DR MADHURI SUNIL BANGERA, THANE V. ITO WD 1(3), THANE

ITA 5967/MUM/2013

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2879 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH LD
• Assessee Lawyers: M SUBRAMANIAN LD
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Revised return
• Section: 143(3); 50C; 54F; 54

Judgement Text

ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI SAKTIJIT DEY, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.5967/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) MADHURI SUNIL BANGERA A-4/802, VIKAS COMPLEX AGRA ROAD, CASTEL MILL THANE-400 601 / VS. INCOME TAX OFFICER, WARD - 1(3) ASHAR IT PARK, ROAD NO.16-Z WAGLE INDUSTRIAL ESTATE THANE-400 604 '#! ./ ! ./PAN/GIR NO. AARPB-0627-P ( #% /APPELLANT ) : ( &'#% / RESPONDENT ) ASSESSEE BY : M. SUBRAMANIAN, LD. AR REVENUE BY : CHAUDHARY ARUN KUMAR SINGH, LD. DR / DATE OF HEARING : 03/10/2018 / DATE OF PRONOUNCEMENT : 02/11/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2009- 10 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INC OME-TAX (APPEALS)-2 [CIT(A)], THANE, APPEAL NO.THN/CIT(A)- ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 2 II/WD.1(3)/THN/714/2011-12 DATED 06/08/2013 QUA REJECTION OF ASSESSEES CLAIM U/S 54F OF THE INCOME TAX ACT, 196 1. 2. BRIEFLY STATED THE ASSESSEE BEING DOCTOR BY PROFESSION WAS ASSESSED U/S 143(3) BY LD. INCOME TAX OFFICER-WARD-1(3) [AO] , THANE ON 26/12/2011 AT RS.27.30 LACS AFTER DENIAL OF DED UCTION U/S 54F AS AGAINST RETURNED INCOME OF RS.8.23 LACS FILE D BY THE ASSESSEE ON 16/09/2010. 3. DURING IMPUGNED AY, IT WAS NOTED THAT THE ASSESS EE SOLD A PLOT OF LAND ON 21/10/2008 FOR A TOTAL SALE CONSIDERATIO N OF RS.45 LACS AND COMPUTED LONG TERM CAPITAL GAIN [LTCG] OF RS.23.26 LACS AFTER ADJUSTING INDEXED COST OF ACQUISITION OF RS.21.73 L ACS. AGAINST THE RESULTANT LTCG OF RS.23.26 LACS, DEDUCTION U/S 54F WAS CLAIMED AGAINST INVESTMENTS MADE BY THE ASSESSEE IN PURCHAS E OF NEW FLAT. ACCORDINGLY, THE ASSESSEE WAS ASKED TO SUBSTANTIATE HER CLAIM WITH DOCUMENTARY EVIDENCES. THE PERUSAL OF THE DOCUMENTS REVEALED THAT THE ASSESSEE JOINTLY WITH HER HUSBAND DR SUNIL BANGERA MADE INVESTMENT IN A NEW PROPERTY FLAT NO. 1601 SG AND 1602 SG SITUATED AT LODHA LUXURIA (CLAREMONT B) , THE PAYMENT OF WHICH WAS MADE BETWEEN THE PERIOD FEBRUARY, 2008 TO MAY, 2008, THE DETAILS OF WHICH HAVE ALREADY BEEN EXTRACTED IN QUANTUM ASSESSMENT O RDER IN PARA-4. THE TOTAL OF PAYMENT MADE UP-TO 30/05/2008 AGGREGAT ED TO RS.27.72 LACS OUT OF WHICH RS.14.26 LACS WERE STATED TO BE C ONTRIBUTED BY THE ASSESSEE WHEREAS THE BALANCE AMOUNT OF RS.13.45 LAC S WAS STATED TO BE CONTRIBUTED BY HER HUSBAND DR. SUNIL BANGERA . HOWEVER, ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 3 SUBSEQUENTLY, THE SAID BOOKING AMOUNT WAS TRANSFERR ED / APPROPRIATED TOWARDS ANOTHER PROPERTY SITUATED IN THE BUILDING WESTGATE. ALL THESE FACTS VIZ. RECEIPTS IN JOINT NAMES, TRANSFER OF AMO UNT FROM ONE PROJECT TO ANOTHER, REDUCTION / RETURN OF AMOUNT ADVANCED F OR PURCHASE OF FLAT, ABSENCE OF DOCUMENTARY EVIDENCES TOWARDS PURCHASE O F FLAT LED THE LD. AO TO FORM AN OPINION THAT THE ASSESSEE FAILED TO COMPLY WITH THE CONDITIONS OF SECTION 54F. FURTHER, THE COST OF THE PLOT SOLD WAS TAKEN AS RS.7.99 LACS INSTEAD OF RS.9.11 LACS SINCE THE A SSESSEE FAILED TO PRODUCE THE DOCUMENTARY EVIDENCES OF PAYMENT OF STA MP DUTY CHARGES. FINALLY, ADOPTING SALE CONSIDERATION TO BE RS.45.45 LACS U/S 50C & AFTER DEDUCTING REVISED INDEXED COST OF ACQUI SITION, LTCG WAS WORKED OUT AT RS.19.06 LACS AND DEDUCTION U/S 54F W AS DENIED TO THE ASSESSEE. THE PERUSAL OF COMPUTATIONS AS MADE BY LD . AO REVEAL THAT THERE ARE COMPUTATIONAL ERRORS IN THE CALCULATIONS SINCE REVISED INDEXED COST OF ACQUISITION WORKS OUT TO BE RS.19,0 6,640/- [7,99,347/- X 582/244] INSTEAD OF RS.26,28,360/- AS TAKEN BY LD . AO AND THE RESULTANT LTCG WORKS OUT TO BE RS.26,28,360/- INSTEAD OF RS.19,06,640/- AS TAKEN BY LD. AO. 4. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITHO UT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 06/08/2013 WHEREIN LD. CIT(A) CONCURRED WITH THE STAND OF LD. AO BY OBSERVING AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD AND SUBMISSION OF LD. A.R. I FIND THAT THE APPELLANT HAS INITIALLY BOOKED TWO FLATS IN CLAREMONT BUILDING AND UNDISPUTEDLY HAS MADE THE PAYMENT OF RS.14,27,702/- DURING THE PERIOD BETWEEN ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 4 5/2/2008 AND 30/5/2008. THE HUSBAND OF APPELLANT HA S ALSO MADE PAYMENT OF RS.13,45,735/- DURING THAT PERIOD. ON PERUSAL OF TH E DOCUMENTARY EVIDENCE PLACED ON RECORD IN THE FORM OF AN ALLOTMENT LETTER DT.08/10/2008, IT IS NOTICED THAT THE APPELLANT ALONG WITH HER HUSBAND HAS BEEN ALLOT TED FLATS B-1601 & 1602 IN CLAREMONT BUILDING BY M/S. LODHA BUILDERS. THIS ALL OTMENT LETTER HAS BEEN ISSUED IN RESPONSE TO THE APPLICATION DT.5.2.2008 MADE FOR ALLOTMENT OF THE RESIDENTIAL FLATS. HOWEVER, SUBSEQUENTLY, THE AMOUNTS OF INVEST MENT MADE BY THE APPELLANT AND HER HUSBAND HAVE BEEN TRANSFERRED TO ANOTHER BU ILDING KNOWN AS WESTGATE OF THE SAME BUILDER AND ANOTHER ALLOTMENT LETTER DT .22/10/2009 HAS BEEN ISSUED. FROM THE FACTS OF THE CASE, IT IS ALSO CLEAR THAT T HE APPELLANT HAS DISCLOSED LONG TERM CAPITAL GAIN OF RS.23,26,366/- IN HER RET URN OF INCOME AND NO CLAIM OF JOINT OWNERSHIP OF THE PROPERTY SOLD HAS B EEN MADE IN THE RETURN OF INCOME. IT IS AN ESTABLISHED LEGAL POSITION THAT TH E A.O. CANNOT REDUCE THE RETURNED INCOME IN THE FAVOUR OF THE ASSESSEE UNLES S THE ASSESSEE FILES A REVISED RETURN OF INCOME. UNDISPUTEDLY, THE APPELLANT HAS NOT MADE ANY REVISED RETURN OF INCOME. UNDER THESE CIRCUMSTANCES AND ALSO KEEPING IN VIEW THE LEGAL POSITION, THUS, I HOLD THAT THE LONG TERM CAPITAL GAIN SHOWN BY THE APPELLANT IN HER RETURN OF INCOME CANNOT BE DISTURB ED AT THIS STAGE. SINCE THE LONG TERM CAPITAL GAIN PERTAINS TO THE APPELLANT, THE IN VESTMENT MADE BY THE APPELLANT CAN ONLY BE CONSIDERED FOR THE PURPOSES OF DEDUCTIO N U/S. 54F OF THE ACT. UNDISPUTEDLY, THE APPELLANT HAS MADE INVESTMENT TIL L 31 ST MARCH 2009 TO THE TUNE OF RS.14,27,702/- ONLY AND HENCE THE SAME CAN ONLY BE CONSIDERED FOR THE PURPOSES OF SECTION 54F OF THE ACT. CONSEQUENTLY, T HE INVESTMENT MADE BY HER HUSBAND CANNOT BE CONSIDERED FOR CLAIMING DEDUCTION U/S. 54F IN THE HANDS OF APPELLANT AS HER HUSBAND IS AN INDEPENDENT ASSESSEE . 4.1 ON PERUSAL OF THE CIRCULARS RELIED UPON BY THE LD. A.R., IT EMERGES THAT THE ALLOTMENT OF FLATS OR HOUSES IN ANY CO-OPERATIVE SO CIETY OR A BUILDING CONSTRUCTED BY THE BUILDERS SHALL BE AT PAR WITH THE ALLOTMENT OF FLATS UNDER A SELF FINANCING SCHEME OF DELHI DEVELOPMENT AUTHORITY AND ACCORDINGLY, SUCH ALLOTMENT SHALL BE TREATED AS CONSTRUCTION OF RESIDENTIAL HOUSE FOR THE PURPOSES OF BENEFITS OF SECTION 54 AND 54F. THE LD. A.R. HAS ALSO CLAIMED BEFORE ME THAT THE ALLOTMENT OF FLAT IN CLAREMONT VIDE ALLOTMENT LETTE R DT.08/10/2008 AND SUBSEQUENTLY TRANSFER OF THE INVESTMENT TO ANOTHER BUILDING OF THE SAME BUILDER VIDE ALLOTMENT LETTER DT.22/10/2009 AMOUNTS TO CONSTRUCTION OF A NEW RESIDENTIAL HOUSE AND HENCE, THE APPELLANT IS ENTITLED TO DEDUCTION U/S. 54F. SINCE ALLOTMENT OF HOUSE IS TO BE TREATED AS CONSTR UCTION OF HOUSE, AS PER THE PROVISIONS OF SECTION 54F, THE CONSTRUCTION OF HOUSE MUST BE WITHIN THE PERIOD OF THREE YEARS AFTER THE DATE ON WHICH TRANS FER TOOK PLACE . IN THIS CASE, TRANSFER HAS TAKEN PLACE ON 21/10/2008 AND HE NCE, THE INVESTMENT IN CONSTRUCTION OF THE HOUSE COULD START THEREAFTER ON LY. HOWEVER, IN THE INSTANT CASE, THE INVESTMENT OF RS.14,27,702/- HAS BEEN MADE BY THE A PPELLANT BETWEEN 05/02/2008 TO 30/05/2008 I.E. PRIOR TO THE DATE OF TRANSFER OF CAPITAL ASSET . THUS, IT IS CRYSTAL CLEAR THAT INVESTMENT RELATIN G TO THE CONSTRUCTION OF NEW HOUSE DOES NOT FALL WITHIN THE PERIOD SPECIFIED IN SECTION 54F OF THE ACT. ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 5 ACCORDINGLY, I AM OF THE CONSIDERED VIEW THAT THE I NVESTMENT MADE BY APPELLANT IN THE CONSTRUCTION OF NEW HOUSE AMOUNTING TO RS.14 ,27,702/- DOES NOT QUALIFY FOR EXEMPTION U/S.54F OF THE ACT. THUS, I HOLD THAT THE A.O. HAS RIGHTLY DISALLOWED THE CLAIM OF EXEMPTION U/S.54F AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [ AR], SHRI M.SUBRAMANIAN, DRAWING OUR ATTENTION TO THE DOCUMENTS PLACED IN TH E PAPER-BOOK CONTESTED THE STAND OF LOWER AUTHORITIES. RELIANCE HAS BEEN PLACED ON SEVERAL JUDICIAL PRONOUNCEMENTS TO S UPPORT THE STAND THAT THE ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 54 F. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE [DR], SUBMITTED THAT TH E ASSESSEE FAILED TO FULFILL THE CONDITIONS PRESCRIBED BY SECTION 54F AND THEREFORE, THE DEDUCTION WAS RIGHTLY BEEN DENIED TO THE ASSESSEE. 6. WE HAVE CAREFULLY HEARD THE RIVAL CONTENTIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING JUDICIAL PRON OUNCEMENTS AS CITED BEFORE US. SO FAR AS THE ADOPTION OF SALE CONSIDERA TION U/S 50C AND REVISED COST OF ACQUISITION AS ADOPTED BY LD. AO IS CONCERNED, THE SAME HAS NOT BEEN DISPUTED BY LD. AR BEFORE US AND THEREFORE, OUR FINDING UNDER THE APPEAL SHALL BE RESTRICTED TO ASS ESSEES ELIGIBILITY TO CLAIM DEDUCTION U/S 54F. 7. PROCEEDING FURTHER, WE FIND THAT THE PROPERTY WH ICH HAS BEEN SOLD BY THE ASSESSEE WAS IN JOINT OWNERSHIP WITH HE R HUSBAND AND THE INVESTMENTS IN NEW PROPERTIES, FIRST IN CLAREMONT AND THEREAFTER IN WESTGATE, MADE BY THE ASSESSEE ARE ALSO IN JOINT OWNERSHIP WI TH HER HUSBAND. THE WHOLE SALE CONSIDERATION HAS BEEN REFL ECTED BY THE ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 6 ASSESSEE IN HER RETURN OF INCOME AND THEREFORE, THE STAND OF LD. FIRST APPELLATE AUTHORITY IN DISREGARDING THE INVESTMENTS MADE BY HER HUSBAND WAS NOT JUSTIFIED. WE ORDER SO. 8. COMING TO ASSESSEES CLAIM OF DEDUCTION U/S 54F, THE DOCUMENTS ON RECORD REVEAL THAT THE ASSESSEE, JOINT LY WITH HER HUSBAND DR. SUNIL B.BANGERA SOLD A COMMERCIAL PREMISES UNIT B NO.3, ADMEASURING 1506 SQUARE FEET BUILT UP SITUATE D AT FIRST FLOOR, THAKKAR HOUSE, UTHALSAR, THANE (W) VIDE AGREEMENT FOR SALE DATED 21/10/2008 FOR A SALE CONSIDERATION OF RS.45 LACS. THE ASSESSEE, JOINTLY WITH HER HUSBAND, ACQUIRED CERTAIN RIGHTS I N PROPERTIES SITUATED AT CLAREMONT VIDE ALLOTMENT LETTER DATED 08/10/2008 PURSUANT TO APPLICATION DATED 05/02/2008, BY MAKING PAYMENT OF RS.27.72 LACS FROM TIME TO TIME, THE DETAILS OF WHICH HAVE ALREAD Y BEEN EXTRACTED IN THE QUANTUM ASSESSMENT ORDER. SUBSEQUENTLY, AS PER THE REQUEST OF ASSESSEE DATED 10/09/2009, THE SAID BOOKING HAS BEE N TRANSFERRED TO ANOTHER PROPERTY SITUATED AT WESTGATE AS EVIDENCED BY FRESH ALLOTMENT LETTER DATED 22/10/2009 ISSUED BY THE SAME BUILDER. THE EXPLANATION OF THE ASSESSEE, IN THIS REGARD, AS EVIDENT FROM TH E DOCUMENTS ON RECORD, IS THAT THE CONSTRUCTION OF THE BUILDING CLAREMONT WAS NOT COMING AS PER THE SCHEDULE AND THEREFORE, THE ASSES SEE AFTER A MUTUAL DISCUSSION WITH THE BUILDER DECIDED TO SHIFT THE PAYMENT TO ANOTHER BUILDING VIZ. WESTGATE . WE FIND THE EXPLANATION TO BE PLAUSIBLE ONE SINCE THE DELAY IN CONSTRUCTION PROJECTS IS COM MON AS WELL AS REGULAR FEATURE OF THIS INDUSTRY. HOWEVER, THE ASSE SSEE COULD NOT BE ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 7 PENALIZED FOR THESE DELAYS SINCE THE ASSESSEE, IN G OOD FAITH, HAD MADE THE INVESTMENTS IN THE HOPE OF GETTING THE ALL OTMENT PARTICULARLY WHEN SUBSTANTIAL PAYMENT TOWARDS THE SAME WAS ALREA DY MADE BY THE ASSESSEE. FURTHER, IT IS TRITE LAW THAT THE BENEFIC IAL PROVISIONS SHOULD BE CONSTRUED LIBERALLY AND THE BENEFITS SHOULD THER EOF BE GIVEN TO THE ASSESSEE, WHEREVER POSSIBLE SO AS TO FULFILL THE OB JECTIVES OF THE STATUTORY ENACTMENT. MERE NON-SUBMISSIONS OF SALE D EED ETC., IN OUR OPINION, COULD NOT DISENTITLE THE ASSESSEE TO CLAIM THE SAID DEDUCTION PARTICULARLY WHEN ALL DOCUMENTARY EVIDENCES AS TO A LLOTMENT AND PAYMENTS WERE AVAILABLE ON RECORD AND THE SAME WERE NOT UNDER DISPUTE. KEEPING IN VIEW THE OVERALL FACTUAL MATRIX , WE HOLD THAT INITIAL INVESTMENT OF RS.27.72 LACS AS WELL AS FURTHER INVE STMENT MADE BY THE ASSESSEE IN WESTGATE PROPERTY WOULD ENTITLE HER TO CLAIM DEDUCTION U/S 54F. THE LD. AO IS DIRECTED TO GRANT THE SAME. 9. THE APPEAL STAND ALLOWED IN TERMS OF OUR ABOVE O RDER. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND NOVEMBER, 2018. SD/- SD/- (SAKTIJIT DEY) (MA NOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED :02/11/2018 SR.PS:-THIRUMALESH/JV,SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &'#% / THE RESPONDENT ITA NO.5967MUM/2013 MADHURI SUNIL BANGERA ASSESSMENT YEAR-2009-10 8 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. ,-& . , . , / DR, ITAT, MUMBAI 6. -/01 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI