Lucy Luke,on behalf of late T.M.Luke, Thodupuzha V. ITo, Thodupuzha

ITA 301/COCH/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0879 (ITAT-COCHIN)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 24-01-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 06-05-2010
• Court: TRIBUNAL
• Department Lawyers: DR BABU JOPSEPHSR
• Assessee Lawyers: V SREEKUMAR
• Keywords: Difference of opinion
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.301/COCH/2010 ASSESSMENT YEAR:2004-05 SMT. LUCY LUKE, ON BEHALF OF LATE T.M.LUKE, THUKKANKOTTIL HOUSE, MUTTOM, THODUPUZHA. PA NO.ACNPL 7266J VS. THE INCOME - TAX OFFICER, WARD-1, THODUPUZHA. (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI V. SREEKUMAR RESPONDENT BY DR. BABU JOPSEPH,SR.DR O R D E R PER N.VIJAYAKUMARAN,J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 10-03-2010 OF THE LD. COMMISSIONER OF I NCOME- TAX, KOCHI, PASSED U/S.263 OF THE I.T.ACT,1961. TH E ASSESSMENT YEAR INVOLVED IS 2004-05. THE ASSESSMEN T U/S.143(3) R.W.S.147 WAS FRAMED BY THE ASSESSING O FFICER ON 26-12-2007. HOWEVER, THE LD. COMMISSIONER OF I NCOME- TAX WAS OF THE VIEW THAT AFTER HAVING EXAMINED THE RECORDS OF THE CASE SHE NOTICED THAT THE ORDER PASSED BY TH E ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE ON THE FOLLOWING REASON: ITA NO. 301/COCH/2010 2 AS PER A CERTIFICATE DATED 04-12-2007 ISSUED BY T HE SECRETARY, MUTTOM GRAMMA PANCHAYATH THE BUILDING WHICH WAS CLAIMED TO BE CONSTRUCTED BY LATE SHRI T. M. LUKE FOR AVAILING THE BENEFIT UNDER SECTION 54F IS, IN FACT, OWNED BY HIS WIFE SMT. LUCY LUKE. AS SUCH, THE DEDUCTION ALLOWED UNDER SECTION 54F AMOUNTING TO 15,07,496 IN COMPUTING THE LONG TERM CAPITAL GAINS IN THE CASE OF LATE T.M.LUKE IS NOT IN ORDER. 2. IN RESPONSE TO NOTICE DATED 22-2-2010, THE ASSESSEE SUBMITTED HER REPRESENTATION THROUGH THE L D. AUTHORIZED REPRESENTATIVE AND THE LD. COMMISSIONER WAS OF THE VIEW THAT THERE IS NOTHING ON RECORD TO SHOW THAT THE RESIDENTIAL HOUSE WAS OWNED BY THE ASSESSEE I.E . LATE SHRI T.M. LUKE AT ANY TIME. THE PRESENT ASSE SSEE IS THE LEGAL REPRESENTATIVE OF THE DECEASED T.M. LU KE. THEREFORE, THE LD. COMMISSIONER WAS OF THE VIEW THA T SUB SECTION 54F CAN BE EXEMPTED AND BECOME ADMISSIBLE ONLY WHERE THE ASSESSEE HAS PURCHASED/CONSTRUCTED THE NEW ASSET. 3. THE LD. COUNSEL CONTENDED BEFORE US THAT THE ORDER OF THE LD. COMMISSIONER PASSED U/S.263 IS ERRONEOUS AS THE ASSESSMENT ITSELF IS FRAMED AFTER REOPENING THE SAME U/S.143(3) R.W.S.147. THE ITA NO. 301/COCH/2010 3 PROPERTY SOLD HAS BEEN ACQUIRED BY THE ASSESSEE BY MEANS OF VARIOUS DEEDS. THE ORIGINAL ASSESSEE SHR I T.M. LUKE EXPIRED ON 14-3-2004. THE LEGAL REPRESENTATIVES ARE SMT. LUCY LUKE, MATHEW T. LUKE, JIM T. LUKE AND PRIYANKA T.LUKE. THE ASSESSING OF FICER AFTER GOING THROUGH THE RECORDS FOUND THAT THIS CLA IM IS ALLOWABLE. THEREFORE, HE ACCEPTED THE CLAIM AND F INALLY THE REASSESSMENT WAS FRAMED. THEREFORE, THE LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICER HAS TA KEN ONE OF THE POSSIBLE VIEWS AND THE ORDER IS NOT ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. 243 ITR 83(SC). THE LD. COUNSEL FURTHER SUBMITTED THAT PASSING OF A NON- SPEAKING ORDER BY THE ASSESSING OFFICER IS NOT ERRO REOUS AND HE PLACED RELIANCE ON THE DECISION OF THE HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS.GABRIEL INDIA LTD. REPORTED IN 203 ITR 108. 4. ON THE OTHER HAND, THE LD. SR.D.R. SUBMITTED THA T THE REVISIONAL ORDER IS WITHIN THE JURISDICTION U/S .263. IT IS NOT A CASE OF DIFFERENCE OF OPINION BETWEEN THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME-TA X ITA NO. 301/COCH/2010 4 BUT A CASE THAT PROPERTY ENQUIRY WAS NOT CONDUCTED BY THE ASSESSING OFFICER. THE LD. D.R. FURTHER SUBMI TTED THAT DUTY WAS ON THE ASSESSING OFFICER TO VERIFY TH E FACTS REGARDING THE OWNERSHIP OF THE PROPERTY AND T HEN ONLY EXEMPTION U/S.54F CAN BE CONSIDERED. THEREFO RE, THE ORDER OF THE ASSESSING OFFICER DATED 26-12-2007 IS CLEARLY AN ERRONEOUS ORDER AND IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IS THE CONTENTION OF THE L D. D.R. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. IT IS A SETTLED LAW THAT FOR INVOKING THE PROVISIONS OF SECTION 263, THE ASSESSMENT ORDER SHO ULD BE ERRONEOUS AND IN SO FAR AS PREJUDICIAL TO THE IN TEREST OF THE REVENUE. THE TWIN CONDITIONS MUST BE SATIS FIED. ON EXAMINATION OF THE RECORD, THE LD. COMMISSIONER OF INCOME-TAX FORMED AN OPINION THAN THAT OF THE ASSESSING OFFICER. THEREFORE, IT IS A CLEAR CASE OF SUBSTITUTING THE OPINION OF THE LD. COMMISSIONER OF INCOME-TAX TO THAT OF THE ASSESSING OFFICER. BEFO RE US ALSO THE LD. COUNSEL FOR THE AD FURNISHED A COPY OF THE WILL EXECUTED BY MATHAI UNDER DOCUMENT NO.31/111/92, WHICH CLEARLY POSTULATES REGARDING TH E ITA NO. 301/COCH/2010 5 OWNERSHIP OF THE PROPERTY ALONG WITH OTHER CO-SHARE RS. HENCE, THE OWNERSHIP HAS BEEN ESTABLISHED AND IT I VERIFIED. FURTHER, IT IS NOT DISPUTED THAT THE A SSESSEE SHRI TM LUKE EXPIRED ON 14-3-2004. ONCE THE OWNERSHIP OF THE PROPERTY HAS BEEN ESTABLISHED, NOT HING PREVENTS THE AUTHORITIES TO GRANT EXEMPTION AS THE CLAIM OF THE ASSESSEE IS IN ACCORDANCE WITH LAW. SECT ION 54F IS THE PROVISION WHICH FALLS UNDER THE EXEMPTIO N REGARDING THE CAPITAL GAIN ON TRANSFER OF CERTAIN C APITAL ASSET NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. THE PURPOSE IS ONLY TO SHOW TH AT THE ASSESSEE IS THE OWNER OF THE ASSET, WHICH IS THE CR UX OF THE POINT WHICH CAST DOUBT ON THE MIND OF THE LD. C IT WHEREIN THE LD. CIT FOUND THAT THE PROPERTY WAS OWN ED BY THE ASSESSEE S WIFE SMT. LUCY LUKE AND CAPITAL GAIN COMPUTED AND ALLOWED AS LONG TERM CAPITAL GAIN IN T HE CASE OF TM LUKE IT HAS BEEN AMPLY PROVED VIDE LETT ER DATED 14-12-2007 ISSUED BY THE SECRETARY, MUTTOM GRAMA PANCHAYAT WHEREIN IT IS CERTIFIED THAT THE BU ILDING WAS CLAIMED TO BE CONSTRUCTED BY LATE TM LUKE. THEREFORE, THE DECEASED TK LUKE IS ENTITLED TO 54F BENEFITS. THE ASSESSING OFFICER HAS PROPERLY APPREC IATED THE FACTS AFTER DUE ENQUIRY AND INVESTIGATION AND ITA NO. 301/COCH/2010 6 NOTHING ERRONEOUS IN THE ORDER OF THE LD. ASSESSING OFFICER AND IT NEVER CAST PREJUDICIAL TO THE INTERE ST OF THE REVENUE. THEREFORE, FOLLOWING THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA -295 ITR 282 AND MALABAR INDUSTRIAL CO. LTD., WE HAVE NO HESITATION TO QUASH THE IMPUGNED ORDER DATED 10- 03- 2010 OF THE LD. CIT PASSED U/S.263 FOR THIS ASSES SMENT YEAR 2004-05 AS THE ASSESSEE HAS FURNISHED ALL THE REQUIRED DETAILS TO ESTABLISH THE OWNERSHIP OVER TH E PROPERTY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 27 TH JANUARY,2011. PM. COPY FORWARDED TO: 1. SMT. LUCY LUKE, ON BEHALF OF LATE T.M.LUKE, THUKKAN KOTTIL HOUSE, MUTTOM, THODUPUZHA. 2. THE INCOME-TAX OFFICER, WARD-1, THODUPUZHA. 3. CIT, KOCHI. 4. D.R.