ITO ,WD 1(5), THANE V. DHRUV BISHWA TEWARI, THANE

ITA 4233/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2656 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 08-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CHAITANYA ANJARIA
• Section: 143(3); 54; 139

Judgement Text

P A G E | 1 ITA NO. 4233/MUM/2017 A.Y. 2013-14 INCOME TAX OFFICER VS. SHRI DHRUV BISHWA TEWARI IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 4233/MUM/2017 (ASSESSMENT YEAR: 2013-14) INCOME TAX OFFICER WARD-1(5), ROOM NO. 14, 6 TH FLOOR, ASHAR IT PARK, B-WING, WAGLE INDL. ESTATE, THANE (W) 400604 VS. SHRI DHRUV BISHWA TEWARI FLAT NO. 802, SPRING HILL, HIRANANDANI ESSTAT, GHODBUNDER ROAD, THANE WEST, 400607 PAN ADJPT6424D APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI CHAITANYA ANJARIA, D.R DATE OF HEARING: 01.11.2018 DATE OF PRONOUNCEMENT: 09.11.2018 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTE D AGAINST THE ORDER PASSED BY THE CIT(A)-1, THANE, DATED 10.03.2017 WHI CH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) OF TH E INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 16.02.2016 FOR A.Y 2013-14 . THE REVENUE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOW ING GROUNDS OF APPEAL: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE DEDUCTION CLAIMED U/S 54 OF THE I.T. ACT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE APPEAL BY CONSIDER ING THE DATE OF FILING OF RETURN AS PER SECTION 139(4) INSTEAD OF 139(1) FOR THE PURPOSE OF DEPOSITING THE CAPITAL GAINS IN THE LONG TERM CAPITAL GAINS SC HEME DESPITE THE FACT THAT SECTION 54(2) CLEARLY SPECIFIES THE DUE DATE F OR THE SAID PURPOSE AS [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THA N THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139] 3. THE ORDER OF THE CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 4. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND, ALTER O R DELETE ANY GROUND OF APPEAL. P A G E | 2 ITA NO. 4233/MUM/2017 A.Y. 2013-14 INCOME TAX OFFICER VS. SHRI DHRUV BISHWA TEWARI 2. BRIEFLY STATED, THE ASSESSEE HAD E-FILED HIS RET URN OF INCOME FOR A.Y. 2013-14 ON 17.08.2013, DECLARING TOTAL INCOME AT RS .5,08,780/-. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC.143(2) OF THE ACT. 3. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS IT W AS OBSERVED BY THE A.O THAT THE ASSESSEE HAD SHOWN A LONG TERM CAPITAL GAIN (FOR SHORT LTCG) OF RS. 80,41,395/- IN RESPECT OF TWO PROPER TIES VIZ. FLAT NO. 504A AND 504B, WHICH WERE SOLD BY HIM FOR AN AGGREGATE C ONSIDERATION OF RS. 1,37,00,000/-, VIDE AGREEMENT TO SELL DATED 26.02.2 013. IT WAS OBSERVED BY THE A.O THAT AS THE ASSESSEE HAD PURCHASED A NEW RE SIDENTIAL PROPERTY VIZ. FLAT NO. A/203, CROWN @ HIRANANDANI, THANE FOR A CO NSIDERATION OF RS.85,92,700/- ON 22.04.2014, THEREFORE, THE ENTIRE AMOUNT OF CAPITAL GAIN WAS CLAIMED BY HIM AS EXEMPT UNDER SEC.54 OF THE AC T. HOWEVER, THE A.O WAS NOT PERSUADED TO ACCEPT THE SAID CLAIM OF THE A SSESSEE. THE A.O WAS OF THE VIEW THAT AS THE LTCG OF RS.80,41,395/- WAS REC EIVED BY THE ASSESSEE ON 26.02.2013, THUS FOR CLAIM OF EXEMPTION UNDER SE C. 54 IT WAS OBLIGATORY ON HIS PART TO HAVE INVESTED THE ENTIRE CAPITAL GAI N RECEIPTS IN THE ACQUISITION OF THE NEW RESIDENTIAL PROPERTY BEFORE THE DUE DAT E OF FILING OF THE RETURN OF INCOME UNDER SEC.139(1) OF THE ACT I.E. LATEST BY 3 1.07.2013. FURTHER, THE A.O WAS OF THE VIEW THAT IN CASE THE ASSESSEE COULD NOT APPROPRIATE THE AMOUNT OF CAPITAL GAIN TOWARDS THE INVESTMENT IN TH E NEW ASSET, THEN IT WAS OBLIGATORY ON HIS PART TO HAVE DEPOSITED THE SAID A MOUNT IN THE CAPITAL GAIN ACCOUNT SCHEME (FOR SHORT CGAS) WITH A SPECIFIED BANK. 4. IT WAS NOTICED BY THE A.O THAT IN RESPECT OF THE NEW FLAT VIZ. A/203, CROWN @ HIRANANDANI, THANE PURCHASED BY THE ASSESSE E FOR RS.85,92,700/- THE FIRST TOKEN PAYMENT OF RS. 2 LAC WAS MADE BY TH E ASSESSEE ON 12.03.2014 AND THE AGREEMENT OF PURCHASE WAS EXECUT ED ON 22.04.2014. IN THE BACKDROP OF THE AFORESAID FACTS, IT WAS OBSERVE D BY THE A.O THAT THE ASSESSEE HAD NEITHER UTILISED THE FUNDS FOR PURCHAS E OF ANY RESIDENTIAL PROPERTY BEFORE THE DUE DATE OF FILING OF THE RETUR N OF INCOME, NOR HAD HE DEPOSITED THE SAME IN THE CGAS ACCOUNT WITH AN AUTH ORISED BANK. ON THE BASIS OF HIS AFORESAID OBSERVATIONS, THE A.O HOLDIN G A CONVICTION THAT THE P A G E | 3 ITA NO. 4233/MUM/2017 A.Y. 2013-14 INCOME TAX OFFICER VS. SHRI DHRUV BISHWA TEWARI ASSESSEE HAD FAILED TO EFFECT COMPLIANCE TO THE CON DITIONS CONTEMPLATED IN SUB-SECTION (2) OF SEC. 54, THUS DECLINED TO ACCEPT THE CLAIM OF EXEMPTION RAISED BY HIM UNDER SEC.54 AND ASSESSED HIS INCOME AT RS.86,03,400/-. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING AT LENGTH ON THE CONT ENTIONS ADVANCED BY THE ASSESSEE DID FIND FAVOUR WITH THE SAME. THE CIT(A) RELIED ON A HOST OF JUDICIAL PRONOUNCEMENTS AND OBSERVED THAT IF THE A MOUNT OF LTCG WAS UTILIZED BY THE ASSESSEE BEFORE THE DUE DATE OF F ILING OF THE RETURN OF INCOME AS PER SEC.139(4) OF THE ACT, THEN IRRESPECTIVE OF THE FACT THAT THE SAME WAS NOT DEPOSITED BY HIM IN THE SPECIFIED BANK ACCOUNT BY THE DUE DATE UNDER SEC. 139(1), THE CLAIM OF EXEMPTION UNDER SEC.54F/5 4 OF THE ACT WOULD STILL BE ALLOWABLE. IT WAS OBSERVED BY THE CIT(A), THAT I N THE CASE OF THE ASSESSEE THE DUE DATE OF FILING OF THE RETURN OF INCOME AS PER SEC. 139(4) WAS 31.03.2015. THE CIT(A) OBSERVED THAT THE ASSESSEE H AD UTILIZED THE AMOUNT OF LTCG FOR MAKING PAYMENT TOWARDS PURCHASE OF THE NEW RESIDENTIAL PROPERTY VIZ. A/203, CROWN @ HIRANANDANI, THANE DUR ING THE PERIOD FALLING BETWEEN 12.03.2014 TO 09.05.2014. ON THE BASIS OF H IS AFORESAID OBSERVATIONS THE CIT(A) DID NOT FIND FAVOUR WITH TH E VIEW TAKEN BY THE A.O THAT AS THE ASSESSEE HAD FAILED TO DEPOSIT THE AMOU NT OF THE CAPITAL GAINS BY THE DUE DATE OF FILING OF THE RETURN OF INCOME AS CONTEMPLATED UNDER SEC.139(1) OF THE ACT, THUS ITS CLAIM OF EXEMPTION UNDER SEC. 54 WAS LIABLE TO BE REJECTED. IN THE BACKDROP OF THE AFORESAID DELIB ERATIONS, THE CIT(A) BEING THE VIEW THAT THE CLAIM OF EXEMPTION RAISED BY THE ASSESSEE UNDER SEC.54 WAS IN ORDER, ALLOWED THE APPEAL OF THE ASSESSEE. 6. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF TH E CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT THE AS SESSEE RESPONDENT DESPITE HAVING BEEN INTIMATED AS REGARDS THE DATE OF HEARIN G OF THE APPEAL HAD HOWEVER FAILED TO PUT UP AN APPEARANCE BEFORE US. I N THE BACKDROP OF THE AFORESAID FACTS WE ARE LEFT WITH NO OTHER ALTERNATI VE BUT TO PROCEED WITH AS PER RULE 25 OF THE APPELLATE TRIBUNAL RULES, 1963 A ND DISPOSE OFF THE APPEAL AFTER HEARING THE APPELLANT REVENUE. THE LD. DEPART MENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER PASSED BY THE A.O. P A G E | 4 ITA NO. 4233/MUM/2017 A.Y. 2013-14 INCOME TAX OFFICER VS. SHRI DHRUV BISHWA TEWARI 7. WE HAVE HEARD THE LD. D.R AND HAVE PERUSED THE O RDERS OF THE LOWER AUTHORITIES. THE ISSUE INVOLVED IN THE PRESENT APPE AL LIES WITHIN A NARROW COMPASS. ADMITTEDLY, THE ASSESSEE HAD NEITHER APPRO PRIATED THE LTCG ARISING ON SALE OF A RESIDENTIAL PROPERTY FOR PURCH ASE OF A NEW RESIDENTIAL PROPERTY, NOR DEPOSITED THE SAID AMOUNT IN THE CGAS ACCOUNT BY THE DUE DATE CONTEMPLATED UNDER SEC. 139(1) FOR FILING OF THE RETURN OF INCOME IN HIS CASE I.E 31.07.2013. HOWEVER, THE ASSESSEE HAD PURCHASED A NEW RESIDENTIAL PROPERTY VIZ. A/203, CROWN @ HIRANANDAN I, THANE WITHIN THE PERIOD PROVIDED UNDER SEC. 139(4) OF THE ACT. THE A .O BEING OF THE VIEW THAT AS THE ASSESSEE HAD FAILED TO DEPOSIT THE AMOUNT OF LTCG IN THE CGAS ACCOUNT WITH THE SPECIFIED BANK BY THE DUE DATE O F FILING OF THE RETURN OF INCOME AS CONTEMPLATED UNDER SEC. 139(1) IN HIS CA SE, THUS HIS CLAIM FOR EXEMPTION RAISED UNDER SEC. 54 WAS LIABLE TO BE DIS ALLOWED. HOWEVER, AS OBSERVED BY US HEREINABOVE, THE CIT(A) NOT FINDING FAVOUR WITH THE VIEW TAKEN BY THE A.O HAD DISLODGED THE SAME AND HAD ALL OWED THE CLAIM OF EXEMPTION RAISED BY THE ASSESSEE IN HIS RETURN OF INCOME. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE BEFORE US AND ARE PERSUADED TO SUBSCRIBE TO THE VIEW TAKEN BY THE CIT (A). ON A PERUSAL OF SEC. 54(2), IT EMERGES THAT THE ASSESSEE IN ORDER TO CLA IM EXEMPTION UNDER SEC.54 REMAINS UNDER AN OBLIGATION TO APPROPRIATE THE AMOU NT OF THE CAPITAL GAIN TOWARDS THE PURCHASE OF THE NEW ASSET WITHIN A PERI OD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER OF T HE ORIGINAL ASSET TOOK PLACE, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE. IN SO FAR, WHERE THE CAPITAL GAI N IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS PURCHASE OR CONSTRUCTION OF THE RE SIDENTIAL PROPERTY WITHIN THE PERIOD CONTEMPLATED UNDER SEC. 139, THEN IN SUC H A CASE THE ENTITLEMENT OF THE ASSESSEE TO CLAIM THE EXEMPTION BY MAKING AN INVESTMENT TOWARDS PURCHASE OR CONSTRUCTION OF THE NEW ASSET WOULD STI LL BE AVAILABLE, SUBJECT TO THE CONDITION THAT THE ASSESSEE HAD DEPOSITED THE A MOUNT OF SUCH CAPITAL GAIN IN THE CGAS ACCOUNT WITH THE SPECIFIED BANK BY THE DUE DATE CONTEMPLATED UNDER SEC. 139(1) OF THE ACT. FURTHER, IN CASE IF ANY PART OF THE CAPITAL GAIN HAD ALREADY BEEN UTILIZED BY THE ASSES SEE FOR THE PURCHASE OR P A G E | 5 ITA NO. 4233/MUM/2017 A.Y. 2013-14 INCOME TAX OFFICER VS. SHRI DHRUV BISHWA TEWARI CONSTRUCTION OF THE NEW ASSET, THE AMOUNT OF SUCH U TILIZATION ALONG WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET. WE ARE OF THE CONSIDERED VIEW THAT THE OUTER LIMIT FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET AS PER SUBSECTION (2) OF SEC. 54 I S THE DATE OF FURNISHING OF THE RETURN OF INCOME BY THE ASSESSEE UNDER SEC.13 9. ON A PLAIN AND LITERAL INTERPRETATION OF THE AFORESAID STATUTORY PROVISION , IT CAN SAFELY BE GATHERED THAT THE CONSCIOUS, PURPOSIVE AND INTENTIONAL PROVI DING BY THE LEGISLATURE OF DATE OF FURNISHING THE RETURN OF INCOME UNDER SEC. 139 CANNOT BE SUBSTITUTED AND NARROWED DOWN TO SEC.139(1) OF THE ACT. WE ARE OF THE CONSIDERED VIEW, THAT THE DATE OF FURNISHING OF THE RETURN OF INCOME UNDER SEC.139 WOULD SAFELY ENCOMPASS WITHIN ITS SWEEP THE TIME LIMIT PROVIDED FOR FILING OF THE RETURN OF INCOME BY THE ASSESSEE UN DER SEC.139(4) OF THE ACT. IN THE BACKDROP OF THE AFORESAID SETTLED POSITION OF L AW, WE ARE OF THE CONSIDERED VIEW THAT SUBSECTION (2) OF SEC. 54 CONT EMPLATES TWO SITUATIONS VIZ. (A) A CASE WHERE THE ASSESSEE HAD APPROPRIATED THE AMOUNT OF LTCG TOWARDS ACQUISITION OF THE NEW ASSET WITHIN A PERIO D OF ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TO OK PLACE OR FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE TH E DATE OF FURNISHING THE RETURN OF INCOME UNDER SEC.139 OF THE ACT; AND (B) A CASE WHERE THE ASSESSEE HAD NOT APPROPRIATED THE AMOUNT OF THE CAP ITAL GAIN BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SEC.139, THERE HE SHALL BE ELIGIBLE TO CLAIM EXEMPTION UNDER SEC.54 TOWARDS PURCHASE OF THE NEW ASSET WITHIN A PERIOD OF TWO YEARS AFTER THE DATE ON WHICH THE T RANSFER TOOK PLACE OR TOWARDS CONSTRUCTION OF A NEW ASSET WITHIN A PERIOD OF 3 YEARS FROM THE DATE ON WHICH THE TRANSFER TOOK PLACE, SUBJECT TO A RIDE R THAT THE ASSESSEE SHOULD HAVE DEPOSITED THE AMOUNT OF CAPITAL GAIN IN A CGAS ACCOUNT WITH A SPECIFIED BANK BY NOT LATER THAN THE DUE DATE APP LICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SEC.139. WE FIND THAT THE CASE BEFORE US CLEARLY FALLS WITHIN THE SW EEP OF THE AFOREMENTIONED FIRST LIMB OF SUB-SECTION (2) OF SEC.54 OF THE ACT. AS THE ASSESSEE IN THE CASE BEFORE US HAD APPROPRIATED THE AMOUNT OF THE LTCG T OWARDS PURCHASE OF THE NEW RESIDENTIAL PROPERTY VIZ. FLAT A-203, CROWN @ H IRANANDANI, THANE ON 22.04.2014 I.E BEFORE THE DATE CONTEMPLATED UNDER S EC.139(4), THUS BY P A G E | 6 ITA NO. 4233/MUM/2017 A.Y. 2013-14 INCOME TAX OFFICER VS. SHRI DHRUV BISHWA TEWARI HAVING UTILIZED THE LTCG BEFORE THE DATE OF FURNISH ING THE RETURN OF INCOME UNDER SEC. 139, HIS CLAIM OF EXEMPTION UNDER SEC. 5 4 IS FOUND TO BE IN ORDER. WE FIND THAT OUR AFORESAID VIEW STANDS FORTI FIED BY A JUDGMENT OF THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. JAGRITI AGGARWAL (2011) 339 ITR 610 (P&H). THE HIGH COURT I N THE SAID CASE HAD OBSERVED AS UNDER: SECTION 54, READ WITH SECTION 139, OF THE INCOME-T AX ACT, 1961 - CAPITAL GAINS - PROFITS ON SALE OF PROPERTY USED FOR RESIDENCE - ASSESSMENT YEAR 2006-07 - ASSESSEE SOLD HER HOUSE PROPERTY ON 13-1-2006 WHILE FILED HER RETURN ON 28-3-2007 CLAIMING DEDUCTION UNDER SECTION 54 ON GROUND THAT SHE HAD PURCHASED A NOTHER PROPERTY JOINTLY ON 2-1- 2007 FOR HIGHER SUM - ASSESSING OFFICER DECLINED SA ID CLAIM - ONE OF GROUNDS WAS THAT ASSESSEE HAD FAILED TO PURCHASE HOUSE PROPERTY BEFO RE DUE DATE OF FILING RETURN OF INCOME UNDER SECTION 139(1), I.E., PRIOR TO 31-7-20 06 - ACCORDING TO ASSESSEE, DUE DATE OF FILING RETURN OF INCOME IN HER CASE WAS NOT AS S PECIFIED IN SECTION 139(1) BUT AS SPECIFIED IN SECTION 139(4) I.E., 31-7-2007 - WHETH ER DUE DATE FOR FURNISHING RETURN OF INCOME AS PER SECTION 139(1) IS SUBJECT TO EXTENDED PERIOD PROVIDED UNDER SUB-SECTION ('4) OF SECTION 139 AND, IF A PERSON HAD NOT FURNIS HED RETURN OF PREVIOUS YEAR WITHIN TIME ALLOWED UNDER SUB-SECTION (1), ASSESSEE COULD FILE RETURN UNDER SUB-SECTION (4) BEFORE EXPIRY OF ONE YEAR FROM END OF RELEVANT ASSE SSMENT YEAR - HELD, YES WHETHER, THEREFORE, SECTION 5, DEDUCTION COULD NOT BE DENIED TO ASSESSEE ON THIS COUNT - HELD, YES [IN FAVOUR OF ASSESSEE] FURTHER, A SIMILAR VIEW HAD ALSO BEEN TAKEN BY THE COORDINATE BENCHES OF THE TRIBUNAL VIZ. (I) KISHORE H. GALAIYA VS. ITO (2012) 137 ITD 229 (MUM); (II) ACIT VS. ASHA ASHOK BOOB (2015) 59 TAXMAN.COM 173 ( PUNE); AND (III) ANIL KUMAR OMKAR SINGH AURORA VS. ITO (2013) 37 CCH 221 (MUM). 9. WE THUS ON THE BASIS OF OUR AFORESAID OBSERVATIO NS ARE PERSUADED TO SUBSCRIBE TO THE WELL REASONED VIEW TAKEN BY THE CI T(A), AND FINDING NO INFIRMITY IN HIS ORDER, UPHOLD THE SAME. 10. THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 09.11.2018 SD/- SD/- ( SHAMIM YAHYA) (RAVISH SOOD) ACCOUNTANT MEMBER JU DICIAL MEMBER MUMBAI; 09.11.2018 PS. ROHIT P A G E | 7 ITA NO. 4233/MUM/2017 A.Y. 2013-14 INCOME TAX OFFICER VS. SHRI DHRUV BISHWA TEWARI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , ! , / DR, ITAT, MUMBAI 6. '# / GUARD FILE. % //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI