Shri Mithun H. Bhayani, Ahmedabad V. ITO,-5(1)(4), Ahmedabad

ITA 481/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4550 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-02-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 28-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: S N DIVETIA
• Keywords: Share purchase agreement
• Section: 80C; 143(3); 54F; 43; 22; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SM C BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND SHRI MADHUMITA ROY , JUDICIAL MEMBER SHRI MITHUN H. BHAYANI, 9, PRAKRUTI FLATS, MATHERAN SOCIETY, MAHALAXMI CHAR RASTA, PALDI, AHMEDABAD - 380007 PAN: AETPB0848N (APPELLANT) VS THE IT O , WARD - 5 ( 1 )(4) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI LALIT P. J AIN , SR. D . R. ASSESSEE BY: SHRI S.N. DIVETIA , A.R. DATE OF HEARING : 17 - 0 2 - 2 020 DATE OF PRONOUNCEMENT : 19 - 02 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOUNTA NT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2013 - 14 , ARI SES FROM ORDER OF THE CIT(A), AHMEDABAD - 5 DATED 1 2 - 12 - 2 017 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS CONTESTED TWO GROUNDS OF APPEA L IN THE INST ANT APPEAL PERTAINING TO TREATING CAPITAL GAIN OF R S. 9 , 78 , 995/ - AS SHORT TERM CAPITAL GAIN I T A NO . 481 / A HD/20 18 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 481 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SHRI MITHUN H. BHAYANI VS. IT O 2 WHICH WAS ACTUALLY LONG TERM CAPITAL GAIN AND DISALLOWANCE OF INTEREST PERTAINING TO HOUSING LOAN INSTALLMENT TO THE AMOUNT OF RS. 80 , 596/ - 3. REGARD ING FIRST GR OUND OF APPEAL PERTAINING TO TREAT ING CAPITAL GAIN OF RS. 9 , 78 , 9 95/ - AS SHORT TERM CAPITAL GAIN, T HE FACT IN BRIEF IS THAT DURING THE COURSE OF ASSESSMENT PROCEEDING U/S. 143(3) OF THE ACT , THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS S O LD RESIDENTIAL PROP ERTY LOCATED AT VE J ALPUR, AHMEDABAD FOR CONSIDERATION OF R S. 22 LA CS AND HAS NOT OFFERED ANY CAPITAL GAIN OR WORKING OF CAPITAL GAIN IN HIS RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. ON QUERY, THE ASSESSEE HAS E XPLAINED THAT HE WAS OWNER OF THE PROPERTY W.E.F. 4 TH MAY , 2009 AS PER SHARE CERTIFICATE NO. 141 ISSUED BY SAKAL CO - OPERATIVE HOUSING SOCIETY LTD. AND THE SAME PROPERTY WAS SOLD ON 8 TH JANUARY, 2013 AFTER 43 MONTHS, T HEREFORE, LONG TERM CAPITAL GAIN T O THE AMOUNT OF R S. 4 , 07 ,025/ - WAS EARNED . THE ASSESSEE HAS FURTHER STATED THAT THE AFORESAID COMPUTATION OF LONG TERM CAPITAL GAIN WAS NOT TAXABLE SINCE HE HAS MADE INVESTMENT IN THE NEW RESIDENTIAL HOUSE FOR A TOTAL PRICE OF RS. 56 , 10 , 225/ - ON SALE OF THE SAID PROPERTY ON 14 TH AUGUST, 2013. THE ASSE SSING OFFICER HAS NOT ACCEPTED THE SUBMISSION OF THE ASSESSEE STATING OWNERSHIP OF THE PROPERTY WAS TO BE TAKEN FROM THE DATE OF ACQUISITION OF THE SOLD PROPERTY AS PER THE REGISTERED DOCUMENT DATED 23 RD AUG UST, 2010. THERE WAS NO ALLOTMENT LETTER ISSUED BY SAKAL CO - OPERATIVE SOCIETY LTD. ON 4 TH MAY, 2009, THEREFORE, THE CLAIM OF EXEMPTION U/S. 54F WAS DISALLOWED. CONSEQUENTLY, THE SHORT TERM CAPITAL GAIN WAS COMPUTED AT RS. 9,78, 995/ - HOLDING THAT ASSESSEE WAS NOT ENTITLED FOR EXEMPTION U/S. 5 4 OF THE ACT. I.T.A NO. 481 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SHRI MITHUN H. BHAYANI VS. IT O 3 4. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE STATING THAT THERE WAS NOTHING ON RECORD WHICH SHOW THAT FLAT HAS BEEN ALLOTTED TO THE AS SESSEE BEFORE THE DATE OF PURCHASE I.E. 23 RD AUGUST, 2010 AS PER THE REGISTERED DOCUMENT . 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS CONTENDED THAT OWNERSHIP OF THE PROPERTY WAS ALLOTTED TO THE AS SESSEE W.E.F. 04 - 05 - 2009 WHEN THE ASSESSEE WAS ALLOTTED THE SHARE CERTIFICATE OF THE SOCIETY. THE LD. COUNSEL HAS ALSO SUBMITTED PA P ER BOOK AND REFERRED PAGE NO. 66 COMPARING SHARE CERTIFICATE NO. 141 AND SUBMITTED THAT IT IS ALLOTTED TO THE ASSESSEE ON 04 - 05 - 2009 AS OWNER OF TH E PROPERTY. THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF THE HIGH COURT OF BOMBAY IN THE CASE OF PCIT VS. VAIDYANATHAN VIDE APPEAL NO. 1459 OF 2016 DATED 22 - 01 - 2016 STATED THAT IN THIS CASE IT IS HELD THAT ALLOTMENT WOULD BE DATE ON WHICH P URCHASES OF A RESIDENTIAL UNIT COULD BE STATED TO BE ACQUIRED PROPERTY. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 6 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. DURI NG THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS REFERRED PAGE NO. 66 OF THE PAPER BOOK PERTAINING TO THE SHARE CERTIFICATE NO. 141 DEMONSTRATING THAT OWNERSHIP WAS PROVIDED TO THE ASSESSEE ON 4 TH M AY, 2009, BY THE SAKAL CO - OPERATIVE H OUSING SOCIETY . IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT SOLD RESIDENTIAL PROPERTY ALLOTTED TO THE ASSESSEE ON 4 TH MAY, 200 9. IN VIEW OF THE ABOVE, WE CONSIDER THAT THE ASSESSEE HAS EARNED CAPITAL GAIN ON SALE OF THE SAID PRO PERTY WHICH WAS I.T.A NO. 481 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SHRI MITHUN H. BHAYANI VS. IT O 4 INVESTED IN THE PURCHASE OF OTHER RESIDENTIAL PROPERTY ON 14 TH AUGUST , 2013 FOR WHICH THE ASSESSEE I S ENTITLED FOR EXEMPTION U/S 54 OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 7 . REGARDING SECOND GROUND OF APPEAL OF THE ASSESSEE PERTAINING TO DISALLOWANCE OF INTEREST ON HOUSING LOAN INSTALLMENT OF RS. 80 , 596/ - . IN THIS REGARD, IT IS NOTICED THAT IT IS UNDISPUTED FACT THAT THE PROPERTY ON WHICH HOUSING LOAN WAS AVAILED WAS SOLD WITHIN FIVE YEARS OF PURCHASE, AFTER CON SIDERING THE RIVAL CONTENTION , WE ARE OF THE VIEW THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/ S. 80C OF THE ACT . ACCORDINGLY, THIS GROUND OF APPEAL IS DISMISSED. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PR O NOUNCED IN THE OPEN C OURT ON 19 - 02 - 20 20 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 19 /02 /2020 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , I.T.A NO. 481 /AHD/20 18 A.Y. 2013 - 14 PAGE NO SHRI MITHUN H. BHAYANI VS. IT O 5 / ,