PUSHPABEN V. PAREKH, MUMBAI V. I.T.O. WARD 13(3)(4), MUMBAI

ITA 2142/MUM/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55658 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 16-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S V CHHABRIA
• Keywords: Capital asset
• Section: 54F; 234B; 69

Judgement Text

1 PUSHABENN V PAREKH IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI T R SOOD, AM & SHRI VIJAY PAL RAO, JM ITA NO. 2142/MUM/2011 (ASST YEAR2007-08 ) PUSHABENN V PAREKH 17 HANUMAN BLDG 67 MUMBADEVI ROAD PHDHONIE MUMBAI 400 003 VS THE INCOME TAX OFFICER WARD 13(3)(4), MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AFWPP8692L ASSESSEE BY MS S V CHHABRIA REVENUE BY SHRI ALEXENDER CHANDY DT.OF HEARING 4 TH OCT 2011 DT OF PRONOUNCEMENT 21 ST OCT 2011 PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31.1.2011 OF THE CIT(A) FOR THE ASSESSMENT YEAR 2007-08. 2 THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS IN THIS APPEAL: I) THE LD CIT(A) ERRED IN LAW IN CONFIRMING THE DIS ALLOWANCE OF EXEMPTION U/S 54F OF THE I T ACT 1961 MADE BY THE ASSESSING OFFIC ER. II) THE LD CIT(A) FAILED TO APPRECIATE THAT THE CAP ITAL GAINS ARISING FROM ASSIGNMENT OF THE APPELLANTS RIGHT IN THE TENANTED PROPERTY ACQUIRED UNDER THE MOU DT 24.4.2000 WERE LONG TERM CAPITAL GAINS AN D NOT SHORT TERM CAPITAL GAINS, WHICH WERE INVESTED BY HER IN PURCHASE OF NEW FLAT FROM M/S TEJPRABHA INDUSTRIES, CLAIMING EXEMPTION U/S 54F OF THE ACT. III)THE APPELLANT DENIES HER LIABILITY TO PAY INTE REST U/S 234A & 234B OF THE ACT. 2 PUSHABENN V PAREKH 3 GROUND NOS 1 & 2 REGARDING DISALLOWANCE OF EXEMPT ION U/S 54F AND TREATING THE CAPITAL GAIN AS SHORT TERM CAPITAL GAINS. 4 THE BRIEF FACTS EMERGE FROM THE RECORDS ARE AS UN DER: 4.1 THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS FROM TRANSACTIONS OF SURRENDER/RELINQUISHMENT OF RIGHTS IN THE PROPERTY BEING LAND ADMEASURING 820 SQ.YARDS ALONG WITH A BUILDING CALLED MOHAN BUILDI NG AT FORJET HILL ROAD, AND ALSO CLAIMED EXEMPTION U/S 54F OF THE ACT. THE ASSESSE E ACQUIRED THE RIGHTS IN THE SAID PROPERTY BEING LAND ADMEASURING 820 SQ. YARDS ALONG WITH BUILDING FOR THE PURCHASE CONSIDERATION OF RS. 37 LACS VIDE MEMORANDUM OF UN DERSTANDING (MOU) DATED 24.4.2000 ENTERED BETWEEN THE ASSESSEE AND THE SELL ER. OUT OF THE TOTAL SALE CONSIDERATION, THE ASSESSEE PAID RS 6,50,000/- ONLY TO THE SELLER SMT JASHREE BHARAT SHAH AND SMT SHILPA MUKESH SHAH. IT IS AN UNDISP UTED FACT THAT THE ASSESSEE DID NOT PAY THE BALANCE PURCHASE CONSIDERATION EXCEPT T HE INITIAL PAYMENT OF RS.6,50,000/-. SUBSEQUENTLY, THE ASSESSEE ENTERED IN TO AN AGREEMENT DATED 27.12.2002 WITH M/S SISODIYA INVESTMENT PVT LTD T O TRANSFER HER RIGHTS IN THE PROPERTY IN QUESTION FOR A CONSIDERATION OF RS. 79,75,000/-. IN THE MEANTIME, THE ASSESSEE HAS ALSO PURCHASED RESIDENTIAL FLAT FROM M/S TEJPRABHA INDUSTRIES FOR A PURCHASE CONSIDERATION OF RS. 80,34,000/- VIDE AGREEMENT DAT ED 11.8.2001. SINCE THE ASSESSEE HAS SHOWN THE BALANCE PAYMENT RECEIVED ON 23.1.2007 FOR RELINQUISHMENT OF RIGHTS IN THE PROPERTY AND THE LAST PAYMENT MADE IN RESPECT OF THE RESIDENTIAL FLATS ON 5.5.2005; THEREFORE, THE ASSESSEE CLAIMED THE SURPL US RECEIVED IN RESPECT OF THE TRANSFER/RELINQUISHMENT OF RIGHTS IN THE PROPERTY A DMEASURING 820 SQ.YARDS AS LONG TERM CAPITAL GAINS AND CLAIMED EXEMPTION U/S 54F AS THE FINAL PAYMENT WAS MADE IN RESPECT OF THE PURCHASE OF RESIDENTIAL FLAT ON 5 .5.2007 WHICH FALLS IN THE AY UNDER CONSIDERATION. 3 PUSHABENN V PAREKH 4.2 THE ASSESSEE CLAIMED TO HAVE TRANSFERRED/RELINQ UISHED THE RIGHTS IN THE PROPERTY BEING LAND ONLY DURING THE PERIOD RELEVANT FOR THE AY UNDER CONSIDERATION AND THEREFORE, CLAIMED THE LONG TERM CAPITAL GAIN A ND CLAIMED EXEMPTION/S 54F AS THE NEW RESIDENTIAL HOUSE PURCHASED WITHIN PRESCRIB ED PERIOD, SUBSEQUENT TO THE SALE OF THE CAPITAL ASSET. 4.3 THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE DID NOT HONOUR THE MOU DT 24.4.2000 AS THE BALANCE OF PURCHASE CONSID ERATION WAS NEVER PAID BY THE ASSESSEE AND THE ADVANCE PAID BY THE ASSESSEE WAS ALSO REVISED BACK SUBSEQUENTLY. THEREFORE, AFTER THE DATE OF EXPIRY F OR PAYMENT, THE MOU WAS NOT ENFORCEABLE AND THERE WAS NO RIGHT TO PROPERTY IN E XISTENCE AT ALL, WHICH IS PURPORTED TO HAVE SURRENDER/RELINQUISHMENT, GIVING RISE TO THE IMPUGNED CAPITAL GAIN. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE ASSESSEES PURPORTED SURRENDER/RELINQUISHMENT OF HER RIGHTS IN THE PROPE RTY IN FAVOUR OF M/S SISODIYA INVESTMENT PVT LTD BY AGREEMENT DATED 27.12.2002; BUT WHEN THE ASSESSEE HAS NOT ACQUIRED ANY RIGHTS OR INTEREST IN THE SAID PROPERT Y, WHICH COULD HAVE BEEN SOLD OR SURRENDERED OR RELINQUISHED SUBSEQUENTLY. THEREFORE , THERE IS NO CAPITAL ASSET IN EXISTENCE WHICH COULD BE TRANSFERRED BY THE ASSESSE E. THE RECEIPT OF RS. 79,75,000/- TOWARDS THE CONSIDERATION FOR THE PURPORTED SURREN DER/RELINQUISHMENT OF RIGHTS IN THE PROPERTY WAS ACCORDINGLY TREATED AS UNDISCLOSED INC OME UNDER THE HEAD INCOME FROM OTHER SOURCES. 4.4 AS REGARDS THE REINVESTMENT IN THE NEW FLATS, T HE ASSESSING OFFICER VIEWED THAT THE SAID TRANSACTION IS ONLY DIVERSION OF FUNDS AND BOGUS AND SHAM ARRANGEMENTS WITH A VIEW TO MISLEAD AND DEFRAUD THE REVENUE. AC CORDINGLY, THE ASSESSING OFFICER 4 PUSHABENN V PAREKH HAS MADE THE ADDITION OF RS. 42,19,000/- AS UNEXPL AINED INVESTMENT U/S 69 OF THE ACT AS WELL AS RS. 79,75,000/- AS UNDISCLOSED INCOM E. 5 ON APPEAL, THE CIT(A) THOUGH HELD THAT THE ASSES SEE ACQUIRED THE RIGHTS IN THE SAID PROPERTY VIDE MOU DT 24.4.2000 AND LATER O N ASSIGNED HER RIGHTS IN THE AFORESAID PROPERTY IN FAVOUR OF M/S SISODIYA INVES TMENT PVT LTD VIDE AGREEMENT DATED 27.7.2002. HOWEVER, THE CLAIM OF DEDUCTION U /S 54F WAS DENIED BECAUSE THE CAPITAL GAIN WAS HELD AS SHORT TERM CAPITAL GAINS. 6 BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITTE D THAT THE CAPITAL GAIN ON SURRENDER/RELINQUISHMENT OF RIGHTS IN THE PROPERTY BEING PLOT OF LAND ADMEASURING 820 SQ. YARDS IS A LONG TERM CAPITAL GAINS. IN SUPPORT OF HER CONTENTION, THE LD AR HAS SUBMITTED THAT THE TRANSACTION OF SURRENDER/RELINQU ISHMENT VIDE AGREEMENT DT 27.12.2002 WAS COMPLETED ONLY WHEN THE ASSESSEE REC EIVED THE FINAL PAYMENT TOWARDS THE CONSIDERATION AGAINST THE SURRENDER OF RIGHTS. THUS, THE LD AR HAS SUBMITTED THAT THE RELINQUISHMENT/SURRENDER OF RIG HTS COMPLETES ONLY ON 23.1.2007 WHEN THE ASSESSEE RECEIVED THE FINAL PAYMENT AS PER THE SAID AGREEMENT AND THEREFORE, CAPITAL GAIN ARISING FROM THE TRANSACTIO N OF SURRENDER/RELINQUISHMENT IS LONG TERM CAPITAL GAINS AS THE ASSESSEE WAS HOLDING THE SAID RIGHTS IN THE PROPERTY SINCE 24.4.2000 TO 23.1.2007. 6.1 THE LD AR HAS FURTHER SUBMITTED THAT THE ASSESS EE PURCHASED A NEW PROPERTY WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF TRANS FER OF THE CAPITAL ASSET; THEREFORE, THE CLAIM OF EXEMPTION U/S 54F OF THE I T ACT IS AL LOWABLE AS THE TOTAL CONSIDERATION SO RECEIVED HAS BEEN INVESTED IN THE NEW RESIDENTIA L HOUSE PROPERTY. IN SUPPORT OF HER CONTENTION, THE LD AR HAS RELIED UPON THE DECI SION OF THE HONBLE JURISDICTIONAL 5 PUSHABENN V PAREKH HIGH COURT IN THE CASE OF CIT VS SMT BEENA K JAIN REPORTED IN 217 ITR 363 AND IN THE CASE OF THE HONBLE PATNA HIGH COURT IN THE CASE O F SMT RAJ RANI DEVI RAMNA VS CIT REPORTED IN 201 ITR 1032. 6.2 THE LD DR, ON THE OTHER HAND, HAS SUBMITTED THA T THE ENTIRE TRANSACTIONS OF PURCHASE, SURRENDER OF RIGHTS IN THE PROPERTY AS WE LL AS THE PURCHASE OF NEW RESIDENTIAL PROPERTY IS BOGUS AND SHAM IN NATURE AS HELD BY THE ASSESSING OFFICER. HE HAS POINTED OUT THAT THE ASSESSING OFFICER HAS CLEA RLY GIVEN A FINDING THAT THE PAYMENT OF RS. 6,50,000/- MADE AS AN ADVANCE TO THE ORIGINAL VENDOR UNDER THE MOU DT 24.4.2000 WAS IN FACT FROM M/S TEJPRABHA IND USTRIES AND M/S AAKASH JAY INVESTMENT AND FINANCE COMPANY AND NOT BY THE ASS ESSEE HERSELF. THE ASSESSEE IS A PARTNER IN THESE FIRMS. HE HAS FURTHER SUBMITTED THAT EVEN THE NEW PROPERTY WAS ALSO PURPORTED TO HAVE PURCHASED FROM M/S TEJPRABHA INDUSTRIES AND PAYMENT OF RS. 80,34,000/- WAS PAID TO THE SAME FIRM. THE LD DR HAS SUBMITTED THAT IT IS CLEAR THAT ON THE ONE HAND, THE ASSESSEE RECEIVED RS. 79,75,00 0/- FOR CANCELLATION/SURRENDER OF THE RIGHTS WHICH WAS ACQUIRED BY VIRTUE OF THE MOU AND MAKING ADVANCE PAYMENT OF RS. 6,50,000/- FROM THE ACCOUNT OF M/S M/S TEJPR ABHA INDUSTRIES AND ON THE OTHER HAND, THE ASSESSEE HAS PAID RS. 80,34,000/- AS PURC HASE CONSIDERATION TO M/S TEJPRABHA INDUSTRIES. THEREFORE, THE ASSESSING OFFI CER IS JUSTIFIED IN TREATING THE ENTIRE TRANSACTION AS SHAM. 6.3 WITHOUT PREJUDICE TO THE ABOVE, THE LD DR FURTH ER SUBMITTED THAT WHEN THE ASSESSEE HAS NOT ACQUIRED ANY PROPERTY BUT ACQUIRED ONLY THE RIGHTS IN THE TENANTED PROPERTY UNDER THE MOU, WHICH WAS SURRENDERED/CANCE LLED IN FAVOUR OF M/S SISODIYA INVESTMENT P LTD., VIDE AGREEMENT DATED 27.12.2002 AND THEREFORE, THE TRANSFER/SURRENDER OF THE RIGHTS ARE WITHIN THREE Y EARS OF TIME PERIOD AND HENCE, THE CAPITAL GAIN CANNOT BE TREATED AS LONG TERM. 6 PUSHABENN V PAREKH 6.4 THE LD DR HAS POINTED OUT THAT AS PER THE PAYME NT DETAILS IN THE MOU DT 24.4.2000, THE PAYMENT OF RS. 3 LACS WAS MADE BY M/ S TEJPRABHA INDUSTRIES WHEREAS THE PAYMENT OF RS. 3,50,000/- WAS MADE BY M/S AAKSA H JAY INVESTGMENT & FINANCE CO WHICH CLEARLY SHOWS THAT THE ASSESSEE HAS NO ROL E IN THE ENTIRE TRANSACTIONS EXCEPT LENDING HER NAME. THE LD DR FURTHER CONTEN DED THAT THE ASSESSEE HAS CLAIMED TO HAVE PURCHASED 5 FLATS FROM M/S TEJPRABH A INDUSTRIES IN THE BUILDING CALLED MOHAN BUILDING; THEREFORE, THE ASSESSEE IS NOT ENTITLED TO EXEMPTION U/S 54F. HE HAS RELIED UPON THE ORDERS OF THE LOWER AUTHORIT IES. 7 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE VIDE MOU DT 24.4.2000 AGREED TO PURCHASE THE PROPERTY IN QUESTION FOR A C ONSIDERATION OF RS. 37 LACS. THE ASSESSEE PAID RS. 6,50,000/- IN ADVANCE AND THE BAL ANCE AMOUNT OF RS.30,50,000/- WAS TO BE PAID ON COMPLETION OF SALE TRANSACTION OF THE PROPERTY IN QUESTION. AS PER THE MOU, THE SALE WAS TO BE COMPLETED ON OR BEF ORE 31.5.2000 AND THE VENDOR/OWNER OF THE PROPERTY HAD TO GET THE PROPERT Y MUTATED IN THEIR NAME IN THE PROPERTY REGISTER CARD AND THE MUNICIPAL RECORDS. IT WAS ALSO CONTENDED THAT THE VENDOR SHALL OBTAIN THE NECESSARY CERTIFICATE U/S 2 30A OF THE I T ACT. THUS, THE MOU DOES NOT TRANSFER ANY TITLE OF PROPERTY BUT IT WAS ONLY THE EXPRESSION OF THE INTENT OF THE PARTIES TO SET OUT CERTAIN TERMS AND CONDITIONS FOR THE TRANSACTIONS OF SALE AND PURCHASE ON SOME FUTURE DATES. FURTHER, NEITHER TH E POSSESSION OF THE PROPERTY NOR ANY DOCUMENT OF THE TITLE OF THE PROPERTY WAS HANDE D OVER TO THE ASSESSEE. THEREFORE, THERE WAS NO TRANSFER OF ANY TITLE OR CA PITAL ASSET IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE MOU DT 24.4.2000. EVEN THE ASSESS EE HAS ALSO NOT CLAIMED TO HAVE PURCHASED OR ACQUIRED THE PROPERTY IN QUESTION VIDE THE SAID MOU DT 24.4.2000. WHAT THE ASSESSEE CLAIMED TO HAVE ACQUIRED CERTAIN RIGHTS IN THE TENANTED PROPERTY WHICH WERE SUBSEQUENTLY SURRENDERED BY THE ASSESSEE IN FAVOUR OF M/S SISODIYA 7 PUSHABENN V PAREKH INVESTMENT P LTD VIDE AGREEMENT DT 27.12.2002; THO UGH THE ASSESSEE CLAIMED THAT THE SURRENDER/RELINQUISHMENT OF THE RIGHTS TOOK PLA CE ONLY ON 23.1.2007 WHEN THE ASSESSEE RECEIVED THE ENTIRE PAYMENT AGAINST THE SA ID SURRENDER/RELINQUISHMENT OF THE RIGHTS AND CONSEQUENTLY, THE GAIN ARISING ON TH IS SURRENDER OF RIGHTS IS LONG TERM CAPITAL GAINS AND ELIGIBLE U/S 54F. FOR EXEMPTION U/S 54F, THE ASSESSEE CLAIMED TO HAVE PURCHASED NEW RESIDENTIAL FLATS VIDE AGREEMENT DT 11.8.2001. HERE, AGAIN THE ASSESSEE CLAIMED THAT PURCHASE OF NEW RESIDENTIAL H OUSE TOOK PLACE ONLY WHEN THE ASSESSEE MADE THE FINAL PAYMENT ON 3.5.2007 AND NOT WHEN THE AGREEMENT WAS ENTERED INTO AND PART PAYMENT WAS MADE. THE QUESTI ON ARISES IS WHETHER THE TRANSACTION OF ACQUISITION OF RIGHT TOOK PLACE ON T HE DATE OF AGREEMENT DT 27.12.2002 OR ON THE DATE WHEN THE ASSESSEE RECEIVE D THE FINAL PAYMENT ON 23.1.2007. THE NATURE OF RIGHTS IN THE PROPERTY B EING PLOT OF LAND ADMEASURING 820 SQ.YARDS AND BUILDING STRUCTURE VESTED TO THE ASSE SSEE BY VIRTUE MOU DT 24.4.2000 IS ONLY TO PURCHASE THE SAID PROPERTY IN TERMS OF TH E SAID MOU. 7.1 IN OTHER WORDS, THE ASSESSEE GOT THE RIGHT TO ENFORCE THE MOU FOR PURCHASE OF THE PROPERTY IN QUESTION. THE ASSESSEE HAS CONTENDE D THAT SINCE THE VENDOR COULD NOT GET THE PROPERTY MUTATED IN THEIR NAME AND THER EFORE, THE MOU COULD NOT BE GIVEN EFFECT AND THE ASSESSEE SURRENDERED HER RIGHT S IN THE PROPERTY AGAINST CONSIDERATION. THUS, WHATEVER THE RIGHTS THE ASSESS EE ACQUIRED AND SURRENDERED IN THE PROPERTY WAS ONLY TO PURCHASE THE PROPERTY. ON CE THE ASSESSEE CANCELLED THE MOU AND SURRENDERED HER RIGHTS BY EXECUTING THE AG REEMENT DT 27.12.2002 NOTHING REMAIN WITH THE ASSESSEE SO FAR AS THE RIGHTS VESTE D TO THE ASSESSEE, QUA, THE PROPERTY IN QUESTION. 7.2 THE LANGUAGE AND SUBSTANCE OF THE AGREEMENT DT 27.12.2002 INDICATES AND EXPRESSES THE NATURE OF THE SAID AGREEMENT AS TRIPA RTITE AGREEMENT TOUCHES THE 8 PUSHABENN V PAREKH RIGHTS AND INTEREST OF THE ASSESSEE, THE OWNER OF T HE PROPERTY AND TRANSFERRED TO M/S SISODIYA INVESTMENT P LTD. THE SAID AGREEMENT WAS MORE OF A DEVELOPMENT AGREEMENT THEN MERE SURRENDER OF RIGHTS BY THE ASSE SSEE. IT IS THUS, CLEAR THAT AS PER THE TERMS OF THE SAID AGREEMENT DT 27.12.2002, THE ASSESSEE WAS LEFT WITH NO RIGHT, NO INTEREST, CLAIM OR DEMAND OF ANY NATURE WHATSOEVER IN THE SAID PROPERTY ON EXECUTION OF THE SAID AGREEMENT. THE ORIGINAL MOU WAS STAND CANCELLED AND HANDED OVER TO M/S SISODIYA INVESTMENT P LTD. AS D ULY ACKNOWLEDGED IN CLAUSE 8 OF THE SAID AGREEMENT. THEREFORE, UNDER THE SAID AGREE MENT, THE ASSESSEE EXTINCT ALL HER RIGHTS WHATEVER IN THE PROPERTY IN QUESTION IN FAVOUR OF M/S SISODIYA INVESTMENT P LTD. , AND COULD CLAIM ONLY THE CONSIDERATION. 7.3 EVEN OTHERWISE, THE ASSESSEE WAS NOT THE OWNER OR IN POSSESSION OF THE SAID PROPERTY. THE ASSESSEE WAS LEFT NO OTHER RIGHT AFT ER CANCELLATION/SURRENDER OF THE RIGHTS UNDER THE MOU EXCEPT TO RECEIVE THE AGREED C ONSIDERATION. THEREFORE, WHEN IT IS NOT THE CASE OF TRANSFER OF CAPITAL ASSET AS SUCH AT FIRST PLACE THEN ,THE TRANSACTION OF SURRENDER OF THE RIGHTS COMPLETES ON THE DATE WHEN THE ASSESSEE ENTERED INTO AGREEMENT DT 27.12.2002. THEREFORE, W E DO NOT FIND ANY MERIT OR SUBSTANCE IN THE CLAIM OF THE ASSESSEE THAT THE GAI N ARISING FROM THE SURRENDER OF RIGHTS ARE LONG TERM CAPITAL GAINS. ON THIS ACCOUN T ITSELF THE ASSESSEE IS NOT ENTITLED FOR THE DEDUCTION U/S 54F. 7.4 EVEN OTHERWISE, IT IS AN UNDISPUTED FACT THAT T HE ASSESSEE PURCHASED FIVE FLATS FROM M/S TEJPRABHA INDUSTRIES IN THE BUILDING CALLE D MOHAN BUILDING AND AS PER THE PROVISIONS OF SEC. 54F THE EXEMPTION IS ELIGIBLE ON LY FOR PURCHASE AND CONSTRUCTION OF A RESIDENTIAL HOUSE. FROM THE PURCHASE AGREEMENT, IT IS CLEAR AND UNAMBIGUOUS THAT THE FIVE FLATS SITUATED AT DIFFERENT FLOORS OF THE BUILDING AND ALL ARE INDEPENDENT AND SEPARATE RESIDENTIAL UNITS. IT IS NOT THE CASE OF THE ASSESSEE THAT THESE FLATS ARE 9 PUSHABENN V PAREKH SITUATED AT ONE FLOOR AND CONSTITUTES ONE CONTIGUOU S UNIT AS PER THE REQUIREMENT OF THE ASSESSEE. THIS FACT WAS POINTED OUT TO THE LD AR OF THE ASSESSEE IN VIEW OF THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF INCOME-TAX OFFICER VS MS. SUSHILA M. JHAVERI REPORTED IN 107 ITD 327(MUM). 8 THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE CHENNAI BENCH OF THE TRIBUNAL HAS TAKEN A VIEW THAT EVEN MORE THAN ONE F LOOR ARE ELIGIBLE FOR EXEMPTION U/S 54F. 9 WE FIND THAT IN THE SAID CASE, THE ASSESSEE GOT C ONSTRUCTED ITS OWN HOUSE, WHICH IS A MULTI-STOREYED BUILDING. THIS IS NOT T HE SITUATION IN THE CASE IN HAND AS THE ASSESSEE HAS NOT RE-CONSTRUCTED OR CONSTRUCTED ITS HOUSE ON HER PLOT OF LAND BUT HAS PURCHASED FIVE SEPARATE FLATS; THEREFORE, IN VIEW O F THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, CITED SUPRA, EXEMPTION U/S 54F IN ANY CASE AVAILABLE ONLY TO ONE RESIDENTIAL HOUSE AND NOT TO MORE THAN ONE RESIDENT IAL HOUSE. 10 IN THE CASE IN HAND, THERE IS NO AMBIGUITY OR DO UBT THAT THESE FIVE FLATS ARE FULL- FLEDGED RESIDENTIAL UNITS HAVING SEPARATE KITCHEN A ND SEPARATE ENTRIES AND LOCATED ON A DIFFERENT FLOOR DO NOT FORM ONE CONTIGUOUS UNI T. 11 IN VIEW OF THE ABOVE DISCUSSION, THE CLAIM OF TH E ASSESSEE U/S 54F IS NOT ALLOWABLE AND THE NAME IS REJECTED. 12 BEFORE PARTING WITH, WE MAY MENTION THAT SINCE T HE CIT(A) HAS ALREADY TREATED THE GAIN SHOWN BY THE ASSESSEE ARISING FRO M THE TRANSACTION AS SHORT TERM CAPITAL GAINS AND THE REVENUE HAS NOT FILED ANY APP EAL AGAINST THE SAID FINDINGS OF THE CIT(A); THEREFORE, THE CONTENTION OF THE LD DR THAT THE ENTIRE TRANSACTION IS BOGUS AND SHAM CANNOT BE ENTERTAINED. 10 PUSHABENN V PAREKH 13 THE REMAINING GROUNDS RELATE TO CHARGING OF INTE REST U/S 234A AND 234B, WHICH IS MANDATORY AND CONSEQUENTIAL IN NATURE AND THERE FORE, NO ADJUDICATION IS REQUIRED. 14 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 21 ST DAY OF OCT 2011. SD/ SD/ ( T R SOOD ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 21 ST OCT 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI