ADDL CIT RG 21(3), MUMBAI V. KRISHANLAL R KHARBANDA, MUMBAI

ITA 3404/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55573 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 15-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.3404/MUM/2010 (ASSESSMENT YEAR: 2006-07) ADDL. CIT RANGE 21(3) / ACIT -CIRCLE-21(3), C-11 BLDG., 5TH FLOOR, PRATYAKSH KAR BHAVAN, BKC, BANDRA (E), MUMBAI -400 051 ....... APPELLANT VS MR. KRISHANLAL R. KHARBANDA, A-1004, VALENCIA CHS LTD., HIRANANDANI GARDEN, POWAI, MUMBAI -400 076 ..... RESPONDENT PAN: AAEPK 2078 G APPELLANT BY: SHRI A.K. NAYAK RESPONDENT BY: NONE DATE OF HEARING: DATE OF PRONOUNCEMENT: 15.09.2011 28.09.2011 O R D E R PER R.S. PADVEKAR, JM: THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT (A)-32 DATED 09.02.2010 FOR TH E A.Y. 2006-07. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUN DS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) ERRED IN ALLOWING THE DEDUCTIO N U/S.54F OF ` 29,78,950/- ON SECOND FLAT WHICH WAS DENIED BY A.O . ITA 3404 /MUM/2010 MR. KRISHANLAL R. KHARBANDA 2 2. BY DOING SO, THE LD. CIT (A) HAS NOT APPRECIATED THE FACT THAT THE ASSESSEE HAS PURCHASED TWO RESIDENTIAL HOU SES AS SEEN FROM THE TWO DIFFERENT REGISTERED SALE DEEDS O F THE FLAT, EACH BEARING A DISTINCT FLAT NO. 2. THE LD. D.R. FOR THE REVENUE IS PRESENT AND NONE IS PRESENT FOR THE ASSESSEE. THE CONTROVERSY IS ROWING AROUND THE CLAIM OF EXEMPTION/DEDUCTION U/S.54F OF THE ACT. 3. BRIEFLY STATED, THE FACTS ARE AS UNDER. THE ASS ESSEE HAS RECEIVED COMPENSATION OF ` 1,75,00,000/- FOR TRANSFER OF TENANCY RIGHT IN THE PROPERTY NAMELY M/S. KOTECHA INVESTMENT P. LTD. TH E ASSESSEE DECLARED LONG-TERM-CAPITAL-GAIN AT ` 54,73,100/- WHICH WAS WORKED OUT AFTER REDUCING THE INDEX COST OF ACQUISITION AS ON 1.04.1981 AT ` 59,64,000/-. 4. THE ASSESSEE HAS MADE THE INVESTMENT IN THE RESI DENTIAL HOUSE TO THE EXTENT OF ` 59,57,900/- AND CLAIMED THE EXEMPTION U/S.54F OF THE ACT. IT WAS NOTICED BY THE A.O. THAT THE ASSES SEE HAS PURCHASED TWO RESIDENTIAL HOUSES AT ` 29,78,950/- EACH AND TWO SEPARATE SALE- DEEDS WERE REGISTERED. THE A.O. WAS OF THE OPINION THAT AS PER THE PROVISIONS OF SEC. 54F, THE PURCHASE COST OF ONLY O NE RESIDENTIAL HOUSE CAN BE ALLOWED U/S.54F. HE, THEREFORE, RESTRICTED THE CLAIM OF EXEMPTION/DEDUCTION U/S.54F TO ` 29,78,950/- AS AGAINST ` 59,57,900/- CLAIMED BY THE ASSESSEE. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. BEFORE THE LD. CIT (A) MAINLY ON THE ISSUE OF EXEMPTION/DEDUCTION U/S.54F. 5. THE ASSESSEE CONTENDED BEFORE THE LD. CIT (A) TH AT, IN FACT, IT WAS ONLY ONE TRANSACTION IN RESPECT OF THE TWO ADJO INING FLATS HAVING THE COMMON ENTRANCE, COMMON KITCHEN, LEAVING AREA E TC., BUT AS THE FLATS WERE DIFFERENT AND HENCE, THE TWO SEPARATE AG REEMENTS TO SALES WERE REQUIRED TO BE EXECUTED. IT WAS CONTENDED THA T BOTH THE FLATS ITA 3404 /MUM/2010 MR. KRISHANLAL R. KHARBANDA 3 WERE USED AS A SINGLE RESIDENTIAL UNIT. THE LD. CI T (A) ACCEPTED THE PLEA OF THE ASSESSEE AND DIRECTED THE A.O. TO ALLOW THE FULL CLAIM U/S.54F. WE FURTHER FIND THAT THIS ISSUE STANDS CO VERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE CALCUTT A HIGH COURT IN THE CASE OF D.B. SARKOR VS. CIT 132 ITR 150 (CAL.). WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT (A) AND ACC ORDINGLY, THE SAME IS CONFIRMED. ALL GROUNDS IN THE REVENUES APPEAL ARE DISMISSED. 6. IN THE RESULT, REVENUES APPEALS IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 8TH SEPTEMBER 2011. SD/- SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATED : 28TH SEPTEMBER 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) -32, MUMBAI. 4) THE CIT-CITY-21, MUMBAI. 5) THE D.R. G BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN ITA 3404 /MUM/2010 MR. KRISHANLAL R. KHARBANDA 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 15.09.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 19.09.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER