MAHESH KUMAR PODDAR, MUMBAI V. ITO WD 26(2)(2), MUMBAI

ITA 1511/MUM/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2936 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 17-03-2016
• Court: TRIBUNAL
• Department Lawyers: B S BIST

Judgement Text

1 I.T.A. NO.1511/MUM/2016 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI JOGINDER SINGH(JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACOUNTANT MEMBER) I.T.A. NO.1511/MUM/2016 (ASSESSMENT YEAR : 2011-12) SHRI MAHESH KUMAR PODDAR C-210, WHISPERING PALMS XCLUSIVE LOKHANDWALA TOWNSHIP, KANDIVALI (E) MUMBAI 400 101 ITO, WD.26(2)(2), MUMBAI PAN : AIWPP1708N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAKESH JOSHI RESPONDENT BY SHRI B.S. BIST DATE OF HEARING : 15-06-2016 DATE OF PRONOUNCEMENT : 24-06-2016 O R D E R PER ASHWANI TANEJA, AM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-46, MUMBAI [HE REINAFTER CALLED CIT(A)] DT 06-01-2014 FOR A.Y. 2011-12 ON THE FOLL OWING GROUNDS: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN ALLOWING THE CLAIM OF EXEMPTIO N ULS 54 OF THE INCOME TAX ACT,1961 OF RS.21,76,0401- INSTEAD OF RS . 24,34,261/- AS 2 I.T.A. NO.1511/MUM/2016 CLAIMED BY THE APPELLANT, WITHOUT CONSIDERING THE F ACTS AND CIRCUMSTANCES OF THE CASE. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F LEARNED ASSESSING OFFICER IN NOT APPRECIATING THE FACT THAT THE INVESTMENT MADE IN TWO FLATS IS THE ADJOINING FLATS AND TO BE CONSIDERED AS ONE FLAT, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANC ES OF THE CASE. 2. THE SOLITARY ISSUE RAISED IN THIS APPEAL IS WITH RE GARD TO DENIAL BY THE ASSESSING OFFICER OF THE CLAIM OF EXEMPTION U/A 54. THE BRIEF BACKGROUND IS THAT THE ASSESSEE IS AN INDIVIDUAL AND SOLD RESIDEN TIAL HOUSE PROPERTY DURING THE YEAR UNDER CONSIDERATION ON WHICH HE EARNED LONG TE RM CAPITAL GAIN. THE AMOUNT OF SALE PROCEEDS WERE INVESTED BY THE ASSESS EE IN TWO ADJACENT FLATS. THE AO ALLOWED THE CLAIM WITH RESPECT TO ONE FLAT O NLY. BEING AGGRIEVED, HE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AN SUBMITTE D THAT THERE WAS NO RESTRICTION UNDER THE LAW IN CLAIMING THE BENEFIT O F DEDUCTION FOR MORE THAN ONE HOUSE. THE LD. CIT(A) WAS NOT SATISFIED WITH T HE SUBMISSION OF THE ASSESSEE AND THEREFORE, SHE REJECTED THE CLAIM OF THE ASSESS EE AN UPHELD THE ORDER OF THE ASSESSING OFFICER. STILL BEING AGGRIEVED, THE A SSESSEE FILED APPEAL BEFORE THE TRIBUNAL. IT HAS BEEN SUBMITTED BY THE LD.COUNSEL THAT TWO FLATS WERE ADJACENT FLATS AND THEY WERE USED BY THE ASSESSEE AS ONE H OUSE. THE FAMILY NEEDS OF THE ASSESSEE WERE GREATER AND, THEREFORE, IN A PLAC E LIKE MUMBAI, THE ASSESSEE NEED TWO FLATS TO FULFIL HIS NEEDS. IT WAS FURTHER SUBMITTED THAT THE LEGISLATURE USED THE WORD A U/S 54 AND NOT THE WORD ONE. I T IS FURTHER SUBMITTED THAT THE WORD A DOES NOT MEAN ONE. IT WAS FURTHER SUBMITTED THAT THIS ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE ON THE BASIS OF FOLLOWING JUDGEMENTS OF VARIOUS HIGH COURTS AND DIFFERENT BENCHES OF THE TR IBUNAL: 1. CIT & ANR VS SMT. K.G. RUKMINIAMMA 331 ITR 211 (KAR ) 3 I.T.A. NO.1511/MUM/2016 2. CIT VS ANAND BASAPPA 309 ITR 329 (KAR) 3. CIT VS KHOOCHAND M MAKHIJA 223 TAXMANN 189 (KAR) 4. CIT VS SAYED ALI ADIL 352 ITR 418 (AP) 5. CIT VS GITA DUGGAL 357 ITR 153 (DEL) 6. CIT VS V.R. KARPAGAM 373 ITR 127 (MAD) 7. DY.CI VS JAI TRIKANAND RAO 149 ITD 112 (ITAT, MUM) 8. GIRDHAR MOHANANI VS ITO ITA NO.4591/MUM/2013& 4650/ MUM/2013 3. PER CONTRA, THE LD.DR RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIE S AND JUDGEMENTS RELIED UPON BY THE LD.COUNSEL BEFORE US. IT IS NO TED THAT THE KARNATAKA HIGH COURT IN ITS VARIOUS JUDGEMENTS HAS CLARIFIED THIS ISSUE THREADBARE. IN THE OTHER JUDGEMENTS ALSO WHICH HAVE BEEN RELIED UPON BY THE LD.COUNSEL AS MENTIONED ABOVE, THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE GIST OF THESE JUDGEMENTS IS THAT THE EXPRESSION 'A RESIDENTIAL HOUSE' IN S. 54(1) H AS TO BE UNDERSTOOD IN THE SENSE THAT THE BUILDING SHOULD BE OF RESIDENTIAL NATURE AND 'A' SHOULD NOT BE UNDERSTOOD TO INDICATE A SINGULAR NUMBER. WHERE AN ASSESSEE HAD PURCHASED TWO RESIDEN TIAL FLATS, HE IS ENTITLED TO EXEMPTION U/S 54 IN RESPECT OF CAPIT AL GAINS ON SALE OF ITS PROPERTY ON PURCHASE OF BOTH THE FLATS, DESPITE THE FACT THAT THE FLATS WERE PURCHASED BY SEPARATE SALE DEEDS). DEDUC TION IS ALLOWABLE EVEN IF THE FLATS ARE ON DIFFERENT FLOORS. ON FACTS , AS THE TWO FLATS PURCHASED BY THE ASSESSEE ARE ADJACENT TO ONE ANOTH ER AND HAVE A COMMON MEETING POINT, THE DEDUCTION CANNOT BE DENIE D. 5. IN THE CASE OF CIT VS GITA DUGGAL 357 ITR 153 (DEL) , HONBLE DELHI HIGH COURT HELD THAT MERELY BECAUSE A RESIDENTIAL HOUSE CONSISTS O SEVERAL INDEPENDENT RESIDENTIAL UNITS, IT WOULD NOT TAKE AW AY THE BENEFIT OF DEDUCTION 4 I.T.A. NO.1511/MUM/2016 U/S 54. THE REVENUE FILED SLP AGAINST THIS JUDGEME NT BEFORE HONBLE SUPREME COURT, WHICH HAS BEEN DISMISSED BY THE HONBLE SUPR EME COURT. THIS ADMITTED FACT ON RECORD THAT BOTH THE FLATS WERE ADJACENT FL ATS AND WERE USED BY THE ASSESSEE AS ONE. THUS, UNDER THESE CIRCUMSTANCES, IN VIEW OF THE SETTLED POSITION OF LAW AS IS COMING OUT FROM THE CASES REL IED UPON BY THE LD.COUNSEL, WE FIND THAT THE ASSESSEE IS ENTITLED FOR THE BENEF IT OF DEDUCTION ON BOTH THE FLATS. THE ASSESSING OFFICER IS DIRECTED TO PROVID E THE SAME. THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 6. AS A RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON THIS 24 TH DAY OF JUNE, 2016. SD/- SD/- (JOGINDER SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT :24 TH JUNE, 2016 PK/- COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , D-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES