Gulab Guruappa Hulsure, Aurangabad V. Income-tax Officer, Ward - 1(2), Aurangabad

ITA 2762/PUN/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6798 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 24-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Cost of acquisition
• Section: 143(3); 54F; 54

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.2762/PUN/2017 / ASSESSMENT YEAR : 2013-14 SHRI GULAB GURUAPPA HULSURE, ROW HOUSE NO.2, VIVEKANAND NAGAR, HOUSING SOCIETY, PUNDALIK NAGAR ROAD, CIDCO NO.4(5), AURANGABAD 431 003. PAN : ABAPH5420J. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 1(2), AURANGABAD. . / RESPONDENT ASSESSEE BY : NONE. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 1, AURANGABAD DT.05.10 .2017 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOME FRO M SALARY, HOUSE PROPERTY AND OTHER SOURCES. ASSESSEE ELE CTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2013-14 ON 30.07.2013 DECLA RING / DATE OF HEARING : 20.12.2018 / DATE OF PRONOUNCEMENT: 21.12.2018 2 ITA NO.2762/PUN/2017 TOTAL INCOME OF RS.9,64,910/-. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE A CT VIDE ORDER DT.30.03.2016 AND THE TOTAL INCOME WAS DETERMINED AT RS.47,63,180/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE C ARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.05.10.2017 (IN AP PEAL NO.ABD/CIT(A)-1/93/2016-17) DISMISSED THE APPEAL OF ASSE SSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL AND HAS RAISED THE FOLLOWING GROUNDS : IN OUR CASE THE ENTIRE CONSIDERATION HAS BEEN RECE IVED BY THE ASSESSEE MR. GULAB GURUAPPA HULSURE INTUNE R UPEES 75,00,000/- AND THE ENTIRE CONSIDERATION IN ADDITIO N TO THE ADVANCE OF RUPEES 31,70,735/- OF STATE BANK OF INDI A HOUSING LOAN TAKEN IN THE NAME OF MR. GULAB GURUAPPA HULSURE MR. GULAB GURUAPPA HULSURE WHICH WAS ENTIRELY USE FOR THE PUR CHASE OF NEW HOUSE PROPERTY AT. FLAT NO. AT FLAT NO. 305 AND 306 , AT SUBHASHNAGAR CO. OP HOUSING SOCIETY, SUBHASH NAGAR, DHARAWI, KUM BHARWADA, MUMBAI - 400017. EXEMPTION U/S 54 SHOULD BE GIVEN TO THE ASSESSEE ON THE FACTS AND THE POINTS GIVEN IN THE APPEAL HERE RESPE CTED SIR IT SHOULD BE KEENLY NOTED THAT THE ESSENCE OF THE SECT ION 54 SAYS THAT CONSIDERATION RECEIVED SHOULD BE BY THE ASSESS EE AND INVESTED IT SHOULD BE BY THE ASSESSEE HIMSELF THEN AND THEN ONLY THE DEDUCTION IS ALLOWED UNDER THIS SECTION. T HE ADDITION OF THE NAME AS A JOINT OWNER FOR PURCHASE OF NEW HO USE PROPERTY SO AS TO AVOID ANY FURTHER LEGAL COMPLICAT IONS OF PROPERTY MATTERS SHOULD NOT DENY THE FULL EXEMPTION OF SECTION 54 F. 3. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF TH E ASSESSEE BUT HOWEVER WRITTEN SUBMISSIONS WERE FILED ON BE HALF OF THE ASSESSEE BY THE REGISTERED TAX PRACTITIONER BY SRI HAR IHAR N. SHAHANE. IT WAS SUBMITTED THAT THE WRITTEN SUBMISSIONS MADE BE CONSIDERED WHILE DECIDING THE APPEAL. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAD SOLD 3 ITA NO.2762/PUN/2017 RESIDENTIAL PROPERTY AT CIDCO, NEW AURANGABAD AND CAPITA L GAIN DERIVED ON SALE OF SUCH PROPERTY WAS RE-INVESTED IN ACQU IRING NEW PROPERTY AT MUMBAI. AO NOTED THAT WHILE CALCULATING THE CAPITAL GAINS FROM THE SALE CONSIDERATION OF RS.75 LACS ASSESSEE HA D DEDUCTED INDEXED COST OF ACQUISITION OF RS.97,371/- AND INDE XED COST OF CONSTRUCTION AT RS.10,98,275/- AGGREGATING TO RS.11,95,646/- AND THE CAPITAL GAINS WAS WORKED OUT AT RS.63,04,354/-. FURTHER SINCE ASSESSEE HAD PURCHASED NE W RESIDENTIAL HOUSE AT RS.74,85,900/-, THE TAXABLE CAPITAL GAIN S WAS WORKED AT RS. NIL. AO NOTED THAT DURING THE COURSE OF AS SESSMENT PROCEEDINGS, ASSESSEE HAD FAILED TO FURNISH ANY SUPPORTING DOCUMENTS IN RESPECT OF COST OF PLOT AND CONSTRUCTION COST. HE ACCORDINGLY DENIED THE CLAIM OF INDEXED COST OF PLOT AND CONSTRUCTION. WITH RESPECT TO THE CLAIM OF DEDUCTION U/S 54F OF THE ACT, AO NOTED THAT NEW FLAT PURCHASED AT MUMBAI WAS IN THE NAME OF THE ASSESSEE AND SHRI ATUL G. HULSURE. AO WAS OF THE VIEW THAT FOR BEING ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT, THE NEW ASSET MUST BE IN THE SAME NAME OF THE PERSON IN WHOSE NAME T HE ORIGINAL ASSET EXISTS. IN THE PRESENT CASE SINCE THE NEW ASSE T WAS ACQUIRED IN THE NAME OF THE ASSESSEE AND A RELATIVE, AO WAS OF THE VIEW THAT ASSESSEE WAS ENTITLED FOR DEDUCTION ONLY TO THE EXTENT OF 50%. HE ACCORDINGLY RESTRICTED THE DEDUCTION U/S 54F OF THE ACT AT 50% AND THUS WORKED OUT THE TAXABLE CAPITAL GAINS AT RS.37,57,050 /-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO IN VIEW OF THE FACT TH AT ASSESSEE DID NOT FURNISH ANY EVIDENCE. WITH RESPECT TO TH E COST INCURRED FOR THE PURCHASE OF ASSET. WITH RESPECT TO T HE AOS 4 ITA NO.2762/PUN/2017 ACTION OF GRANTING DEDUCTION U/S 54 @ 50% TO ASSESSEE, LD.CIT(A) AGREED WITH THE FINDINGS OF AO AND THUS DISMISSED THE GROU NDS OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 5. IN THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE, ASSES SEE FILED A LETTER FROM CIDCO, AURANGABAD TO DEMONSTRATE THE O RIGINAL VALUE OF THE ASSET WHICH COULD BE CONSIDERED AS COST OF ACQUIS ITION. WITH RESPECT TO THE CLAIM OF DEDUCTION U/S 54F OF THE ACT, HE PLACED RELIANCE ON THE DECISIONS CITED IN THE WRITTEN SUBMISSIONS. I T IS ASSESSEES SUBMISSION THAT THE INVESTMENT IN THE NEW ASSET HAS B EEN MADE ENTIRELY BY THE ASSESSEE AND NO PART OF THE PURC HASE HAS BEEN FUNDED BY HIS SON, MR. ATUL HULSURE. IT IS FURTHER HIS SUBMIS SION THAT THE NAME OF THE ASSESSEES SON WAS ONLY INCLUDED TO AVOID ANY FUTURE LEGAL COMPILATIONS AFTER HIS DEMISE. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. I HAVE HEARD THE LD.D.R. AND PERUSED THE WRITTEN SU BMISSIONS AND MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPE CT TO THE COMPUTATION OF LONG TERM CAPITAL GAINS AND THE CLAIM OF DEDUCTION U/S 54F OF THE ACT. IT IS REVENUES CONTENT ION THAT WITH RESPECT TO COST OF ACQUISITION AND CONSTRUCTION OF THE AS SET SOLD, NO DOCUMENTS WERE FURNISHED BY THE ASSESSEE TO DEMONSTRA TE THE COST OF ACQUISITION. BEFORE ME, ASSESSEE HAS FURNISHED A LETTER FR OM CIDCO, AURANGABAD AS AN EVIDENCE FOR THE COST OF ACQU ISITION. THOUGH IT IS A FACT THAT THE AFORESAID DOCUMENT WAS NOT FURNISHED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, BUT SINCE IT HA S BEEN 5 ITA NO.2762/PUN/2017 FURNISHED NOW, I AM OF THE VIEW THAT IN THE INTEREST THE S AME NEEDS TO BE CONSIDERED WHILE COMPUTING THE CAPITAL GAINS. 7. AS FAR AS, ISSUE OF CLAIM OF DEDUCTION U/S 54F OF THE ACT IS CONCERNED, IT IS REVENUES CONTENTION THAT SINCE NEW ASS ET WAS PURCHASED BY THE ASSESSEE JOINTLY WITH HIS SON, ASSESSE E IS ENTITLED FOR DEDUCTION ONLY TO THE EXTENT OF 50%. BEFORE ME, IT IS ASSESSEES CONTENTION THAT THE ENTIRE INVESTMENT IN THE NEW HOUS E PURCHASED AT MUMBAI, FOR WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F, IS OUT OF ASSESSEES FUNDS AND NO PART OF THE PURCHASE OF NEW ASSET HAS BEEN FINANCED BY ASSESSEES SON, MR. ATUL HULSURE, WHO IS THE JOINT OWNER OF PROPERTY. IT IS FURTHER ASSESSEES CONTE NTION THAT THE NAME OF HIS SON HAS BEEN INCLUDED AS THE JOINT OWNER TO AVOID ANY FUTURE LEGAL COMPLICATIONS. THE AFORESAID CONTENTIONS OF THE ASSESSEE HAVE NOT BEEN CONTROVERTED BY REVENUE BEFOR E ME. BEFORE ME, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO DE MONSTRATE THAT THE ASSESSEE WAS NOT THE REAL OWNER OF THE NEW ASSET PURCHASED BY THE ASSESSEE. I FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. RAVINDER KUMAR ARORA REPORTED IN (2012) 342 ITR 38 (DEL) HAS HELD THAT WHEN THE INVESTMENTS IN THE NEW HOUSE WA S MADE BY THE ASSESSEE AND FOR SAFETY REASONS, THE NAME OF HIS BR OTHER WAS INCLUDED, THERE WAS NO JUSTIFICATION IN AOS ACTION IN RESTRIC TING THE DEDUCTION TO 50% OF THE VALUE OF THE NEW PROPERTY. TH E HONBLE HIGH COURT HAS FURTHER HELD THAT SEC.54F OF THE ACT MAND ATES THAT THE HOUSE SHOULD BE PURCHASED BY THE ASSESSEE AND IT DOES NOT STIPULATE THAT THE HOUSE SHOULD BE PURCHASED IN THE NAM E OF ASSESSEE ONLY. IT FURTHER HELD THAT SEC.54F OF THE ACT IS A BENEFICIAL 6 ITA NO.2762/PUN/2017 PROVISION AND ITS OBJECTIVE IS TO PROVIDE IMPETUS TO THE H OUSE CONSTRUCTION AND SO LONG AS THE PURPOSE OF HOUSE CONST RUCTION IS ACHIEVED, HYPER-TECHNICALITY SHOULD NOT IMPEDE THE WAY OF DEDUCTION WHICH THE LEGISLATURE HAS ALLOWED. IT FURTHER HELD THAT SEC .54F OF THE ACT IS A BENEFICIAL PROVISION WHICH SHOULD BE INTERPRETED LIBER ALLY IN FAVOUR OF THE EXEMPTION / DEDUCTION TO THE TAX-PAYER AN D THE DEDUCTION SHOULD NOT BE DENIED ON HYPER-TECHNICAL GROUND . THE AFORESAID DECISION OF HONBLE DELHI HIGH COURT WAS RELIED BY MUMBAI TRIBUNAL IN THE CASE OF JITENDRA V. FARIA VS. ITO (ITA NO.6792/MUM/2016 DT.27.04.2017) WHILE DECIDING ON IDENTICAL ISSUE IN FAVOUR OF ASSESSEE. I THEREFORE FOLLOWING THE AFO RESAID DECISIONS HOLD THAT AO WAS NOT JUSTIFIED IN RESTRICTING THE DEDUCTION U/S 54F OF THE ACT TO 50%. I THEREFORE DIRECT THE AO T O GRANT THE DEDUCTION OF THE ENTIRE AMOUNT INVESTED BY THE ASSESSEE . IN PARA 6 HEREINABOVE, I HAVE HELD THAT THE COST OF ACQUISITION HAS TO BE DETERMINED ON THE BASIS OF CIDCO LETTER SUBMITTED BEFORE ME. I THEREFORE RESTORE THE ISSUE BACK TO THE FILE OF AO AND D IRECT HIM TO DECIDE THE ISSUE AFRESH AS DIRECTED HEREINABOVE AFTER CON SIDERING THE SUBMISSIONS OF ASSESSEE AND IN ACCORDANCE WITH LAW. NEEDLE SS TO STATE THAT AO SHALL GRANT ADEQUATE OPPORTUNITY OF HEAR ING TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO FURNISH ALL THE RE QUIRED DETAILS CALLED FOR BY THE AO. I THEREFORE ALLOW THE GROUNDS OF AP PEAL OF ASSESSEE FOR STATISTICAL PURPOSES. 7 ITA NO.2762/PUN/2017 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 21 ST DAY OF DECEMBER, 2018. SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 21 ST DECEMBER, 2018. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, AURANGABAD. . PR. CIT-1, AURANGABAD. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.