ACIT - 18(2), MUMBAI V. SHALINI KAMATH, MUMBAI

ITA 6562/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1789 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G N MAKWANA
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.6562/M/2013 ASSESSMENT YEAR: 2010-11 ACIT-18(2), ROOM NO.115, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI - 400012 VS. SMT. SHALINI KAMATH, 1203, CHAITANYA TOWERS, A WING, APPASAHEB MARATHE MARG, PRABHADEVI, MUMBAI - 400025 PAN: AAQPK0502M (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI K. GOPAL, A.R. REVENUE BY : SHRI G.N. MAKWANA, D.R. DATE OF HEARING : 07.10.2015 DATE OF PRONOUNCEMENT : 31.12.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 16.08.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2. THE REVENUE IN THIS APPEAL HAS AGITATED THE ACTI ON OF THE LD. CIT(A) IN ALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE UNDE R SECTION 54 OF THE INCOME TAX ACT. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DURING THE PERIOD UNDER CONSIDERATION SOLD HER PROPERTY AT DELHI AND WORKED OUT THE LONG TERM CAPITAL GAINS AMOUNTING TO RS.34,10,000/- AND CLAIM ED THE SAME AS EXEMPT UNDER SECTION 54 OF THE ACT. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) HOWEVER DISALLOWED THE SAID CLAIM OF THE AS SESSEE OBSERVING THAT THE ASSESSEE HAD NOT CONSTRUCTED/TAKEN POSSESSION OF TH E NEW FLAT WITHIN THE TIME SCHEDULE OF THREE YEARS AS PROVIDED IN THE ACT. HE OBSERVED THAT MERELY ITA NO.6562/M/2013 SMT. SHALINI KAMATH 2 ENTERING IN THE AGREEMENT FOR THE PURCHASE OF THE F LAT WITH THE BUILDER WAS NOT SUFFICIENT FOR ALLOWANCE OF DEDUCTION UNDER SECTION 54 OF THE ACT. 3. IN APPEAL, THE LD. CIT(A) OBSERVED THAT THE ASSE SSEE HAD INVESTED THE ENTIRE AMOUNT OF CAPITAL GAINS OF RS.34,10,000/- IN THE NEW ASSET WITHIN SIX MONTHS OF THE SALE OF ORIGINAL ASSET. THEREFORE, T HE CONDITION OF INVESTING THE ENTIRE CAPITAL GAINS INTO THE ACQUISITION OF NEW AS SET GETS FULFILLED. THE ASSESSEE HAD BEEN PAYING THE INSTALLMENTS FOR THE F LAT AS PER SCHEDULE OF PAYMENT WITH THE BUILDER. THE ASSESSEE HAD PAID TH REE INSTALLMENTS TOTALING RS.52,15,361/- ON 03.07.13 BY WAY OF A CHEQUE AND T HEREFORE THE ASSESSEE HAD INVESTED THE ENTIRE CAPITAL GAINS IN THE ACQUISITIO N OF NEW ASSET WITHIN THREE YEARS. HE THEREFORE DELETED THE DISALLOWANCE MADE BY THE AO. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS. WE FIND THAT THE LD. CIT(A), WHILE RELYING UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. MRS. HILLA J.B. WADIA (1993) 113 CTR (BOM.) 173 AND FUR THER THE DECISION OF THIS TRIBUNAL IN THE CASE OF KISHORE H. GALAIYA VS. ITO (2012) 137 ITD 229 (MUM.) AND CONSIDERING THE BENEFICIAL NATURE OF THE PROVISIONS OF SECTION 54 OF THE ACT, HAS ALLOWED THE CLAIM OF THE ASSESSEE HOLD ING THAT THE ASSESSEE HAD INVESTED THE MONEY FOR ACQUISITION OF THE RESIDENTI AL HOUSE AND THAT THE EXEMPTION UNDER SECTION 54 OF THE ACT CANNOT BE DEN IED MERELY BECAUSE THE CONSTRUCTION WAS NOT COMPLETED DURING THE PRESCRIBE D PERIOD. WE FIND THAT THE PROVISION OF SECTION 54 OF THE ACT BEING BENEFICIAL PROVISIONS BROUGHT FOR THE PURPOSE OF ENCOURAGING THE PURCHASE/CONSTRUCTION OF RESIDENTIAL HOUSES AND THE ASSESSEE HAVING MADE INVESTMENT OF THE CAPITAL GAIN S FOR THE PURCHASE OF NEW HOUSE WITHIN THE PRESCRIBED PERIOD, HENCE WAS ELIGI BLE TO CLAIM DEDUCTION UNDER SECTION 54 OF THE ACT. THE SAME CANNOT BE DE NIED MERELY BECAUSE THE ASSESSEE COULD NOT GET THE ACTUAL PHYSICAL POSSESSI ON OF THE HOUSE WITHIN THE PRESCRIBED PERIOD DUE TO CERTAIN REASONS OR NON COM PLETION OF CONSTRUCTION. ITA NO.6562/M/2013 SMT. SHALINI KAMATH 3 5. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN THIS RESPECT. THERE IS NO MERIT IN THE APPEAL OF T HE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.12.2015. SD/- SD/- (N.K. BILLAIYA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.12.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.