Sunil Kumar Chopda, BILASPUR(CG) V. Assistant Commissioner of Income Tax -1(1), BILASPUR(CG)

ITA 2/BIL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2420 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H M MOHARANA
• Assessee Lawyers: R B DOSHI
• Section: 54F; 54

Judgement Text

, RA IPUR IN THE INCOME TA X A PPELLA TE TRIBUNA L, RA IPUR BEFORE S/SHRI MUKUL SHRAW AT ( JM) SHAMIM YAH Y A (AM) , , ./ I.T.A. NO. 02/BLPR/2013 ( / ASSESSMENT YEAR : 2009 - 2010 ) SUNIL KUMAR CHOPDA, H.N.336, W ARD NO.15, FCI ROAD, TARBAHAR PHATAK, BILASPUR / VS. ACIT, AAYAKAR BHAVAN, VAYPA VIHAR, BILASPUR ./ ./ PAN/GIR NO. : AARPC 9211 E ( / AP PELLANT ) . VS ( / RESPONDENT ) / APPELLANT BY : SHRI R.B.DOSHI / RESPONDENT BY : SHRI H.M.MOHARANA / DATE OF HEARING : 15 - 02 - 2016 / DA TE OF PRONOUNCEMENT : 17 - 02 - 2016 / O R D E R PER MUKUL SHRAWAT, JM THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM A N ORDER OF THE LD CIT(A), BILASPUR DATED 5.10.2012 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. THE ONLY EFFECTIVE GRO UND TAKEN BY THE ASSESSEE IS REPRODUCED BELOW: IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD CIT(A) ERRED IN HOLDING THAT DEDUCTION U/S.54F IS NOT AVAILABLE IN RESPECT OF EXPENDITURE OF RS.7,92,980/ - INCURRED BY THE APPELLANT. H E ERRED IN 2 I.T.A. NO.02/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 UPHOLDING THE ACTION OF THE AO AND IN CONFIRMING THE ADDITION OF RS.5,45,070/ - . THE ADDITION IS ILLEGAL AND NOT JUSTIFIED. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) OF THE I.T.ACT, 1961 DATED 23.1 2.2011 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS IN TRANSPORT BUSINESS. T HE ASSESSEE HAD SOLD LAND FOR A CONSIDERATION OF RS.80,00,000/ - . THE CAPITAL GAIN WAS COMPUTED AFTER CLAIMING DEDUCTION UNDER SECTION 54F OF THE ACT OF RS.39,52,387/ - . FURT HER, IT WAS NOTICED THAT A READY BUILT HOUSE AT DUNGAJI COLONY, RAIPUR W AS PURCHASED. T HE INVESTMENT IN THE PURCHASE OF HOUSE WAS ALLOWED BY THE AO BUT IT WAS FOUND THAT THE ASSESSEE HAS ALSO CLAIMED DEDUCTION U/S. 54F IN RESPECT OF EXPENDITURE INCURRED OF RS.7,92,980/ - AFTER THE PURCHASE OF THE PROPERTY. THE AO HAS NOT ALLOWED THE EXPE N DITURE INCURRED AFTER THE PURCHASE OF THE HOUSE. T HE ASSESSEES CONTENTION WAS THAT THE RESIDENTIAL HOUSE BECOMES HABITABLE AFTER THE SAID EXPENDITURE. THE ASSES SEE HAS PLACED RELIANCE IN THE CASE OF SALEM FAZELBHOY VS DCIT (2006) 9 SOT 601 (MUM). A S PER THE AO, THE DESCRIPTION OF THE PROPERTY AS PER THE SALE DEED WAS THAT THE HOUSE IN QUESTION WAS FITTED WITH ITALIAN GRANITE, MODERN KITCHEN, ALL ELECTRICAL FITTI NGS AND FIXTURES, WOODEN FLOOR IN MASTER BED ROOM , ETC . A S PER THE AO, THE HOUSE WAS FIT FOR RESIDENCE. T HE EXPENDITURE WAS TO MAKE THE HOUSE COMFORTABLE OTHERWISE THE HOUSE WAS FULLY HABITABLE. AGAINST THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S. 54F, T HE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 3 I.T.A. NO.02/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 4. SAME ARGUMENTS HAVE BEEN RAISED, HOWEVER, THE CI(A) WAS NOT CONVINCED FULLY BECAUSE OF THE REASON THAT THE EXPENDITURE WAS INCURRED FOR PURCHASE OF SOFA SET, ALMIRAH, ETC. IN HIS OPINION, SUC H EXPENDITURE WAS NOT ADMISSIBLE FOR THE CLAM OF DEDUCTION U/S.54F OF I.T.ACT. T HE FI NDINGS OF LD CIT (A) IS REPRODUCED BELOW: THE WORDINGS OF THE SECTION ARE CLEAR, THUS THE BENEFITS WHICH ARE NOT AVAILABLE UNDER THE SECTION CANNOT BE CONFERRED BY IGNOR ING OR MISINTERPRETING THE WO RDS IN THE SECTION.(ALSO RELIED ON DCITG VS IPCA LABORATORY LTD (2004) 187 CT R 513 (SC). T HE WORD PUR CHASE USED IN SECTION 54 IN ITS PLAIN MEANING CANNOT COMPREHEND ANY SUM THAN THE AMOUNT PAID FOR PURCHASE OF A PROPERTY. ( RELIED OF DCIT VS. UDAY S. KOTAK(2005) 96 TTJ 1018 (MUM). I N THE PRESENT CASE IN HAND, THE APPELLANT PURCHASED A HOUSE, QUITE HABITABLE AND THERE IS NO DISPUTE TO IT. T HERE IS DISTINCTION BETWEEN THE EXPENDITURE INCURRED ON MAKING THE HOUSE HABITABLE AND EXPENDITURE ON MAKING THE HOUSE COMFORTABLE . T HE HOUSE PURCHASED BY THE APPELLANT WAS IN HABITABLE CONDITION AT THE TIME OF PURCHASE. ACCORDINGLY, DEDUCTION U/S.54F IS ADMISSIBLE ON PURCHASE PRICE OF THE HABITABLE HOUSE. T HE EXPENDITURE OF RS.7,92,980/ - INCURRED FOR PURCHASE OF BED, SOFA - SET, ALMIRAH ETC AND OTHER ITEMS OF FURNITURE A ND FIXTURES ARE OBVIOUSLY THE EXPENDITURE INCURRED FOR MAKING HABITATION IN THE HOUSE MORE COMFORTABLE AND LUXURIOUS OVER WHICH DEDUCTION U/S.54F IS INADMISSIBLE.(ALSO RELI ED ON SALEEM FAZELBHOY VS DCIT (2006) 9 SOT 601 (MUM). ON THE FACTS AND IN THE GIVEN CIRCUMSTANCES OF THE CASE, I FIND NO INFIRMITY IN THE ORDER OF THE AO IN DENYING DEDUCTION U/S. 54F ON PURCHASE OF FURNITURE TO MAKE THE HABITATION IN THE HOUSE MORE COMFO RTABLE AND LUXURIOUS. 5. FROM TH E SIDE OF THE ASSESSEE, SHRI R.B .DOSHI, LD AR. APPEARED AND VEHEMENTLY ARGUED THAT WITHOUT PURCHASE OF BED, ALMIRAH AND OTHER BASIC FU RNI TURE, IT WAS NOT POSSIBLE TO LIVE IN THE HOUSE. A HOUSE IS HABITABLE WHEN IT IS FITTE D WITH FURNITURE AS WELL. H E SUBMITTED THAT NO ONE CAN SLEEP ON THE FLOOR OF THE HOUSE. T O LIVE IN A HOUSE, SOFA SET, ALMIRAH, BEDS ARE REQUIRED TO MAKE A 4 I.T.A. NO.02/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 HOUSE HABITABLE. T HE ITEMS WHICH WERE PURCHASED WERE NOT PROVIDING COMFORT BUT THE BASIC NECESSITY OF ANY PERSON STARTING TO LIVE IN A NEW BUILT HOUSE. I N SUPPORT OF HIS ARGUMENTS, FEW CASE LAWS CITED ARE AS UNDER: I) SRINIVAS R DESAI VS ACIT(20130 145 ITD 12 (/AHD) II) JYOTI PAT RAM VS ITO(2005) 92 ITD 423 (LUK) III) SALEEM FAZELBHOY VS DCIT (2007 ) 106 ITD 167 (MUM) IV) MEHER R. SURTI VS ITO(2013) 27 ITR (TRIB) 340 (MUM) V) CIT VS.,ARAVINDA REDDY, (1979 120 ITR 46 (SC) VI) DCIT VS. UDAY S. KOTAK(2005) 96 ITD 177 (MUM) 5. FROM THE SIDE OF THE REVENUE, SHRI H.M,.MOHARANA LD D.R. APPEARED AND PLEA DED THAT THE INVESTMENT MADE UPTO THE STAGE OF MAKING THE HOUSE HABITABLE CAN BE ALLOWED. O NCE THE ASSESSEE HAS EXECUTED T HE PURCHASE DEED, THEN THE INVESTMENT MADE FOR PURCHASE OF HOUSE IS ADMISSIBLE AND REST OF EXPENDITURE, IF INCURRED, AFTER THE COMPL ETION OF TRANSACTION OF PURCHASE OF THE PROPERTY SHOULD BE HELD AS EXPENDITURE TOWARDS LUXURY ITEMS FOR LIVING . R ELIANCE WAS PLACED ON THE FOLLOWING DECISIONS: I) SALEEM FAZELBHOY VS DCIT (2007) 106 ITD 167 (MUM) II) MEHER R SURTI VS ITO(2014) 61 SOT 5 (MUM) III) SRINIVAS R. DESAI VS ACITG (2013) 145 ITD 12 (AHD) IV) JYOTI PAT RAM VS ITO (2005) 92 ITD 423 (LUCKNOW 5 I.T.A. NO.02/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 6. WE H AVE HEARD BOTH THE SIDES. W E HAVE PERUSED THE EVIDENCES PLACED BEFORE US, ESPECIALLY THE BILL THROUGH WHICH THE ITEMS WERE PROCU RED NAMELY, BED FOR MASTER BED ROOM, BED FOR GUEST ROOM, DINING TABLE, ALMIRAH, WALL PAPER, ETC. IN OUR OPINION, THESE ITEMS DO N OT FALL IN THE CATEGORY OF THE INVESTMENT DEFINED U/S.54F OF THE ACT. IN OUR CONSIDERED OPINION, SECTION 54F IS APPLICABLE ONL Y IN RESPECT OF INVESTMENT TOWARDS PURCHASE OF A RESIDENTIAL HOUSE. T HE ASSESSEE S VEHEMENT CONTENTION IS THAT MERELY BY PURCHASING A HOUSE WITH OUT FURNITURE IS NOT FIT FOR RESIDENCE. T O MAKE THE HOUSE HABITABLE, THE FURNITURE, DINING TABLE, BED, ETC, AR E REQUIRED. H OWE VER, WE ARE NOT IN AGREEMENT BECAUSE IN OUR HUMBLE OPINION, THE PROVISIONS OF THE I.T.ACT DO NOT SUBSCRIBE THE TERMINOLOGY VIZ, HABITABLE RESIDENTIAL HOUSE. T HE LANGUAGE OF SECTION IS THAT THE ASSESSEE IS REQUIRED TO MAKE AN INVESTMENT IN A RESIDENTIAL HOUSE. E VEN THE ASSESSEE IS ENTITLED FOR EXEMPTION IF A HOUSE IS CONSTRUCTED WITHIN A SPECIFIED PERIOD. T HE LANGUAGE OF SECTION IS NOT SUGGESTING THAT THE ASSESSEE SHALL BE ENTITLED TO CONSTRUCT A HABITABLE RESIDENTIAL HOUSE. SINCE THE TE RM HABITABLE IS NOT A PART OF THE STATUTE, IT CANNOT BE INSERTED BY US. I N SOME OF THE CASE LAWS AS CITED FROM THE SIDE OF THE ASSESSEE, THE FACTS WERE THAT THE ASSESSEE HAD INCURRED EXPENDITURE TOWARDS HAVING THE CONSTRUCTION WHICH RESULTED INTO THE HOUS E IN A HABITABLE STRUCTURE BUT THE DISTINCTION IS THAT THE EXPENDITURE IN QUESTION WAS NOT IN CURRED O N LUXURIOUS ITEMS. I N ONE OF THE CASE LAW, IT WA S VERY MUCH DISTINGUISHED THAT THE EXPENDITURE IF INCURRED TOWARDS CONSTRUCTION SO THAT THE HOUSE IS FIT FOR LIVING IS ALLOWABLE BUT THE EXPENDITURE IN MAKING THE HOUSE COMFORTABLE IS NOT AN ALLOWABLE EXPENDITURE. WE , THEREFORE, HOLD THAT THERE IS NO 6 I.T.A. NO.02/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 FALLACY IN THE ORDER OF THE LD CI(A) WHILE REJECTING THE CLAIM OF DEDUCTION U/S.54F OF THE ACT. WE , ACCORDI NGLY, REJECT THE GROUND OF APPEAL TAKEN BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 /02/2016 . S D/ - SD/ - ( , ) ( , ) SHAMIM Y AHY A , ACCOUNT ANT MEMBER MUKUL SHRA WA T , JUDICIAL M EM BER RAIPUR , DATED 17 / 02 /20 1 6 . . ./ PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT : SUNIL KUMAR CHOPDA, H.N.336, W ARD NO.15, FCI ROAD, TARBAHAR PHATAK, BILASPUR 2. / THE RESPONDENT : ACIT, AAYAKAR BHAVAN, VAYPA VIHAR, BILASPUR 3. ( ) / THE CIT(A) - BILASPUR 4. / CIT , BILASPUR 5. , , / DR, ITAT , RAIPUR 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SR. PS, ITAT, CAMP: RAIPUR