ITO 22(2)(3), NAVI MUMBAI V. NEELAM R. BHASIN, MUMBAI

ITA 1560/MUM/2014

• Counselvise Citation: 156019914 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K GARGDR
• Assessee Lawyers: RAJESH BHASIN
• Section: 154; 54

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.1560/MUM/2014 ASSESSMENT YEAR: 2010-11 INCOME TAX OFFICER-22(2)-3, R. NO.421, 4 TH FLOOR, TOWER NO.6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI-400705 / VS. NEELAM R. BHASIN, A-702, GANGA ESTATE, BEHIND ATUR PARK, CHEMBUR, MUMBAI-400071 ( / REVENUE) ( '#$ /ASSESSEE) P.A. NO. ABZPB2091E / REVENUE BY SHRI J.K.GARG-DR '#$ / ASSESSEE BY SHRI RAJESH BHASIN % & ' ( / DATE OF HEARING : 25/08/2015 ' ( / DATE OF ORDER: 21/09/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 02/12/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE PER TAINS TO DELETING THE ADDITION OF RS.17,87,738/- MADE U/S 54 OF THE INCOME TAX ACT. ITA NO.1560/MUM/2014 NEELAM R BHASIN 2 2. THE CRUX OF ARGUMENT ADVANCED BY SHRI J.K.GARG, LD. DR IS THAT THE FINDING/INTERPRETATION DONE BY T HE ASSESSEE THAT THE FLAT WAS PURCHASES WITHIN THE LIMIT OF THR EE YEARS IS CONTRARY TO THE PROVISION WITHOUT APPRECIATING THE FACT THAT ASSESSEE MERELY GOT A ALLOTMENT LETTER AND THERE WA S NO REGISTERED SALE AGREEMENT OR SALE DEED EVEN AFTER A LAPSE OF TWO YEARS. ON THE OTHER HAND, THE LD. COUNSEL FOR T HE ASSESSEE, SHRI RAJESH BHASIN, DEFENDED THE CONCLUSI ON ARRIVED AT IN THE IMPUGNED ORDER BY SUBMITTING THAT THE IMPUGNED AMOUNT WAS INVESTED WITHIN THE PRESCRIBED LIMIT. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DECLARED INCOME OF RS.5,26,63 7/- IN HER RETURN FILED ON 27/07/2010 AND PAID TAXES THEREON. DURING THE RELEVANT PERIOD, THE ASSESSEE SOLD FLAT NUMBER 502, SITUATED ON 5 TH FLOOR, IN A BUILDING KALPBRUKSHA, LOCATED AT VASANT VIHAR, THANE FOR RS.53 LAKH VIDE AGREEMENT O F SALE DATED 12/11/2009 AND EARNED LONG TERM CAPITAL GAIN OF RS.17,87,738/-, WHICH WAS CLAIMED EXEMPTED U/S 54 O F THE ACT IN HER RETURN. THE ASSESSEE INVESTED THE SALE PROCEEDS FOR PURCHASE OF A UNDER CONSTRUCTION RESIDENTIAL PR OPERTY FOR RS.68,55,048/-. THE ASSESSING OFFICER REJECTED THE CLAIMED EXEMPTION U/S 54 ON THE GROUND THAT THE FLAT WAS NO T COMPLETE AND THE POSSESSION OF THE SAME WAS NOT TAK EN WITHIN TWO YEARS FROM THE DATE OF SALE I.E. 11/11/2 011. WE FIND THAT THE ASSESSEE DULY PRODUCED THE PROOF OF P AYMENT FOR ACQUIRING FLAT NO. 902 IN LODHA AQUA, WHICH WAS A U NDER ITA NO.1560/MUM/2014 NEELAM R BHASIN 3 CONSTRUCTED FLAT PURCHASED VIDE LETTER OF ALLOTMENT DATED 27/10/2009 LODHA GROUP & COMPANY AND SALE AGREEMENT WAS DATED 30/03/2012 WHICH WAS DULY REGISTERED ON 11/04/2012 AFTER PAYING NECESSARY STAMP DUTY/REGIST RATION CHARGES. ALL THESE FACTS WERE OVERLOOKED BY THE ASS ESSING OFFICER WHILE DENYING THE CLAIMED EXEMPTION U/S 54 OF THE ACT. EVEN OTHERWISE, AS PER SECTION 54 OF THE ACT, THE EXEMPTION CAN BE CLAIMED, IF THE RESIDENTIAL PROPER TY IS CONSTRUCTED WITHIN A PERIOD OF THREE YEARS AFTER TH E DATE OF TRANSFER, THUS, THE ASSESSEE HAS FULFILLED THE REQU IRED CONDITIONS CONTAIN IN SECTION 54 OF THE ACT. SO FAR AS, THE CONTENTION OF THE LD. ASSESSING OFFICER AS WELL AS LD. DR THAT MERELY BOOKING WAS DONE, THIS IS FACTUALLY INCORREC T AS THE ASSESSEE FILED RECTIFICATION APPLICATION U/S 154 OF THE ACT ON 29/01/2013 AND THE SAME WAS RECTIFIED. WE ARE ALSO REPRODUCING HEREUNDER THE FACTUAL FINDING RECORDED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR READY REFE RENCE AND ANALYSIS:- 2.4 I HAVE CONSIDERED THE ASSESSMENT ORDER, REMAND REPORT AND SUBMISSION MADE FOR THE APPELLANT. THE ISSUE TO BE DECIDED IS WHETHER THE UNDER CONSTRUCTION PROPERTY PURCHASED B Y THE APPELLANT FROM THE BUILDER WOULD QUALIFY AS A RESID ENTIAL HOUSE CONSTRUCTED WITHIN A PERIOD OF THREE YEARS AFTER TH E DATE ON WHICH TRANSFER TOOK PLACE WITHIN THE MEANING OF SECTION 54. 2.5 IT MAY BE SEEN THAT THE APPELLANT BOOKED THE NE W FLAT WITH THE BUILDER AND AS PER AGREEMENT, THE APPELLANT WAS TO MAKE PAYMENT IN INSTALMENTS AND THE BUILDER WAS TO HANDO VER THE POSSESSION OF THE FLAT AFTER CONSTRUCTION. BASED ON THE CLARIFICATION OF THE CBDT VIDE ITS CIRCULAR NO.672 DATED 16-12-19 93 READ WITH CIRCULAR NO. 471 DATED 15-10-1986, AND THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT V IS SMT. SUNDER KAUR SAJJAN SINGH GADH (3 SOT 206), IT MAY B E SAID THAT ITA NO.1560/MUM/2014 NEELAM R BHASIN 4 THE CASE OF THE ASSESSEE HAS TO BE CONSIDERED AS TH E CONSTRUCTION OF A NEW RESIDENTIAL HOUSE AND NOT PUR CHASE OF FLAT. THUS, IT IS HELD THAT IN CASE APPELLANT HAS INVESTE D CAPITAL GAIN IN CONSTRUCTION OF A NEW RESIDENTIAL HOUSE WITHIN A PE RIOD OF THREE YEARS, THIS SHOULD BE TREATED AS SUFFICIENT COMPLIA NCE OF PROVISION OF SECTION 54. AS HELD BY THE HO'BLE THE BOMBAY HIG H COURT IN THE CASE OF CRT VIS MRS. HILLA J.B. WADIA (216 ITR 376) , IT IS NOT NECESSARY THAT THE POSSESSION OF THE FLAT SHOULD AL SO BE TAKEN WITHIN A PERIOD OF THREE YEARS. SINCE ALMOST ENTIRE PAYMENT {(P.K.DUTTA VIS ITA) 98 ITD 335} HAS ALSO BEEN DONE BEFORE THE EXPIRY OF THREE YEARS, THE EXEMPTION CLAIMED U/S 54 IS CORRECT AND ACCORDINGLY THE EXEMPTION IS GRANTED. THIS GROUND I S ALLOWED. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT FOR THE PU RPOSES OF SECTION 54 OF THE ACT, THE DATE OF AGREEMENT TO PUR CHASE SHOULD BE TAKEN AS DATE OF PURCHASE AND THE DATE OF REGISTRATION IS ALWAYS NOT NECESSARY. OUR VIEW IS F ORTIFIED BY THE RATIO LAID DOWN IN DECISION IN R.L.SUD 245 ITR 727 (DEL.), CIT VS CHANDANBEN MAGANLAL 245 ITR 182 (GUJ.), BALR AJ VS CIT 254 ITR 22 (DEL.), CIT VS MS. SEHJADA BEGUM 173 ITR 397 (AP), CIT VS HELLA J.B. WADIA 216 ITR 376 (BOM.), S MT. VEENA GOPE SHROFF VS ITO (2013) 33 TAXMAN.COM 344(BOM.), ACIT VS SMT. SUNDAR KAUR SUJAN SINGH GADH (2005) 3 SOT 206 (BOM.). SINCE, THE ENTIRE AMOUNT WAS PAID BY THE AS SESSEE WITHIN THE STIPULATED PERIOD, THEREFORE, THE ASSESS EE RIGHTLY CLAIMED THE EXEMPTION U/S 54 OF THE ACT, THEREFORE, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMIS SIONER OF INCOME TAX (APPEALS), CONSEQUENTLY, THE APPEAL OF T HE REVENUE IS DISMISSED. ITA NO.1560/MUM/2014 NEELAM R BHASIN 5 FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 25/08/2015. SD/ - (ASHWANI TANEJA) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER % & MUMBAI; ) DATED : 21/09/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 % 1 ( + ) / THE CIT, MUMBAI. 4. 0 0 % 1 / CIT(A)- , MUMBAI 5. 34 .' , 0 +( ' 5 , % & / DR, ITAT, MUMBAI 6. 6# 7& / GUARD FILE. / BY ORDER, /3+ . //TRUE COPY// / (DY./ASSTT. REGISTRAR) , % & / ITAT, MUMBAI