ITO 16(2)(2), MUMBAI V. AAKANKSHA R. SHAH, MUMBAI

ITA 318/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3790 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBE
• Assessee Lawyers: AMRIT PORWAL; SHRAD PATEL
• Section: 54F; 142(1); 54

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, ( AM ) ./ I.T.A. NO . 318 / MUM/20 1 4 ( / ASSESSMENT YEAR : 200 9 - 10 ) INCOME TAX OFFICER , 16( 2 ) (2) , MATRU MANDIR,TARDEO ROAD, MUMBAI - 400007 / VS. SMT AAKANKSHA R SHAH, A/105, ADINATH APARTMENTS, 281, TARDEO ROAD, OPP MATRU MANDIR , TARDERO ROAD, MUMBAI - 400007 ( / APPELLANT ) .. ( / RESPON DENT ) ./ ./PAN/GIR NO. : AVFPS3204E / APPELLANT BY: SHRI SACHCHIDANAND DUBE / RESPONDENT BY S/ SHRI SHRAD PATEL AND AMRIT PORWAL / DATE OF HEARING : 2 7 .7. 201 6 / DATE OF PRONOUNCEMENT : 10. 08. 2016 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) - 27 , MUMBAI D A T ED 2 8.1 0 . 201 3 PERTAINING TO A.Y. 200 9 - 10 . 2. ONLY ISSUE RAISED IN THE GROUNDS OF APPEAL IS AGAINST ALLOWING THE DEDUCTION U/S 54 OF THE INCOME TAX ACT , 1961 ( HEREINAFTER REFERRED TO AS THE ACT) BY THE LD. CIT(A) WHICH WAS DENIED BY THE AO ON THE GROUND THAT TH E ASSESSEE HAS NOT COMPLIED WITH THE MANDATORY PROVISIONS OF SECTION 45, 54F ITA NO . 318 / M/1 4 2 OF THE ACT AS THE ASSESSEE FAILED TO OBTAIN POSSESSION IN THE NEW FLAT WITHIN THREE YEARS. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED E - RETURN ON 30.7.2009, DECLARI NG TOTAL INCOME AT RS.8,01,588 / - , WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, SCRUTINY PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE AND STATUTORY NOTICES UNDER SECTION 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS (LTCG) OF RS.1,59,79,878/ - WHICH CLAIMED EXEMPT U/S 54F OF THE ACT AND ACCORDINGLY, THE AO VIDE LETTER DATED 30.11.2011 CALLED UPON THE ASSESSEE TO F URNISH A COPY OF OCCUPATION CERTIFICATE AND POSSESSION LETTER FROM THE BUILDER IN RESPECT OF DEDUCTION CLAIMED U/S 54F OF THE ACT . THE ASSESSEE VIDE LETTER DATED 08.12.2011 SUBMITTED THAT SHE HA S INVESTED THE ENTIRE AMOUNT OF CAPITAL GAINS ON THE PURCHAS E OF PROPERTY WHICH WAS UNDER CONSTRUCTION AND NOT COMPLETED BY THE BUILDER AND NO POSSESSION LETTER WAS GIVEN FOR THAT. IT WAS FURTHER SUBMITTED BY THE ASSESSEE THAT IN ORDER TO AVAIL THE BENEFIT OF SECTION 54F, IT WOULD BE SUFFICIENT IF THE ASSESSEE HA S INVESTED THE ENTIRE AMOUNT OF CAPITAL GAINS IN THE RESIDENTIAL / HOUSE AND ACCORDINGLY REQUESTED THE AO TO ALLOW THE BENEFIT U/S 54F BY RELYING ON THE DECISION IN THE CASE OF SASHI VARMA V/S CIT (1997) 224 ITR 106) (MP), CIT V/S R C SOOD (2000) 108 T AXMANN 227 (DEL ) AND CIT V/S SARDARMAL KOTHARI. THE AO, HOWEVER, NO T CONVINCED WITH THE REPLY OF THE ASSESSEE BROUGHT THE LONG TERM CAPITAL GAIN OF RS.1,59,79,878/ - TO TAX BY REJECTING THE CLAIM OF ITA NO . 318 / M/1 4 3 EXEMPTION MADE BY THE ASSESSEE U/S 54F OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT COMPLIED WITH CONDITIONS AS LAID DOWN IN THE SECTION 54F OF THE ACT BY OBSERVING THAT THE ASSESSEE HAS NEITHER PURCHASED NOR CONSTRUCTED ANY RESIDENTIAL HOUSE WITH A TIME FRAME AS SPECIFIED IN THE SAID SECTION AN D THUS NOT COMPLIED WITH THE MANDATORY REQUIREMENT S OF SECTION 54F AND THUS COMPLETED THE ASSESSMENT AT AN INCOME OF RS.1,67,81,470/ - .AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE APPEALED BEFORE THE LD. CIT( A ) WHO ALLOWED THE APPEAL OF THE ASSESSE E BY HOLDING THAT THE ASSESSEE HAS DULY COMPLIED WITH THE VARIOUS CONDITIONS AS LAID DOWN IN THE PROVISIONS OF SECTION 54F OF THE ACT AND THUS AS INVESTED THE ENTIRE AMOUNT OF CAPITAL GAIN IN THE PURCHASE OF FLAT AND EVEN HOLDING THAT THE PAYMENT TO TH E BUILDER TO THE TUNE OF RS.1,61,16,341/ - THE DETAILS WHERE OF PAYMENT WERE ALSO GIVEN BY THE ASSESSEE WHICH WERE INCORPORATED BY THE LD. CIT(A) IN HIS ORDER AND IS ALSO REPRODUCED BELOW FOR READY REFERENCE : - DATE RS. TO THE DEVELOPERS 7.6.2008 50 ,00,000 16.2.2009 50,00,000 16.2.2009 50,00,000 TOTAL 1,50,00,000 STAMP DUTY 17.2.2009 10,80,990 REGISTRATION FEES 17.2.2009 30,000 BANK CHARGES FOR DD 17.2.2009 3,131 COPYING FEE TO REGISTRAR 3/3/2009 2,220 TOTAL 1,61,16,341 THE APPEAL OF THE ASSESSEE WAS ALLOWED BY THE LD.CIT(A) BY RELYING ON VARIOUS DECISION AS INCORPORATED IN THE APPELLATE ORDER. ITA NO . 318 / M/1 4 4 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE PARTIES, PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BEL OW. WE FIND THAT THE ASSESSEE HAS SOLD HER PROPERTY DURING THE YEAR AND EARNED LONG TERM CAPITAL GAINS OF RS.1,59,79,878/ - WHICH WAS INVESTED IN THE PURCHASE OF NEW FLAT VIDE AGREEMENT DATED 18.2.2009 WHICH WAS YET TO BE COMPLETED AND THE POS SESSION WAS Y ET TO BE HANDED OVER TO T HE ASSESSEE . WE FIND FROM THE FACTS AVAILABLE BEFORE US THAT THE ASSESSEE HAS PAID A SUM OF RS . 1,61,16,34/ - IN TERMS OF AGREEMENT DATED 18.2.2009. WE FURTHER FIND FROM THE ORDER OF LD.CIT(A) THAT THE ASSESSEE FILED BEFORE THE FAA SALE DEED DATED 6.1.2012 EXECUTED IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY FLAT AS REFERRED TO ABOVE WAS TRANSFERRED TO THE ASSESSEE AS AGREED IN T ERMS OF AGREEMENT DA T ED 18.2.2009. HAVING CONSIDERED ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND THAT THE ORDER OF LD. CIT(A) DOES NOT SUFFERS FROM ANY INFIRMITY AND THEREFORE CANNOT BE DISTURBED. WE ACCORDINGLY, DISMISS T HE APPEAL OF THE REVENUE BY UP HOLDING T HE ORDER OF LD. CIT(A). 5 . IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 10TH AUG , 2016 . 10TH AUG, 2016 SD SD (JOGINDER SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 10TH AUG , 2016 . . . ./ SRL , SR. PS ITA NO . 318 / M/1 4 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. 6. , , / DR, ITAT, MUMBAI CONCERNED / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI