Shri Mukesh V. Patel, Gandhinagar V. DCIT, Gandhinagar Circle, Gandhinagar

ITA 1260/AHD/2018

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0099 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-10-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL K. PATEL
• Section: 54F; 142(1)

Judgement Text

ITA No.1260/Ahd/2018 Assessment Year: 2013-14 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.1260/Ahd/2018 Assessment Year: 2013-14 Shri Mukesh V. Patel, C/o. V.P. Patel & Co., Advocates A/102, Akshardham Tower, Near Under Bridge, Shahibaug, Ahmedabad - 380 004. [PAN – ACKPP 7110 L] Vs. D.C.I.T., Gandhinagar Circle, Gandhinagar. (Appellant) (Respondent) Assessee by Shri Mehul K. Patel, Advocate Revenue by Ms. Saumya Pandey Jain, Sr. D.R. Da te o f He a r in g 19.10.2023 Da te o f P ro n o u n ce m e n t 08.11.2023 O R D E R This appeal is filed by the Assessee against order dated 19.03.2018 passed by the CIT(A), Gandhinagar, Ahmedabad for the Assessment Year 2013- 14. 2. The Assessee has raised the following grounds of appeal :- “1. The ld. CIT(A) erred in law and on facts in sustaining the disallowance of DEDUCTION claim u/s. 54F of the Act, where the appellant had fulfilled all the conditions stipulated in said provision. 2. The Ld. CIT(A) erred on facts in upholding the addition made on assumption that, even after the retirement from firm the relinquishment of share/interest didn’t ceased. 3. The assessee has shown income under the heads Salary, Share of Profit, Capital Gain, Interest & Other Sources. The assessee field his return of income declaring total income of Rs.11,48,560/-. The case was selected for scrutiny and accordingly notice u/s.143(2) of the Income Tax Act, 1961 was issued to the assessee on 12.09.2014, which was served upon the assessee. Notice u/s.143(2) r.w.s. 129 and u/s 142(1) were issued on 09.09.2015 which were ITA No.1260/Ahd/2018 Assessment Year: 2013-14 Page 2 of 3 served to the assessee. Thereafter notices u/s.142(1) of the Act were issued on various dates and the authorised representative of the assessee attended the assessment proceedings and submitted the details. The Assessing Officer observed from the statement of income of the assessee that the assessee has shown long term capital gain of Rs.23,46,150/- on account of relinquishment of right in the firm. The assessee during the year under consideration purchased flat for Rs.27,50,000/- and claimed deduction of Rs.23,46,150/- under Section 54F of the Act on this account. The assessee in his reply submitted that the assessee relinquished his share in the firm – Jyoti Quarry Works and derived capital gain and the same was invested in residential premises, therefore, the assessee claimed deduction u/s. 54F of the Act. After taking cognisance of the said reply, the Assessing Officer made disallowance of Rs.23,46,150/- which was claimed as deduction u/s. 54F of the Act. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR stated that one of the other Partner Shri Bipin V. Patel, relinquished his share in the firm – Jyoti Quarry Works and derived capital gain as well and in his case, the Tribunal has allowed the claim of deduction under Section 54F of the Act. (ITA No.1259/Ahd/2018 Bipinbhai V. Patel vs. ITO order dated 13.10.2023). 6. The Ld. DR relied upon the assessment order and the order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee’s case is identical to that of Bipinbhai Patel (supra) who also relinquished his share in the same firm and the Tribunal has granted the claim of deduction under Section 54F of the Act. The Tribunal therein has relied upon the decision of the Hon’ble Apex Court in case of CIT vs. Mansukh Dyeing and Printing Mills (2022) 145 taxmann.com 151(SC) and also that of the decision of Hon’ble Bombay High Court in case of CIT vs. A. N. Naik Associates 265 ITR 346 (Bom) as well as the order of the Tribunal in case of Smt. Giriraj Reddy P. vs. ITO (ITA No. 297/HYD/2012 order dated 25.05.2012) wherein it was held that relinquishment of partner’s share amounts to capital gain as the amount credited to capital accounts of the partners was available for ITA No.1260/Ahd/2018 Assessment Year: 2013-14 Page 3 of 3 withdrawal, assets so revalued and credited to capital accounts of respective partners could be said to be transfer. Thus, the ratio laid down by the Apex Court in case of Mansukh Dyeing and Printing Mills (supra) will be applicable in the present case as well. There are no distinguishing facts pointed out by the Ld. DR from the other partner’s case which was decided by the Tribunal. Hence, the appeal of the assessee is allowed. 8. In result, appeal of the assessee is allowed. Order pronounced in the open Court on this 8 th November, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 8 th November, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad