION, BECAUSE ACCORDING TO HIM THE INVESTMENT SHOULD HAVE BEEN MADE BEYOND PERIOD OF ONE YEAR BEFORE AND 2 YEARS AFTER THE DATE ON WHICH TRANSFER OF THE OLD ASSET TOOK PLACE. 3. BEFORE THE CIT(A), THE ASSESSEE MADE VERY ELABORATE SUBMISSIONS WHICH HAVE BEEN INCORPORATED BY THE CIT(A) FROM PAGES 3 TO 6 OF THE APPELLATE ORDER. THE LD. CIT(A), NOTED THE ENT IRE FACTS AND ALSO ANALYS E THE PROVISIONS OF SECTION 54 AND OBSERVED THAT IN THE PRESENT CASE, THE SALE OF THE OLD PROPERTY WAS REGISTERED ON 30.03.2009 AND THE WINDOW PERIOD OF THE INVESTMENT AS PER SECTION 54 FALL BETWEEN 30.03.200 9 TO 30.03.2011 . HE ALS O NOTED THE TWO TRANSACTION S OF SALE OF OLD FLAT AND PURCHASE OF THE NEW FLAT AND RECTIFICATION DEED OF THE NEW PROPERTY FOR WHICH THE ASSESSEE HAS DRAWN SUPPORT FOR HIS CLAIM WAS AS UNDER : - MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 4 DATE OF SALE OF OLD PROPERTY : 30.03.2009 DATE OF ORIGINAL AGREEMENT FOR NEW PROPERTY : 31.01.2007 DATE OF RECTIFICATION DEED FOR NEW PROPERTY : 19.04.2008 DATE OF POSSESSION : 22.01.2009 DATE OF ISSUE OF OCCUPATION CERTIFICATE : 24.02.2010 4. THEREAFTER, HE ANALYZE THE RECTIFICATION DEED AND ALLOWED THE ASSESSEES CLAIM AFTER OBSERVING AND HOLDING AS UNDER : - THE ARGUMENT OF THE APPELLANT IS THAT THE RECTIFIED DEED IS TO BE TAKEN AS THE DEED FOR PURCHASE OF NEW FLAT. A PERUSAL OF THE DOCUMENTS IN QUESTION REVEALS THAT THE AGREEMENT FOR SALE DATED 23.01.2007 WAS REGISTERED VIDE NUMBER BDR - 1 - 776/2007 AND THE SUBSEQUENT DEED OF RECTIFICATION DATED 19.04.2008 WAS REGISTERED VIDE NUMBER DR - 5272/1/2008. THUS BOTH DOCUMENTS WERE DULY REGISTERED AS PER THE PROVISIONS OF THE MAHARASHTRA OWNERSHIP FLA TS ACT (MOFA), 1963. A CAREFUL READING OF THE AGREEMENT FOR SALE DATED 23.0 1.2007 SHOWS THAT THE DOCUMENT IS ONLY A BASE DOCUMENT FOR THE PROPOSED SALE OF THE FLAT AND CONTAINS NO CLAUSE THAT INDICATES TRANSFER OF OWNERSHIP OF THE FLAT BOOKED BY TH E APPELLANT. RATHER, IT ONLY LAYS DOWN IN GREAT DETAIL THE TERMS AND CONDITIONS, SUBSEQUENT TO THE FULFILLMENT OF WHICH, THE FLAT IN QUESTION WILL BE SOLD TO THE APPELLANT. IN CONTRAST, THE DEED OF RECTIFICATION DATED 19.04.2008 CLEARLY STATES IN CLAUSES 2 AND 3 AS FOLLOWS: 2. THAT THE PURCHASERS HAVE PURCHASED FLAT NO. 1302 ON 13 TH FLOOR, A WING IN THE BUILDING KNOWN AS WATERFORD AT C.D. BARFIWALA ROAD, ANDHERI WEST, MUMBAI - 400 058, DUE TO INADVERTENCE IN THE AGREEMENT NUMBER OF FLAT IS WRONGLY MENTIONED AS FLAT NO. 1402 O N 14 TH FLOOR A WING WATERFORD AT C.D. BARFIWALA ROAD, ANDHERI WEST, MUMBAI - 400 058. 3. THAT HEREINAFTER T HE PURCHASERS SHALL BE KNOWN AS THE OWNERS OF FLAT NO. 1302 ON 13''' FLOOR A WING 'WATERFORD' AT C.D. BARFIWALA ROAD, ANDHERI WEST, MUMBAI - 400 058.' 6 .4 COURTS HAVE HELD THAT THE SALE DEED MUST CONTAIN WORDS TO INDICATE THE TRANSFER OF TITLE TO THE PROP ERTY IN MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 5 QUESTION I.E. THE OPERATIVE WORDS OF CONVEYANCE MUST BE PRESENT. IN OTHER WORDS, THE DOCUMENT MUST GIVE EVIDENCE OF THE INDIVIDUAL'S OWNERSHIP OF A PROPERTY. IN THE INSTANT CASE THEREFORE, THE DEED OF RECTIFICATION, DULY REGISTERED MUST BE CONSIDER ED TO BE THE DOCUMENT INDICATING THE PURCHASE OF THE SAID FLAT BY THE APPELLANT. 6.5 THE APPELLANT HAS ALSO CONTENDED THAT 'PURCHASE' COULD HAPPEN ONLY ON TAKING POSSESSION OF THE FLAT, WHICH OCCURRED IN JANUARY 2009, THUS THE CLAIM U/S 54 IS ALLOWABLE. THE REASONS FOR THE CHANGE OF FLAT NUMBER MENTIONED IN THE AGREEMENT FOR SALE HAVE BEEN DULY EXPLAINED BY THE APPELLANT AND ARE FOUND ACCEPTABLE SINCE THE MODIFICATION IN PROPOSED NUMBER OF STOREYS IN A BUILDING DUE TO RESTRICTIONS BY GOVERNMENT REGULATORY AUTHORITIES SUCH AS THE AIRPORTS AUTHORITY OF INDIA IS A COMMON PHENOMENON. THE FACT THAT THE ORIGINAL FLAT PROPOSED TO BE ACQUIRED THROUGH THE AGREEMENT FOR SALE WAS NO. 1302 DOES NOT VITIATE THE CLAIM OF THE APPELLANT 6.5.1 THE CONNOTATION OF THE WORD 'PURCHASE' WAS EXAMINED BY THE APEX COURT IN THE CASE OF CIT V T.V. ARAVINDA REDDY REPORTED AT 120 ITR 46 (SC) WHEREIN IT WAS HELD THAT THE MEANING OF THE WORD SHOULD BE INTERPRETED IN THE SENSE OF COMMON USAGE. THE COURT HELD AS FOLLOWS: '3. W E FIND NO REASON TO DIVORCE THE ORDINARY MEANING OF THE WORD 'PURCHASE' AS BUYING FOR A PRICE OR EQUIVALENT OF PRICE BY PAYMENT IN KIND OR ADJUSTMENT TOWARDS AN OLD DEBT OR FOR OTHER MONETARY CONSIDERATION FROM THE LEGAL MEANING OF THAT WORD IN SECTION 54( 1). IF YOU SELL YOUR HOUSE AND MAKE A PROFIT, PAY CAESAR WHAT IS DUE TO HIM. BUT IF YOU BUY OR BUILD ANOTHER SUBJECT TO THE CONDITIONS OF SECTION 54(1) YOU ARE EXEMPT.' 6.5.2 IN THE CASE OF CIT VS SHAHAJADA BEGUM (AP) 173 ITR 397, THE APPELLANT HAD SOLD A HOUSE USED FOR SELF OCCUPATION, PURCHASED ANOTHER AND HAD CLAIMED EXEMPTION U/S 54 IN RESPECT OF THE CAPITAL GAINS ARISING FROM THE SALE OF THE FIRST PROPERTY. THE CLAIM U/S 54 WAS DENIED BY THE ASSESSING OFFICER, HOLDING, THAT THE CRUCIAL DATE FOR DETER MINING WHEN THE PROPERTY WAS PURCHASED WAS THE DATE OF REGISTRATION OF THE CONVEYANCE DEED (ALBEIT FOR THE PURCHASE OF THE NEW PROPERTY). THE HONBLE HIGH COURT HELD THAT OWNERSHIP PURCHASE OF THE NEW PROPERTY). THE NON DIE HIGH COURT HE'D THAT OWNERSHIP W OULD BE TAKEN FROM THE POINT IN MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 6 TIME WHEN 'DOMAIN AND CONTROL WERE GIVEN INTO THE ASSESSEES HANDS' AND ALLOWED THE CLAIM OF THE APPELLANT. 6.53 IN THE CASE OF CIT V DR. LAXMICHAND N. NAGDA REPORTED AT 211 ITR 804, THE HON'BLE BOMBAY HIGH COURT ADJUDICAT ED ON A MATTER WHEREIN EXEMPTION U/S 54 HAD BEEN DISALLOWED BY THE A.O. ON THE GROUNDS THAT THE SALE DEED WAS NOT REGISTERED WITHIN THE SPECIFIED PERIOD. THE COURT WHILE EXAMINING THE ALLOWABILITY OF THE CLAIM EMPHASIZED THAT THE MEANING OF THE WORD PURCHA SE SHOULD BE CONSTRUED LIBERALLY AND HELD AS FOLLOWS: 'THE WORD 'PURCHASE' IS NOT DEFINED UNDER THE ACT AND, THEREFORE, RESORT TO ITS ORDINARY MEANING, AS UNDERSTOOD BY A LAY - MAN, WILL HAVE TO BE MADE. IN MANY DICTIONARIES, THE WORD 'PURCHASE MEANS THE ACQUISITION OF PROPERTY BY PARTY'S OWN ACT, AS DISTINGUISHED FROM ACQUISITION BY ACT OF LAW. THE CONTENT DEMANDS NOT THE LITERAL INTERPRETATION BUT LIBERAL AND WIDER INTERPRETATION. GIVING THE CONTEXTUAL MEANING TO THE WORD 'PURCHASE IN AN INSURANCE POLICY , THE MADRAS HIGH COURT IN THE CASE OF C. DURAISWAMI IYENGAR V. UNITED INDIA LIFE ASSURANCE CO. LTD. AIR 1956 MAD. 316 HAS OBSERVED : 'WE CONSIDER THAT THE WORD 'PURCHASE' IN ARTICLE 116 MUST BE GIVEN A WIDER MEANING SO AS TO INCLUDE THE CONSTRUCTION OF A NEW BUILDING; THAT IS TO SAY, THE WORD 'PURCHASE' HAS GOT THE SAME CONNOTATION AS 'ACQUISITION'.' (P. 322) 4. THE SUPREME COURT IN THE CASE OF CIT V. TM. ARAVINDA REDDY [1979] 120 ITR 46 THOUGH IN THE CONTEXT OF DIFFERENT FACTUAL BACKGROUND OBSERVED THAT THE WORD 'PURCHASE' IN SECTION 54 HAS TO BE CONSTRUED IN A WIDER SENSE. 5. IN THE CASE OF CIT V. MRS. SHAHZADA BEGUM [1988] 173 ITR 397, THE ANDHRA PRADESH HIGH COURT, REJECTING THE SUBMISSION THAT CRUCIAL DATE FOR THE PURPOSE OF DETERMINING WHEN TH E PROPERTY IS PURCHASED WITHIN THE MEANING OF SECTION 54 IS THE DATE OF REGISTRATION OF THE SALE DEED IN FAVOUR OF THE ASSESSEE WHEN THE TITLE PASSES, CAME TO THE CONCLUSION THAT THE EXPRESSION 'PURCHASE' WOULD CONNOTE THE DOMAIN AND CONTROL OF THE PROPERT Y GIVEN INTO THE ASSESSEE'S HANDS. MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 7 6. TAKING INTO CONSIDERATION THE LETTER AS WELL AS THE SPIRIT OF SECTION 54 AND THE WORD 'TOWARDS' USED BEFORE THE WORD 'PURCHASE' IN SUB - SECTION (2) OF SECTION 54, IT SEEMS TO US THAT THE SAID WORD IS NOT USED IN THE SENSE OF LEGAL TRANSFER AND, THEREFORE, HOLDING OF A LEGAL TITLE WITHIN A PERIOD OF ONE YEAR IS NOT A CONDITION PRECEDENT FOR ATTRACTING SECTION 54. IN THE INSTANT CASE, THE WHOLE CONSIDERATION WAS PAID, POSSESSION OF THE FLAT WAS OBTAINED AND IT WAS ACTUA LLY PUT TO USE FOR DWELLING WITHIN 4 MONTHS, AS A RESULT EXEMPTION CONTEMPLATED UNDER SECTION 54 WAS CLEARLY ATTRACTED.' 6.54 IN THE INSTANT CASE, THE APPELLANT HAD DULY REGISTERED THE DEED OF RECTIFICATION ON 19.04.2008 AND THIS FELL WITHIN THE WINDOW PR OVIDED FOR INVESTMENT U/S 54 APPLICABLE IN THIS CASE. THE OWNERSHIP OF THE' NEW FLAT CLEARLY VESTS IN THE APPELLANT THROUGH THE EXECUTION OF THIS DOCUMENT. IN ADDITION, THE APPELLANT HAS RECEIVED POSSESSION FROM THE DEVELOPER IN JANUARY 2009 AND THE OC CUPATION CERTIFICATE IS ALSO DATED 24.02.2010, THUS BOTH THESE EVENTS ARE ALSO FALLING WITHIN THE INVESTMENT WINDOW AS PER SECTION 54 . 6.5.5 THUS AFTER DUE CONSIDERATION OF THE ENTIRE CONSPECTUS OF FACTS AVAILABLE ON RECORD AND THE JUDICIAL PRINCIPLES LAID DOWN WHICH HAVE BEEN DISCUSSED IN THE PROCEEDING PARAGRAPHS, 1 HOLD THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S 54 OF RS. 30,07,775/ - THE GROUNDS, RAISED BY THE APPELLANT ARE ALLOWED. 5. BEFORE US, THE LD. COUNSEL REFERRED TO THE FOLLOWING CHRO NOLOGY OF EVENTS : - SR. NO. DATE PARTICULARS 1 31.01.2007 AGREEMENT FOR PURCHASE FOR FLAT NO. 1402 2 19.04.2008 AGREEMENT FOR PURCHASE FOR FLAT NO. 1302 3 02.12.2008 LAST PAYMENT MADE FOR PURCHASE 4 22.01.2009 POSSESSION RECEIVED FOR FLAT PURCHASE 5 30.03.2009 AGREEMENT FOR SALE 6 06.04.2009 AGREEMENT FOR SALE REGISTERED AND SUBMITTED THAT, IN FACT THE PROPERTY HAS BEEN PURCHASED WITHIN ONE YEAR IF THE RELEVANT DATES VIZ. 19.04.2008 AND 22.01.2009 OR 20.03.2009 IS TAKEN INTO CONSIDERATION. THE REASONS GIVEN BY THE CIT(A) ARE BASED ON PROPER APPRECIATION OF FACTS AND MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 8 MATERI AL ON RECORDS AND HENCE SUCH A FINDING CANNOT BE TINKERED WITH. 6. THE LD. DR STRONGLY RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT , WHAT IS TO BE SEEN WITHIN THE TERMS OF SECTION 54 IS NOT THE DATE OF AGREEMENT FOR SALE REGISTRATION AND THE POSS ESSION RECEIVED BY THE ASSESSEE. THUS, HERE IN THIS CASE, THE PERIOD OF 1 YEAR HAD ELAPSED. 7. AFTER CONSIDERING THE RIVAL CONTENTIONS AND ON PERUSAL OF THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS, WE FIND THAT ASSESSEE HAD ENTERED INTO AN AGREEMEN T FOR PURCHASE OF A FLAT NO. 1402 ON 31.01.2007. HOWEVER, THE SAID AGREEMENT WAS COMPLETELY RECTIFIED AND REPLACE WITH A NEW AGREEMENT WHICH WAS ENTERED FOR PURCHASE OF A DIFFERENT FLAT NO. 1302 ON 19.04.2008. THE POSSESSION OF THE SAID FLAT WAS GIVEN ON 2 1.02.2009 AND AGREEMENT FOR SALE WAS MADE ON 30.03.2009. OLD FLAT WAS SOLD ON 6 TH APRIL, 2009. THUS, THE CLAIM OF EXEMPTION U/S 54 MADE BY THE ASSESSEE WAS VERY MUCH WELL WITHIN THE WINDOW PERIOD AS DEFINED IN SECTION 54 . T HEREFORE THE FINDING OF FACT AS RECORDED BY THE CIT(A) (INCORPORATED ABOVE) IS AFFIRMED AND THUS GROUND RAISED BY THE REVENUE IS DISMISSED. 8. IN CROSS OBJECTION, ASSESSEE HAS RAISED FOLLOWING GROUNDS : - 1. THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT VIDE DEED OF RECTIFICATION ENTERED INTO ON 19.04.2008 THE ASSESSEE HAS PURCHASED FLAT NO. 1302 ON 13 TH FLOOR, A WING OF WATERFORD BUILDING AND, HENCE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54 OF THE ACT. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 54 OF THE ACT EVEN IF THE DATE OF RECTIFICATION DEED I.E. 19.04.2008 IS NOT CONSIDERED TO BE THE DATE OF PURCHASE OF NEW FLAT. 3. LEARNED CIT(A) OUGHT TO HAVE CALCULATED INDEXED COST OF ACQUISITION OF 140 (YEAR OF ACQUISITION BY ORIGINAL OWNER) INSTEAD OF 463 (BEING THE YEAR OF ACQUISITION BY MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 9 ASSESSEE VIDE INHERITANCE) AS THE COST OF INFLATION INDEX FOR THE YEAR OF PURCHASE. 9. GROUND NO. 1 & 2 WILL BECOME INFRUCTUOUS IN VIEW OF THE FINDING GIVEN IN THE DEPARTMEN TS APPEAL , HENCE THEY ARE DISMISSED. 10. AS REGARDS THE ISSUE RAISED IN GROUND NO.3, IT HAS BEEN ADMITTED BY BOTH THE PARTIES THE SAME IS COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANJULA J SHAH REPORTED IN [2013] 355 I TR 474 (BOM). ACCORDINGLY, WE DIRECT THE AO TO GIVE BENEFIT OF COST OF I NFLATION INDEX FOR ACQUISITION WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER HA D ACQUIRED THE ASSET AS PER THE PRINCIPLE LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT. AC CORDINGLY, GROUND NO. 3 IS TREATED AS ALLOWED. 11. IN THE RESULT, CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALLOWED. 12. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED AND CO OF THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 30 TH OCTOBER , 2015. SD/ - SD/ - ( . ) ( ) ( D. KARUNAKARA RAO ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 30 TH OCTOBER , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 3 1 , MUMBAI. 4 ) THE CIT - 2 0 , MUMBAI. 5 ) , , / THE D.R. C BENCH, MUMBAI. MR. CHANDRAKANT HIMATLAL SHAH ITA NO. 6725 /M UM /201 3 CO. NO. 14/MUM/2015 10 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS