The ACIT, Central Circle-2(4), Ahmedabad V. Dr. Gunwant Kantilal Patel, Mehsana

ITA 504/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8404 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 02-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 504/AHD/2016 & C.O. NO. 60/AHD/2016 (ASSESSMENT YEAR: 2011-12) ACIT, CENTRAL CIRCLE-2(4), AHMEDABAD DR. GUNWANT KANTILAL PATEL, 64, KRISHNA SOCIETY, JAIL ROAD, MEHASANA V/S V/S DR. GUNWANT KANTILAL PATEL, 64, KRISHNA SOCIETY, JAIL ROAD, MEHASANA ACIT, CENTRAL CIRCLE-2(4), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABHP6938F APPELLANT BY : SHRI MUDIT NAGPAL, SR. D. R. RESPONDENT BY : SHRI ANIL KSHATRIYA, A.R. ( )/ ORDER DATE OF HEARING : 12 -04-201 8 DATE OF PRONOUNCEMENT : 16-04-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 504/ AHD//2016 & C.O. NO. 60/ AHD/2016 . A.Y. 2011-12 2 1. THIS APPEAL BY THE REVENUE AND CROSS OBJECTION OF T HE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-12, AHMEDABAD DATED 22.10.2015 PERTAINING TO A.Y. 2011-12. THE APPEAL AND THE CROSS OBJECTION W ERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 2. THE ONLY GRIEVANCE OF THE REVENUE RELATES TO THE DE LETION OF THE DISALLOWANCE OF DEDUCTION U/S. 54 OF THE ACT AMOUNTING TO RS. 84,72 ,727/-. IT IS THE CLAIM OF THE REVENUE THAT NEITHER THE CAPITAL GAIN WAS DEPOS ITED IN CAPITAL GAIN ACCOUNT SCHEME BEFORE 31.07.2011 NOR THE ASSESSEE HAS MADE THE INVESTMENT AS PER THE PROVISIONS OF THE LAW. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE FILED THE RETURN OF INCOME ON 08.07.2011. THERE WAS A SEARCH ACTION ON SANGHAVI GROUP OF CASES WHICH INCLUDED ONE SMT. KOKILABEN. IT WAS FOUND THA T SMT. KOKILABEN HAD PURCHASED IMMOVABLE PROPERTY FROM THE ASSESSEE AND DURING THE COURSE OF HER STATEMENT U/S. 132(4) OF THE ACT, SHE ADMITTED THE PAYMENT OF UNACCOUNTED SALE CONSIDERATION OF RS. 85,00,000/- PURSUANT TO T HE SAID SEARCH ACTION, THE ASSESSEE REVISED THE RETURN OF INCOME AND COMPUTED THE CAPITAL GAINS BY SHOWING THE SALE CONSIDERATION AT RS. 2 CRORES WHIC H WAS SAME AS HAS BEEN STATED BY SMT. KOKILABEN IN HER STATEMENT U/S. 132( 4) OF THE ACT. THE INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN WAS COMPUTE D AT RS. NIL AFTER CLAIMING DEDUCTION U/S. 54 AND U/S. 54EC OF THE ACT . 4. SINCE THE ASSESSEE HAD REVISED RETURN AFTER THE ADM ISSION MADE BY SMT. KOKILABEN, THE A.O. WAS OF THE FIRM BELIEF THAT DED UCTION U/S. 54 IS NOT AVAILABLE TO THE ASSESSEE AND ACCORDINGLY ALLOWED D EDUCTION U/S. 54C OF THE ACT ONLY. ITA NO. 504/ AHD//2016 & C.O. NO. 60/ AHD/2016 . A.Y. 2011-12 3 5. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT (A) AND EXPLAINED THAT HE IS VERY MUCH ENTITLED FOR DEDUCTION U/S. 54 OF THE ACT INASMUCH AS ALL THE MANDATORY CONDITIONS SPECIFIED THEREIN HAVE BEEN CO MPLIED WITH. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE R ELATED DOCUMENTARY EVIDENCES, THE LD. CIT(A) WAS CONVINCED THAT THE IN VESTMENT IN RESIDENTIAL HOUSE PROPERTY HAS BEEN MADE WELL WITHIN THE TIME P RESCRIBED UNDER THE LAW FOR CLAIMING DEDUCTION U/S. 54 OF THE ACT. THE LD. CIT(A) FURTHER OBSERVED THAT IN ANY CASE, WHETHER THERE IS ONE UNIT OR MORE THA N ONE UNIT EXISTING ON PLOTS IS A FACTUALLY AND PHYSICALLY VERIFIABLE ASPECT AND THERE ARE AT LEAST TWO UNITS- ONE FLAT AND ONE BUNGALOW WHEREIN THE INVESTMENT MA DE IS CLAIMED ELIGIBLE FOR DEDUCTION U/S. 54 OF THE ACT. THE LD. CIT(A) WAS FU RTHER CONVINCED THAT THE ACTUAL INVESTMENT IN THE NEW RESIDENTIAL HOUSE CAN BE MADE WITHIN THE TIME PRESCRIBED UNDER SECTION 54 I.E. TWO YEARS FROM THE DATE OF TRANSACTION OF SALE AND THE SAME IS NOT CONTROLLED BY EITHER THE DATE O F FILING OF RETURN OF INCOME OR OF FACT OF DEPOSITING INTO THE CAPITAL ACCOUNTS SCHEME. AFTER CONSIDERING THE ELIGIBILITY FOR DEDUCTION FROM ALL POSSIBLE ANGLES, THE LD. CIT(A) DIRECTED THE A.O. TO ALLOW THE CLAIM OF DEDUCTION U/S. 54 OF THE ACT. 6. BEFORE US, THE LD. D.R. STRONGLY SUPPORTED THE FIND INGS OF THE A.O. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HA S BEEN STATED BEFORE THE LOWER AUTHORITIES. THERE IS NO DISPUTE THAT THE ASSESSEE REVISED HIS RETURN OF INCOME AFTER THE DATE OF SEARCH IN THE CASE OF SANGHAVI GR OUP. IT IS ALSO TRUE THAT PURSUANT TO THE STATEMENT MADE BY SMT. KOKILABEN, T HE ASSESSEE ENHANCED THE SALE CONSIDERATION OF THE PROPERTY SOLD BY HIM TO S MT. KOKILABEN. IT IS EQUALLY TRUE THAT THE ENHANCED SALE CONSIDERATION WAS INVES TED IN THE PURCHASE OF HOUSE PROPERTY MAKING THE ASSESSEE ELIGIBLE FOR THE DEDUC TION U/S. 54 OF THE ACT. IN ITA NO. 504/ AHD//2016 & C.O. NO. 60/ AHD/2016 . A.Y. 2011-12 4 OUR CONSIDERED OPINION, THE ASSESSEE IS NOT BARRED IN MAKING A FURTHER INVESTMENT OF THE SALE CONSIDERATION AS DISCOVERED DURING THE COURSE OF SEARCH AT THE PURCHASERS PLACE, IF SUCH INVESTMENT IS WITH IN THE TIME ALLOWED U/S. 54OF THE ACT. ONCE THE GENUINENESS OF SUCH INVESTMENT IN NOT IN DISPUTE, THE BENEFIT OF SUCH INVESTMENT CANNOT BE TAKEN AWAY SIMPLY BASE D ON THE FACT THAT SUCH INVESTMENT HAS BEEN MADE AFTER THE DISCOVERY BY THE DEPARTMENT OF ANY ADDITIONAL SALE CONSIDERATION. 7. INSOFAR AS THE INVESTMENT IN MULTIPLE RESIDENTIAL H OUSES IS CONCERNED, THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF K. G . RUKMINIAMMA 331 ITR 211 HAD HELD THAT FOR THE PURPOSE OF SECTION 54, P ROFIT ON SALE OF PROPERTY USED FOR RESIDENCE PURPOSE, FOUR RESIDENTIAL FLATS CANNOT BE CONSTRUED AS FOUR RESIDENTIAL HOUSES FOR THE PURPOSE OF SECTION 54, I T HAS TO BE CONSTRUED ONLY AS A RESIDENTIAL HOUSE. THE HONBLE HIGH COURT OF DELH I IN THE CASE OF GITA DUGGAL 257 CTR 208 HAS HELD THAT THE WORDS A RESID ENTIAL HOUSE APPEARING IN SECTION 54/54F CANNOT BE CONSTRUED TO MEAN A SINGLE RESIDENTIAL HOUSE SINCE UNDER SECTION 13(2) OF THE GENERAL CLAUSES ACT, A S INGULAR INCLUDES PLURAL. WE FIND THAT BECAUSE OF THESE AND SIMILAR JUDICIAL DEC ISIONS, THE AMENDMENT HAS BEEN BROUGHT IN SECTION 54 BY FINANCE ACT, 2014 AND THE LEGISLATURE IN ITS WISDOM HAS ENACTED THE AMENDMENT WITH EFFECT FROM 0 1.04.2015 AND THEREFORE THE SAME IS NOT APPLICABLE TO THE SUBJECT ASSESSMEN T YEAR. 8. CONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF T HE JUDICIAL DECISIONS, WE DO NOT FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT(A). APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSED. ITA NO. 504/ AHD//2016 & C.O. NO. 60/ AHD/2016 . A.Y. 2011-12 5 9. THE CROSS OBJECTION WAS NOT PRESSED AND IS ACCORDIN GLY DISMISSED AS NOT PRESSED. ORDER PRONOUNCED IN OPEN COURT ON 16 - 04- 20 18 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 16/04/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD