ITO 11(1)(4), MUMBAI V. LATE SHRI DIPANKAR CHATTERJI THROUGH THERI LEGAL HEIR SMT SUMA CHATTERJEE, MUMBAI

ITA 1935/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7755 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 10-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.1935/MUM/2010 (ASSESSMENT YEAR: 2006-07) INCOME TAX OFFICER -11(1)(4), ROOM NO.438, 4TH FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI -400 020 .... REVENUE VS LATE SHRI DIPANKAR CHATTERJI THROUGH THEIR LEGAL HEIR SMT. SUMA CHATTERJEE, SUNVILLE, FLAT NO.31/32, NEAR INFANT JESUS SCHOOL, OFF. C.B. ROAD, MALAD (W), MUMBAI -400 064 .ASSESSEE PAN: AGEPC 8352 P ASSESSEE BY: NONE REVENUE BY: SHRI JITENDRA YADAV O R D E R PER R.S. PADVEKAR, JM IN THIS APPEAL THE REVENUE HAS CHALLENGED THE IMPUG NED ORDER OF THE LD. CIT (A) III MUMBAI DATED 21.12.2009 FOR TH E A.Y. 2006-07 THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUND:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT (A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW COMPETITION U/S.54F IN RESPECT OF TWO ITA 1935/M/2010 LATE SHRI DIPANKAR CHATTERJI 2 RESIDENTIAL HOUSES AFTER VERIFICATION WHETHER THESE TWO FLATS ARE ADJACENT TO EACH OTHER AND INTER CONNECTED AND USED AS ONE RESIDENTIAL HOUSE? 2. THE FACTS OF THIS CASE ARE AS UNDER. THE ASSESS EE WAS WORKING AS MUSIC EDITOR IN Q-LAB., LOKHANDWALA, ANDHERI, MUMBA I. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 2006-07 WHI CH WAS SELECTED FOR SCRUTINY. IT WAS NOTICED BY THE A.O. THAT THE ASSE SSEE HAS CLAIMED EXEMPTION U/S.54 OF THE ACT. IT WAS CLAIMED BY THE ASSESSEE THAT HE HAS PURCHASED TWO FLATS BEING FLAT NO.31 AND FLAT NO.32 ON THE THIRD FLOOR, SUNVILLE VILLAGE, CHINCHOLI, TALUKA EORIVILI, MALAD (W), MUMBAI -400 064 FOR A CONSIDERATION OF ` 14,50,000/- AND ` 13,50,000/- RESPECTIVELY. BOTH THE FLATS WERE ACQUIRED BY EXECUTING TWO SEPAR ATE SALE AGREEMENTS. THE A.O. HAS NOTED THAT THE BENEFIT OF SECTION 54 C AN BE AVAILABLE ONLY IN RESPECT OF ONE RESIDENTIAL HOUSE. THE A.O., THEREF ORE, DECLINED TO GIVE THE BENEFIT FOR BOTH THE FLATS U/S.54. THE ASSESSEE CH ALLENGED THE FINDINGS OF THE A.O. BEFORE THE LD. CIT (A). IT WAS PLEADED BY THE ASSESSEE THAT SEC. 54 DOES NOT SPECIFY NOR RESTRICT THE PURCHASE TO ON E RESIDENTIAL HOUSE, IN FACT, IT MENTIONS A RESIDENTIAL HOUSE. IT WAS FURT HER PLEADED THAT SEC.54 MERELY MENTIONS A COST OF NEW ASSET. THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF ANAND BASSAPA 223 CTR 186. THE ASSESSEE FILED AN AFFIDAV IT OF THE CHAIRMAN AND SECRETARY OF SUNVILLE CO-OP. HSG. SOCIETY, ALON G A COPY OF THE FLOOR MAP OF THE FLATS SHOWING BOTH FLATS AS ONE UNIT AT THE TIME OF PURCHASE BY THE ASSESSEE. THE LD. CIT (A) HAS ACCEPTED THE CLAIM OF THE ASSESSEE U/S.54F OF THE ACT BUT HELD THAT AS TENANCY RIGHT D OES NOT EQUATED WITH OWNERSHIP AND HENCE THE AMOUNT RECEIVED ON THE SURR ENDER OF THE TENANCY RIGHT CANNOT BE CONSIDERED AS INCOME FROM T HE HOUSE PROPERTY. HENCE, BENEFIT OF SEC.54 CAN NOT BE GIVEN TO THE AS SESSEE BUT HIS CLAIM CAN BE CONSIDERED UNDER SEC.54F OF THE ACT. NOW, T HE REVENUE HAS CHALLENGED THE SAID ORDER BEFORE US. ITA 1935/M/2010 LATE SHRI DIPANKAR CHATTERJI 3 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. ADMITTEDLY, THERE IS NO DISPUTE THAT THE ASSESSEE RECEIVED THE AMOUNT ON THE SURRENDER OF THE TENANCY RIGHT AN D HE INVESTED THE SAME FOR PURCHASE OF THE RESIDENTIAL ACCOMMODATION IN THE NATURE OF TWO FLATS WHICH WERE JOINT TOGETHER AND MADE AS A ONE R ESIDENTIAL UNIT. ON THE PERUSAL OF THE REASONS GIVEN BY THE LD. CIT (A) , WE FIND THAT THE ASSESSEE FILED THE REQUIRED EVIDENCE TO PROVE THAT, IN FACT, THE TWO FLATS WERE JOINT AS ONE RESIDENTIAL UNIT AND HENCE, THE P RINCIPLES LAID DOWN IN THE CASE OF ANAND BASSAPA (SUPRA) ARE SQUARELY APPL ICABLE. IN OUR OPINION, THE FINDING AND DECISION OF THE LD. CIT (A ) ARE AS PER LAW AND NO INTERFERENCE IS CALLED FOR. WE, ACCORDINGLY, CONFI RM THE SAME. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 3 1ST MARCH 2011. SD/- SD/- ( B. RAMAKOTAIAH) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 31ST MARCH 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) 3, MUMBAI. 4) THE CIT 11, MUMBAI. 5) THE D.R. D BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN ITA 1935/M/2010 LATE SHRI DIPANKAR CHATTERJI 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 29.03.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 29.03.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/ AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER