Amit Choudhari, Pune V. Income-tax Officer,Ward-4(5), Pune

ITA 1139/PUN/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9236 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-08-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 08-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CITA PUNE ON IN RELATION TO AS
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Capital asset; Benefit of exemption
• Section: 54F; 2(14); 201; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH , A PUNE VIRTUAL COURT BEFORE SH RI R.S. SYAL, VICE PRESIDENT AND SH RI S.S. VISWANETHRA RAVI , J UDICIAL MEMBER . / ITA NO . 1 139 / PUN /20 1 7 / ASSESSMENT YEAR : 201 2 - 1 3 AMIT B. CHA UDHARI SHUSHANTI, PLOT NO.349, LANE NO.4, MAHATMA SOCIETY, KOTHRUD, PUNE 411038 PAN : AA RPC5118Q VS. ITO, WARD 4(5), PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 2 , PUNE ON 0 9 - 12 - 201 6 IN RELATION TO THE ASSESSMENT YEAR 201 2 - 1 3 . 2 . THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DENIAL OF EXEMPTION U /S 54F OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN DECLARING TOTAL INCOME OF RS.3,20,401. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS , IT WAS OBSER VED BY THE AO THAT THE ASSESSEE BY SHRI KISHOR B. PHADKE REVENUE BY SHRI S.P. WALIMBE DATE OF HEARING 11 - 08 - 2021 DATE O F PRONOUNCEMENT 11 - 0 8 - 2021 ITA NO .1 139 /PUN/201 7 AMIT CHA UDHARI 2 ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT ON 30.09.2011 WITH M/S. SRISHTI DEVELOPERS IN RESPECT OF RESIDENTIAL PROPERTY SITUATED AT PLOT NO.37, S.NO.125/1B, GIRIJA CO - OPERATIVE HOUSING SOCIETY, PAUD ROAD, KOTHRUD, PUNE . THE TRAN SACTION UNDER THE D EVELOPMENT AGREEMENT TOOK PLACE BETWEEN SHRI BHASKAR CHAUDHARI, THE ASSESSEES FATHER , THE LEGAL OWNER OF THE PROPERTY AND M/S. SRISHTI DEVELOPERS FOR SUM OF RS.2,70,50,000 . T HE ASSESSEE SIGNED AS CONSENTING PARTY AND RECEIVED A SUM OF RS.60 LAKHS THROUGH CHEQUE FROM M/S SRISHTI DEVELOPERS UNDER CLAUSE 3(A) OF THE DEVELOPMENT AGREEMENT . THIS AMOUNT WAS OFFERED AS LONG TERM CAPITAL GAIN AND THEREAFTER EXEMPTION WAS CLAIMED U/S 54F ON DEPOSITING THE EQUAL AMOUNT IN CAPITAL GAIN ACCOUNT SC HEME WITH THE CONCERNED BANK. ON BEING CALLED UPON TO EXPLAIN AS TO ON WHAT ACCOUNT THE SUM OF RS.60 LAKH WAS RECEIVED, THE ASSESSEE SUBMITTED THAT HIS FATHER WANTED TO SELL THE PROPERTY, INCLUDING THE FLOOR WHICH HE WAS OCCUPYING FOR LAST MORE THAN TEN Y EAR S, TO WHICH , HE WAS NOT AGREEABLE. EVENTUALLY, THE ASSESSEE AGREED TO VACATE THE PREMISES IN LIEU OF A CONSIDERATION OF RS.60 LAKHS WHICH WAS RECEIVED ON ACCOUNT OF SURRENDER/ RELINQUISHMENT OF RIGHT TO OCCUPY THE PROPERTY WHICH WAS IN THE NATURE OF A CA PITAL ASSET U/S 2(14) OF THE ACT . THE AO FOUND ITA NO .1 139 /PUN/201 7 AMIT CHA UDHARI 3 THAT THE ASSESSEE WAS NOT A LEGAL OWNER OF THE PROPERTY , FOR WHICH A CONSIDERATION OF RS.60 LAKHS WAS SHOWN TO HAVE BEEN RECEIVED BY HIM. HE REFUSED TO ACCEPT RS.60 LAKHS AS CONSIDERATION FOR TRANSFER OF ANY CAPITAL ASSET. RESULTANTLY, THE EXEMPTION U/S 54F WAS DENIED. THE LD. CIT(A) ECHOED THE ASSESSMENT ORDER ON THIS POINT. 4. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD . THERE IS NO DISPUTE ON THE FA CT THAT THE PROPERTY IN QUESTION WAS IN THE NAME OF ASSESSEES FATHER AND THE ASSESSEE WAS STAYING ALONG WITH HIS FAMILY ON THE FIRST FLOOR OF THE BUILDING FOR THE LAST MORE THAN 10 YEARS. THE ASSESSEES FATHER WANTED TO TRANSFER THE PROPERTY TO M/S. SRISH TI DEVELOPERS , WHICH WAS OBJECTED TO BY T HE ASSESSEE. EVENTUALLY , T HE ASSESSEE AGREED FOR THE TRANSFER BY ACTING AS CONSENTING PARTY ON RECEIPT OF RS.60 LAKHS IN LIEU OF VACATING THE FIRST FLOOR. THE MOU ENTERED INTO BETWEEN THE ASSESSEES FATHER AND M/S . SRISHTI DEVELOPERS CLEARLY RECORDS THIS FACT THAT A SUM OF RS.60 LAKHS WAS GIVEN BY CHEQUE BY THE DEVELOPER TO THE ASSESSEE. UNDER SUCH CIRCUMSTANCES, A QUESTION ARISES AS TO WHETHER THE AUTHORITIES BELOW WERE JUSTIFIED IN TREATING THE SUM OF RS.60 LAKH S AS INCOME FROM OTHER SOURCES IN THE HANDS OF THE ITA NO .1 139 /PUN/201 7 AMIT CHA UDHARI 4 ASSESSEE AND THEREBY DEN YING THE BENEFIT OF EXEMPTION U/S 54F OF THE ACT . 5. ON AN EARLIER OCCASION WHEN THIS APPEAL CAME UP FOR HEARING BEFORE THE TRIBUNAL , THE LD. DR WAS DIRECTED TO VERIFY FROM T HE AO OF ASSESSEES FATHER AS TO HOW THE TRANSACTION OF RS.60 LAKHS WAS REFLECTED AND ASSESSED IN HIS ASSESSMENT. THE LD. DR , ON INFORMATION FROM THE AO OF THE ASSESSEES FATHER , STATED TODAY IN THE OPEN COURT , THAT HIS FATHER REDUCED A SUM OF RS.64 LAKHS FROM THE STAMP VALUE WITH THE REMARKS COST OF SELLING, INCLUDING A SUM OF RS.60 LAKHS GIVEN TO THE ASSESSEE BY THE DEVELOPER DIRECTLY THROUGH CHEQUE AND THAT FURTHER THE CLAIM OF DEDUCTION OF RS.64 LAKHS GOT ACCEPTED AND NO ADDITION OF RS.60 LAKHS WAS M ADE ON THIS SCORE. IT, THEREFORE, EMERGES THAT THE TOTAL CONSIDERATION OF RS.2.70 CRORES WAS RECEIVED IN TWO PARTS, NAMELY, RS.60 LAKHS BY THE ASSESSEE AND THE REMAINING AMOUNT BY HIS FATHER. THE ASSESSEES SHARE WAS ON ACCOUNT OF VACATING THE PREMISES WH ICH HE WAS OCCUPYING FOR LAST MORE THAN 10 YEARS. THE RIGHT TO OCCUPY THE FIRST FLOOR OF THE PROPERTY CONSTITUTE S A CAPITAL ASSET U/S 2(14) OF THE ACT . ON TRANSFER OF THIS RIGHT, THE ASSESSEE RECEIVED A SUM OF RS.60 LAKHS WHICH WAS DULY OFFERED AS LONG TERM CAPITAL GAIN. ONCE THE AO OF THE ASSESSEES FATHER ITA NO .1 139 /PUN/201 7 AMIT CHA UDHARI 5 ACCEPTED THE TRANSACTION AS CORRECT IN ACCORDANCE WITH MOU, THERE CAN BE NO QUESTION OF DISPUTING THE SAME TRANSACTION IN THE HANDS OF THE ASSESSEE . HERE IS A CASE IN WHICH THE ASSESSEE CORRECTLY S HOWED A SUM OF RS.60 LAKHS AS FULL VALUE CONSIDERATION FOR THE TRANSFER OF CAPITAL ASSET AND DEPOSITED THE SAID AMOUNT IN CAPITAL GAIN ACCOUNT SCHEM E FOR EXEMPTION OF CLAIM U/S 54F. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IT I S EVIDENT THAT THE AMOUNT OF RS.60 LAKHS WAS RECEIVED BY THE ASSESSEE AS CONSIDERATION FOR TRANSFER OF HIS RIGHT TO OCCUPY THE PROPERTY. AS SUCH , WE ARE UNABLE TO GIVE ANY OTHER COLOUR TO THE TRANSACTION , WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT AS SUCH I N THE HANDS O F THE ASSESSEES FATHER . EVEN IF FOR A MOMENT , IT IS ACCEPTED THAT THE SUM OF RS.60 LAKHS WAS RECEIVED BY THE ASSESSEE FROM HIS FATHER NOT TOWARDS CONSIDERATION FOR TRANSFER OF RIGHT TO OCCUPY THE PROPERTY, AT THE MOST , IT WOULD AMOUNT TO A GI FT IN HIS HANDS, WHICH IS AGAIN NOT CHARGEABLE TO TAX. THE AUTHORITIES BELOW HAVE CHARACTERIZED RS.60 LAKHS AS INCOME CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES . HOWEVER, NO SPECIFIC CLAUSE OF SECTION 56 OF THE ACT HAS BEEN BROUGHT TO O UR NOTICE ENCOMPASSING THE PREVAILING SITUATION W ITHIN ITS PURVIEW. WE, THEREFORE, OVERTURN THE IMPUGNED ORDER AND HOLD THAT THE ASSESSEE ITA NO .1 139 /PUN/201 7 AMIT CHA UDHARI 6 RIGHTLY COMPUTED LONG TERM CAPITAL GAIN OF RS.60 LAKHS AND THEN CLAIMED EXEMPTION U/S 54F OF THE EQUAL AMOUNT. 6 . TH E LD. AR HAS BROUGHT TO OUR NOTICE THAT FOR THE A.Y. 2015 - 16, THE ASSESSEE OFFERED CAPITAL GAIN OF RS.17.69 LAKHS ON ACCOUNT OF UN - UTILIZATION OF CAPITAL GAIN ACCOUNT SCHEME FROM THIS TRANSACTION TO THAT EXTENT. 7 . IN THE RESULT, THE APPEAL IS ALLOWE D. O RDER PRONOUNCED IN THE OPEN COURT ON 11 TH AUGUST , 2021 . SD/ - SD/ - ( S.S. VISWANETHRA RAVI ) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT PUNE ; DATED : 11 TH AUGUST , 2021 GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A) - 2, PUNE 4. 5. 6 . THE PR.CIT - 2 , PUNE DR, ITAT, A BENCH, PUNE / GUARD FILE . / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO .1 139 /PUN/201 7 AMIT CHA UDHARI 7 DA TE 1. DRAFT DICTATED ON 11 - 08 - 2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 11 - 08 - 2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEP T FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *