ITO, Ward-40(4), Kolkata, Kolkata V. Smt. Pushpa Devi Sethia, Kolkata

ITA 2009/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3327 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 19-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR CIT SRDR
• Section: 143(3); 147; 148; 54; 154

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2009 / KOL / 20 16 ASSESSMENT YEAR :2008-09 INCOME TAX OFFICER, WARD-40(4), 3, GOVT. PLACE (WEST), 2 ND FLOOR, KOLKATA-001 V/S . SMT. PUSHPA DEVI SETHIA 2, RAMLOCHAN MULLICK STREET, KOLKATA-73 [ PAN NO.AJVPS 2277D ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SAURABH KUMAR, ADDL. CIT-SR-DR /BY RESPONDENT SHRI ARYAN KOCHAR, ADVOCATE /DATE OF HEARING 12-07-2018 /DATE OF PRONOUNCEMENT 24-08-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2008-09 A RISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-12, KOLKATAS ORDER DATED 29.07.2016, PASSED IN CASE NO.66/CIT(A)-12/W-40(4)/KOL//2015-16 , IN BOTH QUASHING THE RE-ASSESSMENT IN QUESTION TO BE ILLEGAL AS WELL AS DELETING LONG TERM CAPITAL GAINS ADDITION OF 95,22,372/- MADE BY THE ASSESSING OFFICER IN ASSESS MENT ORDER DATED 30.03.2015, INVOLVING PROCEEDINGS U/S. 147 RW.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT EMERGES AT THE OUTSET THAT CIT(A)S DETAILED DISCUSSION IN QUASHING IMPUGNED RE-OPENING AS WELL AS DELETING THE IMPUGNE D ADDITION OF LONG TERM CAPITAL GAINS ON MERIT READS AS UNDER:- 3.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. FACTS ARE THAT AN ASSESSMENT U/S. 143(3) WAS ITA NO.2009/KOL/2016 A.Y. 2008-0 9 ITO WD-40(4), KOL. VS. SMT. PUSHPA DEVI SETHIA PAGE 2 MADE ON 30.12.2010 DETERMINING INCOME AT RS.10,01,1 30/-. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S. 148 OF THE ACT ON 13.01.2014 WHICH WAS DULY SERVED ON 20.01.2014. IT IS OBSERVE BY THE AO IN THE ORDER OF ASSESSMENT THAT THE ASSESSEE HAD EARNED LO NG TERM CAPITAL GAINS AMOUNTING TO RS.2,09,87,245/- AND THERE WAS C LAIM FOR THE ENTIRE AMOUNT FOR DEDUCTION U/S. 54 OF THE ACT BY PURCHASE OF FLAT FOR RS.2,34,64,873/-. IT HAS BEEN OBSERVED BY THE AO TH AT THE ASSESSEE AVAILED A HOME LOAN TO THE TUNE OF RS.1,20,00,000/- TO PURCHASE THE SAID FLAT AND THAT AMOUNT UTILIZED OUT OF LONG TERM CAPITAL GAIN WAS ONLY RS.1,14,64,873/- AND THEREFORE THE ASSESSEE WA S HELD TO HAVE UTILIZED AMOUNT OF LONG TERM CAPITAL GAIN OF RS.95, 22,372/-. THIS AMOUNT OF RS.95,22,372/- HAS BEEN NOW ADDED TO THE ASSESSED INCOME U/S. 148. THE A/R IN THE COURSE OF HEARING BEFORE ME FILED WR ITTEN SUBMISSIONS INCLUDING COPY OF THE ORDER OF ASSESSMENT PASSED U/ S. 143(3) OF THE ACT. THE AO IN THE ORDER OF ASSESSMENT HAS WHILE COMPUTI NG THE ASSESSABLE INCOME NOTED INCOME FROM CAPITAL GAINS FROM THE HOU SE PROPERTY AT RS.2,09,87,245/- AND ALLOWED EXEMPTION U/S. 54 OF T HE AMOUNT OF RS.2,09,87,245/-. ONE SET OF PROFIT & LOSS ACCOUNT AND BALANCE SHEETS AS ON 31.03.2008 HAS BEEN FILED. IN THE OUTSET, THE A/R HAS CHALLENGED THE ASSUMPTIO N OF JURISDICTION U/S 147 OF THE ACT AND CONSEQUENT ISSUE OF NOTICE U/S. 148. IT IS THE CONTENTION OF THE A/R THAT NOTICE WAS ISSUED AFTER FOUR YEARS FROM THE END OF ASSESSMENT YEAR AND THAT THIS WAS TOTALLY WR ONG & UNCALLED FOR. THE LEARNED A/R IN THE WRITTEN SUBMISSIONS FILED BE FORE ME HAS CONTENDED THAT THE PROCEEDINGS INITIATED U/S. 148 A RE TOTALLY BAD-IN-LAW. FOLLOWING CONTENTIONS AS PLACED IN THE WRITTEN SUBM ISSION WITH REGARD TO THE CHALLENGE MADE BY THE ASSESSEE ON THIS ISSUE AN D THE CASE LAWS ARE SUBTRACTED AS UNDER:- THE UNDISPUTED FACT AS APPARENT FROM THE ORDER OF ASSESSMENT MADE U/S. 143(3) IS THAT THE AO HAS DULY CONSIDERED THE EARNING OF LONG TERM CAPITAL GAINS BY THE ASSESSEE AND DEDU CTION CLAIMED U/S. 154 WAS ALLOWED. PROCEEDING U/S. 148 H AS BEEN DRAWN LATER ON BEYOND FOUR YEARS FROM THE END OF TH E YEAR OF ASSESSMENT. THERE IS NOTHING BROUGHT ON RECORD BY T HE AO WHICH WOULD LAY DOWN ANY BASIS FOR ASSUMPTION OF JURISDIC TION U/S. 148 AS THERE IS NO MATERIAL PLACE ON RECORD BY THE AO W HICH WOULD SHOW THAT INCOME HAD ESCAPED ASSESSMENT BECAUSE OF THE FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING F ACTS AND MATERIALS RELEVANT TO L.T. CAPITAL GAINS AND EXEMPT ION U/S. 54. THE CASE LAWS AS HAVE BEEN NOTED ABOVE AND RELIED U PON BY THE ASSESSEE WHICH INCLUDE THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. REPORT ED IN 350 ITR DULY SUPPORT THE CONTENTIONS RAISED BY THE ASSESSEE THAT THE PROCEEDINGS IN THE FACTS AND CIRCUMSTANCES INITIATE D U/S. 148 ARE ENTIRELY WRONG & UNCALLED FOR. THUS, SO FAR AS THE LEGALITY OF THE ITA NO.2009/KOL/2016 A.Y. 2008-0 9 ITO WD-40(4), KOL. VS. SMT. PUSHPA DEVI SETHIA PAGE 3 PROCEEDINGS INITIATED U/S. 148 ARE CONCERNED, I ALL OW THE GROUND OF THE ASSESSEE AND HOLD THAT ASSUMPTION OF JURISDI CTION U/S. 147/148 & THE ASSESSMENT FRAMED U/S. 147 IS BAD-IN- LAW. 4. AS REGARDS THE 2 ND GROUND OF APPEAL, THE A/R HAS RAISED THE FOLLOWING CONTENTIONS IN THEIR SUBMISSIONS:- THE APPELLANT SUBMITS COPY OF CONVEYANCE DEED 30.0 7.2007 WHEREBY THE APPELLANT ACQUIRED FLAT. IT WILL BE SEE N THAT THE APPELLANT PURCHASED THE FLAT DIRECTLY FROM THE VEND OR AND THERE IS NO INVOLVEMENT OF BANK. IN A CASE WHERE A PERSON OB TAINING LOAN FROM BANK TO PAY OFF CONSIDERATION FOR ACQUISITION OF FLAT, THE BANK BECOMES A PARTY TO THE CONVEYANCE DEED. IN THE CASE OF THE APPELLANT, IT IS TO STATE THAT PURCHASE OF FLAT IS AS PER AGREEMENT BETWEEN THE VENDOR AND THE APPELLANT. IT WOULD CLEA RLY ESTABLISH THAT THE APPELLANT ACQUIRED FLAT OUT OF HER OWN FUN DS WHICH INCLUDE AMOUNTS RECEIVED ON SALE OF HER ALREADY EXISTING FL AT. THE APPELLANT HAVING BECOME OWNER OF FLAT WITH HER OWN FUNDS SUBSEQUENTLY OBTAINED ADVANCE AGAINST THE FLAT AND THIS TRANSACTIONS OF LOAN AGAINST FLAT HAS NOTHING TO DO WITH THE DETERMINATION OF LONG TERM CAPITAL GAINS AND ITS UT ILIZATION.. SINCE THE ASSESSEE HAS ALSO CHALLENGED THE ORDER FR AMED U/S 147 ON MERITS, I HAVE GONE THROUGH THE FACTS AND FIND THAT IT IS NOT A CASE THAT THE ASSESSEE HAS NOT UTILIZED THE LONG TERM CAPITAL GAIN IN ACQUISITION OF THE NEW FLAT. I FIND THAT THE FULL INVESTMENT MA DE IN THE NEW FLAT IS DULY APPEARING IN THE BALANCE SHEET. A REFERENCE TO THE CONVEYANCE DEED RELATING TO THE ACQUISITION OF THE NEW FLAT SHOWS T HAT THE CONVEYANCE DEED IS BETWEEN THE SELLER AND THE ASSESSEE ONLY. T HERE IS NO INVOLVEMENT OF ANY BANK WHICH NORMALLY HAPPENS IF B ANK LOAN IS OBTAINED TO ACQUIRE PROPERTY. OBTAINING LOANS AGAIN ST THE PROPERTY HAS NOTHING TO DO WITH THE ALREADY ACQUIRED FLAT BY THE ASSESSEE. THUS, EVEN ON MERIT, I AM OF THE OPINION THAT THE ASSESSEE HAS PURCHASED THE NEW FLAT BY MAKING INVESTMENT OF HER FUNDS WHICH OBVIOU SLY USED THE LONG TERM CAPITAL GAINS AS WELL. THEREFORE, EVEN ON MERI T, I DO NOT FIND ORDER OF THE ASSESSING OFFICER SUSTAINABLE. THE APPEAL IS ALLOWED. 3. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY CONTENDS THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN BOTH QUASHING THE RE- ASSESSMENT AS WELL AS ACCEPTING ASSESSEES CLAIM OF SECTION 54 DEDUCTION FOR PURCHASE OF THE RESIDENTIAL FLAT IN QUESTION. HER C ASE IS THAT ASSESSEE HAD NOT REINVESTED ALL THE CAPITAL GAINS SINCE SHE PURCHASE D THE ABOVE RESIDENTIAL PROPERTY THROUGH BANK LOAN ONLY. WE FIND NO MERIT I N REVENUES LATTER ARGUMENTS ON MERITS. IT FAILS TO REBUT THE CLINCHIN G FACT THAT IT WAS THE ASSESSEE ITA NO.2009/KOL/2016 A.Y. 2008-0 9 ITO WD-40(4), KOL. VS. SMT. PUSHPA DEVI SETHIA PAGE 4 ONLY WHO HAD PURCHASED THE RESIDENTIAL HOUSE IN QUE STION THROUGH THE CONVEYANCE DEED EXECUTED WITH THE VENDOR CONCERNED. THE BANK IS NOT A PARTY THEREIN EVEN IN MORTGAGEE CAPACITY AS PER THE CIT(A)S FINDINGS EXTRACTED HEREINABOVE. WE THEREFORE CONCLUDE THE CI T(A) HAS RIGHTLY HELD THAT ASSESSEE HAS ACTUALLY REINVESTED ALL OF HER CAPITAL GAINS AS STIPULATED IN THE IMPUGNED BENEFICIAL PROVISIONS ENSHRINED IN SECTION 54 OF THE ACT REQUIRING LIBERAL CONSIDERATION. WE THEREFORE UPHOLD THE CIT( A)S FINDINGS ON MERITS. THE REVENUES ARGUMENTS QUA THE LEGAL ISSUE STAND RENDE RED INFRUCTUOUS. 5. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 24/08/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 24 / 08 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITO WARD-40(4), 3, GOVT. PLACE (WEST), 2 ND FLOOR, KOLKAKTA-001 2. /RESPONDENT-SMT. PUSHPA DEVI SETHIA, 2 RAMLOCHAN MU LLICK ST. KOLKATA-73 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,