A.C.I.T Cir - 24,Kol., Kolkata V. Payal Chirimar., Kolkata

ITA 1807/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100041 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 07-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY JCIT SRDR
• Assessee Lawyers: BISHNU KAANT AGRAWAL
• Section: 143(3); 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1807 / KOL / 2012 ASSESSMENT YEAR :2009-10 ACIT, CIRCLE-24, 169, A.J.C.BOSE ROAD, KOLKATA 700 014 V/S . PAYAL CHIRIMAR 8/4, ALIPORE ROAD, ALIPORE, KOLKATA 700 027 [ PAN NO.ADXPC 5411 D ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI P.K. CHAKRABORTY, JCIT-SR-DR /BY RESPONDENT SHRI BISHNU KAANT AGRAWAL, FCA /DATE OF HEARING 28-10-2015 /DATE OF PRONOUNCEMENT 06-11-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA IN APPEAL NO.809/ CIT(A)/KOL/11-12 DATED 17.09.2012. ASSESSMENT WAS FRAMED BY ACIT, CI RCLE-24, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2011 FOR ASSESSMENT YEAR 2009 -10 AND THE SOLITARY GROUND RAISED THEREIN THE REVENUE HAS CHALLENGED TH E ACTION OF LD. CIT(A) IN TREATING BUILDING SOLD BY ASSESSEE AS LONG TERM CAP ITAL GAINS (LTCG FOR SHORT) INSTEAD OF SHORT TERM CAPITAL GAINS (STCG FO R SHORT) AND CONSEQUENTIAL AN ALLOWING THE EXEMPTION U/S 54F OF THE AC. ITA NO.1807/KOL/2012 A.Y. 2009-10 ACIT CIR-24, KOL. V. PAYAL CHIRIMAR PAGE 2 2. BRIEFLY STATED FACTS ARE THAT ASSESSEE IS AN IND IVIDUAL AND HAS EARNED INCOME UNDER THE HEAD SALARY, HOUSE PROPERTY AND C APITAL GAINS. THE ASSESSEE ALONG WITH HER TWO SISTERS MISS PRIYANKA CHIRIMAR AND MISS. PARIDHI CHIRIMAR HAD PURCHASED A PIECE OF LAND AT A LIPORE ROAD, KOLKATA-27. THE AGREEMENT FOR THE PURCHASE OF THE SAID LAND WAS REGISTERED ON 21.09.2004 (PRIOR AGREEMENT DATED 30.08.2004). THE ASSESSEE ALONG WITH HER SISTERS ENTERED INTO A BUILDING CONSTRUCTION AGREEM ENT AT THE AFORESAID PLOT ON 01.09.2004 WITH M/S CHITRA ESTATE & CREDIT PVT. LTD . (HEREINAFTER REFERRED TO AS CONTRACTOR). THE CONTRACTOR HAS HANDED OVER THE P OSSESSION OF THE SAID BUILDING STRUCTURE VIDE ITS LETTER DATED 31.01.2005 AND AS PER THE AGREEMENT, THE CONTRACTOR CONSTRUCTED THE SAID BUILDING WITHOU T FLOORING, INTERNAL FINISHING, DOOR FITTINGS, INTERNAL CEMENT PLASTER. THE ASSESSE E ALONG WITH HER SAID TWO SISTERS STARTED THE PATCH WORK OF MARBLE FLOORING, BATHROOM FITTINGS, BASIN FITTINGS, KITCHEN FITTINGS, DOOR FITTINGS, AIR COND ITIONER FITTINGS PARIS AND OTHER WORKS ETC. FOR IMPROVEMENT / COMPLETION OF THE BUIL DING AND INCURRED TOTAL EXPENDITURE OF RS.67.00 LACS. THE ASSESSEE SUBMITTE D THE APPLICATION TO THE KOLKATA MUNICIPAL CORPORATION (KMC FOR SHORT) FOR T HE ISSUE COMPLETION CERTIFICATE OF THE BUILDING ON 11.11.2005 AND KMC I SSUED THIS CERTIFICATE FOR THE COMPLETION OF BUILDING ON 30.01.2006. FROM THE ABOV E, ASSESSING OFFICER INFERRED THAT HOUSE PROPERTY STATED ABOVE WAS NOT C APABLE OF BEING LET OUT OR NOT CAPABLE FOR LIVING BY THE OWNERS OF THE HOUSE P ROPERTY EITHER TILL 11.11.2005 OR 30.01.2006. THE AO FURTHER OBSERVED T HAT ACTUALLY NO INCOME ACCRUED FROM SUCH UNFINISHED PROPERTY COULD BE GENE RATED FOR LEVY OF TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS SOLD HIS SHARE IN THE F OUR STORIED BUILDING ON 22.05.2008 FOR A CONSIDERATION OF RS.3,28,66,667/-. THE AO HELD THE GAIN ARISING AS A RESULT OF SALE IS SHORT TERM CAPITAL G AIN AS THE PERIOD OF HOLDING IS LESS THAN 36 MONTHS I.E. BEGINNING 11.11.2005/ 30.1 .2006 TO THE DATE OF SALE 22.5.2008. THEREFORE, THE AMOUNT OF PROFIT EARNED O N THIS TRANSACTION IS AS STCG. ACCORDINGLY, THE AO DISALLOWED THE EXEMPTION CLAIMED U/S 54F OF THE ITA NO.1807/KOL/2012 A.Y. 2009-10 ACIT CIR-24, KOL. V. PAYAL CHIRIMAR PAGE 3 ACT ON THE GROUND OF TREATING THE GAIN ARISING FROM THE SALE OF BUILDING AS STCG. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHO DELETED / DISALLOWANCE THE ADDITION MADE BY AO ON ACCOUNT OF TREATING THE CAPITAL GAINS AS STCG. LD. CIT(A) HAS RECKONED THE DATE OF ACQUIS ITION OF ASSET AS ON 03.01.2005 I.E., THE DATE WHEN THE CONTRACTOR HAS H ANDED OVER THE POSSESSION TO ASSESSEE. 3. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. SHRI BISHNU KANT AGRAWAL, LD. AUTHORIZED REPRESENTATIVE APPEARING ON BEHALF O F ASSESSEE AND SHRI P.K.CHAKRABORTY, LD. DEPARTMENTAL REPRESENTATIVE AP PEARING ON BEHALF OF REVENUE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. LD. DR RELIED ON THE ORDER OF ASSESSING OFF ICER WHEREAS LD. AR RELIED ON THE ORDER OF LD. CIT(A). LD. AR SUBMITTED THE PA PER BOOK CONTAINING PAGES 1 TO 126 AND HE DREW OUR ATTENTION AT PAGE 107 OF T HE PAPER BOOK, WHERE THE ELECTRIC BILL DATED AS 14.12.2004 WAS PLACED. SINCE THE DATE OF ELECTRIC BILL IS ON 14.12.2004 WE INFER THAT BUILDING CAME IN POSSES SION WITH THE ASSESSEE IN THE MONTH OF DECEMBER, 2004 AND IF WE RECKON THE PE RIOD OF HOLDING FROM DECEMBER, 2004 TO THE DATE OF SALE OF THE PROPERTY ON 22.05.2008, THE PERIOD OF HOLDING COMES MORE THAN 36 MONTHS. SO THE PROFIT ARISING OUT OF SALE OF THE BUILDING IS REGARDED AS LTCG AND THE SAME IS ALLOWE D FOR THE DEDUCTION U/S 54F OF THE ACT AND WE ARE RELYING ON THE JUDGMENT O F THE ITAT C BENCH OF CHENNAI IN THE CASE OF ACIT V. SHRI S.R. JEYASHANKAR IN ITA NO. 1264/MDS/2013 DATED 27.06.2014, WHEREIN PARA 7.4 IS REPRODUCED AS UNDER:- 7.4 FROM THE DECISION OF THE ABOVE MENTIONED CASE, IT IS EVIDENT THAT THE COURTS HAVE BEEN CONSISTENTLY HOLDING THAT THE DATE OF ALLOTMENT OF THE FLAT HAS TO BE ADAPTED AS DATE OF ACQUISITION O F THE IMMOVABLE PROPERTY WHEN IT COMES TO ACQUIRING A FLAT FROM THE PROMOTER OF THE FLAT BY WAY OF EXECUTING CONSTRUCTION AGREEMENT AND SALE DEED FOR PURCHASE OF THE RELEVANT UNDIVIDED SHARE IN LAND. LD CIT(A) HAD ONLY FOLLOWED THE ORDER OF THE HIGHER JUDICIARY METICULOUSLY WHILE DE CIDING THE CASE OF THE ITA NO.1807/KOL/2012 A.Y. 2009-10 ACIT CIR-24, KOL. V. PAYAL CHIRIMAR PAGE 4 ASSESSEE. IN THESE CIRCUMSTANCES, WE DO NOT FIND AN Y REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). THEREFO RE THE ISSUE IS DECIDED AGAINST THE REVENUE. TAKING A CONSISTENT VIEW IN THE CASE OF SHRI S.R. JEYASHANKAR (SUPRA) WE UPHOLD THE ORDER OF LD. CIT(A) AND GROUND RAISED BY REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT 06/ 11/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 06 /1 1 /2015 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ACIT, CIR-24, 169, AJC BOSE ROAD, KOLKAT A-14 2. /RESPONDENT- PAYAL CHIRIMAR, 8/4, ALIPORE ROAD, KOL KATA-27 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , /TRUE COPY/ / - +, ,