BIRENDRAKUMAR SHRIVASTAVA, MUMBAI V. ITO 26(1)(3), MUMBAI

ITA 5342/MUM/2010

• Counselvise Citation: 534219914 RSA 2010
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MURALI
• Assessee Lawyers: VINAY MULYE
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NO.5342/MUM/2010 : ASST. YEAR 2007-2008 SHRI BIRENDRAKUMAR SHRIVASTAVA FLAT NO.22, BUILDING NO.4 PRAKASH CHS LTD. RELIEF ROAD SANTACRUZ (WEST), MUMBAI 400 054. PAN : ANPQS5100E. THE INCOME TAX OFFICER WARD 26(1)(3) MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI VINAY MULYE RESPONDENT BY : SHRI M.MURALI DATE OF HEARING : 04.06.2012 DATE OF PRONOUNCEMENT : 08.06.2012 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 14.05.2010, IN RELATION TO THE ASSESSMENT YEAR 2007-2008. 2. THE ONLY ISSUE RAISED THROUGH THREE GROUNDS IS N OT ACCEPTING THE CLAIM OF EXEMPTION U/S 54 OF THE ACT. BRIEFLY STATED THE FAC TS OF THE CASE ARE THAT THE ASSESSEE SOLD CERTAIN PROPERTY FOR A SUM OF ` 45 LAKH ON 21 ST AUGUST, 2006. A NEW RESIDENTIAL HOUSE PROPERTY WAS PURCHASED BY THE ASSESSEE ON 4 TH FEBRUARY, 2006 FOR A SUM OF ` 46,03,850 AFTER TAKING LOAN FROM HIS SON FOR ` 3 LAKH ON 27.01.2006 AND ` 54 LAKH ON 02.02.2006. THE SAID SALE CONSIDERATION OF ` 45 LAKH WAS UTILIZED BY THE ASSESSEE IN MAKING DEPOSIT IN F IXED DEPOSIT RECEIPTS (FDR) IN AUGUST / SEPTEMBER 2006. THE LOAN TAKEN FROM THE SON WAS REPAID BY THE ASSESSEE AT ` 57 LAKH ON 29.05.2007. IN THE RETURN FILED THE ASSE SSEE CLAIMED EXEMPTION U/S 54 IN RESPECT OF CAPITAL GAIN ARISING FROM THE HOUSE PROPERTY TRANSFERRED BY IT FOR ` 45 LAKH. THE A.O. DID NOT ALLOW THIS EXEMPTION AS I N HIS OPINION THE ASSESSEE DID NOT UTILIZE SALE PROCEEDS OF OLD HOUSE FOR MAKING INVESTMENT IN NEW HOUSE, WHICH IN HIS OPINION WAS A PRE-CONDITION FOR CLAIMING ITA NO.4342/MUM/2010 SHRI BIRENDRAKUMAR SHRIVASTAVA. 2 EXEMPTION UNDER SECTION 54. THE LEARNED CIT(A) ALSO UPHELD THE ASSESSMENT ORDER ON THE GROUND THAT THE ASSESSEE OUGHT TO HAVE DEPOSITED THE AMOUNT OF CAPITAL GAIN OF ` 30.71 LAKH IN A DESIGNATED BANK ACCOUNT BEFORE FILI NG RETURN OF INCOME, AS A CONDITION FOR CLAIMING EXEMPTION U/S 5 4. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE SOLD ITS PROPERTY IN AUGUST, 2006 FOR ` 45 LAKH WHICH RESULTED INTO CAPITAL GAIN. AT THE SA ME TIME IT IS RELEVANT TO MENTION THAT THE ASSESSEE PURCHASED ONE HOUSE PROPERTY ON 4 TH FEBRUARY, 2006 FOR A SUM OF ` 43.06 LAKH OUT OF LOAN TAKEN BY HIM FROM HIS SON. THE AUTHORITIES BELOW HAVE DENIED EXEMPTION U/S 54 PRIMARILY FOR THE REASON THAT THE SALE CONSIDERATION RECEIVED BY THE ASSESSE E WAS NOT UTILIZED FOR PURCHASING THE HOUSE PROPERTY AND SECONDLY, THE AMO UNT WAS NOT DEPOSITED IN THE DESIGNATED CAPITAL GAIN ACCOUNT WITH THE BANK A S PER THE MANDATE OF SECTION 54. WE ARE NOT AGREEABLE WITH BOTH THE CONTENTIONS OF THE REVENUE. SECTION 54 GRANTS EXEMPTION IF, INTER ALIA, THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFORE THE DATE OF TRANSFER PURCHASED ANOTHER HOUSE . HERE IS A CASE IN WHICH THE ASSESSEE PURCHASED NEW HOUSE ON 4 TH FEBRUARY, 2006 WHEREAS THE OLD HOUSE WAS SOLD ON 21 ST AUGUST, 2006. ADMITTEDLY THE NEW HOUSE WAS PURCHAS ED WITHIN THE STIPULATED PERIOD OF ONE YEAR BEFORE THE DATE OF TR ANSFER OF OLD HOUSE. THE CONTENTION THAT THE SALE CONSIDERATION OF THE PROPE RTY TRANSFERRED MUST HAVE BEEN UTILIZED IN PURCHASING NEW HOUSE, IS INCAPABLE OF A CCEPTANCE. THE OBVIOUS REASON FOR SUCH A VIEW IS THAT UNLESS OLD HOUSE IS SOLD THERE CAN BE NO SALE CONSIDERATION CAPABLE OF UTILIZATION BY THE ASSESSE E IN PURCHASING A HOUSE. WHEN THE LEGISLATURE HAS GIVEN AN OPTION TO THE ASS ESSEE FOR PURCHASING A NEW HOUSE BEFORE ONE YEAR FROM THE DATE OF TRANSFER OF A HOUSE, IT IMPLIES THAT THE SOURCE OF MONEY FOR PURCHASING THE HOUSE IS IRRELEV ANT. WHAT IS REQUIRED TO BE SEEN IS THAT THE ASSESSEE MUST HAVE PURCHASED A RES IDENTIAL HOUSE ONE YEAR BEFORE THE DATE OF TRANSFER OF THE EXISTING RESIDEN TIAL HOUSE. AS ADMITTEDLY THIS ITA NO.4342/MUM/2010 SHRI BIRENDRAKUMAR SHRIVASTAVA. 3 CONDITION HAS BEEN FULFILLED, IN OUR CONSIDERED OPI NION, THERE IS NO LOGIC IN DENYING U/S 54 OF THE ACT. 4. AS THE ASSESSEE EARNED EXEMPTION U/S 54 AT THE VERY THRESHOLD BY PURCHASING A NEW HOUSE BEFORE THE TRANSFER, THERE I S NO NEED TO EXAMINE AS TO WHETHER THE ASSESSEE DEPOSITED THE SALE CONSIDERATI ON IN THE DESIGNATED CAPITAL GAIN SCHEME ACCOUNT OR NOT. THAT WOULD HAVE BEEN RE LEVANT IF THE ASSESSEE HAD NOT PURCHASED A NEW HOUSE BEFORE THE DATE OF TRANSF ER OF OLD PROPERTY AND HAD BEEN CLAIMING EXEMPTION U/S 54 ON THE BASIS OF DEPO SIT OF SUCH MONEY WITH THE BANK TO BE UTILIZED FOR THE PURCHASE OF A NEW HOUSE . IN VIEW OF THE ASSESSEE HAVING AVAILED EXEMPTION AT THE INITIAL STAGE ITSEL F, THERE IS NO NEED TO EXAMINE AS TO HOW HE UTILIZED THE MONEY FROM SALE CONSIDERA TION AT HIS DISPOSAL. WE, THEREFORE, OVERTURN THE IMPUGNED ORDER AND ORDER FO R THE GRANT OF EXEMPTION U/S 54. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 08 TH DAY OF JUNE, 2012. SD/- SD/- (VIVEK VARMA) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 08 TH JUNE, 2012. DEVDAS* ITA NO.4342/MUM/2010 SHRI BIRENDRAKUMAR SHRIVASTAVA. 4 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXVIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.