ASST CIT 11(3), MUMBAI V. UMANG B MADAN, MUMBAI

ITA 4654/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88000 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Department
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2013
• Court: TRIBUNAL
• Department Lawyers: N PADMANABAN
• Assessee Lawyers: ASHOK J PATIL
• Section: 54

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I.T.A. NO. 4654/M/2013 (AY 2009 - 2010) ASST. CIT 11(3), R.NO.446, AAYAKAR BHAVAN, MUMBAI 400 020. / VS. UMANG B. MADAN, 502A OBEROI GARDENS CHS 5 TH FLOOR, THAKUR VILLAGE, KANDIVALI (E), MUMBAI - 400101. ./ PAN : AANPM 7593H ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI N. PADMANABAN / RESPONDENT BY : SHRI ASHOK J PATIL / DATE OF HEARING : 30.12.2014 / DATE OF PRONOUNCEMENT : 14. 01.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 14.6.2013 IS AGAINST THE ORDER OF THE CIT (A) - 2, MUMBAI DATED 29.4.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUND WHICH READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD CIT (A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 59,04,758/ - MADE ON ACCOUNT OF NOT GRANTING EXEMPTION U/S 54 IN RESPECT OF TWO PROPERTIES SOLD DURING THE YEAR AS THE BENEFIT U/S 54 WAS CLAIMED A GAINST CONSTRUCTION OF A PROPERTY FOR WHICH THE BENEFIT U/S 54 WAS ALREADY TAKEN BY THE ASSESSEE IN PRECEDING AY 2008 - 2009. 2. AT THE OUTSET LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ABOVE GROUND AND MENTIONED THAT THE REVENUE RAISED THE AB OVE GROUND AGAINST THE RELIEF GRANTED BY THE CIT (A) IN RESPECT OF THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 54 OF THE ACT THOUGH THE SALE TRANSACTION INCLUDES THE SALE OF ONE OF THE PROPERTIES TOOK PLACE IN EARLIER ASSESSMENT YEAR. BRIEFLY STATED RELEVANT FACTS OF THE CAS E ARE THAT THE ASSESSEE OWNS COUPLE OF PROPERTIES WHICH WERE SOLD IN MAY 2007 AND MAY 2008. ASSESSEE EARNED CAPITAL GAINS IN THE SALE TRANSACTIONS AND UTILIZED THE RELATED CAPITAL GAINS FOR CONSTRUCTION OF A HOUSE AND THE SAME WAS COMPLETED IN FEBRUARY 20 09. 2 CONSTRUCTION OF THE HOUSE WAS COMMENCED IN JUNE 2007, WHICH IS SUBSEQUENT TO THE SALE OF THE FIRST PROPERTY IN KANHAIYA IN MAY 2007. THE TIME DIFFERENCE BETWEEN THE SALE TRANSACTION AND THE COMPLETION OF CONSTRUCTION OF THE PROPERTY IS LESS THAN THREE YEARS WHICH IS PERMITTED UNDER THE PROVISIONS OF SECTION 24 OF THE ACT. CIT (A) APPRECIATED THE SAME AND FOLLOWED CERTAIN DECISIONS OF THE TRIBUNAL AND ALLOWED THE APPEAL OF THE ASSESSEE ON THIS ISSUE. THE CONTENTS OF PARA 4.4 OF THE CIT (A)S ORDER ARE RELEVANT IN THIS REGARD AND THE SAME READS AS UNDER: 4.4. I HAVE GONE THROUGH THE ISSUE. IN THIS CASE, IT IS SEEN THAT THE APPELLANT SOLD A HOUSE PROPERTY IN THE ACCOUNTING YEAR RELEVANT TO AY 2008 - 2009 AND SOLD ANOTHER TWO FLATS IN THE ACCOUNTING YEAR RELEVANT TO AY 2009 - 2010 AND THE SALE PROCEEDS OF THESE THREE PROPERTIES WERE USED FOR THE CONSTRUCTION OF A BUNGLOW IN PUNE. FROM THE DECISIONS RELIED UPON BY THE APPELLANT, IT IS SEEN THAT THE SALE PROCEEDS OF RESIDENTIAL PROPERTIES (EVEN IF IT IS MORE THAN ONE) IS INVESTED I THE CONSTRUCTION OF A HOUSE PROPERTY THEN THE CAPITAL GAINS ARISING FROM THE SALES IS EXEMPT U/S 54 OF THE ACT. IN THIS CASE, THE SALE PROCEEDS OF THE FLATS SOLD IN THE ACCOUNTING YEAR RELEVANT TO THE AY 2009 - 2 010 ARE USED FOR CONSTRUCTING A RESIDENTIAL BUNGLOW. IN VIEW OF THIS, RESPECTFULLY FOLLOWING THE HONBLE MUMBAI TRIBUNAL IN THE CASE OF SHRI HUMAYN S. RANGILA VS. ITO 19(3)(2) [ITA NO.1239/M/2010 AY 2006 - 2007 ORDER DATED 23.2.2011], I HOLD THAT THE APPE LLANT IS ENTITLED FOR THE DEDUCTION U/S 54 OF THE INCOME TAX ACT. I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS. 59,04,758/ - . 3. IN OUR OPINION, THE ABOVE CONCLUSIONS AND THE REASONS GIVEN BY THE CIT (A) IS FAIR AND REASONABLE AND THE SAME DOES NOT CALL FOR ANY INTERFERENCE. WHILE ADJUDICATING THE ISSUE UNDER CONSIDERATION THE CIT (A) RELIED ON THE COORDINATE BENCH DECISION IN THE CASE OF SHRI HUMAYUN S. RANGILA VS. ITO. ACCORDINGLY, GROUND RAISED BY THE REVENUE IS DISMISSED. 4. IN THE RES ULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNC ED IN THE OPEN COURT ON 1 4 T H JANUARY, 2015. S D / - S D / - (SANJAY GARG) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 4 .1.2015 . . ./ OKK , SR. PS 3 / 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