MRS.GINDO S. YADAV, MUMBAI V. ITO 12(2)(4), MUMBAI

ITA 6507/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3967 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 15-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-11-2013
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P
• Assessee Lawyers: SANJUKTA CHOW DHURY
• Keywords: Capital asset; Share purchase agreement; Opportunity of being heard; Benefit of exemption
• Section: 143(3); 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A. NO.6507/M/2013 (ASSESSMENT YEAR: 2009 - 2010 ) MRS. GINDO SAJJAN YADAV, 601, PARASHARA, TIFR HSG. COMPLEX, COLABA, MUMBAI - 005. / VS. ITO 12(2)(4), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. ./ PAN : AACCG4003A ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRAMOD KUMAR PARIDA & MS. SANJUKTA CHOWDHURY / RESPONDENT BY : SHRI ASGHAR ZAIN, VP , DR / DATE OF HEARING : 15.02.2016 / DATE OF PRONOUNCEMENT : 15.02.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 6.11.2013 IS AGAINST THE ORDER OF THE CIT (A) - 23, MUMBAI DATED 14.8.2013 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1. ON FACTS OF THE CASE AND AS PER LAW, THE LD CIT (A) HAS ERRED IN NOT ALLOWING THE BENEFIT OF EXEMPTION U/S 54F OF THE INCOME TAX ACT, 1961 THOUGH THE ASSESSEE HAS INVESTED THE SALE PROCEEDS OF THE LAND FOR PURCHASE OF RESIDENTIAL FLAT JOINTLY WITH HER HUSBAND . 2. THE LD CIT (A) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSOCIATE MEMBER HAS ALL THE POWERS OF THE MEMBER AS PER BYE LAWS OF THE SOCIETY. 3. WITHOUT PREJUDICE TO ABOVE, THE PROVISIONS OF SECTION 54F OF THE ACT BEING AN INCENTIVE PROVISION, SHOULD BE CONSTRUED LIBERALLY. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS A CIVIL CONTRACTOR, FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS.74,740/ - . IN THE RETURN OF INCOME, ASSESSEE CLAIMED DEDUCTION U/S 54F OF THE ACT. DURING THE YEAR, ASSESSEE SOLD LAND AND EARNED CAPITAL GAINS. ASSESSEE CLAIMED DEDUCTION IN RESPECT OF THE SAID GAINS U/S 54F OF THE ACT. ASSESSEE CLAIMED THAT THE GAINS ARE 2 INVESTED TO ACQUIRE A FLAT IN ADARSH CO. OP. HSG. SOCIETY . AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 34,68,676/ - . IN THE ASSESSMENT, AO DID NOT ALLOW THE ASSESSEES CLAIM OF DEDUCTION U/S 54F OF THE ACT AND MADE DISALLOWANCE OF RS. 35,92,932/ - . AGGRIEVED, ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) DISMISSED THE APPEAL BY HOLDING THAT IN THE PRESENT CASE, THE ASSESSEE H AS NEITHER PURCHASED NOR CONSTRUCTED A RESIDENTIAL HOUSE IN THE ADARSH CO. OP. HSG. SOCIETY AND THE CAPITAL GAINS HAS ARISEN ON SALE OF NON - AGRICULTURAL LAND. AS PER THE PROVISIONS OF THE ACT, ONLY IN A CASE WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET (BUILDING OR LANDS), THE ASSESSEE CAN CLAIM THE DEDUCTION U/S 54 OF THE ACT. PARA 2.3.4 CIT (A)S ORDER IS RELEVANT IN THIS REGARD. AGAIN AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 5. BEFORE US, LD COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. FURTHER, HE RELIED ON THE JUDGMENT OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF DIT (INTE RNATIONAL TAXATION) VS. MRS. JENNIFER BHIDE [2012] 349 ITR 80 (KARN), DATED 26.9.2011 IN SUPPORT OF HIS CONTENTION. 6. ON THE OTHER HAND, LD DR FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MRS. JENNIFER BHIDE (SUPRA). ON PERUSAL OF THE CIT (A)S ORDER, WE FIND PARA 2.3.4 IS RELEVANT IN THIS REGARD AND THE SAME IS E XTRACTED AS UNDER: 2.3.4. THE ASSESSEE HAS CLAIMED EXEMPTION U/S 54 OF THE IT ACT. HOWEVER, SUCH EXEMPTION IS AVAILABLE TO THE ASSESSEE ONLY IN A CASE WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG TERM CAPITAL ASSET, BEING BUILDING OR LAND APPURTENANT THERETO, AND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. ADMITTEDLY, IN THIS CASE THE CAPITAL GAINS HAS ARISEN ON THE SALE OF A NON - AGRICULTURAL LAND. SINCE, THE CAPITAL GAINS HAS NOT ARISEN TO THE ASSESSEE ON THE SALE OF BUILDING OR LANDS APPURTENANT THERETO, BEING A RESIDENTIAL HOUSE, THE EXEMPTION CANNOT BE CLAIMED BY THE ASSESSEE U/S 54 OF THE ACT. THE ASSESSEE MAY, HOWEVER, BE ELIGIBLE TO CLAIM THE DEDUCTION U/S 54 AND IN SECT ION 54F THE ASSESSEE SHOULD HAVE PURCHASED OR CONSTRUCTED A RESIDENTIAL HOUSE WITHIN THE PERIODS SPECIFIED IN THOSE SECTIONS. EVIDENTLY AND AS HELD HEREINABOVE, THE ASSESSEE HAS NEITHER PURCHASED NOR CONSTRUED A RESIDENTIAL HOUSE IN ADARSH CO. OP. HSG. 3 SO CIETY. SHE MAY HAVE PAID SOME MONEY TO THE SOCIETY IN RESPECT OF THE FLAT PURCHASED BY HER HUSBAND. BUT, THIS DOES NOT MAKE THE ASSESSEE THE PURCHASER OF THE FLAT. THE PROVISIONS OF SUB - SECTION (4) OF SECTION 54F OR SUB - SECTION (2) OF SECTION 54 ARE ALS O NOT APPLICABLE TO THE CASE OF THE ASSESSEE. IN VIEW OF THE AFORESAID REASONS, THE ASSESSEE WOULD NOT BE ELIGIBLE FOR CLAIMING THE BENEFITS OF EITHER SECTION 54 OR SECTION 54F OF THE IT ACT, 1961. THE ACTION OF THE ASSESSING OFFICER OF NOT ALLOWING THE B ENEFIT OF EXEMPTION TO THE ASSESSEE U/S 54 OF THE IT ACT, 1961 AS CLAIMED BY HER, BEING AS PER LAW, IS UPHELD. THE GROUND OF APPEAL FILED BY THE ASSESSEE IS DISMISSED. 8. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT (A) HAS GIVEN A FINDING THAT THE ASSESS EE HAS NOT ACQUIRED ANY PROPERTY BY VIRTUE OF THE INVESTMENT OF THE CAPITAL GAINS. THEREFORE, ASSESSEE IS NOT ENTITLED FOR ANY DEDUCTION U/S 54F OF THE ACT. DURING THE PROCEEDINGS, AFTER EXAMINING THE FACTS OF THE CASE AVAILABLE BEFORE US, WE FIND THAT T HE ASSESSEE FAILED TO DEMONSTRATE THE OWNERSHIP OF THE FLAT AN D THE EXTENT OF THE OWNERSHIP IN THE FLAT. IT IS ADMITTED THAT THE FLAT WAS NOT REGISTERED DUE TO THE ADARSH SCANDAL BROKE OUT CONCERNING THE OWNERSHIP OF THE PLOT OF LAND ON WHICH THE FLATS WERE CONSTRUCTED. THE ONLY PAPER THAT IS MADE AVAILABLE BEFORE US RELATES TO THE ALLOTMENT LETTER, WHICH IS AGAIN HELD IN THE NAME OF SHRI SAJJAN SINGH YADAV, THE HUSBAND OF THE ASSESSEE . T HE SHARE CERTIFICATE, WHICH IS AGAIN HELD IN THE NAME OF THE HUS BAND OF THE ASSESSEE . OF COURSE, THE ASSESSEES NAME ALSO APPEARING ON THE FACE OF THE SAID PAPERS. THE LIST OF THE OWNERSHIP OF THE FLATS SUBMITTED BEFORE US SUBSTANTIVELY BEARS THE NAME OF MR. SAJJAN SINGH YADAV BUT NOT THE ASSESSEE. THEREFORE, THE R IGHT OF THE ASSESSEE ON THE SAID FLAT AS A OWNER IS NOT CONCLUSIVE. FURTHER, THE INVESTMENT MADE BY THE ASSESSEE IN THE FLAT MAY ALSO BE A KIND OF LOAN OR ADVANCE GIVEN TO THE HUSBAND, WHICH FOUND WAY INTO THE INVESTMENT IN FLAT . ON THIS ISSUE, THERE ARE NO FACTS AVAILABLE ON RECORD. THERE IS NO CLARITY AS TO THE EXTENT OF THE OWNERSHIP OF THE ASSESSEE ON THE FLAT. HOWEVER, IT IS ALSO RELEVANT FACT TO MENTION THAT THE ASSESSEE INVESTED AROUND 70% AS STATED BY THE ASSESSEE IN THE SAID FLAT AND THE LOAN O F RS. 30 LAKHS GRANTED BY THE BANK OF PATIALA DOES NOT SPECIFY THE EXTENT OF SUCH LOAN ATTRIBUTABLE TO THE ASSESSEE. FROM ALL THESE POINTS OF VIEW, THE EXTENT OF OWNERSHIP OF THE FLAT IS MISSING, WHICH IS RELEVANT FACT TO THE EXTENT OF THE FLAT ATTRIBUTAB LE TO THE ASSESSEE. ASSESSEE CLAIMS AN AMOUNT OF RS. 35,92,932/ - WAS INVESTED OUT OF THE CAPITAL GAINS EARNED BY THE ASSESSEE ON THE SALE OF THE LAND. FURTHER, THE DECISION CITED BY THE ASSESSEE IN THE CASE OF MRS. JENNIFER BHIDE (SUPRA) WAS NOT ATTENDED BY THE LOWER AUTHORITIES IN PASSING A SPEAKING ON THE ISSUE UNDER 4 CONSIDERATION. FROM ALL THESE POINTS OF VIEW, WE ARE OF THE OPINION THAT THE ISSUE SHOULD BE REMANDED TO THE FILE OF THE CIT (A) FOR THE FRESH ADJUDICATION AND PASSING A SPEAKING ORDER ON THE ISSUE UNDER CONSIDERATION. HE SHOULD CONSIDER ALL THE DECISIONS RELIED UPON BY THE ASSESSEE WHILE PASSING A SPEAKING ORDER. CIT (A) IS DIRECTED TO PASS A SPEAKING ORDER IN A TIME BOUND MANNER AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SECTION 54F IS THE RELEVANT PROVISION AND THE PROVISIONS MANDATE THE ASSESSEE TO CONSTRUCT / PURCHA SE A RESIDENTIAL HOUSE IN INDIA FOR AVAILING THE DEDUCTION U/S 54F OF THE ACT. THE REVENUE NEEDS TO EXAMINE IF THE ASSESSEE COMPLIED WITH THE SAID CONDITION. AN AMENDMENT IS BROUGHT INTO THE STATUE BY THE FINANCE ACT (NO.2), 2014 TOO. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH FEBRUARY, 2016. S D / - S D / - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 15.2.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI