INCOME TAX OFFICER-30(1)(2), MUMBAI V. BHAVESH NATWARLAL GANATRA, MUMBAI

ITA 4725/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5626 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 04-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NAVEEN
• Assessee Lawyers: VIPUL J SHAH
• Keywords: Capital asset; Tax effect; Capital Gains
• Section: 54F; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 4725 /MUM/20 1 7 (ASSESSMENT YEAR 20 13 - 14 ) ITO 30(1)(2) ROOM NO. 505 5 TH FLOOR C - 13, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BAND RA(E) MUMBAI - 400 051. VS. SHRI BHAVESH NATWARLAL GANATRA A - 1301, VIKASH PARK LINK ROAD, MALAD W MUMBAI - 400 064. PAN :AGTPG2794A ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI VIPUL J. SHAH DEPARTMENT BY SHRI M. NAVEEN DATE OF HEARING 1 2 . 1 1 . 2 01 8 DATE OF PRONOUNCEMENT 20 . 1 1 . 201 8 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 20.4.2017 PASSED BY THE LEARNED CIT(A) - 41, MUMBAI AND IT RELATES TO A.Y. 2013 - 14. THE REVENUE IS AGGR IEVED BY THE DECISION OF THE LEARNED CIT(A) IN ALLOWING DEDUCTION U/S. 54F OF THE ACT TO THE ASSESSEE. 2. THE FACTS RELATING TO THE CASE ARE DISCUSSED IN BRIEF. THE ASSESSEE HAD SOLD CERTAIN GALAS AND DECLARED GAINS ARISING ON THE SALE AS LONG TERM CAPIT AL GAINS . THE ASSESSEE ALSO PURCHASED TWO ADJACENT FLATS IN AHUJA MAPLE VIEW, KANCHPADA, MUMBA I AND ACCORDINGLY CLAIMED THE VALUE OF BOTH FLATS AS DEDUCTION U/S. 54F OF THE ACT AGAINST LONG TERM CAPITAL GAINS DECLARED BY HIM . IN THE ASSESSMENT PROCEEDIN GS, T HE ASSESSING OFFICER HELD THAT THE CAPITAL ASSET, BEING GALAS, WERE NOT HELD BY THE ASSESSEE FOR MORE THAN 36 MONTHS AND HENCE THEY ARE NOT LONG TERM CAPITAL ASSETS AS CLAIMED BY THE ASSESSEE. ACCORDINGLY HE HELD THAT CAPITAL GAIN REALIZED BY THE ASS ESSEE IS ASSESSABLE AS SHORT TERM CAPITAL GAINS ONLY. SINCE DEDUCTION U/S 54F IS AVAILABLE ONLY AGAINST LONG TERM CAPITAL GAINS ONLY, HE REJECTED THE CLAIM OF THE ASSESSEE FOR SHRI BHAVESH NATWARLAL GANATRA 2 DEDUCTION U/S. 54F OF THE ACT ALSO. THE AO ALSO ADDUCED SOME MORE REASONS FOR RE JECTING THE CLAIM FOR DEDUCTION U/S 54F OF THE ACT, I.E, (A) HE TOOK THE VIEW THAT THE DEDUCTION U/S 54F IS NOT AVAILABLE TO THE ASSESSEE, SINCE HE HAS NOT ENTERED INTO ANY AGREEMENT FOR PURCHASE OF THE FLATS . (B) DEDUCTION U/S. 54F IS AVAILABLE ON PUR CHASE OF ONE RESIDENTIAL HOUSE ONLY. 3. IN THE APPELLATE PROCEEDINGS, THE LEARNED CIT(A) , HOWEVER, ACCEPTED THE CONTENTIONS OF THE ASSESSEE THAT THE GALAS HELD BY HIM WERE LONG TERM CAPITAL ASSETS . A CCORDINGLY , THE LD CIT(A) HE LD THAT CAPITAL GAIN AR ISING ON THEIR SALE IS ASSESSABLE AS LONG TERM CAPITAL GAIN. SINCE THE CAPITAL GAIN WAS HELD TO BE LONG TERM IN NATURE, THE LD CIT(A) ALSO HELD THAT TH E ASSESSEE CAN CLAIM DEDUCTION U/S. 54F OF THE ACT ON THE VALUE OF BOTH THE ADJACENT FLATS PURCHASED BY THE ASSESSEE. ACCORDINGLY HE ALLOWED DEDUCTION U/S 54F OF THE ACT. THE R EVENUE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN ALLOWING DEDUCTION U/S. 54F OF THE ACT. 4 . THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THA T LONG TERM CAPITAL GAINS WORKED OUT BY THE ASSESSEE WAS RS . 60.37 LAKHS AND DEDUCTION U/S. 54F OF THE ACT CAN BE CLAIMED BY THE ASSESSEE ONLY TO THE EXTENT OF RS 60.37 LAKHS. HE SUBMITTED THAT REVENUE IS DISPUTING THE DEDUCTION U/S 54F OF THE ACT ALLOWED BY THE LD CIT(A) AND HENCE THE QUANTUM IN DISPUTE IS RS.60.37 LAKHS. HENCE T HE TAX EFFECT INVOLVED ON THE ABOVE SAID AMOUNT @ 20% (RATE APPLICABLE TO CAPITAL GAINS) IS RS 12.43 LAKHS ONLY. SINCE THE TAX EFFECT INVOLVED ON THE QUANTUM IN DISPUTE IS LESS THAN RS.20.00 LAKHS, T HE LEARNED AR SUBMITTED THAT THE REVENUE IS PRECLUDED FROM PURSING THIS APPEAL IN VIEW OF THE CIRCULAR NO.3/2018 DATED 11.07.2018 ISSUED BY CBDT . 5. THOUGH THE LEARNED DR , IN PRINCIPLE , AGREED WITH THE SUBMISSIONS MADE BY LEARNE D AR, YET HE SOUGHT ONE WEEK TIME TO GET A REPORT FROM THE ASSESSING OFFICER IN THIS REGARD. AT THAT TIME, THE BENCH INFORMED LD D.R THAT THE APPEAL SHRI BHAVESH NATWARLAL GANATRA 3 WILL BE DISPOSED OF , ON THE BASIS OF SUBMISSIONS MADE IN THE BENCH, AFTER ONE WEEK , EVEN IF REPORT IS NOT R ECEIVED FROM THE ASSESSING OFFICER. 6 . THE REVENUE HAS NOT FURNISH ED ANY REPORT FROM THE ASSESSING OFFICER TILL DATE. ACCORDINGLY WE PROCEED TO DISPOSE OF THIS APPEAL FILED BY THE REVENUE ON THE BASIS OF SUBMISSIONS MADE IN THE BENCH BY THE PARTIES . F ROM THE SUBMISSIONS MADE BY LD A.R, WE NOTICE THAT THE TAX EFFECT INVOLVED IN THIS APPEAL IN RESPECT OF THE ISSUE CONTESTED BY THE REVENUE IS LESS THAN RS . 20 .00 LAKHS AND HENCE THE R EVENUE IS PRECLUDED FROM PURSUING THIS APPEAL AS PER THE CIRCULAR ISSUED B Y CBDT REFERRED (SUPRA). ACCORDINGLY, WE DISMISS THE APPEAL FILED BY THE REVENUE IN LIMINE. 6 . IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 20 . 1 1 .201 8 . SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BA SKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 20 / 1 1 / 20 1 8 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. BY ORDER, //TRUE COPY// ( SENIOR PRIVATE SECRETARY ) PS ITAT, MUMBAI