ACIT CIR 25(3), MUMBAI V. BHAVANIDATTA B. PANT, MUMBAI

ITA 2427/MUM/2012

• Counselvise Citation: 242719914 RSA 2012
• Duration Of Justice: 3 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: YOGESH KAMAT SR
• Keywords: Capital asset
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.2427/M/2012 ASSESSMENT YEAR: 2008-09 ACIT, CIR-25(3), 308, C-11, BANDRA-KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 VS. SHRI BHAVANIDATTA B. PANT, 1005, ARCADE BHOOMI HEIGHTS, DHANUKARWADI, M.G. ROAD, KANDIVALI (WEST), MUMBAI 400 067 PAN: AHAPP 1036L (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI YOGESH KAMAT, SR. A.R. REVENUE BY : SHRI BHUPENDRA SHAH, D.R. DATE OF HEARING : 21.05.2015 DATE OF PRONOUNCEMENT : 30.06.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 27.01.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2008-09. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN GIVING RELIEF OF RS.12,80,521/-. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN GIVING RELIEF IN IMPROVEMENT COST OF RS.15 ,00,000/-, BROKERAGE OF RS.1,02,100/- AND CAPITAL EXPENSES OF RS.1,13,900/- . (III) THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. ITA NO.2427/M/2012 SHRI BHAVANIDATTA B. PANT 2 3. VIDE GROUND NO.1, THE REVENUE HAS AGITATED THE A CTION OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF INDEXATION FROM THE DATE O N WHICH THE PREVIOUS OWNER I.E. FATHER OF THE ASSESSEE FROM WHOM THE ASSESSEE HAD INHERITED THE PROPERTY IN QUESTION AND IN COMPUTING THE CAPITAL GAINS EARNED FROM THE SALE OF PROPERTY. THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSE E WHILE RELYING UPON THE DECISION OF THE SPECIAL BENCH OF MUMBAI ITAT IN DC IT VS. MANJULA J. SHAH 318 ITR AT 417, FOR THE PURPOSE OF INDEXATION, THE DATE SHOULD BE RECKONED FROM THE DATE FROM WHICH THE ORIGINAL OWNER HELD TH E PROPERTY. HE FURTHER OBSERVED THAT THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. MANJULA J. SHAH (SUPRA) WAS SQUARELY APP LICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE. HE THEREFORE DIRECTED THE AO TO ADOPT COST INFLATION INDEX OF ACQUISITION OF THE CAPITAL ASSET WITH REFERENCE TO THE YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD THE ASSET I.E. FROM 1.4.1 981 AND TO COMPUTE THE LONG TERM CAPITAL GAIN ACCORDINGLY. THE REVENUE IS THUS IN APPEAL BEFORE US. 4. WE MAY OBSERVE THAT THE SPECIAL BENCH DECISION O F THE TRIBUNAL IN THE CASE OF DCIT VS. MANJULA J. SHAH (SUPRA) HAS BEEN FURTHER APPROVED BY THE HONBLE BOMBAY HIGH COURT CITED AS CIT VS. MANJULA J. SHAH (2013) 355 ITR 0474. ACCORDINGLY, THE FINDING OF THE LD. CIT( A) ON GROUND NO.1 IS UPHELD. 5. VIDE GROUND NO.2, THE REVENUE HAS AGITATED THE A CTION OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF EXPENDITURE INCURRED ON IM PROVEMENT OF HOUSE OF RS.15,00,000/-, BROKERAGE OF RS.10,21,000/- AND CAP ITAL EXPENSES OF RS.1,13,900/- IN THE COST OF HOUSE IN QUESTION. TH E LD. CIT(A) HAS HELD THAT THE SAID EXPENDITURE WAS IN THE NATURE OF ALLOWABLE DEDUCTION UNDER SECTION 54F OF THE ACT. HE HAS RELIED IN THIS RESPECT ON T HE DECISION IN THE CASE OF SONIA GULATI VS. ITO IN ITA NO.1300/M/1998. ITA NO.2427/M/2012 SHRI BHAVANIDATTA B. PANT 3 6. WE FIND THAT THE HONBLE ORISSA HIGH COURT IN TH E CASE OF CWT V. K.B. PRADHAN [1981] 130 ITR 393 HELD THAT IF THE INVEST MENT HAS BEEN MADE TO MAKE THE HOUSE HABITABLE, IT COULD NOT BE PRESUMED THAT THE HOUSE WAS NOT IN A HABITABLE CONDITION ON THE DAY WHEN IT WAS PURCHASE D AND THE AMOUNT INVESTED SHOULD BE CONSIDERED AS SPENT FOR THE PURCHASE OF A HOUSE OR CONSTRUCTION, THE CONCEPT OF HABITABILITY BEING INHERENT IN THE WORD HOUSE. 7. THE ABOVE RATIO LAID DOWN BY THE HONBLE HIGH CO URT HAS BEEN FURTHER FOLLOWED BY THE TRIBUNAL IN THE CASE OF SONIA GULA TI VS. ITO (SUPRA) WHICH IS SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT( A) IN RELATION TO HIS FINDING ON GROUND NO.2. WE THEREFORE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY HEREBY DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2015. SD/- SD/- (G.S. PANNU) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 30.06.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.