SHEELA BHAGWANDAS NICHLANI, MUMBAI V. ITO 12(3)(2), MUMBAI

ITA 4068/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4204 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 08-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K R LAKHSHMI NARAYAN
• Keywords: Capital asset; Additional evidence
• Section: 143(3); 54

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI . . , . !' , # $ BEFORE SHRI I.P. BANSAL, JM AND SHRI N.K. BILLAI YA, AM . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 MRS. SHEELA BHAGWANDAS NICHLANI, 1302/1303, DALAMAL TOWER, NARIMAN POINT, MUMBAI - 21 / VS. THE ITO 12(3)(2), AAYKAR BHAVAN, MK ROAD, MUMBAI - 20. & # ./ '( ./ PAN/GIR NO. : AAEPN 2257Q ( &) / APPELLANT ) .. ( *+&) / RESPONDENT ) &) , / APPELLANT BY: SHRI K.R.LAKHSHMINARAYAN *+&) - , / RESPONDENT BY : SHRI RAJENDRA KUMAR - .# / DATE OF HEARING : 08/07/2013 /0% - .# / DATE OF PRONOUNCEMENT : 08/07/2013 1 / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER DATED 03/04/2012 PASSED BY LD. CIT(A)-23, MUMBAI FO R THE ASSESSMENT YEAR 2004-05. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE ORDER PASSED BY THE LEARNED CIT (A) IS BAD IN LAW. 2. THE LEARNED CIT (A) ERRED IN HOLDING THAT APPELL ANT IS NOT ENTITLED TO DEDUCTION U/S.54 ON THE GROUND THAT HER HALF OWNERSHIP IN THE FLAT JOINTLY SOLD BY HER AND HER HUSBAND HAS NOT BEEN PROVED. 3. THE LEARNED CIT (A) FAILED TO TAKE NOTE OF THE F ACT THAT DEDUCTION U/S.54 ON THE SAME POINT WAS ALLOWED BY EARLIER CIT (A) IN HER FA VOUR AMONG OTHER THINGS ON THE BASIS OF AGREEMENT DATED 03-12-1973 BETWEEN APPELLA NT AND HER HUSBAND. . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 2 4. THE LEARNED CIT (A) FAILED TO TAKE NOTE OF THE F ACT THAT THE ITAT WHILE ALLOWING DEPTS APPEAL THAT THE EARLIER CIT (A) HAD ALLOWED FRESH EVIDENCE HAD REMITTED THE MATTER TO A.O. ON THE LIMITED POINT THAT THE AGREEM ENT DATED 03-12-1973 BETWEEN APPELLANT AND HER HUSBAND SHOWING APPELLANT WAS 50% OWNER OF THE PROPERTY WITH FUNDS CONTRIBUTED BY HER HUSBAND HAD NOT BEEN FILED BEFORE THE A.O. 5. THE LEARNED CIT (A) ERRED IN SUSTAINING THE A.O. S ORDER WHO HAD NOT LIMITED HIMSELF TO THE RE-EXAMINATION OF THE SAID FRESH EVI DENCE VIZ. AGREEMENT DATED 03-12- 1973 BUT PROCEEDED BEYOND THE SAID LIMIT AND REFERR ING TO OTHER PAPERS SUCH AS BALANCE SHEETS OF APPELLANT AND HER HUSBAND WHICH W ERE NOT FRESH EVIDENCE. 6. IT IS PRAYED THAT THE ORDER OF CIT (A) HOLDING A PPELLANT IS NOT ENTITLED TO DEDUCTION U/S.54 MAY BE REVERSED. 2. IMPUGNED ASSESSMENT ORDER IS DATED 30/12/2010 FR AMED UNDER SECTION 143(3) R.W.S. 254 OF INCOME TAX ACT,1961(THE ACT). THE TRIBUNAL HAD SET ASIDE THE MATTER TO THE FILE OF AO VIDE ITS ORDER DATED 12/3 /2010, COPY OF WHICH IS FILED AT PAGES 13 TO 17 OF THE PAPER BOOK. THE DISPUTE WAS IN RESPECT OF GRANT OF EXEMPTION UNDER SECTION 54 OF THE ACT WITH REGARD T O SALE CONSIDERATION RECEIVED BY THE ASSESSEE IN RESPECT OF KHAR PROPERTY OF WHIC H THE ASSESSEE WAS OWNER OF 50%. THOUGH THE CAPITAL GAIN WAS COMPUTED IN THE H ANDS OF THE ASSESSEE BUT EXEMPTION UNDER SECTION 54 WAS NOT GRANTED IN THE A SSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT ON THE GROUND THAT ASSESSEE IS NOT OWNER OF THE HOUSE PROPERTY WHICH WAS SOLD AND NO INCOME HAS BEE N ASSESSED RELATING TO THE SAID PROPERTY IN THE HANDS OF THE ASSESSEE UNDER TH E HEAD HOUSE PROPERTY. THE ASSESSEE CLAIMED THAT SHE HAS INVESTED A SUM OF RS . 1,96,17,250/- IN NEW RESIDENTIAL HOUSE WHICH WAS AN ALLOWABLE DEDUCTION UNDER SECTION 54 AGAINST THE INCOME ASSESSED UNDER THE HEAD LONG TERM CAPITAL G AIN. 3. LD. CIT(A) DECIDED THE SAID ISSUE IN FAVOUR OF A SSESSEE VIDE ORDER DATED 29/11/2007, COPY OF WHICH IS FIELD AT PAGES 5 TO 12 OF THE PAPER BOOKS. THE REVENUE HAS FIELD APPEAL AGAINST THAT ORDER AND MAT TER WAS RESTORED BACK TO THE FILE OF AO BY THE TRIBUNAL VIDE ORDER DATED 12/3/20 10 IN ITA NO.889/MUM/2009. IT MAY ALSO BE MENTIONED HERE THAT THE HUSBAND OF T HE ASSESSEE OWNS REMAINING 50% SHARE IN THE PROPERTY WHICH SOLD BY THE ASSESSE E AND SIMILAR CAPITAL GAIN WAS ALSO ASSESSED IN THE HANDS OF HUSBAND OF THE AS SESSEE ON WHICH EXEMPTION . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 3 UNDER SECTION 54 WAS ALSO GRANTED. HOWEVER, EXEMP TION WAS DENIED TO THE ASSESSEE BY THE AO. THE REVENUE HAS FILED AN APPEA L BEFORE ITAT IN THE CASE OF ASSESSEE AS WELL AS HER HUSBAND AND VIDE AFOREMENTI ONED ORDER DATED 12/3/2010. THE TRIBUNAL HAS DECIDED BOTH THE APPEA LS OF THE REVENUE BY WAY OF CONSOLIDATED ORDER. WITH REGARD TO ASSESSEES APP EAL THE ISSUE REGARDING GRANT OF EXEMPTION U/S.54 WAS RESTORED BACK TO THE FILE OF AO WITH THE FOLLOWING OBSERVATIONS. 2.2.1 WE HAVE HEARD BOTH THE PARTIES PERUSED THE R ECORDS CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABILITY OF DEDUCTION U/S 54 IN RESPECT OF CAPITAL GAIN ARISING FROM SALE OF RESIDENTIAL HOUSE . THE ASSESSING OFFICER DISALLOWED THE CLAIM ON THE GROUND THAT THE ASSESSEE WAS ONLY THE OWNER OF THE LAND AND NOT THE OWNER OF THE RESIDENTIAL HOUSE. THE CASE OF THE ASSESSEE IS THAT IN TERMS OF THE AGREEMENT DATED 3.12.1973 THE ASSESSEE WAS 50% OWNE R OF THE PROPERTY, WHICH HAD BEEN CONSTRUCTED ON THE LAND BELONGING TO HER, WITH FUNDS CONTRIBUTED BY HER HUSBAND. HOWEVER, THE PERUSAL OF THE ASSESSMENT ORD ER DOES NOT SHOW THAT THE SAID AGREEMENT HAD BEEN FILED BEFORE THE ASSESSING OFFIC ER. THE ASSESSEE ALSO PRODUCED NO EVIDENCE TO SHOW THAT THE SAID AGREEMENT HAD BEE N FILED BEFORE ASSESSING OFFICER. IN FACT, BOTH THE PARTIES AGREED THAT THE MATTER MAY BE RESTORED TO THE ASSESSING OFFICER FOR EXAMINATION OF THE VARIOUS AD DITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE THE CIT (A). WE AGREE THAT FRESH EXAMINATION IS NECESSARY AS THE ASSESSING OFFICER HAD NOT BEEN GIVEN OPPORTUNITY IN RESPECT OF THE ADDITIONAL EVIDENCES FILED BEFORE THE CIT (A). WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR PASSING A FRESH ORDER AFTER N ECESSARY EXAMINATION OF THE EVIDENCES FILED BEFORE THE CIT (A) AND AFTER ALLOWI NG OF OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. THE ANOTHER ISSUE WHICH WAS SET ASIDE BY THE TRI BUNAL IN THE CASE OF ASSESSEE AS WELL AS IN THE CASE OF HUSBAND OF THE ASSESSEE WAS REGARDING A SUM OF RS. 25.00 LACS WHICH WAS CLAIMED BY THEM AGAINST LONG TERM CAPITAL GAIN AS PAYMENT MADE TO TENANT FOR VACATION OF THE PROPERT Y. LD. CIT(A) HAS GRANTED THIS RELIEF AND THIS ISSUE IN THE CASE OF ASSESSEE WAS RESTORED BACK TO THE FILE OF AO WITH THE FOLLOWING OBSERVATION. 2.1.2 WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDING ALLOWABI LITY OF DEDUCTION OF RS 25 LAKHS ON ACCOUNT OF PAYMENT TO THE TENANT SHRI RAMESH B. NICHIANI. THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM ON THE GROUND THAT THERE W AS NO EVIDENCE PRODUCED TO SHOW THAT SHRI RAMESH NICHLANI WAS A TENANT. HOWEVE R, IT APPEARS THAT THE ASSESSEE FILED EVIDENCE IN THE FORM OF LEAVE AND LICENSE AGREEMENT DATED 16.9.1969 BEFORE CIT (A) TO PROVE THE TENANCY BASED ON WHICH THE CLAIM WAS . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 4 ALLOWED. THIS WAS A FRESH EVIDENCE AND, THEREFORE, OPPORTUNITY WAS REQUIRED TO BE GIVEN TO THE ASSESSING OFFICER BY CIT(A) WHICH HAD BEEN NOT DONE. BOTH THE PARTIES AGREED THAT THE MATTER MAY BE RESTORED TO THE ASSE SSING OFFICER FOR NECESSARY EXAMINATION OF THE ADDITIONAL EVIDENCE. WE, THEREFO RE, RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR PASSING A FRESH ORDER AFT ER NECESSARY EXAMINATION OF EVIDENCES PRODUCED BEFORE THE CIT (A) AND AFTER ALL OWING THE OPPORTUNITY TO THE ASSESSEE. 5. IT IS IN PURSUANCE OF AFOREMENTIONED ORDER OF TH E TRIBUNAL THE IMPUGNED ASSESSMENT HAS BEEN FRAMED WHICH AN ORDER DATED 30/ 12/2010. BEFORE AO THE AO THE ASSESSEE FILED VARIOUS EVIDENCES WITH REGARD TO A SUM OF RS.25.00 AND THE AO HAS REFERRED TO THOSE EVIDENCES IN PARA-8, WHIC H IS REPRODUCED BELOW: 8.THE ASSESSEES REPRESENTATIVE SHRI VASU HARWANI, CA ATTENDED AND FILED HIS SUBMISSIONS AS PER LETTER DATED 18/10/2010. HE FILED COPY OF TENANCY AGREEMENT DATED 16/9/1969 AS PER WHICH MR. RAMESH N ICHLANI AND M/S. RALHAN PRODUCTIONS TO WHOM FLAT WAS SUB LEASED AND ALSO COPY OF AFFIDAVIT FILED BY SHRI RAMESH NICHLANI BEFORE SMALL CAUSE CO URT IN SUIT NO.975/3248 OF 1979 WHICH WAS FILED AGAINST M/S.RALHAN PRODUCTI ONS. FURTHER ASSESSEE ALSO FILED COPY OF AGREEMENT DATED 3/12/1973 BETWE EN HIM AND HIS WIFE AS PER WHICH THEY AGREED TO CONSTRUCT HOUSE PROPERTY O N PLOT OF LAND OWNED BY ASSESSEES WIFE. THE SAID GROUND ALSO CONTAINS REC ITAL TO THE EFFECT THAT IN CASE PROPERTY IS SOLD THE SALE PROCEEDS WERE TO BE SHARED EQUALLY. THE ASSESSEE HAS ALSO FILED THE COPIES OF RECEIPTS OF P ROPERTY TAX FOR THE YEAR 199399 AND 2003-04 WHICH BEARS THE NAME OF THE ASS ESSEE. FURTHER, MR. VASU HARWANI, CA ALONGWITH ASSESSEES HUSBAND SHRI BHAGWANDAS NICHLANI ATTENDED AND PRODUCED THE C ORI GINAL AGREEMENTS FOR VERIFICATION. 6. CONSIDERING ALL THESE EVIDENCES AO HAS ALLOWED D EDUCTION OF RS.25.00 LACS WITH THE FOLLOWING OBSERVATIONS: 9. CONSIDERING THE ABOVE SUBMISSIONS ASSESSS CLAI M FOR DEDUCTION OF COMPENSATION OF RS.25,00,000/- PAID TO TENANT SHRI RAMESH BHAGWANDAS NICHLANI IS HELD TO BE ALLOWABLE. HOWEVER, AO DID NOT ALLOW THE CLAIM UNDER SECTION 54 OF THE ACT TO THE ASSESSEE AS ACCORDING TO AO THE ASSESSEE DID NOT BRING ENOUG H MATERIAL ON RECORD TO PROVE THAT THE ASSESSEE IS 50% OWNER OF THE PROPERTY. AC CORDING TO AO SALE AGREEMENT DATED 3/3/2004 ONLY SHOWED THAT THE ASSESSEE WAS OW NER OF THE LAND. THE AO . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 5 ALSO OBSERVED THAT NO INCOME HAS BEEN SHOWN BY THE ASSESSEE FROM THE PROPERTY WHICH WAS SOLD AND ALSO THE FACT THAT RENT RECEIVA BLE FROM TENANTS WAS NOT OFFERED TO TAX. THE OBSERVATION OF AO FOR NOT ALLO WING THE EXEMPTION UNDER SECTION 54 IS AS UNDER: 10.REGARDING THE CLAIM OF EXEMPTION OF THE ASSESSE E UNDER SECTION 54 OF RS.1,96,17,250/- THE ASSESSEE HAD NOT BROUGHT ENOU GH MATERIAL TO PROVE THAT THE ASSESSEE IS A 50% OWNER OF THE PROPERTY, S INCE THE RECITAL OF THE SALE AGREEMENT DATED 03/03/2004 SHOWS THAT THE ASSESSEE WAS THE OWNER OF THE LAND ONLY. ALSO THE ASSESSING OFFICER HAS CORRECTL Y POINTED OUT THAT IN THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR ENDED 31 /03/2003 THE ASSESSEE IS SHOWN TO BE THE OWNER OF THE LAND. ALSO NO INCO ME FROM THE HOUSE PROPERTY I.E. RENT FROM THE TENANTS OFFERED FOR TAX ATION IN THE HANDS OF THE ASSESSEE. THEREFORE, THE ASSESSEES CLAIM OF EXEMP TION UNDER SECTION54 OF THE ACT IS REJECTED. LD. CIT(A) HAS UPHELD THE ACTION OF AO. THE ASSESS EE IS AGGRIEVED, HENCE, IN APPEAL. 7. IT WAS SUBMITTED BY LD. A.R THAT ASSESSEE IS UND ISPUTABLE OWNER OF THE LAND ON WHICH BUILDING WAS CONSTRUCTED BY THE HUSBA ND OF THE ASSESSEE WHICH WAS SOLD. HE IN THIS REGARD REFERRED TO THE AGREEM ENT ENTERED INTO BETWEEN THE ASSESSEE AND HER HUSBAND, WHICH IS DATED 3/12/1973 AND COPY OF WHICH IS FILED AT PAGE 18 OF THE PAPER BOOK. ACCORDING TO RECITAL OF THE SAID CLAIM IT WAS CLEARLY MENTIONED THAT ASSESSEE BEING PARTY OF ONE PART OWN S PLOT OF LAND ADMEASURING 660 SQ. YARDS BEARING PLOT NO.671 OF , BANDRA,BOMBA Y. THE ASSESSEE AND HER HUSBAND HAD AGREED TO CONSTRUCT A RESIDENTIAL HOUS E CONSISTING OF GROUND AND TWO UPPER FLOOR ON THE SAID PLOT OF LAND AND THE HO USE CONSISTING OF THE SAID PLOT OF LAND TOGETHER WITH STRUCTURE THEREON IS INDENTED TO BE HELD JOINTLY IN EQUAL PROPORTION BY THE ASSESSEE AND HER HUSBAND. THE HU SBAND OF THE ASSESSEE HAS CONTRIBUTED ALL THE FUNDS FOR CONSTRUCTION OF THE R ESIDENTIAL BUILDING THEREON. THE SAID RECITAL IS REPRODUCED BELOW FOR THE SAKE OF C ONVENIENCE: WHEREAS: A) MRS. SHEELA OF THE ONE PART OWNS A PLOT OF LAND ADM EASURING 660 SQ. YARDS BEARING PLOT NO.671, TPS-III OF BANDRA, BOMBA Y (HEREINAFTER REFERRED TO AS THE SAID PLOT OF LAND). . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 6 B) MR. BHAGWANDS IS THE HUSBAND OF THE SAID MRS. SHEEL A. C) BOTH THE PARTIES HERETO HAD AGREED TO CONSTRUCT A R ESIDENTIAL HOUSE CONSISTING OF GROUND AND TWO UPPER FLOORS ON THE SA ID PLOT OF LAND. D) THE HOUSE CONSISTING OF THE SAID PLOT OF LAND TOGET HER WITH STRUCTURE THEREON IS INTENDED TO BE HELD JOINTLY IN EQUAL PRO PORTION BY SMT. SHEET AND THE SAID SHRI BHAGWANDAS. E) SMT. SHEELAS CONTRIBUTION IS THE SAID PLOT OF LAND ON WHICH THE HOUSE IS CONSTRUCTED WHEREAS THE SAID SHRI BHAGWANDAS HAS CO NTRIBUTED ALL THE FUNDS FOR CONSTRUCTION OF THE RESIDENTIAL BUILDING THEREON. LD. AR FURTHER SUBMITTED THAT AS PER CLAUSE -2 OF THE SAID AGREEMENT THE GROUND AND THE FIRST FLOOR WAS TO BE LET OUT AND THE SECON D FLOOR WAS TO BE USED BY THE ASSESSEE AND HER HUSBAND FOR THEIR OWN RESIDENCE. IN CLAUSE -3, IT HAS BEEN PROVIDED THAT IN CASE OF SALE OF THE PROPERTY NET SALE CONSIDERATION WILL BE SHARED BY THE ASSESSEE AND HER HUSBAND IN EQUAL PROPORTION . FOR THE SAKE OF CONVENIENCE CLAUSES 2 & 3 ARE ALSO REPRODUCED BE LOW: 2.WHILE THE GROUND AND THE FIRST FLOOR ARE LET OUT , THE SECOND FLOOR IS USED BY SMT. SHEELA AND SHRI BHAGWANDAS FOR THEIR OWN R ESIDENCE. 3. IN CASE THE PROPERTY IS SOLD THE NET SALE PROC EEDS WILL BE SHARED BY THE TWO OWNERS IN EQUAL PROPORTION. 8. IT WAS SUBMITTED BY LD. AR THAT AS IN THE CASE O F HUSBAND OF THE ASSESSEE THE AO HIMSELF HAD ALLOWED EXEMPTION UNDER SECTION 54 ON PURCHASE OF NEW RESIDENTIAL PROPERTY OF WHICH ASSESSEE IS ALSO CO-O WNER OF 50%. HE SUBMITTED THAT DEPARTMENT CANNOT TAKE DIFFERENT STAND IN THE CASE OF THE ASSESSEE AS ASSESSEES CASE IS ON SOUND FOOTING THAT SHE IS OWN ER OF THE LAND UPON WHICH THE PROPERTY WAS CONSTRUCTED AND WHICH HAS BEEN SOLD. HE SUBMITTED THAT SECTION 54 NOWHERE CONVEYS THAT FOR THE PURPOSE OF AVAILING E XEMPTION UNDER SECTION 54 THE SELLER OF THE PROPERTY SHOULD BE THE OWNER OF THE S AID PROPERTY. THE MAIN REQUIREMENT IS THAT LONG TERM CAPITAL GAIN HAS BEEN COMPUTED IN RESPECT OF TRANSFER OF A LONG TERM CAPITAL ASSET BEING BUILDI NG OR LAND APPURTENANT THEREON TO THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEA D INCOME FROM HOUSE PROPERTY. LD. A.R SUBMITTED THAT AO HIMSELF HAS A CCEPTED THAT THERE WAS A . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 7 TENANT IN THE PROPERTY AND THE DISPUTE WAS PREVAILI NG BETWEEN THE ASSESSEE AND THE TENANT, THEREFORE, NO RENT WAS RECEIVED. THE A O HIMSELF HAS ALLOWED DEDUCTION OF COMPENSATION PAID TO TENANT AFTER VER IFYING THE EVIDENCES. THUS IT WAS PLEADED BY LD. AR THAT CLAIM OF EXEMPTION UNDER SECTION 54 HAS WRONGLY BEEN DENIED TO THE ASSESSEE AND THE SAME SHOULD BE GRANTED. 9. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER S PASSED BY AO & LD. CIT(A). HE SUBMITTED THAT ASSESSEE HAS NOT SUBMITT ED SUFFICIENT EVIDENCES TO PROVE THE OWNERSHIP OF THE ASSESSEE ON THE ASSETS OF WHICH LONG TERM CAPITAL GAIN HAS BEEN COMPUTED AND ALSO ASSESSEE COULD NOT PROVE THAT ANY INCOME WAS DERIVED BY THE ASSESSEE WHICH WAS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THEREFORE, LD. DR PLEADED THAT THE CLAIM OF THE ASSESSEE HAS RIGHTLY BEEN REJECTED BY LD. CIT(A) AND THE APPEAL FILED BY THE ASSESSEE SHOULD BE DISMISSED. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT IS UNDISPUTED THAT ASSESSEE IS OWNER OF THE LAND UPON WHICH BUILDING WAS CONSTRUCTED BY THE FUNDS MADE AVAILABLE BY THE HUSBAND OF THE ASSESSEE IN PURSUANCE TO AN AGREEMENT DATED 3/1 2/1973. THE RELEVANT CLAUSES OF THE SAID AGREEMENT HAVE BEEN REPRODUCED ABOVE. IF THE TERMS OF AFOREMENTIONED AGREEMENT ARE KEPT IN MIND THEN IT CANNOT BE SAID THAT ASSESSEE WAS NOT OWNER OF THE BUILDING WHICH WAS SOLD BY HER . UPON THE BASIS OF AFOREMENTIONED AGREEMENT REVENUE HAS ASSESSED THE H USBAND OF THE ASSESSEE AND HAS COMPUTED LONG TERM CAPITAL GAIN ON 50% OF T HE SALE PROCEEDS AND EXEMPTION HAS ALSO BEEN GRANTED UNDER SECTION 54. THE CASE OF THE ASSESSEE IS ON SOUND FOOTING AS ASSESSEE IS OWNER OF THE LAND I TSELF. THEREFORE, THE CLAIM OF THE ASSESSEE HAS WRONGLY BEEN REJECTED FOR THE REAS ON THAT ASSESSEE IS NOT OWNER OF THE BUILDING WHICH WAS SOLD AND UPON WHICH LON G TERM LONG TERM CAPITAL GAIN HAS BEEN COMPUTED. . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 8 10.1 NOW THE QUESTION REMAIN IS REGARDING HOUSE PRO PERTY INCOME. THE AO AFTER VERIFYING THE EVIDENCES FILED BY THE ASSESSEE HAS A CCEPTED THE CLAIM OF THE ASSESSEE REGARDING DEDUCTIBILITY OF RS.25.00 LACS, WHICH WAS PAID TO THE TENANT AS COMPENSATION. THIS FACT ITSELF HAS ESTABLISHED THAT THE PROPERTY OF THE ASSESSEE WAS OCCUPIED BY THE TENANT. THE REQUIREME NT OF SECTION 54 IS THAT THE INCOME OF THE BUILDING WHICH IS BEING SOLD SHOUL D BE CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE REQUIREMENT OF SECTION IS NOT THAT THE ASSESSEE MUST EARN INCOME FROM SAID PROPERTY. I F THERE WAS A TENANT THEN THE INCOME FROM THE PROPERTY WAS CHARGEABLE TO TAX. TH EREFORE, EXEMPTION ALSO CANNOT BE DENIED TO THE ASSESSEE ON THE GROUND THAT ASSESSEE DID NOT SHOW ANY INCOME CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 10.2 THERE CANNOT BE ANY DISPUTE ON THE FACT THAT T HE NEW RESIDENTIAL PROPERTY PURCHASED BY THE ASSESSEE AND HER HUSBAND IS FULFI LLING THE CRITERIA FOR EXEMPTION UNDER SECTION 54 AS THE REVENUE ITSELF H AS GRANTED SUCH EXEMPTION TO THE HUSBAND OF THE ASSESSEE FOR HIS 50% SHARE. KEE PING IN VIEW THIS FACT WE HOLD THAT EXEMPTION UNDER SECTION 54 HAS WRONGLY BEEN DE NIED TO THE ASSESSEE. WE DIRECT THE AO TO GRANT SUCH EXEMPTION TO THE ASSES SEE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/07/2013 1 - /0% # 3 45 08/07/2013 0 - 6 7 SD/- SD/- ( !' / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 4 DATED 08/07/2013 . / ITA NO.4068/MUM/2012 % % % % / ASSESSMENT YEAR 2004-05 9 1 1 1 1 - -- - *.89 *.89 *.89 *.89 :9%. :9%. :9%. :9%. / COPY OF THE ORDER FORWARDED TO : 1. &) / THE APPELLANT 2. *+&) / THE RESPONDENT. 3. ; ( ) / THE CIT(A)- 4. ; / CIT 5. 9<6 *. , , / DR, ITAT, MUMBAI 6. 6= > / GUARD FILE. 1 1 1 1 / BY ORDER, +9. *. //TRUE COPY// ? ?? ? / @ @ @ @ ' ' ' ' (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS