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

ITA 1808/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100034 (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. 1808 / KOL / 2012 ASSESSMENT YEAR :2009-10 ACIT, CIRCLE-24, 169, A.J.C.BOSE ROAD, KOLKATA 700 014 V/S . PARIDHI CHIRIMAR 8/4, ALIPORE ROAD, ALIPORE, KOLKATA 700 027 [ PAN NO.ACRPC 4252 H ] /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.833/ 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 ACT. ITA NO.1808/KOL/2012 A.Y. 2009-10 ACIT CIR-24, KOL. V. PARIDHI 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. PAYAL CHIRIMAR HAD PURCHASED A PIECE OF LAND AT ALIPORE R OAD, KOLKATA-27. THE AGREEMENT FOR THE PURCHASE OF THE SAID LAND WAS REG ISTERED ON 21.09.2004 (PRIOR TO AGREEMENT ON 31.08.2002). THE ASSESSEE AL ONG WITH HER TWO OTHER 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 STRUCTURE OF THE BUILDIN G WITHOUT FLOORING, INTERNAL FINISHING, DOOR FITTINGS, INTERNAL CEMENT PLASTER. THE ASSESSEE ALONG WITH HER SAID TWO SISTERS STARTED THE PATCH WORK OF MARBLE F LOORING, BATHROOM FITTINGS, BASIN FITTINGS, KITCHEN FITTINGS, DOOR FITTINGS, AI R CONDITIONER FITTINGS PARIS AND OTHER WORKS ETC. FOR IMPROVEMENT / COMPLETION OF TH E BUILDING AND INCURRED TOTAL EXPENDITURE OF RS.63 LAKH. THE ASSESSEE SUBMI TTED THE APPLICATION TO KOLKATA MUNICIPAL CORPORATION (KMC FOR SHORT) FOR T HE CERTIFICATE OF BUILDING COMPLETION CERTIFICATE ON DATED 11.11.2005 AND KMC ISSUED THIS CERTIFICATE FOR THE COMPLETION OF BUILDING ON 30.01.2006. FROM THE ABOVE, 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 THAT ACTUALL Y NO INCOME ACCRUED FROM SUCH UNFINISHED PROPERTY COULD BE GENERATED FOR LEV Y OF TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY . DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS SOLD HIS SHARE IN THE FOUR STORIED BUILDING ON 22.05.2008 FOR A CONSIDERATION OF RS.3,28,66,667/- AND ACCORDINGLY T HE AO HELD THE GAIN ARISING AS A RESULT OF SALE IS SHORT TERM CAPITAL GAIN AS T HE PERIOD OF HOLDING IS LESS THAN 36 MONTHS I.E. BEGINNING 11.11.2005 / 30.1.200 6 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 ACT ON THE GROUND OF TREATING THE GAIN ARISING FROM THE SALE OF BUILDING AS ITA NO.1808/KOL/2012 A.Y. 2009-10 ACIT CIR-24, KOL. V. PARIDHI CHIRIMAR PAGE 3 STCG. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE L D. CIT(A) WHO DELETED / DISALLOWANCE MADE THE ADDITION 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 RELYING ON THE JUDGMENT OF TH E 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 A S 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 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. ITA NO.1808/KOL/2012 A.Y. 2009-10 ACIT CIR-24, KOL. V. PARIDHI CHIRIMAR PAGE 4 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- PARIDHI CHIRIMIR, 8/4, ALIPORE ROAD, K OLKATA-27 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , / - +, ,