Smt. Nayanaben J.Solanki, Ahmedabad V. The Income tax Officer,Ward-14(2), Ahmedabad

ITA 2574/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2091 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: S N SOPARKAR
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALANKAMONY, AM) ITA NO.2574/AHD/2012 A. Y.: 2009-10 SMT. NAYANNABEN J. SOLANKI, G- MADHUPURI RAW HOUSE, JIVRAJ PARK, VEJALPUR, AHMEDABAD 380 051 P. A. NO. AHBPS 8138 D VS THE INCOME TAX OFFICER, WARD- 14 (2), NATURE VIEW BUILDING, ASHRAM ROAD, AHMEDABAD 380 006 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR, AR RESPONDENT BY SHRI RAHUL KUMAR, SR. DR DATE OF HEARING: 06-03-2013 DATE OF PRONOUNCEMENT: 10-05-2013 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A)-XXI, AHMEDABAD DATED 4 TH SEPTEMBER, 2012, IN APPEAL NO. CIT(A)- XXI/426/11-12, PASSED U/S 250 READ WITH SECTION 143 (3) OF THE IT ACT, FOR THE ASSESSMENT YEAR 2009-10. 2. THOUGH, IN THIS APPEAL THE ASSESSEE HAS RAISED S IX ELABORATE GROUNDS, THE CRUX OF THE ISSUE IS THAT THE LEARNED CIT(A) HAS ERRED IN ITA NO.2574/AHD/2012 (AY 2009-10) SMT. NAYANABEN J. SOLANKI VS ITO, W-14(2), AHMEDABA D 2 CONFIRMING THE ACTION OF THE LEARNED AO IN DISALLOW ING ASSESSEES CLAIM OF EXEMPTION U/S 54F OF THE ACT AMOUNTING TO RS.38,00,000/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E AN INDIVIDUAL FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 08-07- 2009 DECLARING TOTAL INCOME AT RS.3,31,240/- ALONG WITH ITR FORM NO.2. THE CASE WAS PROCESSED U/S 143(1) AND THEREAF TER TAKEN UP FOR SCRUTINY U/S CASS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEARNED AO OBSERVED THE FOLLOWING FACTS: (I) THE ASSESSEE HAD SOLD PROPERTY WORTH RS.1,80,00 ,000/- VIDE SALE DEED NO.314/2009 AND HAD RECEIVED HER SHA RE BEING TWO THIRD OF THE TOTAL SALE AMOUNTING TO RS.1,20,00,000/- AND THUS EARNED CAPITAL GAIN OF RS.1,18,83,600/- AFTER DEDUCTING COST OF ACQUISITIO N OF RS.1,16,400/-. (II) THE ASSESSEE CLAIMED DEDUCTION BY WAY OF INVES TMENT IN RURAL BOND FOR RS.50,00,000/- AND INVESTMENT IN TWO BUNGALOWS ALONG WITH LAND IN THE LAYOUT PLAN OF NEE LKANTH VILLA BUNGALOW PROMOTED BY DHARAMDEV INFRASTRUCTURA L PVT. LTD. THE LEARNED AO DISALLOWED THE ASSESSEES CLAIM OF D EDUCTION U/S 54F OF THE ACT FOR RS.38 LAKHS WITH RESPECT TO THE SECO ND BUNGALOW PURCHASED BY THE ASSESSEE FOR THE FOLLOWING REASONS :- (I) THE ASSESSEE HAD MADE PURCHASE TWO ADJACENT SEP ARATE BUNGALOWS VIZ. BUNGALOW NO.33 AND BUNGALOW NO.34 IN THE LAYOUT PLAN OF NEELKANTH VILLA BUNGALOW. (II) BOTH THE BUNGALOWS ARE NOT A COMBINED UNIT AND HAVE SEPARATE ENTRIES TO EACH OF THE BUNGALOW. ITA NO.2574/AHD/2012 (AY 2009-10) SMT. NAYANABEN J. SOLANKI VS ITO, W-14(2), AHMEDABA D 3 (III) NOBODY HAS OCCUPIED THE BUNGALOWS FOR A LONG TIME. (IV) SINCE 54F DEDUCTION IS ALLOWABLE FOR ONE RESID ENTIAL UNIT, DEDUCTION FOR THE SECOND BUNGALOW IS NOT PERMISSIBL E. 3.1 THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LEARNED CIT(A) AND THE LEARNED CIT(A) AFTER CONSIDERING TH E ASSESSMENT ORDER, SUBMISSION OF THE ASSESSEE AND THE CASE LAWS CITED, CONFIRMED THE DISALLOWANCE OF RS.38,00,000/- MADE BY THE LEAR NED AO. THE RELEVANT PORTION OF HIS ORDER IS REPRODUCED HEREIN UNDER FOR REFERENCE:- 4.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER, THE SUBMISSIONS MADE AND THE CASE LAWS CITED BY THE APP ELLANT. I AM NOT INCLINED TO AGREE WITH THE APPELLANT DUE TO FOLLOWING REASONS: 1) THAT IT IS UNDISPUTED AND ADMITTED FACT THAT THE RE EXISTED 2 BUNGALOWS NUMBER 33 AND 34. THESE 2 BUNGALOWS WERE CONSTRUCTED AND SOLD OFF INDEPENDENTLY BY THE BUILD ER AS IT IS EVIDENT FROM THE 2 SALE DEEDS EXECUTED, AND ALSO AG REED BY THE ASSESSEE. FURTHER, EVEN THE CERTIFICATE BY THE BUIL DER IS VAGUE AS MENTIONS 33 & 34 AS COMBINE BUNGALOW AT ONE PLAC E AND AT THE OTHER MENTIONS THAT A PAYMENT OF RS.76 LAKHS FO R THE TWO BUNGALOWS WAS PAID BY THE ASSESSEE. 2) THAT IT IS VERY NOTICEABLE FROM THE BROACHER OF THE BUILDER THAT THESE 2 BUNGALOWS ARE SEPARATE AND DISTINCT. S AME IS CONFIRMED FROM THE ITI REPORT WHEN HE HAS REPORTED THAT THERE ARE 2 SEPARATE ENTRANCES FOR BUNGALOW NUMBER 33 & 3 4. 3) THAT THE MERE FACT THAT COMMON WALL HAS BEEN RE PORTEDLY REMOVED DOES NOT MAKE 2 DISTINCT DWELLING UNIT AS O NE DWELLING UNIT SPECIALLY WHEN NO THERE ARE NO INTERNAL CHANGE S HAVE BEEN CARRIED OUT TO MAKE IT AS ONE UNIT. ON BEING SPECIF ICALLY ASKED WHAT INTERNAL CHANGES WERE CARRIED OUT BY THE BUILD ER OR BY THE APPELLANT AND WHAT EXTRA CHARGES WERE PAID/INCURRED BY THE ITA NO.2574/AHD/2012 (AY 2009-10) SMT. NAYANABEN J. SOLANKI VS ITO, W-14(2), AHMEDABA D 4 APPELLANT, INCLUDING ITS NATURE AND SOURCES, THE AP PELLANT IS CONSPICUOUSLY SILENT. THE BUILDER CERTIFICATE ALSO DOES NOT SPELL OUT ANY MODIFICATIONS CARRIED OUT BY HIM. IT MERELY STATES THAT 2 BUNGALOWS WERE SOLD OFF AS COMBINED BUNGALOWS. 4) THAT THE CITATION 309 ITR 329 DOES NOT APPLY IN THIS CASE AS IN THE CITED JUDGMENT THE A ENTERED INTO AGREE MENT WITH THE BUILDER/DEVELOPER TO CARRY OUT NECESSARY INTERNAL CHANGES SO THAT TWO DISTINCT UNIT MAY BECOME ONE USABLE DWELLI NG UNIT . THERE IS NO SUCH AGREEMENT IN THE INSTANT CASE NOR ANY DETAILS OF INTERNAL CHANGES CARRIED OUT BY THE BUILDER OR T HE A, NOR ANY CERTIFICATE FROM THE BUILDER THAT HE HAS EFFECTED N ECESSARY INTERNAL MODIFICATIONS TO MAKE IT AS ONE DWELLING U NIT. CONSIDERING THE ABOVE I AM OF THE VIEW THAT ACTION OF AO TO DENY THE EXEMPTION OF RS.38 LAKHS IS CORRECT AND IS CONFIRMED. 4. THE LEARNED AR BEFORE US REITERATED HIS SUBMISSI ON MADE BEFORE THE LEARNED AO AND LEARNED CIT(A) AND FURTHE R RELIED ON THE DECISION OF THE HOBLE DELHI HIGH COURT IN THE CASE OF CIT VS GITA DUGGAL IN ITA NO.1237/2011 DATED 21-02-2013. 5. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THEIR ORDERS M AY BE CONFIRMED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE REVENUE AND CAREFULLY CONSIDERED THE MATERIALS ON R ECORD ALONG WITH THE PAPER BOOK PRODUCED BEFORE US AND THE CASE LAWS CITED. FROM THE FACTS ON RECORD IT IS EVIDENT THAT THE ASSESSEE HAD PURCHASED TWO ADJACENT BUNGALOWS HAVING A COMMON WALL, WHICH WAS REMOVED AND THUS THE ENTIRE TWIN BUNGALOW WAS CONSIDERED AS A S INGLE UNIT BY THE ASSESSEE. WE ALSO FIND THAT SECTION 54F OF THE ACT DOES NOT HAVE ANY ITA NO.2574/AHD/2012 (AY 2009-10) SMT. NAYANABEN J. SOLANKI VS ITO, W-14(2), AHMEDABA D 5 BAR IN TREATING SUCH A BUILDING AS ONE UNIT. FURTHE R, ON THE IDENTICAL ISSUE HONBLE DELHI HIGH COURT IN ITA 1237/2011 DATED 21.02.2013 HAS HELD IN PARA 8 THAT WE ARE THEREFORE, UNABLE TO SEE HOW OR WHY THE PHY SICAL STRUCTURING OF THE NEW RESIDENTIAL HOUSE, WHETHER IT IS LATERAL OR VERTICAL, SHOULD COME IN THE WAY OF CONSIDERING THE BUILDING AS A RE SIDENTIAL HOUSE. WE DO NOT THINK THAT THE FACT THAT THE RESIDENTIAL HOUSE CONSISTS OF SEVERAL INDEPENDENT UNITS CAN BE PERMITTED TO ACT A S AN IMPEDIMENT TO THE ALLOWANCE OF THE DEDUCTION UNDER SECTION 54/ 54F. IT IS NEITHER EXPRESSLY NOR BY NECESSARY IMPLICATION PROHIBITED. FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH CO URT, WE HEREBY DIRECT THE LEARNED AO TO TREAT BOTH THE BUNGALOWS P URCHASED BY THE ASSESSEE AS ONE UNIT AND GRANT DEDUCTION UNDER SECT ION 54F OF THE ACT SUBJECT TO THE ADHERENCE OF OTHER REQUIREMENTS OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10-05-2013 SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA/ DEKA/ DEKA/ DEKA/DKP* DKP* DKP* DKP* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED ITA NO.2574/AHD/2012 (AY 2009-10) SMT. NAYANABEN J. SOLANKI VS ITO, W-14(2), AHMEDABA D 6 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: DIRECT ON COMPUTER 11/03,1 2/03 & 09/05 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 09-05 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.:09/05 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: N.A. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.:10/05 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: