Assistant Commissioner of Income-tax, V. Smt. Asha Ashok Boob, Ahmednagar

ITA 69/PUN/2014

• Counselvise Citation: 6924514 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 13-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PYBC
• Keywords: Capital asset; Salary income; Period of limitation; Wrong claim; Revised return
• Section: 54F; 133(6); 139; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 69/PN/2014 (ASSESSMENT YEAR : 2007-08) ASSTT. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR .. APPELLANT VS. SMT. ASHA ASHOK BOOB, PROP.-SHRI TILES, SANGAMNER, TAL.-SANGAMNER, DISTT.-AHMEDNAGAR .. RESPONDENT PAN NO.ABYPYB8234C ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 24-04-2015 DATE OF PRONOUNCEMENT : 20-05-2015 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 04-10-2013 OF THE CIT(A)-IT/TP, PUNE RE LATING TO ASSESSMENT YEAR 2007-08. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALARY FROM THE PARTNERSHIP FIRM, INCOME FROM HOUSE PROPERTY, CAPITAL GAIN AND INCOME FROM OTHER SOURCES. SHE FILED HER RETURN OF INCOME ON 3 1-12-2007 DECLARING TOTAL INCOME AT RS.1,44,13,610/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE AS SESSEE HAS EARNED LONG TERM CAPITAL GAIN FROM SALE OF SHARES A T 2 RS.1,67,70,424/- AND SHORT TERM CAPITAL GAIN OF RS. 5,95,155/-. THE LONG TERM CAPITAL GAIN WAS DERIVED BY SELLING 76279 2 SHARES OF MANGALAM DRUGS & ORGANICS LTD. TO IPCA LABORATORIES OFF MARKET FOR A CONSIDERATION OF RS.2,44,09,344/-. SH E HAS CLAIMED D.P. CHARGES OF RS.16,000/- AND SHOWED NET RECEIPT OF RS.2,43,93,344/-. 2.1 THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED D EDUCTION OF RS.30,78,228/- U/S. 54 FOR INVESTMENT OF LONG TERM CAPITAL GAIN TOWARDS PURCHASE OF A HOUSE. THIS AMOUNT WAS PAID TO CITY CORPORATION LTD., PUNE DURING A.Y. 2007-08 AND THE ASSESSEE HAS CLAIMED THE ENTIRE AMOUNT AS EXEMPT U/S. 54. THE A O OBSERVED THAT THE ASSESSEE CANNOT CLAIM DEDUCTION U/S. 54 AS THAT SECTION DEALS WITH THE TRANSFER OF A CAPITAL ASSET BEING BU ILDING OR LANDS APPURTENANT THERETO. IF AT ALL SHE SHOULD HAVE CLA IMED U/S. 54F WHICH IS FOR THE TRANSFER OF ANY LONG TERM CAPITAL ASSET NOT BEING A RESIDENTIAL HOUSE AND THE PROCEEDS ARE INVESTED IN A RESIDENTIAL HOUSE. THE AO FURTHER OBSERVED THAT THE ASSESSEE A PPARENTLY BOOKED A FLAT BEARING NO. 1001 IN TOWER-8 OF AMANOR A PARK TOWN, HADAPSAR, PUNE. THE COST OF THE FLAT IS RS.1 ,34,59,685/- AND TILL 23-11-2009, AN AMOUNT OF RS.98,50,000/- HA S BEEN PAID. POSSESSION OF THE SAID FLAT HAS NOT BEEN GIVEN TILL DATE. HE, THEREFORE, HELD THAT EVEN IF THE ASSESSEE IS ELIGIB LE, THEN ALSO THE DEDUCTION ALLOWABLE WILL NOT BE THE ENTIRE INVESTME NT BUT AS CALCULATED AS PER PROVISIONS OF SEC. 54F OF THE ACT . 3 2.2 THE ASSESSING OFFICER FURTHER NOTED THAT THE AS SESSEE HAS TRANSFERRED THE SHARES ON 19-10-2006. THEREFORE, T HE ASSESSEE HAS TO PURCHASE A HOUSE ONE YEAR BEFORE OR TWO YEARS AF TER THE DATE OF TRANSACTION I.E. THE PURCHASE SHOULD BE EFFECTED BE TWEEN 19-10- 2005 AND 19-10-2008. FROM THE COPY OF LEASE AGREEM ENT WITH CITY CORPORATION LTD. DATED 29-12-2007 HE OBSERVED THAT THE ASSESSEE IS A LESSEE FOR UNIT NO. 0081001 IN TOWER NO. 008 OF AMANORA PARK TOWN, HADAPSAR, PUNE. THE LEASE IS FO R A PERIOD OF 999 YEARS COMMENCING FROM THE DATE OF THE LEASE DEE D I.E. 29-01- 02007, FOR A TOTAL ONE TIME PREMIUM OF RS.1,23,12,5 00/- AND AT AN YEARLY RENT OF RS.1. SINCE, THE ASSESSEE IS NOT TH E OWNER OF THE PROPERTY BUT MERELY A LESSEE AND AS THE DEDUCTION A VAILABLE U/S. 54F IS FOR PURCHASE OF A HOUSE AND NOT FOR A LEASED PROPERTY, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSES SEE IS NOT ELIGIBLE TO CLAIM THE SAID DEDUCTION. HE, THEREFOR E, CONFRONTED THE ASSESSEE ON THE ABOVE ISSUE. 2.3 RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED B Y THE ASSESSEE THAT LEASE SHOULD BE TREATED AS PURCHASE. HOWEVER, THE ASSESSING OFFICER REJECTED THE ABOVE CONTENTION OF THE ASSESSEE AND HELD THAT THE ASSESSEE BY ENTERING INTO A LEASE AGREEMENT WITH CITY CORPORATION LTD. HAS CERTAINLY NOT BECOME THE OWNER OF THE PROPERTY AND IS THEREFORE INELIGIBLE TO CLAIM THE D EDUCTION U/S. 54F OF THE ACT. HE ALSO REJECTED THE CONTENTION OF THE ASSESSEE THAT IT IS A DEEMED PURCHASE. FROM THE DETAILS RECEIVED BY HI M U/S. 133(6) OF THE I.T. ACT THE ASSESSING OFFICER NOTED THAT CI TY CORPORATION LTD. HAS NOT GIVEN POSSESSION TILL 23-11-2009 AND T HE TENTATIVE 4 POSSESSION DATE IS GOING TO BE IN APRIL, 2010. THE REFORE, HE CONCLUDED THAT THE ASSESSEE HAS NOT COMPLETED THE P URCHASE, IF ANY, WITHIN THE STIPULATED TIME AND THEREFORE IS INELIGI BLE FOR THE SAID DEDUCTION. THE ASSESSEE HAS NOT PURCHASED THE HOUS E WITHIN THE TIME PERMITTED U/S. 54F OF THE ACT. RELYING ON THE DECISION OF THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF SMT. R ITA GAUR VS. DCIT REPORTED IN 90 TTJ (LUCKNOW) 441 HE HELD THAT MERELY GIVING AN ADVANCE DOES NOT COMPLETE THE SALE. HE, ACCORDINGLY, DISALLOWED THE CLAIM OF DEDUCTION U/S. 54 MADE BY T HE ASSESSEE AT RS.30,78,228/-. 3. BEFORE THE CIT(A) THE ASSESSEE SUBMITTED THAT SH E HAD INADVERTENTLY CLAIMED THE DEDUCTION U/S. 54 INSTEAD OF CLAIMING THE SAME U/S. 54F WHILE FILING OF THE INCOME TAX RETURN . IT WAS ARGUED THAT MERELY BECAUSE THE ASSESSEE HAS CLAIMED DEDUCT ION UNDER AN INCORRECT SECTION, SHE WOULD NOT BE PROHIBITED DURI NG THE ASSESSMENT PROCEEDINGS FROM CLAIMING THE DEDUCTION UNDER CORRECT SECTION. THERE IS NO ESTOPPEL AGAINST LAW, WHICH W OULD PREVENT THE ASSESSEE CLAIMING THE DEDUCTION, WHICH THE ASSE SSEE IS OTHERWISE ELIGIBLE TO CLAIM. SHE CAN CORRECT THE M ISTAKE MADE AT THE TIME OF FILING OF RETURN DURING THE ASSESSMENT PROCEEDINGS. FOR THE ABOVE PROPOSITION THE ASSESSEE RELIED ON VARIOU S DECISIONS. 3.1 AS REGARDS THE ALLEGATION OF THE ASSESSING OFFI CER THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION AS SHE WAS NO T THE OWNER OF THE PROPERTY PURCHASED BUT A LESSEE IT WAS ARGUED T HAT THE LEASE AGREEMENT ENTERED INTO BY HER IS FOR A PERIOD OF 99 9 YEARS WHICH IS 5 EXTENDABLE FOR A FURTHER PERIOD OF 999 YEARS ON THE SAME TERMS. THEREFORE, IT IS AN AGREEMENT FOR THE PERPETUAL PER IOD. FURTHER, ACCORDING TO THE LEASE AGREEMENT, THERE IS NO BAR O N THE TRANSFER OF PROPERTY EXCEPT FOR THE PAYMENT OF TRANSFER CHARGES OF 1% TO LESSOR. THE LESSEE MAY TRANSFER THE PROPERTY TO AN Y PERSON WITHIN THE TIME OF LEASE. IT WAS SUBMITTED THAT ONE TIME LEASE PREMIUM OF RS.1,23,12,500/- IS TO BE PAID BEFORE THE POSSESSIO N WHICH IS IN THE NATURE OF THE PURCHASE CONSIDERATION. IT WAS ARGUED THAT THE CHARACTERISTICS AND RIGHTS ATTACHED TO PROPERTY UND ER THE LEASE ARE SIMILAR TO THE RIGHTS OBTAINED BY A PURCHASER OF TH E PROPERTY. IT WAS ACCORDINGLY SUBMITTED THAT THE BENEFIT OF DEDUCTION U/S. 54F CANNOT BE DENIED TO THE ASSESSEE MERELY BECAUSE THE ASSESS EE HAS ENTERED INTO A LEASE AGREEMENT AND HAS NOT PURCHASED THE PR OPERTY ON AN OUTRIGHT BASIS. 3.2 AS REGARDS THE ALLEGATION OF THE ASSESSING OFFI CER THAT POSSESSION OF THE HOUSE PROPERTY WAS NOT TAKEN WITH IN THE STIPULATED PERIOD OF TWO YEARS FROM THE DATE OF TRA NSFER OF SHARES, IT WAS ARGUED THAT THE ASSESSEE HAS ENTERED INTO AN AG REEMENT WITH THE BUILDER FOR CONSTRUCTION OF THE FLAT AND NOT FO R PURCHASE OF THE FLAT. THEREFORE, THE TIME LIMIT FOR CONSTRUCTION O F HOUSE AVAILABLE TO THE ASSESSEE ACCORDING TO SECTION 54F IS OF THRE E YEARS FROM THE DATE OF TRANSFER OF THE CAPITAL ASSET AND NOT OF TW O YEARS. FOR THE ABOVE PROPOSITION THE ASSESSEE RELIED ON VARIOUS DE CISIONS. IT WAS FURTHER STATED THAT THE ASSESSEE HAS PURCHASED THE PROPERTY FOR TOTAL CONSIDERATION OF RS.1,23,12,500/- BEING ONE TIME LE ASE PREMIUM AND FURTHER BY PAYING AMOUNT RS.1,53,125/- TOWARDS STAMP DUTY 6 AND REGISTRATION CHARGES. THUS, TOTAL CONSIDERATIO N AMOUNTED TO RS.1,24,65,625/- OUT OF WHICH THE ASSESSEE PAID AN AMOUNT OF RS.1,00,03,125/- INCLUDING STAMP DUTY AND REGISTRAT ION CHARGES BEFORE THE PRESCRIBED DATE OF 18-10-2009. SINCE, T HE ASSESSEE HAS PAID MORE THAN 80% OF THE TOTAL CONSIDERATION BEFOR E 18-10-2009, THEREFORE, SHE OBTAINED SUBSTANTIAL DOMINION OVER T HE FLAT BEFORE 18-10-2009. THE ASSESSEE FURTHER ARGUED THAT THE B UILDER HAD AGREED TO HAND OVER THE POSSESSION OF THE FLAT ON O R BEFORE 30-09- 2009. HAD THE BUILDER FULFILLED HIS COMMITMENT, TH E ASSESSEE WOULD HAVE OBTAINED POSSESSION OF THE FLAT BEFORE 3 0-09-2009 I.E. WITHIN THE PERIOD OF THREE YEARS FROM THE DATE OF T RANSFER OF ORIGINAL CAPITAL ASSET. IT WAS ARGUED THAT THERE I S NO DELAY ON PART OF THE ASSESSEE IN MAKING PAYMENTS OF THE INSTALLME NTS TO THE BUILDER. THE DELAY IN GETTING POSSESSION OF THE PR OPERTY WAS NOT ATTRIBUTABLE TO THE ASSESSEE AND THE SAME WAS FOR T HE REASONS BEYOND THE CONTROL OF THE ASSESSEE. RELYING ON VAR IOUS DECISIONS IT WAS ARGUED THAT THE ASSESSEE SHOULD BE GRANTED DEDU CTION U/S. 54F, WHEN SHE HAD MADE SUBSTANTIAL PAYMENT FOR THE PURCH ASE OF FLAT AND HAD OBTAINED SUBSTANTIAL DOMINION OVER THE RESI DENTIAL PROPERTY WITHIN THE PERIOD OF THREE YEARS. 4. THE ASSESSEE ALSO RAISED TWO ADDITIONAL GROUNDS IN WHICH IT WAS CLAIMED THAT EXEMPTION U/S. 54F IS ALLOWABLE IN RESPECT OF THE TOTAL COST OF THE RESIDENTIAL HOUSE ACQUIRED BY THE ASSESSEE OF RS.1,24,65,625/- AS AGAINST THE AMOUNT OF RS.30,78, 228/- CLAIMED BY THE ASSESSEE IN THE RETURN FILED. WITHOUT PREJU DICE TO THE ABOVE IT WAS SUBMITTED THAT THE EXEMPTION U/S. 54F MAY BE ALLOWED IN 7 RESPECT OF THE AMOUNT OF RS.1,00,03,125/- PAID WITH IN THE PERIOD OF THREE YEARS FORM THE DATE OF TRANSFER OF THE ORIGIN AL ASSET. 5. BASED ON ARGUMENTS ADVANCED BY THE ASSESSEE THE LD. CIT(A) HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S. 54F TO THE EXTENT OF RS.1,00,03.125/- WHICH IS THE AMOUNT THE ASSESSEE HAS PAID WITHIN THE PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF ORIGINAL COST. WHILE DOING SO HE OBSER VED THAT MERELY BECAUSE THE ASSESSEE HAS MENTIONED A WRONG OR INCOR RECT SECTION IN THE RETURN OF INCOME THE SAME WILL NOT BE A GROU ND TO DENY THE DEDUCTION TO THE ASSESSEE. 6. AS REGARDS THE ALLEGATION OF THE AO THAT IT IS O NLY A LEASE AND NOT A PURCHASE, THE LD.CIT(A) OBSERVED THAT THE LEASE IS FOR A PERIOD OF 999 YEARS AND ACCORDING TO CLAUSE 26 OF T HE LEASE AGREEMENT THE ASSESSEE ENJOYS ALL THE RIGHTS I.E. T RANSFER, MORTGAGE, ASSIGNMENT, SUB-LEASE ETC., WHICH ARE ENJOYED BY TH E OWNER OF THE IMMOVABLE PROPERTY. THEREFORE, CONSIDERING THE LON G PERIOD OF LEASE, WHICH IS AS GOOD AS PERMANENT AND NATURE OF THE RIGHTS ENJOYED BY THE ASSESSEE, HE HELD THAT THE ASSESSEE IS OWNER OF THE PROPERTY AND THEREFORE, SHE CAN BE TREATED AS A PUR CHASER FOR THE PURPOSE OF SECTION 54F. HE OBSERVED THAT COURTS HA VE INTERPRETED IN A LIBERAL MANNER TO HOLD THAT PURCHASE OF FLAT M AY BE TREATED AS FLAT UNDER CONSTRUCTION AND NOT PURCHASE. THEREFOR E, PERIOD OF THREE YEARS SHOULD BE AVAILABLE TO THE ASSESSEE FOR GETTING HOUSE CONSTRUCTED. AS REGARDS THE POSSESSION OF THE HOUS E PROPERTY WITHIN THE PRESCRIBED PERIOD, HE OBSERVED THAT THE JURISDICTIONAL 8 HIGH COURT AND JURISDICTIONAL TRIBUNAL HAVE HELD TH AT THE DEDUCTION CAN BE ALLOWED IF THE ASSESSEE HAS ACQUIR ED DOMINION OVER HOUSE BY MAKING SUBSTANTIAL PAYMENT BEFORE THE PRESCRIBED TIME LIMIT. THE LAW DOES NOT PROVIDE THAT THE CONS TRUCTION SHOULD BE COMPLETED WITHIN THE PRESCRIBED TIME LIMIT. SIN CE, THE ASSESSEE IN THE INSTANT CASE HAS PAID APPROXIMATELY 80% OF T HE PAYMENT BEFORE THE TIME LIMIT OF THREE YEARS, HE HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S. 54F OF THE ACT. S INCE, THE ASSESSEE ACCORDING TO HIM HAS PAID AN AMOUNT OF RS.1,00,03,1 25/- BEFORE THE PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF ORIGINAL ASSETS, HE HELD THAT THE ASSESSEE IS ENTITLED TO CL AIM DEDUCTION U/S. 54F TO THE EXTENT OF RS.1,00,03,125/-. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE.. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE L D. COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN D ELETING THE DISALLOWANCE U/S. 54 OF RS.30,78,228/- INSTEAD OF CONFIRMING THE SAME. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN ALLOWING DED UCTION U/S 54F OF RS.1,00,03,125/- WITHOUT CONSIDERING THE FACT THAT TH E ASSESSEE HAS CLAIMED RS.30,78,228/- IN THE RETURN. 4. THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GROSSLY ERRED IN FA ILING TO APPRECIATE THAT THE ONLY AVENUE FOR THE ASSESSEE TO MAK E ANY CLAIM IS IN THE RETURN OF INCOME OR REVISED RETURN AN D NO CLAIM CAN BE MADE OTHER THAN THESE PRESCRIBED MEANS 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE L D. COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN F AILING TO CONSIDER THAT THE ASSESSEE IS ONLY A LESSEE AND NOT THE OW NER OF THE FLAT AND THE DEDUCTION IS ALLOWABLE U/S 54F ONLY TO THE OWNER AND NOT A LESSEE. 9 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND AN Y OR ALL THE GROUNDS OF APPEAL. 8. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE ORDER OF THE ASSESSING OFFICER. REFERRING TO THE D ECISION OF THE HON'BLE KERALA HIGH IN THE CASE OF CIT VS. V.R. DES AI REPORTED IN 197 TAXMAN 52 (KERALA) HE SUBMITTED THAT THE HON'BL E HIGH COURT IN THE SAID DECISION HAS HELD THAT THE ASSESSEE WAS NOT ENTITLED TO EXEMPTION U/S. 54F BECAUSE HE HAS NEITHER DEPOSITED THE SALE PROCEEDS IN THE SPECIFIED BANK ACCOUNT IN TERMS OF SECTION 54F(4) BEFORE THE DUE DATE OF FILING OF RETURN NOR WERE TH E SALE PROCEEDS UTILIZED FOR CONSTRUCTION IN TERMS OF SECTION 54F(1 ). 9. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND REFERRED TO THE COMPUTATION STATEMENT PLACED AT PAGE 14 OF T HE PAPER BOOK AND SUBMITTED THAT THE ASSESSEE HAS CLAIMED EXEMPTI ON U/S. 54 AMOUNTING TO RS.30,78,228/-. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF DEDUCTION ON THE FOLLOWING GROUNDS : (A) THE ASSESSEE HAS MADE THE CLAIM UNDER WRONG SECTION , (B) THE ASSESSEE HAS NOT PURCHASED THE PROPERTY WITHIN TH E STIPULATED PERIOD AS PRESCRIBED IN THE ACT, (C) THE ASSESSEE IS A LESSEE FOR 999 YEARS AND IS NOT THE O WNER OF THE FLAT AS ENVISAGED IN PROVISIONS OF SECTION 54F O F THE ACT. 9.1 HE SUBMITTED THAT THE LD. CIT(A) ALLOWED THE CL AIM OF DEDUCTION U/S. 54F TO THE EXTENT OF RS.1,00,03,125/ - WHICH THE ASSESSEE HAS PAID WITHIN THE PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF SHARES TOWARDS PURCHASE OF FLAT. REFER RING TO PAGE 15 OF THE PAPER BOOK HE DREW THE ATTENTION OF THE BENC H TO THE DETAILS 10 OF PAYMENTS MADE TO THE BUILDER FOR PURCHASE OF FLA T THE DETAILS OF WHICH ARE AS UNDER : DATE RECEIPT NO. AMOUNT 21/10/2007 927 1,000,000 21/10/2007 926 231,250 25/12/2007 1680 615,625 29/12/2007 1713 1,231,250 7/2/2009 548 1,231,250 26/03/2009 1089 1,231,250 30/04/2009 1464 1,231,250 30/06/2009 2306 1,231,250 20/08/2009 2926 1,846,875 30/01/2010 5515 615,625 25/03/2010 6649 615,625 7/4/2011 14394 2,109,043 TOTAL 13,190,293 9.2 HE SUBMITTED THAT THE SHARES WERE TRANSFERRED O N 19-10- 2006. THE ASSESSEE HAS PAID AN AMOUNT OF RS.98,50, 000/- TILL 20- 08-2009 WHICH IS WITHIN THE PERIOD OF THREE YEARS F ROM THE DATE OF SALE OF SHARES. REFERRING TO THE DECISION OF THE H ON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. MS. JAGRI TY AGGARWAL REPORTED IN 339 ITR 610 HE SUBMITTED THAT THE HON'B LE HIGH COURT IN THE SAID DECISION HAS HELD THAT SUB-SECTION (4) OF SECTION 139 OF THE ACT IS, IN FACT, A PROVISO TO SUB-SECTION (1) O F SECTION 139 OF THE ACT. THEREFORE, IF A PERSON HAS NOT FURNISHED THE RETURN OF THE PREVIOUS YEAR WITHIN THE TIME ALLOWED UNDER SUB-SEC TION (1), I.E. BEFORE THE 31 ST DAY OF JULY OF THE ASSESSMENT YEAR, THE ASSESSEE C AN FILE HIS RETURN OF INCOME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, SU CH PROVISION IS NOT AN INDEPENDENT PROVISION, BUT RELATES TO TIME C ONTEMPLATED 11 UNDER SUB-SECTION (1) OF SECTION 139. THEREFORE, T HE ASSESSEE CAN UTILIZE THE PROFITS FOR PURCHASE OF RESIDENTIAL PRO PERTIES OR DEPOSIT IN SPECIFIED ACCOUNT BEFORE THE DUE DATE OF FURNISH ING SUCH RETURN U/S. 139(4). 9.3 REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. ASHOK DEOKISHAN BHUTADA VID E ITA NO. 966/PN/2011 ORDER DATED 18-03-2013 FOR THE A.Y. 200 8-09 HE SUBMITTED THAT THE TRIBUNAL FOLLOWING THE AFOREMENT IONED DECISION HAS HELD THAT THE ASSESSEE HAS FULFILLED THE CONDIT ION OF INVESTING THE AMOUNT FOR ACQUIRING THE FLAT WITHIN THE TIME L IMIT FOR FILING THE BELATED RETURN U/S. 139(4) AND THEREFORE IS ENTITLE D TO CLAIM THE DEDUCTION U/S. 54F. REFERRING TO THE DECISION OF T HE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MRS. PREMA P. SHAH VS. ITO REPORTED IN 100 ITD 60 HE SUBMITTED THAT THE TRIBUN AL IN THE SAID DECISION HAS HELD THAT WHERE THE LEASE IS FOR 150 Y EARS WHICH IS IN PERPETUITY, THEREFORE, THE ASSESSEE IS AS GOOD AS A BSOLUTE OWNER OF THE PROPERTY. AS REGARDS THE ALLEGATION OF THE ASS ESSING OFFICER THAT THE ASSESSEE HAS MADE A CLAIM UNDER WRONG PROV ISION I.E. U/S. 54 INSTEAD OF SECTION 54F, HE SUBMITTED THAT THE HO N'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS A ND SHAREHOLDERS P. LTD. REPORTED IN 349 ITR 336 HAS HE LD THAT THE ASSESSEE CAN MAKE A CLAIM BEFORE THE APPELLATE AUTH ORITY EVEN IF NO CLAIM WAS MADE BEFORE THE ASSESSING OFFICER. HOWEV ER, IN THE INSTANT CASE THE ASSESSEE HAS ALREADY MADE A CLAIM ALTHOUGH UNDER THE WRONG SECTION. HE SUBMITTED THAT ADMITTEDLY TH E ASSESSEE HAS NOT DEPOSITED THE SALE PROCEEDS IN THE SPECIFIED BA NK ACCOUNT 12 UNDER CAPITAL GAIN SCHEME. HOWEVER, THE ASSESSEE H AS PAID AN AMOUNT OF RS.55,40,625/- TILL 31-03-2009. THEREFOR E, IN VIEW OF THE DECISION OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MS. JAGRITY AGGARWAL (SUPRA) DEDUCTION U/S. 54F HAS TO BE ALLOWED TO THE EXTENT OF RS.55,40,625/-. AS REGARDS THE DECISION OF HONBLE KERALA HIGH COURT RELIED ON BY LD. DEPARTM ENTAL REPRESENTATIVE, HE SUBMITTED THAT THE FACTS IN THAT CASE ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.30,78,228/- U/S.54 BEING LONG TERM CAPITAL GAIN ON SALE OF SHAR ES INVESTED TOWARDS PURCHASE OF A FLAT. THE ASSESSING OFFICER DENIED THE DEDUCTION ON THE GROUND THAT THE ASSESSEE HAS MADE THE CLAIM UNDER WRONG PROVISION AND THE CORRECT PROVISION IS SECTION 54F. FURTHER THE ASSESSEE HAS NOT TAKEN POSSESSION OF TH E FLAT TILL THE DATE OF ASSESSMENT ORDER AND THE ASSESSEE IS ONLY A LESSEE AND THE LEASE IS FOR A PERIOD OF 999 YEARS AND THE ASSESSEE IS NOT THE ABSOLUTE OWNER. WE FIND APART FROM CHALLENGING THE ABOVE CONTENTIONS THE ASSESSEE HAD TAKEN ADDITIONAL GROUN DS BEFORE THE LD. CIT(A) ACCORDING TO WHICH THE ASSESSEE HAS PAID AN AMOUNT OF RS.1,24,65,625/- TOWARDS THE COST OF RESIDENTIAL HO USE AND THEREFORE THE CLAIM U/S. 54F SHOULD BE ALLOWED TO T HE ASSESSEE TO THIS EXTENT AS AGAINST THE AMOUNT OF RS.30,78,228/- INADVERTENTLY 13 CLAIMED. ALTERNATIVELY IT WAS ARGUED THAT THE ASSE SSEE HAS PAID AN AMOUNT OF RS.1,00,03,125/- WITHIN THE PERIOD OF THR EE YEARS FORM THE DATE OF TRANSFER OF THE ORIGINAL ASSET AND THER EFORE THE SAME SHOULD BE ALLOWED AS DEDUCTION U/S. 54F. WE FIND T HE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW CLAIM OF DE DUCTION U/S. 54F AMOUNTING TO RS.1,00,03,125/- WHICH THE ASSESSEE HA S PAID WITHIN THE PERIOD OF THREE YEARS FORM THE DATE OF TRANSFER OF THE ORIGINAL ASSET. HE FURTHER OBSERVED THAT MERELY BECAUSE THE ASSESSEE HAS MADE A WRONG CLAIM U/S. 54 THE SAME CANNOT BE A GRO UND TO DENY THE BENEFIT OF DEDUCTION U/S. 54F TO WHICH THE ASSE SSEE IS OTHERWISE ELIGIBLE. AS REGARDS THE OBSERVATION OF THE ASSESS ING OFFICER THAT THE ASSESSEE IS ONLY A LESSEE AND THE LEASE PERIOD IS ONLY 999 YEARS AND THEREFORE, THE ASSESSEE IS NOT THE OWNER OF THE HOUSE, HE OBSERVED THAT THE LONG PERIOD OF LEASE OF 999 YEARS IS AS GOOD AS PERMANENT. THE NATURE OF RIGHTS ENJOYED BY THE ASS ESSEE ARE SUFFICIENT ENOUGH TO SHOW THAT THE ASSESSEE IS OWNE R OF THE PROPERTY AND THEREFORE SHE CAN BE TREATED AS A PURC HASER FOR THE PURPOSE OF SECTION 54F. AS REGARDS THE ALLEGATION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT TAKEN O VER POSSESSION OF THE PROPERTY HE HELD THAT BY MAKING APPROXIMATEL Y 80% OF THE PAYMENT BEFORE THE TIME LIMIT OF THREE YEARS THE AS SESSEE ACQUIRED DOMINION OVER THE FLAT BEFORE THE PRESCRIBED TIME L IMIT. 11. AS REGARDS THE GROUND RAISED BY THE REVENUE THA T BY MAKING A WRONG CLAIM U/S. 54F THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S. 54F, WE FIND THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PRUTHVI BROKERS AND SHAREHOLDERS P. LTD. (S UPRA) HAS HELD 14 THAT AN ASSESSEE IS ENTITLED TO RAISE NOT MERELY AD DITIONAL LEGAL SUBMISSIONS BEFORE THE APPELLATE AUTHORITIES BUT IS ALSO ENTITLED TO RAISE ADDITIONAL CLAIMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE THE DISCRETION TO PERMIT SUCH ADDITIONAL CLAIMS TO BE RAISED. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONAL GROUNDS, WHICH BECAME AVAILABLE ON ACCOU NT OF CHANGE OF CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL GROUND S WHICH WERE AVAILABLE WHEN THE RETURN WAS FILED. THE WORDS CO ULD NOT HAVE BEEN RAISED MUST BE CONSTRUED LIBERALLY AND NOT ST RICTLY. THERE MAY BE SEVERAL FACTORS JUSTIFYING THE RAISING OF A NEW PLEA IN AN APPEAL AND EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. IN THE INSTANT CASE THE ASSESSEE HAS ALREADY MADE A CLAIM ALTHOUGH UNDER THE WRONG HEAD. THEREFORE, WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE LD. CIT(A) ALLOWING THE CLAIM OF DEDUC TION U/S. 54F. 12. AS REGARDS THE ALLEGATION OF THE REVENUE THAT T HE ASSESSEE IS NOT THE ABSOLUTE OWNER OF THE PROPERTY SINCE HE IS A LESSEE AND THE LEASE IS FOR A PERIOD OF 999 YEARS, WE FIND THIS IS SUE ALSO STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MRS. PREMA P. SHAH (SUPRA). IN THE ABOVE DECISION THE TRIBUNAL HAS HELD THAT TH E LEASE IS VALID FOR A PERIOD OF 150 YEARS, WHICH IS IN PERPETUITY AND AS SUCH, THE ASSESSEE IS AS GOOD AS ABSOLUTE OWNER OF THE PROPER TY. IN THE INSTANT CASE THE LEASE IS FOR A PERIOD OF 999 YEARS SUBJECT TO RENEWAL FOR FURTHER PERIOD OF 999 YEARS. FURTHER, AS PER CLAUSE 26 OF THE LEASE AGREEMENT, THE ASSESSEE ENJOYS ALL THE RIGHTS, I.E. 15 TRANSFER, MORTGAGE, SUB-LEASE ETC. THEREFORE, IT CA NNOT BE SAID THAT THE ASSESSEE IS NOT THE OWNER OF THE PROPERTY. 13. NOW COMING TO THE AMOUNT OF DEDUCTION TO BE ALL OWED U/S.54F OF THE ACT, WE FIND IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS NOT DEPOSITED THE SALE PROCEEDS IN THE SPECIFIE D BANK ACCOUNT TILL 31-03-2009. THE ASSESSEE ONLY MADE PAYMENT OF RS.55,40,625/- TILL 31-03-2009 TOWARDS PURCHASE OF FLAT. IN THE CASE DECIDED BY THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MS. JAGRITY AGGARWAL (SUPRA) THE ASSESSEE S OLD HER HOUSE PROPERTY FOR RS.45 LAKHS ON JANUARY 13, 2006, AND H AVING PURCHASED A NEW RESIDENTIAL PROPERTY ON JANUARY 2, 2007, CLAIMED DEDUCTION UNDER SECTION 54 OF THE INCOME-TAX ACT, 1 961. THE ASSESSING OFFICER DECLINED THE CLAIM HOLDING THAT T HE ASSESSEE FAILED TO DEPOSIT THE AMOUNT IN THE CAPITAL GAINS A CCOUNT SCHEME AND ALSO FAILED TO PURCHASE HOUSE PROPERTY BEFORE T HE DUE DATE OF FILING THE RETURN OF INCOME. THE COMMISSIONER (APPE ALS) HELD THAT THE ASSESSEE HAD PURCHASED A NEW RESIDENTIAL PROPER TY ON 2 ND JANUARY, 2007, AND THE DUE DATE ACCORDING TO SECTIO N 139(4) WAS MARCH 31 2007, AND, THUS, THE ASSESSEE HAD COMPLIED WITH THE PROVISIONS OF SECTION 54 OF THE ACT. THIS ORDER WAS AFFIRMED BY THE TRIBUNAL. ON FURTHER APPEAL BY THE REVENUE, THE H ONBLE HIGH COURT HELD AS UNDER (SHORT NOTES) : THE ASSESSEE SOLD HER HOUSE PROPERTY FOR RS.45 LAKHS ON JA NUARY 13, 2006, AND HAVING PURCHASED A NEW RESIDENTIAL PROP ERTY ON JANUARY 2, 2007, CLAIMED DEDUCTION UNDER SECTION 54 OF THE INCOME-TAX ACT, 1961. THE ASSESSING OFFICER DECLINED T HE CLAIM HOLDING THAT THE ASSESSEE FAILED TO DEPOSIT THE AMOUNT IN THE CAPITAL GAINS ACCOUNT SCHEME AND ALSO FAILED TO PURC HASE HOUSE PROPERTY BEFORE THE DUE DATE OF FILING THE RETURN O F INCOME. THE COMMISSIONER (APPEALS) HELD THAT THE ASSESSEE HAD PURCHA SED A 16 NEW RESIDENTIAL PROPERTY ON JANUARY 2, 2007, AND THE DUE DATE ACCORDING TO SECTION 139(4) WAS MARCH 31, 2007, AND, THUS, THE ASSESSEE HAD COMPLIED WITH THE PROVISIONS OF SECTION 54 O F THE ACT. THIS ORDER WAS AFFIRMED BY THE TRIBUNAL. ON APPEAL : HELD, DISMISSING THE APPEAL, THAT THE SALE OF THE ASSET H AD TAKEN PLACE ON JANUARY 13, 2006, FAILING IN THE PREVIOUS Y EAR 2006-07, THE RETURN COULD BE FILED BEFORE THE END OF THE REL EVANT ASSESSMENT YEAR 2007-08, I.E. MARCH 31, 2007. THUS, SUB-SECTION (4) OF SECTION 139 PROVIDES THE EXTENDED PERIOD OF LIMITATION AS AN EXCEPTION TO SUB-SECTION (1) OF SECTION 139 OF THE ACT. SUB-SECTION (4) WAS IN RELATION TO THE TIME ALLOWED TO AN ASSESSEE UNDER SUB-SEC TION (1) TO FILE THE RETURN. THEREFORE, SUCH PROVISION WAS NOT AN INDEPENDENT PROVISION, BUT RELATES TO THE TIME CONTEM PLATED UNDER SUB-SECTION (1) OF SECTION 139. THEREFORE, SUB-SE CTION (4) HAD TO BE READ ALONG WITH SUB-SECTION (1). THEREFORE , THE DUE DATE FOR FURNISHING THE RETURN OF INCOME ACCORDING TO SECT ION 139(1) OF THE ACT WAS SUBJECT TO THE EXTENDED PERIOD PROVIDED UNDER SUB- SECTION (4) OF SECTION 139 OF THE ACT. 14. WE FIND FOLLOWING THE ABOVE DECISIONS, THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASHOK DEOKISHAN BHUTADA (SUPRA) HAS ALLOWED THE CLAIM OF DEDUCTION MADE BY THE ASSESSEE WHERE THE INVESTMENTS WERE MADE WITHIN THE TIME LIMIT UP TO W HICH THE RETURN CAN BE FILED U/S. 139(4). SINCE, IN THE INS TANT CASE ADMITTEDLY THE ASSESSEE HAS MADE PAYMENT OF RS.55,4 0,625/- TILL 31-03-2009 WHICH IS THE DUE DATE OF FILING OF RETUR N U/S. 139(4), THEREFORE, FOLLOWING THE DECISIONS CITED (SUPRA) WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S.54F ONL Y TO THE EXTENT OF RS.55,40,625/- AS AGAINST RS.100,03,125/- ALLOWED B Y THE LD. CIT(A). AS REGARDS THE RELIANCE PLACED BY THE LD. DR ON THE DECISION OF THE HON'BLE KERALA HIGH IN THE CASE OF V.R. DESAI (SUPRA) IS CONCERNED THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THAT CASE IT WAS HELD THAT THE AS SESSEE WAS NOT ENTITLED TO DEDUCTION U/S. 54F BECAUSE HE NEITHER D EPOSITED THE SALE PROCEEDS IN THE SPECIFIED BANK ACCOUNT BEFORE THE DUE DATE NOR UTILIZED THE SAME FOR CONSTRUCTION OF THE HOUSE IN TERMS OF 17 PROVISIONS OF SECTION 54F. HOWEVER, IN THE INSTANT CASE THE ASSESSEE HAS UTILIZED A PART OF CAPITAL GAIN TOWARD S PURCHASE OF FLAT WHICH IS NOT IN DISPUTE. THEREFORE, THE SAID DECIS ION IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONS IDERED OPINION THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S. 54F TO THE EXTENT OF RS.55,40,625/- ONLY. WE HOLD AND DIRECT ACCORDINGL Y. THE GROUNDS RAISED BY THE REVENUE ARE PARTLY ALLOWED. 15. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 20-05-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED: 20 TH MAY, 2015 RK/SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-IT/TP, PUNE 4. THE CIT-IT/TP, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE