Sh. Ricky Chaudhary, New Delhi V. Addl. CIT, Karnal

ITA 2941/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7763 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 24-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIMA BERNWAL
• Section: 54B; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I, NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER I.T.A. NOS.2941/DEL/2012 (ASSESSMENT YEAR 2007-08) SHRI RICKY CHAUDHARY, VS. ADDL. CIT, C/O M/S. K.R. THEATRE, KARNAL RANGE, MEERUT ROAD, KARNAL KARNAL GIR / PAN :ALQPR2328K I.T.A.NO. 2942/DEL/2012 (ASSESSMENT YEAR 2007-08) SHRI SUNNY CHAUDHARY, VS. ADDL. CIT, C/O M/S. RRA TEXINDIA, KARNAL RANGE, D-28, SOUTH EXTENSION, PART I, KARNAL NEW DELHI PAN: AGNPC1017E I.T.A.NO. 2943/DEL/2012 (ASSESSMENT YEAR 2007-08) SHRI KRISHNA CHAUDHARY, VS. ADDL. CIT, C/O M/S. RRA TAXINDIA, KARNAL RANGE, D-28, SOUTH EXTENSION, PART I, KARNAL NEW DELHI PAN: AWDPK2903P (APPELLANT) (RESPONDENT) APPELLANT BY :SHRI SOMIL AGARWAL,ADV. SHRI TARUN KUMAR, ADV. RESPONDENT BY :MS. ANIMA BERNWAL, SR. DR 2 I.T.A.NOS.2941-2943/DEL/2012 DATE OF HEARING: 24.05.2016 DATE OF PRONOUNCEMENT: 25.05.2016 ORDER PER R. S. SYAL, AM: THESE THREE APPEALS BY DIFFERENT BUT CONNECTED ASS ESSEES ARISE OUT OF A COMMON ORDER PASSED BY THE LD. CIT(A ) KARNAL ON 14.03.2012 IN RELATION TO THE ASSESSMENT YEAR 20 07-08. SINCE ALL THESE APPEALS ARE BASED ON IDENTICAL FACT S AND COMMON GROUNDS OF APPEALS, WE ARE THEREFORE PROCEED ING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY ISSUE RAISED IN ALL THESE APPEALS IS AGAINST DENIAL OF DEDUCTION U/S 54F OF THE INCOME-TAX ACT, 1961 (H EREINAFTER ALSO CALLED `THE ACT). FOR THE SAKE OF CONVENIENC E, WE ARE ESPOUSING THE CASE OF SHRI RICKY CHAUDHARY FOR CONS IDERATION. FACTS OF THE CASE ARE THAT THE ASSESSEE ALONG WITH CERTAIN OTHER CO-OWNERS SOLD FOUR PROPERTIES. THE TOTAL AMOUNT O F CAPITAL GAINS WAS COMPUTED AT RS.2.75 CRORES. INVESTMENT O F RS.2.55 CRORES WAS MADE WITHIN ONE YEAR FROM THE DATE OF SA LE, FOR WHICH DEDUCTION WAS CLAIMED U/S 54B, AND THE SAME W AS ALLOWED BY THE ASSESSING OFFICER. A FURTHER SUM OF RS.18,91,250/- WAS INVESTED BY THE ASSESSEE ON 06.0 5.2008 AS HIS SHARE FOR THE PURCHASE OF RESIDENTIAL PROPERTY. THE ASSESSEE ALSO INVESTED A STILL FURTHER SUM OF RS.11,18,175/- ON 3 I.T.A.NOS.2941-2943/DEL/2012 23.06.2008 AS HIS SHARE IN RESIDENTIAL PROPERTY. D EDUCTION WAS CLAIMED U/S 54F IN RESPECT OF BOTH THE INVESTME NTS. THE ASSESSING OFFICER, APPLYING THE PROVISIONS OF SECTI ON 54F, PERMITTED THE DEDUCTION ONLY IN RESPECT OF ONE RESI DENTIAL HOUSE. HE, THEREFORE, RESTRICTED THE DEDUCTION U/S 54F IN RESPECT OF INVESTMENT MADE TO THE TUNE OF RS.18,91, 250/-. THE REMAINING AMOUNT OF RS.11,18,175/- WAS NOT CONSIDER ED FOR THE PURPOSE OF DEDUCTION U/S 54F OF THE ACT. 3. THE LD. CIT(A), RELYING UPON THE ORDER PASSED B Y HIM IN THE CASE OF ANOTHER CO-OWNER OF THE SAME PROPERTIES , NAMELY, SHRI RAJNISH CHAUDHARY, UPHELD THE ASSESSING OFFIC ERS STAND IN NOT GRANTING DEDUCTION U/S 54F IN RESPECT OF INV ESTMENT MADE IN THE SECOND RESIDENTIAL HOUSE. THE ASSESSEE IS AGGRIEVED AGAINST THE DENIAL OF DEDUCTION U/S 54F T O THIS EXTENT. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. IT EMERGES THA T THERE WERE AT LEAST FIVE CO-OWNERS, INCLUDING THE ASSESSEE, WH O TRANSFERRED THE PROPERTIES RESULTING INTO THE CAPIT AL GAINS, WHICH BECAME SUBJECT MATTER OF DEDUCTION U/S 54B AN D 54F OF THE ACT. THE AO DENIED DEDUCTION U/S 54F IN ALL SU CH CASES IN RESPECT OF INVESTMENT MADE IN THE SECOND PROPERTY. CASES OF TWO SUCH CO-OWNERS, NAMELY, SHRI RAJNISH CHAUDHAR Y AND SHRI RAMNIK CHAUDNARY CAME UP FOR CONSIDERATION BEF ORE THE TRIBUNAL. VIDE ITS ORDER DATED 30.10.2014 IN I.T.A . NO. 2565 4 I.T.A.NOS.2941-2943/DEL/2012 AND 2566/DEL/2012, THE TRIBUNAL HAS UPHELD THE DENI AL OF DEDUCTION U/S 54F IN THESE CASES BY RELYING UPON TH E JUDGEMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN T HE CASE OF PAWAN ARYA VS CIT (2011) 237 CTR 210 (P&H). THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD IN THIS CASE THAT THE ASSESSEE CANNOT CLAIM DEDUCTION U/S 54, THE RELEVA NT PART OF WHICH IS ADMITTEDLY IN PARI MATERIA WITH SECTION 54F, IN RESPECT OF TWO INDEPENDENT RESIDENTIAL HOUSES SITUA TED AT DIFFERENT LOCATIONS. IN VIEW OF THE JUDGMENT OF H ON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PAWAN ARYA (SUPRA) AND THE ORDER PASSED BY THE TRIBUNAL IN THE HANDS O F OTHER TWO CO-OWNERS, WE DO NOT SEE ANY REASON TO DISTURB THE FINDINGS GIVEN BY LD. CIT(A) IN THIS REGARD. 5. THE LD. A.R. INVITED OUR ATTENTION TOWARDS AMEND MENT MADE TO SECTION 54F(1) BY THE FINANCE (NO.2) ACT 2 014 W.E.F. 01.04.2015 SUBSTITUTING THE WORD CONSTRUCT, A RESI DENTIAL HOUSE WITH CONSTRUCT ONE RESIDENTIAL HOUSE IN IND IA. IN THE LIGHT OF THIS AMENDMENT, THE LD. A.R. ARGUED THAT T HE WORD A SHOULD BE READ AS PLURAL IN THE PERIOD ANTERIOR TO SUCH AMENDMENT AND DEDUCTION U/S 54F BE ACCORDINGLY ALLO WED IN RESPECT OF TWO PROPERTIES. THIS WAS COUNTERED BY THE LD. D.R., WHO, WHILE REFERRING TO THE RELEVANT PART OF FINANCE BILL (NO.2) OF 2014, SUBMITTED THAT SECTION 54F HAS BEEN AMENDED SO AS TO CLARIFY THAT DEDUCTION UNDER THIS SECTION IS AVAILABLE 5 I.T.A.NOS.2941-2943/DEL/2012 ONLY IN RESPECT OF ONE HOUSE PROPERTY. THE SAME BE ING CLARIFICATORY, THE LD. DR CONTENDED, IS RETROSPECTI VE. 6. AT THIS JUNCTURE WE WANT TO CLARIFY THAT IT I S NOT ESSENTIAL FOR US TO DECIDE IF THE AMENDMENT IS RETROSPECTIVE OR PROSPECTIVE IN VIEW OF THE FACT THAT THE HON'BLE JU RISDICTIONAL HIGH COURT, WHILE INTERPRETING THE PROVISION, HAS HELD THAT DEDUCTION CAN BE ALLOWED IN RESPECT OF ONLY ONE PR OPERTY. IN VIEW OF THE THIS JUDGMENT, IT IS NOT POSSIBLE FOR U S TO ACCEPT THE CONTENTION THAT THE DEDUCTION BE ALLOWED IN RESPECT OF TWO INDEPENDENT RESIDENTIAL HOUSES SITUATED AT DIFFEREN T LOCATIONS. WE, ERGO, LEAVE THE QUESTION OPEN AS TO WHETHER THE AMENDMENT MADE BY FINANCE (NO.2) ACT 2014 W.E.F. 01.04.2015 IS RETROSPECTIVE OR PROSPECTIVE. 7. RELIANCE OF THE LD. A.R. ON CERTAIN DECISIONS INTERPRETING SECTION 54F IN A MANNER ALLOWING DEDUCTION IN RESPE CT OF MORE THAN ONE RESIDENTIAL HOUSES, IS OF NO CONSEQUE NCE BECAUSE OF THE AVAILABILITY OF THE DIRECT JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT AVAILABLE ON THE POINT. THERE IS HARDLY ANY NEED TO ACCENTUATE THAT THE JUD GMENT OF HON'BLE JURISDICTIONAL HIGH COURT IS BINDING ON ALL THE AUTHORITIES WORKING UNDER ITS JURISDICTION AND THE SAME SHOULD BE FOLLOWED UNLESS IT IS REVERSED BY THE HON'BLE SU PREME COURT. IN VIEW OF THE FORGOING REASONS, WE ARE SAT ISFIED THAT THE LD. CIT(A) WAS JUSTIFIED IN REJECTING THE ASSE SSEES CLAIM 6 I.T.A.NOS.2941-2943/DEL/2012 OF DEDUCTION U/S 54F OF THE ACT IN RESPECT OF THE S ECOND HOUSE PROPERTY. 8. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS A ND CIRCUMSTANCES OF OTHER TWO APPEALS ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF RICKY CHAUDHARY DISCUSSED ABOVE . FOLLOWING THE VIEW TAKEN HEREINABOVE IN THE CASE OF RICKY CHAUDHARY, WE UPHOLD THE DECISION OF THE LD. CIT(A) . 9. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY, 2016. SD./- SD./- (C. M. GARG) (R. S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 25.05.2016 SP. COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI) 7 I.T.A.NOS.2941-2943/DEL/2012 S.NO. DETAILS DATE INITIALS DES IGNATION 1 DRAFT DICTATED ON 24/5 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 24/5/16 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 25/5/16 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 25/5 SR. PS/PS 7 FILE SENT TO BENCH CLERK 25/5 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER *