ACIT, New Delhi V. Smt. Suman Bindal, New Delhi

ITA 5327/DEL/2012

• Counselvise Citation: 532720114 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 02-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 17-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Assessee Lawyers: V RAJ KUMAR
• Keywords: Capital asset
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH G GG G : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .5327/DEL/2012 5327/DEL/2012 5327/DEL/2012 5327/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2009 2009 2009 2009- -- -10 1010 10 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -35(1), 35(1), 35(1), 35(1), ROOM ROOM ROOM ROOM NO.D NO.D NO.D NO.D- -- -4, VIKAS BHAWAN, 4, VIKAS BHAWAN, 4, VIKAS BHAWAN, 4, VIKAS BHAWAN, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 002. 110 002. 110 002. 110 002. VS. VS. VS. VS. SMT. SUMAN BINDAL, SMT. SUMAN BINDAL, SMT. SUMAN BINDAL, SMT. SUMAN BINDAL, A AA A- -- -69, ANAND VIHAR, 69, ANAND VIHAR, 69, ANAND VIHAR, 69, ANAND VIHAR, TRANS YAMUNA, TRANS YAMUNA, TRANS YAMUNA, TRANS YAMUNA, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN : PAN : PAN : PAN : AALPB8120H. AALPB8120H. AALPB8120H. AALPB8120H. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. RENUKA JAIN GUPTA, SR.DR. RESPONDENT BY : SHRI K. SAMPATH AND SHRI V. RAJ KUMAR, ADVOCATES. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-XXVII, NEW DELHI DATED 6 TH JULY, 2012 FOR THE AY 2009- 10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1. THAT THE LD.CIT(A) HAD ERRED IN LAW AND ON FACT S BY OBSERVING THAT SECTION 54F(I) IS APPLICABLE ON THE INST ANT CASE. 2. THAT THE LD.CIT(A) HAS IGNORED THAT THE SECTION 54 F(I) HAS STATED THAT THE CAPITAL GAIN ARISES FROM THE TRANSFE R OF ANY LONG TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL H OUSE. 3. THAT THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS B Y OBSERVING THAT IN SECTION 54F(I), THE CAPITAL GAIN MU ST ARISE FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, EXCE PT RESIDENTIAL PROPERTY. ITA-5327/D/2012 2 3. AT THE TIME OF HEARING BEFORE US, IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSESSING OFFICER RIGHTLY DENIED EXEMPTION UNDER SECTION 54F(I) TO THE ASSESSEE ON TWO GROUNDS (I) THE ASSESSEE HA D SOLD THE RESIDENTIAL HOUSE AND SECTION 54F(I) IS APPLICABLE FOR THE CAPITAL ASSET EXCEPT RESIDENTIAL HOUSE, AND (II) THAT ON THE DATE O F THE TRANSFER, THE ASSESSEE WAS OWNING MORE THAN ONE RESIDENTIAL HOUSE. THAT THE LEARNED CIT(A) WITHOUT PROPERLY APPRECIATING THE AB OVE FACTS DIRECTED THE ASSESSING OFFICER TO ALLOW EXEMPTION UNDER SECTION 54F(I) TO THE ASSESSEE. THEREFORE, HIS ORDER SHOULD BE REVERSED AND THA T OF THE ASSESSING OFFICER SHOULD BE RESTORED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HA ND, STATED THAT THE ASSESSEE SOLD THE CAPITAL ASSET WHICH WAS RESIDENT IAL PLOT NO.D-46. THAT AS PER SECTION 54F, THE CAPITAL ASSET SO LD BY THE ASSESSEE SHOULD BE A CAPITAL ASSET OTHER THAN RESIDENTIAL H OUSE. THE RESIDENTIAL PLOT CANNOT BE SAID TO BE RESIDENTIAL HOUSE . IN THIS REGARD, HE REFERRED TO PARAGRAPH 3.3 OF THE ASSESSMENT ORDER WH EREIN THE ASSESSING OFFICER HIMSELF HAS RECORDED THE FINDING THAT T HE ASSESSEE ONLY HAD A RESIDENTIAL PLOT AND NOT A RESIDENTIAL HOU SE. WITH REGARD TO THE OTHER OBJECTION, IT IS STATED BY THE LEARNED COUN SEL THAT APART FROM ONE RESIDENTIAL HOUSE AND THE PLOT WHICH WAS SOLD BY T HE ASSESSEE, THE ASSESSEE WAS HAVING A BUSINESS/COMMERCIAL PROPERTY AT BARAK HAMBA ROAD, CONNAUGHT PLACE WHICH WAS LEASED TO M/S PRIVY CO NSULTING PVT.LTD. WHO WAS USING THE SAME FOR BUSINESS AND COMMERC IAL PURPOSES. THUS, THE ASSESSEE WAS NOT HAVING MORE THAN ONE RESIDENTIAL HOUSE. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE SUSTAINED AND THE REVENUES APPEAL SHOU LD BE DISMISSED. ITA-5327/D/2012 3 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. THE ASSESSING OFFICER HAD REJECTED THE ASSESSEES CLAIM FOR EXEMPTION UNDER SECTI ON 54F ON TWO GROUNDS (I) THE ASSET SOLD BY THE ASSESSEE WAS A RESIDENTIA L HOUSE AND, (II) ON THE DATE OF TRANSFER, THE ASSESSEE OWNED MO RE THAN ONE RESIDENTIAL HOUSE. THIS FINDING OF THE ASSESSING OFFICER WAS BASED ON HIS INFERENCE THAT THE ASSESSEES PROPERTY AT BARAKHAMBA ROAD, CONNAUGHT PLACE WAS A RESIDENTIAL HOUSE. LEARNED CIT( A), CONSIDERING BOTH THE ASPECTS AND AFTER EXAMINING THE FACTS OF THE CASE, ARRIVED AT THE FOLLOWING CONCLUSION :- 11. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, THE OBSERVATIONS MADE BY THE A.O. IN THE ASSESSMENT ORDER AND THE FACTS OF THE CASE. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER EXEMPTION U/S 54F W AS AVAILABLE TO THE APPELLANT OR NOT IN RESPECT OF THE LTCGS EARNED BY HER. THE PRIMARY GROUND ON WHICH THE A.O . HAS DENIED THE EXEMPTION U/S 54F TO THE APPELLANT IS THAT THE PROPERTY SOLD BY HER WAS A RESIDENTIAL HOUSE PROPERTY. THE A.O. HAS NOT DOUBTED THE FACT OF THE SALE OF THE RESID ENTIAL PLOT AS IN THE ASSESSMENT ORDER THE A.O. HAS HIMSELF OBSERVED THAT WHAT HAS BEEN SOLD BY THE APPELLANT IS A RESIDENTIAL PLOT. BUT AS THE RESIDENTIAL PLOT SOLD BY THE APPELLANT WAS SITUATED IN A COLONY WHICH WAS MEANT FOR DEVELOPMENT OF RESIDENTIAL HOUSES, THE AO HELD THAT TH E SALE OF RESIDENTIAL PLOT AMOUNTED TO SALE OF A RESIDEN TIAL HOUSE PROPERTY. IN VIEW OF THE CATEGORICAL OBSERVATI ON OF THE A.O. THAT THE APPELLANT HAD SOLD A RESIDENTIAL PL OT, IT IS NOT CLEAR AS TO HOW THE RESIDENTIAL PLOT EVEN IF SITUA TED IN A COLONY MEANT FOR DEVELOPMENT OF RESIDENTIAL HOUSES CAN BE TREATED AS A RESIDENTIAL HOUSE. THE WORD RESIDENTIAL H AS BEEN EXPLAINED BY THE HON'BLE SUPREME COURT AS REPRODUCED ABOVE. AS PER WEBSTERS NEW COLLEGIATE DICTIONARY RESIDENTIAL MEANS USED AS A RESIDENCE OR RESIDENCES. IN VIEW OF THE SUPREME COURTS JUDGMENT A S MENTIONED ABOVE, A RESIDENCE MEANS A PLACE WHERE ONE RESIDES, RESIDENTIAL MEANS USED OR DESIGNED AS A RESIDENCE OR FOR OCCUPATION AS A RESIDENCE. THEREFORE A RESIDEN TIAL PLOT CANNOT BE INCLUDED IN THE DEFINITION OF A RESID ENTIAL HOUSE PROPERTY AS IT CANNOT BE USED FOR RESIDENCE. ITA-5327/D/2012 4 THEREFORE, SECTION 54F WAS APPLICABLE TO THE APPELLAN TS CASE AND THE A.O. HAD ERRED IN DENYING THE EXEMPTION TO THE APPELLANT U/S 54F OF THE ACT ON THIS GROUND. 12. AS FAR AS THE SECOND OBSERVATION OF THE A.O. FOR DENYING EXEMPTION TO THE APPELLANT U/S 54F IS CONCERN ED I.E. THE APPELLANT HAD MORE THAN ONE RESIDENTIAL HOU SE PROPERTY ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET , IT SEEN THAT PROPERTY NO.805, BARAKHAMBA ROAD, NEW DELH I HAS BEEN GIVEN ON LEASE BY THE APPELLANT TO M/S PRIVY CONSULTING PVT.LTD. WHO ARE USING THE SAME FOR BUSINESS AND COMMERCIAL PURPOSES. THE APPELLANT IS ALSO CHARGIN G SERVICE TAX ON THE RENT RECEIVED FROM THIS COMPANY AN D DEPOSITING THE SAME TO THE GOVERNMENTS ACCOUNT. THE PROPERTY IS SITUATED IN A COMMERCIAL DISTRICT OF DELHI I.E. BARAKHAMBA ROAD, CONNAUGHT PLACE, NEW DELHI AND IS BEING USED FOR BUSINESS/COMMERCIAL PURPOSES AS CAN BE SEEN FROM THE LEASE AGREEMENT ENTERED INTO BY THE APPELLANT WITH M/S PRIVY CONSULTING PVT.LTD. THEREFO RE, THE SAME CANNOT BE SAID TO BE A RESIDENTIAL HOUSE PROPERTY. THE APPELLANT, THEREFORE, HAD ONLY ONE RESIDENTIAL H OUSE PROPERTY I.E. A-69, ANAND VIHAR, NEW DELHI OTHER TH AN NEW ASSET ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THEREFORE, EXEMPTION U/S 54F WAS AVAILABLE TO THE APPELLANT ON THIS GROUND ALSO. 13. THE INVESTMENT MADE BY THE APPELLANT IN THE NEW ASSET IS RS.1,42,20,651/- WHICH IS MORE THAN THE SALE CONSIDERATION OF THE ORIGINAL ASSET AT RS.1,27,50,000/- . THEREFORE, WHOLE OF THE LTCGS EARNED BY THE APPELLAN T WERE ELIGIBLE FOR EXEMPTION U/S 54F OF THE ACT. THE AO IS DIRECTED ACCORDINGLY. 6. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES AN D THE FACTS OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ABO VE FINDING OF THE LEARNED CIT(A). A PLOT IN A RESIDENTIAL COLONY CAN BE A RESIDENTIAL PLOT BUT CANNOT BE SAID TO BE A RESIDENTIAL HOUSE. SIMILAR LY, PROPERTY NO.805, BARAKHAMBA ROAD, CONNAUGHT PLACE WHICH IS LE T OUT BY THE ASSESSEE TO M/S PRIVY CONSULTING PVT.LTD. AND USED FOR COM MERCIAL PURPOSES BY THEM CANNOT BE PRESUMED TO BE A RESIDENTIAL HOUSE. THE ASSESSING OFFICER HAS NOT GIVEN ANY BASIS OR EVIDENCE FOR TREATING ITA-5327/D/2012 5 PROPERTY NO.805, BARAKHAMBA ROAD, CONNAUGHT PLACE T O BE A RESIDENTIAL HOUSE. IN VIEW OF THE ABOVE, WE DO NOT F IND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNED CIT(A). THE SAME IS SUSTAINED AND THE REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . DECISION PRONOUNCED IN THE OPEN COURT ON 3 RD JANUARY, 2014. SD/- SD/- ( (( (I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 03.01.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -35(1), ROOM NO.D 35(1), ROOM NO.D 35(1), ROOM NO.D 35(1), ROOM NO.D- -- -4, VIKAS BHAWAN, 4, VIKAS BHAWAN, 4, VIKAS BHAWAN, 4, VIKAS BHAWAN, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 002. 110 002. 110 002. 110 002. 2. RESPONDENT : SMT. SUMAN BINDAL, SMT. SUMAN BINDAL, SMT. SUMAN BINDAL, SMT. SUMAN BINDAL, A AA A- -- -69, ANAND VIHAR, 69, ANAND VIHAR, 69, ANAND VIHAR, 69, ANAND VIHAR, TRANS YAMUNA, DELHI TRANS YAMUNA, DELHI TRANS YAMUNA, DELHI TRANS YAMUNA, DELHI 110 092. 110 092. 110 092. 110 092. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR