ITO-19(2)(4), MUMBAI V. ABDUL HUSSAIN MALLICK, MUMBAI

ITA 5797/MUM/2011

• Counselvise Citation: 579719914 RSA 2011
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 16-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBE
• Assessee Lawyers: DEEPAK TRALSHAWALA
• Section: 54

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A BENCH. .. , ! '#$ , # BEFORE S/SH. I.P. BANSAL,JUDICIAL MEMBER & RAJENDRA ,ACCOUNTANT MEMBER /.ITA NO.5797/MUM/2011 , % & /ASSESSMENT YEAR-2007-08 ITO 19(2)(4), ROOM NO.310 PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI.-400012 % / VS. SHRI ABDUL HUSSAIN MALLICK, 17, JEEVAN SARTH ,4 TH FLOOR DATTA MANDIR ROAD, VAKOLA PIPE LINE, S.CRUZ. MUMBAI-40005 PAN: AGOPM67O ( /APPELLANT ) ( / RESPONDENT ) . /CO NO.154/MUM/2012(ARISING ITA NO.5797/MUM/2011) % & /ASSESSMENT YEAR-2007-08 SHRI ABDUL HUSSAIN MA LLICK, 17, JEEVAN SARTH ,4 TH FLOOR DATTA MANDIR ROAD, VAKOLA PIPE LINE, S.CRUZ. MUMBAI-40005 PAN: AGOPM67O ITO 19(2)(4), ROOM NO.310 PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI.-400012 ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY : SHRI SACHCHIDANAND DUBE RESPON DENT BY : SHRI DEEPAK TRALSHAWALA / DATE OF HEARING :07.04.2015 / DATE OF PRONOUNCEMENT :07 .04 .2015 #( / O R D E R I.P.BANSAL ( JM) : THIS APPEAL IS FILED BY THE REVENUE AND CROSS OBJEC TION BY THE ASSESSEE BOTH ARE DIRECTED AGAINST THE ORDER PASSED BY CIT(A ) DATED 23.06.2011 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER: ITA NO .5797/ MUM/2011 CO NO.154/M/2012 . 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO ALLOW THE EXEMPTION U/S 54 OF THE I.T. ACT. CLAIMED BY THE ASSESSEE FOR TWO FLATS IGNORING THE FACTS THAT THE ASSESSEE HAS PURCHASED TWO RESIDENTIAL UNIT VIDE SEPARATE AGREEMENT WITH REGIS TERED SEPARATELY AND AS SUCH VIOLATED THE CONDITIONS SPECIFIED UNDER THE PROVISI ON OF SECTION 54(1) OF THE ACT. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE U/ S 54 OF T HE ACT. AFTER RELYING ON THE DECISION OF THE ITAT MUMBAI BENCH IN THE CASE OF SU SHILA M. JHAVERI (107 LTD 321) WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT ON ME RITS OF THE CASE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. GROUNDS OF CROSS OBJECTION FILED BY THE ASSESSEE READ AS UNDER; (A)ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-35 ERRED IN FAILING TO OBSERVE THAT THE ASSESSMENT ORDER WAS TIME- BARED, ILLEGAL, BAD IN LAW, AND NON-EST INASM UCH AS NOTICE U/S.143(2) ISSUED ON 26.09.2008 ON THE RETURN OF INCOME FILED ON 13.04.2 007, WAS ISSUED BEYOND THE TIME PERIOD SPECIFIED IN THE PROVISO TO SECTION 143(2)(I I). (B) ALL GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACHE OTHER. (C) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND , MODIFY OR DROP ANY GROUNDS OF APPEAL OR CROSS OBJECTIONS AT THE TIME OF PROCEEDIN GS. 3. THE ONLY GROUND RAISED BY THE ASSESSEE IN HIS CROS S OBJECTION IS REGARDING INVALIDITY OF THE ASSESSMENT ORDER ON ACCOUNT OF BE LATED ISSUE OF NOTICE U/S.143(2) WHICH WAS ISSUED ON 26.9.2008 IN RESPECT OF RETURN OF INCOME FILED ON 13.4.2007. ACCORDING TO PROVISIONS PREVALENT FOR THE RELEVANT PERIOD SUCH NOTICE COULD BE ISSUED WITHIN ONE YEAR FROM THE END OF THE MONTH IN WHICH THE RETURN HAS BEEN FILED. SO THE NOTICE U/S.143(2) COU LD BE ISSUED UP TO 30 TH APRIL 2008, ACCORDING TO PROVISO SECTION 143(2)(II) WHERE AS THE SAME WAS ISSUED ON 26.9.2008. FOR CONTENDING THAT ASSESSMENT IS NOT VA LID AS THE NOTICE U/S 143(2) IS ISSUED BELATEDLY, LD. AR PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME ITA NO .5797/ MUM/2011 CO NO.154/M/2012 . 3 COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON 321 I TR 362(SC). THE FACT THAT NOTICE U/S.143(2) WAS ISSUED ON 26.9.2008 AND THE F ACT THAT RETURN IS FILED ON 13.4.2007 ARE RECORDED IN THE FIRST PARA OF THE ASS ESSMENT ORDER AND THESE FACTS ARE ALSO NOT DISPUTED BY THE LD. DR EXCEPT SAYING T HAT THIS ISSUE WAS NOT RAISED BEFORE AO OR CIT(A). 4. PER CONTRA IT WAS SUBMITTED BY LD. AR THAT THIS IS LEGAL ISSUE AND ALL THE FACTS ARE MENTIONED IN THE ASSESSMENT ORDER ITSELF, THEREFORE, THE ASSESSEE IS ENTITLED TO RAISE THIS ISSUE. HE FURTHER SUBMITTED THAT EVEN AS PER RULE 27 OF APPELLATE TRIBUNAL RULES 1963, THE RESPONDENT, THOU GH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED AGAINST AN Y OF THE GROUND DECIDE AGAINST HIM. THUS, IT WAS SUBMITTED BY LD. AR THAT THE ASSESSMENT IS VITIATED IN LAW AND IS REQUIRED TO BE QUASHED. 5. IT WAS FURTHER SUBMITTED BY LD. AR THAT THE APPE AL ON MERITS HAS BEEN DECIDED BY LD. CIT(A), IN ACCORDANCE WITH SPECIAL B ENCH OF DECISION OF ITAT. LD. AR HAS ALSO PLACED RELIANCE UPON THE DECISION O F HONBLE BOMBAY HIGH COURT WHICH IS DATED 27 TH NOVEMBER, 2012 IN THE INCOME TAX APPEAL NO.6962 OF 2010 IN THE CASE OF CIT VS. RAMAN KUMAR SURI, CO PY OF THE SAID ORDER WAS ALSO PLACED ON RECORD AND WAS GIVEN TO LD. DR. IN T HE SAID CASE TWO NEW FLATS WERE PURCHASED BY THE ASSESSEE, WHICH WERE NO.416A AND 516A AND EXEMPTION U/S.54 WAS CLAIMED BY TREATING THE SAME AS ONE A SI NGLE RESIDENTIAL UNIT. THE APPEAL WAS DECIDE IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL AND HONBLE HIGH COURT HAS UPHELD THE DECISION OF THE TRIBUNAL WITH THE FOLLOWING OBSERVATIONS; D) WE FIND NO FAULT WITH THE ORDER OF THE TRIBUNAL WHICH HAS UPHELD THE FINDING OF FACT OF THE COMMISSIONER OF INCOME TAX ( APPEALS) TO THE EFFECT THOUGH THE RESPONDENT-ASSESSEE HAD PURCHASE FLAT NOS. 416A AND 516A IT WAS ONLY PURCHASE OF ONE RESIDENTIAL HOUSE. FURTHER, THE TRI BUNAL HELD THAT TWO FLATS WERE JOINED TOGETHER BEFORE THE RESPONDENT ASSESSEE BECA ME THE OWNER OF THE TWO FLATS. THE CERTIFICATE FROM THE SOCIETY ALSO ESTABLISHED T HE FACT THAT TWO FLAT NOS.416A AND 516A WERE JOINED TOGETHER AND WERE CONSIDERED AS ON E RESIDENTIAL HOUSE. THESE ITA NO .5797/ MUM/2011 CO NO.154/M/2012 . 4 CONCURRENT FINDINGS OF FACT BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL HAVE NOT BEEN SHOWN TO BE PRESERVE OR ARBI TRARY. FURTHER, SECTION 54 OF THE ACT EXEMPTS CAPITAL GAIN TO THE EXTENT THE CONSIDER ATION IS PAID FOR THE PURPOSE OF A RESIDENTIAL HOUSE. CONSEQUENTLY, WHERE RESPONDENT-A SSESSEE HAS ACQUIRED ONE RESIDENTIAL HOUSE CONSISTING OF TWO FLATS, IT CANNO T BE SAID THE RESPONDENT ASSESSEE HAD PURCHASED TWO RESIDENTIAL HOUSES. IN VIEW OF TH E ABOVE, WE FIND THAT QUESTION (E)AND (F) ALSO DON NOT RAISE ANY SUBSTANTIAL QUEST ION OF LAW. THEREFORE, THE APPEAL IS DISMISSED WITH REGARD TO QUESTION (E) AND (F) ABOVE . 7. IN VIEW OF THE ABOVE, THE APPEAL IS DISMISSED WI TH NO ORDER AS TO COSTS. 6. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT ACCO RDING TO UNDISPUTED FINDINGS RECORDED BY THE LD. CIT(A). IT IS CLEAR TH AT WALL BETWEEN THESE TWO FLATS WAS REMOVED AND TWO RESIDENTIAL FLATS WERE CONVERTE D INTO SINGLE RESIDENTIAL UNIT. THUS, IT WAS SUBMITTED BY LD. AR THAT SO FAR AS IT RELATED TWO FLATS, THERE IS NO DISPUTE. 7. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY AO. 8. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY CONSIDERED. WITHOUT GOING INTO THE LEGAL QUESTION, OTHERWISE ALSO THE APPEAL HAS TO BE DECIDED AGAINST THE REVENUE AS EVEN JURISDICT IONAL HIGH COURT IN THE AFOREMENTIONED CASE HAS APPROVED THE VIEW THAT WHER E TWO RESIDENTIAL UNITS HAVE BEEN CONVERTED INTO ONE UNIT, THE ASSESSEE WIL L BE ENTITLED TO CLAIM DEDUCTION U/S.54. THEREFORE, WE FIND NO MERITS IN D EPARTMENTAL APPEAL WHICH IS DISMISSED. 9. IT MAY ALSO BE MENTIONED THAT THE ASSESSEE IS AL SO ENTITLED TO SUCCEED ON ITS CROSS OBJECTION AS ACCORDING TO ESTABLISHED FAC TS NOTICE U/S.143(2) HAS NOT BEEN SERVED WITHIN STATUTORY TIME. THEREFORE, ALSO THE ASSESSMENT IS VITIATED IN LAW AND IS LIABLE TO BE QUASHED. ACCORDINGLY QUASHE D. ITA NO .5797/ MUM/2011 CO NO.154/M/2012 . 5 10. IN THE RESULT , THE APPEAL FILED BY THE REVENUE IS DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS DAY OF 07 TH APRIL 2015. !'# $'% 07.04.2015 , - SD/- SD/- ( '#$ / RAJENDRA) ( . . / I.P.BANSAL ) '. / ACCOUNTANT MEMBER / JUDICIAL MEMBER / 0 MUMBAI ; $' DATED :07 .04.2015 AK PATEL* #( ) *+,- .#-&+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ! 1 ( ) / THE CIT, MUMBAI. 4. ! ! 1 / CIT(A) , MUMBAI 5. 45, 6678 , ! 78 , / 0 / DR, ITAT, MUMBAI 6. ,:; < / GUARD FILE. #(% / BY ORDER, 4 6 //TRUE COPY// //0 ' ( DY./ASSTT. REGISTRAR) , / 0 / ITAT, MUMBAI