ITO 17(1)(4), MUMBAI V. DEENAZ HOSHANG JHABVALA, MUMBAI

ITA 5062/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75382 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 54; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND RAJENDRA (AM) . . , , ./I.T.A. NO.5062/MUM/2012 ( / ASSESSMENT YEAR:2009-10) INCOME TAX OFFICER 17(1)(4), ROOM NO.112, 1ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012. / VS. SMT.DEENAZ HOSHANG JHABVALA, 401, MARYLAND, 4 TH FLOOR, NORTH AVENUE, SANTACRUZ (W), MUMBAI-400049 ( ' / APPELLANT) .. ( ( ' / RESPONDENT) ./ ./PAN/GIR NO. : AAAPJ5295N ' / APPELLANT BY : SHRI SANJEEV JAIN ( ' + /RESPONDENT : SHRI DINESH R SHAH + . / DATE OF HEARING : 6.1.2014 + . /DATE OF PRONOUNCEMENT : 15.1.2014 / O R D E R PER B.R.MITTAL, JM: THE DEPARTMENT HAS FIELD THIS APPEAL FOR ASSESSME NT YEAR 2009-10 AGAINST ORDER OF LD. CIT(A) DATED 23.5.2012 ON FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS.55,57,600/- MADE BY THE AO BY DENYING EXEMPTION U/S 54 SINCE THE ASSESSEE FAIL ED TO INVEST LONG TERM CAPITAL GAIN FOR PURCHASE OF RESIDENTIAL FLAT WITHI N A PERIOD OF ONE YEAR FROM THE DATE OF TRANSFER OF SUCH FLAT AND HAD ALSO FAILED T O DEPOSIT THE AMOUNT OF CAPITAL GAIN IN THE CAPITAL GAIN ACCOUNT BEFORE THE DUE DAT E OF FURNISHING OF RETURN OF INCOME U/S 139(1) AS PER PROVISIONS OF SECTION 54(2 ) OF THE ACT 2. RELEVANT FACTS ARE THAT THE ASSESSEE SOLD A H OUSE PROPERTY FOR RS.85,00,101/- AND DECLARED LTCG OF RS.56,37,705/- AFTER CLAIMING EXEMPTION U/S 54 OF AN AMOUNT OF RS.55,57,600/- BEING INVESTMENT IN NEW FLAT. THE AO HAS STATED THAT INVESTMENT IN HOUSE PROPERTY HAS BEEN MADE ON 27.10.2009, WHICH WAS DONE AFTER ONE YEAR FROM THE DATE OF TRANSFER OF FLAT. AO STATED THAT THE ASSESSEE HAD PURCHASED RESIDENTIAL FLAT WITHIN A PERIOD OF 2 YEARS FROM THE DATE OF TRANSFE R AND SHE FAILED TO DEPOSIT THE SAID AMOUNT IN THE CAPITAL GAIN ACCOUNT BEFORE THE DA TE OF FURNISHING OF RETURN U/S 139(1) I.T.A. NO.5062/MUM/2012 2 OF THE ACT AND HENCE DENIED EXEMPTION U/S 54 OF TH E ACT. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE A UTHORITY. 3. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE VIDE PARA 5.3 OF THE IMPUGNED ORDER HAS STATED THAT THE TIME LIM IT AS PRESCRIBED U/S 139(1) HAS TO BE READ ALONG WITH THE TIME LIMIT ALLOWED U/S 139(4) O F THE ACT FOR FILING OF RETURN OF INCOME. THEREFORE, THE EXTENDED TIME LIMIT WILL BE 31.3.2010 U/S 139(4) OF THE ACT. IN THIS RESPECT, THE LD. CIT(A) RELIED ON THE DECIS ION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASES OF CIT V/S MS. JAGRITI AGGARWAL , 339 ITR 610 (P&H), DECISION OF HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT V/S RAJESH KUMAR JALAN, 286 ITR 274 (GAU) AND THE DECISION OF HONBLE KARNATAKA HIGH C OURT IN THE CASE OF FATIMABAI V/S ITO (2009) 32 DTR (KAR) 243, WHEREIN IT WAS HELD IN TER ALIA THAT THE ASSESSEE CAN FULFILL THE REQUIREMENT OF SECTION 54 OF THE ACT UP TO THE EXTENDED TIME LIMIT FOR FURNISHING THE RETURN OF INCOME U/S 139(4) OF THE ACT. SINCE, THE ASSESSEE PURCHASED A NEW HOUSE PROPERTY ON 27.10.2009 I.E. BEFORE EXTENDED TIME LI MIT SPECIFIED UNDER SUB-SECTION (4) OF SECTION 139 OF THE ACT, THE LD. CIT(A) HELD THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 54 OF THE ACT AMOUNTING TO RS.55,57,600/- UP TO THE AMOUNT OF INVESTMENT. HENCE, THE DEPARTMENT IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE LD. DR RELIED ON THE ORDER OF AO AND WHEREA S THE LD. AR SUBMITTED THAT THE ABOVE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE NO T ONLY BY THE DECISIONS OF HONBLE PUNJAB AND HARYANA, GAUHATI, KARNATAKA HIGH COURT S (SUPRA) BUT ALSO BY THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE OF KISHOR H GALAIYA V/S ITO (2012) 137 ITD 229 (MUMBAI) TO WHICH ONE OF US (JM) IS A PARTY, WHEREI N IT WAS HELD THAT IF THE ASSESSEE HAD UTILIZED THE AMOUNT WHICH WAS MORE THAN CAPITAL GAIN EARNED TOWARDS CONSTRUCTION OF NEW RESIDENTIAL HOUSE WITHIN THE EXTENDED PERIOD U/S 139(4) OF THE ACT, THERE WAS NO DEFAULT IN NOT DEPOSITING THE AMOUNT INTO THE CAPIT AL ACCOUNT GAIN SCHEME AND THE CLAIM OF THE ASSESSEE CANNOT BE DENIED. THAT THE A SSESSEE IS ENTITLED TO EXEMPTION U/S 54 OF THE ACT. 5. IN VIEW OF ABOVE FACTS AND THE REASONS STATED HEREINABOVE, WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A) AS THE ABOVE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF HONBLE HIGH COURTS AB OVE NAMED (SUPRA) AS WELL AS BY THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL(SUPRA ). HENCE WE UPHOLD THE ORDER OF LD. CIT()A) AND REJECT GROUND OF APPEAL TAKEN BY DEPART MENT. I.T.A. NO.5062/MUM/2012 3 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 15TH D AY OF JANUARY, 2014 + 2 3 15TH JANUARY, 2014 + SD SD ( /RAJENDRA ) ( . . /B.R.MITTAL) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 3 DATED 15/1/2014 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. ( ' / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- CONCERNED 4. 7 / CIT CONCERNED 5. 8 (: , . : , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) . : , /ITAT, MUMBAI