ACIT, Intl. Taxation, Circle, Chandigarh V. Sh. Manjit Singh Baidwan, Chandigarh

ITA 1245/CHANDI/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2971 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 28-09-2018

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI R.L NEGI, JUDICIAL MEMBER ./ ITA NO. 1245/CHD/2018 / ASSESSMENT YEAR : 2013-14 THE ACIT, (INTERNATIONAL TAXATION), CHANDIGARH SH. MANJIT SINGH BAIDWAN, # 3151, SECTOR 27-D, CHANDIGARH ./PAN NO: AAPPB3691P / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING / REVENUE BY : SH. SANDEEP DAHIYA, CIT ! /ASSESSEE BY : SH. B.K. NOHRIA, CA % /DATE OF HEARING : 04.08.2021 % / DATE OF PRONOUNCEMENT : 26.10.2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 06.07.2018 PASSED BY COMMISSIONER OF INCOME TAX (AP PEALS)-43, NEW DELHI [FOR SHORT THE CIT(A)] FOR THE ASSESSMENT Y EAR 2013-14, VIDE WHICH THE LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE REVENUE AGAINST THE ASSESSMENT ORDER PASSED U/S 143(3) OF T HE INCOME TAX ACT, 1961 [FOR SHORT THE ACT]. 2. THE BRIEF FACTS EMANATING FROM THE RECORD AND PL EADINGS OF THE PARTIES ARE THAT THE ASSESSEE FILED ITS RETURN OF I NCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 86,000/-. THE ITA NO.1245-CHD-2018- SH. MANJIT SINGH BAID WAN, CHANDIGARH 2 AO PASSED THE ASSESSMENT ORDER DETERMINING THE TOTA L INCOME OF THE ASSESSEE AT RS. 4,72,98,280/- AFTER MAKING ADDITION OF RS. 4,71,90,800/- ON ACCOUNT OF DISALLOWANCE OF THE EXEMPTION / DEDUC TION CLAIMED BY THE ASSESSEE U/S 54 OF THE ACT AND ADDITION OF RS. 21,4 78/- I.E., ON ACCOUNT OF DIFFERENCE OF ACTUAL AMOUNT OF INTEREST RECEIVED BY THE ASSESSEE AND THE AMOUNT DECLARED BY THE ASSESSEE. THE ASSESSEE C HALLENGED THE ACTION OF THE AO IN MAKING ADDITION OF RS.4,72,98,280/- BE FORE THE LD. CIT(A). THE LD. CIT(A) AFTER HEARING THE ASSESSEE PARTLY AL LOWED THE APPEAL OF AND RESTRICTED THE DEDUCTION TO 50% OF THE INVESTME NT MADE IN RESIDENTIAL PROPERTY AMOUNTING TO RS. 6,36,64,000/- . AGAINST THE SAID FINDINGS OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PA SSED BY THE LD. CIT(A) ON THE FOLLOWING GROUNDS: - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , WHETHER THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW BY HOLDING TH AT CLAIM OF THE ASSESSEE TO GET THE BENEFIT OF DEDUCTION/S 54 FOR I NVESTMENT OUTSIDE INDIA BE ALLOWED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, WHETHER THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW BY HOLDING TH AT CLAIM OF THE ASSESSEE TO GET THE BENEFIT OF DEDUCTION/S 54 FOR I NVESTMENT OUTSIDE INDIA BE ALLOWED BY IGNORING THE FACT THAT INTENTIO N OF THE LEGISLATURE BEHIND SEC 54 OF THE INCOME TAX ACT, 19 61 WAS TO GRANT BENEFIT TO INVESTMENT IN RESIDENTIAL HOUSE IN INDIA. 3. THE APPELLANT CRAVES TO ADD, AMEND, MODIFY OR AL TER ANY GROUNDS OF APPEAL AT ANY TIME OR BEFORE THE HEARING OF THE APPEAL. 4. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE ( DR) SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY HELD THAT THE ASSES SEE IS ENTITLED TO GET ITA NO.1245-CHD-2018- SH. MANJIT SINGH BAID WAN, CHANDIGARH 3 BENEFIT OF DEDUCTION U/S 54 OF THE ACT FOR INVESTME NT OUTSIDE INDIA IGNORING THE INTENTION OF THE LEGISLATURE IN MAKING PROVISIONS UNDER SECTION 54 OF THE ACT. THE LD. DR SUPPORTING THE A SSESSMENT ORDER SUBMITTED THAT THE ASSESSEE PURCHASED A RESIDENTIAL HOUSE FOR A SUM OF RS. 636.64 LACS BY RAISING A LOAN AND UTILIZING THE SALE PROCEEDS AMOUNTING TO RS. 575 LACS RECEIVED FROM SALE OF HOU SE NO. 144, SECTOR 27A, CHANDIGARH. THE ENTIRE GAIN ON SALE OF THE HO USE PROPERTY WAS INVESTED IN PURCHASING RESIDENTIAL HOUSE IN AUCKLAN D, NEW ZEALAND. SINCE THE ASSESSEE HAD PURCHASED THE HOUSE OUTSIDE INDIA, THE LD. CIT(A) OUGHT TO HAVE REJECTED THE CLAIM OF THE ASSE SSEE U/S 54 OF THE ACT. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTING THE ORDER PASSED BY THE LD. CIT(A) SUBMITTED THAT SINCE THE ORDER PASSED BY THE LD. CIT(A) IS BASED ON THE PROVISIONS OF LAW AN D IN ACCORDANCE WITH THE JUDGEMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF LEENA JUGAL KISHORE SHAH VS ACIT 392 ITR 0018 (GUJ.) AND THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF SHRI JASWINDER SINGH LOTA VS DCIT, ITA NO. 802/CHD/2015 AY 2008-09 , THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) TO INTERFERE WITH THE SAME. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON BY THE LD. COUNSEL. THE LD. CIT(A) HAS ALLOWED THE DEDUCTIONS U/S 54 OF THE ACT BASICALLY HOLDING THAT THE AMENDED PROVISIONS HAVE NO RETROSP ECTIVE APPLICATION ITA NO.1245-CHD-2018- SH. MANJIT SINGH BAID WAN, CHANDIGARH 4 AS THE CLAIM OF THE ASSESSEE PERTAINS TO THE ASSESS MENT YEAR 2013-14, WHEREAS, THE AMENDMENT WAS MADE APPLICABLE W.E.F. 0 1.04.2015. AS POINTED OUT BY THE LD. COUNSEL, THE LD. CIT(A) HAS DECIDED THE ISSUE INVOLVED IN THE PRESENT CASE BY FOLLOWING THE JUDGE MENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF LEENA JUGAL KISHORE SHAH VS ACIT AND THE DECISION OF THE COORDINATE BENCH IN THE CAS E OF SHRI JASWINDER SINGH LOTA VS DCIT (INTERNATIONAL TAXATION) (SUPRA). THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF SHRI JASWINDER SINGH LOTA VS DCIT (SUPRA) HOLDING AS UNDER: - 4.1 THE LD. AR IN THE COURSE OF THE HEARING HAD AL SO FILED COPY OF THE ORDER DATED 15.02.2018 IN ITA 3429/MUM/2016 IN THE CASE OF ASHOK KESHAVLAL TEJUJA VERSUS ACIT. RELYING ON T HE SAID DECISION IT WAS SUBMITTED BY THE LD. AR THE DECISIO N BEING LATEST IN POINT OF TIME WHEREIN THE ITAT HAS RELIED ON THE DE CISION OF THE HONBLE GUJARAT HIGH COURT AND IN THE ABSENCE OF AN Y CONTRARY DECISION, IT WAS HIS PRAYER THAT THE SAME MAY BE FO LLOWED. A PERUSAL OF THE SAID ORDER FURTHER BRINGS OUT THE FA CT THAT THE COORDINATE BENCH SITTING AT MUMBAI TOOK COGNIZANCE OF AN EARLIER ORDER ALSO OF THE MUMBAI BENCH IN THE CASE OF IT0 V ERSUS NISHANT LALIT JADHAV IN ITA 68 83/MUM/2014 WHICH ALSO RELIE D ON THE AFORESAID DECISION. ACCORDINGLY, IN THE PECULIAR FA CTS AND CIRCUMSTANCE OF THE PRESENT CASE WHICH HAVE BEEN SE T OUT HEREIN ABOVE CONSIDERING THE POSITION OF LAW AS ALSO DISCU SSED IN DETAIL IN THE EARLIER PORTION OF THIS ORDER, WE FIND THAT IN THE PECULIAR FACTS OF THE PRESENT CASE THE CLAIM OF THE ASSESSEE HAS T O BE ALLOWED. IT IS SEEN THAT THE AMENDMENT BY THE FINANCE ACT OF 2014 IN SECTION 54F COMES INTO EFFECT ONLY FROM 01/04/2015. THUS, FROM THE SAID DATE THE BENEFIT OF DEDUCTION UNDER SECTION 54F FOR INVE STMENTS MADE OUTSIDE INDIA UNDISPUTEDLY CAN BE DENIED AS IT CAN BE SAID TO BE LIMITED TO THE INVESTMENT IN RESIDENTIAL HOUSE PROP ERTY MADE ONLY WITHIN INDIA. HOWEVER, PRIOR TO THE SAID DATE WHEN THE AMENDMENT KICKS IN, THERE IS NO STATUTORY BAR FOR THE TAXPAYE R TO MAKE INVESTMENTS OUTSIDE INDIA IN RESIDENTIAL HOUSE PROP ERTY IN ORDER TO GET THE BENEFIT OF DEDUCTIONS 54F PROVIDED OTHER CO NDITIONS WERE FULFILLED. THUS, SINCE THE ASSESSMENT YEAR UNDER CO NSIDERATION IS PRIOR TO THE AMENDMENT OF SECTION 54F BY THE FINANC E ACT, 2014 THE LAW AS ON DATE STANDS THAT THE CLAIM OF THE ASS ESSEE HAS TO BE ITA NO.1245-CHD-2018- SH. MANJIT SINGH BAID WAN, CHANDIGARH 5 ALLOWED. ACCORDINGLY, THE ISSUE IS RESTORED BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO GRANT NECESSARY RELIEF IN ACCORDANCE WITH LAW. 6. SINCE THE FINDINGS OF THE LD. CIT(A) ARE BASED O N THE RATIO LAID DOWN BY THE HON'BLE GUJARAT HIGH COURT AND THE DECI SION OF THE COORDINATE BENCH IN THE CASES REFERRED / DISCUSSED ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD . CIT(A). HENCE, IN OUR CONSIDERED VIEW, THERE IS NO MERIT IN THE REVEN UES APPEAL. ACCORDINGLY, WE UPHOLD THE FINDINGS OF THE LD. CIT( A) AND DISMISS THE APPEAL OF THE REVENUE. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 26 TH OCTOBER, 2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 26.10 .2021 .. ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / / CIT 4. / ( )/ THE CIT(A) 5. - 2 , %2 , 4 / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR