ITO (IT) 4(1), MUMBAI V. SRINATH S. MUKHERJI, MUMBAI

ITA 5753/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8390 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 14-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Reopening of assessment; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 147; 148; 54

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE HONBLE S/SHRI VIJAY PAL RAO (JM) , AND B.R.BASKARAN (AM) , . . , ./I.T.A. NO.5753/MUM/2012 ( / ASSESSMENT YEAR: 200607) INCOME TAX OFFICER, (INTERNATIONAL TAXATION ), 4(1), MUMBAI. / VS. MR.SRINATH S MUKHERJI, 703704, TARDEO, A C MARKET, TARDEO ROAD, MUMBAI CENTRAL, MUMBAI40008. ( / APPELLANT) .. ( / RESPONDENT) ./ ./ PAN/GIRNO.:AAUPM6394F ! / APPELLANT BY : SHRI LOVE KUMAR ' ! /RESPONDENT BY SHRI K GOPAL AND SHRI JITENDRA SINGH # ' $% / DATE OF HEARING : 18.11.2014 &' ' $% /DATE OF PRONOUNCEMENT : 21.11.2014. / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 26.6.2012 PASSED BY THE LD. CIT(A)11, MUMBAI AND I T RELATES TO THE ASSESSMENT YEAR 200607. 2. THE GROUNDS URGED BY THE REVENUE RELATE TO THE F OLLOWING ISSUES: A) WHETHER THE LD CIT(A) WAS JUSTIFIED IN HOLDING T HAT THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT , 1961(THE ACT) IS NOT VALID IN LAW AND B) WHETHER THE LD CIT(A) WAS JUSTIFIED IN HOLDING THAT THE DEDUCTION UNDER SECTION 54 OF THE ACT IS AVAILABLE IN RESPECT OF P ROPERTY PURCHASED IN SINGAPORE. ITA NO.5753/M/2012 2 3. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. T HE ORIGINAL ASSESSMENT IN THE CASE OF ASSESSEE FOR THE YEAR UNDER CONSIDERATI ON WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT O N 11.8.2006. SUBSEQUENTLY, THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE DATED 21.10.2010 UNDER SECTION 148 O F THE ACT. THE REASONS FOR REOPENING OF THE ASSESSMENT ARE STATED AS UNDER IN THE ASSESSMENT ORDER:- THE RETURN OF INCOME FOR A.Y. 200607 WAS FILED ON 11.8.2006, DECLARING TOTAL INCOME OF RS .92,460/. THE ASSESSMENT UNDER SECTION 143(3) OF THE IT ACT WAS COMPLETED ON 3.12.2008 ON A RETURNED INC OME OF RS .92,460/. ON PERUSAL OF THE CASE RECORDS, IT IS SEEN THAT THE ASSESSEE HAS SOLD FLAT NO. 907/908 SITUATED AT PRABHADEVI, MUMBAI FOR RS. 1,42,50,000/ AND SHOWN LONG TERM CAPITAL GAIN OF RS .43,33,239/. THE ASSESSEE PURCHASED A RESIDENTIAL HOUSE AT 29, LEONIE HILL, #1804, HOR IZON TOWER SINGAPORE239228 FOR SCD 10,351,368/ WHICH COMES T O AT RS .2,79,25,739/. THE ASSESSEE HAS CLAIMED EXEMPTION AMOUNTING TO RS .43,33,239/ UNDER SECTION 54 ON A RESIDENTIAL HOUS E PURCHASED IN SINGAPORE. AS THE ASSESSEES FOREIGN INCOME IS NOT TAXABLE IN INDIA, THE EXPENDITURE MADE BY THE ASSESSEE FOR PURCHASE OF RE SIDENTIAL HOUSE IN SINGAPORE ARE NOT ALLOWABLE FOR CLAIMING EXEMPTION UNDER SECTION 54 OF THE ACT. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THA T THE INCOME TO THE TUNE OF RS .43.33 LAKHS HAS ESCAPED ASSESSMENT. THEREFORE, TH E CASE IS REQUIRED TO BE REOPENED UNDER SECTION 147 BY IS SUE OF NOTICE UNDER SECTION 148 4. IN THE REOPENED ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER DISALLOWED THE CLAIM FOR DEDUCTION UNDER SECTION 54 OF THE ACT IN RESPECT OF THE VALUE OF PROPERTY PURCHASED IN SINGAPORE. IN THE AP PELLATE PROCEEDINGS, THE LD.CIT(A) HELD THAT THE REOPENING OF ASSESSMENT WAS DUE TO CHANGE OF OPINION AND HENCE IT WAS NOT VALID. ON MERITS ALSO, THE LD .CIT(A) HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 54 IN RESPECT OF RESIDENTIAL FLAT PURCHASED IN SINGAPORE. AGGRIEVED, BY THE DECISION OF THE LD,. CIT(A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. 5. THE ASSESSEE HAS PLACED A COPY OF ORIGINAL ASSES SMENT ORDER DATED 3.12.2008 PASSED UNDER SECTION 143(3) OF THE ACT AT PAGE 11 OF THE PAPER BOOK. IN PARAGRAPH 2 OF THE SAID ORDER, WE FIND THAT THE ASSESSING OFFICER HAS DISCUSSED ITA NO.5753/M/2012 3 ABOUT THE DEDUCTION U/S 54 CLAIMED BY THE ASSESSEE. WE EXTRACT BELOW THE RELEVANT OBSERVATIONS, FOR THE SAKE OF CONVENIENCE: 2. THE ASSESSEE IS NRI STAYING IN SINGAPORE. DURIN G F.Y. 200506, HE HAS SHOWN INCOME FROM HOUSE PROPERTY OF RS .1,12,836/ AND INCOME FROM OTHER SOURCES OF RS .50,063/-. THE ASSESSEE HAS KNOWN (SIC. SHOWN) NIL LONG TERM CAPITAL GAIN ON SALE OF HOUSE. THE ASSES SEE HAD PURCHASED A FLAT NO. 907/908, (ADMEASURING 905 SQF CARPET AREA) B WING, EL DORADO CHS, KASHINATH DHURU MARG, OFF CADELL ROAD, PRABHA DEVI, MUMBAI IN 19992000 FOR RS.76,38,900/. VIDE AGREEMENT DATED 31.1.2006, THE ASSESSEE HAS SOLD THIS FLAT FOR RS.1,42,50,000/ T O M/S FDC LTD. AFTER INDEXATION, THE ASSESSEE HAS SHOWN LONG TERM CAPITA L GAIN OF RS.43,33,239/ ON SALE OF THIS HOUSE. VIDE AGREEMEN T DATED 13.12.2005, THE ASSESSEE HAD PURCHASED A RESIDENTIAL HOUSE AT 2 9, LEONIC HILL #18 04, HORIZON TOWER SINGAPORE 239228 FOR SGD 10,10, 000/. THE ASSESSEE HAS CLAIMED EXEMPTION UNDER SECTION 54 AS HE HAS PURCHASED A NEW RESIDENTIAL HOUSE WITHIN THE TIME LIMIT GIVEN I N SECTION 54. THERE IS NO OTHER INCOME TO THE ASSESSEE. THEREFORE, THE RE TURNED INCOME IS ACCEPTED AS ASSESSED TOTAL INCOME ON A PERUSAL OF THE OBSERVATIONS MADE BY THE ASSESS ING OFFICER, WHICH ARE EXTRACTED ABOVE, WE NOTICE THAT THE ASSESSING OFFIC ER HAS ALLOWED THE CLAIM FOR DEDUCTION UNDER SECTION 54 OF THE ACT CONSCIOUSLY, AFTER DULY APPLYING HIS MIND FULLY TO THE FACT THAT THE ASSESSEE HAS PURCHASED T HE NEW RESIDENTIAL FLAT IN SINGAPORE. THE ASSESSEE ALSO POINTED OUT THAT THE RE ARE DECISIONS OF TRIBUNAL, WHEREIN THE TRIBUNAL HAS HELD THAT THE RESIDENTIAL HOUSE PURCHASED OUTSIDE INDIA IS ELIGIBLE FOR DEDUCTION U/S 54 OF THE ACT. THESE FACTS ONLY SHOW THAT THE ASSESSING OFFICER HAS ONLY CHANGED HIS MIND WITH RE GARD TO THE ELIGIBILITY OF THE ASSESSEE TO CLAIM DEDUCTION U/S 54 OF THE ACT IN RE SPECT OF THE RESIDENTIAL HOUSE PURCHASED OUTSIDE INDIA, MEANING THEREBY, HE HAS RE OPENED THE ASSESSMENT DUE TO CHANGE OF OPINION ONLY. IT IS WELL SETTLED PROP OSITION THAT THE ASSESSING OFFICER IS NOT ENTITLED TO REOPEN THE ASSESSMENT ON CHANGE OF OPINION ON ANY ISSUE AND THE AUTHORITY FOR THE SAME CAN BE FOUND IN THE DECI SIONS RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF 320 ITR 561 (SC). H ENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN HOLDING THAT THE REOPENING OF ASSESSMENT IS NOT VALID IN LAW. ITA NO.5753/M/2012 4 6. SINCE WE HAVE UPHELD THE DECISION OF LD CIT(A) IN DECIDING THE LEGAL ISSUE RELATING TO THE REOPENING OF ASSESSMENT IN FAVOUR O F THE ASSESSEE, WE DO NOT FIND IT NECESSARY TO ADJUDICATE THE ISSUE RAISED ON MERI TS. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OP EN COURT ON 21ST NOV, 2014 . &' # () * +21ST NOV , 2014 ' ' 0 1 SD SD ( / VIJAY PAL RAO ) ( . . ,/ B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ( # MUMBAI: 21ST NOV,2014. . . ./ SRL , SR. PS !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. # 4$ ( ) / THE CIT(A)- CONCERNED 4. # 4$ / CIT CONCERNED 5. 6. 50 $ 6 , % 6 , ( # / DR, ITAT, MUMBAI CONCERNED 07 8 / GUARD FILE. 9 # / BY ORDER, TRUE COPY : (ASSTT. REGISTRAR) % 6 , ( # /ITAT, MUMBAI