VANITA H.ALIMCANDANI, MUMBAI V. ITO 19(2)(2), MUMBAI

ITA 3172/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88261 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 25-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACCHIDANAND DUBEY
• Assessee Lawyers: K K LAKSHMINARAYANAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI , ,, , BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. : 3172/MUM/2013 (ASSESSMENT YEAR: 2005-06) MRS. VINITA H. ALIMCANDANI, C/O. M R CHAMBERS, M C ROAD, ANDHERI (EAST), MUMBAI -400 093 .: PAN: AGYPA 7278 C VS ITO -19(2)(2), PIRAMAL CHAMBER, MUMBAI -400 012 (APPELLANT) !' (RESPONDENT) APPELLANT BY : SHRI K K LAKSHMINARAYANAN RESPONDENT BY : SHRI SACCHIDANAND DUBEY #$ % &' /DATE OF HEARING : 12-01-2015 ()* % &' / DATE OF PRONOUNCEMENT : 13-02-2015 ORDER , , , , PER VIVEK VARMA, JM: INSTANT APPEAL IS FIELD BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-30, MUMBAI, DATED 19.03.2013, WHEREIN THE FOLLOWING REVISED GROUNDS HAVE BEEN RAISED: 1. THE ORDER PASSED BY THE LEARNED CIT (A) IS BAD IN LAW. 2. THE ASSESSING OFFICER ERRED IN HOLDING THAT THE SUM OF RS. 2,58,35,652/- RECEIVED BY THE APPELLANT ON RETIREMENT FROM THE FIRM, WHICH WAS NOT DISSOLVED, IS INCOME FROM BUSINESS. THE LEARNED CIT (A) ERRED IN HOLDING THAT THE SAID SUM OF RS. 2,58,35,652/- IS T AXABLE U/S.45(4). 3. THE LEARNED CIT (A) FAILED TO NOTE OF FOLLOWING DECISIONS. I) SMT. PARU DAVE 110 ITD 410 MUM THAT REVALUATION OF ITA 3172/M/2013 MRS. VINITA H. ALIMCANDANI 2 ASSET OF PARTNERSHIP FIRM AND CREDITING THE SAME TO PARTNER'S A/C. DOES NOT ENTAIL TRANSFER. II) PRASHANT SHAH 324 ITR 154 BOM - THAT ANY AMOUNT PAID TO PARTNERS AS FINAL SETTLEMENT OF DUES ON RET IREMENT DOES NOT INVOLVE TAX LIABILITIES. III) CIT V. KUNNAMKULAM MILL BOARD 257 ITR 544 KER. RETIREMENT OF PARTNER TAKING ENHANCED AMOUNT ON A/C . OF REVALUATION DOES NOT ATTRACT 45(4). IV) ITO V. A R ASHER ITA NO.526/M/9 RETIREMENT OF PARTNER TAKING ENHANCED AMOUNT ON A/C . OF REVALUATION DOES NOT ATTRACT 45(4). 4. LEARNED CIT (A) ERRED IN NOT GRANTING RELIEF U/S .54F ON THE INVESTMENT MADE IN TWO ADJACENT FLATS WITHIN SPECIFIED TIME. 5. LEARNED CIT (A) ERRED IN STATING THAT APPELLANT WAS OWNING ALREADY A FLAT BEFORE CLAIMING DEDUCTION U/S .54F WHEREAS APPELLANT WAS NOT OWNING ANY SUCH FLAT. 6. IT IS PRAYED THAT THE AMOUNT RECEIVED ON RETIREM ENT FROM THE FIRM MAY BE HELD AS NON TAXABLE. 7. WITHOUT PREJUDICE TO THAT, APPELLANT MAY BE GRAN TED BENEFIT U/S. 54F. 8. THE APPELLANT CRAVES LIBERTY TO ADD, AMEND, ALTE R, AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL . 2. THE ASSESSEE HAS ALSO TAKEN ADDITIONAL GROUND OF APP EAL, WHICH IS AS UNDER: WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, IT IS PRAYED THAT APPELLANT MAY PLEASE BE GRANTED THE BEN EFIT OF SEC. 54-F TO THE EXTENT OF INVESTMENT MADE IN TH E PURCHASE OF RESIDENCE. 3. THE FACTS ARE THAT THE ASSESSEE WAS PARTNER IN M/S B ALIM BUILDERS. IN THE CURRENT YEAR, THE ASSESSEE RETIRED FROM THE FIRM AND RECEIVED A SUBSTANTIAL SUM OF MONEY. ORIGINALLY, THE ASSESSEE DID NOT FILE HER ROI BUT AS A CONSEQUENCE OF NO TICE U/S 148, SHE FILED THE RETURN, BUT DID NOT OFFER ANY TAX ON THE SUM RECEIVED BY HER ON RETIREMENT. IN THE ASSESSMENT PROCE EDINGS, THE ASSESSEE CONTENDED THAT THE PROVISIONS OF SECTION 45(4) DOES NOT APPLY ON HER AND THEREFORE NO TAX WAS PAID, RELYING ON THE DECISION OF CIT VS LINGMALLU RAGHUKUMAR R, REPORTED IN 247 ITR 801(SC). THE AO DISTINGUISHED THE DECISION AND PLACING RELIANCE ON THE DECISION OF ALA FIRM VS CIT, REPORTED IN 189 ITR 2 85 (SC). THE AO HELD THAT IN THE CASE OF THE ASSESSEE, THE VA LUATION WAS DONE JUST PRIOR TO RETIREMENT BUT IN THE CASE OF AL A FIRM, THE ACCOUNT HAVE TO BE MADE UPTO THE DATE OF DISSOLUTION. ITA 3172/M/2013 MRS. VINITA H. ALIMCANDANI 3 4. IN APPEAL BEFORE THE CIT(A), THE ASSESSEE REITERATED H ER SUBMISSIONS, AS MADE BEFORE THE AO, WHICH WERE REJECTED. T HE ASSESSEE ALSO POINTED OUT THAT THE ASSESSEE HAD IN FACT INVESTED THE RETIREMENT PROCEEDS IN THE PURCHASE OF 2 ADJACENT RESIDENTIAL FLATS AND CLAIMED DEDUCTION U/S 54F, WHICH WAS ALSO DENIED B Y THE AO. 5. THE CIT(A) SUSTAINED THE OBSERVATIONS OF THE AO. 6. AGAINST THIS ORDER, THE ASSESSEE IS IN APPEAL BEFORE TH E ITAT. 7. BEFORE US, THE AR REITERATED THE SUBMISSIONS AND IN TH E GOA FILED BEFORE US POINTED OUT THAT THE REVENUE AUTHORIT IES ERRED IN NOT CONSIDERING THE DECISIONS, WHICH WERE PLACED B EFORE THEM. THE AR ALSO SUBMITTED THAT THE REVENUE AUTHORITIES DID NOT ALLOW THE BENEFIT OF SECTION 54F. 8. THE AR, THEREFORE, PLEADED THAT SINCE THE REVENUE AUTHORITIES DID NOT TAKE INTO CONSIDERATION VARIOUS ARGUME NTS, THE CASE BE RESTORED FOR FRESH ADJUDICATION. 9. THE DR RELIED AND SUPPORTED THE ORDERS OF THE REVEN UE AUTHORITIES. 10. WE HAVE HEARD THE ARGUMENTS AND HAVE PURSUED TH E ORDERS OF THE REVENUE AUTHORITIES AND THE CASE LAWS CITE D. IT IS A FACT THAT THE CIT(A) DID NOT TAKE INTO CONSIDERATION THE V ARIOUS CASE LAWS, WHICH ACCORDING TO THE AR WERE RELEVANT TO TH E APPEAL. IN THIS CIRCUMSTANCES, WE AGREE WITH THE AR THAT THE CASE BE RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJU DICATION ON BOTH THE ISSUES, I.E. TAXABILITY OF RETIREMENT RECEIPTS AND DEDUCTION U/S 54F. IT IS NEEDLESS TO MENTION THAT THE CI T(A) SHALL PROVIDE REASONABLE AND ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PRESENT HER CASE. ITA 3172/M/2013 MRS. VINITA H. ALIMCANDANI 4 11. ALL THE GOA INCLUSIVE OF ADDITIONAL GROUND VIDE LETTER DATED 17 TH APRIL, 2014, ARE THEREFORE RESTORED TO THE FILE OF THE CIT(A). 12. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH FEBRUARY, 2015. SD/- SD/- ( ) ( ) (R C SHARMA) ( VIVEK VARMA ) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 13 TH FEBRUARY, 2015 !&/ COPY TO:- 1) / THE APPELLANT. 2) !' / THE RESPONDENT. 3) THE CIT(A) -30, MUMBAI. 4) THE CIT-CITY-19, MUMBAI/CIT CITY-19, MUMBAI. 5) .$/0 !&# , , / THE D.R. F BENCH, MUMBAI. 6) 012 3 COPY TO GUARD FILE. 45# / BY ORDER / / TRUE COPY / / 6 / 7 8 , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN, SR.PS