ANJU S JAIN, MUMBAI V. ASST CIT WD 19(3), MUMBAI

ITA 1462/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9871 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR RAI LD
• Assessee Lawyers: VIPUL K MODY LD
• Section: 143(3); 54

Judgement Text

ITA NO.1462/MUM/2015 ANJU S. JAIN ASSESSMENT YEAR 2011-12 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 1462/MUM/2015 ( / ASSESSMENT YEAR: 2011-12) ANJU S. JAIN 136, NIBHANA, 13 TH FLOOR PALI HILL BANDRA(W) MUMBAI 400 050. / VS. ASSISTANT COMMISSIONER OF INCOME TAX WARD 19(3) PIRAMAL CHAMBERS LALBAGH,PAREL MUMBAI 400 012. ./ ./ PAN/GIR NO. AASPJ-1284-F ( ! /APPELLANT ) : ( '#! / RESPONDENT ) ! / APPELLANT BY : VIPUL K.MODY, LD. AR '#! / RESPONDENT BY : SAURABH KUMAR RAI, LD.DR / DATE OF HEARING : 12/07/2017 / DATE OF PRONOUNCEMENT : 13/07/2017 2 ITA NO.1462/MUM/2015 ANJU S. JAIN ASSESSMENT YEAR 2011-12 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY THE ASSESSEE FOR THE ASS ESSMENT YEAR [AY] 2011-12 ASSAILS THE ORDER OF THE LD. COMMISSIONER O F INCOME-TAX (APPEALS)- 32 [CIT(A)], MUMBAI DATED 16/01/2015 QUA DENIAL OF EXEMPTION U/S 54 FOR RS.37.15 LACS. 2. BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT INDIVIDUAL, WAS ASSESSED FOR IMPUGNED AY U/S 143(3) VIDE ORDER DATED 27/12/2 013 AT RS.1,35,18,060/- AS AGAINST RETURNED INCOME OF RS.9 8,02,350/- FILED BY ASSESSEE ON 28/09/2011. THE ASSESSEE HAS SUFFERED A DDITION OF RS.37.15 LACS UNDER THE HEAD CAPITAL GAINS WHICH IS THE SOLE SUBJECT MATTER OF THIS APPEAL. 2.1 DURING THE YEAR, THE ASSESSEE EARNED CERTAIN LONG TERM CAPITAL GAINS [LTCG] OF RS.37.15 LACS ON SALE OF HOUSE SITUATED AT MALAD, MUMBAI AND CLAIMED EXEMPTION U/S 54 FOR THE SAME AMOUNT SI NCE IT MADE INVESTMENT IN NEW FLAT SITUATED AT RUSTOMJEE PARAMOUNT. HOWEVER THE LD. AO NOTED THAT THE ASSESSEE CLAIMED THE EXEMPTION ON LY ON THE STRENGTH OF ALLOTMENT LETTER DATED 30/07/2011 WHEREAS POSSESSIO N WAS NOT TAKEN AND NO SALE DEED WAS EXECUTED IN FAVOR OF THE ASSESSEE AND AS PER THE TERMS OF THE ALLOTMENT LETTER, THE CONSTRUCTION OF THE PROJE CT WAS TO COMMENCE NOT BEFORE 30/06/2012 AND WAS EXPECTED TO BE COMPLETED BY 30/06/2016 AND THEREFORE THE PAYMENT OF RS.52 LACS MADE BY THE ASS ESSEE TO THE BUILDER 3 ITA NO.1462/MUM/2015 ANJU S. JAIN ASSESSMENT YEAR 2011-12 WAS ONLY AN ADVANCE AMOUNT. THEREFORE, NO EXEMPTION U/S 54 TOWARDS THE SAME COULD BE GRANTED TO THE ASSESSEE SINCE THE ASS ESSEE WAS NOT HAVING DOMAIN OR CONTROL OVER THE PROPERTY WITHIN THE STIP ULATED PERIOD AS PRESCRIBED U/S 54. 3. AGGRIEVED THE ASSESSEE ASSAILED THE SAME WITHOUT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 16/01/2 015 WHO CAME TO SAME CONCLUSION. AGGRIEVED, THE ASSESSEE IS IN APPE AL BEFORE US. 4. THE LD. COUNSEL FOR ASSESSEE [AR] CONTENDED THAT THE ASSESSEE WAS REQUIRED TO INVEST RESULTANT LTCG OF RS.37.15 LACS IN THE NEW PROPERTY WHICH HE HAS ALREADY DONE BEFORE FILING OF RETURN O F INCOME AND THEREFORE, ELIGIBLE TO CLAIM THE SAID EXEMPTION. 4.1 PER CONTRA, LD. DR RELIED UPON THE FINDINGS OF LD. CIT(A) AND CONTENDED THAT THE AS PER THE TERMS OF THE CONTRACT , THE ASSESSEE COULD NOT GET THE CONTROL OVER THE PERIOD WITHIN STIPULATED P ERIOD AS PRESCRIBED U/S 54 AND THEREFORE, NOT ELIGIBLE TO CLAIM THE SAID DEDUC TION. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE BASIC FACTS ARE NOT IN DISPUTE. THE ASSESSEE HAS EARNED LTCG OF RS.37.15 LACS DURING THE YEAR AND CLAIMED EXEMPT ION ON CONTRIBUTION OF RS.52.00 LACS U/S 54 ON THE STRENGT H OF THE ALLOTMENT LETTER DATED 30/07/2011 ISSUED BY THE BUILDER. THE ASSESSE E HAS PAID A SUM OF RS.10 LACS ON 29/06/2011 & RS.42 LACS ON 29/07/2011 TOWARDS THE SAME I.E. BEFORE DUE DATE OF FILING OF RETURN OF INCOME. NOW, THE ONLY QUESTION TO BE ADJUDICATED IS THAT WHETHER THE ASSESSEE WOULD B E ENTITLED FOR THE SAID 4 ITA NO.1462/MUM/2015 ANJU S. JAIN ASSESSMENT YEAR 2011-12 EXEMPTION U/S 54 ON THE STRENGTH OF ALLOTMENT LETTE R KEEPING IN VIEW THE TERMS OF THE AGREEMENT. 6. IT IS SETTLED LEGAL PROVISIONS THAT THE BENEFICI AL PROVISIONS SHOULD BE CONSTRUED LIBERALLY AND SHOULD BE GRANTED TO THE AS SESSEE PROVIDED THE COMPLIANCE HAS BEEN MADE IN THE LATTER AND SPIRIT O F THE STATUTORY PROVISIONS. EVIDENTLY, THE ASSESSEE HAS INVESTED RS .52 LACS IN THE NEW PROPERTY WELL BEFORE DUE DATE OF FILING OF RETURN O F INCOME AND THE SAME IS MORE THAN RS.37.15 LACS LTCG EARNED BY THE ASSESSEE NOTWITHSTANDING THE FACT THAT THE TOTAL COST OF THE NEW PROPERTY WA S MORE THAN RS.500 LAKHS AND THE ASSESSEE PAID A MINISCULE PORTION OF THE SA ME DURING THE YEAR. NEVERTHELESS, THE ASSESSEE HAD MADE EFFORTS TO PROC URE THE NEW PROPERTY AND INVESTED THE MONEY AND THEREFORE, COULD DO NOTH ING MORE TO COMPLY WITH THE STATUTORY PROVISIONS SINCE CONSTRUCTION OF THE PROPERTY WAS IN THE HANDS OF THE BUILDER. 7. AT THE SAME TIME, WE FIND THAT AS PER THE TERMS OF ALLOTMENT LETTER, THE BUILDER WAS NOT HAVING NECESSARY PERMISSION FOR THE DEVELOPMENT OF THE PROJECT FROM APPROPRIATE AUTHORITY AND THE ALLOTMEN T COULD BE CANCELLED IN THE EVENT OF NON-COMMENCEMENT OF CONSTRUCTION BEFOR E 30/06/2012. HENCE, ON THE FACTS, IN PRINCIPAL WHILE UPHOLDING THAT THE ASSESSEE SHALL BE ENTITLED FOR THE SAID EXEMPTION U/S 54, WE RESTORE THE MATTE R BACK TO THE FILE OF LD. AO TO VERIFY THE FACT THE PROPERTY WAS FINALLY BEEN ACQUIRED BY THE ASSESSEE AND POSSESSION THEREOF WAS OBTAINED AND NECESSARY O WNERSHIP DOCUMENTS WERE EXECUTED IN ASSESSEES FAVOR. IF SO, THE ASSES SEE SHALL BE ENTITLED TO 5 ITA NO.1462/MUM/2015 ANJU S. JAIN ASSESSMENT YEAR 2011-12 GET THE SAID EXEMPTION OTHERWISE NOT. THE ASSESSEE IS ALSO DIRECTED TO SUBSTANTIATE HIS CLAIM FORTHWITH IN THIS REGARD BY PRODUCING NECESSARY EVIDENCES / INFORMATION FAILING WHICH THE LD. AO SH ALL BE AT LIBERTY TO DECIDE THE MATTER ON THE BASIS OF MATERIAL AVAILABLE ON RE CORD. 8. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2017 SD/- SD/- (JOGINDER SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 13 .07.2017 SR.PS:- THIRUMALESH / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. '&. , . , / DR, ITAT, MUMBAI 6. /0 / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI