ASST CIT 35(1), MUMBAI V. HEMLATA MANIKRAO HAMILAPURKAR, MUMBAI

ITA 44/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2375 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 05-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SATHYA MOORTHYDR
• Section: 54F

Judgement Text

1 , INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUMBAI , . . , BEFORE S/SH.RAJENDRA,ACCOUNTANT MEMBER AND C.N. PRA SAD,JUDICIAL MEMBER ./I.T.A./44/MUM/2015, /ASSESSMENT YEAR: 2010-11 ACIT-35(1), 310, C-12, 3 RD FLOOR PRATYAKSHAKAR BHAVAN, BKC COMPLEX, BANDRA (E),MUMBAI-400 051. VS. SMT. HEMLATA MANIKRAO HAMILAPURKAR 1801, SOMERSET CHS LTD., POWAI MUMBAI-400 076. PAN:AAAPH 8475 Q ( /APPELLANT ) ( / RESPONDENT) REVENUE BY: SHRI N. SATHYA MOORTHY-DR ASSESSEE BY: RAJESH S. SHAH / DATE OF HEARING: 21.07.2016 / DATE OF PRONOUNCEMENT: 29.07.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 14.10.2014 OF THE CIT(A )-28,MUMBAI,THE ASSESSING OFFICER(A.O),HAS FILED THE PRESENT APPEAL.ASSESSEE, AN INDIVIDUAL,FILED A RETURN OF INCOME ON 31/07/2010,SHOWING TOTAL INCOME AT RS. 1. 43 CRORES.THE AO COMPLETED ASSESSMENT ON 20.3.2013,U/S.143 (3) OF THE ACT,DETE RMINING THE INCOME OF THE ASSESSEE AT RS.3.58 CRORES. 2.SOLITARY GROUND OF APPEAL IS ABOUT ALLOWING DEDUC TION U/S.54 OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS,THE AO NOTED THAT THE AS SESSEE HAD SOLD RIGHTS IN FLATS NO.703 AND 2104,TORINO BUILDING, POWAI,MUMBAI AGAIN ST WHICH DEDUCTION U/S.54F WAS CLAIMED,THAT THE OCCUPANCY CERTIFICATE FOR THE BUILDING WAS GIVEN BY THE MUNICIPAL CORPORATION ON 02/01/2010,AFTER THE WATER CONNECTION WAS MADE AVAILABLE.HE HELD THAT THE SALE MADE BY THE ASSESSE E WAS OF RIGHTS INTO FLATS AND THAT IT WAS NOT THE CASE OF SALE OF FLATS PER SE.HE NOTE D THAT THE ASSESSEE OWNED THREE 44/M/15-(10-11) HEMLATA 2 MORE HOUSE PROPERTIES.THEREFORE,HE HELD THAT THE AS SESSEE WAS NOT ENTITLED TO GET DIRECTION U/S.54F OF THE ACT,AMOUNTING TO RS. 2.14 CRORES. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA)AND MADE ELABORATE SU BMISSIONS.IT WAS SPECIFICALLY ARGUED THAT THE OCCUPANCY CERTIFICATE FOR THE BUILD ING WAS RECEIVED ON 31/08/2009, THAT THE AO HAD WRONGLY MENTIONED THAT SAID CERTIFI CATE WAS ISSUED IN JANUARY,2010.THE FAA CALLED FOR A REMAND REPORT FRO M THE AO. HE DIRECTED THE ASSESSEE TO OFFER COMMENTS ON THE REMAND REPORT OF THE AO. 3.1 AFTER CONSIDERING ALL THE MATERIAL, HE HELD THAT TH E ASSESSEE HAD SOLD TWO FLATS DURING THE YEAR,THAT SHE HAD CLAIMED DEDUCTION U/S. 54F OF THE ACT MISTAKE, THAT SHE SHOULD HAVE MADE THE CLAIM U/S.54, THAT THE MATTER WAS BROUGHT TO THE NOTICE OF THE AO VIDE LETTER DATED 11/02/2013,THAT ONCE THE BASIC FACT WAS BROUGHT TO THE NOTICE OF THE AO HE SHOULD HAVE NOT IGNORED THE CLAIM AND SHOULD HAVE COMPLETED THE ASSESSMENT CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE,THAT THE AO COMPLET -ED THE ASSESSMENT CONSIDERING THE DEDUCTION CLAIME D IN THE RETURN ONLY, THAT ONLY JUST TAXES SHOULD BE COLLECTED FROM THE TAXPAYER, T HAT IGNORANCE OF TAXPAYER SHOULD NOT BE TAKEN ADVANTAGE BY THE AO. HE FURTHER HELD T HAT THE ASSESSEE OWN MORE THAN ONE RESIDENTIAL HOUSES ON THE DATE OF SALE OF ORIGI NAL ASSET,THAT SHE DID NOT FULFILL THE CONDITIONS FOR GRANT OF DEDUCTION U/S.54F OF THE AC T,THAT SINCE THERE IS NO SUCH PROHIBITION U/S.54 THE AO SHOULD HAVE CONSIDERED TH E CLAIM DURING THE ASSESSMENT PROCEEDINGS,THAT THE OCCUPATION CERTIFICATE FOR THE BUILDING WAS OBTAINED ON 31/ 08/2010,THAT FOR THE PURPOSE OF CALCULATING RATABLE VALUE BY THE MUNICIPAL CORPORATION THE DATE OF 02/01/2010 WAS ADAPTED AFTE R THE WATER CONNECTION WAS OBTAINED BY THE DEVELOPER,THAT THE SAID DATE COULD NOT BE CONSIDERED AS THE DATE OF OCCUPATION FOR THE PURPOSE OF DETERMINING THE OWNER SHIP OF THE FLAT SOLD BY THE ASSESSEE,THAT THE SAID DATE COULD BE VALID FOR LEVY OF MUNICIPAL TAXES AND THE 44/M/15-(10-11) HEMLATA 3 CONCLUSION OF RATABLE VALUE,THAT IT HAD NO SIGNIFIC ANCE FOR THE PURPOSE OF DETERMIN - ING THE OWNERSHIP OF THE FLATS,THAT SHE HAD SUFFICI ENTLY DEMONSTRATED THAT THE POSSESSION OF THE FLATS FOR THE PURPOSE OF DOING FU RNITURE WORK WAS OBTAINED ON 07/07/2009,THAT THE POSSESSION OF THE FLAT WAS MORE IMPORTANT THAN THE PHYSICAL OCCUPATION,THAT THE POSSESSION OF THE FLATS WAS TAK EN BY THE ASSESSEE BEFORE THE DATE OF ITS SALES,THAT IT COULD NOT BE HELD THAT WHAT WA S SOLD BY THE ASSESSEE WAS THE RIGHT IN THE FLAT AND NOT THE FLATS THEMSELVES,THAT SHE W AS ENTITLED TO DEDUCTION U/S.54 OF THE ACT.FINALLY,THE FAA ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4. BEFORE US, THE DEPARTMENTAL REPRESENTATIVE(DR) SUPP ORTED THE ORDER OF THE AO AND AUTHORISED REPRESENTATIVE(AR) RELIED UPON THE O RDER OF THE FAA. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD REQUESTED T HE AO TO ALLOW THE DEDUCTION U/S. 84, THAT THE CERTIFICATE FROM MUNICIPAL AUTHOR ITY WAS NOT RELEVANT FOR DETERMINING THE ALLOWABILITY OF DEDUCTION. 5. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD.W E FIND THAT INITIALLY THE ASSESSEE HAD MADE CLAIM U/S.54F OF THE ACT,THAT DUR ING THE ASSESSMENT PROCEEDINGS SHE REQUESTED THE AO TO CONSIDER THE CLAIM U/S.54 O F THE ACT,THAT THE AO IGNORED THE SUBMISSION MADE BY THE ASSESSEE,THAT THE FAA AL LOWED THE APPEAL HOLDING THAT POSSESSION OF IMMOVABLE PROPERTY SHOULD NOT BE EQUA TED WITH OCCUPATION.IT IS A FACT THAT THE ASSESSEE HAD STARTED FURNITURE WORK I N THE FLAT.THEREFORE,WATER CONNECTION OR OTHER FORMALITIES SHOULD NOT BE DECID ING FACTOR TO DENY OR ALLOW A DEDUCTION THAT IS A PART OF A BENEVOLENT PROVISION. THEREFORE, IN OUR OPINION THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INF IRMITY. UPHOLDING THE SAME WE, DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE A O. AS A RESULT,APP EAL FILED BY THE AO STANDS DISMISSED . . 44/M/15-(10-11) HEMLATA 4 ORDER PRONOUNCED IN TH E OPEN COURT ON 29 TH JULY,2016. 29 , 2016 SD/- SD/- ( . /C.N. PRASAD ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 29.07.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR C BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.