WENCELAUS I. DSOUZA, MUMBAI V. ITO 27(3)(5) OLD 22(2)(4), NAVI MUMBAI

ITA 1519/MUM/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3570 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2015
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN LD
• Keywords: Cost of acquisition
• Section: 143(3); 54F; 54; 154

Judgement Text

ITA NO . 15 19 /MUM/201 5 - SMC - JM WENCELAUS I DSOUZA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH: MUMBAI BEFORE HONBLE SRI MAHAVIR SINGH, JM I.T.A NO. 1519/MUM/2015 A.Y 2008 - 09 WENCELAUS I. DSOUZA VS. I.T.O . 27(3) OLD 22(2)(4) PAN: AACPD3326N (APPELLANT/ASSESSEE ) ( RESPONDENT/DEPARTMENT ) FOR THE APPELLANT/ASSESSEE : NONE APPEARED FOR THE RESPONDENT/ DEPARTMENT : SHRI A.RAMACHANDRAN, LD.SR.DR DATE OF HEARING: 27 - 06 - 2016 DATE OF PRONOUNCEMENT: 01 - 0 7 - 2016 ORDER SHRI MAHAVIR SINGH, JUDICI AL MEMBER: THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDER OF CIT(A) IN APPEAL NO. CIT(A)33/IT/13/13 - 14 DATED 01/12/2014. RE CTIFICATION OF ASSESSMENT WAS CARRIED OUT BY I.T.O. W - 22(2)(4), MUMBAI FOR THE ASSESSMENT YEAR 2008 - 09 U/S 154 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 08 - 01 - 2013. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGAINST THE ORDER OF THE CIT(A) IN CONFIRMING THE ACTION OF THE AO RECTIFYING THE DEBATABLE ISSUE U/S. 154 OF THE AC T IN DISALLOWING THE CLAIM U/S. 54F OF THE ACT. 3 . I HAVE HEARD THE LD. SR. DR AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. I FIND THAT THE ASSESSEE HAS SOLD COMMERCIAL SHOP ON 29 - 02 - 2008 FOR A TOTAL CONSIDERATION OF RS.1,15,00,000/ - . THE A S SESSEE WAS HAVING 50% SHARE IN THE PROPERTY AND HIS SHARE OF CONSIDERATION WAS TO THE EXTENT OF RS.57,50,000/ - . THE ASSESSEE CLAIMED COST OF ACQUISITION OF RS.11,77,350/ - AND ALSO CLAIMED DEDUCTION U/S.54F OF THE ACT ON ACCOUNT OF INVESTMENT IN RESIDENTIAL HOUSE PROPERTY AN AMOUNT OF RS. 1,00,00,000/ - . THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT ALLOWED THE CLAIM OF DEDUCTION U/S. 54F OF THE ACT BY OBSERVING AS UNDER: - ITA NO . 15 19 /MUM/201 5 - SMC - JM WENCELAUS I DSOUZA 2 3. ASSESSEE IS AN INDIVIDUAL AND DERIVED INCOME F ROM BUSINESS AND INTEREST INCOME. DURING THE YEAR, ASSESSEE HAS CLAIMED LONG TERM CAPITAL OF RS.45,72,650/ - , AS EXEMPT U/S. 54 OF THE I.T ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE REPRESENTATIVE OF THE ASSESSEE FURNISHED RELEVANT DETAILS AND SU BMISSION VIDE LETTER DATED 20.12.2010. 4 . SUBSEQUENTLY, THE AO NOTICED THAT THE ASSESSEE HAS ONLY BOOKED A RESIDENTIAL FLAT FOR A SUM OF RS.1,00,00,000/ - OUT OF WHICH AN AMOUNT OF RS.50,00,000/ - WAS PAID IN FEB09. IN SUPPORT OF HIS CLAIM, THE ASSESSE E SUBMITTED THE COPY OF LETTER OF ALLOTMENT ISSUED BY THE BUILDER. ACCORDING TO THE AO, THE BUILDER HAS NOT YET STARTED THE CONSTRUCTION, HENCE, HE WANTED TO RECTIFY THE MISTAKE U/S. 154 OF THE ACT BY DENYING THE DEDUCTION U/S. 54F OF THE ACT, WHICH WAS AL LOWED BY THE AO DURING THE ORIGINAL ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT. THIS ACTION OF THE AO WAS CONFIRMED BY THE CIT(A). 5 . I FIND FROM THE ABOVE FACTS THAT THE ISSUE OF CLAIM OF DEDUCTION U/S. 54F WAS EXAMINED BY THE AO DURING THE ORIGINAL ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT. NOW THE AO RECTIFIED THE MISTAKE U/S. 154 OF THE ACT WITHOUT ANY EVIDENCE AND ON THE GROUND THAT THE ASSESSEE HAS NOT INVESTED THE SALE PROCEEDS IN THE NEW RESIDENTIAL HOUSE. I FIND FROM RECORDS THAT THE AO W HILE ADJUDICATING THIS ISSUE DURING ORIGINAL ASSESSMENT HAS RECORDED THE FACTUM OF INVESTMENT OF THIS LONG TERM CAPITAL GAINS IN PURCHASE OF RESIDENTIAL HOUSE. THE CIT(A) RECORDED THE FACT THAT THE ASSESSEE HAS PAID AN AMOUNT OF RS. ONE CRORE TOWARDS BOOKI NG OF FLAT ON THE BASIS ALLOTMENT LETTER DATED 19.01.2009 ISSUED BY THE BUILDER NEUMEC DEVELOPERS. ONLY REASON OF CIT(A) FOR CONFIRMATION IS THAT THE LETTER DATED 19.01.2009 DOES NOT INDICATE THAT THE TITLE OF THE PROPERTY IS TRANSFERRED IN THE NAME OF ASS ESSEE OR NOT ? IN VIEW OF THIS FACT, I AM OF THE VIEW THAT THE ISSUE IS HIGHLY DEBATABLE AND CANNOT BE BROUGHT UNDER THE PURVIEW OF SECTION 154 OF THE ACT UNDER THE SUBJECT MATTER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE REVERSED AND TH E GROU NDS RAISED BY THE ASSESSEE ARE ALLOWED. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 - 0 7 - 2016 SD/ - MAHAVIR SINGH DATED 01 - 0 7 - 2016 JUDICIAL MEMBER *PP /SR.P.S. ITA NO . 15 19 /MUM/201 5 - SMC - JM WENCELAUS I DSOUZA 3 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ASSESSEE: WENCELAUS I DSOUZA 7/1 BMC BLOCKS OPP: PENINSULA HOTEL SION(W). 2 RESPONDENT: THE INCOME TAX OFFICER 27(3)(5) OLD 22(2)(4), 4 TH FLOOR, TOWER N O.6 VASHI RLY STN BLDG. VASHI. MUMBAI 400023. 3 . THE CIT, 4 . THE CIT(A), MUMBAI 5 . DR, MUMBAI BENCHES, MUMBAI BY ORDER, /ASSTT. REGISTRAR SR.NO. PARTICULARS DATE INITIALS PERSON CONCERNED 1 DICTATION GIVEN ON 27/6/16 PP SPS 2 DR AFT PLACED BEFORE AUTHOR 30/7/16 JM 3 DRAFT PROPOSED/PLACED BEFORE THE SECOND MEMBER - - 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER - - - 5 APPROVED DRAFT COMES TO THE SR.PS 30/7/16 6 KEPT FOR PRONOUNCEMENT ON 1/7/16 PP SPS 7 FILE SENT TO THE BE NCH CLERK 1/7/16 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER