Sri Rohit Dasegowda, Bangalore V. ITO, Bangalore

ITA 1091/BANG/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1587 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S PARTHASARTHI
• Keywords: Gift; Cost of acquisition
• Section: 143(3); 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO.109 1/BANG/2009 (ASST. YE AR 2006-07) SHRI ROHIT DASEGOWDA, NO.2309, 21 ST CROSS, K.R ROAD, BSK 2 ND STAGE, BANGALORE-560 070. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-4(2), BANGALORE. . RESPONDENT APPELLANT BY : SHRI S PARTHASARTHI, ADVOCATE RESPONDENT BY : SMT. JACINTA VASHAI ZIMIK, ADDL. COMMISSIONER OF INCOME-TAX O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST TH E ORDER OF THE CIT- (A)-II AT BANGALORE DATED 24.8.2009. THE APPEAL AR ISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX A CT 1961. ITA NO.1091/B/09 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS ON THE Q UESTION OF EXEMPTION U/S 54F. THE ASSESSEE CLAIMED THE BENEFI T OF SEC. 54F ON THE CAPITAL GAINS ARISING OUT OF THE SALE OF HIS PR OPERTY. HE CLAIMED THE BENEFIT U/S 54F ON THE GROUND THAT HE HAS PURCH ASED THE GROUND FLOOR OF A RESIDENTIAL PROPERTY. THE FIRST FLOOR O F THAT RESIDENTIAL UNIT WAS ALREADY GIFTED TO THE ASSESSEE BY HIS PATERNAL UNCLE. THE LOWER AUTHORITIES HAVE DISALLOWED THE CLAIM OF THE ASSESS EE ON THE GROUND THAT THE ASSESSEE HAS NOT PRODUCED THE DOCUMENT TO SHOW THE PURCHASE OF THE GROUND FLOOR UNIT AND THAT THE ASSESSEE HAS CLAIMED EXEMPTION ON THE AMOUNTS SPENT TOWARD RENOVATION OF BOTH GROU ND AND FIRST FLOOR UNITS. 3. WE HEARD BOTH SIDES IN DETAIL AND CONSIDERED THE MATTER. WHETHER THE PATERNAL UNCLE OF THE ASSESSEE HAD GIFT ED THE FIRST FLOOR UNIT TO THE ASSESSEE OR NOT IS NOT CRUCIAL IN DECID ING THE CLAIM OF THE ASSESSEE. THE CLAIM OF THE ASSESSEE IS THAT HE HAD PURCHASED THE GROUND FLOOR UNIT. THEREFORE, THE ASSESSEE IS DIRE CTED TO PRODUCE THE PURCHASE DOCUMENT BEFORE THE ASSESSING AUTHORITY AN D ON VERIFICATION IF THE ASSESSING OFFICER IS SATISFIED THAT THE ASSE SSEE HAD ACQUIRED THE OWNERSHIP OF THE GROUND FLOOR UNIT BY WAY OF PURCH ASE WITHIN THE TIME PRESCRIBED, HE SHALL GIVE THE BENEFIT OF SEC. 54F TO THE ASSESSEE. ITA NO.1091/B/09 3 4. REGARDING THE AMOUNT SPENT FOR RENOVATION, THE A SSESSING AUTHORITY SHALL TREAT THE AMOUNT SPENT ON THE GROUN D FLOOR PURCHASED BY THE ASSESSEE, AS PART OF THE ELIGIBLE AMOUNT, PR OVIDED RENOVATION HAD BEEN MADE CONTEMPORANEOUSLY, SO AS TO MAKE THE GROUND FLOOR UNIT PURCHASED BY HIM MORE FUNCTIONAL AND LIVABLE. WHEN EXPENSES INCURRED FOR THE RENOVATION OF AN EXISTING PROPERTY AND THE EXPENSES WERE INCURRED IMMEDIATELY AFTER THE PURCHASE OF THE PROPERTY, IT IS NECESSARY TO TREAT THE RENOVATION EXPENDITURE AS PA RT OF THE ACQUISITION COST FOR THE PURPOSE OF SEC. 54F. ONE SHOULD NOT B E RULED BY TECHNICALITIES. 5. REGARDING THE AMOUNT ON RENOVATION OF THE FIRST FLOOR IF ANY, THE ASSESSING OFFICER SHALL ALLOW THE BENEFIT AS STATED IN THE ABOVE PARAGRAPHS, IF AFTER THE RENOVATION, BOTH GROUND FL OOR AND FIRST FLOOR HAVE BEEN MADE UP AS A SINGLE UNIT OF RESIDENCE. I F FIRST FLOOR STILL RETAINS INDEPENDENT IDENTITY, THE ASSESSING AUTHORI TY SHALL NOT GIVE SUCH BENEFIT AS FAR AS THAT UNIT IS CONCERNED. 6. THE ASSESSING AUTHORITY IS DIRECTED TO HEAR THE ASSESSEE AND MODIFY THE ASSESSMENT IN ACCORDANCE WITH LAW. ITA NO.1091/B/09 4 7. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY THE 8TH DAY OF FEBRUARY, 2011, AT BANGALORE. SD/- SD/- (P MADHAVI DEVI) (DR. O.K NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE.