Haresh D. Trivedi (HUF), Pune V. Principal Commissioner of Income-tax : 4,

ITA 674/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9407 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Keywords: Capital asset; Difference of opinion; Assessment record
• Section: 143(3); 54F; 54; 263

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.674/PUN/2016 / ASSESSMENT YEAR : 2012-13 SHRI HARESH D TRIVEDI (HUF), B-3, REVIERA APARTMENTS, OPP. SHAHU MODAK GARDEN, SOUTH KOREGAON PARK, PUNE 411 001. PAN : AADHH5323L. . / APPELLANT V/S PRL.COMMISSIONER OF INCOME TAX 4, PUNE. . / RESPONDENT ASSESSEE BY : SHRI SHARAD SHAH REVENUE BY : SMT. NIRUPAMA KOTRU. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF PRINCIPAL COMMISSIONER OF INCOME TAX (PCIT), PUNE - 4, DT.04.02.2016 FOR THE ASSESSMENT YEAR 2012-13 PASSED U /S 263 OF THE ACT. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- / DATE OF HEARING : 16.01.2018 / DATE OF PRONOUNCEMENT: 23.01.2018 2 2.1 ASSESSEE IS AN HUF STATED TO BE HAVING INCOME FROM OTHER SOURCES AND CAPITAL GAINS. ASSESSEE FILED ITS RETURN OF INCO ME FOR A.Y. 2012-13 ON 20.12.2012 DECLARING TOTAL INCOME OF RS.2,20,70 2/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSES SMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.10.03.2015 AND T HE TOTAL INCOME WAS DETERMINED AT RS.2,20,700/- BEING THE SAME A S RETURN OF INCOME FILED BY THE ASSESSEE. THEREAFTER ON PERUSAL OF T HE ASSESSMENT RECORDS, LD.PCIT NOTICED THAT ASSESSEE HAD SOLD A FLAT ON 09.05.2011 FOR RS.1,40,00,000/- AND HAD CLAIMED EXEMPTION U /S 54F OF THE ACT FOR INVESTMENT IN CONSTRUCTION. HE WAS O F THE VIEW THAT THE CLAIM OF DEDUCTION U/S 54F WAS NOT IN ORDER BE CAUSE THE DATE OF INVESTMENT OF RS.76,20,583/- TOWARDS NEW RESIDE NTIAL PROPERTY WAS ON 18.11.2009 WHICH WAS NOT ONE YEAR PRIOR TO THE DATE OF TRANSFER I.E., 09.05.2011 AND HENCE NOT ELIGIBLE FOR DE DUCTION. HE FURTHER NOTICED THAT THE CLAIM OF RE-INVESTMENT TOWAR DS NEW RESIDENTIAL HOUSE PROPERTY WITHIN TWO YEARS FROM THE DATE OF TRANSFER WAS ALSO NOT ACCEPTABLE IN THE ABSENCE OF ANY EVIDENCE O F RE- INVESTMENT OR PROOF OF COMPLETION OF SUCH CONSTRUCTION. HE ACCORDINGLY HELD THAT THE ORDER PASSED BY THE AO U/S 143(3) OF THE ACT DT.10.03.2015 TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HE ACCORDINGLY ISSUED SHOW CAUSE NOTICE U/S 263 OF THE ACT. THE SUBMISSIONS OF THE ASSESSEE WERE NOT FOUND AC CEPTABLE TO LD.PCIT. HE THEREAFTER VIDE ORDER DT.04.02.2016 HELD THA T THE ORDER OF AO TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT AND DIRECTED THE AO TO COMPLETE THE ASSESSMENT AS PER THE DIRECTIONS CONTAINED IN HIS ORDER. AGGRIEVED BY THE ORDE R OF LD.PCIT, 3 ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE F OLLOWING GROUNDS : 1. THE ORDER U/S 263(1) BE DECLARED AS NULL AND VO ID AS THE RELEVANT ORDER OF AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE AND DIRECTION GIVEN BY LD.PR.CIT BE QUASHED . 2. THE PRL.CIT HAS ERRED IN ASSUMING POWER U/S 263 TO REVIEW THE ASSESSMENT ORDER WHICH HAS BEEN PASSED AFTER DUE VE RIFICATION OF THE FACT AND THE LAW. 3. THE PRL.CIT ERRED IN CONCLUDING THAT THE DEDUCTI ON U/S 54 IS NOT AVAILABLE IN RELATION TO THE AMOUNT PAID / SPENT BE FORE THE SALE OF ORIGINAL ASSET. 4. THE PRL.CIT ERRED IN CONDUCTING THAT SOME OF THE MONEY IS INVESTED IN NEW HOUSE AFTER THE DUE DATE OF FILING THE RETUR N OF INCOME AND THEREFORE, THE MONEY SHOULD HAVE BEEN PARKED IN CAP ITAL GAIN ACCOUNT, WHEREAS ALL THE PAYMENTS ARE MADE BEFORE D UE DATE OF FILING THE RETURN OF INCOME. 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THOUG H ASSESSEE HAS RAISED SEVERAL GROUNDS BUT THE SOLE CONTR OVERSY IS WITH RESPECT TO INVOKING THE REVISIONARY POWERS BY LD.PCIT U/ S 263 OF THE ACT. 4. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFO RE LD.PCIT AND POINTED TO THE CHART OF EVENTS PLACED IN THE APPEAL MEMO. FROM THE AFORESAID CHART, HE SUBMITTED THAT THE OLD PROPERTY WAS SOLD ON 09.05.2011 AND THE AGREEMENT FOR PURCHASE O F NEW PROPERTY WAS ENTERED INTO ON 18.11.2009. HE FURTHER SUB MITTED THAT THE PAYMENT MADE BY THE ASSESSEE TO THE BUILDER ONE Y EAR PRIOR AND WITHIN TWO YEARS AFTER DATE OF TRANSFER WAS RS.76,20,583/- AND OUT OF WHICH, PAYMENT OF RS.76,20,583/- FOR THE NEW RESIDENTIAL PRO PERTY WAS MADE BEFORE THE DATE OF SALE OF OLD PROPERTY AND RS.9 ,02,583/- WAS MADE AFTER THE DATE OF SALE OF OLD HOUSE BUT BEFORE T HE DUE DATE 4 OF FILING OF RETURN. HE FURTHER SUBMITTED THAT THE COMPLETIO N CERTIFICATE FROM APPROPRIATE AUTHORITY WAS RECEIVED ON 12.0 3.2012. HE THEREFORE RELYING ON THE DECISION OF HONBLE BOMBAY H IGH COURT IN THE CASE OF CIT VS. SMT. BEENA K. JAIN REPORTED IN (1996) 217 ITR 363 (BOM) AND THE DECISION OF PUNE TRIBUNAL IN THE CASE OF ITO VS. NARSHIVHA AMRUTRAO DHERE AND OTHERS IN ITA NOS.1944 AN D 1945/PUN/2013 ORDER DT.18.03.2015 SUBMITTED THAT THERE WAS NO ERROR IN ASSESSEES CLAIMING DEDUCTION U/S 54F OF THE ACT AND THAT THE ASSESSEE HAS RIGHTLY CLAIMED THE DEDUCTION AND WAS ALSO RIGHTLY ALLOWED BY AO. HE FURTHER SUBMITTED THAT THE ISSUE WAS E XAMINED BY THE AO AND WHEN AN ISSUE HAS BEEN EXAMINED BY AO T HEN MERELY BECAUSE OF DIFFERENCE IN OPINION, INVOCATION OF REVISIONARY POWE RS U/S 263 OF THE ACT IS NOT PERMISSIBLE. HE THEREFORE SUBMITT ED THAT THE ORDER OF LD.PCIT PASSED U/S 263 OF THE ACT BE SET ASIDE. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.PCIT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESP ECT TO INVOCATION OF REVISIONARY POWERS U/S 263 OF THE ACT BY L D.PCIT. LD.PCIT WAS OF THE VIEW THAT ASSESSEE IS NOT ELIGIBLE FOR CLA IM OF DEDUCTION U/S 54F OF THE ACT BECAUSE ACCORDING TO HIM E XEMPTION U/S 54F IS AVAILABLE FOR CAPITAL GAINS ON TRANSFER OF LONG TER M CAPITAL ASSET ONLY IF THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEA R BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLA CE OR WITHIN A PERIOD OF THREE YEARS AFTER CONSTRUCTED A RESIDENTIAL HOU SE. IN THE CASE OF ASSESSEE SINCE THE PURCHASE OF NEW PROPERTY WA S ON 18.11.2009 I.E., BEYOND ONE YEAR PRIOR TO THE DATE OF SALE, T HE 5 ASSESSEE WAS NOT ELIGIBLE FOR BENEFIT U/S 54F OF THE ACT. WE FIND THAT ON IDENTICAL ISSUE THE CO-ORDINATE BENCH OF THE TRIB UNAL IN THE CASE OF ITO VS. NARSHIVHA AMRUTRAO (SUPRA) AFTER RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF B EENA K. JAIN (SUPRA) HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE A ND HAS HELD AS UNDER : 11. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY TH E HONBLE BOMBAY HIGH COURT IN CIT VS. BEENA K. JAIN (SUPRA), WHEREI N IT HAS BEEN HELD THAT THE RELEVANT DATE FOR PURCHASE OF THE PROPERTY WAS WHEN THE PETITIONER HAD PAID FULL CONSIDERATION AMOUNT ON TH E FLAT BECOMING READY FOR OCCUPATION AND HAD OBTAINED POSSESSION OF THE FLAT AND THE DATE OF ENTERING INTO THE AGREEMENT TO PURCHASE THE SAID FLAT HAD NOT TO BE CONSIDERED. FOLLOWING THE SAID PROPOSITION OF LAW PROPOUNDED BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. BEENA K. J AIN (SUPRA), THE DATE TO BE CONSIDERED IS THE DATE ON WHICH THE ASSE SSEE HAD OCCUPIED THE SAID PROPERTY AND NOT THE DATE ON WHICH IT HAD ENTERED INTO AN AGREEMENT TO PURCHASE THE PROPERTY. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD ENTERED INTO AN AGREEMENT ON 19.11 .2004. HOWEVER, THE OCCUPANCY CERTIFICATE WAS ISSUED BY PM C ONLY ON 18.03.2008 AND EVEN THE FIRST MSEB BILL WAS DATED 1 4.08.2007. CONSEQUENTLY, THE ASSESSEE HAD RECEIVED, THE POSSES SION OF THE PROPERTY IN ASSESSMENT YEAR 2008-09 I.E. WITHIN THE YEAR OF SALE OF THE ASSET AND THE ASSESSEE FULFILLED THE CONDITIONS LAID DOWN UNDER SECTION 54F OF THE ACT VIS--VIS INVESTMENT IN THE NEW ASSETS AND WAS ENTITLED TO THE CLAIM OF DEDUCTION IN THIS REGARD. 6. WE FIND THAT THE ISSUE IN THE PRESENT CASE IS COVERED BY THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. NARSHIVHA AMRUTRAO (SUPRA). BEFORE US, THE REVENUE HAS NOT PLACED ANY CONTRARY BINDING DECISION NOR HAS BROUGHT ANY MATE RIAL ON RECORD TO DEMONSTRATE THAT THE VIEW TAKEN BY THE A.O. WAS CONTRARY TO LAW OR WAS AN IMPERMISSIBLE VIEW OR WAS UPON APPLICATION OF WRONG LEGAL PRINCIPLES AND THEREFORE REQUIRED INITIATING THE EXERCISE OF REVISIONARY POWERS UNDER SEC.263. IN VIEW OF THE AFORES AID FACTS, WE ARE OF THE VIEW THAT IN THE PRESENT CASE THE LD.PCIT WAS NOT JUSTIFIED IN RESORTING TO THE REVISIONARY POWERS UNDER SEC .263 OF THE 6 ACT. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD.PCIT CA NCELLING THE ORDER DT.10.03.2015 PASSED UNDER SEC.143(3) OF THE ACT. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 23 RD DAY OF JANUARY, 2018. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 23 RD JANUARY, 2018. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. THE PR.CIT-4, PUNE. THE JT. CIT, RANGE 7, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $+,-/ GUARD FILE. / BY ORDER // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.