BHARATI A. SHAH, MUMBAI V. I.T.O. WD. 16(3)(4), MUMBAI

ITA 5771/MUM/2011

• Counselvise Citation: 577119914 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-03-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 12-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V SEXSENA
• Assessee Lawyers: S C TIWARI
• Keywords: Benefit of exemption; Reassessment proceedings
• Section: 131; 54; 154; 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI . . , ! ' #'' '$ , % ! & BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 5771 / / 2011 : 1998-99 ITA NO. : 5771/MUM/2011 (ASSESSMENT YEAR: 1998-99) BHARATI A SHAH, C/O. BHARAT TRADERS, 13/15, KALSA MOHALLA MOTIWALA MANZIL, 1 ST FLOOR, PYDHUNI, MUMBAI PAN: ANNPS 1678 J VS INCOME TAX OFFICER WARD 16(3)(4), MATRU MANDIR, TARDEO ROAD, GRANT ROAD, MUMBAI -400 007 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S C TIWARI RESPONDENT BY : SHRI V SEXSENA /DATE OF HEARING : 03-03-2014 / DATE OF PRONOUNCEMENT : 12-03-2014 * O R D E R #'' '$ , : PER VIVEK VARMA, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF C IT(A)- 27, MUMBAI, DATED 24.06.2011, WHEREIN, THE FOLLOWING GROUNDS HA VE BEEN TAKEN: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-27, MUMBAI [CIT(A)] ERRED IN DENYING THE BENEFIT OF EXEMPTION UNDER SECTION 54 OF THE ACT IN RESPECT OF THE CAPITAL GAIN OF RS. 4,67,93,367/- ARISEN ON SALE OF PROPERTY CALLED SAKINA MANZIL A T BANDRA. YOUR APPELLANT SUBMITS THAT THE APPELLANT IS ENTIT LED TO THE EXEMPTION UNDER SECTION 54 OF THE ACT IN RESPECT OF REINVESTMENT OF CAPITAL GAIN IN ANOTHER HOUSE PROPERTY AND THE S AME OUGHT TO HAVE BEEN GRANTED. 2. THE LEARNED CIT(A) ERRED IN FAILED TO APPRECIATE THAT THE ACT OF PURCHASE OF PROPERTY WAS COMPLETE WHEN THE APPELL ANT HAD PAID THE ENTIRE AMOUNT OF THE PURCHASE CONSIDERATIO N WITHIN THE STIPULATED PERIOD AND FAILURE TO GIVE POSSESSION CA NNOT BE THE REASON TO DENY THE BENEFIT OF THE BENEVOLENT PROVIS ION. BHARATI A SHAH ITA 5711/MUM/2011 2 YOUR APPELLANT SUBMITS THAT THE APPELLANT HAD ACQU IRED DOMAIN OVER THE PROPERTY AND HAD INVESTED THE CAPITAL GAIN AMOUNT BY MAKING PAYMENT TO THE BUILDER AND THEREFORE THE APP ELLANT WAS ENTITLED TO THE EXEMPTION UNDER SECTION 54 OF THE A CT AND THE SAME OUGHT TO HAVE BEEN GRANTED. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEVY OF INTEREST UNDER SECTION 234B(3) FOR THE FIRST TIME IN THE RE-ASSESS MENT PROCEEDINGS. YOURS APPELLANT SUBMITS THAT NO INTEREST WAS CHARG ED UNDER SECTION 234B(1) AND THEREFORE THE LEVY OF INTEREST UNDER SECTION 234B FOR THE FIRST TIME UNDER SECTION 234B(3) IS WR ONG AND OUGHT TO BE CANCELLED. 4. THE LEARNED CIT ERRED IN NOT ADJUDICATING GROUND NO. 6(C) REGARDING INCREASE OF INTEREST UNDER SECTION 234B F ROM RS. 75,07,768/- CHARGED IN THE ORDER UNDER SECTION 143( 3) R.W.S. 147 OF THE ACT DATED 22.03.2002 TO RS. 1,71,87,675/ - AS CHARGED IN THE ORDER UNDER APPEAL (WHICH IS REDUCED BY THE ORDER UNDER SECTION 154 DATED 21.02.2011 TO RS. 1,2 0,27,481/- ). YOUR APPELLANT SUBMITS THAT THE INTEREST UNDER SEC TION 234B CHARGED IN THE ORDER UNDER SECTION 143(3) R.W.S. 14 7 COULD NOT BE INCREASED IN THE ORDER UNDER SECTION 143(3) R.W. S. 254 BEING THE ORDER PASSED PURSUANT TO ORDER OF TRIBUNAL SETT ING ASIDE THE ISSUE OF EXEMPTION UNDER SECTION 54 OF THE ACT. 5. THE LEARNED CIT(A) ERRED IN CONFIRMING THE CHARG E OF INTEREST UNDER SECTION 234D AMOUNTING TO RS. 41,612/-. YOURS APPELLANT SUBMITS THAT AFTER OBSERVING THE I NTEREST UNDER SECTION 234D IS CHARGEABLE FORM A.Y. 2004-05 ONWARD S, THE LEARNED CIT(A) WRONGLY DISMISSED THE APPELLANTS GR OUND IGNORING THE FACT THAT THE APPEAL PERTAINED TO AY 1 998-99. YOUR APPELLANT SUBMITS THAT THE LEVY OF INTEREST O UGHT TO BE CANCELLED. 2. GROUND NO. 1 & 2 ARE EFFECTIVE GROUNDS, WHEREIN THE AO HAS DISALLOWED THE EXEMPTION UNDER SECTION 54 OF THE ACT. 3. THE FACTS, AS STATED ARE, THAT THE ASSESSEE IS YOUNG WIDOW SURVIVING WITH HER TWO DAUGHTERS, AFTER THE UNTIMELY DEM ISE OF HER HUSBAND MR. HITEN SHAH, A CHARTERED ACCOUNTANT ON 14.06 .2010. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT Y EAR 1998-99 ON 22.01.1999 DECLARING TOTAL INCOME OF RS. 92,897/-. 4. THE AO PROCESSED THE RETURN OF INCOME AND ISSUE INTIM ATION UNDER SECTION 143(1) WITHOUT ANY ADJUSTMENTS. LATER ON T HE ASSESSMENT WAS REOPENED UNDER SECTION 147 AND REASSE SSMENT WAS MADE UNDER SECTION 147 READ WITH 143(3) ON 22.03.2002. IN THE REASSESSMENT PROCEEDINGS, THE AO ASSESSED LONG-TERM CA PITAL GAINS AT BHARATI A SHAH ITA 5711/MUM/2011 3 RS. 4,67,93,267/-, AND COMPUTED THE TOTAL INCOME AT RS. 4,68,86,270/-. IN THE YEAR UNDER CONSIDERATION, THE ASSESS EE SOLD HER HOUSE PROPERTY SAKINA MANZIL SITUATED AT SV ROAD, BANDRA (WEST) MUMBAI. ON THE SALE OF THIS PROPERTY, LTCG WAS COMPUTED B Y THE AND ASSESSED THE SAME AT RS. 4,67,93,361/-. OUT OF THIS SALE PR OCEEDS, THE ASSESSEE INVESTED RS. 4.85 CRORES, FOR PURCHASE OF A NEW HOUSE PROPERTY AT BANDRA (WEST), VIDE AGREEMENT DATED 20.08.19 98 WITH THE BUILDER M/S BHATI HOMES PVT. LTD., UNDER WHICH THE APPELLA NT WAS TO ACQUIRE SEVEN FLATS TO BE USED AS A SINGLE HOUSE FOR RES IDENCE OF HERSELF AND HER FAMILY MEMBERS. ON THIS MODUS, THE ASSESSEE, CLAIM ED THE EXEMPTION UNDER SECTION 54. 4. THE AO, TAKING INTO CONSIDERATION THE FACTS OF THE CAS E AND AS PER THE DECISION OF THE COORDINATE BENCH OF THE ITAT IN T HE CASE OF THE ASSESSEE IN THE FIRST ROUND, WHEREIN, THE CASE WAS RESTOR ED TO THE AO FOR DE NOVO ADJUDICATION, DEPUTED HIS WARD INSPECTOR TO GET THE DE TAILS OF THE BUILDING IN WHICH THE ASSESSEE HAD MADE HER INVESTMENTS. 5. THE WARD INSPECTOR REPORTED THE STATUS OF THE WOR K DONE, WHICH HAS BEEN SUMMARIZED AS: THAT THERE IS NEITHER ANY BUILDING ON THE SITE N OR ANY BUILDING UNDER CONSTRUCTION EXISTING AS ON DATE ONLY PLINTH OF THE HEIGHT 5 TO 7 FT IS ERECTED ON THE LAND.. FROM THE ABOVE FOLLOWING FACTS EMERGED AS ON TODAY (1) THE BUILDING PLAN IS APPROVED BY THE MUNICIPAL AUTH ORITY AS STATED BY THE BUILDERS. (2) THE CONSTRUCTION OF THE SAID BUILDING HAS NOT TAKEN PLACE. (3) THE BUILDING IS NOT IN EXISTENCE. (4) THE COMPLAINT LODGED BY THE ASSESSEE WITH STATE CONSUMERS REDRESSAL FORUM IS PENDING FOR FINAL HEA RING. IN VIEW OF THE DISCUSSIONS MADE IN THE PRECEDING PA RAS, IT IS CLEAR THAT THE ASSESSEE IS NOT IN THE POSSESSION OF RESIDENTIAL PROPERTY (ASSET) WHICH FULFILS THE ELIGIBILITY CRIT ERIA FOR AVAILING EXEMPTION UNDER SECTION 54 OF THE I.T. ACT, 1961. 6. THE AO, TAKING INTO CONSIDERATION, THE FACTUAL FINDINGS OF THE WARD INSPECTOR, CAME TO THE CONCLUSION, IT IS CLEAR THAT THE ASSESSEE IS NOT IN THE POSSESSION OF RESIDENTIAL PROPERTY (ASSET ) WHICH FULFILS THE ELIGIBILITY CRITERIA FOR AVAILING EXEMPTION UNDER SEC TION 54 OF THE I.T. ACT, BHARATI A SHAH ITA 5711/MUM/2011 4 1961. THE AO, THEREFORE DENIED THE BENEFIT OF EXEMPTION UNDER SE CTION 54 OF THE ACT AND COMPUTED THE LTCG. 6. THE ASSESSEE APPROACHED THE CIT(A), BEFORE WHOM THE ASSESSEE REITERATED THE SUBMISSIONS MADE AND ALSO PLACED RELIANCE ON BOARDS CIRCULAR NO. 471, DATED 15.10.1986, ISSUED BY THE CBDT AND PRAYED THAT THE EXEMPTION BE GRANTED TO THE ASSESSEE. 7. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE, HELD, 4. I HAVE CAREFULLY CONSIDERED THE APPELLANTS SU BMISSIONS IN THIS REGARD. THE PRESENT ASSESSMENT ORDER IS PAS SED IN PURSUANCE TO THE DIRECTIONS OF THE ITAT AND THE AO HAS GOT THE FACTS VERIFIED AS DIRECTED BY THE ITAT. IT IS AN UN DISPUTED FACT THAT AS ON THE DATE OF COMPLETION OF THE ASSESSMENT AT PRESENT, THERE WAS NO BUILDING IN EXISTENCE WHICH WAS CLAIME D TO BE THE NEW ASSET FOR THE PURPOSE OF DEDUCTION UNDER SECTIO N. 54 AND IN FACT THE CONSTRUCTION OF THE PROPOSED BUILDING AS P ER THE APPROVED MUNICIPAL PLANS HAS NOT TAKEN PLACE. THE O FFICE INSPECTOR WHO CONDUCTED THE ENQUIRY REPORTED THAT A S ON DATE ONLY PLINTH OF THE HEIGHT 5 TO 7 FT. WAS ERECTED ON THE LAND. FURTHER, THE COMPLAINT LODGED BY THE APPELLANT WITH THE STATE CONSUMER REDRESSAL QUORAM/FORUM WAS PENDING FOR FIN AL HEARING. THUS IT IS ESTABLISHED ON RECORD THAT THE PURCHASE OF NEW PROPERTY AS REQUIRED UNDER SECTION. 54 OF THE A CT AGAINST THE CAPITAL GAINS ARISING ON A TRANSACTION CONDUCTE D IN THE F.Y. RELEVANT TO THE A.Y. 1998-99, IS NOT COMPLETED AS L ATE AS 29.12.2010 I.E. THE DATE OF THE PRESENT ASSESSMENT ORDER. THE INTENTION OF THE CIRCULAR NO.471 ISSUED BY THE CBDT IS DEFINITELY NOT TO EXTEND THE BENEFIT OF SECTION 54 OF THE ACT TO SUCH TRANSACTIONS WHERE THE PROPOSED NEW ASSET HAS NOT B EEN BROUGHT INTO EXISTENCE EVEN AFTER A LAPSE OF 12 YEA RS. THEREFORE, HAVING REGARD TO THE ABOVE FACTS BROUGHT ON RECORD AT THE TIME OF PRESENT ASSESSMENT AND ALSO THE OBSERVATIONS OF THE ITAT IN ITS EARLIER ORDER CITED ABOVE, I AM OF THE CONSIDERED O PINION THAT THE APPELLANT IS NOT ENTITLED FOR THE BENEFIT UNDER SEC TION.54 OF THE ACT IRRESPECTIVE OF THE FACT THAT PAYMENT WAS MADE TO THE BUILDER. ACCORDINGLY APPELLANT FAILS ON THIS GROUND . 8. THE CIT(A), THEREFORE, REJECTED THE APPEAL OF THE ASSESSEE. 9. THE ASSESSEE IS NOW BEFORE THE ITAT. 10. BEFORE US, THE AR REITERATED THE SUBMISSIONS MADE BE FORE THE REVENUE AUTHORITIES AND PLACED RELIANCE ON THE CIRCULAR ISS UED BY THE BOARD, WHEREIN, CENTRAL BOARD OF DIRECT TAXES (CBDT) CONSIDE RED THE CASES OF ACQUISITION OF THE FLAT BY AN ALLOTTEE UNDER THE S ELF-FINANCING BHARATI A SHAH ITA 5711/MUM/2011 5 SCHEME OF THE DELHI DEVELOPMENT AUTHORITY. AFTER CONSIDERAT ION THE BOARD HAS DECIDED AND ISSUED CIRCULAR NO. 471 DATED 15.10 .1986 THAT CASES OF ALLOTMENT OF FLATS UNDER THE SCHEME OF DDA SHALL BE TREATED AS CONSTRUCTION FOR THE PURPOSE OF CAPITAL GAINS. SUBSEQUENTL Y CBDT ISSUED ANOTHER CIRCULAR, CIRCULAR NO. 672 DATED 16.12.1993 A ND UNDER THIS CIRCULAR THE BOARD DECIDED THAT IF THE TERMS OF THE S CHEMES OF ALLOTMENTS AND CONSTRUCTION OF FLATS/HOUSES BY THE CO-OPE RATIVE SOCIETIES OR OTHER INSTITUTIONS ARE SIMILAR TO THOSE MENTION ED IN EARLIER CIRCULAR NO. 471, SUCH CASES SHOULD BE SIMILARLY TREATED. 11. THE AR ALSO RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT CONSIDERED THE AFORESAID CBDT CIRCULAR NO. 471 IN THE CASE OF CIT V. MRS. HULA J. B. WADIA 216 ITR 376 (BORN). IN THAT CASE THE ASSESSEE SOLD HER RESIDENTIAL PROPERTY BY CONVEYANCE DATED 8.12.19 72 AND PAY THE ENTIRE CAPITAL GAINS FOR PURCHASE OF A NEW FLAT UNDER C ONSTRUCTION BY WAY OF INSTALLMENT PAID FROM 18.09.1972 TO 07.03.1975. ON T HESE FACTS HONBLE BOMBAY HIGH COURT HELD THAT THE ASSESSEE HAD ACQUIRED SUBSTANTIAL DOMAIN OVER THE FLAT IN QUESTION UNDER THE AGR EEMENT WITH THE SOCIETY COUPLED WITH THE PAYMENT OF ALMOST THE ENTIRE COST OF CONSTRUCTION WITHIN A PERIOD OF TWO YEARS. 12. THE AR ALSO RELIED ON THE DECISION OF CIT V. DR. LAXMICHAND NARPAL NAGDA 211 ITR 804 (BORN) HONBLE BOMBAY HIGH COURT HELD THAT FROM THE SPIRIT OF THE SECTION 54 AND THE FACT THAT THE WORD TOWARDS HAS BEEN USED BEFORE THE WORD PURCHASE IT APPEARS THAT THE SAID WORD IS NOT USED IN THE SENSE OF LEGA L TRANSFER AND THEREFORE HOLDING OF A LEGAL TITLE WITHIN THE SPECI FIED PERIOD WAS NOT A CONDITION PRECEDENT FOR ATTRACTING SECTION 54 . 13. HE, FURTHER PLACED RELIANCE OF THE DECISION OF SMT. SHASHI VARMA V. CIT 224 ITR 106 (MP) HONBLE MADHYA PRADESH HIGH COUR T HAS HELD AS UNDER WE HAVE HEARD LEARNED COUNSEL AND PERUSED THE RECO RD. IN FACT, THE TRIBUNAL HAS TAKEN VERY PEDANTIC APPROACH WHILE CONSTRUING THE PROVISIONS OF S. 54 OF THE IT ACT. IN THE PRESE NT CASE, IN FACT THE CAPITAL GAIN IS RS. 31,980; WHEREAS THE FIRST I NSTALLMENT TOWARDS FLAT FROM THE DELHI DEVELOPMENT AUTHORITY W AS RS. 71,256 I.E., MUCH MORE THAN THE CAPITAL GAINS. THE CBDT ALSO BHARATI A SHAH ITA 5711/MUM/2011 6 ISSUED CIRCULAR NO. 471 DT. 15TH OCT., 1986, AND HA S CLARIFIED AS UNDER: THEREFORE FOR THE PURPOSE OF CAPITAL GAIN TAX, THE COST OF THE NEW ASSET IS THE TENTATIVE COST OF CONSTRUCTION AND THE FACT THAT THE AMOUNT WAS ALLOWED TO BE PAID IN INSTALLMENTS DOES NOT AFFECT THE LEGAL POSITION STATED ABOVE, IN VIEW OF THESE F ACTS, IT HAS BEEN DECIDED THAT CASES OF ALLOTMENT OF FLATS UNDER THE SELF FINANCING SCHEME OF THE DELHI DEVELOPMENT AUTHORITY SHALL BE TREATED AS CASES OF CONSTRUCTION FOR THE PURPOSES O F CAPITAL GAINS. THIS CLINCHES THE MATTER AND IT WAS NOT PROPER FOR THE TRIBUNAL TO HAVE IGNORED THE CIRCULAR BECAUSE IT HAS A PERSUASI VE VALUE AND IT WAS IN THE NATURE OF GRANTING RELIEF THEREFORE, THE TRIBUNAL SHOULD HAVE CONSIDERED THE CIRCULAR SYMPATHETICALLY AND GRANTED THE RELIEF MORE SO, S. 54 OF THE ACT OF 196 1 ONLY SAYS THAT WITHIN TWO YEARS, THE ASSESSEE SHOULD HAVE CON STRUCTED THE HOUSE BUT THAT DOES NOT MEAN THAT THE CONSTRUCTION OF HOUSE SHOULD NECESSARILY BE COMPLETE WITHIN TWO YEARS. IA /HAT IT MEANS IS THAT THE CONSTRUCTION OF HOUSE SHOULD BE C OMPLETED AS FAR AS POSSIBLE WITHIN TWO YEARS. IN THE MODERN DAY S, IT IS NOT EASY TO CONSTRUCT A HOUSE WITHIN THE TIME LIMIT OF TWO YEARS AND UNDER THE GOVERNMENT SCHEMES, CONSTRUCTION TAKES YE ARS TO YEARS. THEREFORE, CONFINING TO TWO YEARS PERIOD FO R CONSTRUCTION AND HANDING OVER POSSESSION THEREOF IS IMPOSSIBLE A ND UNWORKABLE UNDER S. 54 OF THE ACT. IF THE SUBSTANTI AL INVESTMENT IS MADE IN THE CONSTRUCTION OF HOUSE, THEN IT SHOUL D BE DEEMED THAT SUFFICIENT STEPS HAVE BEEN TAKEN AND THIS SATI SFIES THE REQUIREMENTS OF S. 54. THEREFORE, THE VIEW TAKEN BY THE TRIBUNAL IS NOT CORRECT. HENCE, WE ANSWER THE QUESTION IN FA VOUR OF ASSESSEE AND AGAINST THE REVENUE. 14. HE ALSO RELIED UPON THE DECISION OF CIT V. R. L. SOOD 245 ITR 727 (DEL) HONBLE DELHI HIGH COURT HAS HELD AS UNDER: IN OUR VIEW THE TRIBUNAL WAS JUSTIFIED IN DECLININ G TO MAKE A REFERENCE ON THE PROPOSED QUESTION TO THIS COURT. A DMITTEDLY, THE ASSESSEE HAD PAID A SUM OF RS. 2,39,850 OUT OF THE TOTAL SALE CONSIDERATION OF RS. 2,75,000 FOR PURCHASE OF FLAT WITHIN THE PERIOD OF ONE YEAR FROM THE DATE OF SALE OF HIS OLD RESIDENTIAL HOUSE. THUS, ON PAYMENT OF A SUBSTANTIAL AMOUNT IN TERMS OF THE AGREEMENT OF PURCHASE DT. 25TH SEPT., 1981, I.E., W ITHIN FOUR DAYS OF THE SALE OF HIS OLD PROPERTY, THE ASSESSEE ACQUIRED SUBSTANTIAL DOMAIN OVER THE NEW RESIDENTIAL FLAT WI THIN THE SPECIFIED PERIOD OF ONE YEAR AND COMPLIED WITH THE REQUIREMENTS OF S. 54. MERELY BECAUSE THE BUILDER FAILED TO HAND OVER POSSESSION OF THE FLAT TO THE ASSESSEE WITHIN THE P ERIOD OF ONE YEAR, THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF THE SAID BENEVOLENT PROVISION. THIS WOULD NOT BE IN CONSONAN CE WITH THE SPIRIT OF S. 54 OF THE ACT. WE MAY NOTE THAT REALISING THE PRACTICAL DIFFICULTY FACED BY THE ASSESSEE IN SUCH SITUATIONS, THE CBDT ISSUED A CIRC ULAR NO. 471, DT. 15TH OCT., 1986, CLARIFYING THAT WHEN THE DDA ISSUES THE ALLOTMENT LETTER TO AN ALLOTTEE UNDER ITS SELF- FINANCING SCHEME, ON PAYMENT OF FIRST INSTALLMENT OF COST OF CONSTRUC TION, THE ALLOTTEE GETS TITLE TO THE PROPERTY AND SUCH ALLOTM ENT SHOULD BE TREATED AS COST OF CONSTRUCTION FOR THE PURPOSE OF CAPITAL GAINS. ON THE SAME ANALOGY, THE ASSESSEE HAVING BEEN ALLOT TED THE FLAT, BHARATI A SHAH ITA 5711/MUM/2011 7 HE HAVING PAID A SUBSTANTIAL AMOUNT TOWARDS ITS COS T WITHIN THE STIPULATE PERIOD OF ONE YEAR, HE CANNOT BE DENIED T HE BENEFIT OF THE SAID SECTION BECAUSE THE FLAT PURCHASED BY HIM HAD COME INTO HIS FULL DOMAIN WITHIN THE PERIOD OF ONE YEAR, THOUGH THE SALE DEED IN HIS FAVOUR WAS REGISTERED SUBSEQUENTLY . 15. THE AR, THEREFORE, SUBMITTED THAT THE ASSESSEE IS CA UGHT BETWEEN THE WRONG DOING OF THE BUILDER AND THE REVENUE DEPARTMENT, BECAUSE THE BUILDER HAD TAKEN THE ENTIRE MONEY IN ADVAN CE AND EVEN AFTER MORE THAN 13 YEARS, THERE IS NO SIGHT OF GETTING TH E FLATS IN LIEU OF THE PROPERTY SOLD BY THE ASSESSEE. ON THESE GROUNDS A ND PLACING RELIANCE ON THE DECISIONS OF VARIOUS COURTS, THE ASSESSEE BE ALLOWED THE BENEFIT OF THE EXEMPTION. 12. THE DR ON THE OTHER HAND SUBMITTED THAT THE AGRE EMENT PLACED IN THE APB IS NEITHER STAMPED NOR REGISTERED, HENCE THE AGREEMENT WITH THE BUILDER CANNOT BE RELIED UPON. HE FURTHER SUBMITTE D THAT IF AT ALL THE ASSESSEE HAD ENTERED INTO THE PURCHASE AGREEME NT, THERE WOULD HAVE BEEN OTHER PURCHASES AS WELL, WHAT HAPPENED WITH T HOSE PEOPLE, THE ASSESSEE HAS NOT MENTIONED ANYTHING ABOUT THIS ASP ECT. THE DR ALSO SUBMITTED THAT MERELY BY ENTERING INTO AN AGREEMEN T, CANNOT SECURE ANY SUBSTANTIAL RIGHT OF THE ASSESSEE OVER THE B UILDER AND THE PROPOSED FLAT. 13. THE DR FURTHER SUBMITTED THAT THE ENTIRE CIRCUMSTANCE, SEEMS TO BE AN EYE WASH, AND HE, THEREFORE, SUBMITTED THAT THERE WAS NO INFIRMITY WITH THE ORDER OF THE REVENUE AUTHORITIES. HE ALSO, ONE BY ONE DISTINGUISHED EACH OF THE CASE LAWS. THE AR IN THE REJOINDE R SUBMITTED THAT THE BUILDER WAS SUMMONED BY THE AO UNDER SECTION 131 AND HE CONFIRMED BEFORE THE AO ABOUT THE RECEIPT OF THE MONEY/ PAYMENT. THE AR FINALLY SUBMITTED THAT THE MONEY SO PAID TO THE BUILDER COULD NOT HAVE EVAPORATED. 14. WE HAVE HEARD THE ARGUMENTS OF THE PARTIES AND HA VE CONSIDERED THE CASE LAWS AND BOARDS INSTRUCTIONS AND THE FACTS OF THE CASE. THE FACT THAT THE ASSESSEE INVESTED IN THE FLAT TO HAVE BEEN CONSTRUCTED BY BHARATI A SHAH ITA 5711/MUM/2011 8 BHATI HOMES PVT LTD IS UNDISPUTED. THE FACT THAT BHATI HO MES PVT LTD GOT THE PLANS APPROVED FOR DEVELOPMENT OF SAKINA MANZIL IS ALSO UNDISPUTED. WHAT PUTS THE FACTS UNDER SCANNER ARE (A) WHY THE ASSESSEE PARTED WITH THE ENTIRE COST OF THE FLATS SHE WAS ABOUT TO PURCHASE; (B) WHY THE BUILDER/DEVELOPER, M/S BHATI HOMES PVT LTD DID NOT PROCEED WITH THE CONSTRUCTION ACTIVITY; AND (C) WHAT IS THE STATUS OF OTHER OWNERS. 15. THE ASSESSEE HAS SUBMITTED THAT SHE HAS APPROACH ED THE CONSUMER FORUM & IT IS FINALLY TO BE HEARD. AS TO WHETHE R THE OTHER CO- OWNERS HAVE ALSO PAID THE ENTIRE COST OF THE FLATS IN ADVA NCE. WHAT IS SURPRISING IS THAT AFTER CONSTRUCTING THE PLINTH, THE CONST RUCTION WAS STOPPED. WHEY IT WAS STOPPED, IT HAS NOT BEEN ANSWERED IN ANY PROCEEDINGS TILL DATE. EVEN IF THE ARGUMENTS OF THE AR ARE CONSIDERED T O THE BENEFIT, EVEN THEN, UNLESS IT IS PROVED THAT THE ASSES SEE HAS BOUGHT A CORRESPONDING PROPERTY WITHIN 36 MONTHS, THE EXEMPTION CANNOT BE ALLOWED. THE FACT IS THAT THE CASE PERTAINS TO 1998 AND EVEN AFTER 13 YEARS THERE IS NO CLARITY WITH REGARD TO PURCHASE, WHERE THE AGREEMENT WITH BHATI IS ON UNREGISTERED AND UNSTAMPED DOCUMENT CA NNOT BE RELIED UPON AS THE ASSESSEE CANNOT HAVE A CLAIM OF DOMAIN ON ANYTHING. THE CASE LAWS SO HEAVILY RELIED UPON BY THE AR AND THE CIRCULARS ARE OF NO BENEFIT, BECAUSE, ALL THE CASES ARE DISTI NGUISHABLE ON FACTS. IN NONE OF THE ABOVE CASE LAWS AS RELIED UPON BY THE AR, THERE IS A WAITING PERIOD OF MORE THAN 13 YEARS AND STILL T HE PROPOSED BUILDING IS NOT BEYOND 5 6 OF PLINTH. 16. IN THE CIRCUMSTANCES, NEITHER THE SUBMISSIONS NOR T HE CASE LAWS AND OTHER CITATIONS INSPIRE ANY CONFIDENCE TO RULE THE CAS E IN THE FAVOUR OF THE ASSESSEE. WE, THEREFORE, SUSTAIN THE ORDER O F THE REVENUE AUTHORITIES AND REJECT, GROUNDS NO. 1 & 2. 17. GROUND NO. 3, 4 & 5 PERTAIN TO INTEREST CHARGEABILITY UNDER SECTION 234B, 234D. BHARATI A SHAH ITA 5711/MUM/2011 9 18. THE GROUNDS, THE AR SUBMITTED ARE CONSEQUENTIAL TO THE FINAL ORDER OF THE AO. THE AO IS ACCORDINGLY DIRECTED TO COM PUTE THE INTEREST UNDER SECTION 234B & 234D. 19. GROUND NO. 6 IS GENERAL. 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH, 2014. SD/- SD/- ( . . ) ( #'' '$ ) ! ! (P.M. JAGTAP) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 12 TH MARCH, 2014 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT (A)-27, MUMBAI 4) THE CIT-CITY-16, MUMBAI, 5) !'# $ % , & $ , '() / THE D.R. B BENCH, MUMBAI. 6) #* + COPY TO GUARD FILE. &,%- / BY ORDER / / TRUE COPY / / . / / (0 & $ , '() DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * CHAVAN