The Asstt. Commissioner of Income-tax, Amritsar. V. Dr. Kuldeep Singh Arora, Amritsar.

ITA 62/ASR/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80628 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA KUMAR SINGH
• Keywords: Capital asset
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 62(ASR)/2013 ASSESSMENT YEAR: 2009-10 PAN: AAMPA5538M ASSISTANT COMMISSIONER OF VS. DR. KULDEEP SINGH A RORA, INCOME TAX, CIRCLE-IV, ASR GOPAL NAGAR, MAJITHA R OAD, AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. VIRENDRA KUMAR SINGH, DR RESPONDENT BY: SH. SALIL KAPOOR, ADVOCATE DATE OF HEARING: 26.11.2014 DATE OF PRONOUNCEMENT: 27.11.2014 ORDER PER A.D. JAIN, J.M. 1. THIS IS DEPARTMENTS APPEAL AGAINST THE ORDER DAT ED 03.12.2012 FOR THE ASSESSMENT YEAR 2009-10 PASSED BY LEARNED CIT(A), AMRITSAR 2. THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN TAKEN BY THE DEPARTMENT. I. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE LEARNED CIT(A) HAS GROSSLY ERRED IN ALLOWING EXEMPT ION U/S 54F OF THE INCOME-TAX ACT, 1961 TO THE ASSESSEE WHEN IT IS NOT APPLICABLE IN THIS CASE ACCORDINGLY TO THE FACTS. II. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS GROSSLY ERRED IN HOLDING THAT IT IS A JO INT PROPER. BUT IN THIS CASE, THE ASSESSEE AND HIS SONS ARE PURCHASING TWO DIFFERENT PROPERTIES ON TWO DIFFERENT DATES. 2 I.T.A. NO. 62(ASR)/2013 ASSESSMENT YEAR: 2009-10 III. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS GROSSLY ERRED TO ALLOW EXEMPTION U/S 54F AS THE EXEMPTION U/S 54F IS NOT APPLICABLE TO INVESTMENT M ADE IN THE NAME OF KIN. IN THIS CASE, THE ASSESSEE HAD SOLD ON E PROPERTY. THE PROPERTIES ARE TWO PROPERTIES PURCHASED ON TWO DIFF ERENT DATES I.E. 10.10.2008 & 06.01.2009 BY TWO DIFFERENT PERSONS I. E. SH. KULDEEP SINGH ARORA & HIS SON SH. LOVEDEEP SINGH ARORA. IV. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS GROSSLY ERRED IN HOLDING THAT IT IS A SI NGLY PROPERTY. BUT IN THIS CASE ONE PROPERTY IS PLEDGED WITH CENTRAL B ANK OF INDIA AND OTHER IS NOT. THE AGREEMENTS WITH THE BANK CLEARLY SHOW THAT THE ONE PROPERTY IS PLEDGED AND THE OTHER IS NOT. IT CL EARLY SHOWS THAT THESE ARE TWO PROPERTIES NOT A SINGLE PROPERTY. V. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A HAS GROSSLY ERRED ON RELIED UPON JUDGMENT OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS . GURNAM SINGH REPORTED IN 170 TAXMAN 160 (P&H). THE JUDGM ENT PERTAINS TO A SINGLE JOINT PROPERTY PURCHASED IN TWO DIFFERE NT NAMES ON THE SAME DATE. BUT IN THIS CASE TWO DIFFERENT PROPERTIE S ARE PURCHASED ON TWO DIFFERENT DATES BY THE TWO PERSONS I.E. SH. KULDEEP SINGH ARORA AND HIS SON SH. LOVEDEEP SINGH ARORA. 3. THE ASSESSEE, DURING THE YEAR RELEVANT TO A.Y. 2009-10, SOLD AN IMMOVABLE PROPERTY FOR RS. 1,12,70,000/-, LEADING T O A CAPITAL GAIN OF RS. 96,87,779/-. SUBSEQUENTLY, THE ASSESSEE PURCHASED A NEW PROPERTY PARTLY IN HIS OWN NAME FOR RS. 53, 46,756/- AND PARTLY IN THE NAME OF HIS SON, SH. LAVDEEP SINGH FOR RS. 52 LACS. THE COST OF THE SAID PROPERTY FAR EXCEEDED THE NET CONSIDERATION REALIZED IN RESPECT OF THE ORIGINAL CAPITAL ASSET SOLD DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2009- 10. THE A.O. ALLOWED THE ASSESSEES CLAIM UNDER SE CTION 54F OF THE INCOME-TAX ACT, 1961 (FOR SHORT, THE ACT) IN RESP ECT OF THE INVESTMENT 3 I.T.A. NO. 62(ASR)/2013 ASSESSMENT YEAR: 2009-10 MADE IN THE ASSESSEES OWN NAME AND THE INVESTMENT OF RS. 52 LACS MADE BY THE ASSESSEE IN THE NAME OF HIS SON WAS DISALLOW ED. 4. BY VIRTUE OF THE IMPUGNED ORDER, THE LEARNED CIT (A) DELETED THE DISALLOWANCE MADE BY THE A.O. BEING AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE US. 5. THE LEARNED DR HAS CONTENDED THAT THE LEARNED CI T(A) HAS ERRED IN ALLOWING THE EXEMPTION UNDER SECTION 54F O F THE ACT TO THE ASSESSEE IN RESPECT OF INVESTMENT MADE IN THE NAME OF ASSESSEES SON; THAT TWO DIFFERENT PROPERTIES WERE PURCHASED ON TWO DIFF ERENT DATES AND THE LEARNED CIT(A) ERRONEOUSLY HELD THAT IT WAS A JOINT PROPERTY; THAT THE LEARNED CIT(A) HAS FAILED TO CONSIDER THAT THE PROV ISIONS OF SECTION 54F OF THE ACT ARE NOT APPLICABLE TO THE KIN OF THE ASS ESSEE; THAT THE LEARNED CIT(A) ALSO FAILED TO CONSIDER THAT THE CASE OF CI T VS. GURNAM SINGH, 327 ITR 278 (P&H) WAS NOT APPLICABLE TO THE FACTS O F THE PRESENT CASE, SINCE THEREIN, A SINGLE JOINT PROPERTY WAS PURCHASE D IN TWO DIFFERENT NAMES ON THE SAME DAY, WHICH IS NOT SO HEREIN. 6. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS STRONGLY PLACED RELIANCE ON THE IMPUGNED ORDER, CON TENDING THAT THE PROVISIONS OF SECTION 54F OF THE ACT NOWHERE STATE THAT THE PROPERTY/RESIDENTIAL HOUSE SHOULD BE PURCHASED IN T HE NAME OF ASSESSEE 4 I.T.A. NO. 62(ASR)/2013 ASSESSMENT YEAR: 2009-10 ONLY; THAT THE WORD ASSESSEE REQUIRES TO BE GIVEN A LIBERAL INTERPRETATION SO AS TO INCLUDE THE DESCENDENTS/LEGAL HEIRS OF THE ASSESSEE ALSO; THAT IF THE INTERPRETATION WERE TO BE TOO STRICT, IT WOULD FRUS TRATE THE OBJECT OF GRANTING THE EXEMPTION UNDER SECTION 54F OF THE ACT . RELIANCE HAS BEEN PLACED ON CIT VS. GURNAM SINGH (SUPRA). 7. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. IN CIT VS. GURNAM SINGH (SUPRA), IT HA S BEEN HELD THAT THE EXEMPTION UNDER SECTION 54F OF THE ACT CANNOT BE DE NIED MERELY BECAUSE THE PROPERTY WAS CO-OWNED BY THE ASSESSEES SON. TH IS DECISION HAS BEEN RENDERED BY THE JURISDICTIONAL PUNJAB & HARYANA HIG H COURT. NO DECISION TO THE CONTRARY HAS BEEN BROUGHT TO OUR NOTICE. FUR THER, IN CIT VS. RAVINDRA KUMAR ARORA (2011) 15 TAXMANN.COM 307 (DE LHI), ALSO THE SAME POSITION HAS BEEN MAINTAINED. SIMILAR REMAINS THE SITUATION IN CIT VS. NATARAJAN 154 TAXMANN.COM 399 (MAD.) AND IN D IRECTOR OF INCOME-TAX, INTERNATIONAL TAXATION, BANGALORE VS. M RS. JENNIFER BHIDE (2011) 15 TAXMANN.COM 82 (KARNATAKA). IT ALSO DOES NOT MAKE ANY DIFFERENCE THAT THE PURCHASE WAS MADE ON TWO DIFFER ENT DATES. ALSO, THE PROPERTY PURCHASED IS ONE SINGLE PROPERTY, I.E., AS NOTICED IN PARA 7 OF THE IMPUGNED ORDER, 6, CIRCULAR ROAD, AMRITSAR. THE OBJ ECTION OF THE DEPARTMENT IN THIS REGARD IS, THUS, NOT CORRECT. I T CANNOT BE DENIED THAT 5 I.T.A. NO. 62(ASR)/2013 ASSESSMENT YEAR: 2009-10 THE REQUIREMENTS OF SECTION 54F HAVE BEEN COMPLIED WITH AND THAT BEING SO, THE CLAIM OF THE ASSESSEE CANNOT BE DISALLOWED. THE LEARNED CIT(A), WE FIND, HAS CORRECTLY RELIED ON THE DECISION OF HO NBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GURNAM SINGH ( SUPRA) IN THIS REGARD. 8. ACCORDINGLY, FINDING NO ERROR IN THE ORDER OF LE ARNED CIT(A). THEREFORE, THE SAME IS CONFIRMED AND THE GRIEVANCE OF THE ASSESSEE IS FOUND NOT TO HOLD ANY WATER AND IS REJECTED AS SUCH . 9. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2014 SD/- SD/- (B.P. JAIN) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH NOVEMBER, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: DR. KULDEEP SINGH ARORA, GOPAL NAGA, MAJITHA ROAD, AMRITSAR. 2. ACIT, CIRCLE-IV, AMRITSAR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER 6 I.T.A. NO. 62(ASR)/2013 ASSESSMENT YEAR: 2009-10 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.