SHRI ANIL KUMAR TAK, JAIPUR V. INCOME TAX OFFICER, WARD-1-3, JAIPUR

ITA 695/JPR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3586 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 11-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Deemed Gift on Purchase of immovable Property below Jantri value; Capital asset; Gift; Capital Gains
• Section: 54F; 32; 54; 12

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 695/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2013-14 SHRI ANIL KUMAR TAK 358,NEAR MANGLA MATA TEMPLE MANGLA MARG, BRAHMPURI, JAIPUR CUKE VS. THE ITO WARD- 1(3) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AANPT 4888 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY:SMT. POONAM RAI, DCIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/05/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 31/05/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM T HE ORDER OF THE LD. CIT(A)-1, JAIPUR DATED 12-07-2017 FOR THE ASSE SSMENT YEAR 2013-14 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. (1) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF RS. 17,07,294/- MADE BY THE ASSESSE E U/S 54F (1.1) THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSEE WAS THE OWNER OF TWO HOUSES AS ON THE DATE OF TRANSFER OF O RIGINAL ASSET ON 25.05.2012 BY NOT ACCEPTING THE CONTENTION OF THE ASSESSEE THA T BEFORE THIS DATE, ASSESSEE HAD GIFTED ONE OF THE HOUSE PROPERTY TO HIS SON, AN SHUL TAK VIDE GIFT DEED DATED 10.04.2012 AND THUS, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 2 ASSESSEE WAS THE OWNER OF ONLY ONE HOUSE PROPERTY A ND THAT IN THE PROPERTY GIFTED BY THE ASSESSEE, HE HAD ONLY SHARE AND THU S, NOT THE COMPLETE OWNER OF THE PROPERTY. (2) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDI TION OF RS. 84,000/- MADE BY AO BY ESTIMATING THE RENTAL INCOME RECEIVABLE FROM SHOP IN GANPATI PLAZA AT RS. 1,20,000/- INSTEAD OF RS. 60,0 00/- AS ESTIMATED BY THE ASSESSEE 2.1 APROPOS GROUND NO. 1 AND 1.1 OF THE ASSESSEE, T HE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 3.1.2 DETERMINATION: (I) THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS SOLD TWO PLOTS OF LAND AND HAS CLAIMED EXEMPTION AMOUNTING TO RS. 17,07,294/- U/S 54F OF T HE ACT OUT OF THE CAPITAL GAIN ON THE SALE OF THESE TWO PLOTS. THE AO HAS DISALLOWED THE EXEMPTION CLAIMED BY THE APPELLANT U/S 54F OF THE A CT BY OBSERVING THAT : THE APPELLANT WAS OWING TWO RESIDENTIAL HOUSES ON T HE DATE OF SALE OF THE PLOTS AND THE UNREGISTERED GIFT DEED DATED 10.04.2012 WHEREIN THE APPELLANT HAS GIFTED HIS SHARE IN THE RESIDENTIAL H OUSE PROPERTY SITUATED AT 3550, BARIYO KI GALI, HANDIPURA, JAIPUR TO HIS SON ANSHUL TAK WAS NOTHING BUT AN AFTERTHOUGHT. (II) DURING THE APPELLATE PROCEEDINGS, IT WAS THE C ONTENTION OF THE APPELLANT THAT REGISTRATION OF THE GIFT DEED IN NOT REQUIRED AND THE TRANSFER WAS COMPLETE AS THE DONEE HAS TAKEN THE PO SSESSION OF THE HOUSE PROPERTY UNDER CONSIDERATION ON 10.04.2012 I. E. THE DATE OF EXECUTION OF GIFT DEED. IT WAS FURTHER STATED THAT ON THE DATE OF TRANSFER OF THE ASSET, IT WAS HAVING ONLY ONE RESIDENTIAL HO USE PROPERTY AND THE OTHER RESIDENTIAL HOUSE PROPERTY WAS JOINTLY OWNED BY HIM WITH HIS SON AND THUS THE PROVISIONS OF SECTION 54F OF THE ACT A RE CLEARLY APPLICABLE IN ITS CASE. (III) I HAVE DULY CONSIDERED THE SUBMISSIONS OF TH E APPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. IT IS CLAIMED THAT A GIFT DEED WAS EXECUTED BY THE APPELLANT IN FAVOUR O F HIS SON ANSHUL TAK ON 10.04.2012 AND THE POSSESSION OF THE SAME WA S ALSO GIVEN ON THE SAME DATE AND THUS THE TRANSFER WAS COMPLETE IN VIEW OF THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT. IT IS NO TED THAT AS PER PROVISIONS OF SECTION 2(47)(V) OF THE ACT, 'TRANSFE R' INCLUDES ANY ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 3 TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSIO N OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANC E OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSF ER OF PROPERTY ACT, 1882 (4 OF 1882). IT WOULD BE APPROPRIATE TO REPROD UCE HEREUNDER THE PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPER TY ACT AS UNDER: '53A. PART PERFORMANCE.WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVEABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMA NCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY P ART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CON TINUES IN POSSESSION IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT IN FURTHERANCE OF THE CONTRACT, AND THE TR ANSFEREE HAS PERFORMED OR IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT 2[***] WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLET ED IN THE MANNER PRESCRIBED THEREFORE BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROP ERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSS ESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHA LL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF THE CONTRACT OR OF THE PART PERFORMANCE THEREOF.' ( IV) THUS, IT IS EVIDENT THAT SECTION 53A OF THE TR ANSFER OF PROPERTY ACT REQUIRES PAYMENT OF PART CONSIDERATION FOR TRAN SFER OF A PROPERTY WHEREAS IN THE CASE OF GIFT, THERE CANNOT BE ANY CO NSIDERATION AND THUS SECTION 2(47)(V) OF THE ACT IS NOT APPLICABLE IN TH E INSTANT CASE UNDER CONSIDERATION. FURTHER, IT IS NOTED THAT THE FRESH GIFT DEED WAS EXECUTED ON 14.03.2016 WHICH WAS REGISTERED ON THE SAME DATE . IT IS TO BE NOTED THAT IF A VALID GIFT OF IMMOVABLE PROPERTY WAS MADE ON 10.04.2012, WHAT WAS THE NEED OF EXECUTING A FRESH GIFT DEED ON 14.0 3.2016. IT APPEARS THAT TILL 14.03.2016, THE APPELLANT WAS HAVING ALL THE R IGHTS IN THE IMMOVABLE PROPERTY. REGARDING THE CLAIM OF THE APPELLANT THAT POSSESSION OF THE PROPERTY WAS ALSO GIVEN TO THE DONE ON 10.04.2012, IT IS TO BE NOTED THAT THE DONEE IS ALREADY OWNER OF UNDIVIDED 1 / 2 SHARE OF THE SAID PROPERTY AS THE SAME WAS PURCHASED BY THE DONEE ON 03.10.2011. (V) THE CONTENTION OF THE APPELLANT THAT IT HAS DEB ITED THE GIFTED PROPERTY IN ITS CAPITAL ACCOUNT AND HAS SHOWN THE S AME IN ITS RETURN OF INCOME HAS ALSO BEEN EXAMINED VERY CAREFULLY. IT IS TRITE LAW THAT ENTRIES ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 4 IN THE BOOKS OF ACCOUNTS DO NOT DETERMINE THE NATUR E OF TRANSACTION AND THE SUBSTANCE OF THE TRANSACTION SHOULD PREVAIL OVE R ITS FORM. IT MAY BE MENTIONED THAT IN THE ABSENCE OF A REGISTERED GIFT DEED, THE APPELLANT WAS THE OWNER OF THE GIFTED PROPERTY FOR ALL PRACTICAL PURPOSES. THE GIFT DEED DATED 10.04.2012 IS NOT ENFORCEABLE IN A COURT OF L AW IN ABSENCE OF ITS REGISTRATION. THE MOOT QUESTION IS THAT ON THE BASI S OF THE GIFT DEED DATED 10.04.2012 WHETHER THE DONEE CAN DISPOSE OFF THE GI FTED PROPERTY AND TO MY MIND, THE ANSWER IS CERTAINLY 'NO'. (VI) THE SECOND CONTENTION OF THE APPELLANT WAS THA T IT WAS THE JOINT OWNER OF THE SAID PROPERTY AND THUS WAS NOT HAVING MORE THAN ONE HOUSE ON THE DATE OF TRANSFER AND THUS THE PROVISIONS OF SECTION 54F OF THE ACT ARE APPLICABLE. IT MAY BE MENTIONED THAT VIDE TWO S EPARATE SALE DEEDS DATED 03.10.2011, THE APPELLANT AND HIS SON MR. ANS HUL TAK HAS PURCHASED 50% EACH OF THE UNDIVIDED SHARE IN THE HO USE PROPERTY 3550, BARIYO KI GALI, CHOKDI RAMCHANDRA JI, JAIPUR FROM T WO DIFFERENT SELLERS. THUS, THE APPELLANT WAS CLEARLY HAVING TWO SEPARATE RESIDENTIAL HOUSE PROPERTIES ON THE DATE OF TRANSFER OF THE ASSET I.E . ONE AT HOUSE NO. 358, MANGAL MARG, BRAHAMPURI, JAIPUR AND THE SECOND AT H OUSE NO. 3550, BARIYON KI GALI, HANDIPURA, CHOKDI RAM CHANDRAJI, J AIPUR IT MAY BE MENTIONED THAT THE SIMILAR ISSUE WAS BEFORE THE HON 'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS M J SIWANI [2014] 4 6 TAXMANN.COM 170 (KARNATAKA), WHEREIN IT WAS HELD THAT: 'SECTION 54F PROVIDES CAPITAL GAIN ARISING FROM TRA NSFER OF ANY LONG TERM CAPITAL ASSET NOT BEING RESIDENTIAL H OUSE. IN VIEW THEREOF, THE PROVISIONS CONTAINED IN SECTION 54F AS HAS BEEN RIGHTLY HELD BY THE ASSESSING OFFICER AND THE APPELLATE AUT HORITY, WERE ATTRACTED. UNDER THIS PROVISION, THE ASSESSEE SHOUL D NOT BE IN POSSESSION OF A RESIDENTIAL HOUSE ON THE DATE ON WH ICH THE TRANSACTION RESULTING IN LONG TERM CAPITAL GAINS TA KES PLACE. ON THE DATE OF TRANSACTION, THAT IS, THE SALE OF UNDIVIDED SHARES IN THE LANDED PROPERTY THE ASSESSEES WERE HAVING TWO RESID ENTIAL HOUSES HAVING ONE HALF SHARE EACH THEREIN. IT IS IN THIS B ACKDROP, THE ASSESSING OFFICER AS WELL AS THE APPELLATE AUTHORIT Y REFUSED TO GRANT ANY BENEFIT EITHER UNDER SECTION 54 OR UNDER SECTIO N 54F OF THE ACT IN RESPECT OF CAPITAL GAINS INCOME DERIVED BY THE A SSESSEES. [PARA 25.4] THE TRIBUNAL, HOWEVER, REVERSED THE FINDINGS OF FAC T RECORDED BY THE AUTHORITIES BELOW HOLDING THAT 'A R ESIDENTIAL HOUSE' MEANS COMPLETE RESIDENTIAL HOUSE AND WOULD NOT INCL UDE SHARED INTEREST IN A RESIDENTIAL HOUSE. IN OTHER WORDS, WH ERE THE PROPERTIES ARE OWNED BY MORE THAN ONE PERSON IT CANNOT BE SAID THAT ANY ONE OF THEM IS THE OWNER OF THE PROPERTY. SUCH PROPERTY , AS OBSERVED BY THE TRIBUNAL, CONTINUED TO BE OF CO-OWNERS AND THAT SUCH JOINT ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 5 OWNERSHIP IS DIFFERENT FROM ABSOLUTE OWNERSHIP. SUC H INTERPRETATION IS MADE BY THE TRIBUNAL IN THE LIGHT OF THE LANGUAG E EMPLOYED IN SECTION 54F OF THE ACT, WHEREIN, THE EXPRESSION 'A RESIDENTIAL HOUSE' IS USED. THE TRIBUNAL ALSO PLACED RELIANCE UPON THE JUDGMENT OF THE SUPREME COURT TO TAKE SUCH VIEW IN SETH BANARSI DOSS GUPTA V. CIT [1987]166 ITR 783/32 TAXMAN 112A. IN THIS CA SE, THE SUPREME COURT OBSERVED THAT A FRACTIONAL OWNERSHIP WAS NOT SUFFICIENT FOR CLAIMING EVEN FRACTIONAL DEPRECIATIO N UNDER SECTION 32 OF THE ACT WITH EFFECT FROM 1-4-1997 BY USING THE EXPRESSION 'OWNED WHOLLY OR PARTLY'. [PARA 25.5] SECTION 54F PROVIDES THAT IF THE ASSESSEE HAS A RE SIDENTIAL HOUSE HE CANNOT SEEK THE BENEFIT OF LONG TERM CAPIT AL GAIN. UNDER THIS PROVISION, MERELY BECAUSE, THE WORDS RESIDENTI AL HOUSE ARE PRECEDED BY ARTICLE 'A' WOULD NOT EXCLUDE A HOUSE S HARED WITH ANY OTHER PERSON. EVEN IF THE RESIDENTIAL HOUSE IS SHAR ED BY AN ASSESSEE, HIS RIGHT AND OWNERSHIP IN THE HOUSE, TO WHATEVER EXTENT, IS EXCLUSIVE AND NOBODY CAN TAKE AWAY HIS RIGHT IN THE HOUSE WITHOUT DUE PROCESS OF LAW. IN OTHER WORDS, CO-OWNE R IS THE OWNER OF A HOUSE IN WHICH HE HAS SHARE AND THAT HIS RIGHT , TITLE AND INTEREST IS EXCLUSIVE TO THE EXTENT OF HIS SHARE AN D THAT HE IS THE OWNER OF THE ENTIRE UNDIVIDED HOUSE TILL IT IS PART ITIONED. THE ANALOGY APPLIED BY THE TRIBUNAL BASED ON THE JUDGME NT OF THE SUPREME COURT IN BANARSI DOSS GUPTA (SUPRA), WHEREI N, THE SUPREME COURT CONSIDERED THE PROVISIONS CONTAINED I N SECTION 32 OF THE ACT, WOULD NOT APPLY TO THE FACTS OF THE PRESEN T CASE. THE RIGHT OF A PERSON, MAY BE ONE HALF, IN THE RESIDENTIAL HO USE CANNOT BE TAKEN AWAY WITHOUT DUE PROCESS OF LAW OR IT CONTINU ES TILL THERE IS A PARTITION OF SUCH RESIDENTIAL HOUSE. THUS, THE VIEW EXPRESSED BY THE TRIBUNAL ON THIS ISSUE CANNOT BE ACCEPTED. THUS, TH E ORDER PASSED BY REVENUE AUTHORITIES REJECTING ASSESSEE'S CLAIM W AS TO BE RESTORED. [PARA 26]'(EMPHASIS SUPPLIED) IT MAY FURTHER BE MENTIONED THAT THE SLP FILED BY THE APPELLANT IN THE ABOVE REFERRED CASE WAS DISMISSED BY THE HONBL E APEX COURT REPORTED IN [2015] 53 TAXMANN.COM 318 (SC) (VII) THEREFORE, IN VIEW OF THE FACTS AND CIRCUMST ANCES OF THE CASE AND THE ABOVE JUDICIAL PRONOUNCEMENTS, THE CONTENTI ON OF THE APPELLANT THAT IT WAS NOT HAVING MORE THAN ONE RESIDENTIAL HO USE AS ONE OF THE HOUSE WAS A JOINT PROPERTY HAS NO WEIGHT AND DESERV ES TO BE REJECTED. ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 6 2.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOW ANCE OF RS. 17,07,294/- MADE BY THE ASSESSEE U/S 54F OF THE ACT AND FURTHER ERRED IN HOLDING THAT THE ASSESSEE WAS THE OWNER OF TWO HOUS ES AS ON THE DATE OF TRANSFER OF ORIGINAL ASSET ON 25-05-2012. THE LD.AR OF THE ASSESSEE ALSO SUBMITTED THAT THE ASSESSEE WAS THE OWNER OF ONLY O NE HOUSE PROPERTY AND THAT IN THE PROPERTY GIFTED BY THE ASSESSEE, THE AS SESSEE HAD ONLY SHARE AND THUS THE ASSESSEE WAS NOT THE COMPLETE OWNER OF THE PROPERTY. THE LD.AR OF THE ASSESSEE FILED THE FOLLOWING WRITTEN S UBMISSION AS TO THE GROUNDS OF APPEAL NO. 1 AND 1.1. 1. FROM THE FACTS STATED ABOVE IT CAN BE NOTED THAT TH E ONLY DISPUTE IN THIS GROUND IS WHETHER ON THE DATE OF PURCHASE O F THE NEW HOUSE AT DEVI NAGAR, NEW SANGANER ROAD, JAIPUR, ASSESSEE WAS THE OWNER OF TWO HOUSES OR ONE HOUSE. 2. IT IS SUBMITTED THAT BEFORE THE DATE OF PURCHASE OF NEW HOUSE, ASSESSEE OUT OF HIS TWO HOUSE PROPERTY OWNED BY HIM , GIFTED THE HOUSE PROPERTY NO. 3550 SITUATED AT BARIYON KI GALI, HAND IPURA, JAIPUR TO HIS SON ANSUL TAK VIDE GIFT DEED DT. 10.04.2012 EXECUTED ON STAMP PAPER AND DULY NOTARISED (PB 22-26) . THE ASSESSEE HAS ONLY SHARE IN THIS HOUSE, THE REMAINING SHARE BEING OF HIS SON SH. ANSUL TAK. F ROM THE GIFT DEED IT CAN BE NOTED THAT ASSESSEE HAS TRANSFERRED ALL HIS RIGHTS AND INTEREST OF HIS SHARE IN THE SAID PROPERTY TO THE DONEE. THUS, THE DONEE BEC AME THE COMPLETE OWNER OF THE ENTIRE HOUSE WITH THE RIGHT TO USE THE SAID PRO PERTY FOR HIS OWN RESIDENCE OR TO SALE THE PROPERTY OR TO TRANSFER THE PROPERTY. T HE DONEE HAS THE RIGHT TO APPEAR AS THE OWNER OF THE PROPERTY IN ALL GOVERNME NT OFFICES LIKE JAIPUR NAGAR NIGAM, JVVNL, ETC. THE POSSESSION OF THE PROP ERTY HAS BEEN HANDED OVER TO ANSUL TAK ON 10.04.2012 WHO HAS ACCEPTED TH E GIFTED HOUSE PROPERTY. THE DONEE HAS SHOWN THE PROPERTY IN HIS BALANCE SHE ET (PB 27) . THUS, THERE IS A TRANSFER OF GIFTED PROPERTY BY THE ASSESSEE TO HI S SON IN TERMS OF SECTION 2(47) ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 7 OF THE ACT. THE GIFT DEED IS ALSO REGISTERED SUBSEQ UENTLY VIDE REGISTRY DATED 14.03.2016 (PB 28-37) . 3. IT IS A SETTLED LAW THAT WHEN THE POSSESSION OF THE PROPERTY HAS BEEN HANDED OVER EITHER ORALLY OR THROUGH ANY DOCUM ENT, THE TRANSFER TOOK PLACE EVEN THOUGH THE DOCUMENT IS REGISTERED AT A L ATER DATE. FOR THIS PURPOSE RELIANCE IS PLACED ON THE FOLLOWING CASES:- SMT. SAJIDA BEGUM VS. ITO (2015) 43 CCH 501 (BANG.) (TRIB.) THE FACTS OF THIS CASE IS THAT THE ASSESSEE SOLD TH E VACANT SITE FOR A CONSIDERATION OF RS.65,65,000/- AND PURCHASED ANOTH ER VACANT SITE FOR A SUM OF RS.42,75,000/- AND DEPOSITED BALANCE CAPITAL GAI N IN CAPITAL GAINS ACCOUNT SCHEME WITH SYNDICATE BANK, WITH VIEW TO CL AIM EXEMPTION OF ENTIRE CAPITAL GAIN ON SALE OF VACANT SITE BY INVES TING ENTIRE SALE CONSIDERATION RECEIVED ON ANOTHER SITE AND CONSTRUCTING RESIDENTI AL HOUSE THEREON. AO REFERRED TO PROVISIONS OF SECTION 54F AND OBSERVED THAT UNDER PROVISO TO SECTION 54F, EXEMPTION WOULD NOT BE ALLOWED IF ASSE SSEE OWNED MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN NEW ASSET ON DATE OF TRANSFER OF ORIGINAL ASSET. AO HELD THAT ASSESSEE WAS OWNER OF MORE THAN ONE RESIDENTIAL HOUSE ON DATE OF TRANSFER OF VACANT SITE AND HENCE, CLAIM OF EXEMPTION U/S 54F WAS NOT ALLOWABLE. IT WAS HELD THAT ORAL GIFT SUBMITTED BY ASSESSEE COULD NOT BE DISREGARDED BY REVENUE AUTHORITIES. STAND TAKEN BY REVENUE WAS THAT DOCUMENT OF GIFT OF IMMOVABLE PROPERTY REQUIRED REG ISTRATION IN VIEW OF PROVISIONS OF SECTION 123 OF THE TRANSFER OF PROPER TY ACT R.W. SECTION 17 OF THE REGISTRATION ACT, 1908 IS NOT CORRECT POSITION IN LAW. AS FAR AS GIFT IN QUESTION WAS CONCERNED, REQUIREMENTS OF VALID GIFT AS PER MOHAMMEDAN LAW WERE DULY SATISFIED IN AS MUCH AS THERE HAD BEEN DE CLARATION OF GIFT BY DONOR AND ACCEPTANCE OF GIFT BY DONEE AND DELIVERY OF POS SESSION. DELIVERY IN THIS CASE WOULD ONLY BE CONSTRUCTIVE. GIFT IN QUESTION S ATISFIED ALL REQUIREMENTS OF LAW AND HAD TO BE HELD AS VALID IN LAW. SINCE GIFTS WERE HELD TO BE VALID, ASSESSEE COULD NOT BE REGARDED AS OWNER OF PROPERTY NO.222 AND 228 OF KADIRENAHALLI VILLAGE. HE WOULD BE OWNER OF ONLY ON E PROPERTY VIZ., NO.518, 5TH FLOOR, MALAPRABHA, KORAMANGALA, BANGALORE. THER EFORE, THE RESTRICTION IN THE PROVISO TO SECTION 54F(1) OF THE ACT ARE NOT AT TRACTED IN THE CASE OF ASSESSEE. CIT VS. SMT. S. PARVATHAVARTHINI AMMAL (1996) 219 I TR 661 (KERALA) (HC) IN THIS CASE, ASSESSEE EXECUTED GIFT DEEDS ON 20TH NOV., 1978 GIFTING CERTAIN SHARES IN A COMPANY TO HER GRANDCHILDREN AN D THE TRANSFER FORMS WERE SUBMITTED TO THE COMPANY ON 26TH NOV., 1978 AND ON 1ST DEC., 1978. SHARES WERE, HOWEVER, REGISTERED IN THE DONEES' NAMES ON 2 5TH OCT., 1980 BECAUSE OF SOME DOUBT REGARDING TRANSFER OF SHARES TO MINORS. TRIBUNAL AS WELL AS FIRST APPELLATE AUTHORITY ACCEPTED THE EVIDENCE OF EXECUT ION OF GIFT DEED AS WELL AS ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 8 GENUINENESS THEREOF. ON THESE FACTS, IT WAS HELD TH AT FOR A VALID TRANSFER (GIFT), A REGISTERED DEED IS NOT A MUST. GIFT COULD BE EFFECT IVE IF THE DELIVERY OR THE SUBJECT-MATTER OF THE GIFT IS UNDERSTANDABLE AND TH US, TRANSFER OF SHARES TOOK PLACE ON THE DATE OF EXECUTION OF TRANSFER FORMS. I N THE PRESENT CASE ALSO, SINCE THE POSSESSION OF THE PROPERTY HAS BEEN HANDED OVER TO ANSUL TAK VIDE GIFT DEED DT. 10.04.2012, TRANSFER OF PROPERTY TOOK PLAC E ON SAID DATE EVEN THOUGH THE GIFT DEED WAS REGISTERED AT A LATER DATE. 4. SUPREME COURT IN CASE OF SH. SANJEEV LA ETC. VS. CIT 365 ITR 389 WHICH IS WITH REFERENCE TO THE PROVISION OF SECTION 2(47) OF THE ACT WHERE THE HONBLE COURT HELD AS UNDER:- PROVISIONS OF S 2(47) SHOWS THAT WHEN ANY RIGHT IN RESPECT OF ANY CAPITAL ASSET IS EXTINGUISHED AND THAT RIGHT IS TRA NSFERRED TO SOMEONE, IT WOULD AMOUNT TO TRANSFER OF A CAPITAL ASSETINTENTION OF LEGISLATURE BY VIRTUE OF S 54 IS TO GIVE HIM RELIEF IN MATTER OF PAYMENT OF TAX O N LONG TERM CAPITAL GAIN WHERE A PERSON GETS SOME EXCESS AMOUNT UPON TRANSFE R OF HIS OLD RESIDENTIAL PREMISES AND THEREAFTER PURCHASES OR CONSTRUCTS A N EW PREMISES WITHIN TIME STIPULATED U/S 54, LEGISLATURE DOES NOT WANT HIM TO BE BURDENED WITH TAX ON THE LONG TERM CAPITAL GAIN AND THEREFORE, RELIEF HAS BE EN GIVEN TO HIM IN RESPECT OF PAYING INCOME TAX ON LONG TERM CAPITAL GAINPURPOSI VE INTERPRETATION SHOULD BE GIVEN TO PROVISIONS OF ACT WHILE CONSIDERING A C LAIM FOR EXEMPTION FROM TAXIN INSTANT CASE SALE DEED COULD NOT BE EXECUTED BECAUSE OF REASONS BEYOND CONTROL OF APPELLANTS, I.E. PENDENCY OF LITI GATION AND SAME WAS REGISTERED ONLY ON 24.9.2004 AFTER DISMISSAL OF SUI TIN VIEW OF THE DEFINITION OF TERM TRANSFER, IT CAN BE SAID THAT SOME RIGHT IN RESPECT OF CAPITAL ASSET IN QUESTION HAD BEEN TRANSFERRED IN FAVOUR OF VENDEET HEREFORE, SOME RIGHT WHICH APPELLANTS HAD, IN RESPECT OF CAPITAL ASSET I N QUESTION, HAD BEEN EXTINGUISHED BECAUSE AFTER EXECUTION OF THE AGREEME NT TO SELL IT WAS NOT OPEN TO APPELLANTS TO SELL PROPERTY TO SOMEONE ELSE IN A CCORDANCE WITH LAWA RIGHT IN PERSONAM HAD BEEN CREATED IN FAVOUR OF THE VENDE E, IN WHOSE FAVOUR AGREEMENT TO SELL HAD BEEN EXECUTED AND WHO HAD ALS O PAID RS.15 LAKHS BY WAY OF EARNEST MONEYIN VIEW OF PECULIAR FACTS OF C ASE AND CONSIDERING DEFINITION OF TERM TRANSFER AS DEFINED U/S 2(47), APPELLANTS WERE ENTITLED TO RELIEF U/S 54 IN RESPECT OF LONG TERM CAPITAL GAIN WHICH THEY HAD EARNED IN PURSUANCE OF TRANSFER OF THEIR RESIDENTIAL PROPERTY AND USED FOR PURCHASE OF A NEW ASSET/RESIDENTIAL HOUSE. THEREFORE, ON EXECUTION OF THE GIFT DEED DULY NOTAR ISED COUPLED WITH HANDLING OVER THE POSSESSION OF THE PROPERTY TO THE DONEE, THE ASSESSEE REMAINS OWNER OF ONLY ONE HOUSE PROPERTY ON THE DATE OF SAL E OF THE PLOT AND THEREFORE, IT IS ENTITLED TO DEDUCTION U/S 54F ON PURCHASE OF ANOTHER HOUSE PROPERTY. 5. OTHERWISE ALSO, THE PROVISO TO SEC.54F IS NOT A TTRACTED IN THE PRESENT CASE FOR THE REASON THAT IN ORDER TO ATTRAC T PROVISO TO CLAUSE (A)(I) OF ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 9 SEC. 54F, THE ASSESSEE SHOULD OWN MORE THAN ONE RES IDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGI NAL ASSET. IN ORDER TO ATTRACT THE PROVISO, THE ASSESSEE SHOULD BE THE EXCLUSIVE O WNER OF THE RESIDENTIAL PROPERTY AND THE ENTIRE PROPERTY SHOULD BE RESIDENT IAL PROPERTY. WHERE ASSESSEE IS JOINT OWNER OF A PROPERTY, THE SAME SHOULD NOT B E CONSIDERED FOR THE PURPOSE OF CONSIDERING WHETHER THE ASSESSEE WAS HAVING MORE THAN ONE HOUSE ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET FOR ALLOWING DEDUCTION U/S 54F. FOR THIS RELIANCE IS PLACED ON THE FOLLOWING CASES:- DR. P. K. VASANTI RANGARAJAN VS. CIT (2012) 209 TAX MAN 628/75 DTR 0056 (MAD.)(HC) THE FACTS AND FINDING IS AS UNDER:- THE ASSESSEE WAS AN INDIVIDUAL, A DOCTOR BY PROFESS ION. THE ASSESSEE OWNED A PROPERTY ALONG WITH HER HUSBAND IN EQUAL PR OPORTION. THE SAID PROPERTY CONSISTED OF A CLINIC ON THE GROUND FLOOR AND A RESIDENTIAL PORTION ON THE FIRST FLOOR. THE ASSESSEE AND HER HUSBAND HAD S HOWN 50% SHARE WITH REFERENCE TO THE CLINIC AND THE RESIDENTIAL PORTION IN THEIR RESPECTIVE RETURNS. THE ASSESSEE ENTERED INTO AN AGREEMENT FOR JOINT DE VELOPMENT OF CONSTRUCTIONS OF 8 APARTMENTS IN ANOTHER PROPERTY OWNED BY HER IN DIVIDUALLY. AS PER THE TERMS OF JOINT DEVELOPMENT AGREEMENT, THE ASSESSEE HAD RETAINED FOR HERSELF, UNDIVIDED SHARE TO EXTENT OF 50 PERCENT AND THE BAL ANCE OF 50 PERCENT WAS TO BE CONVEYED BY THE ASSESSEE IN FAVOR OF THE DEVELOP ER. THE CONSIDERATION FOR PARTING WITH 50 PERCENT OF THE UNDIVIDED SHARE CONS ISTED OF FOUR FLATS AS WELL AS THE SUM OF RS. 10 LAKHS PAYABLE BY THE DEVELOPER . IN THE RETURNS FILED, THE ASSESSEE CLAIMED EXEMPTIO N OF SEC. 54F. THE SAID CLAIM WAS REJECTED. THE COMMISSIONER (APPEALS) AFFIRMED THE ORDER OF ASSESSING OFFICER. ON APPEAL, THE TRIBUNAL AFFIRMED THE ORDER OF COMMISSIONER (APPEALS). ON APPEAL TO THE HIGH COURT IT WAS HELD- A READING OF THE PROVISIONS CONTAINED IN SEC. 54F ( 1), AS IT STOOD AT THE RELEVANT POINT OF TIME, SHOWS THAT EXEMPTION FROM P AYMENT OF TAX ON THE CAPITAL GAINS ARISING ON THE TRANSFER OF ANY LONG-T ERM CAPITAL ASSET NOT BEING A RESIDENTIAL HOUSE IS AVAILABLE TO AN ASSESSEE BEING A HINDU UNDIVIDED FAMILY OR AN INDIVIDUAL, IF THE LONG-TERM CAPITAL GAIN IS INVESTED IN PURCHASING A RESIDENTIAL HOUSE OR CONSTRUCTING THE RESIDENTIAL H OUSE WITHIN THE TIME STIPULATED THEREIN. PROVISION TO SEC. 54 F (1) STAT ES THAT THE EXEMPTION CONTEMPLATED UNDER SEC.54F(1) WOULD NOT BE AVAILABL E WHERE AN ASSESSEE OWNS A RESIDENTIAL HOUSE AS ON THE DATE OF THE TRAN SFER AND THAT THE INCOME FROM THE RESIDENTIAL HOUSE IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 10 THE FACTS REVEAL THAT AS JOINT OWNERS OF THE PROPER TY, THE ASSESSEE AND HER HUSBAND HAD SHOWN 50 PERCENT SHARE WITH REFEREN CE TO THE CLINIC AND THE RESIDENTIAL PORTION IN THEIR RESPECTIVE RETURNS. TH US, IT IS CLEAR THAT AS ON THE DATE OF THE TRANSFER, THE ASSESSEE DID NOT OWN A RE SIDENTIAL HOUSE IN HER NAME ONLY, THE INCOME FROM WHICH WAS CHARGEABLE UNDER TH E HEAD INCOME FROM HOUSE PROPERTY, TO BRING INTO OPERATION, THE PROVI SO TO SEC.54F OF THE IT ACT. THE REJECTION OF THE CLAIM FOR EXEMPTION WOULD ARIS E IF ONLY THE PROPERTY STANDS IN THE NAME OF THE ASSESSEE, NAMELY, INDIVID UAL OR HUF. GIVEN THE FACT THAT THE ASSESSEE HAD NOT OWNED THE PROPERTY IN HER NAME ONLY TO THE EXCLUSION OF ANYBODY ELSE INCLUDING THE HUSBAND, BUT IN JOINT NAME WITH HER HUSBAND, UNLESS AND UNTIL THERE ARE MATERIALS TO SHOW THAT T HE ASSESSEE IS THE EXCLUSIVE OWNER OF THE RESIDENTIAL PROPERTY, THE BAR OF THE P ROVISO CANNOT BE APPLIED TO THE FACTS HEREIN. APART FROM THAT, 50 PERCENT OWNERSHIP IS WITH REFE RENCE TO THE CLINIC SITUATED IN THE GROUND FLOOR. AS SUCH, THE E NTIRE PROPERTY IS NOT AN EXCLUSIVE RESIDENTIAL PROPERTY. HENCE, THE JOINT OW NERSHIP OF THE PROPERTY WOULD NOT STAND IN THE WAY OF CLAIMING EXEMPTION UN DER SEC. 54F. AS FAR AS THE PRESENT CASE IS CONCERNED, THE PURCHA SE OF THE PROPERTY WAS BY THE INDIVIDUAL IN HER OWN NAME AND THE PROPE RTY HELD BY HER AS ON THE DATE OF TRANSFER, STOOD IN THE JOINT NAMES OF THE A SSESSEE AND HER HUSBAND. A READING OF SEC.54F OF CLEARLY POINTS OUT THAT THE H OLDING OF THE RESIDENTIAL HOUSE AS ON THE DATE OF TRANSFER HAS RELEVANCE OF T HE STATUS OF THE ASSESSEE AS AN INDIVIDUAL OR HUF. ON THE ADMITTED FACT THAT THE ASSESSEE HEREIN, AS AN INDIVIDUAL, DOES NOT ANY PROPERTY IN THE STATUS OF AN INDIVIDUAL AS ON THE DATE OF TRANSFER, THE ASSESSEES APPEAL IS ALLOWED. CIT VS. KAPIL NAGPAL (2016) 381 ITR 351 (DEL.) (HC) ASSESSEE FILED ITS RETURN CLAIMING DEDUCTION U/S 54 F. AO DENIED EXEMPTION ON GROUND THAT ASSESSEE ALREADY OWNED TWO RESIDENTIAL PROPERTIES. IT WAS HELD THAT AT TIME OF SALE OF ASSET, ASSESSEE WA S ONLY A CO-OWNER HOLDING 15% SHARE IN ONE RESIDENTIAL PROPERTY APART FROM OW ING ANOTHER RESIDENTIAL HOUSE. FURTHER, SAID HOUSE WAS PURCHASED WITHIN TIM E ALLOWED U/S 54F. THUS, ASSESSEE DULY SATISFIED CONDITIONS PRESCRIBED U/S 5 4F AND HIS CLAIM OF DEDUCTION IS TO BE ALLOWED. 6. THE LD. CIT(A) HAS WRONGLY HELD THAT SECTION 2(4 7)(V) IS NOT APPLICABLE AS IN CASE OF GIFT THERE IS NO CONSIDERA TION. THIS OBSERVATION IS ERRONEOUS AS SECTION 2(47)(V) NOWHERE PROVIDES SO. IN FACT IN CASE OF A GIFT THERE IS A TRANSFER U/S 2(47) AND THEREFORE, FOR TH E PURPOSE OF CAPITAL GAIN TAXATION U/S 47(III), IT IS NOT REGARDED AS TRANSFE R. FURTHER, THE OBSERVATION OF THE LD. CIT(A) THAT IN THE ABSENCE OF REGISTERED GI FT DEED, THE ASSESSEE WAS THE OWNER OF THE GIFTED PROPERTY FOR ALL PRACTICAL PURP OSE AS THE GIFT DEED DT. 10.04.2012 IS NOT ENFORCEABLE IN THE COURT OF LAW I S ALSO WITHOUT ANY BASIS. AGAIN THE DECISION OF KARNATAKA HIGH COURT IN CASE OF CIT VS. M.J. SIWANI ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 11 HOLDING THAT EVEN IF A RESIDENTIAL HOUSE IS SHARED BY THE ASSESSEE, HE WOULD BE THE OWNER OF THE UNDIVIDED HOUSE TILL IT WAS PARTIT IONED IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE IN AS MUCH AS THIS DECISI ON IS ON DIFFERENT FACTS AND HAS NOT TAKEN INTO CONSIDERATION THE DECISION OF MA DRAS HIGH COURT IN 209 TAXMAN 318 AND DELHI HIGH COURT IN 381 ITR 351. THE REFORE, EVEN IN CASE THERE ARE TWO VIEWS, THE VIEW IN FAVOUR OF THE ASSE SSEE SHOULD BE ADOPTED AS HELD BY SUPREME COURT IN CASE OF CIT VS. VATIKA TOWNSHIP PVT. LTD. 109 DTR 33 . IN VIEW OF ABOVE, DISALLOWANCE CONFIRMED BY THE LD. CIT(A) BE DIRECTED TO BE DELETED. 2.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LD. CIT(A). 2.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE FILED HIS RETURN ON 01.10.2013 DECLARING INCOME OF RS.5,83,23 0/-. DURING THE YEAR HE SOLD HIS PLOT NO.C-334 & C-335 SITUATED AT VILLA GE MACHEDA, TEHSIL- AJMER, JAIPUR ON 25.05.2012 FOR SALES CONSIDERATION OF RS.21,93,657/-. AFTER CLAIMING INDEXED COST AT RS.1,25,612/- AND DE DUCTION U/S 54F AT RS.17,07,294/- (AGAINST INVESTMENT OF RS.18,10,994/ - ON PURCHASE OF RESIDENTIAL HOUSE AT 301, DEVI NAGAR, NEW SANGANER ROAD, JAIPUR), HE DECLARED LONG TERM CAPITAL GAIN AT RS.3,60,751/-. T HE AO OBSERVED THAT AT THE TIME OF SALE OF PLOT, ASSESSEE WAS HAVING TWO R ESIDENTIAL HOUSE (1) HOUSE NO.358, MANGAL MARG, BRAHMPURI, JAIPUR, (2) H OUSE NO.3550, BARIYON KI GALI, HANDIPURA, CHOKDI RAM CHANDRAJI, J AIPUR AND THUS, ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 12 DEDUCTION U/S 54F IS NOT ALLOWABLE TO ASSESSEE. TH E ASSESSEE EXPLAINED THAT OUT OF THE TWO HOUSES, HOUSE NO.3550, BARIYON KI GALI, HANDIPURA, JAIPUR WAS GIFTED TO HIS SON ANSUL TAK VIDE GIFT DE ED DT. 10.04.2012 WHICH IS DULY NOTARISED AND EXECUTED ON STAMP PAPER . THE POSSESSION OF THE PROPERTY HAS BEEN HANDED OVER TO THE DONEE AND HE HAS ACCEPTED THE GIFTED HOUSE PROPERTY. THE AO, HOWEVER, DISALLOWED THE DEDUCTION U/S 54F BY HOLDING THAT GIFT DEED IS NOT REGISTERED AND EVEN DOES NOT BEAR THE NOTARY REGISTRATION NO. THIS SHOWS THAT THE CLAIM O F THE ASSESSEE IS AFTER THOUGHT AND THE GIFT DEED HAS BEEN PREPARED ON BACK DATE. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT THE HOUSE AT 35 50, BARIYON KI GALI, HANDIPURA, JAIPUR IS JOINTLY OWNED BY THE ASSESSEE AND HIS SON, ANSHUL. THE ASSESSEE GIFTED HIS SHARE (1/2) IN THE PROPERTY TO HIS SON, ANSHUL VIDE NOTARIZED GIFT DEED DATED 10.04.2012 (PB 22-26) WHO HAS INCLUDED THIS IN HIS BOOKS OF ACCOUNTS (PB27) . THE ASSESSEE ALSO SUBMITTED A REGISTERED GIFT DEED DATED 14.03.2016 (PB 28-37) . THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF CLAIM BY GIVING THE FOLLOWING REASO NS: (I) SECTION 53A OF THE TRANSFER OF PROPERTY ACT REQ UIRES PAYMENT OF PART OF CONSIDERATION OF A PROPERTY WHEREAS IN T HE CASE OF GIFT, THERE CANNOT BE ANY CONSIDERATION AND THUS, SECTION 2(47)(V) OF THE ACT IS NOT APPLICABLE IN THE INSTANT CASE. ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 13 (II) IF A VALID GIFT OF IMMOVABLE PROPERTY WAS MADE ON 10.04.2012, WHAT WAS THE NEED OF EXECUTING A FRESH GIFT DEED ON 14.03.2016. (III) IT IS A TRITE LAW THAT ENTRIES IN THE BOOKS O F ACCOUNTS DO NOT DETERMINE THE NATURE OF TRANSACTION AND THE SUBSTAN CE SHOULD PREVAIL OVER ITS FORM. (IV) IN ABSENCE OF A REGISTERED GIFT DEED, THE APPE LLANT WAS THE OWNER OF THE GIFTED PROPERTY FOR ALL PRACTICAL PURP OSES. THE GIFT DEED DATED 10.04.2012 IS NOT ENFORCEABLE IN A COURT OF LAW. (V) THE OTHER CONTENTION OF THE ASSESSEE THAT HE DO ES NOT HAVE MORE THAN ONE RESIDENTIAL HOUSE AS IT WAS A JOINT PROPER TY HAS NO WEIGHT AND DESERVES TO BE REJECTED AS HELD BY THE HONBLE HIGH COURT OF KARNATAKA IN CASE OF CIT VS. M.J. SIWANI (2014) 46 TAXMANN.COM 170 AN D THE SLP FILED AGAINST THIS ORDER WAS DISMISSED BY THE HONBLE SUPREME COU RT (2015) 53 TAXMANN.COM 318. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE CASE LAWS RELIED ON BY THE LD. CIT(A), WE NOTED THAT THE LD.A R OF THE ASSESSEE COULD NOT EXACTLY CONTROVERT THE FINDINGS OF THE LD. CIT( A) WHICH HAS BEEN EXPLICITLY DEALT WITH ON BOTH THE ISSUES IN QUESTIO N. IN THIS VIEW OF THE MATTER, WE FIND NO REASON TO INTERFERE WITH THE ORD ER OF THE LD. CIT(A). THUS GROUND NO. 1 AND 1.1 OF THE ASSESSEE ARE DISM ISSED. 3.1 APROPOS GROUND NO. 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) ARE AS UNDER:- 3.2.1 DETERMINATION (I) THE APPELLANT OWNED A SHOP ON THE GROUND FLOOR OF A MAJOR SHOPPING CENTRE AT GANPATI TOWER, JAIPUR. SIN CE THE SHOP WAS VACANT, THUS THE APPELLANT HAS NOT DECLARE D ANY RENTAL INCOME FROM THIS SHOP. THE AO HAS ESTIMATED THE ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 14 ANNUAL VALUE OF SUCH SHOP AT RS. 1,20,000/- AND AFT ER ALLOWING STATUTORY DEDUCTION, ASSESSED THE INCOME A T RS. 84,000/-. (II) DURING THE APPELLATE PROCEEDINGS, IT WAS SUBMI TTED BY THE APPELLANT THAT AS PER SECTION 23 OF THE ACT, AN NUAL VALUE IS DEEMED TO BE THE SUM FOR WHICH PROPERTY MIGHT RE ASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR. THE AO HAS NO BASIS FOR ESTIMATING THE LETTING VALUE OF THE PROPERTY AT RS. 1,20,000/-. IT WAS SUBMITTED THAT THE ANNUAL LETTING VALUE OF T HE SHOP SHOULD BE TAKEN AT RS. 60,000/-. (III) I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLANT AND THE ASSESSMENT ORDER. IT IS NOTICED THAT THE AP PELLANT HAS NOT PROVIDED ANY BASIS FOR ESTIMATING THE ALV OF TH E SHOP LOCATED AT THE GROUND FLOOR OF PRESTIGIOUS GANAPATI PLAZA AT RS. 60,000/-. IN FACT, DURING THE ASSESSMENT PROCEE DING, THE AO HAS ISSUED SHOW CAUSE NOTICE TO THE APPELLANT F OR TAKING THE ALV AT RS. 1,20,000/- WHICH WAS NOT DISPUTED BY THE APPELLANT BEFORE THE AO. THEREFORE, LOOKING TO THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, I DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE AO AS RECORD ED IN THE ASSESSMENT ORDER. IT IS THEREFORE, HELD THAT THE AO WAS JUSTIFIED IN TAKING THE VALUE OF THE PROPERTY AT RS . 1,20,000/-. HENCE, THIS GROUND OF APPEAL IS HEREBY REJECTED. 3.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 84,000/- MADE BY THE AO BY ESTIMATING THE RENTAL INCOME RECEIVABL E FROM SHOP IN GANPATI PLAZA AT RS. 1,20,000/- INSTEAD OF RS. 60,0 00/- AS ESTIMATED BY THE AO FOR WHICH THE LD.AR OF THE ASSESSEE FILED THE FO LLOWING WRITTEN SUBMISSION. ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 15 IT IS SUBMITTED THAT SIZE OF THE SHOP IS ONLY 200 SQ. FT. ITS ANNUAL VALUE IS NOT MORE THAN RS.60,000/- THE AO WI THOUT ANY BASIS HAS ASSUMED IT AT RS.1,20,000/-. AS PER SECTION 23 OF THE ACT, ANNUAL VALUE IS DEEMED TO BE THE SUM FOR WHICH PROPERTY MI GHT REASONABLY BE EXPECTED TO BE LET FROM YEAR TO YEAR. THE LOWER AUT HORITIES HAVE ESTIMATED THE ANNUAL VALUE AT RS. 1,20,000/- WITHOU T ANY BASIS. 3.3 ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORD ER OF THE LD. CIT(A). 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE OWNED A SHOP AT GANPATI TOWER, JAIPUR. THE SHOP WAS LYING V ACANT AND THEREFORE, ASSESSEE HAS NOT DECLARED ANY RENTAL INCOME FROM TH IS SHOP. THE AO ESTIMATED THE ANNUAL VALUE OF SUCH SHOP AT RS.1,20 ,000/- AND AFTER ALLOWING THE STATUTORY DEDUCTION, ASSESSED THE INCO ME AT RS.1,20,000/-. THE LD. CIT(A) CONFIRMED THE ADDITION BY HOLDING TH AT THE ASSESSEE HAS NEITHER PROVIDED ANY BASIS FOR ESTIMATING THE ALV OF THE SHOP AT RS. 60,000/- NOR HAS DISPUTED THE SHOW CAUSE NOTICE ISS UED DURING THE ASSESSMENT PROCEEDINGS. DURING THE COURSE OF HEARI NG BEFORE THE BENCH , THE LD.AR OF THE ASSESSEE CONTENDED THAT THE SIZE O F THE SHOP IS ONLY AT 200 SQ. FT AND ITS ANNUAL VALUE IS NOT MORE THAN R S. 60,000/-. HOWEVER, THE LOWER AUTHORITIES HAVE ESTIMATED THE ANNUAL VAL UE AT RS. 1,20,000/- WITHOUT ANY BASIS. LOOKING INTO THE FACTS, CIRCUMST ANCES OF THE CASE, IT ITA NO.695/JP/2017 SHRI ANIL KUMAR TAK VS ITO, WARD- 1(3), JAIPUR 16 WILL BE IN THE INTEREST OF EQUITY AND JUSTICE TO RE STORE THE ISSUE TO THE FILE OF THE AO TO DECIDE IT AFRESH TAKING INTO CONSIDERA TION THE PREVAILING RENT IN THE MARKET OF THE SIMILAR SIZE OF SHOP AT GANAPA TI PLAZA AND ALLOW THE RELIEF TO THE ASSESSEE ACCORDINGLY. THUS THE GROUND NO. 2 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31-05-2018. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31/05/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ANIL KUMAR TAK, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 1(3), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 695/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR