ACIT - 21(1), MUMBAI V. ANOOP SAXENA, MUMBAI

ITA 5101/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1741 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 10-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHA
• Assessee Lawyers: B V JHAVERI
• Keywords: Period of limitation; Cost of acquisition; Time period of passing order
• Section: 54

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL G BENCH MUMB AI BEFORE SHRI SHAMIM YAHYA, JUDICIAL MEMBER AND SHRI PAWAN SINGH, ACCOUNTANT MEMBER ITA NO. 5101/MUM/2016 (ASSESSMENT YEAR 20 12-13 ) ACIT CIRC-21 ROOM NO. 116, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012. VS. SHRI ANUP SAXENA 507, SHAH AND NAHAR INDL ESTATE, DR. E. MOSES ROAD, WORLI, MUMBAI-400018. PAN: AFOPS0804H APPELLANT RESPONDE NT APPELLANT BY : R. KAVITHA (DR) RESPONDENT BY : SHRI B.V. JHAVERI (ADVOCATE) DATE OF HEARING : 30.08.2018 DATE OF PRONOUNCEMEN T : 30.08.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME- TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-33, MUMBAI DATED 06 .05.2016 FOR ASSESSMENT YEAR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: L. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) WAS ERRED IN DELETING THE ADDITION OF RS.1,2 4,40,806/- AND ALLOWING THE DEDUCTION U/S.54 OF THE INCOME TAX ACT, 1961.' 2. 'WHETHER THE LD. CIT(A) WAS CORRECT IN ALLOWING THE DEDUCTION U/S.54 AS CONSTRUCTION WAS NOT COMPLETED WITHIN THE THREE YEA RS TIME AS CONTEMPLATED BY THE INCOME TAX ACT, 1961.' 3. 'THE APPELLANT PRAYS THAT THE ORDER OF LD. CIT(A ) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED.' 2. AT THE OUTSET OF HEARING, THE LD. AUTHORIZED REPRES ENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE GROUNDS OF APPEAL RAISED BY REVENUE IS COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE BY TH E ORDER OF TRIBUNAL IN ITA NO. 5101 MUM 2016-SHRI ANUP SAXENA 2 ASSESSEES WIFE CASE IN ITA NO. 5102/MUM/2016 FOR A Y 20112-12. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THE FAC TS OF THE ASSESSEES CASE ARE SIMILAR AS THE FACTS OF ASSESSEES WIFE CASE. T HE ASSESSEE AND HIS WIFE IS CO-OWNER OF 50% OF THE RESIDENTIAL PROPERTY/ FLAT N O. 1702 AT AVARSEKAR HEIGHTS, WORLI, ON THE SALE OF WHICH, THE ASSESSEE AND HIS WIFE CLAIMED LONG TERM CAPITAL. THE APPEAL OF THE ASSESSEES WIF E WAS DECIDED FIRST. 3. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) FOR THE REVENUE AFTER GOING THROUGH THE DECISION OF TRIBUNA L IN ASSESSEES WIFE CASE IN ITA NO. 5102/MUM/2016 DATED 14.08.2018 CONC EDED THAT THE GROUNDS OF APPEAL ARE COVERED IN FAVOUR OF ASSESSEE . 4. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CO-ORD INATE BENCH OF TRIBUNAL IN ASSESSEES WIFE CASE (SMT. MRIDULA ANOOP SAXENA) ON SIMILAR FACTS PASSED THE FOLLOWING ORDER: 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PE RUSED THE MATERIAL ON RECORD. THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEA L OF THE ASSESSEE HOLDING AS UNDER: 16. IN THE LIGHT OF THE DISCUSSION MADE IN THE PRE CEDING PARAGRAPHS, IN MY CONSIDERED OPINION, THE BENEFIT OF SEC. 54 OF THE I . T. ACT IS AVAILABLE TO THE APPELLANT CONSIDERING THE FACT THAT THE ENTIRE PAYM ENT FOR THE NEW PROPERTY WAS MADE BY THE APPELLANT AS WELL AS THE ALLOTMENT LETT ER WAS ISSUED BEFORE THE LIMITATION PERIOD OF 3 YEARS. 17. IT IS OBSERVED THAT THE APPELLANT HAS CLAIMED T HAT THE COST OF ACQUISITION OF THE NEW FLAT WAS RS. 2,35,58,440/- AND THE APPELLAN T'S 50% SHARE COMES TO RS. 1,17,79,220/-. IT IS CONTENDED BY THE AR OF THE APP ELLANT DURING APPELLATE PROCEEDINGS THAT THE APPELLANT HAS OFFERED SHORT AP PLICATION OF FUNDS I.E. AMOUNT OF CAPITAL GAIN LESS AMOUNT INVESTED I.E. .R S. 6,61,586/- (RS. 1,24,40,806- RS. 1,17,79,220) AS TAXABLE LTCG IN A. Y.2015-16 I.E. YEAR IN WHICH FIGURE OF APPLICATION OF FUND IS CRYSTALLIZED . HOWEVER, I DO NOT AGREE TO ITA NO. 5101 MUM 2016-SHRI ANUP SAXENA 3 THIS PROPOSITION OF THE APPELLANT. THE PROVISIONS O F SEC. 54(1)(I) STATE AS UNDER:- 54.(1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) , WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED F AMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASS ET, BEING BUILDINGS OR LANDS APPURTENANT THERETO, AND BEING RESIDENTIAL HOUSE, T HE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPER TY' (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON W HICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YE ARS AFTER THAT DATE CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA], THEN] , INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIO US YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WITH IN ACCO RDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY- (I) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER TH AN THE COST OF THE RESIDENTIAL HOUSE SO PURCHASED OR CONSTRUCTED (HEREAFTER IN THI S SECTION REFERRED TO AS THE NEW ASSET)], THE DIFFERENT BETWEEN THE AMOUNT OF TH E CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR AND FOR THE PURPOSE OF COMPUTING IN R ESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE NIL, OR 18. FROM THE ABOVE PROVISIONS OF SUB SECTION (I) OF SEC. 54(1), IT IS CLEAR THAT IF THE AMOUNT OF CAPITAL GAIN IS GREATER THAN THE C OST OF THE NEW ASSET, THE DIFFERENCE SHALL BE CHARGED AS INCOME OF THE PREVIO US YEAR IN WHICH THE TRANSFER TOOK PLACE. IN THE INSTANT CASE, THE CAPIT AL GAIN WAS EXCESS BY AN AMOUNT OF RS. 6,61,586/- WHICH IS REQUIRED TO BE CH ARGED TO TAX IN THE YEAR OF TRANSFER I.E. A. Y. 2012-13 AND NOT A. Y. 2015-1 6 AS CONTENDED BY THE AR IN THE WRITTEN SUBMISSION. HENCE THE AO IS DIRECTED TO TAX RS. 6,61,586/- AS LTCG AS AGAINST RS. 1,24,40,806/- BEING COMPUTED IN THE ASSESSMENT ORDER. THE AO IS ALSO DIRECTED TO MAKE THE RE-COMPUTATION OF LTCG AFTER MAKING NECESSARY VERIFICATION OF PROOF OF PAYMENTS OF VARI OUS CHARGES AND TAXES RELATED TO THE PURCHASE OF NEW ASSET VIZ., VAT OF R S. 2,68,560/-. SERVICE TAX OF RS. 6,39,630/- AND 'AS PER CLAUSE 11 OF RS. 5,75,350/ -, AS CLAIMED DURING APPELLATE PROCEEDINGS. WITH THE ABOVE REMARK S, GROUNDS OF APPEAL NO. 2 IS PARTLY ALLOWED. 8. WE NOTICE THAT THE FINDINGS OF THE LD. CIT (A) A RE BASED ON THE DECISIONS OF THE VARIOUS BENCHES OF THE ITAT AND THE DECISION OF THE HON'BLE DELHI HIGH COURT AND THE HON'BLE HIGH COURT OF PUNJAB AND HARY ANA. THE HON'BLE DELHI HIGH COURT HAS HELD IN THE CASE OF CIT VS. RAMAKRIS HNAN, 48 TAXMANN.COM 55(DEN HAS HELD THAT THE DATE OF ALLOTMENT IS RELEV ANT FOR THE PURPOSE OF COMPUTING HOLDING PERIOD AND NOT THE DATE OF CONVEY ANCE DEED. SIMILARLY, THE HON'BLE P&H HIGH COURT HAS HELD IN VINOD KUMAR JAIN VS. CIT, 344 ITR 501 (P&H) THAT AN ALLOTTEE ACQUIRES A TITLE OF PROPERTY ON RECEIVING ALLOTMENT LETTER AND PAYMENT OF INSTALLMENT IS ONLY A CONSEQUENTIAL ACTION UPON WHICH DELIVERY OF POSSESSION FOLLOWS. HENCE, IN THE LIGHT OF THE U NDISPUTED FACTS THAT THE ASSESSEE HAD MADE PAYMENT OF RS. 1,25,00,000/- ON 1 8.04.2011 FROM HER SHARE ITA NO. 5101 MUM 2016-SHRI ANUP SAXENA 4 IN THE LONG TERM CAPITAL GAIN OF RS. 3,50,00,000/- AND THE ALLOTMENT LETTER WAS ISSUED ON 20.01.2012 AND FINALLY EXECUTED AND REGIS TERED ON 09.03.2015 AND IN THE LIGHT OF THE RATIO LAID DOWN BY THE HON'BLE HIG H COURTS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS OF THE LD. CIT(A) ARE IN ACCORDANCE WITH THE LAW AND THE EVIDENCE ON RECORD. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT (A) TO INTERFERE WITH. ACCO RDINGLY, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THE SOLE GR OUND OF APPEAL OF THE REVENUE AND DIRECT THE AO TO COMPUTE THE DEDUCTION IN TERMS OF THE ORDER OF THE LD. CIT(A). IN THE RESULT, APPEAL FILED BY THE REVENUE FOR ASSE SSMENT YEAR 2012-2013 IS DISMISSED. 5. CONSIDERING THE DECISION OF TRIBUNAL IN ASSESSEES GROUP/WIFES CASE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAIS ED BY REVENUE. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/08/2018. SD/- SD/- SHAMIM YAHYA PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 30.08.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI