A.K.Pattnaik, L/H. Late Kamal Kumari Pattnaik, Bhubaneswar V. ITO, Ward-3(3), Bhubaneswar

CO 6/CTK/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2682 (ITAT-CUTTACK)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K BANDYOPADHYAY
• Assessee Lawyers: BHAGBAN
• Keywords: Capital asset; Cost of acquisition; Benefit of exemption
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO. 62 /CTK/2017 ( / ASSESSMENT YEAR : 2009 - 2010 ) ITO, WARD - 3(3), BHUBANESWAR VS. L/H SHRI A.K.PATTNAIK OF LATE KAMALA KUMARI PATTNAIK, PLOT NO.94, SATYA NAGAR, BHUBANESWAR - 751007 ./ ./ PAN/GIR NO. : A VXPP 6288 K ( / APPELLANT ) .. ( / RESPONDENT ) AND CO NO. 06 /CTK/2017 (ARISING OUT OF ITA NO.62/CT K/2017) ( / ASSESSMENT YEAR :2009 - 2010 ) L/H SHRI A.K.PATTNAIK OF LATE KAMALA KUMARI PATTNAIK, PLOT NO.94, SATYA NAGAR, BHUBANESWAR - 751007 VS. ITO, WARD - 3(3), BHUBANESWAR ./ ./ PAN/GIR NO. : AVXPP 6288 K ( / AP PELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI S.K.BANDYOPADHYAY , DR /AS SESSEE BY : SHRI BHAGBAN PANDA , AR / DATE OF HEARING : 04 / 01 /201 8 / DATE OF PRONOUNCEMENT 22 / 0 1 /201 8 / O R D E R PER SHRI N.S.SAINI , A M : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) - 2 , BHUBANESWAR DATED 30.11.2016 AND CROSS OBJECTION FILED BY THE ASSESSEE. 2. THE SOLE ISSUE INVOLVED IN THE APPEAL OF THE REVENUE IS THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.69,76,258/ - MADE BY ITA NO. 62 /17 & CO NO.06/17 2 THE AO BY DISALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE ON ACCOUNT OF OTHER THREE FLATS U/S.54F OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE RECEIVED 4 066 SQ.FT OF BUILT UP AREA AGAINST THE TRANSFER OF LAND OF KAMALA KUMARI P ATTNAIK MARKET VALUE D AT RS.89,85,860/ - ON ADOPTION OF THE VALUATION AT RS.2210/ - PER SQ.FT. AND, THUS, FULL VALUE OF CONSIDERATION AGAINST THE TRANSFER OF THAT PIECE OF LAND WORKED OUT AT RS.93,35,860/ - ON CONSIDERATION OF ADVANCE OF RS.6.50 LAKHS. AGAINST THIS INDEXED COST OF ACQUISITION WAS WORKED OUT AT RS.64,602/ - AND LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.92,71,258/ - . THE ASSESSEE CONTENDED THAT AS HIS MOTHER WAS NOT HAVING A NY OTHER HOUSE PROPERTY OF HER OWN, SHE SHOULD BE ALLOWED EXEMPTION U/S.54F OF THE INCOME TAX ACT, 1961. THE AO OBSERVED THAT U/S.54F OF THE ACT ONE UNIT VALUED AT RS.22.95 LAKHS COULD BE ALLOWED AS DEDUCTION AND , HENCE, CAPITAL GAIN CHARGEABLE TO TAX WAS COMPUTED AT RS.69,76,258/ - . 4 . BEING AGGRIEVED BY THIS ORDER OF AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER : - 5.1 IN THESE TWO GROUNDS THE APPELLANT HAS CHALLENGED THE DECISION O F THE ASSESSING OFFICER TO GRANT DEDUCTION U/S.54F OF RS.22,95,000/ - IN RESPECT OF ONLY ONE FLAT. THE APPELLANT HAS STATED THAT HE IS ELIGIBLE FOR DEDUCTION U/S.54F IN RESPECT OF ALL FOUR FLATS AS THEY CONSTITUTE A RESIDENTIAL HOUSE. THE APPELLANT HAS QUOT ED THE FOLLOWING DECISIONS IN HIS FAVOUR. (A) COMMISSIONER OF INCOME - TAX V. D. ANANDA BASAPPA [2009] 180 TAXMAN 4 (KARNATAKA) ' SECTION 54 OF THE INCOME - TAX ACT, 1961 - CAPITAL GAINS - PROFIT ON SALE OF PROPERTY USED FOR RESIDENTIAL PURPOSE - ASSESSMENT YEAR 1996 - 97 - WHETHER EXPRESSION 'A RESIDENTIAL HOUSE' AS OCCURRING IN SECTION 54(1) SHOULD BE UNDERSTOOD IN A SENSE THAT BUILDING SHOULD ITA NO. 62 /17 & CO NO.06/17 3 BE RESIDENTIAL IN NATURE AND 'A' SHOULD NOT BE UNDERSTOOD TO INDICATE A SINGULAR NUMBER - HELD, YES - WHETHER WHEN A N HUF'S RESIDENTIAL HOUSE IS SOLD AND MEMBERS OF HUF, KEEPING IN VIEW FUTURE NEEDS IN EVENT OF SEPARATION, INVEST CAPITAL GAIN IN PURCHASING MORE THAN ONE RESIDENTIAL BUILDING, BENEFIT OF EXEMPTION UNDER SECTION 54(1) WOULD BE AVAILABLE TO HUF - HELD, YES ' (B) COMMISSIONER OF INCOME - TAX V. GITA DUQGAL[2013] 30 TAXMANN.COM 230 (DELHI) 'SECTION 54 OF THE INCOME - TAX ACT, 1961 - CAPITAL GAINS - PROFIT ON SALE OF PROPERTY USE FOR RESIDENTIAL HOUSE [RESIDENTIAL HOUSE, MEANING OF] - ASSESSMENT YEAR 2007 - 08 - WHETHER FACT THAT RESIDENTIAL HOUSE CONSISTS OF SEVERAL INDEPENDENT UNITS CANNOT BE PERMITTED TO ACT AS AN IMPEDIMENT TO ALLOWANCE OF DEDUCTION UNDER SECTION 54/54F - HELD, YES [PARA 8} [IN FAVOUR OF ' ASSESSEE} WORDS AND PHRASES: EXPRESSION 'A RESIDENTI AL HOUSE' AS APPEARING IN SECTION 54/54F OF THE INCOME - TAX ACT, 1961' ( C) COMMISSIONER OF INCOME - TAX, COIMBATORE V. SMT. V.R. KARPAGAM [2014J 50 TAXMANN.COM 55 (MADRAS) 'SECTION 54F OF THE INCOME - TAX ACT, 1961 - CAPITAL GAINS - EXEMPTION OF, IN CASE 0. 1 INVESTMENT IN RESIDENTIAL HOUSE (MEANING OF RESIDENTIAL HOUSE) - ASSESSMENT YEAR 2007 - 08 - AS PER A DEVELOPMENT AGREEMENT, ASSESSEE - LAND OWNER PARTED FROM LAND AND SHE WAS TO RECEIVE 43,75 PER CENT OF BUILT UP AREA, WHICH WAS TRANSLATED TO 5FLATS - WHETH ER A RESIDENTIAL HOUSE WOULD INCLUDE MULTIPLE FLATS/RESIDENTIAL UNITS ALSO) AND, THEREFORE, ASSESSEE WAS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F IN RESPECT OF ALL FIVE FLATS - HELD, YES [PARA 10} [IN FAVOUR 0.1 ASSESSEE}' (D) COMMISSIONER OF INCOME - TAX, BANGALORE V. SMT. K.G. RUKMINIAMMA [2011J 196 TAXMAN 87 (KAR.) 'SECTION 54 OF THE INCOME - TAX ACT, 1961 - CAPITAL GAINS - PROFIT ON SALE OF PROPERTY USED FOR RESIDENTIAL HOUSE - ASSESSMENT YEAR 2004 - 05 - WHETHER EXPRESSION 'A RESIDENTIAL HOUSE' IN SECTION 54 NECESSARILY HAS TO INCLUDE BUILDINGS OR LANDS APPURTENANT THERETO; IT CANNOT BE CONSTRUED AS ONE RESIDENTIAL HOUSE - HELD, YES - ASSESSEE HAD A RESIDENTIAL PROPERTY ON A SITE - UNDER A JOINT DEVELOPMENT AGREEMENT, SHE GAVE THAT PROPERTY TO A BUILDER FO R PUTTING UP FLATS - UNDER AGREEMENT, EIGHT RESIDENTIAL FLATS WERE TO BE PUT UP ON THAT PROPERTY AND FOUR FLATS REPRESENTING 48 PER CENT WAS SHARE OF ASSESSEE AND REMAINING 52 PER CENT REPRESENTING ANOTHER FOUR FLATS WAS SHARE OF BUILDER - THUS, CONSIDERA TION FOR SELLING 52 PER CENT OF SITE WAS FOUR RESIDENTIAL FLATS REPRESENTING 48 PER CENT - WHETHER FOR PURPOSE OF SECTION 54, FOUR RESIDENTIAL FLATS ACQUIRED BY ASSESSEE COULD NOT BE CONSTRUED AS FOUR RESIDENTIAL HOUSES BUT ONLY AS 'A RESIDENTIAL HOUSE' AN D, THEREFORE, ASSESSEE WAS ENTITLED TO ITA NO. 62 /17 & CO NO.06/17 4 BENEFIT UNDER SECTION 54 IN RESPECT OF ENTIRE VALUE OF FOUR FLATS - HELD, YES 5.2 AS IT CAN BE SEEN FROM THE ABOVE, ALL THE FOUR DECISIONS OF HON'BLE HIGH COURTS ARE IN FAVOUR OF THE APPELLANT AND THEREFORE THE A PPELLANT IS ENTITLED FOR THE DEDUCTION TO THE EXTENT OF WHOLE OF CAPITAL GAIN AMOUNTING TO RS. 92,71,258/ - . THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION U/S.54F OF I .T. ACT, 1961 OF RS. 92,71,258/ - . ACCORDINGLY THESE GROUNDS OF APPEAL ARE ALLOWED. 5 . THE DR COULD NOT POINT OUT ANY SPECIFIC ERROR IN THE ABOVE QUOTED ORDER OF CIT(A). 6 . HENCE, I DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF CIT(A). IT IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7 . THE AR SUBMITTE D THAT IN THE CROSS OBJECTION FILED BY THE ASSESSEE, THE ASSESSEE HAS SUPPORTED THE ORDER OF CIT(A). HENCE, AS THE ASSESSEE HAS NO GRIEVANCE AGAINST THE ORDER OF CIT(A), THEREFORE, CROSS OBJECTION FILED BY THE ASSESSEE IS INFRUCTUOUS AND ACCORDINGLY DISMIS SED. 8 . IN THE RESULT, APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 / 01 /201 8 . SD/ - ( PAVAN KUMAR GADALE ) SD/ - (N. S. SAINI) / JUDICI AL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 22 /01/2018 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPOND ENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//