Sh. Kamal Wahal, New Delhi V. ACIT, New Delhi

CO 2/DEL/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7403 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 09-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: PRADEEP KAPOOR
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH D BENCH D BENCH D BENCH D : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.5064/DEL/2011 5064/DEL/2011 5064/DEL/2011 5064/DEL/2011 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008- -- -09 0909 09 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -34(1), 34(1), 34(1), 34(1), D DD D- -- -BLOCK BLOCK BLOCK BLOCK, VIKAS BHAWAN, , VIKAS BHAWAN, , VIKAS BHAWAN, , VIKAS BHAWAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, 73, HARI CHAND MELA RAM SEWA 73, HARI CHAND MELA RAM SEWA 73, HARI CHAND MELA RAM SEWA 73, HARI CHAND MELA RAM SEWA DHAM, DHAM, DHAM, DHAM, MANDOLI, MANDOLI, MANDOLI, MANDOLI, DELHI. DELHI. DELHI. DELHI. PAN : AALPW2719B. PAN : AALPW2719B. PAN : AALPW2719B. PAN : AALPW2719B. (APPELLANT) (RESPONDENT) CROSS CROSS CROSS CROSS- -- -OBJECTION NO.2/DEL/2012 OBJECTION NO.2/DEL/2012 OBJECTION NO.2/DEL/2012 OBJECTION NO.2/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2008 2008 2008 2008- -- -09 0909 09 SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, 73, HARI CHAND ME 73, HARI CHAND ME 73, HARI CHAND ME 73, HARI CHAND MELA RAM LA RAM LA RAM LA RAM SEWA DHAM, SEWA DHAM, SEWA DHAM, SEWA DHAM, MANDOLI, MANDOLI, MANDOLI, MANDOLI, DELHI. DELHI. DELHI. DELHI. PAN : AALPW2719B. PAN : AALPW2719B. PAN : AALPW2719B. PAN : AALPW2719B. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -34(1), 34(1), 34(1), 34(1), D DD D- -- -BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI R.S.NEGI, SR.DR. ASSESSEE BY : SHRI PRADEEP KAPOOR, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THE ONLY GROUND RAISED IN THIS APPEAL FILED BY THE REVENUE READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.51,25,100/- MADE BY THE AO DISALLOWING THE EXEMP TION CLAIMED UNDER 54F ON THE PURCHASE OF A HOUSE PROPER TY IN THE NAME OF ASSESSEES WIFE. ITA-5064/D/2011 & C.O.2/D/2012 2 2. THE FACTS OF THE CASE ARE THAT DURING THE YEAR U NDER CONSIDERATION, THE ASSESSEE SOLD HIS RESIDENTIAL HO USE AT VASANT VIHAR, NEW DELHI. OUT OF THE SALE PROCEEDS, THE ASSESSEE PURCHASED A RESIDENTIAL PROPERTY FOR A SUM OF ` 31,25,100/- IN HIS WIFES NAME AND ALSO INCURRED A FURTHER EXPENDITURE OF ` 20 LAKHS ON ADDITIONAL CONSTRUCTION IN THE SAID RESIDENTIAL PROPERTY. HE, THEREFORE, CLAIMED DEDUCTION OF ` 51,25,100/- UNDER SECTION 54 WHILE COMPUTING THE LO NG TERM CAPITAL GAIN ARISING FROM THE SALE OF RESIDENT IAL HOUSE. THE ASSESSING OFFICER REJECTED THE ASSESSEES CLAIM ON THE GROUND THAT THE NEW PROPERTY ACQUIRED WAS NOT IN THE NAME OF THE AS SESSEE. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DECIS ION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PRAKASH VS. ITO (2008) 173 TAXMAN 311. 3. THE LEARNED CIT(A) ALLOWED THE RELIEF RELYING UP ON THE FOLLOWING DECISIONS :- (I) CIT VS. NATARAJAN 287 ITR 271 (MAD)(2006). (II) LATE MIR GULAM ALI KHAN VS. CIT (1987) 165 ITR 22 8 (AP). (III) CONTROLLER OF ESTATE DUTY VS. ALOKE MITRA (1980) 126 ITR 599 (SC). 4. LEARNED CIT(A) ALSO DISTINGUISHED THE DECISION O F HONBLE BOMBAY HIGH COURT RELIED UPON BY THE ASSESSING OFFI CER. THE REVENUE, AGGRIEVED WITH THE ORDER OF CIT(A), IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED BEFORE US. THE FACTS ARE UNDISPUTED THAT TH E ASSESSEE DERIVED INCOME FROM CAPITAL GAIN FROM THE SALE OF RESIDENTI AL HOUSE. PART OF THE SALE CONSIDERATION WAS INVESTED IN ACQUISITION PLUS CONSTRUCTION OF RESIDENTIAL HOUSE IN THE NAME OF THE WIFE. THE DEC ISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF PRAKASH (SUPRA) AND ALSO THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F NATARAJAN (SUPRA) ITA-5064/D/2011 & C.O.2/D/2012 3 HAVE TAKEN A CONTRARY VIEW ON THE FACTS SIMILAR TO THE CASE OF THE ASSESSEE. IN THE CASE OF PRAKASH (SUPRA), THE ASSESSEE PURCHASED THE NEW PROPERTY IN THE NAME OF HIS ADOPTED SON. THE H ONBLE BOMBAY HIGH COURT REJECTED THE ASSESSEES CLAIM OF DEDUCTI ON UNDER SECTION 54F. IN THE CASE OF NATARAJAN (SUPRA), THE ASSESSEE PURCHASED THE NEW PROPERTY IN THE NAME OF HIS WIFE AND HONBLE MADRAS HIGH COURT HELD THE ASSESSEE TO BE ENTITLED FOR DEDUCTION UNDER SEC TION 54. THUS, ON THIS ISSUE, TWO INTERPRETATIONS OF SECTION 54F HAVE BEEN MADE BY TWO DIFFERENT HIGH COURTS. THERE IS NO DECISION OF HON BLE JURISDICTIONAL HIGH COURT. 6. HONBLE SUPREME COURT IN THE CASE OF CIT, WEST BENGAL-I VS. VEGETABLE PRODUCTS LTD. 88 ITR 192 HAS HELD THAT IF THE COURTS FINDS THAT THE LANGUAGE OF A TAXING PROVISION IS AMBIGUOU S OR CAPABLE OF MORE MEANINGS THAN ONE, THEN THE COURT HAS TO ADOPT THAT INTERPRETATION WHICH FAVOURS THE ASSESSEE. SECTION 54F IS A BENEFICIAL PROVISION ENACTED FOR ENCOURAGING THE ASSESSEES TO INVEST IN THE ACQUISITION OF RESIDENTIAL HOUSE. IT IS ALSO A SET TLED LAW THAT A BENEFICIAL PROVISION SHOULD BE LIBERALLY INTERPRETED. IN THIS VIEW ALSO, THE INTERPRETATION IN FAVOUR OF THE ASSESSEE SHOULD BE ADOPTED. 7. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO CITED THE DECISION OF HONBLE KARNATAKA HIGH C OURT IN THE CASE OF DIRECTOR OF INCOME-TAX, INTERNATIONAL TAXATION, BAN GALORE VS. MRS. JENNIFER BHIDE (2011) 203 TAXMAN 208 WHEREIN IT HAS BEEN HELD T HAT WHAT IS MATERIAL IS INVESTMENT OF SALE CONSIDERATIO N IN ACQUIRING RESIDENTIAL PREMISES, OR CONSTRUCTING A RESIDENTIAL PREMISES, OR INVESTING AMOUNT IN BONDS SET OUT IN SECTION 54EC A ND THAT THERE IS NO REQUIREMENT THAT SUCH INVESTMENT SHOULD BE IN THE N AME OF THE ASSESSEE ONLY. THUS, THE SAID DECISION OF HONBLE KARNATAKA HIGH COURT ALSO SUPPORTS THE CASE OF THE ASSESSEE. ITA-5064/D/2011 & C.O.2/D/2012 4 8. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF VEGETABLE PRODUCTS LTD. (SUPRA), HONBLE MADRAS HIGH COURT IN THE CASE OF NATARAJAN (SUPRA) AS ALSO THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CAS E OF MRS. JENNIFER BHIDE (SUPRA), WE UPHOLD THE ORDER OF LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 9. THE CROSS-OBJECTION FILED BY THE ASSESSEE IS ONL Y IN SUPPORT OF THE ORDER OF LEARNED CIT(A). AS WE HAVE ALREADY UPHELD THE ORDER OF LEARNED CIT(A) WHILE DISMISSING THE APPEAL OF THE R EVENUE, THE CROSS- OBJECTION OF THE ASSESSEE HAS BECOME INFRUCTUOUS AN D IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS- OBJECTION OF THE ASSESSEE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 20 TH JULY, 2012. SD/- SD/- ( (( (I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR I.C.SUDHIR) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESID VICE PRESID VICE PRESID VICE PRESIDENT ENT ENT ENT DATED : 20.07.2012 VK. COPY FORWARDED TO: - 1. REVENUE : ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -34(1), 34(1), 34(1), 34(1), D DD D- -- -BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, BLOCK, VIKAS BHAWAN, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 2. ASSESSEE : SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, SHRI KAMAL WAHAL, 73, HARI CHAND MELA RAM SEWA DHAM, 73, HARI CHAND MELA RAM SEWA DHAM, 73, HARI CHAND MELA RAM SEWA DHAM, 73, HARI CHAND MELA RAM SEWA DHAM, MANDOLI, MANDOLI, MANDOLI, MANDOLI, DELHI. DELHI. DELHI. DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR