LATE DR. (MRS.) PUSHPA GULRAJANI, MUMBAI V. ITO 11(3)(2), MUMBAI

ITA 1214/MUM/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2646 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 23-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YESHWANT U CHAVAN
• Keywords: Revision of order; Set aside
• Section: 143(3); 54EC; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: MUMBAI BEFORE SHRI P M JAGTAP, ACCOUNTANT MEMBER AND SHRI R S PADVEKAR, JUDICIAL MEMBER ITA NO 1214/MUM/2009 (ASSESSMENT YEAR: 2004-05) LATE DR (MRS) PUSHPA GULRAJANI, C/O. (I) DR SUBIR ROY, 29, CRESCENT, PALI HILL RD, KHAR, MUMBAI -400 052 (II) ANJALI JAGTIANI, 13, SATNAM, 93, CUFFE PARADE, MUMBAI -400 005 PAN: AACPG 0882 G VS INCOME TAX OFFICER 11(3)(2), 4TH FLOOR, AAYAKAR BHAVAN, MUMBAI -400 020 APPELLANT RESPONDENT APPELLANT BY: MS MRUGAKSHI JOSHI RESPONDENT BY: SHRI YESHWANT U CHAVAN ORDER PER P M JAGTAP, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT-11 MUMBAI DATED 21.11.2009 PASSED U/S 263. 2. THE ASSESSEE IN THE PRESENT CASE IS A GYNAECOLOG IST WHO FILED HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 30.10.20 04 DECLARING TOTAL INCOME OF RS 3,09,476/-. IN THE ASSESSMENT COMPLETED U/S 143(3) VIDE AN ORDER DATED 24.8.2006, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS 3,34,099/- AFTER MAKING DISALLOWANCE OF CERTAIN EXP ENSES. THE RECORDS OF THE SAID ASSESSMENT WAS EXAMINED BY THE LEARNED CIT AND ON S UCH EXAMINATION HE FOUND THAT ASSESSEE HAD SOLD DEPRECIABLE ASSETS DURING TH E YEAR UNDER CONSIDERATION ON WHICH EXEMPTION U/S 54EC WAS CLAIMED BY TREATING TH E PROFIT ARISING FROM SALE OF DEPRECIABLE ASSETS AS LONG-TERM-CAPITAL-GAIN. ACCO RDING TO HIM, PROFITS AND GAINS ARSING FROM SALE OF DEPRECIABLE ASSETS WAS REQUIRED TO BE COMPUTED AS PER SECTION 50 TREATING THE SAME AS SHORT-TERM-CAPITAL-GAIN AND TH E ASSESSEE, THEREFORE, WAS NOT ITA 1214/M/2009 LATE DR (MRS) PUSHPA GULRAJANI 2 ENTITLED TO CLAIM EXEMPTION U/S 54EC. HE, THEREFOR E, HELD THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ALLOWING ASSESSEES CLAIM FOR EXEMPTION U/S 54EC TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND EXERCISING HIS POWERS U/S 263, HE SET ASIDE THE ASSESSMENT MADE BY THE AS SESSING OFFICER AND DIRECTED HIM TO MAKE THE SAME AFRESH DISALLOWING THE CLAIM OF TH E ASSESSEE U/S 54EC. AGGRIEVED BY THE ORDER PASSED BY LEARNED CIT U/S 263, THE ASS ESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND AL SO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT A SIMILAR MATTER HAS ALREADY BEEN DECIDED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ENTERPRISE ADVERTISING PVT LTD VS DCIT VIDE ITS ORDER DATED 4.6.2009 PASSED IN ITA 28 73/MUM/2008. IN THE SAID CASE ALSO, THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 5 4EC IN RESPECT OF PROFIT ARISING FROM SALE OF DEPRECIABLE ASSET WAS ALLOWED BY THE A SSESSING OFFICER IN THE ASSESSMENT COMPLETED U/S 143(3) AND THE SAID ASSESS MENT WAS SET ASIDE BY THE LEARNED CIT EXERCISING POWERS CONFERRED UPON HIM U/ S 263 WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE THE SAME AFRESH AFTER DIS ALLOWING THE ASSESSEES CLAIM FOR EXEMPTION U/S 54EC. WHEN THE MATTER REACHED TO THE TRIBUNAL, IT WAS FOUND BY THE TRIBUNAL THAT THE ISSUE IN DISPUTE WAS SQUARELY COV ERED ON MERITS IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE BOMBAY HIGH COU RT IN THE CASE OF ACE BUILDERS PRIVATE LIMITED REPORTED IN 144 TAXMAN 855 (BOM) WH EREIN IT WAS HELD THAT SECTION 54EC DOES NOT MAKE ANY DISTINCTION BETWEEN THE DEPR ECIABLE ASSETS AND NON- DEPRECIABLE ASSETS AND, THEREFORE, EXEMPTION AVAILA BLE TO DEPRECIABLE ASSET U/S 54EC CANNOT BE DENIED BY REFERRING TO FICTION CREATED BY SECTION 50, WHICH HAS LIMITED APPLICATION. IT WAS ALSO HELD BY THE TRIBUNAL THAT THE VIEW TAKEN BY THE ASSESSING OFFICER WHILE ALLOWING THE CLAIM OF THE ASSESSEE OF EXEMPTION U/S 54EC WAS A POSSIBLE VIEW AND IT WAS NOT PERMISSIBLE TO THE LEARNED CIT TO SUBSTITUTE HIS OWN VIEWS U/S 263. THE TRIBUNAL ALSO TOOK NOTE OF THE FACT THAT IN THE CASE OF CIT VS LEGAL HEIRS OF LATE DR (MRS) S R PANDIT, A SIMILAR ISSUE WAS DECID ED BY THE HONBLE BOMBAY HIGH COURT IN FAVOUR OF THE ASSESSEE ON MERITS FOLLOWING ITS DECISION IN THE CASE OF ACE BUILDERS PRIVATE LIMITED (SUPRA) AND THE SLP FILED BY THE DEPARTMENT AGAINST THE SAID DECISION WAS DISMISSED BY HONBLE SUPREME COURT. A S THE ISSUE INVOLVED IN THE ITA 1214/M/2009 LATE DR (MRS) PUSHPA GULRAJANI 3 PRESENT CASE AS WELL AS ALL THE MATERIAL FACTS RELE VANT THERETO ARE SIMILAR TO THAT OF THE CASE OF M/S ENTERPRISE ADVERTISING PVT LTD, WE RESPECTFULLY FOLLOW THE DECISION OF THE TRIBUNAL RENDERED IN THAT CASE AND SET ASIDE TH E IMPUGNED ORDER OF THE LEARNED CIT PASSED U/S 263 RESTORING THAT OF THE ASSESSING OFFICER PASSED U/S 143(3). 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON THE 22 ND DAY OF DECEMBER 2009. SD/- (R S PADVEKAR) JUDICIAL MEMBER SD/- (P M JAGTAP) ACCOUNTANT MEMBER MUMBAI, DATE: 22ND DECEMBER 2009 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT -11, MUMBAI. 4) THE CIT/ADDL CIT-RG 11(3)/CONCERNED, MUMBAI. 5) THE D.R. C BENCH, ITAT, MUMBAI BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR CHAVAN* I.T.A.T., MUMBAI ITA 1214/M/2009 LATE DR (MRS) PUSHPA GULRAJANI 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 18.12.09 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 22.12.09 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS 7 FILE SENT TO THE BENCH CLERK SR.PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER