ASST CIT 19(3), MUMBAI V. SAMINA J BARODAWALA, MUMBAI

ITA 3266/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8016 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 09-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AARJU GARODIA
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA N O. 3266 / MUM . /2016 ( ASSESSMENT YEAR : 20 11 12 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 19(3), MUMBAI . APPELLANT V/S SMT. SAMINA J. BARODAWALA 201 A, 2 ND FLOOR, MARINA APARTMENT GURPOWDER ROAD, MAZGAON MUMBAI 400 010 PAN AEQPB8997K . RESPONDENT REVENUE BY : MS. AARJU GARODIA ASSESSEE BY : SHRI BHUPENDRA SHAH DATE OF HEARING 14 .1 2 .201 7 DATE OF ORDER 20.12.2017 O R D E R PER SAKTIJIT DEY, J.M. THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 19 TH FEBRUARY 2016 , PASSED BY THE LEARNED COMMISSIONER (A PPEALS ) 30 , MUMBAI , FOR A SSESSMENT Y EAR 20 11 1 2 . 2 . THE ISSUE IN DISPUTE IN THE PRESENT APPEAL IS LIMITED TO ALLOWANCE OF ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54F INCOME TAX ACT, 1961 (FOR SHORT THE ACT ). 3 . B RIEF FACTS ARE, THE ASSESSEE , AN INDIVIDUAL FILED HER RETURN OF INCOME FOR THE I MPUGNED ASSESSMENT YEAR ON 31 ST MARCH 2012 2 SMT. SAMINA J. BARODAWALA DECLARING TOTAL INCOME OF ` 1,61,86,210,. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS OFFERED NET TAXABLE LONG TERM CAPITAL GAIN OF ` 1,40,67,227, AFTER CLAIMING DEDUCTIO N UNDER SECTION 54F OF THE ACT FOR AN AMOUNT OF ` 1,09,32,773. TO VERIFY ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT, THE ASSESSING OFFICER CALLED FOR THE NECESSARY DETAILS. AFTER EXAMINING THE DETAILS SUB MITTED BY THE ASSESSEE, HE ALLEGED THAT THE DEDUCTION CLAIMED UNDER SECTION 54F OF THE ACT WAS ON ACCOUNT OF PURCHASE OF THR EE SEPARATE FLATS. HE ALSO ALLEGED THAT FLATS WERE NEITHER IN THE NAME OF THE ASSESSEE ALONE, NOR THE ASSESSEE HAS PAID THE ENTIRE CONSIDERATION TOWARDS PURCHASE OF T HE FLATS. ON VERIFICATION OF THE SALE DEED HE ALLEGED THAT IN TWO OF THE FLATS PURCHASED, THE FIRST NAMES WHICH ARE APPEARING ARE OF THE DAUGHTERS OF THE ASSESSEE AND IN THE THIRD FLAT THE SECOND AND THIRD NAME S WERE OF ASSESSEES DAUGHTERS. THUS, THE ASSE SSING OFFICER WAS OF THE VIEW THAT SINCE , THE ASSESSEE WAS NOT THE OWNER OF ALL THE FLAT S AND HAS ALSO NOT PAID THE ENTIRE CONSIDERATION; SHE IS INELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 54F OF THE ACT IN RESPECT OF ALL THE FLATS. ACCORDINGLY, HE RESTRIC TED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT TO AN AMOUNT OF ` 54,49,482. BEING AGGRIEVED OF PART DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 54F OF THE ACT, ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3 SMT. SAMINA J. BARODAWALA 4 . THE LEA RNED COMMISSIONER (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND VERIFYING THE FACTS ON RECOR D FOUND THAT THE ENTIRE CONSIDERATION T OWARDS PURCHASE OF FLAT WAS SOURCED FROM THE CAPITAL GAIN ARISING FROM THE CONSIDERATION RECEIVED BY THE AS SESSEE FROM TRANSFER OF TENANCY RIGHTS. FURTHER, FROM THE REMAND REPORT OF THE ASSESSING OFFICER HE FOUND THAT THE INSPECTOR OF INCOME TAX WHO WAS SENT FOR SITE VERIFICATION HAS REPORTED THAT THE FLAT IN RESPECT OF WHICH ASSESSEE HAS CLAIMED DEDUCTION UNDE R SECTION 54F OF THE ACT IS A SINGLE 3 BHK FLAT WITH ATTACHED BATH ROOM, ONE KITCHEN AND ONE HALL. HOWEVER, HE STATED THAT IT IS DIFFICULT TO SAY WHETHER ORIGINALLY THE FLAT WAS ONE UNIT OR NOT. THUS, ON THE BASIS OF THE SUBMISSIONS MADE BY THE ASSESSEE AN D OTHER MATERIALS ON RECORD LEARNED COMMISSIONER (APPEALS) CONCLUDED THAT THE RESIDENTIAL UNIT IS A SINGLE 3 BHK FLAT CONSISTING OF SINGLE KITCHEN AND HALL AND A COMMON ENTRANCE. FURTHER , ON EXAMINING THE EVIDENCE BROUGHT ON RECORD, HE FOUND THAT , THOUGH , THE NAME OF ASSES SEES DAUGHTERS WERE SHOWN AS JOINT OWNERS, HOWEVER, THE ENTIRE FUND TOWARDS PURCHASE OF THE FLAT CAME FROM THE ASSESSEE. THEREFORE, RELYING UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S DEVDAS NAIK (366ITR12) , LD. C OMMISSIONER (APPEALS) ULTIMATELY ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. 4 SMT. SAMINA J. BARODAWALA 5 . WHILE THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE GROUNDS RAISED, THE LEARNED AUTHORISED REPRESENTATIVE REITERATED THE STAND TAKEN BEFORE THE DEPARTMENTAL AUTHORITIES. 6 . WE HAVE H EARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. IT IS EVIDENT, THE ASSESSING OFFICER MADE PART DISALLOWANCE OF DEDUCTION CLAIMED 54F OF THE ACT BY THE ASSESSEE ON THE REASONING THAT ASSESSEE HAS CLAIMED SUCH DEDUCTION IN RESPECT OF THREE SEPARATE FLATS OUT OF WHICH IN RESPECT OF TWO FLATS THE FIRST OWNERS ARE ASSESSEES DAUGHTERS. HE HAS FURTHER OBSERVED THAT PAYMENTS IN RESPECT OF T HOSE FLATS WERE ALSO MADE BY ASSESSEES DAUGHTERS. HOWEVER, BEFORE THE FIRST A PPELLATE AUTHORITY ASSESSEE HAS PRODUCED ALL RELEVANT AND NECESSARY EVIDENCE IN RESPECT OF ITS CLAIM THAT NOT ONLY THE FLAT IN RESPECT OF WHICH DEDUCTION UNDER SECTION 54F OF THE ACT WAS CLAIMED IS A SINGLE 3 BHK RESIDENTIAL UNIT BUT THE ENTIRE PAYMENT FOR PURCHASE OF THE FLAT WAS ALSO MADE BY THE ASSESSEE. IT IS RELEVANT TO OBSERVE, ON THE BASIS OF THE SUBMISSIONS MADE AND EVIDENCES PRODUCED, THE FIRST APPELLATE AUTHORITY DIRECTED THE ASSESSING OFFICER TO RE EXAMINE THE ISSUE AND WHILE DOING SO, THE ASSESS ING OFFICER HAD DEPUTED THE INSPECTOR OF INCOME TAX TO PHYSICALLY VERIFY THE FLAT. ON PHYSICAL VERIFICATION OF THE FLAT THE INSPECTOR OF INCOME TAX HAS REPORTED THAT THE FLAT IN EXISTENCE IS A 3 BHK RESIDENTIAL UNIT HAVING A COMMON KITCHEN, HALL AND COMMON ENTRANCE. THUS, IN VIEW OF THE AFORESAID FACT, 5 SMT. SAMINA J. BARODAWALA THE ALLEGATION OF THE ASSESSING OFFICER THAT THEY ARE THREE SEPARATE FLATS CANNOT BE ACCEPTED. INSOFAR AS THE PAYMENT OF CONSIDERATION TOWARDS PURCHASE OF FLAT IS CONCERNED, THE LEARNED AUTHORISED REPRESENTAT IVE THROUGH COPIES OF BANK ACCOUNT S SUBMITTED IN THE PAPER BOOK HAS DEMONSTRATED THAT THE ENTIRE FUND FOR PURCHASE OF THE FLAT WAS PROVIDED BY THE ASSESSEE FROM THE SALE CONSIDERATION RECEIVED BY HER FROM SALE OF TENANCY RIGHTS. IT NEEDS TO BE MENTIONED, D UE TO INSISTENCE OF SELLERS OF THE FLAT THAT THE SALE CONSIDERATION SHOULD BE PAID BY THE JOINT OWNER S SEPARATELY , THE ASSESSEE HAD TO TRANSFER FUND TO THE ACCOUNTS OF HER DAUGHTER S FROM WHERE PAYMENTS WERE MADE TO THE OWNER OF THE FLAT. HOWEVER, FACT REMA INS THAT THE ENTIRE SALE CONSIDERATION OF THE FLAT WAS SOURCED FROM THE AMOUNT RECEIVED BY THE ASSESSEE FROM SALE OF TENANCY RIGHT. IN VIEW OF THE AFORESAID FACTS AND APPLYING THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF DEVDAS N AIK (SUPRA) AND THE OTHER DECISION RELIED UPON BY THE FIRST APPELLATE AUTHORITY, WE UPHOLD THE IMPUGNED ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUNDS RAISED. 7 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.12.2017 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 20.12.2017 6 SMT. SAMINA J. BARODAWALA COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI