NEENA NARESH M SINGHI, MUMBAI V. ASST CIT 24(3), MUMBAI

ITA 6182/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3188 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-10-2014
• Court: TRIBUNAL
• Assessee Lawyers: BHARAT P SHAH; PATHIK B SHAH
• Keywords: Capital asset
• Section: 143(3); 54F

Judgement Text

, , B, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.6182/MUM/2014 ASSESSMENT YEAR: 2010-11 NEENA NARESH M SINGHI , 37, APOLLO ENDOSCOPY CENTRE, HIRNEN SHOPPING CENTRE, S.V. ROAD, GOREGAON (W), MUMBAI-400062 / VS. ACIT 24(3) MUMBAI- (ASSESSEE ) (REVENUE) P.A. NO. AAPPS1647G !' / ASSESSEE BY SHRI BHARAT P. SHAH & SHRI PATHIK B. SHAH (AR) / REVENUE BY SHRI VIVEKANAND OJHA (DR) # $ % & / DATE OF HEARING : 28/04/2016 % & / DATE OF ORDER: 15/06/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI- 34 {(IN SHORT CIT(A)}, DATED 31.7.2014 PASSED AGA INST NEENA NARESHSINGHI 2 ASSESSMENT ORDER U/S 143(3) DATED 12.03.2013 FOR TH E ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS: 1.WHETHER IN FACT AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CORRECT IN DENYING THE DEDUCTION OF RS. 50,00,000 U/S 54EC OUT OF TOTAL INVESTMENT OF RS. 1,00,00,000/-. (A) WHERE ASSESSEE HAS MADE INVESTMENT OF RS. 50,00,000/- EACH IN TWO FINANCIAL YEARS BUT WITHIN SIX MONTHS OF SALE OF ORIGINAL ASSET. (B) WHERE THE ASSESSEE HAS MADE INVESTMENT WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH ORIGINAL ASSET WAS SOLD. (C) WHETHER ASSESSING OFFICER IS CORRECT IN TREATING TH E DATE OF SALE OF ORIGINAL ASSET ON 6TH OCTOBER 2009, INSTEAD OF 101H OCTOBER, 2009 ON THE FACTS OF THE CASE AND CALCULATING THE PERIOD OF SIX MONTHS FOR INVESTMENT IN LONG TERM SPECIFIED ASSETS ACCORDINGLY. 2. WHETHER IN FACT AND IN LAW THE LEARNED COMMISSIO NER OF INCOME TAX (APPEALS) IS CORRECT THAT THE RESIDEN TIAL HOUSE ACQUIRED BY ASSESSEE, THOUGH UNDER CONSTRUCTI ON, SHOULD HAVE BEEN ACQUIRED BY THE ASSESSEE WITHIN TW O YEARS TO ALLOW DEDUCTION U/S 54F OF RS. 86,00,000/- . (A) ON THE GROUND THAT THE NEW RESIDENTIAL ASSET UN DER CONSTRUCTION, WHICH WAS PURCHASED BY THE ASSESSEE B Y ALLOTMENT LETTER, IS RIGHT FOR ACQUISITION AND NOT A RESIDENTIAL HOUSE UNDER CONSTRUCTION. (B) ON THE GROUND THAT THE NEW RESIDENTIAL HOUSE UN DER CONSTRUCTION IS NOT ACQUIRED WITHIN TWO YEARS THOUG H AS PER INCOME TAX ACT, U/S 54F, THE RESIDENTIAL HOUSE UNDER CONSTRUCTION IS REQUIRED TO BE ACQUIRED IN THREE YE ARS. 3. THE APPELLANT CRAVES LEAVE TO ADD AMEND AND/OR A FTER ANY OF THE ABOVE GROUNDS OF APPEAL.' 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI BHARAT P. SHAH & SHRI PATHIK B. SHAH, AUTHORIS ED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND B Y SHRI VIVEKANAND OJHA, DEPARTMENTAL REPRESENTATIVE (DR) O N BEHALF OF THE REVENUE. NEENA NARESHSINGHI 3 3. GROUND NO.1: THIS GROUND RELATES TO DISALLOWANCE OF RS.50,00,000/- U/S 54EC OUT OF AGGREGATE INVESTMENT OF RS.1,00,00,000/- IN TWO DIFFERENT FINANCIAL YEARS, FOR RS.50,00,000/- IN EACH YEAR. IN THIS REGARD, IT IS NOTED THAT ASSESSEE HAD MADE DEDUCTION U/S 54EC ON ACCOUNT OF INVESTMENT WITHIN SIX MONTHS FROM THE END OF MONTH I N WHICH THE TRANSFER OF THE ASSET HAD TAKEN PLACE WHICH HAS BEEN DENIED BY THE AO INTER ALIA ON THE GROUND THAT INVESTMENT WAS NOT WITHIN A PERIOD OF SIX MONTHS. AS PER THE ASSES SEE, THE DATE OF TRANSFER OF ASSET WAS ON 10.10.2009 WHEREAS , AS PER THE AO THE DATE OF TRANSFER OF ASSET WAS ON 06.10.2 009. DURING THE COURSE OF HEARING, THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT THERE WERE TWO AGREEMENTS, ONE PERTA INING TO THE ASSESSEE AND OTHER FOR THE BUYER, WHICH LEAD TO CONFUSION WITH REGARD TO DATES. ON THE OTHER HAND, THE AO HEL D THAT THE ACTUAL DATE OF AGREEMENT WAS ON 06.10.2009 ONLY BUT SUBSEQUENT AGREEMENT DATED 10.10.2009 HAS BEEN CREA TED JUST TO GET BENEFIT OF DEDUCTION U/S 54EC. 3.1. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHO RITIES AND ALSO GONE THROUGH THE COPIES OF AGREEMENTS PLAC ED BEFORE US. IT IS NOTED THAT THERE IS A CONFUSION WITH REGA RD TO THE DATES, WHICH HAVE NEITHER BEEN PROPERLY EXPLAINED B Y THE ASSESSEE BEFORE LOWER AUTHORITIES NOR IT HAS BEEN A DDRESSED PROPERLY BY THE LOWER AUTHORITIES. EVEN BEFORE US, LD. COUNSEL WAS NOT ABLE TO EXPLAIN AS TO HOW THERE COULD BE TW O AGREEMENTS. HOW COULD THERE BE ONE AGREEMENT OF T WO DATES. THERE SHOULD BE ONLY ONE AGREEMENT. EVEN IF SEPAR ATE NEENA NARESHSINGHI 4 AGREEMENT IS MADE FOR THE BUYERS, THE DATE IS SUPPO SED TO BE SAME. WE FIND THAT NONE OF THE AUTHORITIES HAVE LOO KED INTO THE ASPECT OF DATES PROPERLY. AS PER AO, THE DATE OF SI X MONTHS SHOULD BE RECKONED FROM 06.10.2009 AND THEREFORE DA TE OF INVESTMENT BEING 08.04.2010 SHALL FALL BEYOND THE P ERIOD OF SIX MONTHS, WHEREAS THE ASSESSEE SAYS THAT THE SIX MONT HS PERIOD SHOULD BE RECKONED FROM THE DATE 10.10.2009 WHICH I S ACTUAL DATE OF TRANSFER OF ORIGINAL ASSET AND IF IT IS SO DONE THEN THE INVESTMENT MADE ON 08.04.2010 SHALL FALL WITHIN THE STIPULATED PERIOD OF SIX MONTHS. IN VIEW OF ALL THESE FACTS, A SCERTAINING CORRECT DATE OF TRANSFER BECOMES CRUCIAL. IN VIEW O F THESE CIRCUMSTANCES, WE SEND THIS ISSUE BACK TO THE FILE OF THE AO WHO SHALL GIVE ADEQUATE OPPORTUNITY OF HEARING TO T HE ASSESSEE TO SUBMIT REQUISITE DETAILS AND DOCUMENTS AS MAY BE CONSIDERED APPROPRIATE BY THE ASSESSEE WHICH SHALL BE OBJECTIVELY TAKEN INTO ACCOUNT BY THE AO TO DECIDE THIS ISSUE AFRESH. THE ASSESSEE IS ALSO FREE TO TAKE ALL OTHER FACTUAL AND LEGAL ISSUES INCLUDING ITS ALTERNATIVE ARGUMENTS WI TH REGARD TO COMPUTATION OF PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE TRANSFER OF THE ASSET HAS TAKEN PLACE. 3.2. FURTHER THE CONNECTED ISSUES RAISED IN THIS REGARD WAS WHETHER THE ASSESSEE CAN BE ALLOWED THE INVESTMENT IN RESPECT OF 50 LAKHS IN ONE FINANCIAL YEAR AND THE SECOND IN VESTMENT IN NEXT FINANCIAL YEAR BUT WITHIN THE STIPULATED PERIO D OF SIX MONTHS. IT WAS STATED THAT THIS ISSUE IS IN FAVOUR OF THE ASSESSEE IN VIEW OF VARIOUS JUDGMENTS OF THE TRIBUN AL. THE NEENA NARESHSINGHI 5 RELIANCE IN THIS REGARD HAS BEEN PLACED ON THE FOLL OWING JUDGMENTS: I. SHRI ASPI GINWALA V. ACIT (ITA NO.3226/AHD/2011 DATED 30 TH MARCH 2012.) (AHMADABAD-TRIB.) II. MRS. LILAVATI M. SAYANI V. ITO 49 TAXMANN.COM 5 79 (MUMBAI-TRIB.) 3.3. PER CONTRA LD. DR WAS NOT ABLE TO POINT OUT ANY CO NTRARY JUDGMENT. 3.4. WE HAVE GONE THROUGH THE JUDGMENTS RELIED UPON BEF ORE US. IN THE CASE OF SHRI ASPI GINWALA (SUPRA), IT WA S HELD AS UNDER: WHILE GOING THROUGH THE PROVISO OF SECTION 54EC, W E FIND THAT THE PROVISO TO SECTION READS AS UNDER:- [PROVIDED THAT THE INVESTMENT MADE ON OR AFTER THE 1ST DAY OF APRIL, 2007 IN THE LONG TERM SPECIFIED ASSET BY AN ASSESSEE DURING ANY FINANCIAL YEAR DOES NOT EXCEED FIFTY LAKH RUPEE] IT IS CLEAR FROM THIS PROVISO THAT WHERE ASSESSEE T RANSFERS HIS CAPITAL ASSET AFTER 30TH SEPTEMBER OF THE FINAN CIAL YEAR HE GETS AN OPPORTUNITY TO MAKE AN INVESTMENT OF RS. 50 LAKHS EACH IN TWO DIFFERENT FINANCIAL YEARS AND IS ABLE TO CLAIM EXEMPTION UPTO RS.1 CRORE U/S 54EC OF THE ACT . SINCE THE LANGUAGE OF THE PROVISO IS CLEAR AND UNAMBIGUOUS, WE HAVE NO HESITATION IN HOLDING THAT THE ASSESSEE IS ENTITLED TO GET EXEMPTION UPTO RS.1 CRO RE IN THIS CASE. THIS VIEW OF OURS GETS SUPPORT FROM THE FOLLOWING FINDING OF THE HON'BLE SUPREME COURT IN THE CASE OF IPCA LAB 266 ITR 521 (SC), WHEREIN IT HAS BEEN HELD BY T HE HON'BLE SUPREME COURT THAT EVEN THOUGH A LIB ERAL INTERPRETATION HAS TO BE GIVEN TO SUCH A PROVISION THE INTERPRETATION HAS TO BE AS PER THE WORDING OF THE SECTION. IF THE WORDING OF THE SECTION IS CLEAR, THEN BENEFI TS WHICH ARE NOT AVAILABLE CANNOT BE CONFERRED BY IGNORING O R MISINTERPRETING WORDS IN THE SECTION' NEENA NARESHSINGHI 6 HERE THE SITUATION IS REVERSE. SINCE THE WORDING OF THE PROVISO TO SECTION 54EC IS CLEAR, THE BENEFITS WHIC H ARE AVAILABLE TO THE ASSESSEE CANNOT BE DENIED. IN VIEW OF ABOVE, IT IS HEREBY HELD THAT THE ASSESSEE IS ENTIT LED FOR EXEMPTION OF RS.1 CRORE AS SIX MONTHS PERIOD FOR INVESTMENT IN ELIGIBLE INVESTMENTS INVOLVED IS TWO FINANCIAL YEARS. 3.5. SIMILARLY, THE SAME VIEW HAS BEEN TAKEN BY THE COORDINATE BENCH IN THE CASE OF MRS. LILAVATI M. SA YANI (SUPRA). THUS, RESPECTFULLY FOLLOWING THESE JUDGMEN T AND IN ABSENCE OF ANY CONTRARY JUDGMENT HAVING BEEN BROUGH T BEFORE US, WE ALLOW THE AGGREGATE CLAIM OF THE ASSESSEE FO R RS. 1 CRORE SUBJECT TO THE DECISION TO BE TAKEN BY THE AO IN TE RMS OF ISSUE SENT BACK TO THE FILE OF AO FOR VERIFICATION OF DAT ES. 4. GROUND NO.2: IN THIS GROUND, THE ASSESSEE HAD RAISED AN ISSUE THAT THE AO HAD WRONGLY DENIED THE BENEFIT OF DEDUCTION U/S 54F FOR RS.86 LAKHS, ON THE GROUND THAT THE FLA T WAS UNDER CONSTRUCTION AND WAS NOT ACQUIRED WITHIN PRES CRIBED PERIOD OF TWO YEARS. IT HAS BEEN ALLEGED BY THE LOW ER AUTHORITIES THAT SINCE ASSESSEE HAD ACQUIRED THE FL AT BY WAY OF A PURCHASE, THIS EXERCISE SHOULD HAVE BEEN COMPLETE D WITHIN TWO YEARS, BUT NOT DONE BY THE ASSESSEE. 4.1. DURING THE COURSE OF HEARING BEFORE US, IT WAS SUB MITTED THAT THE ASSESSEE HAD MADE INVESTMENT IN A FLAT WHI CH WAS UNDER CONSTRUCTION, AND THIS FACT HAS NOT BEEN DENI ED. BUT SINCE THE CONSTRUCTION WAS NOT COMPLETED BY THE BUI LDER, THEREFORE, THIS TRANSACTION WAS CANCELLED AND RESUL TANTLY THE ASSESSEE OFFERED THE CORRESPONDING INCOME IN A.Y. 2 013-14, NEENA NARESHSINGHI 7 AND FOR CONFIRMING THIS FACT COPY OF INCOME TAX RE TURN WAS FILED BEFORE US. 4.2. PER CONTRA, THE LD. DR STATED THAT IN CASE THE INC OME HAS ALREADY BEEN OFFERED BY THE ASSESSEE, THEN THIS ISS UE CAN TO BE DECIDED ON MERITS. 4.3. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND FIN D THAT ASSESSEE HAD DULY MADE INVESTMENT IN THE FLAT WHICH WAS UNDER CONSTRUCTION. THE FACTS IN THIS REGARD ARE NO T UNDER DISPUTE. THE COMPLETION OF CONSTRUCTION WAS NOT IN CONTROL OF THE ASSESSEE. SINCE THE CONSTRUCTION OF FLAT COULD NOT BE COMPLETED, THEREFORE, CORRESPONDING INCOME AS STIPU LATED IN SECTION 54F WAS OFFERED IN THE RETURN FOR A.Y. 2013 -14. OUR ATTENTION WAS DRAWN IN THIS REGARD AND COPY OF COMP UTATION SHEET FILED ALONG WITH RETURN FOR A.Y. 2013-14 SHOW ING THAT A SUM OF RS.86 LAKHS WAS SHOWN AS LONG TERM CAPITAL G AIN ON WHICH THE TAX AT THE RATE OF 20% HAS BEEN PAID BY T HE ASSESSEE. WE FIND THAT ENTIRE EXERCISE HAS BEEN DON E IN THE BONAFIDE MANNER AND THERE WAS NO DELIBERATE ATTEMPT OF ANY TAX EVASION. THE ASSESSEE HAS FILED ITS RETURN FOR THE IMPUGNED YEAR AS WELL AS FOR A.Y. 2013-14, IN ACCORDANCE WIT H LAW. THE LOWER AUTHORITIES WERE NOT ABLE TO CONTROVERT OR CO NTRADICT THE FACTUM OF MAKING INVESTMENT IN THE FLAT AT THE TIME OF FILING OF RETURN FOR THE IMPUGNED YEAR IN WHICH DEDUCTION U/S 54F WAS CLAIMED IN ACCORDANCE WITH LAW. IN VIEW OF THESE CIRCUMSTANCES, WE FIND THAT ADDITION HAS BEEN WRONG LY MADE NEENA NARESHSINGHI 8 BY THE LOWER AUTHORITIES, IN THIS REGARD AND THEREF ORE, THE SAME IS DIRECT TO BE DELETED. THUS GROUND NO.2 IS DELETE D. 5. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE I S PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE , 2016. SD/- (JOGINDER SINGH) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER # $ MUMBAI; ( DATED: 15/06 /2016 CTX? P.S/. . . %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+, / THE APPELLANT 2. -.+, / THE RESPONDENT. 3. / / # 0 ( * ) / THE CIT, MUMBAI. 4. / / # 0 / CIT(A)- , MUMBAI 5. 34 - , / *& 5 , # $ / DR, ITAT, MUMBAI 6. 6! 7$ / GUARD FILE. / BY ORDER, .3* - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI