Chaitali Mukund Mota, Ahmednagar V. Income-tax Officer,

ITA 206/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1834 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Capital asset
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 206/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2007-08 CHAITALI MUKUND MOTA, M/S. SHANTILAL GANDHI, TAX CONSULTANT, 146 1 ST FLOOR, AMBER PLAZA, STATION ROAD, AHMEDNAGAR 414001 PAN : BSJPM9372F ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 3, AHMEDNAGAR / RESPONDENT ASSESSEE BY : SHRI C.H. NANIWADEKAR REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 13-04-2016 / DATE OF PRONOUNCEMENT : 18-05-2016 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-IT/TP, PUNE DATED 01 -01-2014 FOR THE ASSESSMENT YEAR 2007-08. THE ONLY ISSUE RAISED IN THE APPEAL IS DISALLOWANCE OF DEDUCTION U/S. 54 OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT). 2 ITA NO. 206/PN/2014, A.Y. 2007-08 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE HAD SHARE IN ANCESTRAL PROPERTY SITUATED AT S . NO. 355, PLOT NO. 16 ADMEASURING 5100 SQ. FT. THE FATHER OF THE ASSESSE E EXPIRED IN THE YEAR 2003. HE WAS HAVING 1/4 TH SHARE IN THE SAID ANCESTRAL PROPERTY. HE WAS SURVIVED BY WIFE, SON AND DAUGHTER (ASS ESSEE). THUS, THE ABOVE SAID LEGAL HEIRS HAD 1/12 TH SHARE EACH IN THE ANCESTRAL PROPERTY. THE SAID ANCESTRAL PROPERTY WAS SOLD IN APRIL, 2 006. THE ASSESSEE PURCHASED A HOUSE IN MARCH, 2006 FOR A CONSID ERATION OF ` 6,90,000/-. THE SALE AND PURCHASE OF THE PROPERTY WAS DONE IN THE NAME OF SMT. NAYANA MOTA, MOTHER OF THE ASSESSEE. THE ASSESSEE CLAIMED DEDUCTION U/S. 54 OF THE ACT. THE ASSESSING OFFICER DENIED THE SAME ON THE GROUND THAT THE HOUSE WAS PURCHASED IN T HE NAME OF ASSESSEES MOTHER, THEREFORE, SHE IS ENTITLED TO CLAIM THE BENEFIT OF DEDUCTION U/S. 54 OF THE ACT AND NOT THE ASSESSEE. AGGRIEVED BY THE ASSESSMENT ORDER DATED 04-11-2011, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUG NED ORDER UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED T HE APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. SHRI C.H. NANIWADEKAR APPEARING ON BEHALF OF THE ASSESS EE SUBMITTED THAT THE ASSESSEE WAS MINOR AT THE TIME OF SALE AND PURCH ASE OF PROPERTIES. THEREFORE, THE HOUSE WAS PURCHASED IN THE NAME OF MOTHER OF THE ASSESSEE FROM THE SHARE OF ASSESSEE. THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 54 OF THE ACT IN VIEW OF DECIS IONS OF HON'BLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCO ME TAX VS. KAMAL WAHAL REPORTED AS 351 ITR 4 (DELHI) AND THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHIRISH VINAYAK GODBOLE VS. 3 ITA NO. 206/PN/2014, A.Y. 2007-08 INCOME TAX OFFICER IN ITA NO. 1320/PN/2010 FOR THE ASSES SMENT YEAR 2007-08 DECIDED ON 13-02-2013. 4. ON THE OTHER HAND SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ORDER OF COMMISS IONER OF INCOME TAX (APPEALS). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ONLY ISSUE IN APPEAL BY ASSESSEE IS DISALLOWANCE OF CLAIM U/ S. 54 OF THE ACT. IT HAS BEEN CONTENDED THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 54 OF THE ACT IN RESPECT OF THE PROPERTY PURCHASED FROM THE SHARE RECEIVED FROM THE SALE OF ANCESTRAL HOUSE. TH E ASSESSEE HAS RECEIVED ` 5,00,000/- AS HER SHARE FROM THE SALE PROCEEDS OF THE ANCESTRAL HOUSE AND A NEW HOUSE WAS PURCHASED BY THE ASSESSEE FOR A CONSIDERATION OF ` 6,90,000/-. THE NEW HOUSE WAS PURCHASED IN THE NAME OF ASSESSEES MOTHER SMT. NAYANA MOTA AS THE ASS ESSEE WAS STATED TO BE MINOR AT THAT TIME. A PERUSAL OF THE PROV ISIONS OF SECTION 54 OF THE ACT WOULD SHOW THAT IT ONLY REQUIRES THAT THE ASSESSEE HAS TO INVEST THE AMOUNT ARISING FROM THE SALE OF PROPERTY FOR PU RCHASE OR CONSTRUCTION OF A RESIDENTIAL HOUSE. THE SECTION DOES NOT REQUIRE THAT THE AMOUNT SHOULD BE INVESTED IN THE ASSESSEES NAME ONLY. WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ELIGIBLE TO CLAIM D EDUCTION U/S. 54 OF THE ACT. 6. THE HON'BLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. KAMAL WAHAL (SUPRA) IN SIMILAR CIRCUMSTANCES H AVE ALLOWED THE CLAIM OF DEDUCTION U/S. 54 OF THE ACT WHERE THE CAPITAL ASSET WAS PURCHASED BY THE ASSESSEE IN THE NAME OF H IS WIFE. THE RELEVANT EXTRACT OF THE FINDINGS OF THE HON'BLE COURT IN AFO RESAID CASE ARE AS UNDER : 4 ITA NO. 206/PN/2014, A.Y. 2007-08 7. WE HAVE NO HESITATION IN AGREEING WITH THE VIEW TAKEN BY THE TRIBUNAL. APART FROM THE FACT THAT THE JUDGMENTS OF THE MADRAS AND KARNATAKA HIGH COURTS (SUPRA) ARE IN FAVOUR OF THE ASSESSEE, THE REVENUE FAIRLY BROUGHT TO OUR NOTICE A SIMILAR VIEW OF THIS COURT IN CIT VS. RAVINDER KUMAR ARORA : (2012) 342 ITR 38 (DEL.). TH AT WAS ALSO A CASE WHICH AROSE UNDER SECTION 54F OF THE ACT. THE NEW R ESIDENTIAL PROPERTY WAS ACQUIRED IN THE JOINT NAMES OF THE ASSESSEE AND HIS WIFE. THE INCOME TAX AUTHORITIES RESTRICTED THE DEDUCTION UND ER SECTION 54F TO 50% ON THE FOOTING THAT THE DEDUCTION WAS NO T AVAILABLE ON THE PORTION OF THE INVESTMENT WHICH STANDS IN THE NAME OF THE ASSESSEE'S WIFE. THIS VIEW WAS DISAPPROVED BY THIS COURT. IT N OTED THAT THE ENTIRE PURCHASE CONSIDERATION WAS PAID ONLY BY THE ASSESSE E AND NOT A SINGLE PENNY WAS CONTRIBUTED BY THE ASSESSEE'S WIFE. IT AL SO NOTED THAT A PURPOSIVE CONSTRUCTION IS TO BE PREFERRED AS AGAINS T A LITERAL CONSTRUCTION, MORE SO WHEN EVEN APPLYING THE LITERAL CONSTRUCTION , THERE IS NOTHING IN THE SECTION TO SHOW THAT THE HOUSE SHOULD BE PURCHA SED IN THE NAME OF THE ASSESSEE ONLY. AS A MATTER OF FACT, SECTION 54F IN TERMS DOES NOT REQUIRE THAT THE NEW RESIDENTIAL PROPERTY SHALL BE PURCHASED IN THE NAME OF THE ASSESSEE; IT MERELY SAYS THAT THE ASSESSEE S HOULD HAVE PURCHASED/CONSTRUCTED 'A RESIDENTIAL HOUSE'. 8. THIS COURT IN THE DECISION CITED ALONE ALSO NOTI CED THE JUDGMENT OF THE MADRAS HIGH COURT (SUPRA) AND AGREED WITH THE SAME, OBSERVING THAT THOUGH THE MADRAS CASE WAS DECIDED IN RELATION TO S ECTION 54 OF THE ACT, THAT SECTION WAS IN PARI MATERIA WITH SECTION 54F. THE JUDGMENT OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CI T VS. GURNAM SINGH : (2014) 327 ITR 278 IN WHICH THE SAME VIEW WAS TAK EN WITH REFERENCE TO SECTION 54F WAS ALSO NOTICED BY THIS COURT. 9. IT THUS APPEARS TO US THAT THE PREDOMINANT JUDIC IAL VIEW, INCLUDING THAT OF THIS COURT, IS THAT FOR THE PURPOSES OF SECTION 54F, THE NEW RESIDENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NOR IS IT NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVELY I N HIS NAME. IT IS MOREOVER TO BE NOTED THAT THE ASSESSEE IN THE PRESE NT CASE HAS NOT PURCHASED THE NEW HOUSE IN THE NAME OF A STRANGER O R SOMEBODY WHO IS UNCONNECTED WITH HIM. HE HAS PURCHASED IT ONLY IN T HE NAME OF HIS WIFE. THERE IS ALSO NO DISPUTE THAT THE ENTIRE INVESTMENT HAS COME OUT OF THE SALE PROCEEDS AND THAT THERE WAS NO CONSTRIBUTI ON FROM THE ASSESSEE'S WIFE. 10. HAVING REGARD TO THE RULE OF PURPOSIVE CONSTRUC TION AND THE OBJECT WHICH SECTION 54F SEEKS TO ACHIEVE AND RESPECTFULLY AGREEING WITH THE JUDGMENT OF THIS COURT, WE ANSWER THE SUBSTANTIAL Q UESTION OF LAW 5 ITA NO. 206/PN/2014, A.Y. 2007-08 FRAMED BY US IN THE AFFIRMATIVE, IN FAVOUR OF THE A SSESSEE AND AGAINST THE REVENUE. THE APPEAL IS ACCORDINGLY DISMISSED WITH NO ORDER A S TO COSTS. SIMILAR VIEW HAS BEEN TAKEN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHIRISH VINAYAK GODBOLE VS. INCOME TAX OFFICER (SUPRA). 7. THUS, IN VIEW OF THE FACTS OF THE INSTANT CASE AND THE LAW LAID DOWN BY THE HON'BLE DELHI HIGH COURT, WE ACCEPT THE CONT ENTIONS OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO GRANT BENEFIT OF DEDUCTION U/S. 54 OF THE ACT TO THE ASSESSEE. THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 18 TH DAY OF MAY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 18 TH MAY, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-IT/TP, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE