RAMESHWAR SARAN MATHUR, MUMBAI V. ITO , WARD- 19 (3)(1), MUMBAI

ITA 5977/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1215 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 17-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR ANSARI
• Keywords: Deduction for capital gain; Capital Gains
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 5977/ MUM/ 2018 ( ASSESSMENT YEAR: 2014 - 15 ) LATE MR. RAMESHWAR SARAN MAT HUR MRS. KUMUD RAMESHWAR MATHUR K - 201/201, PALM COURT, MALAD LINK ROAD MALAD (WEST) MUMBAI 40 0 064 VS. INCOME TAX OFFICER WARD 19(3)(1) AAYAKAR BHAVAN NEW MARINE LINES MUMBAI 40 - 0 020 PAN/GIR NO. AAAPM3226C (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY NONE REVENUE BY SHRI AKHTAR ANSARI DATE OF HEARING 04 / 11 / 2019 DATE OF PRONOUNCEMEN T 28 / 11 /2019 / O R D E R PER: R.C. SHARMA, A.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 2, MUMBAI IN APPEAL NO.CIT(A) - 2/IT - 190/2017 - 18 DATED 18/07/2018 FOR A.Y.2014 - 15 IN THE MATTER OF ORDER PASSED U/S.143(3) OF TH E INCOME TAX ACT, 1961. 2. NOBODY APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF SERVICE OF NOTICES. THIS APPEAL WAS EARLIER FIXED ON 17/09/2019, ON THAT DATE ALSO NOBODY APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT WAS FILED. ON THAT DATE , CASE WAS ADJOURNED ON 04/11/2019 . E VEN ON 04/11/2019 NEITHER ANYBODY APPEARED NOR ANY ADJOURNMENT ITA NO. 5977/MUM/2018 LATE RAMESHWAR SARAN MATHUR 2 WAS FILED, ACCORDINGLY BENCH DECIDED TO DISPOSE OFF THE APPEAL AFTER CONSIDERING THE MATERIAL PLACED ON RECORD AND CONTENTION OF LD. DR. 3 . FROM THE RECORD, I FOUND THAT AO HAS DECLINED ASSESSEES CLAIM OF EXEMPTION U/S.54. DURING THE COURSE OF ASSESSMENT PROCEEDING S, IT WAS OBSERVED THAT ASSESSEE HAS CLAIMED LONG TERM CAPITAL GAIN EXEMPTION U /S. 54 OF RS. 92,68,985/ - . THE ASSESSEE AND HIS W IFE HAS SOLD A FLAT NO. 12, 1ST FLOOR, BELLE VIEW, 85, BHULABHAI DESAI ROAD, MUMBAI - 400 036 AT RS. 1,95,00,000/ - . IN THIS FLAT THE ASSESSEE'S SHARE OF CAPITAL GAIN IS RS. 92,68,985/ - . FURTHER THE ASSESSEE HAS PURCHASED TWO FLATS NO K - 201 AND K - 202, 2 ND F LOOR, PALM COURT CO - OP HSG SCT LTD, PALM COURT COMPLEX, LINK ROAD, MALAD (W), MUMBAI - 400064 IN THE JOINT NAME WITH HIS WIFE AND CLAIMED THE ABOVE SAID CAPITAL EXEMPTION U/S.54 IN RESPECT OF CAPITAL GAIN ON ACCOUNT OF SALE OF FLAT WHICH HAS BEEN CLAIMED TO BE INVESTED IN PURCHASE OF A RESIDENTIAL HOUSE. TO FIND OUT THE CORRECT POSITION, THE AO CALLED FOR INSPECTOR REPORT. AS PER INSPECTOR REPORT, THE ASSESSEE HAS PURCHASED TWO RESIDENTIAL PROPERTIES INSTEAD OF ONE RESIDENTIAL PROPERTY. ACCORDINGLY, THE AO D ECLINED ASSESSEES CLAIM OF EXEMPTION. 4. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF AO AFTER HAVING THE FOLLOWING OBSERVATION: - 4.3 FROM THE ABOVE, IT IS CLEAR THAT IF THE APPELLANT INVESTS IN A SINGLE UNIT, OUT OF THE SALE PROCEEDS OF THE CA PITAL ASSET, THEN THE APPELLANT IS ALLOWED TO CLAIM THE BENEFIT OF INVESTMENT AS TAX EXEMPTION. IN THE INSTANT CASE, THE APPELLANT AND HIS WIFE SOLD A FLAT AND THE APPELLANT HAD PURCHASED TWO FLATS WITH NOS. K - 201 & K - 202, PALM COURT CO - OP HSG SCTY.,PALM C OURT COMPLEX, IN MALAD (WEST), MUMBAI. AS SEEN FROM THE ASSESSMENT ORDER, THE APPELLANT HAD CLAIMED THE EXEMPTION U/S.54 TREATING BOTH THESE UNITS AS AN INVESTMENT IN A RESIDENTIAL HOUSE. THE ASSESSING OFFICER HAS CONDUCTED DETAILED INQUIRIES TO ASCERTAIN THE FACTS. INSPECTOR FROM HIS OFFICE WAS ALSO DEPUTED TO DO NECESSARY INQUIRIES. THE AO HAD FURTHER VERIFIED THE FACTS ITA NO. 5977/MUM/2018 LATE RAMESHWAR SARAN MATHUR 3 SUCH AS DOCUMENTS OF THE PROPERTIES PURCHASED AND EXAMINED THE SUBMISSIONS OF THE ASSESSEE. UPON EXAMINING ALL THE FACTS, THE ASSESSING O FFICER HAD COME TO A CONCLUSION THAT THE APPELLANT HAD PURCHASED TWO RESIDENTIAL PROPERTIES AND ALSO CLAIMED EXEMPTION U/S.54F FOR TWO PROPERTIES. HOWEVER, AS PER THE STATUTE SUCH EXEMPTION U/S.54F IS ALLOWED FOR ONLY ONE PROPERTY. ACCORDINGLY, THE ASSE SSING OFFICER HAD DISALLOWED EXEMPTION AND ADDED CAPITAL GAINS OF A FLAT TO THE TUNE OF RS.28,43,985/ - . 4.4 DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAD EMPHASISED THAT THE PROPE RTY WAS ONLY ONE LARGE RESIDENTIAL HOUSE BUT GOT IT REGISTERED VIDE TW O AGREEMENTS. ACCORDINGLY, THE APPELLANT PLEADED THAT THE EXEMPTION U/S.54F TO BE ALLOWED FULLY. THE FACTS EMERGED FROM THE ASSESSMENT ORDER, THE INQUIRIES CONDUCTED BY THE ASSESSING OFFICER AND THE DOCUMENTS SUBMITTED BY THE APPELLANT DIRECTLY INDICATE TH AT THERE ARE TWO DIFFERENT RESIDENTIAL UNITS WERE BOUGHT BY THE APPELLANT. SINCE, THESE ARE TWO DIFFERENT RESIDENTIAL UNITS, THEREFORE, THE EXEMPTION SHALL NOT BE ALLOWED FOR TWO UNITS. AS DISCUSSED SUPRA AND ALSO ON PERUSAL OF THE FACTS, I DO NOT FIND ANY VALID REASON TO INTERFERE WITH THE ORDER OF THE AO AND APPARENTLY THE SOLITARY GROUND OF THE APPELLANT IS TREATED AS DISPOSED OFF AND DISMISSED. 5. AGAINST ABOVE ORDER OF CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. I HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT AFTER SALE OF RESIDENTIAL HOUSE, ASSESSEE HAD REINVESTED THE CAPITAL GAINS INTO A NEW RESIDENTIAL HOUSE AT MALAD. EVENTHOUGH TWO FLATS K - 201 AND K - 202 WERE PURCHASED, BUT THE SAME WERE STATED TO BE COMBINED FLAT FOR MING ONE BIG RESIDENTIAL HOUSE. SINCE THESE FLATS WERE PURCHASED BY THE VENDOR BY A SEPARATE PURCHASE DEED, THEREFORE, SOLD BY VENDOR BY SEPARATE SALE DEED TO THE ASSESSEE. BOTH SALE DEED WERE EXECUTED ON THE VERY SAME DAY I.E.26/02/2014 AND PURCHASERS WER E ASSESSEE IE. SHRI ITA NO. 5977/MUM/2018 LATE RAMESHWAR SARAN MATHUR 4 RAMESHWAR SARAN MATHUR AND HIS WIFE. FROM THE RECORD, I ALSO OBSERVED THAT THE VENDOR SHRI SANDEEP ARORA HAD BOUGHT AND KEPT THESE TWO FLATS AS JODI FLATS AND CONVERTED THEM INTO ONE UNIT FOR THE PURPOSE OF HIS RESIDENCE. THE ASSESSEE HAD ALSO BOUGHT THIS JODI FLAT AS ONE UNIT. ALL THESE FLATS HAVE NOT BEEN PROPERLY EXAMINED BY THE AO WHILE DECLINING ASSESSEES CLAIM FOR INVESTMENT IN NEW RESIDENTIAL HOUSE. MERELY ON THE PLEA THAT TWO FLATS K - 201 AND K - 202 WERE PURCHASE BY A SEPARATE PU RCHASE DEED, THE AO HAS DECLARED ASSESSEES CLAIM. IN ALL FAIRNESS, I RESTORE THE MATTER BACK TO THE FILE OF AO FOR DECIDING AFRESH KEEPING IN VIEW OF OUR ABOVE OBSERVATIONS. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 / 11 / 2019. SD/ - (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 28 / 11 /2019 KARUNA, SR. PS ITA NO. 5977/MUM/2018 LATE RAMESHWAR SARAN MATHUR 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPOND ENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//