Dr. V.C. Dubey, Mainpuri V. I.T.O., Ward-1, Mainpuri

ITA 528/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0606 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 6 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-03-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 15-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Cost of acquisition
• Section: 143(3); 54F; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 528/AGRA/ 2012 ASSESSMENT YEAR 2006-07 DR. V.C. DUBEY VS. INCOME TAX OFFICER , COURT ROAD, WARD-1 MAINPURI MAINPURI (APPELLANT) (RESPONDENT) (PAN ABVPD3449E) APPELLANT BY : SHRI SAHIB P. SATSANGEE, C.A. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 05.03.2013 DATE OF PRONOUNCEMENT : 08.03.2013 ORDER PER A.L. GEHLOT,ACCOUNTANT MEMBER: THE APPEAL BY THE ASSESSEE IS FILED AGAINST THE OR DER OF CIT(A) GHAZIABAD DATED 03.08.2012. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITS APPEAL ARE REPRODUCED AS UNDER:- 1 . BECAUSE THE LEARNED AUTHORITIES BELOW HAVE ERRED IN FACTS AND IN LAW IN NOT FOLLOWING THE DIRECTIONS OF THE HONBLE INCO ME TAX APPELLATE TRIBUNAL VIDE ITS ORDER DATED 27.10.2010. ITA NO.528/AGRA/2012 A.Y. 2006-07 2 2. BECAUSE THE LEARNED AUTHORITIES BELOW HAVE ERRED ON FACTS AND IN LAW IN NOT ALLOWING EXEMPTION UNDER SECTION 54F, BEING INVESTMENT MADE IN PURCHASE OF RESIDENTIAL HOUSE IGNORING THAT THE ASSESSEE SATISFIES ALL THE CONDITIONS AS STIPULATED UNDER THAT SECTION. TH E DISALLOWANCE MADE IS LIABLE TO BE DELETED. 3. BECAUSE THE LEARNED AUTHORITIES BELOW HAVE ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE PROPERTY SITUATED AT 1 16/12, NORTH CHAPATTI, MANDI MOITIGANJ, MAINPURI IS LET OUT TO B ANK OF BARODA AND W.H.O., WHO ARE RUNNING THEIR OFFICE AS PER THE REP ORT OF INCOME TAX INSPECTOR DATED 26.03.2008. 4. BECAUSE THE LEARNED AUTHORITIES BELOW HAVE ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE INVESTMENT MADE IN THE ACQUISITION OF NEW RESIDENTIAL HOUSE PROPERTY HAS BEEN MADE BY THE ASS ESSEE OUT OF HIS OWN FUNDS AND JOINT NAME OF HIS SON HAS BEEN MENTIO NED MERELY FOR CONVENIENCE. 5. BECAUSE THE LEARNED ASSESSING OFFICER HAS ERRED BOT H ON FACTS AND IN LAW IN CHARGING INTEREST UNDER SECTION 234A & 234B. THE INTEREST CHARGED IS LIABLE TO BE DELETED. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD TO OR DELETE ANY OF THE GROUNDS HEIRINBEFORE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGIN AL ASSESSMENT UNDER SECTION 143(3) WAS MADE WHEREIN EXEMPTION UND ER SECTION 54F WAS DENIED ON THE GROUND THAT ASSESSEE WAS HAVING TWO R ESIDENTIAL HOUSES; IN ONE HE WAS RESIDING WHILE THE OTHER HAD BEEN GIVEN ON R ENT TO BANK OF BARODA. THE A.O. WAS OF THE VIEW THAT DEDUCTION UNDER SECTI ON 54F IS ALLOWABLE ONLY IF ASSESSEE DOES NOT OWN MORE THAN ONE RESIDEN TIAL HOUSE, OTHER THAN THAT FOR WHICH EXEMPTION UNDER SECTION 54F IS BEING CLAIMED. THE SECOND ITA NO.528/AGRA/2012 A.Y. 2006-07 3 REASON FOR DISALLOWANCE OF ASSESSEE CLAIM UNDER SEC TION 54F IS THAT THE INVESTMENT IN NEW PROPERTY WAS IN THE JOINT NAME AL ONG WITH ASSESSEES SON. 4. THE CIT(A) CONFIRMED THE ACTION OF THE A.O. THE ASSESSEE WENT IN APPEAL BEFORE THE ITAT. THE ITAT SENT BACK MATTE R TO THE FILE OF THE A.O. WITH DIRECTION TO FRAME THE ASSESSMENT DENOVO AFTER PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE. 5. IN SECOND ROUND OF LITIGATION THE A.O. AGAIN RE JECTED THE ASSESSEES CLAIM UNDER SECTION 54F OF THE ACT ON SA ME REASON. THE CIT(A) CONFIRMED THE ACTION OF THE A.O. 6. THE LEARNED A.R. DREW OUR ATTENTION ON PAGE 1 A ND 2 OF ASSESSEES PAPER BOOK WHERE CHART OF COMPUTATION OF CAPITAL GAIN AND THE REASONS AND EXPLANATION OF THE ASSESSEE WERE FILE. FOR THE PURPOSE OF READY REFERENCE SAME IS REPRODUCED AS BELOW:- CHART OF ISSUES- COMPUTATION OF CAPITAL GAINS PARTICULARS OF THE ASSET AS PER ASSESSEE AS PER A.O./CIT(A) SALES CONSIDERATION 49,25,3 10 49,25,310 INDEXED COST OF ACQUISITION 68,586 68,586 ------------- ------------- 48,56,724 48,56,724 EXEMPTION UNDER SECTION 54F PURCHASE OF FLAT NO. 302 ON 20.03.2006 AT 30,90, 000 EAST END APARTMENTS, GHAZIABAD INVESTMENT IN PROPERTY IN NEXT YEAR 18,00,000 48,90,000 NIL --------------- --- ----- ------- ----------------- ITA NO.528/AGRA/2012 A.Y. 2006-07 4 NIL 48,56,724 ------------- ----------------- AS PER A.O. /CIT(A) EXPLANATION-AS PER ASSESSEE NO EXEMPTION U/S 54F ALLOWABLE (A) ASSESSEE OWNED MORE THAN ONE RESIDENTIAL HOUSE ON DATE OF TRANSFER ASSESSEE OWNS ARE RESIDENTIAL HOUSE NO.1200, NORTH CHHAPATTI, MAINPURI PROPERTY NO.1166/12 IS COMMERCIAL PROPERTY ARE EVID ENT FROM REPORT OF INCOME TAX INSPECTOR AND AGREEMENT W ITH BANK. (B) AS PER CLAUSE (A)(II) TO PROVISO TO SECTION 54F , ASSESSEE PURCHASE ANY RESIDENTIAL HOUSE OTHER THAN NEW ASSET WITHIN ONE YEAR OF THE DATE OF ORIGINAL ASSET, HE WILL NOT BE ENTITLED TO EXEMPTION THE SUB-CLAUSE (A) (II) OF PROVISO TO SECTION 54F P ROVIDES AS UNDER- (II)PURCHASE ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR THE ASSESSEE HAS NOT PURCHASED ANY RESIDENTIAL ASSE T. HE HAS MADE PAYMENT TO THE BUILDERS, M/S RAHEJA CITY RESIDENTIAL TOWNSHIP FOR THE ALLOTMENT OF 15 SQ. YA RDS LAND IN PROPOSED TOWNSHIP AND ALSO ADVANCE BOOKING FOR 2 BEDROOM FLAT AT PARAS PANORAMA AS UNDER- NAME OF BUILDERS R.NO. DATE AMOUNT RAHEJA DESIGN & CONTRACT LTD. 301 10.07.06 1,43,700 304 10.07.06 86,250 TOTAL RS. 2,30,000 DYNASTY BUILDWELL (P) LTD. 921 22.07.06 2,50,000 194 11.12.06 3,87,600 438 19.12.07 39,000 TOTAL RS. 6,76,600 (C) NEW HOUSE HAS BEEN PURCHASED IN JOINT NAME OF ASSESSEE AND HIS SON THE PERUSAL OF THE DOCUMENTS EVIDENCING THE ACQUISI TION OF FLAT NO. 302, BLOCK 6 AT EAST END SAHKARI SAMITI WI LL REVEAL THAT THE SAME IS IN FIRST NAME OF THE ASSESS EE AND SECOND NAME OF HIS SON, MOHIT DUBEY, WHERE NAME HAS BEEN ADDED ONLY FOR THE PURPOSE OF CONVENIENCE SINC E HE IS ABOUT 70 YEARS OLD. THE SECTION NOWHERE PROVIDES TH AT THE NEW ASSET SHOULD BE IN THE NAME OF THE ASSESSEE ONL Y. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS. (A) CIT VS.NATARAJAN (2006) 287 ITR 271 (MARD.)- INVESTMENT IN WIFES NAME ELIGIBLE FOR EXEMPTION UNDER SECTION 54. (B) CIT VS. GURNAM SINGH (2008) 218 CTR (P&H 674 INVESTMENT IN AGRICULTURE LAND BY THE ASSESSEE WITH HIS ONLY SON CANNOT FORFEIT EXEMPTION UNDER SE CTION 54B. (C) CIT VS. P.R. SESHADRI (2010) 228 CTR (KAR) 334- INVESTMENT IN HOUSE OF WHICH LAND IS OWNED BY ASSESSEES WIFE, EXEMPTION UNDER SECTION 54F ELIGIB LE. ITA NO.528/AGRA/2012 A.Y. 2006-07 5 7. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE A.O. IS NOT CORRECT IN SAYING THAT THE ASSESSEE OWNED MO RE THAN ONE RESIDENTIAL HOUSE ON DATE OF TRANSFER. THE LEARNED AUTHORISED R EPRESENTATIVE REFERRED THE VARIOUS PAGES OF PAPER BOOK AND SUBMITTED THAT THE ASSESSEE OWNS ONLY ONE RESIDENTIAL HOUSE NO. 1200 NORTH CHHAPATTI, COU RT ROAD, MAINPURI. HE FURTHER SUBMITTED THAT SO FAR RESIDENTIAL HOUSE STA TED BY THE A.O. PROPERTY NO. 1166/12 IS A COMMERCIAL PROPERTY. LEARNED A.R. SUBMITTED THAT THE PROPERTY WAS GIVEN ON RENT AND IN THIS REGARD NECES SARY DOCUMENTS WERE ALSO FURNISHED BEFORE THE REVENUE AUTHORITY. LEARNED A.R . SUBMITTED THAT THE INSPECTOR OF THE DEPARTMENT HAS GIVEN A REPORT THAT THE PROPERTY WAS GIVEN ON RENT TO BANK AND OTHERS. 8. AS REGARDS THE SECOND OBJECTION OF THE A.O. IS THAT THE ASSESSEE PURCHASED ONE MORE RESIDENTIAL HOUSE AS NEW ASSET W ITHIN ONE YEAR OF THE DATE OF ORIGINAL ASSET. THE LEARNED A.R. SUBMITTED THAT THE A.O. WITHOUT APPRECIATING THE FACT HAS COME TO THE CONCLUSION, W HEREAS THE ASSESSEE HAS NOT PURCHASED ANY RESIDENTIAL ASSET. HE HAS MADE PA YMENT TO THE BUILDER M/S RAHEJA CITY RESIDENTIAL TOWNSHIP FOR THE ALLOTMENT OF 150 SQ. YARDS LAND IN PROPOSED TOWNSHIP AND THE AMOUNTS SHOWN WAS ADVANCE BOOKING FOR 2 BEDROOM FLAT SIMILAR IS THE POSITION IN RESPECT OF AMOUNTS GIVEN TO DYNASTY BUILDWELL (P) LTD. ITA NO.528/AGRA/2012 A.Y. 2006-07 6 9. LEARNED A.R. SUBMITTED THAT EVEN IF THE RESIDENT IAL HOUSE IS PURCHASED IN JOINT NAME, ASSESSEE IS ELIGIBLE FOR DEDUCTION U NDER SECTION 54F OF THE ACT. HE RELIED UPON THE DECISIONS OF COMMISSIONER OF INCOME TAX VS. V. NATARAJAN REPORTED IN [2006] 287 ITR 271 (MAD.), CIT VS. GURNAM SINGH (2008) 218 CTR (P&H) 674 AND CIT VS. P.R. SESHADRI (2010) 228 CTR (KAR.) 334. 10 . THE LEARNED A.R. ON THE OTHER HAND, RELIED UPON THE ORDER OF CIT(A). HE ALSO RELIED UPON THE FOLLOWING DECISIONS OF I.T.O. VS. PRAKASH TIMAJI, DHANJODE 81 TTJ 694, JAI NARAYAN VS. INCOME TAX OFFICER [2008] 306 ITR 335 (P&H), PRAKASH VS. I.T.O & OTHERS 220/C TR/249. 11. WE HAVE HEARD LEARNED REPRESENTATIVE OF THE PARTIES , RECORD PERUSED AND GONE THROUGH THE DECISIONS CITED. THE F IRST OBJECTION OF THE REVENUE AUTHORITY THAT THE ASSESSEE HAS OWNED MORE THAN ONE RESIDENTIAL HOUSE ON THE DATE OF TRANSFER IS NOT FOUND CORRECT, AS ONE OF THE HOUSE NO. 1166/12 IS A COMMERCIAL PROPERTY. THE INSPECTOR OF THE DEPARTMENT VIDE HIS REPORT DATED 26.03.2008 SUBMITTED THAT IN PROPERTY NO. 1166/12 THERE WAS AN OFFICE OF THE BANK OF BARODA AND OFFICE OF THE W.H. O. THIS FACT IS NOT IN DISPUTE. THE PROPERTY WHICH WAS LET OUT TO BANK AND OTHERS CANNOT BE SAID TO BE A RESIDENTIAL HOUSE. IN THE LIGHT OF THESE FACTS , WE ARE OF THE VIEW THAT THE ITA NO.528/AGRA/2012 A.Y. 2006-07 7 REVENUE AUTHORITIES ARE NOT CORRECT IN HOLDING THAT THE PROPERTY LET OUT IS A RESIDENTIAL HOUSE; APPARENTLY THE SAID PROPERTY IS A COMMERCIAL PROPERTY. 12. AS REGARDS THE SECOND OBJECTION OF THE REVENU E AUTHORITIES THAT THE ASSESSEE PURCHASED ONE MORE RESIDENTIAL HOUSE A S NEW ASSETS WITHIN ONE YEAR WHICH IS ALSO NOT A CORRECT FACT. THE LEARNED A.R. DEMONSTRATED BY REFERRING THE RELEVANT DOCUMENTS THAT RS.18,00,000/ - WAS GIVEN AS AN ADVANCE AND NOT FOR PURCHASE OF RESIDENTIAL HOUSE. IN THE LIGHT OF THE FACT, WE ARE NOT AGREEING WITH THE VIEW OF THE REVENUE AU THORITIES. 13. AS REGARDS TO THE THIRD OBJECTION THAT THE NEW ASSET PURCHASED WAS IN JOINT NAMES, WE NOTICE THAT THERE ARE JUDGME NTS OF BOTH THE SIDES, THEREFORE, KEEPING IN VIEW THAT IF THERE ARE TWO PO SSIBLE VIEWS, THE VIEW IN FAVOUR OF THE ASSESSEE IS TO BE TAKEN AS HELD IN FO LLOWING JUDGMENTS:- 1. MYSORE MINERALS LTD. VS. CIT 239 ITR 775 (SC) 2. ORISSA STATE WAREHOUSING CORPORATION VS. CIT 237 IT R 589 (SC) 3. CIT VS. PODAR CEMENT PVT. LTD. AND OTHERS 226 ITR 6 25 (SC) 4. CIT VS. GWALIER RAYON SILK MFG. CO. LTD. 196 ITR 14 9 (SC) 5. CIT VS. SAHAZADA NAND 60 ITR 392 (SC) 6. CIT VS. KULU VALLEY TRANSPORT CO. LTD. 77 ITR 518, 530 (SC) 7. CIT VS. VEGETABLE PRODUCTS LTD. 88 ITR 192 (SC) 8. CIT VS. NAGA HILLS TEA CO. LTD. 89 ITR 236, 240 (SC ) ITA NO.528/AGRA/2012 A.Y. 2006-07 8 9. CONTR. ED VS. KANAKASABAI 89 ITR 251, 257 (SC) 10. CIT VS. MADHO JATIA 105 ITR 179, 184 (SC) 14. IN THE LIGHT OF ABOVE DISCUSSIONS, WE ALLOW TH E CLAIM OF ASSESSEE UNDER SECTION 54F OF THE ACT. 15. THE OTHER GROUND IS IN RESPECT OF CHARGING OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT WHICH IS CONSEQUEN TIAL IN NATURE. THE A.O. IS DIRECTED ACCORDINGLY. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTA NT MEMBER AMIT/ COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY