UMA KACHHAWA, Jaipur V. ITO, Jaipur

ITA 409/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1844 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 22-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Assessee Lawyers: S L PODDAR; ISHA KANOONGO
• Keywords: Question of law; Cost of acquisition; Benefit of exemption
• Section: 148; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 409/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 UMA KACHHAWA, W/O- SHRI MOOL SINGH KACHHAWA, 1460, KHUNTETON KA RASTA, KISHANPOLE BAZAR, JAIPUR. CUKE VS. I.T.O., WARD 7(2), JAIPUR. PAN NO.: AEOPK 2725 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR & MS. ISHA KANOONGO (ADV). JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25/10/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12/12/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS THE APPEAL FILED BY THE ASSESSEE EMANATES F ROM THE ORDER OF THE LD. CIT(A)-5, JAIPUR DATED 17/03/2017 FOR THE A .Y. 2007-08, WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LD ASSESSING OFFICER I N PASSING THE ORDER U/S 147/144 OF THE INCOME TAX ACT, 1961 WHICH IS VOID A B INITIO DESERVES TO BE QUASHED. ITA 409/JP/2017 UMA KACHHAWA VS ITO 2 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD CIT(A) HAS ERRED IN ADOPTING THE COST OF ACQUISITION OF RS. 2,12,250/- BY DISALLOWING THE AMOUNT OF RS. 4,04,737/-. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD CIT(A) HAS ERRED IN NOT GIVING THE BENEFIT OF RS. 7,25,630/- U/S 54 CLA IMED BY THE ASSESSEE REGARDING SECOND HOUSE PURCHASE. 4. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. THE GROUNDS NO. 1 AND 2 OF THE APPEAL WERE NOT PR ESSED AT THE TIME OF HEARING, THEREFORE, THE SAME STANDS DISMISSED AS NOT PRESSED. 3. GROUND NO. 4 IS GENERAL IN NATURE AND DOES NOT R EQUIRE ANY ADJUDICATION, THEREFORE, THE SAME STANDS DISMISSED. 4. IN THE GROUND NO. 3, THE ISSUE INVOLVED IS NOT G IVING THE BENEFIT OF RS. 7,25,630/- U/S 54 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) CLAIMED BY THE ASSESSEE REGARDING SECOND HOUSE PURC HASE. THE LD. CIT(A) HAS DEALT THE ISSUE OF CLAIM U/S 54 OF THE ACT WHILE DECIDING GROUND NO. 5 IN HIS ORDER AT PARA 6.1 TO 6.4, WHICH ARE REPRODUCE D HEREUNDER: 6.1 IN THE ASSESSMENT ORDER, THE AO HAS GRANTED D EDUCTION OF RS. 20,11,000 U/S 54 IN RESPECT OF HOUSE PURCHASED AT N EMI NAGAR EXTENSION, JAIPUR FOR RS. 20,11,000 ON 10-11-2006. THE ASSESSEE HAS CLAIMED FURTHER DEDUCTION OF RS. 1,51,030 ON ACCOUN T OF STAMP DUTY AND REGISTRATION CHARGES IN RESPECT OF THIS PROPERT Y AND FURTHER DEDUCTION OF RS. 7,25,630 INVESTED IN ANOTHER RESID ENTIAL HOUSE IN THE JOINT NAMES OF THE ASSESSEE AND HER DAUGHTER. ITA 409/JP/2017 UMA KACHHAWA VS ITO 3 6.2 IN THE REMAND REPORT, THE ASSESSING OFFICER HAS OBSERVED THAT STAMP DUTY AND REGISTRATION CHARGES OF RS. 1,30,720 PAID IN RESPECT OF THE NEW HOUSE AT NEMI NAGAR EXTENSION, JAIPUR IS ALLOWABLE. HE HAS FURTHER STATED THAT 50% OF INVESTMENT OF RS. 7, 25,630 MADE IN THE SECOND HOUSE PURCHASED IN THE NAME OF THE ASSES SEE AND HER DAUGHTER CAN BE ALLOWED SINCE ASSESSEE IS 50% OWNER OF THE SAID PROPERTY. 6.3 I HAVE CONSIDERED THE REMAND REPORT, THE ASSESS MENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. AS REGARDS THE STAMP DUTY AND REGISTRATION CHARGES IN RESPECT OF THE NEW HOUSE AT NEMI NAGAR EXTENSION, JAIPUR, IT IS SEEN THAT THE CORRECT ALLO WABLE AMOUNT IS RS. 1,51,030 VERSUS AMOUNT OF RS. 1,30,720 MENTIONED BY THE AO SINCE REGISTRATION CHARGES OF RS. 20,110 AND COPYING CHAR GES OF RS. 200 HAVE NOT BEEN CONSIDERED BY THE AO IN THE REMAND RE PORT. ACCORDINGLY, THE AO IS DIRECTED TO GRANT FURTHER DE DUCTION OF RS. 1,51,030 U/S 54 IN RESPECT OF THIS AMOUNT. 6.4 REGARDING FURTHER CONTENTION OF THE ASSESSEE CL AIMING FURTHER DEDUCTION OF RS. 7,25,630 IN RESPECT OF THE SECOND HOUSE PURCHASED, IT IS OBSERVED THAT THE CLAIM OF EXEMPTION U/S 54 I S ALLOWABLE ONLY IN RESPECT OF ONE NEW HOUSE PROPERTY PURCHASED. THIS W AS THE LEGISLATIVE INTENT EVEN BEFORE THE SPECIFIC AMENDME NT INTRODUCED IN SECTION 54 WITH EFFECT FROM 01-04-2015. THIS VIEW I S SUPPORTED BY THE DECISIONS IN THE CASES OF PAWAN ARYA VS CIT (2011) 11 TAXMANN.COM 312 (PUNJAB & HARYANA) AND DCIT VS. R.V. LOKUPAVAN (2008) 25 SOT 420 ( MUMBAI) . ACCORDINGLY, FURTHER CLAIM OF DEDUCTION OF RS. 7,25,630 IS NOT ALLOWABLE. THIS GR OUND IS PARTLY ALLOWED. ITA 409/JP/2017 UMA KACHHAWA VS ITO 4 5. THE BRIEF FACTS IN A NUTSHELL IS THAT THE ASSESS EE HAS SOLD A PROPERTY OF RS. 50,00,000/- AND THE CASE WAS REOPENED BY ISSU ING NOTICE U/S 148 OF THE ACT. THE ASSESSMENT WAS FINALIZED DETERMINING TOT AL INCOME OF RS. 27,42,560/-. THE LD CIT(A) HAS GRANTED PART RELIEF TO THE ASSESSEE. THE CLAIM OF ASSESSEE U/S 54 OF THE ACT WITH REGARD TO S ECOND HOUSE PURCHASE AT RS. 7,25,630/- WAS NOT ALLOWED. 6. BENCH HEARD BOTH THE SIDES ON THIS ISSUE. THE ITA T MUMBAI BENCH IN THE CASE OF SMT. SYRTLE DSOUZA VS. INCOME TAX OF FICER, WARD 19(3)(4), MUMBAI (2012) 24 TAXMANN.COM 261 (MUM) HAS CONSIDER ED SUCH ISSUE AND DECIDED AS UNDER: 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE RELEVANT MATERIAL ON RECORD. THE SHORT CONTROVERSY IS AS TO WHETHER EXEMPTION U/S 54 IS AVAILABLE IN RESPECT OF ONE HOUSE OR MORE THAN ONE HOUSE. IN THE PRESENT CASE, THE ASSESSEE WAS ALLOTTED TWO FLA TS ON TWO DIFFERENT STORIES WHICH HE CLAIMED AS ELIGIBLE FOR EXEMPTION U/S 54. ADMITTEDLY THERE IS NO UNITY OF CONSTRUCTION BETWEEN SUCH FLAT S. THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF SUSHILA M. JHAVERI ( SUPRA ) HAS CATEGORICALLY HELD THAT THE EXEMPTION U/S 54 IS AVA ILABLE ONLY IN RESPECT OF ONE HOUSE AND NOT MORE THAN ONE. IT IS T RUE THAT THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF D. ANANDA BASAPPA ( SUPRA ) HAS ENTITLED THE ASSESSEE TO EXEMPTION U/S 54 IN RESPECT OF TWO RESIDENTIAL HOUSES, HOWEVER IT IS ALSO EQUALLY TRUE THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF K.C. KAUSHIK ( SUPRA ) AND THE HON'BLE PUNJAB & HARYANA HIGH COURT IN PAWAN ARYA ( SUPRA ) ITA 409/JP/2017 UMA KACHHAWA VS ITO 5 HAVE HELD THE ASSESSEE TO BE ENTITLED TO EXEMPTION U/S 54 ONLY IN RESPECT OF ONE RESIDENTIAL HOUSE. THE LEARNED AR ST RONGLY ARGUED THAT THE JUDGMENT IN THE CASE OF KARNATAKA HIGH COURT BE FOLLOWED IN PREFERENCE TO THAT OF THE SPECIAL BENCH OF THE TRIB UNAL AND OTHER HIGH COURTS AS NOTED ABOVE. A FEEBLE UNSUCCESSFUL ATTEMP T WAS MADE TO DISTINGUISH THE JUDGMENT OF THE HON'BLE JURISDICTIO NAL HIGH COURT IN THE AFORENOTED CASE. IN OUR CONSIDERED OPINION THIS CONTENTION DESERVES THE FATE OF DISMISSAL AT THE VERY OUTSET F OR THE REASON THAT IN THE CASE OF K. C. KAUSHIK ( SUPRA ) IT HAS BEEN HELD THAT: 'IN THE ABSENCE OF ANY PROVISION TO THE CONTRARY, IN MY JUDGMENT, T HE PETITIONER IS ENTITLED TO AVAIL OF THE RELIEF IN RESPECT OF THE C APITAL GAIN ARISING ON THE SALE OF HIS FLAT IN 1979 AGAINST THE FLAT PURCH ASED IN THAT YEAR AS ALSO AGAINST THE FLAT PURCHASED ON JULY 26, 1980. I T HAS, OF COURSE, TO BE ADJUSTED AGAINST ONE OF THE FLATS ONLY.. I AM INCLINED TO HOLD THAT IT IS FOR THE PETITIONER TO CLAIM RELIEF UNDER THIS SECTION AGAINST THE PURCHASE OF ANY ONE OF THE FLATS PROVIDED THAT THE OTHER CONDITIONS MENTIONED IN THE SECTION ARE SATISFIED'. A CURSORY LOOK AT THE MANDATE OF THE ABOVE JUDGMENT FAIRLY INDICATES THAT THE EXEMPTION U/S 54 IS AVAILABLE ONLY IN RESPECT OF ON E HOUSE AND NOT MORE THAN ONE HOUSE. THE JUDGMENT OF THE HON'BLE JU RISDICTIONAL HIGH COURT WHICH IS BINDING ON THE TRIBUNAL, CAN UN DER NO CIRCUMSTANCES, BE IGNORED IN PREFERENCE TO THE JUDG MENT OF ANY OTHER HON'BLE HIGH COURTS. IT IS RELEVANT TO NOTE THAT TH E DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF GITA DUGGAL {SUPRA) IS DISTINGUISHABLE INASMUCH AS IN THAT CASE THE ASSESS EE WAS ALLOTTED BASEMENT AND GROUND FLOOR ON WHICH EXEMPTION WAS GI VEN BUT THE SAID BENEFIT WAS DENIED ON THE FIRST FLOOR AND SECO ND FLOOR AS THEY WERE LET OUT. THERE WAS NO DISPUTE THAT ALL THE BAS EMENT, GROUND FLOOR, FIRST FLOOR AND SECOND FLOOR CONSTITUTED ONE RESIDENTIAL HOUSE, FOR WHICH THE TRIBUNAL WAS PLEASED TO DECIDE THE IS SUE OF EXEMPTION ITA 409/JP/2017 UMA KACHHAWA VS ITO 6 IN ASSESSEE'S FAVOUR. THE FACTS OF THE INSTANT CASE ARE DIFFERENT INASMUCH AS THE ASSESSEE WAS ALLOTTED TWO FLATS ON TWO DIFFERENT STORIES. IT IS NOT THE CASE OF THE ASSESSEE THAT BO TH THE FLATS ON DIFFERENT FLOORS WERE USED AS ONE RESIDENTIAL HOUSE . NATURALLY IT COULD NOT HAVE BEEN SO FOR THE REASON OF THESE TWO FLATS SITUATED ON DIFFERENT STORIES CAN NOT CONSTITUTE ONE HOUSE. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COU RT AND THE SPECIAL BENCH IN THE ABOVE REFERRED CASES, WE HOLD THAT THE LEARNED CIT(A) WAS JUSTIFIED IN RESTRICTING THE BENEFIT OF EXEMPTION U/S 54 ONLY IN RESPECT OF ONE FLAT. THIS GROUND IS NOT ALLOWED. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PAWAN ARYA VS CIT (2011) 11 TAXMANN.COM 312 (P&H) HAS HELD AS UNDE R: AS REGARD CLAIM FOR EXEMPTION AGAINST ACQUISITION O F TWO HOUSES UNDER SECTION 54, THE SAME WAS NOT ADMISSIBLE IN PLAIN LA NGUAGE OF STATUTE. THUS, NO SUBSTANTIAL QUESTION OF LAW AROSE FROM TH E TRIBUNALS ORDER. IN THE RESULT, THE ASSESSEES APPEAL WAS TO BE DISMISS ED. CONSIDERING THE FACTUAL ASPECT OF THIS CASE AND THE CASE LAWS RELIED UPON, THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED ORDER PRONOUNCED IN THE OPEN COURT ON 12/12/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12 TH DECEMBER, 2017 ITA 409/JP/2017 UMA KACHHAWA VS ITO 7 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SMT. UMA KACHHAWA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 7(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 409/JP/2017) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR