ITO, Ward-8(12), Hyderabad, Hyderabad V. Krishna Bai, Hyd, Hyderabad

ITA 188/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6525 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 02-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.188/HYD/2015 ASSESSMENT YEAR 2009-2010 THE INCOME TAX OFFICER, WARD-8(2), HYDERABAD. VS. SMT. KRISHNA BAI HYDERABAD. PAN ABYPB1563G (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. M. NARMADA FOR ASSESSEE : MR. KISHORE KUMAR KABRA DATE OF HEARING : 3 1 .0 3 .2016 DATE OF PRONOUNCEMENT : 31 .05.2016 ORDER PER D. MANMOHAN, V.P. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-II, HYDERABAD AND IT PERTAI NS TO THE A.Y. 2009-2010. THE FOLLOWING GROUNDS WERE URGED BY ITO, WARD-8(2), HYDERABAD. 1. THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND LAW. 2. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE FACTS OF THE CASE UNDER APPEAL ARE DIFFERENT AND DISTINGUISHABLE TO THAT OF THE JUDICIAL DECISIONS FOLLOWED IN THE CASES OF CIT V. SYED ALI ADIL (AP), CIT VS GITA DUGGAL (DELHI) AND CIT & ANR. V. SMT. K.G. RUKMINIAMMA (KAR) AND THE RATIO OF THESE 2 ITA.NO.188/HYD/2015 SMT. KRISHNA BAI, HYDERABAD. DECISIONS OUGHT NOT TO HAVE APPLIED TO THE FACTS OF THE ASSESSEE'S CASE. 3. THE LD. CIT(A) IS NOT CORRECT IN FACT AND IN LAW WHILE TAKING PRECEDENCE FROM THE JUDICIAL PRONOUNCEMENTS CITED IN THE ORDER, AND HOLDING THE SAME AS FAVORABLE TO THE ASSESSEE, WHEN THE FACTS AND CIRCUMSTANCES IN THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF SHRI. K. SIVA REDDY & OTHERS VS ITO, WARD-3(6), HYD IN ITTA NO. 76 OF 2000 DATED 11 TH AUGUST, 2006 ARE CLEARLY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THIS ASSESSEE'S CASE. 4. THE LD. CIT(A)S ORDER IS ERRONEOUS IN FACT AND IN LAW AS FAR AS WHILE ADJUDICATING THAT THE ASSESSEE-INDIVIDUAL WAS ENTITLED TO SEC.54F EXEMPTION ON THE 2 RESIDENTIAL UNITS, WHEN THE ASSESSEE-INDIVIDUAL COULD HAVE UTILIZED ONLY ONE RESIDENTIAL HOUSE, AT ANY GIVEN POINT IN TIME. 5. ANY OTHER GROUND RAISED DURING THE COURSE OF HEARING OF APPEAL. 2. IT MAY BE NOTICED THAT THE AUTHORISATION MEMO ISSUED BY THE COMMISSIONER DOES NOT INDICATE THE GROUNDS WHICH WERE TO BE URGED BEFORE THE TRIBUNAL. THE POWER TO GRANT APPROVAL FOR FILING OF AN APPEAL IS VESTED IN THE COMMISSIONER UNDER SECTION 253(2) AND IT IS FOR THE PR. COMMISSIONER TO SPECIFY AS TO WHAT ARE THE GROU NDS WHICH WERE APPROVED BY HIM. UNFORTUNATELY, AS IS TH E PRACTICE BEING FOLLOWED BY THE REVENUE, DESPITE POI NTING OUT IN NUMBER OF CASES, THE REVENUE IN GENERAL AND THE D.RS ALSO ARE LAX IN PLACING THE NECESSARY MATERIAL TO ENABLE US TO VERIFY AS TO WHETHER THE GROUNDS URGED BY THE A.O. ARE ACTUALLY APPROVED BY THE COMMISSIONER OR N OT. THE TRIBUNAL BEING A CREATURE OF THE STATUTE, IT IS DUTY 3 ITA.NO.188/HYD/2015 SMT. KRISHNA BAI, HYDERABAD. BOUND TO GO IN ACCORDANCE WITH THE ACT. SINCE SECTI ON 253(2) PERMITS ONLY THE COMMISSIONER TO FILE AN APP EAL, HE IS DUTY BOUND TO SPECIFY THE GROUNDS AS OTHERWIS E, WE CANNOT ASSUME THAT THE GROUNDS RAISED BY THE A.O. A RE THE GROUNDS WHICH ARE ACTUALLY APPROVED BY THE COMMISSIONER. ON THIS LIMITED COUNT, THIS APPEAL DE SERVES TO BE DISMISSED. 2.1. HOWEVER, WE WISH TO GO INTO THE MERITS OF THE APPEAL ALSO TO SEE AS TO WHETHER THE COMMISSIONER W AS JUSTIFIED IN HOLDING THAT THE TWO FLATS PURCHASED B Y THE ASSESSEE CAN BE CONSIDERED AS A FLAT WITHIN TH E MEANING OF SECTION 54F OF THE ACT. THE EXPRESSION A FLAT HAD COME UP FOR CONSIDERATION IN NUMBER OF CASES. S INCE IT IS A BENEFICIAL PROVISION, THE COURTS HAVE TIME AND AGAIN OBSERVED THAT SO LONG AS THE HOUSES ARE CONJOINED W ITH EACH OTHER AND UTILISED AS ONE HOUSE, IT FULFILLS T HE CONDITION PRESCRIBED UNDER SECTION 54F OF THE ACT A ND MERELY BECAUSE TWO OR MORE FLATS ARE SEPARATELY REG ISTERED IT CANNOT BE TREATED AS TWO INDEPENDENT HOUSES. IN OTHERWORDS, THE PURPOSE FOR WHICH IT WAS USED IS A DECISIVE FACTOR. THE CASE OF THE ASSESSEE HEREIN IS TWO ADJACENT FLATS WERE PURCHASED BUT THEY WERE USED BY THE FAMILY AND HENCE, IT HAS TO BE TREATED AS PURCHASE OF A HOUSE. THE A.O, ON THE OTHER HAND, WAS OF THE VIEW THAT IN THE ABSENCE OF COMMON ENTRANCE THEY CANNOT BE TREAT ED AS ONE PROPERTY. HE ALSO OBSERVED THAT THEY ARE IN THE DIAGONAL DIRECTION TO EACH OTHER AND HENCE, IT CANN OT BE USED AS ONE HOUSE. HE THEREFORE RESTRICTED THE CLAI M OF 4 ITA.NO.188/HYD/2015 SMT. KRISHNA BAI, HYDERABAD. EXEMPTION UNDER SECTION 54F TO THE VALUE OF THE PUR CHASE OF ONE FLAT. THE FIRST APPELLATE AUTHORITY OBSERVED THAT SO LONG AS TWO FLATS ARE UTILISED BY THE FAMILY AS ONE HOUSE, THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 54F AND IN THIS REGARD, HE FOLLOWED THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SY ED ALI ADIL 352 ITR 418 (AP) (HC) AND ALSO DECISIONS OF VA RIOUS OTHER HIGH COURTS. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 3. LD. D.R. SUBMITTED THAT IN THE CASE OF MR. K. SIVA REDY, I.T. APPEAL NO.76 OF 2000 DATED 11.08.20 06, THE HONBLE HIGH COURT OF JUDICATURE OF A.P. HAD CONSIDERED AN IDENTICAL ISSUE WHEREIN THE SAID ASSE SSEE CLAIMED EXEMPTION OF 24 FLATS CONSTRUCTED IN ONE CO MPLEX. THE COURT OBSERVED THAT SO MANY FLATS WOULD NOT HAV E BEEN UTILISED FOR RESIDENTIAL PURPOSE OF AN ASSESSE E AND THUS, CONCLUDED THAT THE TRIBUNAL WAS JUSTIFIED IN THAT CASE IN HOLDING THAT THE ASSESSEE IS NOT ENTITLED T O EXEMPTION UNDER SECTION 54F OF THE ACT ON CONSTRUCT ION OF 24 FLATS. 4. THE CASE OF THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE, ON THE OTHER HAND, WAS THAT THE JUDGMENT OF A.P. HIGH COURT (SUPRA), WAS RENDERED I N THE PECULIAR FACTUAL MATRIX OF THE CASE AND IT WAS REND ERED ON 11.08.2006 WHEREAS, THE SAME HIGH COURT IN THE CASE OF CIT VS. SYED ALI ADIL (SUPRA) OBSERVED THAT THE EXP RESSION A HOUSE MEANS, HOUSE PROPERTY USED FOR THE PURPO SE OF 5 ITA.NO.188/HYD/2015 SMT. KRISHNA BAI, HYDERABAD. RESIDENCE EVEN THOUGH MORE THAN ONE FLAT IS REGISTE RED SEPARATELY. IN THE INSTANT CASE, ONLY TWO FLATS WE RE PURCHASED BY THE ASSESSEE AND THEY WERE CLOSE TO EA CH OTHER AND UTILISED AS ONE HOUSE. THE REVENUE HAS RE JECTED THE CONTENTION OF THE ASSESSEE ONLY ON THE GROUND T HAT THE ASSESSEE IS NOT ENTITLED TO EXEMPTION ON MORE THAN ONE FLAT AND IT IS NOT THEIR CASE THAT THE ASSESSEE HAD NOT UTILISED THE TWO FLATS FOR HER RESIDENCE. HE FURTHE R SUBMITTED THAT WHEN AN APPEAL IS FILED BY THE REVEN UE, IT IS THEIR DUTY TO FURNISH SOME EVIDENCE TO SHOW THAT THE OTHER HOUSE IS LET OUT OR NOT USED BY THE SAME PERS ON WHEREAS, IN THE INSTANT CASE, NO SUCH MATERIAL WAS BROUGHT ON RECORD AND THUS, HE SUPPORTED THE VIEW T AKEN BY THE CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE HONBLE A.P . HIGH COURT HAD IN PRINCIPLE ACCEPTED THE INTERPRETA TION OF THE PROVISIONS OF SECTION 54F OF THE ACT BY HOLDING THAT IF MORE THAN ONE FLAT IS UTILISED FOR THE PURPOSE OF R ESIDENCE, THE ASSESSEE IS ENTITLED TO EXEMPTION THEREON. IN T HE ABSENCE OF FURNISHING ANY MATERIAL TO CONTRADICT TH E FINDINGS OF THE LD. CIT(A), WE ARE OF THE VIEW THAT THE DECISION RENDERED BY THE CIT(A) DOES NOT CALL FOR A NY INTERFERENCE. AS RIGHTLY POINTED OUT BY THE LD. COU NSEL APPEARING ON BEHALF OF THE ASSESSEE, THE EARLIER DE CISION OF THE A.P. HIGH COURT IS LIMITED TO THE FACTUAL MATRI X OF THE SAID CASE AND IT HAD NOT LAID DOWN ANY RATIO THAT E VEN IF MORE THAN ONE FLAT IS USED FOR THE PURPOSE OF RESID ENCE 6 ITA.NO.188/HYD/2015 SMT. KRISHNA BAI, HYDERABAD. THE ASSESSEE IS NOT ENTITLED TO EXEMPTION BEYOND ON E FLAT. UNDER THESE CIRCUMSTANCES, WE UPHOLD THE ORDER OF T HE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED IN THE OPEN COURT ON 31.05.2016. SD/- SD/- (S. RIFAUR RAHMAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD DATED 31 ST MAY, 2016 VBP/- COPY TO 1. THE INCOME TAX OFFICER, WARD - 8 ( 2 ), 8 TH FLOOR, D BLOCK, I.T. TOWERS, MASAB TANK, HYDERABAD. 2. SMT. KRISHNA BAI, 21 - 7 - 621, CHELAPURA, HYDERABAD. 3. CIT(A) - I I, HYDERABAD. 4. CIT - I I, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE