HETAL D. MERCHANT, MUMBAI V. ITO WD 25(2)(1), MUMBAI

ITA 6264/MUM/2013

• Counselvise Citation: 626419914 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2015
• Appeal Filed By: Assessee
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 28-10-2013
• Court: TRIBUNAL
• Assessee Lawyers: ASHOK SUTHAR
• Section: 143(3); 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI , . . , BEFORE SHRI JOGINDER SINGH, JM & SHRI R.C.SHARMA, AM ./ ITA NO . 6264 / MUM /20 1 3 ( / ASSESSMENT YEAR : 200 9 - 20 10 ) SMT. HETAL D. MERCHANT, C - 102, NEW HERITAGE, NEAR HERITAGE, NEAR RBI QUARTERS, KANDARPADA, DAHISAR (WEST), MUMBAI - 68 VS. ITO, WARD - 25(2)(1), MUMBAI ./ ./ PAN/GIR NO. : A GAPM 8586 H ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI ASHOK SUTHAR /REVENUE BY : SHRI JITENDRA KUMAR / DATE OF HEARING : 2 3 RD APRIL , 201 5 / DATE OF P RONOUNCEMENT 2 3 RD APRIL , 201 5 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - 35, MUMBAI DATED 16 - 8 - 2013 , FOR THE ASSESSMENT YEAR 200 9 - 20 10 , IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3) OF TH E I.T. ACT , WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 35, MUMBAI ERRED IN CONFIRMING THE ADDITION OF RS. 10,11,112/ - UNDER THE HEAD LONG TE RM CAPITAL GAINS DISALLOWING CLAIM U/S.54 OF THE INCOME - TAX ACT, 1961 (THE ACT) IN RESPECT OF NEW RESIDENTIAL HOUSE PURCHASED WITHIN TWO YEARS FROM THE DATE OF SALE OF OLD RESIDENTIAL HOUSE AND BEFORE THE DUE DATE OF FILING RETURN OF INCOME UNDER SECTIO N 139 OF THE ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FROM THE RECORD WE FOUND THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS ITA NO. 6264 / 1 3 2 CLAIMED DEDUCTION U/S.54 IN RESPECT OF CAPITAL GAINS EARNED AND UTILIZED FOR PURCHASE OF NEW HOUSE. THE AO DECLINED ASSESSEES CLAIM U/S.54 OF THE ACT ON THE PLEA THAT THE ASSESSEE DID NOT DEPOSIT THE AMOUNT OF CAPITAL GAIN IN AN ACCOUNT UNDER THE CAPITAL GAINS ACCOUNTS SCHEME WITHIN THE DUE DATE OF FILING OF RETURN U/S.139(1) I.E. 31 - 7 - 2009. THE ASSESS EE HAD MADE SUBMISSION VIDE LETTER DATED 06 - 12 - 2011, THE RELEVANT PORTION OF WHICH IS REPRODUCED AS UNDER: 'IT IS EXPLAINED THAT I HAVE PURCHASED THE FLAT C/102 IN NEW HERITAGE VIDE AGREEMENT DATED 17 - 08 - 2009. THOUGH IT IS BEYOND 31 - 07 - 2009, THE REGULAR M EETINGS WITH THE TRANSFEROR WERE GOING ON QUITE EARLIER. UNFORTUNATELY THE FINALIZATION OF THE DEAL WAS DELAYED BY 17 DAYS AFTER DUE DATE I.1. 17 - 08 - 2009. I WAS ALWAYS HOPE FULL OF GETTING THE DEAL FINALIZED BEFORE 31 - 07 - 2009. A TIME CAME WHEN AN APPOINTME NT WAS FIXED WITH THE STAMP DUTY AGENT ON 25 - 07 - 2009 FOR FINAL REGISTRATION. HOWEVER, AGAIN UNFORTUNATELY IT WAS POSTPONED. YOUR HONOUR WOULD CERTAINLY APPRECIATE THAT THE DELAY IS UNINTENTIONAL AND DUE TO POSSIBLE HOPE THAT THE DEAL WOULD BE FINALIZED BEF ORE 31 - 07 - 2008. MOREOVER, I BEING LAYMAN AND NOT GUIDED BY ANY INCOME TAX EXPERT, WAS NOT AWARE OF THE PROVISIONS OF THE IT.ACT, 1961 AND THE CONSEQUENCES OF THE SAME. IT IS, THEREFORE, REQUESTED TO KINDLY CONDONE THE DELAY OF ONLY 17 DAYS IN PURCHASING T HE NEW FLAT ON OR BEFORE 31 - 07 - 2009 . HOWEVER, NOT AGREEING WITH THE ASSESSEES CONTENTION, THE AO DECLINED ASSESSEES CLAIM FOR INVESTMENT MADE IN IMMEDIATELY NEXT YEAR IN ANOTHER HOUSE U/S.54. 3. BY THE IMPUGNED ORDER THE CIT(A) CONFIRMED THE ACTION O F THE AO AFTER HAVING FOLLOWING OBSERVATION : - I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS RIVAL SUBMISSIONS. 5 A. THE MAIN GROUND INVOLVED IS THAT WHETHER THE APPELLANT IS ENTITLED TO DEDUCTION U/S.54 OF THE I T.ACT, 1961 IN A SCENARIO WHERE SHE HAS NOT DEPOSITED THE AMOUNT OF CAPITAL GAIN IN THE PRESCRIBED CAPITAL GAINS ACCOUNT SCHEME AS MANDATED BY SECTION 54(2) OF THE I T.ACT, 1961. THE APPELLANT IN HER STATEMENT HAS REFERRED (MENTIONED SUPRA) TO THE DECISIONS IN THE CASE OF JAGTAR SINGH CHAWLA, RAJESH KUMAR JALAN AND FATH IMA BAI AND SUBSEQUENT ITA NO. 6264 / 1 3 3 DECISIONS OF THE HON'BLE ITAT IN THE CASE OF SUBHASH S. JOGLEKAR TO STAKE HER CLAIM FOR THE SAID DEDUCTION ON THE BASIS THAT REFERENCE TO SECTION139(1) AUTOMATICALLY INCLUDES THE TIME PERIOD ALLOWED FOR FI LING OF RETURN U/S.139(4). HOWEVER; I AM INCLINED TO AGREE WITH THE ARGUMENTS OF THE A. O . THAT SECTION 54(2) (REPRODUCED SUPRA) CLEARLY MENTIONS THAT THE QUANTUM OF CAPITAL GAIN NOT UTILIZED FOR THE PURCHASE OF NEW ASSET BEFORE THE DATE OF FURNISHING THE R ETURN OF INCOME U/S.139 SHOULD BE DEPOSITED IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED CERTAINLY NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE APPELLANT FOR FURNISHING THE RETURN OF INCOME UNDER SUB - SECTION (1) TO SECTION 139. IN TERMS OF SUCH SPECIFIC CLARITY BEING BROUGHT IN THE SECTION WHEREIN THE TIME FRAME IS FIXED AS 139(1), THE FACTS OF THE CASE BECOME VERY CRITICAL. IT IS SEEN FROM THE VARIOUS REFERENCES TO DECISIONS MADE BY THE APPELLANT THAT THE DEPOSIT OF THE SAID AMOUNT WAS MADE OR AT LEAST AN EFFORT WAS MADE TO DEPOSIT THE SAID AMOUNT AND THE DECISIONS HAVE BEEN MADE IN THAT BACKGROUND. IN THE PRESENT CASE, THERE IS NO DEPOSIT OF ANY SUCH AMOUNT. IN THE CASE OF JAGTAR SINGH CHAWLA, THE ASSESSEE HAD CLAIMED TO HAVE WRITTEN A LETTER TO THE BANK TO DEPOSIT THE SAID AMOUNT IN THE CAPITAL GAIN ACCOUNT, BUT INADVERTENTLY THE SAID AMOUNT WAS ,DEPOSITED IN A 'FLEXI GENERAL ACCOUNT'. SIMILARLY, IN THE CASE OF SUBHASH S. JOGLEKAR, THE AMOUNT WAS DEPOSITED IN THE SAVINGS BANK ACCOUNT. I N THE LIGHT OF THE ABOVE DISTINCTION OF FACTS AND ALSO THE LEGISLATIVE POSITION IN THIS REGARD, THE APPEAL OF THE APPELLANT IS DISMISSED . 4. IT IS CLEAR FROM THE ABOVE FINDINGS RECORDED BY CIT(A) THAT CAPITAL GAIN S EARNED DURING THE YEAR WAS INVESTED BY THE ASSESSEE IMMEDIATELY IN THE NEXT YEAR. MERELY ON THE PLEA THAT CAPITAL GAIN WAS INVESTED AFTER 17 DAYS FROM THE DUE DATE OF FILING RETURN UPTO WHICH ASSESSEE WAS SUPPOSED TO DEPOSIT OF AMOUNT OF CAPITAL GAIN IN THE CAPITAL GAINS ACCOUNT, THE AO HAS DEC LINED ASSESSEES CLAIM FOR DEDUCTION. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEE WAS IN THE PROCESS OF PURC HASE OF NEW HOUSE AND THE DEAL FOR PURCHASE WAS EXPECTED TO BE FINALIZED BEFORE 31 - 7 - 2009. HOWEVER, THERE WAS SOME DELAY IN FINALIZATION OF THE DE AL AND THE DEAL WAS FINALIZED ONLY ON 7 - 8 - 2009, HOWEVER, THE LAST DATE OF FILING RETURN FOR THE YEAR UNDER CONSIDERATION WAS 31 - 7 - 2009, THE ASSESSEE HAS UTILIZED ITA NO. 6264 / 1 3 4 THE SAME FOR PURPOSE OF NEW HOUSE ON 17 - 8 - 2009 BECAUSE UNFORTUNATELY THE DEAL WAS NOT FINALIZE D BEFORE 31 - 7 - 2009. 5. THE ASSESSEE HAS ALL THE INTENTION TO BUY THE HOUSE AND APPOINTMENT WAS ALSO FIXED WITH THE STAMP DUTY AGENT ON 25 - 07 - 2009 FOR FINAL REGISTRATION. HOWEVER, AGAIN UNFORTUNATELY IT WAS POSTPONED AND THE REGISTRATION WAS FINALLY DONE ON 17 - 8 - 2009 . THE ASSESSEE BEING A LAYMAN AND NOT GUIDED BY ANY INCOME TAX EXPERT, WAS NOT AWARE OF THE PROVISIONS OF THE I T.ACT, 1961 REQUIRING HIM TO DEPOSIT AMOUNT ON CAPITAL GAIN IF NOT UTILIZED BY THE LAST DATE OF FILING OF RETURN IN ANY BANK IN THE CA PITAL GAIN TAX ACCOUNT. MERE PROCEDURAL FAILURE TO DEPOSIT THE AMOUNT WILL NOT DEBAR THE ASSESSEE ITS LEGAL RIGHT OF EXEMPTION IN RESPECT OF CAPITAL GAIN WHICH WAS ACTUALLY UTILIZED FOR THE PURPOSE OF NEW HOUSE NOT ONLY WITHIN THE STATUTORY PERIOD OF TWO Y EARS BUT IN THE IMMEDIATELY NEXT YEAR. ACCORDINGLY, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE AO FOR DECLINING ASSESSEES CLAIM OF DEDUCTION 54 IN RESPECT OF AMOUNT OF CAPITAL GAIN UTILIZED FOR PURCHASE OF NEW HOUSE. 6 . IN THE RESULT, APPEAL OF T HE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23/04 /2015 . 23/04 /2015 SD/ - SD/ - ( ) ( JOGINDER SINGH ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNT ANT MEMBER MUMBAI ; DATED 23/04/ 2015 . . /PKM , . / PS ITA NO. 6264 / 1 3 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//