ACIT, New Delhi V. Hira Lal Gupta, New Delhi

ITA 4230/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74266 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 06-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: AMIT GOEL
• Keywords: Capital asset; Depreciation
• Section: 54F; 37(1); 54; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .4230/DEL/2012 4230/DEL/2012 4230/DEL/2012 4230/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -37(1) 37(1) 37(1) 37(1), ,, , NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI HIRA LAL GUPTA, SHRI HIRA LAL GUPTA, SHRI HIRA LAL GUPTA, SHRI HIRA LAL GUPTA, 1149/4, DURGA PURI EXTENSION, 1149/4, DURGA PURI EXTENSION, 1149/4, DURGA PURI EXTENSION, 1149/4, DURGA PURI EXTENSION, MAIN LONI ROAD, DURGA PURI CHOWK, MAIN LONI ROAD, DURGA PURI CHOWK, MAIN LONI ROAD, DURGA PURI CHOWK, MAIN LONI ROAD, DURGA PURI CHOWK, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 093. 110 093. 110 093. 110 093. PAN : AAHPG3708J. PAN : AAHPG3708J. PAN : AAHPG3708J. PAN : AAHPG3708J. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATPAL SINGH, SR.DR. RESPONDENT BY : SHRI AMIT GOEL, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-XXVIII, NEW DELHI DATED 18 TH JUNE, 2012 FOR THE AY 2009- 10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS BEFORE US:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF DENIAL OF EXEMPTION U/S 54 F BY TREATING THE TRANSACTION ON SALE OF DEPRECIATION ASSET AS SHORT TERM CAPITAL GAIN IN VIEW OF SECTION 50 OF T HE INCOME TAX ACT, 1961. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN NOT APPRECIATING THAT SECT ION 50 IS A SPECIAL PROVISIONS SECTION AND IT HAS NO DEPENDENCE ON ITA-4230/DEL/2012 2 SECTION 54 OF THE INCOME TAX ACT, 1961 AND FURTHER SE CTION 50 IS FOR DEPRECIABLE ASSETS, WHEREAS, SECTION 54 IS SPECIFICALLY FOR A RESIDENTIAL HOUSE. 3. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 4. THE APPELLANT CAN CRAVES TO ADD, AMEND OR MODIFY THE GROUNDS OF APPEAL AT ANY TIME. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL PLACED BEFORE US. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT VS. RAJIV SHUKLA [2011] 334 ITR 138 WHE REIN THEIR LORDSHIPS HELD AS UNDER:- IN THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08, HE HAD SHOWN LONG-TERM CAPITAL GAINS O N SALE OF PROPERTY AND CLAIMED THE BENEFIT OF DEDUCTIO N UNDER SECTION 54F OF THE INCOME-TAX ACT, 1961. THE CLAIM WAS REJECTED ON THE GROUND THAT THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE SHOWING INVESTMENT IN THE CAPIT AL GAINS DEPOSIT ACCOUNT SCHEME AND THAT THE PROPERTY SOL D BY HIM WAS A DEPRECIABLE ASSET. THE ASSESSING OFFICER TOOK THE VIEW THAT THE CAPITAL GAINS ARISING FROM TR ANSFER OF A DEPRECIABLE ASSET SHALL BE DEEMED TO BE CAPITAL GAIN S ARISING FROM TRANSFER OF A SHORT-TERM CAPITAL ASSET AND DEDUCTION UNDER SECTION 54F WAS NOT AVAILABLE. THE COMMISSIONER (APPEALS) DELETED THE ADDITION OF RS.91,77,118 MADE BY THE ASSESSING OFFICER UNDER THE HEAD SHORT-TERM CAPITAL GAIN. THIS WAS CONFIRMED B Y THE TRIBUNAL. ON APPEAL : HELD, DISMISSING THE APPEAL, THAT THE INCOME EARNED BY THE ASSESSEE ON SALE OF PROPERTY WAS TO BE TREATED AS LONG- TERM CAPITAL GAINS ENTITLING HIM TO THE BENEFIT OF DEDUCTION UNDER SECTION 54F. 4. THAT THE FACTS OF THE ASSESSEES CASE ARE ALSO IDENTICAL . IN THE CASE BEFORE US, THE ASSESSEE SOLD HIS NURSING HOME WHICH WAS ITA-4230/DEL/2012 3 CONSISTING OF LAND AND BUILDING. NO DEPRECIATION WAS BEING CLAIMED ON LAND BUT, ON BUILDING, DEPRECIATION WAS BEING CLAIM ED. ADMITTEDLY, THE LAND AND BUILDING WERE OWNED FOR MORE THAN THREE YE ARS. THE ASSESSING OFFICER TREATED THE CAPITAL GAIN FROM THE SALE OF NURSING HOME AS SHORT TERM CAPITAL GAIN UNDER SECTION 50 OF T HE INCOME-TAX ACT, 1961 AND CONSEQUENTLY DISALLOWED THE EXEMPTION CLAIMED UNDER SECTION 54F. THAT ON IDENTICAL FACTS, HON'BLE JURISD ICTIONAL HIGH COURT UPHELD THE DECISION OF THE TRIBUNAL WHEREIN EXEMPTIO N UNDER SECTION 54F WAS ALLOWED THOUGH THE CAPITAL GAIN AROSE FROM TH E SALE OF DEPRECIABLE ASSET. IN VIEW OF THE ABOVE, WE, RESPECTF ULLY FOLLOWING THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, UPHOLD THE ORDER OF LEARNED CIT(A) AND DISMISS THE APPEAL FILED BY THE REV ENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2014. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 28.02.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -37(1), NEW DELHI. 37(1), NEW DELHI. 37(1), NEW DELHI. 37(1), NEW DELHI. 2. RESPONDENT : SHRI HIRA LAL GUPTA, SHRI HIRA LAL GUPTA, SHRI HIRA LAL GUPTA, SHRI HIRA LAL GUPTA, 1149/4, DURGA PURI EXTENSION, 1149/4, DURGA PURI EXTENSION, 1149/4, DURGA PURI EXTENSION, 1149/4, DURGA PURI EXTENSION, MAIN LONI ROAD, DURGA PURI CHOWK, MAIN LONI ROAD, DURGA PURI CHOWK, MAIN LONI ROAD, DURGA PURI CHOWK, MAIN LONI ROAD, DURGA PURI CHOWK, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 093. 110 093. 110 093. 110 093. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR