Ajay Khanna, New Delhi V. ACIT, New Delhi

ITA 6190/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7319 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 02-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Keywords: Capital asset; Benefit of exemption
• Section: 54

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI D BENCH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6190/DEL/2016 [ASSESSMENT YEAR: 2013-14] AJAY KHANNA, VS. ACIT, CENTRAL CIRCLE-26, A-9, RING ROAD, NEW DELHI NARAINA VIHAR, NEW DELHI 110 028 (PAN: AAAPK1321Q) [APPELLANT] [RESPONDENT] ASSESSEE BY : SH. ARVIND KUMAR, ADV. REVENUE BY : SH. RAJAT KUMAR KUREEL, SR. DR. ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE LD. COMMISSIONER OF INCOME TAX [APPEALS]-29, NEW DE LHI DATED 30.09.2016 PERTAINING TO ASSESSMENT YEAR 2013-14 ON THE FOLLOWING GROUNDS:- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DISALLOWING THE CLAIM OF DEDUCTION U/S. 54 OF THE INCOME TAX ACT, 1961 IN RESPECT OF INVESTMENT MADE IN SECOND HOUSE PROPERTY BY THE APPELLANT, ON THE GROUND THAT DEDUCTION UNDER SECTION 54 IS ALLOWABLE WITH RESPECT TO INVESTMENT MADE ONLY IN ONE RESIDENTIAL PROPERTY. 2 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN NOT APPRECIATING THE FACT THAT THE AMENDMENT BROUGHT U/S. 54 OF THE INCOME TAX ACT, 1961 BY FINANCE (NO. 2) ACT, 2014, W.E.F. 01.04.2015 IS PROSPECTIVE IN NATURE AND HENCE THE DISALLOWANCE OF DEDUCTION IN INVESTMENT MADE BY THE APPELLANT IN SECOND HOUSE PROPERTY IS BAD IN LAW. 2. AT THE TIME HEARING, LD. COUNSEL FOR THE ASSESS EE STATED THAT THE ISSUE REGARDING THE CLAIM OF DEDUCTION U/S. 54 OF T HE I.T. ACT, 1961 IN RESPECT OF INVESTMENT MADE IN THE SECOND HOUSE PROPERTY BY THE ASSESSEE HAS ALREADY BEEN ADJUDICATED AND DECIDED I N FAVOUR OF THE ASSESSEE BY THE VARIOUS HONBLE COURTS AND TRIBUNAL INCLUDING THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT DATED 14. 03.2019 REPORTED IN [2019] 105 TAXMANN.COM 151 (MADRAS) IN THE CASE OF TILOKCHAND & SONS VS. INCOME TAX OFFICER, WARD-II (4), MADURAI. HE ALSO DRAW OUR ATTENTION TOWARDS PARA NO. 20 OF THE AFORESAID JUDGMENT BY FILING THE COPY OF THE SAID DECISION AN D STATED THAT RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT OF T HE HONBLE MADRAS HIGH COURT, THE ADDITION IN DISPUTE MAY BE DELETED BY ALLOWING THE APPEAL OF THE ASSESEE. 3. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER PA SSED BY THE LD. CIT(A). 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES ESPECIALLY THE JUDGMENT DATED 1 4.3.2019 OF THE HONBLE MADRAS HIGH COURT REPORTED IN [2019] 105 TA XMANN.COM 151 (MADRAS) IN THE CASE OF TILOKCHAND & SONS VS. I NCOME TAX OFFICER, WARD-II (4), MADURAI WHEREIN THE HONBLE C OURT HAS HELD THAT WHETHER WHERE ASSESSEE HUF SOLD ITS RESIDENTIAL HO USE AND 3 INVESTED CAPITAL GAIN PURCHASING MORE THAN ONE RESI DENTIAL HOUSES WITHIN STIPULATED TIME LIMIT, ASSESSEE WOULD BE ENT ITLED TO BENEFIT OF EXEMPTION UNDER SECTION 54. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARA NO. 20 OF THE AFORESAID JUDGMENT IS R EPRODUCED AS UNDER:- 20. WE HAVE DISCUSSED ABOUT THE TWO DECISIONS FROM THE KARNATAKA HIGH COURT, WHICH, IN OUR OPINION, DEALT WITH SIMILAR CONTROVERSY AS IS RAIS ED BEFORE US HEREIN. THE ONLY DIFFERENCE WHICH WE FIND IS THAT THE PURCHASE OF THE RESIDENTIAL HOUSES IN T HE PRESENT CASE IS AT DIFFERENT ADDRESS IN THE SAME CI TY OF MADURAI. IN D. ANANDA BASAPPA CASE STATED (SUPRA), TWO FLATS IN QUESTION WERE ADMITTEDLY ADJACENT TO EACH OTHER AND WHICH WERE JOINED TO BECOME ONE RESIDENTIAL HOUSE. IN THE CASE OF KHOOBCHAND M MAKHIJA (SUPRA), TWO DOOR NOS ARE GIVEN VIZ., 623 AND 729, BUT THE COMPLETE ADDRESSES AND EVEN THE NAME OF THE CITY IS NOT CLEAR IN THE FACTS NARRATED IN THE SAID JUDGMENT. B UT IN OUR CONSIDERED OPINION, THE DIFFERENCE OF LOCATI ON OF THE NEWLY PURCHASED RESIDENTIAL HOUSE(S) WILL NO T ALTER THE POSITION FOR INTERPRETATION OF THE WORD ' A RESIDENTIAL HOUSE' TO THE EFFECT THAT IT MAY INCLUD E MORE THAN ONE OR PLURAL RESIDENTIAL HOUSES, AS HELD BY THE KARNATAKA HIGH COURT, WITH WHICH WE RESPECTFULLY AGREE. THE LOCATION OF THE NEWLY PURCHASED HOUSES BY THE SAME ASSESSEE VIZ., HUF OUT OF SALE CONSIDERATION RECEIVED ON THE SALE OF ORIGINAL CAPITAL ASSET OR A RESIDENTIAL HOUSE IN TH E 4 GIVEN CIRCUMSTANCES OF AVAILABILITY OF SUCH RESIDENTIAL HOUSES AS PER THE REQUIREMENT OF THE HUF WILL NOT ALTER THE POSITION OF INTERPRETATION. 4.1 WE HAVE GONE THROUGH THE JUDGMENT PASSED BY TH E HONBLE MADRAS HIGH COURT IN THE CASE OF TILOKCHAND & SONS VS. INCOME TAX OFFICER, WARD-II (4), MADURAI (SUPRA), ESPECIALLY T HE PARA NO. 20 AS REPRODUCED ABOVE AND WE ARE OF THE VIEW THAT THE IS SUE IN DISPUTE INVOLVED IN THE PRESENT APPEAL IS EXACTLY SIMILAR TO THE AFORESAID ISSUE ALREADY ADJUDICATED BY THE HONBLE HIGH COUR T, HENCE, THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE AFORESA ID JUDGEMENT. THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID PRE CEDENT, THE ADDITION INVOLVED IN THE PRESENT CASE IS HEREBY DEL ETED AND APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED ON 03.02.2020. SD/- SD/- [PRASHANT MAHARISHI ] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:03-02-2020 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI