ACIT 28 (2), Mumbai V. SMT. PUNITA SANJAY BIDRA , Mumbai

ITA 2145/MUM/2019

AI Insights

The case involves an appeal by the Revenue against the order of the Ld. Commissioner of Income-tax (Appeals)-26, Mumbai, which pertained to the assessment year 2012-13. The primary issues revolved around the eligibility of the assessee, Smt. Punita Sanjay Bindra, to claim deductions under section 54F of the Income Tax Act, 1961, concerning the sale of shares and the subsequent investment in residential properties. The Revenue contested the CIT(A)'s decision which had favored the assessee, leading to the present appeal. The ITAT examined the circumstances under which the deductions were claimed, including the dates of transfer of assets and the ownership status of the properties involved.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123257 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2023
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 12-06-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 07-04-2019
• Other Referred Cases: CIT vs MJ Siwani, Dr Vandana Bulchandani Vs Income Tax Officer, CIT vs. Podar Cement (P.) Ltd, CIT v. Mormasji Mancharji Vaid, Banarsi Dass Gupta vs. State of U.P.
• Laws Referred To: Income-tax Act, 1961, Transfer of Property Act, 1882
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V. CHAVDA
• Keywords: Capital asset; Gift; Principle of natural justice; Additional evidence; Set aside; Capital Gains
• Section: 32; 54; 143(3); 54F; 250; 54EC; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 2145/MUM/2019 Assessment Year: 2012-13 ACIT-28(2), Room No. 307, 3 rd floor, Tower No. 6, Vashi Railway Station Complex, Vashi, Navi Mumbai-400703. Vs. Smt. Punita Sanjay Bindra, 505-506, Kesar Solitaire, 5 th floor, Sanpada, Plot No. 5, Sector-19, Navi Mumbai-400705. PAN No. ACSPB 2454 M Appellant Respondent Assessee by : Mr. V. Chavda, Adv. Revenue by : Ms. Agnes P. Thomas, DR Date of Hearing : 13/06/2023 Date of pronouncement : 30/06/2023 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 07/01/2019 passed by the Ld. Commissioner of Income-tax (Appeals)-26, Mumbai [in short, the ‘Ld. CIT(A)’] for assessment year 2012-13, raising following grounds: 1. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the disallowances of deduction made by A.O. u/s 54 F of the Act by holding that assessee was holding only one residential house property on the date of transfer of original asset whereas assessee was date of sale of shares? 2. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) I was correct in holding that date of transfer of Flat at Country Park would be 09.05.2011 instead of 08.05.2012 when the gift deed was registered? 3. "Whether on the facts and in the circumstances.on the case and in law, the Ld. CIT (A) was correct in holding that the date of transfer of shares would be 30.06.2011 instead of 30.04.2011, the day on which the s were sold to Future Ventures of India Ltd.? 4. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was correct in holding that notional rent shall be calculated from 01.04.2011 to 09.05.2011 instead of 01.04.2011 to 08.05.2012, the day on which gift deed was registered? 2. Briefly stated facts of the case that the assessee an individual, filed return of income for the year under consideration on 29/09/2012 declaring total income of income filed by the assessee was selected for a scrutiny and the statutory notices under the Income were issued and complied with. The Assessing Officer observed that during the year under consideration the of “BIBA apparels Private Limited” for a sale consideration of ₹6,38,97,750/-. The assessee computed long ₹6,16,28,964/-but claimed deduction under section 54F of the amounting to ₹6,26,55, The Assessing Officer however held that the assessee did not satisfy the conditions required for claiming deduction under section 54F of Smt. Punita Sanjay Bindra ITA No. whereas assessee was owning two house properties on the date of sale of shares? 2. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) I was correct in holding that date of transfer of Flat at Country Park would be 09.05.2011 instead 5.2012 when the gift deed was registered? 3. "Whether on the facts and in the circumstances.on the case and in law, the Ld. CIT (A) was correct in holding that the date of transfer of shares would be 30.06.2011 instead of 30.04.2011, the day on which the shares of the assessee were sold to Future Ventures of India Ltd.? 4. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was correct in holding that notional rent shall be calculated from 01.04.2011 to 09.05.2011 of 01.04.2011 to 08.05.2012, the day on which gift deed was registered? stated facts of the case that the assessee an individual, filed return of income for the year under consideration on 29/09/2012 declaring total income of ₹46,82,616/- income filed by the assessee was selected for a scrutiny and the nder the Income-tax Act, 1961 (in were issued and complied with. The Assessing Officer observed that during the year under consideration the assessee sold 15000 shares BIBA apparels Private Limited” for a sale consideration of . The assessee computed long-term capital gain of but claimed deduction under section 54F of the 6,26,55,132/- against the long-term capital gain. The Assessing Officer however held that the assessee did not satisfy the conditions required for claiming deduction under section 54F of Smt. Punita Sanjay Bindra. 2 ITA No. 2145/Mum/2019 owning two house properties on the 2. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) I was correct in holding that date of transfer of Flat at Country Park would be 09.05.2011 instead 5.2012 when the gift deed was registered? 3. "Whether on the facts and in the circumstances.on the case and in law, the Ld. CIT (A) was correct in holding that the date of transfer of shares would be 30.06.2011 instead of hares of the assessee 4. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was correct in holding that notional rent shall be calculated from 01.04.2011 to 09.05.2011 of 01.04.2011 to 08.05.2012, the day on which gift stated facts of the case that the assessee an individual, filed return of income for the year under consideration on -. The return of income filed by the assessee was selected for a scrutiny and the in short, the Act) were issued and complied with. The Assessing Officer observed that see sold 15000 shares BIBA apparels Private Limited” for a sale consideration of term capital gain of but claimed deduction under section 54F of the Act term capital gain. The Assessing Officer however held that the assessee did not satisfy the conditions required for claiming deduction under section 54F of the Act, therefore, he rejected the claim of deduction under section 54F of the Act. The Assessin from house property in relation to with addition for cash deposit. In this manner, the Assessing Officer assessed the total income dated 30/03/2015 p further appeal, the Ld. CIT(A) deleted the under section 54F of the notional income from house property. Aggrieved, the appeal before the ITAT grounds as reproduced above. 3. Before us, the paperbook containing pages 1 4. The ground Nos disallowance of deduction under section 54 5. The Assessee shown long BIBA apparel’s Private Limited i.e. the original asset, which is reproduced by the Assessing Officer as under: Asset Qty Sale Date Biba Apparels Pvt. Ltd. 15000 30.04.2011 5.1 The deduction under section 54F claimed by the assessee has been summarised by the Assessing Officer Smt. Punita Sanjay Bindra ITA No. , therefore, he rejected the claim of deduction under section . The Assessing Officer also added notional income from house property in relation to flat of the house property with addition for cash deposit. In this manner, the Assessing Officer assessed the total income to ₹6,27,92,420/-in assessment order dated 30/03/2015 passed under section 143(3) of the further appeal, the Ld. CIT(A) deleted the disallowance of claim of the Act and also deleted the addition for notional income from house property. Aggrieved, the ITAT (in short, the Tribunal) by way of raising grounds as reproduced above. Before us, the Ld. counsel of the assessee has filed a paperbook containing pages 1 to 187. s. 1 to 3 of the appeal are related to the issue of deduction under section 54F of the Act The Assessee shown long-term capital gain on sale of shares of BIBA apparel’s Private Limited i.e. the original asset, which is reproduced by the Assessing Officer as under: Sale Date Net Sales Purchase Date Purchase Amount 30.04.2011 6,38,97,750 8/12/2006 15,00,000 he deduction under section 54F claimed by the assessee has been summarised by the Assessing Officer as under: Smt. Punita Sanjay Bindra. 3 ITA No. 2145/Mum/2019 , therefore, he rejected the claim of deduction under section g Officer also added notional income of the house property along with addition for cash deposit. In this manner, the Assessing Officer in assessment order assed under section 143(3) of the Act. On disallowance of claim and also deleted the addition for notional income from house property. Aggrieved, the Revenue is in by way of raising counsel of the assessee has filed a 3 of the appeal are related to the issue of Act. term capital gain on sale of shares of BIBA apparel’s Private Limited i.e. the original asset, details of which is reproduced by the Assessing Officer as under: Purchase Amount Taxable capital gain 15,00,000 6,16,28,964 he deduction under section 54F claimed by the assessee has as under: Consideration received on 30.04.2011 Invested in house property and claimed deduction u/s 54F Invested in Capital gains scheme on 21.05.2012 and claimed deduction u/s 54F Invested in NHAI bonds 5.2 For ready reference reproduced as under: “54F. Capital gain on transfer of certain. capital assets not to be charged in case of investment in residential house. Where, in the case of an assessee being an individual, the capital gain arises from the transfer of any long asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or after the date on which the transfer took place purchased, or has within a period of three years after that residential house new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say, (a) if the cost of the new asset is not less consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub where the assessee owns original asset, or purchases, within the period of one year after such date, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Inco other than the new asset. Smt. Punita Sanjay Bindra ITA No. Rs. Consideration received on 30.04.2011 Invested in house property and claimed deduction u/s 1,09,83,090 Invested in Capital gains scheme on 21.05.2012 and claimed deduction u/s 54F 4,66,72,042 Invested in NHAI bonds on 30.09.2011 u/s 54EC 50,00,000 6,26,55,132 For ready reference, the relevant provisions of section 54F reproduced as under: Capital gain on transfer of certain. capital assets not to be charged in case of investment in residential house. Where, in the case of an assessee being an individual, the capital gain arises from the transfer of any long being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say, (a) if the cost of the new asset is not less than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where the assessee owns on the date of the transfer of the original asset, or purchases, within the period of one year after such date, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset. Smt. Punita Sanjay Bindra. 4 ITA No. 2145/Mum/2019 Rs. Rs. 6,38,97,750 1,09,83,090 4,66,72,042 50,00,000 6,26,55,132 6,26,55,132 he relevant provisions of section 54F are Capital gain on transfer of certain. capital assets not to be charged in case of investment in residential house.—(1) Where, in the case of an assessee being an individual, the capital gain arises from the transfer of any long-term capital being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or after the date on which the transfer took place purchased, or has within date constructed, a (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,— than the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: section shall apply on the date of the transfer of the original asset, or purchases, within the period of one year after such date, or constructs, within the period of three years after such date, any residential house, the income from which me from house property", Explanation. (i) "long-term capital asset" means a capital asset which is not a short-term capital asset; (ii) "net consideration", in relation to the transfer of a capit asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, with year after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other t new asset, the amount of capital gain arising from the transfer of the original asset not changed under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub deemed to be income chargeable under the head "Capital gains" relating to long in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause, (a) or, as the ca deemed to be income chargeable under the head "Capital gains" relating to long in which such new asset i 5.3 The Ld. Assessing Officer has summari section 54F as under: “Thus, the exemption w/s 54F is denied to an assessee if (i) The assessee already owns more than one residential house on the date of Transfer of original assets (Proviso a(i) to 54F(1)]; Smt. Punita Sanjay Bindra ITA No. Explanation.—For the purposes of this section,— term capital asset" means a capital asset which is not term capital asset; (ii) "net consideration", in relation to the transfer of a capit asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of one year after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other t new asset, the amount of capital gain arising from the transfer of the original asset not changed under section 45 on the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall b deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three m the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause, (a) or, as the case may be, clause (b), of sub-section (I) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred.” Assessing Officer has summarised the conditions of 4F as under: Thus, the exemption w/s 54F is denied to an assessee if (i) The assessee already owns more than one residential house on the date of Transfer of original assets (Proviso a(i) to Smt. Punita Sanjay Bindra. 5 ITA No. 2145/Mum/2019 term capital asset" means a capital asset which is not (ii) "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in the period of one year after the date of the transfer of the original asset, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer of the original asset not changed under section 45 on the basis of the cost of such new asset as provided in clause (a), section (1), shall be deemed to be income chargeable under the head "Capital term capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three m the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause, section (I) shall be deemed to be income chargeable under the head "Capital term capital assets of the previous year sed the conditions of Thus, the exemption w/s 54F is denied to an assessee if- (i) The assessee already owns more than one residential house on the date of Transfer of original assets (Proviso a(i) to (ii) After purchasing/constructing the qualifying new house within the prescribed period, he purchases within one year of the transfer of original asset (proviso 1() to section 54F(1) another residential house, income from which is taxable under the head income from house property'. (iii) After purchasing/constructing the qualifying new house within the prescribed period, he constructs another residential house, income from which is taxable under the head income from house property; within three y of original asset. (Proviso a(ji) to section 54F(1)). (iv) The assessee purchases or constructs a residential house in addition to the qualifying new house within two or three years respectively. The additional house should be income from which is taxable under the head income from house property' (seotion 54F(2)]; (ii) The assessee transfers the qualifying new house within three years of the date of purchas 54F(3)’ 5.4 The dispute between the parti conditions of section 54F of the original asset, the assessee should not be owner of more than one residential house property purchase of house proper original asset i.e. shares of Biba apparel For understanding of events leading to generation of long deduction claimed, as under S No. Event 1. Property co-owned with Husband at B-5, Dorabjee 2. (a) Assessee Smt. Punita Sanjay Bindra ITA No. ) After purchasing/constructing the qualifying new house within the prescribed period, he purchases within one year of the transfer of original asset (proviso 1() to section 54F(1) another residential house, income from which is taxable under the head income from house property'. ) After purchasing/constructing the qualifying new house within the prescribed period, he constructs another residential house, income from which is taxable under the head income from house property; within three years of the date of transfer of original asset. (Proviso a(ji) to section 54F(1)). (iv) The assessee purchases or constructs a residential house in addition to the qualifying new house within two or three years respectively. The additional house should be income from which is taxable under the head income from house property' (seotion 54F(2)]; ) The assessee transfers the qualifying new house within three years of the date of purchase /construction (section The dispute between the parties is in respect of one of the of section 54F of the Act that on the date of transfer of original asset, the assessee should not be owner of more than one residential house property, other than the new asset purchase of house property as well as date of sale/transfer of shares of Biba apparel pvt ltd, is of the controversy, it is relevant to reproduce events leading to generation of long-term capital and consequent , as under: Date as per assessee owned with Husband at Assessee registered as first 22/05/2007 Smt. Punita Sanjay Bindra. 6 ITA No. 2145/Mum/2019 ) After purchasing/constructing the qualifying new house within the prescribed period, he purchases within one year of the transfer of original asset (proviso 1() to section 54F(1) another residential house, income from which is taxable under ) After purchasing/constructing the qualifying new house within the prescribed period, he constructs another residential house, income from which is taxable under the head income ears of the date of transfer (iv) The assessee purchases or constructs a residential house in addition to the qualifying new house within two or three years respectively. The additional house should be such, income from which is taxable under the head income from ) The assessee transfers the qualifying new house within e /construction (section in respect of one of the ct that on the date of transfer of original asset, the assessee should not be owner of more than one , other than the new asset. The date of ty as well as date of sale/transfer of is also disputed. the controversy, it is relevant to reproduce term capital and consequent Date as per Assessing Officer 22/05/2007 Co-owner 3. (b) Assessee’s name was changedas second Co 2. Purchase of flat at Shobha Carnation, Pune 3. Sale of shares i.e. original asset The assessee sold shares Agreement dated 20/12/2010 sale for shares of subsequent amendment dated 30/04/2011 and return to Registrar of companies on 30/06/2011 and claimed sale of shares as on 30/06/2011 4. Purchase of flat at a Country Park for an amount of 5. Gift of flat at a Country Park to daughter (i) gift dead unregistered dated was submitted before the Ld. CIT(A) additional evidence (ii) gift deed registered on 08/05/2012, which was filed before the Assessing Officer 6. Rs.4, 66, 72, 042/ Capital gain scheme of State Bank of India 7. Invested ₹ 50, 00, 000/ convertible redeemable taxable bonds of National Highway authority of India 8. Invested Rs.4, 36, 55, 000/ purchase of house property at 301, Marvel , Pune 5.5 The Assessing officer has noted letter dated 26/12/2014 submitted to consider 06/05/2011 at Countr under section 54F of the Smt. Punita Sanjay Bindra ITA No. ’s name was as second Co-owner 25/04/2013 Purchase of flat at Shobha Carnation, Pune for₹.1,21,49, 750/- 23/07/2010 Sale of shares i.e. original asset sold shares under dated 20/12/2010 for sale for shares of Biba apparel and subsequent amendment dated and filed annual egistrar of companies on 30/06/2011 and claimed sale of as on 30/06/2011 30/06/2011 Purchase of flat at a Country Park for an amount of ₹ 1, 26, 13, 120/- 06/05/2011 Gift of flat at a Country Park to gift dead unregistered 9/05/2011, which was submitted before the Ld. CIT(A) additional evidence gift deed registered on 08/05/2012, which was filed before the Assessing Officer 09/05/2011 42/-was deposited in scheme of State Bank 24/05/2012 50, 00, 000/-in non- convertible redeemable taxable bonds of National Highway authority of India 30/09/2011 , 36, 55, 000/-in purchase of house property at 301, 07/12/2012 The Assessing officer has noted that the assessee initially by letter dated 26/12/2014 submitted to consider purchase of flat at Country Park as new asset for claiming deduction under section 54F of the Act amounting to ₹1,09,83,090/ Smt. Punita Sanjay Bindra. 7 ITA No. 2145/Mum/2019 25/04/2013 23/07/2010 30/04/2011 06/05/2011 08/05/2012 24/05/2012 30/09/2011 07/12/2012 assessee initially by purchase of flat on y Park as new asset for claiming deduction 1,09,83,090/-, however subsequently by letter dated 11/03/2015 submitted that exemption under section 54F claimed in respect of flat at 5.6 The assessee has taken the date of sale of shares as on 30/06/2011 and therefore the contention of the assessee that as on the date of the transfer of shares the assessee conditions of not owning more than one residential house other than the new asset, because the flat at Country Park was gifted to the daughter on 09/05/2011 i.e. prior to the transfer of shares. Whereas, the Assessing Officer has taken the date of the sale shares as on 30/04/2011 and therefore according to him, the assessee owned two residential properties Country Park ) , first, flat at ownership in building at for deduction under section 54F of the new asset i.e. flat at Country Park or investment in capital gain scheme or in NHAI bonds. 5.7 The Assessing Officer also noted various investments in property made by the ass Bindra. The relevant observations Assessing Officer is reproduced as under: “vii. On going through the details on record, it is seen that the assessee had also made investments in the six other properties during the ye Smt. Punita Sanjay Bindra ITA No. subsequently by letter dated 11/03/2015 submitted that exemption of the Act amounting to ₹1,09,83,090/ claimed in respect of flat at ‘Shoba Carnation’. The assessee has taken the date of sale of shares as on 30/06/2011 and therefore the contention of the assessee that as on the date of the transfer of shares the assessee conditions of not owning more than one residential house other , because the flat at Country Park was gifted to the daughter on 09/05/2011 i.e. prior to the transfer of shares. Whereas, the Assessing Officer has taken the date of the sale shares as on 30/04/2011 and therefore according to him, the assessee owned two residential properties other than new asset ( i.e. , first, flat at ‘Shoba Carnation’ and second, co ownership in building at ‘Dorabjee Paradise’, and thus no for deduction under section 54F of the Act, for either new asset i.e. flat at Country Park or investment in capital gain scheme or in NHAI bonds. The Assessing Officer also noted various investments in property made by the assessee along with her daughter Anahita Bindra. The relevant observations Assessing Officer is reproduced On going through the details on record, it is seen that the assessee had also made investments in the six other properties during the year as under: Smt. Punita Sanjay Bindra. 8 ITA No. 2145/Mum/2019 subsequently by letter dated 11/03/2015 submitted that exemption 1,09,83,090/-was The assessee has taken the date of sale of shares as on 30/06/2011 and therefore the contention of the assessee that as on the date of the transfer of shares the assessee fulfilled the conditions of not owning more than one residential house other , because the flat at Country Park was gifted to the daughter on 09/05/2011 i.e. prior to the transfer of shares. Whereas, the Assessing Officer has taken the date of the sale of shares as on 30/04/2011 and therefore according to him, the other than new asset ( i.e. and second, co- , and thus not entitled ct, for either investment in new asset i.e. flat at Country Park or investment in capital gain The Assessing Officer also noted various investments in essee along with her daughter Anahita Bindra. The relevant observations Assessing Officer is reproduced On going through the details on record, it is seen that the assessee had also made investments in the six other i Flat No 701 Corolla Realty), iii. Flat A properties [v) Row houses no 13 at Wagoli Pune In response to query made, the assessee submitted that all the above 6 properties are in the name of their daughter Anahita Bindra, and the assesseee is only the consenting party. It is relevant to note here that : a)All the properties have been shown by assets in the statement filed during assessment proceedings. b)The assessee's daughter was only 19 years old then and she was a student with no source of income. The assessee has made the major payments towards the purchase of these flats. The assessee has vide letter dated 05.02.2015 submitted that she had invested in properties under construction as an inyestor but had given the same as gift before receiving possession of the proderty to her daughter Anahita Bindra. 5.8 The Ld. Assess deduction/exemption under grounds. Firstly, he rejected the contention of the assessee that name of the assessee ‘Dorabjee Paradise’isas a noted that in original registered sale deed 22/05/2007, the assessee was the first co which has been subsequently changed on 25/04/2013 by way of application only. The decision of the Hon’ble Karnataka High Court in the case of CIT vs MJSiwani 46 taxmann.com 170 Smt. Punita Sanjay Bindra ITA No. i Flat No 701 Corolla Realty), ii. Flat No 702 Corolla Realty Flat A-2-702 Siddarth iv) Flat A-2-602 Siddarth properties [v) Row houses no 13 at Wagoli (vi) Row houses no 14 at Wagoli Pune In response to query made, the assessee submitted that all the above 6 properties are in the name of their daughter Anahita Bindra, and the assesseee is only the consenting party. It is relevant to note here that : a)All the properties have been shown by the assessee as her assets in the statement filed during assessment proceedings. b)The assessee's daughter was only 19 years old then and she was a student with no source of income. The assessee has made the major payments towards the purchase of these ts. The assessee has vide letter dated 05.02.2015 submitted that she had invested in properties under construction as an inyestor but had given the same as gift before receiving possession of the proderty to her daughter Anahita Bindra.” Assessing Officer rejected the claim of deduction/exemption under section 54F of the Act mainly on three , he rejected the contention of the assessee that name of the assessee in registered deed for sale of property namely isas a second co-owner. The Assessing Officer noted that in original registered sale deed vide agreement dated 22/05/2007, the assessee was the first co-owner of the property which has been subsequently changed on 25/04/2013 by way of application only. The learned Assessing Officer relied on the Hon’ble Karnataka High Court in the case of CIT Siwani 46 taxmann.com 170, wherein it is held that co Smt. Punita Sanjay Bindra. 9 ITA No. 2145/Mum/2019 Flat No 702 Corolla Realty 602 Siddarth properties (vi) Row houses no 14 at Wagoli In response to query made, the assessee submitted that all the above 6 properties are in the name of their daughter Anahita Bindra, and the assesseee is only the consenting the assessee as her assets in the statement filed during assessment proceedings. b)The assessee's daughter was only 19 years old then and she was a student with no source of income. The assessee has made the major payments towards the purchase of these ts. The assessee has vide letter dated 05.02.2015 submitted that she had invested in properties under construction as an inyestor but had given the same as gift before receiving possession of the proderty to her daughter ing Officer rejected the claim of ct mainly on three , he rejected the contention of the assessee that in registered deed for sale of property namely owner. The Assessing Officer ide agreement dated owner of the property which has been subsequently changed on 25/04/2013 by way of Assessing Officer relied on the Hon’ble Karnataka High Court in the case of CIT wherein it is held that co- owner is the owner of house in which he has share and that his right, title and interest is and he is the owner of the entire undivided house till it is partitioned. The relevant finding of the Assessing Officer is reproduced as under: “7.1 Applicability of the proviso of sec 54F in this case: The assessee owns two houses as on the date of transfer a) The assessee is the sole owner of D1, Flat No 1037, Shoba Carnation b) The assessee is also the co alongwith her husband. The assessee authorized representatives have vide the that the developers had made an error by including the assessee's name as the first name and the second name of her husband in the agreement for purchase of the property and that her husband had applied for rectification t his name as the first name and the assesses name as the second name. On going through the application it is seen that the same is dated 25.04.2013 whereas the property was purchased as the assessee's name as the first purchaser vide agreement date that she does not have an interest is not acceptable and is merely is an afterthought. The question here is Whether exemption under section 54F would be allowable where assessee is already a co another flat? In this context the Hon'ble Karnataka High Court has held in the case ofCIT, Central Circle Bangalore v/s M.J.SiwANI 46 taxmann.com 170 (Karnataka) that Section 54F provides that if the assessee has a residential house he cannot seek the benefit of long te because, the words residential house are preceded by article a would not exclude a house shared with any other person. Even if the residential house is shared by an assessee, his Smt. Punita Sanjay Bindra ITA No. ner is the owner of house in which he has share and that his right, title and interest is exclusive to the extent of a share in that he is the owner of the entire undivided house till it is partitioned. The relevant finding of the Assessing Officer is reproduced as under: 7.1 Applicability of the proviso of sec 54F in this case: ee owns two houses as on the date of transfer a) The assessee is the sole owner of D1, Flat No 1037, Shoba b) The assessee is also the co-owner in B-5, Dorabjee Paradise alongwith her husband. The assessee authorized representatives have vide their letter dated 20.03.2015 stated that the developers had made an error by including the assessee's name as the first name and the second name of her husband in the agreement for purchase of the property and that her husband had applied for rectification t his name as the first name and the assesses name as the second name. On going through the application it is seen that the same is dated 25.04.2013 whereas the property was purchased as the assessee's name as the first purchaser vide agreement dated 22.05.2007. Hence, the assessee's claim that she does not have an interest is not acceptable and is merely is an afterthought. The question here is Whether exemption under section 54F would be allowable where assessee is already a co t? In this context the Hon'ble Karnataka High Court has held in the case ofCIT, Central Circle Bangalore v/s M.J.SiwANI 46 taxmann.com 170 (Karnataka) that Section 54F provides that if the assessee has a residential house he cannot seek the benefit of long term capital gain. Under this provision, merely because, the words residential house are preceded by article a would not exclude a house shared with any other person. Even if the residential house is shared by an assessee, his Smt. Punita Sanjay Bindra. 10 ITA No. 2145/Mum/2019 ner is the owner of house in which he has share and that his exclusive to the extent of a share in that he is the owner of the entire undivided house till it is partitioned. The relevant finding of the Assessing Officer is 7.1 Applicability of the proviso of sec 54F in this case: ee owns two houses as on the date of transfer a) The assessee is the sole owner of D1, Flat No 1037, Shoba 5, Dorabjee Paradise alongwith her husband. The assessee authorized ir letter dated 20.03.2015 stated that the developers had made an error by including the assessee's name as the first name and the second name of her husband in the agreement for purchase of the property and that her husband had applied for rectification to change his name as the first name and the assesses name as the second name. On going through the application it is seen that the same is dated 25.04.2013 whereas the property was purchased as the assessee's name as the first purchaser vide d 22.05.2007. Hence, the assessee's claim that she does not have an interest is not acceptable and is The question here is Whether exemption under section 54F would be allowable where assessee is already a co-owner of In this context the Hon'ble Karnataka High Court has held in the case ofCIT, Central Circle Bangalore v/s M.J.SiwANI 46 taxmann.com 170 (Karnataka) that Section 54F provides that if the assessee has a residential house he cannot seek the rm capital gain. Under this provision, merely because, the words residential house are preceded by article a would not exclude a house shared with any other person. Even if the residential house is shared by an assessee, his right and ownership in the hous exclusive and nobody can take away his right in the house without due process of law. In other words, co owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his that he is the owner of the entire undivided house till it is partitioned. The analogy applied by the Tribunal based on the judgment of the Supreme Court in Banarsi Dass Gupta (supra), wherein, the Supreme Court considered the provisions contained in section 32 of the Act, would not apply to the facts of the present case. The right of a person, may be one half, in the residential house cannot be taken away without due process of law or it continues till there is a partition of such residential hou this issue cannot be accepted. Thus, the order passed by revenue authorities rejecting assessee's claim was to be restored. From the above, it is clear that the assessee already owns joint ownership entitled for deduction u/s 54F ofthe Act. 5.9 Secondly, the AO assessee purchased a residential house i.e. flat at Country other than the new asset, within a period of one year from the date of the transfer of the original asset. 5.10 Thirdly, he rejected under section 54F in respect of invested in flat at ‘C daughter within a year. The relevant observation of the Assessing Officer is reproduced as under: “8.1. The asessee is not eligible for deduction W/s 54F in respect of Rs 1,09,83,900 claimed to be invested in Count Park and claimed in the return of income filed as the assessce Smt. Punita Sanjay Bindra ITA No. right and ownership in the house, to whatever extent, is exclusive and nobody can take away his right in the house without due process of law. In other words, co-owner is the owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his that he is the owner of the entire undivided house till it is partitioned. The analogy applied by the Tribunal based on the judgment of the Supreme Court in Banarsi Dass Gupta (supra), wherein, the Supreme Court considered the provisions d in section 32 of the Act, would not apply to the facts of the present case. The right of a person, may be one half, in the residential house cannot be taken away without due process of law or it continues till there is a partition of such residential house.Thus, the view expressed by the Tribunal on this issue cannot be accepted. Thus, the order passed by revenue authorities rejecting assessee's claim was to be From the above, it is clear that the assessee already owns joint ownership with her husband. Hence, the assessee is not entitled for deduction u/s 54F ofthe Act.” the AO rejected the claim on the ground that assessee purchased a residential house i.e. flat at Country other than the new asset, within a period of one year from the date of the transfer of the original asset. , he rejected the claim on the ground that deduction under section 54F in respect of ₹1,09,83,900/- flat at ‘Country Park’, which was gifted away to her daughter within a year. The relevant observation of the Assessing Officer is reproduced as under: 8.1. The asessee is not eligible for deduction W/s 54F in respect of Rs 1,09,83,900 claimed to be invested in Count Park and claimed in the return of income filed as the assessce Smt. Punita Sanjay Bindra. 11 ITA No. 2145/Mum/2019 e, to whatever extent, is exclusive and nobody can take away his right in the house owner is the owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his share and that he is the owner of the entire undivided house till it is partitioned. The analogy applied by the Tribunal based on the judgment of the Supreme Court in Banarsi Dass Gupta (supra), wherein, the Supreme Court considered the provisions d in section 32 of the Act, would not apply to the facts of the present case. The right of a person, may be one half, in the residential house cannot be taken away without due process of law or it continues till there is a partition of such se.Thus, the view expressed by the Tribunal on this issue cannot be accepted. Thus, the order passed by revenue authorities rejecting assessee's claim was to be From the above, it is clear that the assessee already owns usband. Hence, the assessee is not rejected the claim on the ground that assessee purchased a residential house i.e. flat at Country park, other than the new asset, within a period of one year from the date on the ground that deduction -claimed to be , which was gifted away to her daughter within a year. The relevant observation of the Assessing 8.1. The asessee is not eligible for deduction W/s 54F in respect of Rs 1,09,83,900 claimed to be invested in Country Park and claimed in the return of income filed as the assessce flouts the following condition as the asset has been gifted away to her daughter within a year “.....Where the new asset is transferred within a period of three years from the date of its purc be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), be deemed to be income chargeable under the head "Capital gains" relating to long in which such new asset is transferred. 5.11 The Assessing Officer accordingly rejected the claim of deduction of ₹1,09,83,900/ “9. To summarize, it is seen that if the assessee claims deduction u/s 54F on investment in Shobha Carnation vide agreement dated 23.07 section 54F are not satisfied since: The assessee held a residential house jointly with her husband and the assessee subsequently within a year of transfer ) purchased a residential property viz 'Country Park" on 6/5/2011 within a period of one year after the date of transfer of the original asset. Hence, the assessee is not eligible for deduction u/s 54F of the Act on account of investment in this residential property. Further, if the asséssee's alternate claim for de account of investment in 'Country Park" on 6/5/2011 is considered then again the assessee owns one house solely and has interest in another residential property jointly with her husband as on the date of transfer and further has transferred this three years vide gift deed on 08.05.2015 which was duly registered contravening the provisions of section54F(3) of the Act wherein it states that Where the new asset is transferred within a period of three years shall be deemed to beIncome chargeable under the head "Capital gains". Smt. Punita Sanjay Bindra ITA No. flouts the following condition as the asset has been gifted away to her daughter within a year Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head "Capital gains" relating to long-term capital assets of the previous year in which such new asset is transferred.” he Assessing Officer accordingly rejected the claim of 1,09,83,900/-under section 54F, observing as under: 9. To summarize, it is seen that if the assessee claims deduction u/s 54F on investment in Shobha Carnation vide agreement dated 23.07.2010 the first and second provisos to section 54F are not satisfied since: The assessee held a residential house jointly with her husband and the assessee subsequently within a year of transfer ) purchased a residential property viz 'Country Park" 2011 within a period of one year after the date of transfer of the original asset. Hence, the assessee is not eligible for deduction u/s 54F of the Act on account of investment in this residential property. Further, if the asséssee's alternate claim for de account of investment in 'Country Park" on 6/5/2011 is considered then again the assessee owns one house solely and has interest in another residential property jointly with her husband as on the date of transfer and further has transferred this property to her daughter within a period of three years vide gift deed on 08.05.2015 which was duly registered contravening the provisions of section54F(3) of the Act wherein it states that Where the new asset is transferred within a period of three years from the date of its purchase, ... shall be deemed to beIncome chargeable under the head "Capital gains".” Smt. Punita Sanjay Bindra. 12 ITA No. 2145/Mum/2019 flouts the following condition as the asset has been gifted Where the new asset is transferred within a period of hase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause section (1) shall be deemed to be income chargeable under the head "Capital term capital assets of the previous year he Assessing Officer accordingly rejected the claim of under section 54F, observing as under: 9. To summarize, it is seen that if the assessee claims deduction u/s 54F on investment in Shobha Carnation vide .2010 the first and second provisos to The assessee held a residential house jointly with her husband and the assessee subsequently within a year of transfer ) purchased a residential property viz 'Country Park" 2011 within a period of one year after the date of transfer of the original asset. Hence, the assessee is not eligible for deduction u/s 54F of the Act on account of Further, if the asséssee's alternate claim for deduction on account of investment in 'Country Park" on 6/5/2011 is considered then again the assessee owns one house solely and has interest in another residential property jointly with her husband as on the date of transfer and further has property to her daughter within a period of three years vide gift deed on 08.05.2015 which was duly registered contravening the provisions of section54F(3) of the Act wherein it states that Where the new asset is transferred from the date of its purchase, ... shall be deemed to beIncome chargeable under the head 5.12 The deduction under section 54F of the capital gain scheme and NHAI amounting to also rejected observin “9.2. Parking of funds in Capital Gain Account Scheme: As in the case of section 34, this provision also provides for parking of funds to be invested in new house in the specified account with the specified bank or institution in accordance with the Capital Gain Account Scheme 1988 Appendix the provisions relating to deposit, withdrawal and utilization as well as consequences for not utilizing the deposit within the prescribed period apply to section 54F in the same manner as section 54. The assessee has invested an amount of Rs. 4,66,72,042/ Capital gains scheme on 21/5/2012 and claimed deduction u/s 54F of the IT Act. On the date of deposit into the Capital gains scheme on 21/5/2012, the assessee owns one house solely viz. D1, Flat No 1037, Shoba Carnation and has interest in another residential property jointly with her husband as on the date of transfer viz. B ii.the assessee has investment in 'Country Park" on 6/5/2011 after the transfer of the original ass property to her daughter within a period of three 'vears vide gift deed on 08.05.2015. This purchase is again a purchase of a new asset other than the purchase made vide amounts invested in Capital gains scheme on 21.05.2012. Th of Rs.4,66,72,042/ 21.05.2012 and subsequently used in purchase of residential property being 301, Marvel Div for an amount of Rs. 4,36,55,000/ Thus, the assessee is not respect of Rs. gains scheme on 21.05.2012. Smt. Punita Sanjay Bindra ITA No. he deduction under section 54F of the Act for investment in capital gain scheme and NHAI amounting to ₹4,36,55,000/ also rejected observing as under: 9.2. Parking of funds in Capital Gain Account Scheme: As in the case of section 34, this provision also provides for parking of funds to be invested in new house in the specified account with the specified bank or institution in accordance h the Capital Gain Account Scheme 1988 Appendix the provisions relating to deposit, withdrawal and utilization as well as consequences for not utilizing the deposit within the prescribed period apply to section 54F in the same manner as The assessee has invested an amount of Rs. 4,66,72,042/ Capital gains scheme on 21/5/2012 and claimed deduction u/s 54F of the IT Act. On the date of deposit into the Capital gains scheme on 21/5/2012, the assessee owns one house solely viz. D1, Flat No 1037, Shoba Carnation and has interest in another residential property jointly with her husband as on the date of transfer viz. B-5, Dorabjee Paradise. ii.the assessee has investment in 'Country Park" on 6/5/2011 after the transfer of the original asset and has transferred this property to her daughter within a period of three 'vears vide gift deed on 08.05.2015. This purchase is again a purchase of a new asset other than the purchase made vide amounts invested in Capital gains scheme on 21.05.2012. Th of Rs.4,66,72,042/- was invested in Capital Gains Scheme on 21.05.2012 and subsequently used in purchase of residential property being 301, Marvel Diva, Pune on 7 th December, 2012 for an amount of Rs. 4,36,55,000/-. Thus, the assessee is not eligible for deduction u/s 54F in Rs. 4,36,55,000/- amounts invested in Capital gains scheme on 21.05.2012.” Smt. Punita Sanjay Bindra. 13 ITA No. 2145/Mum/2019 ct for investment in 4,36,55,000/-was 9.2. Parking of funds in Capital Gain Account Scheme: As in the case of section 34, this provision also provides for parking of funds to be invested in new house in the specified account with the specified bank or institution in accordance h the Capital Gain Account Scheme 1988 Appendix-IF]. All the provisions relating to deposit, withdrawal and utilization as well as consequences for not utilizing the deposit within the prescribed period apply to section 54F in the same manner as The assessee has invested an amount of Rs. 4,66,72,042/- in Capital gains scheme on 21/5/2012 and claimed deduction On the date of deposit into the Capital gains scheme on 21/5/2012, the assessee owns one house solely viz. D1, Flat No 1037, Shoba Carnation and has interest in another residential property jointly with her husband as on the date of ii.the assessee has investment in 'Country Park" on 6/5/2011 et and has transferred this property to her daughter within a period of three 'vears vide gift deed on 08.05.2015. This purchase is again a purchase of a new asset other than the purchase made vide amounts invested in Capital gains scheme on 21.05.2012. The amount was invested in Capital Gains Scheme on 21.05.2012 and subsequently used in purchase of residential December, 2012 eligible for deduction u/s 54F in amounts invested in Capital 6. Before the Ld. CIT(A) the first time filed a gift dead dated 09/05/2011 as additional evidence. The Ld. CIT(A) held that firstly, the assessee was not owner of the bungalow at ‘Dorabajee’ as the assessee did not make any monetary contribution towards the purchase of the said as a matter of convenience. The relevant finding of the Ld. CIT(A) is reproduced as under: “The AO has noticed that the Appellant was also a co the flat at Dorabjee paradise with her husband and treated Dorbajee paradise house as the second and denied the benefit of section 54F of the Income Tax Act, 1961. In this regard the AR of the Appellant submitted that although the appellant was a co just included in the property for the sake o the name of a spouse is added to provide a sense of comfort, to ensure ease of succession on death. All the funds contributed towards the purchase of the Bungalow were of her husband. As per the recent ITAT ruling in the case of Dr Vandana Bulchandani Vs Income Tax Officer 978/Mum/2013 (Assessment year 2009 10.08.2016 "F" Bench Mumbai on the identical issue clearly stated that "Property Co liability and also "Co payments for purchase of property was made by her husband and that her name was just added as a matter of convenience. Receipts of payment made by her husband wherein the payment was made for the purchase of Dorabjee Bungalow conf furnished. It was stated that Bungalow Dorabiee was shown as Self occupied Property in the Income Tax returns of her husband i.e. Sanjay Bindra. Income Tax returns of Sanjay Bindra for AY 2008 going to the facts of the case it is evidenced that Appellant Smt. Punita Sanjay Bindra ITA No. the Ld. CIT(A), regarding gift of flat at Country Park , for the first time filed a gift dead dated 09/05/2011 as additional Ld. CIT(A) after considering submission of assessee , the assessee was not owner of the bungalow at as the assessee did not make any monetary contribution towards the purchase of the said flat and her name was just as a matter of convenience. The relevant finding of the Ld. CIT(A) is reproduced as under: The AO has noticed that the Appellant was also a co the flat at Dorabjee paradise with her husband and treated Dorbajee paradise house as the second house of the appellant and denied the benefit of section 54F of the Income Tax Act, In this regard the AR of the Appellant submitted that although the appellant was a co-owner of the flat but her name was just included in the property for the sake of convenience. Often the name of a spouse is added to provide a sense of comfort, to ensure ease of succession on death. All the funds contributed towards the purchase of the Bungalow were of her husband. As per the recent ITAT ruling in the case of Dr dana Bulchandani Vs Income Tax Officer -11(3)(4), ITA No. 978/Mum/2013 (Assessment year 2009- 10.08.2016 "F" Bench Mumbai on the identical issue clearly stated that "Property Co - Ownership doesn't mean joint I liability and also "Co-Holder of Property can't be taxed as payments for purchase of property was made by her husband and that her name was just added as a matter of convenience. Receipts of payment made by her husband wherein the payment was made for the purchase of Dorabjee Bungalow confirmed by Dorabjee Developers were also furnished. It was stated that Bungalow Dorabiee was shown as Self occupied Property in the Income Tax returns of her husband i.e. Sanjay Bindra. Income Tax returns of Sanjay Bindra for AY 2008-2009 and AY 2012-2013 we going to the facts of the case it is evidenced that Appellant Smt. Punita Sanjay Bindra. 14 ITA No. 2145/Mum/2019 at Country Park , for the first time filed a gift dead dated 09/05/2011 as additional after considering submission of assessee , the assessee was not owner of the bungalow at as the assessee did not make any monetary contribution and her name was just added as a matter of convenience. The relevant finding of the Ld. CIT(A) is The AO has noticed that the Appellant was also a co-owner of the flat at Dorabjee paradise with her husband and treated house of the appellant and denied the benefit of section 54F of the Income Tax Act, In this regard the AR of the Appellant submitted that although owner of the flat but her name was f convenience. Often the name of a spouse is added to provide a sense of comfort, to ensure ease of succession on death. All the funds contributed towards the purchase of the Bungalow were of her husband. As per the recent ITAT ruling in the case of Dr 11(3)(4), ITA No. -10) dated 10.08.2016 "F" Bench Mumbai on the identical issue clearly Ownership doesn't mean joint I-T roperty can't be taxed as payments for purchase of property was made by her husband and that her name was just added as a matter of convenience. Receipts of payment made by her husband wherein the payment was made for the purchase of Dorabjee irmed by Dorabjee Developers were also furnished. It was stated that Bungalow Dorabiee was shown as Self occupied Property in the Income Tax returns of her husband i.e. Sanjay Bindra. Income Tax returns of Sanjay 2013 were filed. On going to the facts of the case it is evidenced that Appellant was merely a co owner of the bungalow and has no monetary contribution towards purchase of bungalow. I have gone through the assessment order, bank statements, confirmation of the appellant and am of the view that appellant's name has been included for the sake of convenience. The property belongs to her husband and cannot be included in the appellant's name. Reliance is placed on "ITAT case of Dr Vandana Bulchandani Vs Income Tax Officer 11(3)(4) ITA No.978/Mum/2013 (Assessment year 2009 dated 10.08.2016 "F" Bench Mumbai on theidentical issue clearly stated that "Property Co joint I-T liabilit taxed. Therefore, the AO is not right holding that appellant was owner of second house and thereby not eligible for deduction u/s 54F. 6.1 Secondly, the ld CIT(A) held that gifted to the daughter on 09/05/2011 i.e. the date of unregistered gift deed. Relevant finding of the Ld. CIT(A) “In this regard the AR of the Appellant submitted that the appellant entered into a Gift Deed to transfer the flat "Country Park" to her daughter on Ogl May 2011, although the gift deed got registered on 8th May 2012. The relevant clauses of section 2(47) of the Income Tax Act and as per Section 53A of the Transfer of Property Act, 1882, clearly mentions that transfer does not mer exchange but also includes transaction allowing of the possession of any immovable property to be taken or retained in part performance of a contract. Mere non registration of gift deed does not mean that transfer of c taken place. The term 'capital asset' in Section 2114) refers to property of any kind 'held' by an Assessee. There is no reference to 'owner' or 'owned'. Section 53A of the Transfer of Property Act allows the doctrine of part applied to the agreement which, though required to be registered, is not registered. The appellant relied on the decision in case of CIT vs. Podar Cement (P.) Ltd [1997] 226 IT 625/92 Taxman 541 (SC), wherein it was held that Smt. Punita Sanjay Bindra ITA No. was merely a co owner of the bungalow and has no monetary contribution towards purchase of bungalow. I have gone through the assessment order, bank statements, confirmation of Dorabjee Developer and submissions made by the appellant and am of the view that appellant's name has been included for the sake of convenience. The property belongs to her husband and cannot be included in the appellant's name. Reliance is placed on "ITAT ruling in the case of Dr Vandana Bulchandani Vs Income Tax Officer 11(3)(4) ITA No.978/Mum/2013 (Assessment year 2009 dated 10.08.2016 "F" Bench Mumbai on theidentical issue clearly stated that "Property Co - Ownership doesn't mean T liability and also "Co-Holder of Property can't be taxed. Therefore, the AO is not right holding that appellant was owner of second house and thereby not eligible for deduction u/s 54F.” the ld CIT(A) held that the flat at ‘Country Park o the daughter on 09/05/2011 i.e. the date of unregistered . Relevant finding of the Ld. CIT(A) is reproduced as under: In this regard the AR of the Appellant submitted that the appellant entered into a Gift Deed to transfer the flat "Country k" to her daughter on Ogl May 2011, although the gift deed got registered on 8th May 2012. The relevant clauses of section 2(47) of the Income Tax Act and as per Section 53A of the Transfer of Property Act, 1882, clearly mentions that transfer does not merely includes "sale, relinquishment or exchange but also includes transaction allowing of the possession of any immovable property to be taken or retained in part performance of a contract. Mere non registration of gift deed does not mean that transfer of capital asset has not taken place. The term 'capital asset' in Section 2114) refers to property of any kind 'held' by an Assessee. There is no reference to 'owner' or 'owned'. Section 53A of the Transfer of Property Act allows the doctrine of part-performan applied to the agreement which, though required to be registered, is not registered. The appellant relied on the decision in case of CIT vs. Podar Cement (P.) Ltd [1997] 226 IT 625/92 Taxman 541 (SC), wherein it was held that Smt. Punita Sanjay Bindra. 15 ITA No. 2145/Mum/2019 was merely a co owner of the bungalow and has no monetary I have gone through the assessment order, bank statements, Dorabjee Developer and submissions made by the appellant and am of the view that appellant's name has been included for the sake of convenience. The property belongs to her husband and cannot be included in the ruling in the case of Dr Vandana Bulchandani Vs Income Tax Officer - 11(3)(4) ITA No.978/Mum/2013 (Assessment year 2009-10) dated 10.08.2016 "F" Bench Mumbai on theidentical issue Ownership doesn't mean Holder of Property can't be taxed. Therefore, the AO is not right holding that appellant was owner of second house and thereby not eligible for Country Park’ was o the daughter on 09/05/2011 i.e. the date of unregistered reproduced as under: In this regard the AR of the Appellant submitted that the appellant entered into a Gift Deed to transfer the flat "Country k" to her daughter on Ogl May 2011, although the gift deed got registered on 8th May 2012. The relevant clauses of section 2(47) of the Income Tax Act and as per Section 53A of the Transfer of Property Act, 1882, clearly mentions that ely includes "sale, relinquishment or exchange but also includes transaction allowing of the possession of any immovable property to be taken or retained in part performance of a contract. Mere non registration of gift apital asset has not taken place. The term 'capital asset' in Section 2114) refers to property of any kind 'held' by an Assessee. There is no reference to 'owner' or 'owned'. Section 53A of the Transfer of performance to be applied to the agreement which, though required to be registered, is not registered. The appellant relied on the decision in case of CIT vs. Podar Cement (P.) Ltd [1997] 226 IT 625/92 Taxman 541 (SC), wherein it was held that registration for the not necessary as regards taxability of income in respect of income from house property. Following the view taken by the Supreme Court in above case the Full Bench of the Gujarat High Court in CIT v.Mormasji Manchar 542/118 Taxman 276 has held that capital gain on the transfer has to be assessed to tax in the assessment year relevant to previous year within which the date of execution of deed of transfer falls and not in the subsequent assessment year in which the deed is registered. It was contended that her daughter was allowed the possession of the property at "Country Park" and there was part performance of a contract i.e. gift deed was executed but got registered at a later stage. Keeping in followed the provisions correctly and gifted the property to her daughter on 09' May 2011. I have gone through the Assessment order and submissions made by the appellant. On a careful reading of the section 2(47), Transfer of Property Act, and decision relied upon by the appellant the date of transfer of flat at Country Park would be considered as 09.05.2011 when the first gift deed was made. Therefore the AO was not correct in holding that the gift of property was 2011.” 6.2 Thirdly, he held Apparel p ltd i.e., the original asset, annual return filed before the relevant finding of the Ld. CIT(A) is reproduced as under: “In this regard the AR of the Appellant stated that the transfer of shares reflected in annual return is 30" June 2011 which is the actual date of transfer of shares. For the purpose of section 54F date of 2011, the actual transfer of shares get effective from the date when the Director's approval is received and same is reflected in Annual return filed with the ROC. The same view was taken in the case of Mrs. Hami ACIT. (2009 Smt. Punita Sanjay Bindra ITA No. registration for the purpose of conferring ownership right was not necessary as regards taxability of income in respect of income from house property. Following the view taken by the Supreme Court in above case the Full Bench of the Gujarat High Court in CIT v.Mormasji Mancharji Vaid [2001] 250 IT 542/118 Taxman 276 has held that capital gain on the transfer has to be assessed to tax in the assessment year relevant to previous year within which the date of execution of deed of transfer falls and not in the subsequent assessment year in which the deed is registered. It was contended that her daughter was allowed the possession of the property at "Country Park" and there was part performance of a contract i.e. gift deed was executed but got registered at a later stage. Keeping in view the above the appellant has very well followed the provisions correctly and gifted the property to her daughter on 09' May 2011. have gone through the Assessment order and submissions made by the appellant. On a careful reading of the section Transfer of Property Act, and decision relied upon by the appellant the date of transfer of flat at Country Park would be considered as 09.05.2011 when the first gift deed was made. Therefore the AO was not correct in holding that the gift of property was made on 08-05-2012 instead of 09 held that the date of transfer of shares of BIBA the original asset, was on 30/06/2011, as per the annual return filed before the Registrar of companies finding of the Ld. CIT(A) is reproduced as under: In this regard the AR of the Appellant stated that the transfer of shares reflected in annual return is 30" June 2011 which is the actual date of transfer of shares. For the purpose of section 54F date of transfer of original asset will be 30l June 2011, the actual transfer of shares get effective from the date when the Director's approval is received and same is reflected in Annual return filed with the ROC. The same view was taken in the case of Mrs. Hami Aspi Balsara (Taxpaver) V ACIT. (2009-TIOL-789-ITAT-MUM] wherein TAT had made Smt. Punita Sanjay Bindra. 16 ITA No. 2145/Mum/2019 purpose of conferring ownership right was not necessary as regards taxability of income in respect of income from house property. Following the view taken by the Supreme Court in above case the Full Bench of the Gujarat ji Vaid [2001] 250 IT 542/118 Taxman 276 has held that capital gain on the transfer has to be assessed to tax in the assessment year relevant to previous year within which the date of execution of deed of transfer falls and not in the subsequent assessment year in which the deed is registered. It was contended that her daughter was allowed the possession of the property at "Country Park" and there was part performance of a contract i.e. gift deed was executed but got registered at a later stage. view the above the appellant has very well followed the provisions correctly and gifted the property to her have gone through the Assessment order and submissions made by the appellant. On a careful reading of the section Transfer of Property Act, and decision relied upon by the appellant the date of transfer of flat at Country Park would be considered as 09.05.2011 when the first gift deed was made. Therefore the AO was not correct in holding that 2012 instead of 09-05- the date of transfer of shares of BIBA as on 30/06/2011, as per the egistrar of companies (ROC). The finding of the Ld. CIT(A) is reproduced as under: In this regard the AR of the Appellant stated that the transfer of shares reflected in annual return is 30" June 2011 which is the actual date of transfer of shares. For the purpose of transfer of original asset will be 30l June 2011, the actual transfer of shares get effective from the date when the Director's approval is received and same is reflected in Annual return filed with the ROC. The same view was Aspi Balsara (Taxpaver) V MUM] wherein TAT had made reference to the Supreme Court decision of "Vasudev Ramchandra Shelat vs. Pranlal Jayanand Thakkar case 1974 AIR 1728, 1975 SCR (1) 534 dated 17.07.1974".Therefore the date of transfer of share is 30.06.2011 as per the Annual return filed. I have gone through the Assessment order and submissions made by the appellant and of the view that date of transfer of shares will be the date on which the actual transfer of shares takes place ie. in this case on 30.06.2011. The transfer would would be considered complete when the delivery of share certificate along with transfer deed is handed over to the purchaser. In the present case the physical delivery of the shares took place on 30th Ju is not relevant in this case and thus the date of transfer of shares i.e. 30l June 2011 will be considered for capital gains purpose.I agree with the contention of the apellant and held that the date of transfer of share shou 2011 for computation the capital gain and deducted thereof. 7. We have heard rival submission of the parties on the issue in disputes and perused the relevant material on record. The dispute is whether the co namely ‘Dorabjee Pradise residential property for the purpose of section 54F of the act. From the facts brought on record, it is evident that property was initial purchased with the first holder on 25 th April 2013, only the assessee has been entered as second owner and therefore as on the date of transfer of original asset, the assessee was first co Officer has relied on the decision of the Hon’ble Karnataka High Court in the case of MJ Siwani (supra). The relevant Smt. Punita Sanjay Bindra ITA No. reference to the Supreme Court decision of "Vasudev Ramchandra Shelat vs. Pranlal Jayanand Thakkar case 1974 AIR 1728, 1975 SCR (1) 534 dated 17.07.1974".Therefore the ransfer of share is 30.06.2011 as per the Annual I have gone through the Assessment order and submissions made by the appellant and of the view that date of transfer of shares will be the date on which the actual transfer of shares e ie. in this case on 30.06.2011. The transfer would would be considered complete when the delivery of share certificate along with transfer deed is handed over to the purchaser. In the present case the physical delivery of the shares took place on 30th June 2011. The date of agreement is not relevant in this case and thus the date of transfer of shares i.e. 30l June 2011 will be considered for capital gains purpose.I agree with the contention of the apellant and held that the date of transfer of share should be taken as 30 2011 for computation the capital gain and deducted thereof. e have heard rival submission of the parties on the issue in disputes and perused the relevant material on record. The is whether the co-ownership of the assessee in property Dorabjee Pradise’ should be treated as ownership of a residential property for the purpose of section 54F of the act. From the facts brought on record, it is evident that property was initial purchased with the first holder as the assessee, but subsequently 2013, only the assessee has been entered as second owner and therefore as on the date of transfer of original asset, the co-owner of the property. The lear Officer has relied on the decision of the Hon’ble Karnataka High Court in the case of MJ Siwani (supra). The relevant Smt. Punita Sanjay Bindra. 17 ITA No. 2145/Mum/2019 reference to the Supreme Court decision of "Vasudev Ramchandra Shelat vs. Pranlal Jayanand Thakkar case 1974 AIR 1728, 1975 SCR (1) 534 dated 17.07.1974".Therefore the ransfer of share is 30.06.2011 as per the Annual I have gone through the Assessment order and submissions made by the appellant and of the view that date of transfer of shares will be the date on which the actual transfer of shares e ie. in this case on 30.06.2011. The transfer would would be considered complete when the delivery of share certificate along with transfer deed is handed over to the purchaser. In the present case the physical delivery of the ne 2011. The date of agreement is not relevant in this case and thus the date of transfer of shares i.e. 30l June 2011 will be considered for capital gains purpose.I agree with the contention of the apellant and held ld be taken as 30-06- 2011 for computation the capital gain and deducted thereof.” e have heard rival submission of the parties on the issue in disputes and perused the relevant material on record. The first ownership of the assessee in property should be treated as ownership of a residential property for the purpose of section 54F of the act. From the facts brought on record, it is evident that property was initially but subsequently 2013, only the assessee has been entered as second owner and therefore as on the date of transfer of original asset, the owner of the property. The learned Assessing Officer has relied on the decision of the Hon’ble Karnataka High Court in the case of MJ Siwani (supra). The relevant part of said decision has been summarised by the ld AO, which has been extracted above. 7.1 In view of the decision of the find any error in the order of the Assessing Officer and therefore accordingly, we set aside the finding of the Ld. CIT(A) and restore the finding of Assessing Officer. 7.2 The second dispute property namely flat at ‘ the assessee filed registered gift deed of the property which is dated 08/05/2012, whereas before the Ld. CIT(A) the assessee filed another gift deed, which is unregistered, but da 09/05/2011(which is available on page 47 to 54 of the and submitted that same might be admitted as additional evidence. As appear from the impugned given any finding on admission of the same as additional ev nor provided any opportunity to the Assessing Officer for his comment as per the short the Rules) , therefore the decision relying upon the said additional evidence is in Therefore, we feel it appropriate to set aside the finding of the Ld. CIT(A) on the issue in dispute and restore this issue back to the file of the Ld. CIT(A) for following the provisions rule 46A. The Ld. CIT(A) may direct the assesse said gift deed for verification of date of the purchase of the stamp or Smt. Punita Sanjay Bindra ITA No. summarised by the ld AO, which has been n view of the decision of the Hon’ble High Court, we do not find any error in the order of the Assessing Officer and therefore we set aside the finding of the Ld. CIT(A) and restore the finding of Assessing Officer. second dispute, is in respect of date of flat at ‘Country Park’. Before the Assessing Officer, the assessee filed registered gift deed of the property which is dated 08/05/2012, whereas before the Ld. CIT(A) the assessee filed another gift deed, which is unregistered, but da is available on page 47 to 54 of the submitted that same might be admitted as additional evidence. As appear from the impugned order, the Ld. CIT(A) has neither given any finding on admission of the same as additional ev nor provided any opportunity to the Assessing Officer for his comment as per the Rule 46A of the Income-tax R , therefore the decision relying upon the said additional evidence is in violation of principles of natural justice. feel it appropriate to set aside the finding of the Ld. CIT(A) on the issue in dispute and restore this issue back to the file of the Ld. CIT(A) for following the provisions rule 46A. The Ld. CIT(A) may direct the assessee to produce the original copy of the said gift deed for verification of date of the purchase of the stamp or Smt. Punita Sanjay Bindra. 18 ITA No. 2145/Mum/2019 summarised by the ld AO, which has been Hon’ble High Court, we do not find any error in the order of the Assessing Officer and therefore we set aside the finding of the Ld. CIT(A) and restore date of gift deed of . Before the Assessing Officer, the assessee filed registered gift deed of the property which is dated 08/05/2012, whereas before the Ld. CIT(A) the assessee filed another gift deed, which is unregistered, but dated is available on page 47 to 54 of the paperbook) submitted that same might be admitted as additional evidence. the Ld. CIT(A) has neither given any finding on admission of the same as additional evidence nor provided any opportunity to the Assessing Officer for his Rules, 1962 ( in , therefore the decision relying upon the said of natural justice. feel it appropriate to set aside the finding of the Ld. CIT(A) on the issue in dispute and restore this issue back to the file of the Ld. CIT(A) for following the provisions rule 46A. The Ld. e to produce the original copy of the said gift deed for verification of date of the purchase of the stamp or notarization at the assessee has also filed of Country Park building related to transfer of the property, which is available on page 52 to 55 of the paperbook. The Ld. CIT(A) may also forward the same to the Assessing Officer for verification actual date of gift / possession Housing Society. 7.3 The third dispute BIBA Apparels. The learne transfer cum purchase agreement available on page 1to 46 of the paperbook. The learne filed under provisions of the C share capital available on page 61 to 70 of the paperbook. He referred to the page No. 70 of t 30/06/2011 shares in the to Future ventures India Ltd. Further the learne to the decision dated 25/11/1976 of Hon’ble Supreme Court in the case of Mannallal Khetan and others Vs Kedarnath Civil Appeal No. 1805 held that the provisions contained in section 108 of companies 1956 states that a company shall not register a transfer of shares unless a proper instrument of transfer duly stamped and by or on behalf of the transferor and by or on behalf of the transferee has been delivered to the company along with a Smt. Punita Sanjay Bindra ITA No. at the end of the Assessing Officer. Before us the assessee has also filed a letter from the cooperative Housing Society ark building related to transfer of the property, which available on page 52 to 55 of the paperbook. The Ld. CIT(A) may also forward the same to the Assessing Officer for verification actual date of gift / possession from the records of the third dispute is regarding date of transfer of shares of BIBA Apparels. The learned counsel drawn our attention to share transfer cum purchase agreement available on page 1to 46 of the The learned counsel also referred to the filed under provisions of the Company Act, 1956 having detail of share capital available on page 61 to 70 of the paperbook. He referred to the page No. 70 of the paperbook according to which 30/06/2011 shares in the name of the assessee stands transferred to Future ventures India Ltd. Further the learned co to the decision dated 25/11/1976 of Hon’ble Supreme Court in the Khetan and others Vs Kedarnath Civil Appeal No. 1805 to 1808 of 1968 wherein in para 16 it is held that the provisions contained in section 108 of companies 1956 states that a company shall not register a transfer of shares unless a proper instrument of transfer duly stamped and of the transferor and by or on behalf of the transferee has been delivered to the company along with a Smt. Punita Sanjay Bindra. 19 ITA No. 2145/Mum/2019 nd of the Assessing Officer. Before us the letter from the cooperative Housing Society ark building related to transfer of the property, which available on page 52 to 55 of the paperbook. The Ld. CIT(A) may also forward the same to the Assessing Officer for verification of from the records of the cooperative is regarding date of transfer of shares of l drawn our attention to share transfer cum purchase agreement available on page 1to 46 of the l also referred to the Annual Return having detail of share capital available on page 61 to 70 of the paperbook. He he paperbook according to which, on name of the assessee stands transferred counsel referred to the decision dated 25/11/1976 of Hon’ble Supreme Court in the Khetan and others Vs Kedarnath Khetan vin wherein in para 16 it is held that the provisions contained in section 108 of companies Act, 1956 states that a company shall not register a transfer of shares unless a proper instrument of transfer duly stamped and executed of the transferor and by or on behalf of the transferee has been delivered to the company along with a certificate relating to shares is in existence along with a letter of allotment of the shares. The learned counsel of the assessee was asked to produce such an instrument of transfer of shares duly stamped and executed between the parties, which was then forwarded to the company for change of the name of the shareholder in the register of shareholders of the company inability in producing such a certificate readily. In our opinion, the actual date of the transfer of the shares is not the date of the memorandum of understanding for transfer of the shares or name of the shareholder al of shareholder of company. 7.4 Since no such instrument of transfer executed between the parties duly stamped interest of substantial justice, we restore this issue to the file of the Ld. CIT(A), with the direction to assessee to produce all the necessary documentary evidence including the transfer executed between the parties duly stamped, for determination of the actual date of the finding of the Ld. CIT(A) on the issue in dispute is accordingly set aside. 7.5 In view of above discussion, the grounds raised by the Revenu the issue of deduction u/s Ld CIT(A) for deciding afresh Smt. Punita Sanjay Bindra ITA No. certificate relating to shares or debentures or if no such certificate is in existence along with a letter of allotment of the shares. The l of the assessee was asked to produce such an instrument of transfer of shares duly stamped and executed between the parties, which was then forwarded to the company for change of the name of the shareholder in the register of shareholders of the company. The learned counse inability in producing such a certificate readily. In our opinion, the actual date of the transfer of the shares is not the date of the memorandum of understanding for transfer of the shares or name of the shareholder along with date appearing in the annual return of shareholder of company. ince no such instrument of transfer executed between the parties duly stamped has been produced before us, interest of substantial justice, we restore this issue to the file of the Ld. CIT(A), with the direction to assessee to produce all the necessary documentary evidence including the transfer executed between the parties duly stamped, for determination of the actual date of the transfer of the shares. The finding of the Ld. CIT(A) on the issue in dispute is accordingly set 7.5 In view of above discussion, the grounds raised by the Revenu the issue of deduction u/s 54F of the Act are restored back to the file of A) for deciding afresh in accordance with law after Smt. Punita Sanjay Bindra. 20 ITA No. 2145/Mum/2019 or debentures or if no such certificate is in existence along with a letter of allotment of the shares. The l of the assessee was asked to produce such an instrument of transfer of shares duly stamped and executed between the parties, which was then forwarded to the company for change of the name of the shareholder in the register of el expressed his inability in producing such a certificate readily. In our opinion, the actual date of the transfer of the shares is not the date of the memorandum of understanding for transfer of the shares or name in the annual return ince no such instrument of transfer executed between the therefore in the interest of substantial justice, we restore this issue in dispute also to the file of the Ld. CIT(A), with the direction to assessee to produce all the necessary documentary evidence including the instrument of transfer executed between the parties duly stamped, for transfer of the shares. The finding of the Ld. CIT(A) on the issue in dispute is accordingly set 7.5 In view of above discussion, the grounds raised by the Revenue on 54F of the Act are restored back to the file of in accordance with law after of verification of date of sale of shares of Biba apparel and date o Country Park as directed above. 8. In the result, the appeal filed by the Revenue is allowed for statistical purpose. Order pronounce Sd/ (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 30/06/2023 Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Smt. Punita Sanjay Bindra ITA No. date of sale of shares of Biba apparel and date o as directed above. 8. In the result, the appeal filed by the Revenue is allowed for nced in the open Court on 30/06 Sd/- KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Dragon Legal/Rahul Sharma, Sr. P.S. Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Smt. Punita Sanjay Bindra. 21 ITA No. 2145/Mum/2019 date of sale of shares of Biba apparel and date of gift of flat at 8. In the result, the appeal filed by the Revenue is allowed for /06/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai