SHYAM R. GUPTA, MUMBAI V. ITO 11(1)(4), MUMBAI

ITA 5736/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7989 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 17-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Cost of acquisition; Revised return
• Section: 54

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNALE BENCH, MUMB AI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.5736/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) SHYAM R. GUPTA FLAT NO-F2/703, POONAM KUNJ,POONAM NAGAR MAHAKALI CRAVES ROAD, ANDHERI EAST MUMBAI - 400093 / VS. INCOME TAX OFFICER 11(1)(4) AYAKAR BHAVAN, NEW MARINE LINES, MUMBAI. ./ ./ PAN/GIR NO. ADQPG7610M ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 17.02.2017 /DATE OF PRONOUNCEMENT:. 28.02.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 22.08.2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-3, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RE LEVANT TO THE A.Y.2009- 10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- REVENUE BY SHRI HARESH PURUSHOTTAMDAS SHAH ASSESSEE BY: SHRI SAMBIT MISHRA ITA NO.5736.M.13 A.Y. 2009-10 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE RESTRICTION OF EXEMPTION U/S.54 TO RS.18,91,000/- AS AGAINST RS.31,38,860/- CLAIMED BY THE APPELLANT ON ACCOUNT OF RE-INVESTMENT OF LONG TERM CAPITAL GAINS IN THE RESIDENTIAL HOUSE, THEREBY MAKING AN ADDITION OF RS.12,47,860/- UNDER THE HEAD CAPITAL GAINS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE RE- INVESTMENT OF RS.23,91,000/- U/S.54 INSTEAD OF RS.18,91,000/- SHOWN BY THE APPELLANT IN HIS BALANC E SHEET. AND ALTERNATIVELY CLAIMED BEFORE CIT(A) DURING APPELLANT PROCEEDINGS. 3. THE ORDER OF THE LEARNED CIT(A) IS AGAINST THE W EIGHT OF EQUITY, NATURAL JUSTICE AND GOOD CONSCIENCE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME TO THE TUNE OF RS.2,0 0,995/-. THEREAFTER, THE ASSESSEE AGAIN FILED THE REVISED RETURN OF INCOME O N 29.07.2009 DECLARING TOTAL INCOME TO THE TUNE OF RS.2,00,995/-. THE RET URN OF INCOME WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2 ) OF THE ACT DATED 18.08.2010 WAS ISSUED AND DULY SERVED UPON THE ASSE SSEE. THEREAFTER, THE NOTICE U/S.142(1) OF THE ACT DATED 16.06.2011 WAS I SSUED AND ALSO DULY SERVED UPON THE ASSESSEE. THE ASSESSEE WAS IN THE PROFESSION OF PRODUCTION FILM MANAGER. THE ASSESSEE DURING THE ASSESSMENT Y EAR HAS DECLARED THE INCOME FROM BUSINESS AND PROFESSION, CAPITAL GAIN A ND INCOME FROM OTHER SOURCES. THE ASSESSEE SUBMITTED THE COMPUTATION OF LONG TERM CAPITAL GAIN ON SALE OF FLAT AT PUNE. THE ASSESSEE SHOWED THE S ALE CONSIDERATION OF RS.40,00,000/- AND AFTER DEBITING THE SALE EXPENSES (BROKERAGE PAID) OF RS.1,03,118, RS.38,96,882/- WAS CONSIDERED AS SALE CONSIDERATION. THE ITA NO.5736.M.13 A.Y. 2009-10 3 ASSESSEE CONSIDERED THE INDEXED COST OF ACQUISITION OF SAID PROPERTY OF RS.7,58,022/-, LONG TERM CAPITAL GAIN HAS BEEN SHOW N AT RS.31,38,860/-. SINCE THE ASSESSEE DID NOT OFFERED THE SAID AMOUNT TO TAX, THEREFORE NOTICE WAS ISSUED AND AFTER RECEIPT OF REPLY, THE ASSESSIN G OFFICER WAS OF THE VIEW THAT THE FLAT SOLD WAS WITH JOINT NAME OF THE ASSE SSEE AND HIS WIFE AND THE ASSESSEE AND HIS WIFE HAD ALSO INVESTED THE SAME FO R THE PURCHASE OF NEW PROPERTY VIDE AGREEMENT DATED 17.01.2008 IN TOTAL S ALE CONSIDERATION OF RS.44,86,000/-. ACCORDINGLY, THE ASSESSEES CONTR IBUTION WAS CONSIDERED TO THE EXTENT OF 12,50,000/- ON ACCOUNT OF PURCHASE OF HOUSE AND HIS INVESTMENT TO THE TUNE OF RS.6,41,000/- IN THE CAPITAL GAINS F IXED DEPOSIT SCHEME ON 19.06.2009 WAS ALSO CONSIDERED TOTAL TO TUNE OF RS. 18,91,000/-. AN AMOUNT OF RS.12,47,860/- WHICH WAS IN THE SHARE OF THE AS SESSEES WIFE WAS NOT CONSIDERED FOR EXEMPTION AND ADDED TO THE INCOME OF THE ASSESSEE. FEELING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE C IT(A) WHO CONFIRMED THE ORDER IN QUESTION, THEREFORE, THE ASSESSEE FILED TH E PRESENT APPEAL BEFORE US. ISSUE NO.1 TO 3:- 4. ALL THE ISSUES LEADS TO THE FACTS AND CIRCUMSTAN CES OF THE CASE IN WHICH IT IS REQUIRE TO BE ASCERTAIN WHETHER THE ASSESSEE IS ENTITLED FOR THE EXEMPTION U/S.54 OF THE ACT ON ACCOUNT OF INVESTMENT IN THE P URCHASE OF NEW RESIDENTIAL HOUSE, AFTER SELLING THE OLD FLAT SITUATED AT PUNE. THE FACTUAL POSITION IS NOT IN DISPUTE IN WHICH THE ASSESSEE HAD SOLD THE FLAT SITUATED AT PUNE IN SALE CONSIDERATION OF RS.40,00,000/- AND AFTER DEBITING THE SELLING EXPENDITURE OF RS.1,03,118/-. HE HAS SHOWN THE SALE CONSIDERATION TO THE TUNE OF RS.31,38,860/-. THE ASSESSEE AFTER CONSIDERING THE INDEXED COST ON ITA NO.5736.M.13 A.Y. 2009-10 4 ACQUISITION OF THE SAID PROPERTY TO THE TUNE OF RS. 7,58,022 HAS ASSESSED THE LONG TERM CAPITAL GAIN TO THE TUNE OF RS.31,38,860/ -. THE ASSESSEE CLAIMED THE EXEMPTION U/S.54 OF THE ACT ON ACCOUNT OF THE P URCHASED OF THE PROPERTY BY HIM ALONG WITH HIS WIFE BY VIRTUE OF AGREEMENT D ATED 17.01.2008. THE ASSESSEE ALSO MADE INVESTMENT TO THE TUNE OF RS.6,4 1,000/- IN CAPITAL GAIN FIXED DEPOSIT SCHEME ON 19.06.2009. THE ASSESSING OFFICER ONLY CONSIDERED THE SHARE OF THE HUSBAND FOR THE PURPOSE OF EXEMPTION U/S.54 OF THE ACT. THE TOTAL EXEMPTION WAS CONSIDERED TO THE TUNE OF RS.12,50,000/- AND 6,41,000/- ON ACCOUNT OF DEPOSITS UNDER CAPITAL GAIN FIXED DEPOSIT SCHEME TO THE TUNE OF RS.18,91,000/-. IT IS TO BE SEEN WHETHER THE SHARE OF THE WIFE IS LIABLE TO BE CONSIDERED FOR THE PURPOSE OF EXEMPTION U/S.54 OF THE ACT. UNDISPUTEDLY, THE INVESTMENT WAS TO PURCHASE THE NEW PROPERTY. THERE ARE PLETHORA OF JUDGMENTS IN WHICH THE INVESTMENT M ADE BY HUSBAND AND WIFE HAVE BEEN EXEMPTED U/S.54 OF THE ACT. IN THIS REGARD, WE ARE CITING FEW JUDGEMENTS ON RECORD I.E. DECIDED BY THE HONBLE DELHI HIGH COURT [2012] 342 ITR 38 (DELHI) DATED 27.09.2011 IN CASE TITLED AS COMMISSIONER OF INCOME TAX V. RAVINDER KUMAR ARORA AND DECIDED BY H ONBLE KARNATAKA HIGH COURT [2012] 349 ITR 80 (KARN.) DATED 26.09.20 11 IN CASE TITLED AS DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) AND ANOTHER VS. MRS.JENNIFER BHIDE AND DECDIED BY HONBLE MADRAS HI GH COURT [2010] 235 CTR (MAD) 588 DATED 12.04.2010 IN CASE TITLED AS CO MMISSIONER OF INCOME TAX VS. SRINIVASAN AND HONBLE DELHI HIGH COURT [20 10] 235 CTR (DEL) DATED 16.08.2010 IN CASE TITLED AS COMMISSIONER OF INCOME TAX VS. ROHIT ANAND. PERIOD FOR SALE AND PURCHASE OF THE OLD AND NEW PRO PERTY IS NOT IN DISPUTE AS THE ASSESSING OFFICER HAS ALREADY ALLOWE D THE HUSBANDS PROPERTY ITA NO.5736.M.13 A.Y. 2009-10 5 SHARE AS EXEMPT U/S.54 OF THE ACT. IN VIEW OF THE ABOVE MENTIONED LAW, NO DOUBT THE FINDING OF THE CIT(A) IS WRONG AGAINST LA W AND FACTS AND IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW, THE SA ME IS HEREBY ORDERED TO BE SET ASIDE AND THE ASSESSING OFFICER IS HEREBY DIREC TED TO ALLOW THE SHARE OF THE HUSBAND AND WIFE AS EXEMPTED IN VIEW OF THE PRO VISION CONTAINED IN SECTION 54 OF THE ACT. ACCORDINGLY, THESE ISSUES A RE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2017 . SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) ! / ACCOUNTANT MEMBER ' #! /JUDICIAL MEMBER MUMBAI; DATED : 28 TH FEBRUARY, 2017 MP MP MP MP / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & ( ) / THE CIT(A)- 4. & / CIT 5. #' (###) , #) , / DR, ITAT, MUMBAI 6. ( *+, / GUARD FILE. / BY ORDER, ## //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI