ITO 20(3)4, MUMBAI V. ZEBUN A RANGWALA, MUMBAI

ITA 2090/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8406 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 13-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R N DSOUZA
• Keywords: Capital asset; Assessment record
• Section: 54F; 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI , BEFORE SHRI R.C.SHARMA , A M & VIVEK VARMA , J M ITA NO. 2090 / MUM/20 1 3 ( ASSESSMENT YEAR : 200 8 - 09 ) ITO - 20(3) - 4, MUMBAI VS. MRS.ZEBUN A . RANGAWALA, A - 501, PARSIAN APARTMENT, V.P.ROAD, ANDHERI (W), MUMBAI - 58 PAN/GIR NO. : A AJPR 2468 Q ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : SHRI R.N DSOUZA /ASSESSEE BY : SHRI VIPUL JOSHI DATE OF HEARING : 1 7 TH NOVEMBER , 201 4 DATE OF PRONOUNCEMENT 21 ST NOV. , 201 4 O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER CIT(A) DATED 03 - 12 - 2012 , IN THE MATTER OF ORDER PASSED U/S. 143 ( 3 ) OF THE I.T. ACT, FOR THE ASSESSMENT YEAR 200 8 - 09 , WHEREIN FOLLOWING GROUND S HAVE BEEN TAKEN BY THE REVENUE : - I. THE LD. CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES AND IN LAW IN DIRECTING THE AO TO ALLOW CLAIM U/S 54F OF THE ACT AMOUNTING TO RS.25,56,100/ - . II. THE LEARNED CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES O F THE CASE HAS NOT APPRECIATED THE FACT THAT THE ONLY EVIDENCE SUBMITTED IN SUPPORT OF CLAIM U/S 54F OF ACT WAS AN AGREEMENT FOR SALE DATED 20.12.2006 AND THE FACT OF POSSESSION OF FLAT ON 18.01.2010 IS NOT BORNE OUT OF ASSESSMENT RECORDS. III. THE LEARNE D CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES AND IN LAW IN ADMITTING FRESH EVIDENCE WITHOUT GIVING AN OPPORTUNITY TO ITA NO. 2090 / 13 2 THE AO TO VERIFY THESE EVIDENCES, THEREBY CONTRAVENING THE PROVISIONS OF RULE 46A OF IT RULES. IV. THE APPELLANT PRAYS THAT THE ORDE R OF THE CIT (APPEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED . 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE SOLITARY ISSUE IN THE APPEAL PERTAINS TO ALLOWING THE CLAIM U/S.54F BY THE C IT(A). THE REVENUE HAS ALSO T AKEN A GROUND REGARDING VIOLATION OF RULES 46A BY THE CIT(A). 3 . FACTS IN BRIEF ARE THAT DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO OBSERVED THAT THE ASSESSEE SOLD A SHOP ON 19 - 2 - 2008 FOR A SALE CONSIDERATION OF RS.40,52,000/ - AND CLAIMED INDEXED CO ST OF RS.4,95,000 / - , THUS HAVING LONG TERM CAPITAL GAIN OF RS.35,56,100/ - . THE AO FURTHER OBSERVED THAT OUT OF THE SALE PROCEEDS, THE ASSESSEE INVESTED A SUM OF RS.10, 00,000/ - IN CAPITAL GAIN TAX SAVING BOND AND THE REMAINING BALANCE WAS CLAIMED AS EXEMPT ED U/S 54F OF THE ACT AS THE SAME WAS INVESTED IN PURCHASE OF A RESIDENTIAL FLAT. FURTHER, HE OBSERVED THAT THE ASSESSEE HAS PURCHASED FLAT ON 20 - 12 - 2006 MORE THAN ONE YEAR BEFORE THE TRANSFER OF THE LONG TERM CAPITAL ASSET. ACCORDING TO THE AO, THE PROVIS IONS OF SECTION 54F CLEARLY STATES THAT PURCHASE SHOULD BE WITHIN ONE YEAR BEFORE AND TWO YEARS AFTER THE DATE OF LONG TERM CAPITAL GAIN ARISES. ACCORDINGLY, THE ASSESSING OFFICER REJECTED THE CLAIM OF EXEMPTION U/S 54F MADE BY THE ASSESSEE. 4 . BY THE IMPU GNED ORDER, THE CIT(A) ALLOWED ASSESSEES CLAIM AFTER HAVING THE FOLLOWING OBSERVATIONS : - 3.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AS THEY EMERGE FROM THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT DURING THESE PRO CEEDINGS. THE DISPUTE ARISES ITA NO. 2090 / 13 3 FROM THE AO'S REJECTION OF CLAIM OF EXEMPTION MADE BY THE APPELLANT U/S 54F OF THE ACT. SECTION 54F STIPULATES THAT WHEREVER AN ASSESSEE TRANSFERS A LONG TERM CAPITAL ASSET (NOT BEING A RESIDENTIAL HOUSE) AND WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE OF SUCH TRANSFER, PURCHASES A RESIDENTIAL HOUSE, THE CAPITAL GAINS WILL BE DEALT WITH AS PROVIDED IN THE SECTION. IN THE INSTANT CASE, THE APPELLANT SOLD THE LONG TERM CAPITAL ASSET IN QUESTION ON 19 - 02 - 2008. TH US THE WINDOW AVAILABLE TO HER FOR THE PURCHASE OF NEW RESIDENTIAL HOUSE WAS FROM 19 - 02 - 2007 (ONE YEAR BEFORE) TO 19 - 02 - 2010(TWO YEARS AFTER). ADMITTEDLY, THE APPELLANT HAD ENTERED INTO AN AGREEMENT OF SALE FOR THE NEW RESIDENTIAL HOUSE ON 20 - 12 - 2006, WH ICH LAY BEYOND THE STIPULATED TIME FRAME AS FAR AS PERIOD AVAILABLE BEFORE THE TRANSFER OF THE LONG TERM CAPITAL ASSET WAS CONCERNED. HOWEVER, IT IS CLEAR THAT THE APPELLANT TOOK POSSESSION OF THE HOUSE ONLY ON 18 - 01 - 2010 AFTER MAKING THE REMAINING PAYMENT S. THE DATE OF 18 - 01 - 2010 FALLS WITHIN THE PERIOD PROVIDED FOR PURCHASE OF THE RESIDENTIAL HOUSE AFTER THE TRANSFER OF THE LONG TERM CAPITAL ASSET. 3.2.1 A SIMILAR SITUATION WAS ADJUDICATED UPON BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V S . SMT B EENA K JAIN REPORTED IN 216 ITR 363, WHERE THE CLAIM U/S 54F WAS CONSIDERED ALLOWABLE DESPITE THE FACT THAT THE AGREEMENT FOR THE PURCHASE OF THE NEW FLAT WAS ENTERED INTO MORE THAN ONE YEAR PRIOR TO THE SALE OF THE LONG TERM CAPITAL ASSET. THE COURT HELD THAT THE RELEVANT DATE WAS THE ONE, ON WHICH, THE APPELLANT OBTAINED POSSESSION OF THE FLAT AFTER HAVING MADE FULL PAYMENT. THE FACTS OF THIS CASE APPLY SQUARELY TO THE PRESENT CASE IN APPEAL. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLA IM U/S 54F OF THE ACT. THE APPELLANT SUCCEEDS IN THIS GROUND. 5 . WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE ASSESSEE HAS SOLD LONG TERM CAPITAL ASSETS ON 19 - 2 - 2008. THE ASSESSEE WAS HAVING TIME PERIOD TO BUY NEW RESIDENTIAL HOUSE UPTO 19 - 2 - 2010 I.E. TWO YEARS FROM THE DATE OF SALE. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO PURCHASE FOR THE NEW RESIDENTIAL HOUSE ON 20 - 12 - 2006. EVEN THOUGH ASSESSEE HAS ENTERED INTO AGREEMENT FOR BUYING THE NEW RESIDENTIAL HOUSE ON 20 - 12 - 2006, HE HAS TAKEN POSSESSION ONLY ON 18 - 1 - 2006, AFTER MAKING FULL PAYMENTS. SINCE THE DATE OF 18 - 1 - 2010 FALL WITHIN THE PERIOD PROVIDED FOR PURCHASE OF RESIDENTIAL HOUSE AFTER TRANSFER OF LONG ITA NO. 2090 / 13 4 TERM CAPITAL ASSETS, THE CIT(A) DELETED THE DISALLOWANCE CLAIMED U/S.54F AFTER RECORDING DETAILED FINDING AT PARA 3.2 AND 3.2.1, WHICH HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT BY BRINING ANY POSITIVE MATERIAL ON RECORD. THE ASSESSEE HAS ALSO FILED PAPER BOO K INDICATING THAT POSSESSION LETTER DATED 18 - 1 - 2010 WAS ALSO FILED BEFORE THE AO TO SUBSTANTIATE THE CLAIM THAT THE PURCHASE WAS WITHIN THE PERIOD OF TWO YEARS. IN VIEW OF THE PAPER BOOK FILED BY THE ASSESSEE DULY SIGNED, INDICATING POSSESSION LETTER HAVIN G BEEN FILED BEFORE THE AO ALSO, THE GROUND TAKEN BY THE REVENUE UNDER RULE 46A DOES NOT SURVIVE ANYMORE. MERELY BECAUSE IN THE ASSESSMENT ORDER THE AO HAD NOT MENTIONED AND DISCUSSED ABOUT LETTER DATED 18 - 1 - 2010 INDICATING TAKING OF POSSESSION OF NEW HOUS E PROPERTY, THE SAME CANNOT GIVE RISE TO ISSUE UNDER RULE 46A WHEN THE PAPER BOOK FILED BY THE ASSESSEE DULY INDICATES FILING OF SUCH DOCUMENT BEFORE THE AO AND CIT(A) HAS DISCUSSED REGARDING SUCH DOCUMENT. MOREOVER, THE POSSESSION LETTER DATED 18 - 1 - 2010 D ULY REFERS THE AGREEMENT FOR SALE DATED 20 - 12 - 2006. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE CLAIMED BY THE ASSESSEE U/S.54F. 6 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 /11/ 201 4 . 21 /11/ 2014 SD/ - SD/ - ( ) ( VIVEK VARMA ) ( ) ( R.C.SHARMA ) / JUDI CIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 21 / 11 /2014 /PKM , PS ITA NO. 2090 / 13 5 COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//