Late Susan Cherian , Bangalore V. The Income Tax Officer Ward-4(2)(3), Bangalore

ITA 2818/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8638 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-06-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 11-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN SHRI MANJ
• Keywords: Capital Gains
• Section: 54F; 147; 54; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA 2818/BANG/2018 ASSESSMENT YEAR : 2006 07 LATE SUSAN CHERIAN, L/R BY MR. ABRAHAM CHERIAN, NO. 56, MUNNEKOLALA, MARTHAHALLI, BENGALURU. PAN NO : BJHPS7835L VS. THE INCOME TAX OFFICER, WARD 4(2) (3), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI. V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI. MANJEET SINGH, ADDL. CIT DATE OF HEARING : 18-02-2020 DATE OF PRONOUNCEMENT : 19-02-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED 20/09/2018 PASSED BY LD. CIT(A)-9, BANGALORE FOR ASSESSMENT YEAR 2006-07 ON FOLLOWING GROUNDS OF APP EAL: PAGE 2 OF 7 ITA 2818/BANG/2017 A. Y: 2006 - 07 PAGE 3 OF 7 ITA 2818/BANG/2017 A. Y: 2006 - 07 BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS AN INDIVIDUAL REPRESENTED BY LEGAL REPRESENTATIVE. SHE DID NOT FILE HER RETURN OF INCO ME FOR YEAR UNDER CONSIDERATION. LD.AO OBSERVED THAT, ASSESSEE ENTERED INTO JOINT DEVELOPMENT AGREEMENT ON 23/05/2005 WITH M/S. VENUS HOMES, FOR DEVELOPMENT OF LAND, BY TRANSFERRING 1 A CRE 0.6 GUNTAS OF VACANT LAND SITUATED AT SY NO. 20/1, MUNN EKOLLA VILLAGE, VARTHUR HOBLI, BANGALORE. IN RETURN, ASS ESSEE RECEIVED 10815 SFT . OF SUPER BUILT UP AREA OF VILLA AND 14407 SFT . OF SUPER BUILT UP AREA FROM THE APARTMENT. LD.AO WAS OF T HE OPINION THAT, ASSESSEE DID NOT REFLECT ALL THESE DETAILS IN HER RETURN OF INCOME AND THEREFORE, THERE WAS ESCAPEMENT OF INCOM E CHARGEABLE TO TAX UNDER THE HEAD CAPITAL GAINS. SU BSEQUENTLY, NOTICE UNDER SECTION 147 WAS ISSUED TO ASSESSEE. ASSESSEE, AFTER NUMBER OF OPPORTUNITIES, FILED RETURN OF INCOME FOR YEAR AND UNDER CONSIDERATION ON 24/03/2014, FOLLOWED BY WHIC H, NOTICE UNDER SECTION 143 (2) OF THE ACT WAS ISSUED. AS T HERE WAS NO RESPONSE, LD.AO PASSED ORDER UNDER SECTION 144 OF T HE ACT, BY COMPUTING LONG TERM CAPITAL GAINS IN THE HANDS OF A SSESSEE AT RS.2,38,93,444/-. LD.AO ALSO DENIED BENEFIT UNDER SECTION 54F OF THE ACT CLAIMED BY ASSESSEE BY HOLDING THAT ASSE SSEE HAD MORE THAN ONE RESIDENTIAL HOUSE AS ON THE DATE OF TRANSF ER. PAGE 4 OF 7 ITA 2818/BANG/2017 A. Y: 2006 - 07 3. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE PREFERRED APP EAL BEFORE LD. CIT(A), WHEREIN, ASSESSEE RELIED UPON DE CISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF ANAND BASAPPA REPORTED IN 309 ITR 329 AND K. G. RUKMINIAMMA REPORTED IN 331 ITR 221 . IT WAS SUBMITTED THAT, ON IDENTICAL FACTS OF CASE O F ASSESSEE CLAIM UNDER SECTION 54 WAS GRANTED WHICH IS PARI MATERIA WITH SECTION 54F OF THE ACT. 4. LD. CIT(A) WAS OF THE OPINION THAT, ASSESSEE CANNOT SEEK ANY BENEFIT DUE TO DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN CASE OF SUSEELA M ZAVERI REPORTED IN 110 ITD 327. LD. CIT (A) WAS OF THE VIEW THAT, RESIDENTIAL HOUSES RECEIVED BY ASSESSEE UNDER JDA CANNOT BE TERMED TO CONSTITUTE A RESIDENTIAL HOUSE FOR PURPOSE OF 54F OF THE ACT. AGGRIEVED BY OBSERVATIONS OF LD. CIT(A) ASSESSEE IS IN APPEAL BEFORE US NOW. AT THE OUTSET, LD.AR SUBMITTED THAT GROUND NO.1 IS GENERAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATIO N. HE SUBMITTED THAT, GROUND NO.2-3 ARE NOT PRESSED AT THE INSTRUCTIONS OF ASSESSEE. ACCORDINGLY, THESE GROUNDS ARE DISMISSED AS NOT PRE SSED. LD.AR ARGUED ON GROUND NO.6 BEING THE CLAIM DENIED UNDER SECTION 54F. HE PLACED RELIANCE UPON: DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF ANAND BASAPPA REPORTED IN 309 ITR 329 ; DECISION OF HONBLE MADRAS HIGH COURT IN CASE OF CIT VS SMT. V. R. KARPAGAM IN TAX CASE (APPEALS) NO. 301 OF 2014 DATED 18/08/2014 , PAGE 5 OF 7 ITA 2818/BANG/2017 A. Y: 2006 - 07 DECISION OF THIS TRIBUNAL IN CASE OF SMT. NETHRAVATHI IN ITA NO. 2630/BANG/2017 DATED 25/04/2018; LD. AR SUBMITTED THAT, PRIOR TO AMENDMENT, SECTION 54F WAS LIBERALLY CONSTRUCT A RESIDENTIAL HOUSE TO BE INT ERPRETED AS APPLYING TO EACH AND EVERY ONE OF RESIDENTIAL HOUSE S AND VILLAS RECEIVED BY ASSESSEE. HE PLACED RELIANCE ON DECISI ONS RELIED UPON BY HIM. ON THE CONTRARY, LD. SR. DR PLACED RELIANCE UPON OR DERS PASSED BY AUTHORITIES BELOW. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN THE BASIS OF RECORDS PLACED BEFORE US. 5. AS PER JDA REGISTERED ON 23/05/2005, ASSESSEE RECEI VED 35% OF TOTAL BUILT UP AREA, I.E, 35% OF APARTMENTS CONSTRUCTED ALONG WITH 35% OF CAR PARKING AND 35% OF TERRACE AN D GARDEN RIGHTS EARMARKED FOR PRIVATE USE AS AGAINST COMMON USE IN CONSIDERATION FOR TRANSFERRING 65% OF UNDIVIDED INT EREST. ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54F ON THE VALUE OF THE 35% OF CONSTRUCTED AREA WHICH WAS DENIED BY LD. AO AND CONFIRMED BY LD. CIT(A). BEFORE US ASSESSEE URGES THAT, SHE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F ON THE 35% OF CONSTRUCTED AREA RECEIVED IN VIEW OF THE LAND SHE H AD PARTED WITH. 6. IT IS OBSERVED THAT IN DECISIONS RELIED UPON BY LD. AR REPRODUCED HEREINABOVE, HONBLE MADRAS HIGH COURT , HONBLE KARNATAKA HIGH COURT HAS CATEGORICALLY HELD THAT AMENDMENT TO SECTION 54F WITH REGARD TO A BY FINANCE (NO.2) AC T, 2014 W.E.F. 01/04/2015 WITHDRAWING DEDUCTION FOR MORE THAN ONE FLAT (RESIDENTIAL HOUSE). COURTS HAVE CONSISTENTLY HELD THAT POST PAGE 6 OF 7 ITA 2818/BANG/2017 A. Y: 2006 - 07 AMENDMENT BENEFIT OF SECTION 54F WILL BE APPLICABLE ONLY TO ONE RESIDENTIAL HOUSE IN INDIA WHEREAS PRIOR TO THE AME NDMENT RESIDENTIAL HOUSE WOULD INCLUDE MULTIPLE RESIDENTIA L HOUSE/UNITS. 7. IN VIEW OF CONSISTENT VIEW TAKEN BY JURISDICTIONAL HIGH COURT, AS WELL AS OTHER HIGH COURTS, WE ARE OF THE OPINION THAT ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 54F OF THE ACT IN RESPECT OF 35% OF CONSTRUCTED PROPERTY RECEIVED BY HER. ACCORDINGLY, THIS GROUND RAISED BY ASSESSEE STANDS ALLOWED. GROUND NOS. 4-5 , NOW BECOMES ACADEMIC IN NATURE AND THEREFORE DO NOT REQUIRE ADJUDICATION. GROUND NO.7 IS CONSEQUENTIAL AND GROUND NO.8 IS GENERAL IN NATURE. IN THE RESULT, APPEAL FILED BY ASSESSEE STANDS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH FEBRUARY, 2020. SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 19 TH FEBRUARY, 2020. /MK/ PAGE 7 OF 7 ITA 2818/BANG/2017 A. Y: 2006 - 07 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL. BANGALORE.