Shivkumar Sangappa Saboji, Belgaum V. Income Tax Officer, Ward - 1, (International Taxation), Panaji

ITA 160/PAN/2019

AI Insights

The case involves an appeal by Shivkumar Sangappa Saboji against the order of the Commissioner of Income Tax (Appeals) Bangalore-12, which had declined his claim for a section 54 deduction under the Income Tax Act, 1961. The deduction was sought for the purchase of three flats, which the assessee argued were reinvestments of capital gains from the sale of property. The Income Tax Officer and the CIT(A) had previously denied the claim, citing precedents that disallowed such deductions for multiple properties. However, the Tribunal, referencing decisions from the Karnataka High Court, overturned this decision, allowing the deduction and emphasizing the prospective nature of the legislative amendment to section 54.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 136917 (ITAT-PANAJI)
• Duration Of Justice: 3 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-11-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 29-04-2019
• Other Referred Cases: ITO vs. Sushila Jhaveri [2007] 107 ITD 327 (Mum.), Commissioner of Customs (Import), Mumbai vs. Dilip Kumar & Co. [2018] 9 SCC 1 (SC) (FB), CIT vs., Smt. K.G. Rukminiamma 331 ITR 291 (Kar.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital Gains
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH “SMC” : PANAJI [THROUGH VIRTUAL HEARING] BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER I.T.A.No.160/PAN/2019 Assessment Year 2013-14 Shivkumar Sangappa Saboji, CTS No.174, Budhwar Peth, Tilakwadi, Belgaum – 590 006. Karnataka. PAN BBUPS6615M vs The Income Tax Officer, [International Taxation], Ward – 1, Pundalik Niwas, 3 rd Floor, Near Patto Foot Bridge, Rua De Ourem, Panaji - 403001. Goa. Appellant Respondent Assessee by : Shri Shivanand Halbhavi Revenue by : Smt. Neelima Nadkarni, Sr.DR Date of hearing : 29.11.2022 Date of pronouncement : 28.12.2022 ORDER This assessee’s appeal for Assessment Year 2013-14 is directed against the Commissioner of Income Tax (Appeals) Bangalore-12, Bangalore’s order dated 28.03.2019 passed in case No.10445/CIT(A)-12/Bang/2017-18, in proceedings u/s.143(3) of the Income Tax Act, 1961 [in short “the Act”]. 2. Heard both the parties. Case file perused. 3. It emerges during the course of hearing and from a perusal of CIT(A)'s detailed discussion in paragraphs 27 to 47 that he has declined the assessee’s claim of section 54 deduction regarding three flats as to have been constructed/purchased for re- investment of the corresponding capital gains. 2 ITA.No.160/PAN/2019 Shivkumar Sangappa Saboji, Belgaum. 4. The Learned DR vehemently argued in light of CIT(A)'s detailed discussion that he has rightly followed ITO vs. Sushila Jhaveri [2007] 107 ITD 327 (Mum.) as well as Commissioner of Customs (Import), Mumbai vs. Dilip Kumar & Co. [2018] 9 SCC 1 (SC) (FB) that such deduction claim of multiple flats is not eligible for deduction. 5. All these Revenue’s arguments hardly deserve to be accepted. This is for the precise reason that the hon’ble Karnataka high court happens to be assessee’s jurisdictional high court which has already settled the issue in many of it’s decisions namely CIT vs., Smt. K.G. Rukminiamma 331 ITR 291 (Kar.) holding the concerned taxpayer as eligible for the impugned deduction. This is further coupled with the fact that we are in assessment year 2013- 14 whereas the legislature has amended sec.54 of the Act by substituting “residential house” to “one residential house” w.e.f. 01.04.2015 carrying prospective effect only. I thus follow hon’ble jurisdictional High Court decision hereinabove to treat the assessee as eligible for claiming impugned sec.54 deduction. Necessary computation shall follow as per law. 6. This assessee’s appeal is allowed. Order pronounced in the open Court on 28 th December, 2022. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Pune, Dated 28 th December, 2022 VBP/- 3 ITA.No.160/PAN/2019 Shivkumar Sangappa Saboji, Belgaum. Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5 . DR, ITAT, SMC Bench, Panaji, Goa. 6. Guard File. BY ORDER, // TRUE COPY // Senior Private Secretary ITAT, Pune.