Anant Janardhan Thakur, Panaji V. Commissioner of Income tax, Panaji

ITA 70/PAN/2013

• Counselvise Citation: 7024114 RSA 2013
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONAL L SONKAVDE
• Assessee Lawyers: D E ROBINSON
• Keywords: Salary income
• Section: 54; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P. K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 70 /PNJ/2013 (ASSESSMENT Y EARS - 2008 - 09 ) SRI ANANT JANARDHAN THAKUR HOUSE NO. 725, PLOT NO. E - 1, LA CAMPALA , MIRAMAR, PANAJI GOA. PAN:ABCPT5596M (APPELLANT) VS. THE COMMISSIONER OF INCOME TAX, PANAJI, GOA RANGE, AAYAKAR BHAWAN, PATTO, PANJIM - GOA. (RESPONDENT) ITA NO. 71 /PNJ/2013 (ASSESSMENT YEARS - 2008 - 09) SMT. POOJA ANANT THAKUR HOUSE NO. 725, PLOT NO. E - 1, LA CAMPALA, MIRAMAR, PANAJI GOA. PAN:ABMPT2689R (APPELLANT) VS. THE COMMISSIONER OF INCOME TAX, PANAJI, GOA RANGE, AAYAKAR BHAWAN, PATTO, PANJIM - GOA. (RESPONDENT) AP PELLANT BY : SRI D.E. ROBINSON, ADV. RESPONDENT BY : SMT. SONAL L. SONKAVDE, DR DATE OF HEARING : 30/12 /2013 DATE O F ORDER : 30/12 /2013 O R D E R PER: D.T.GARASIA (JM) BOTH THESE APPEALS ARE FILED BY THE ASSESSEE S AGAINST THE ORDER OF THE CIT(A) - PANAJI ORDER DATED 13.02.2013 FOR THE A.Y. 2008 - 09. 2. THE FOLLOWING COMMON GROUNDS ARE RAISED IN THESE APPEALS. 2 ITA NOS. 70 & 71/ PNJ/ 2013 (A.Y.2008 - 09) MR. ANANT JANARDAN THAKUR & MRS.POOJA ANNAT THAKUR VS. THE COMMISSIONER O F INCOME TAX, PANAJI. 1. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN INSTITUTING PROCEEDINGS UNDER SECTION 263 OF THE ACT BY NOT ISSUING SEPARATE NOTICE TO THE APPELLANT AS REQUIRED UNDER THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN SETTING ASIDE THE ASSESSMEN T ORDER OF THE ASSESSING OFFICER, WHEREIN NEITHER IS THERE AN ERROR NOR ANY PREJUDICE CAUSED TO THE REVENUE, UNDER SECTION 263. 3. WITHOUT PREJUDICE TO GROUND NO. 2, THE LEARNED COMMISSIONER ERRED IN SETTING ASIDE THE ASSESSMENT ORDER ON THE ISSUE DEALT WITH, WHEREIN TWO DIFFERENT VIEW OF THE PROVISION OF LAW IS POSSIBLE. 3. THE FIRST GROUND IS NOT PRESSED, THEREFORE , DISPOSED. 4. THE GROUND NO S . 2 AND 3 ARE COMMON, THEREFORE, DISPOSED BY THIS COMMON ORDER. 4.1 . THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNER IN M/S. B.N. THAKUR AUTO SERVICE AND HIS SPOUSE SMT. POOJA ANANT THAKUR IS PROVIDING TUITIONS TO HIGHER SECONDARY STUDENTS UNDER THE NAME AND STYLE M/S INFINITY LEARNING. THE ASSESSEE HAS DECLARED THE I NCOME CLAIMING APPORTIONMENT OF INCOME U/S. 5A OF THE ACT, 1961. APART FROM THESE, DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2008 - 09 ASSESSEE HAS SHOWN RS.69,49,733/ - RECEIVED, BEING 3.64% SHARE IN SALE OF FAMILY PROPERTY. THE ASSESSEE HAS CLAIMED CAPITAL GAIN - EXEMPTION U/S. 54EC BY INVESTING RS. 50 LAKHS IN REC BONDS AND REMAINING U/S. 54F(4) BY DEPOSITING IN THE BANK UNDER THE CAPITAL GAIN SCHEME IN RESPECT OF HIS AMOUNT OF SHARE RECEIVED FROM SALE OF FAMILY PROPERTY. THE ASSESSING OFFICER HAS VERI FIED T HIS CLAIM AND ALLOWED. THE COMMISSIONER U/S. 263 UNDER THE REVISION WAS OF THE VIEW THAT THE ASSESSING OFFICER HAS WRONGLY ALLOWED DEDUCTION AS PER PROVISIONS OF SECTION 54 EC IN ASMUCH AS RS.1 CRORE HAS BEEN ALLOWED U/S. 54EC IN THE CASE OF THE ABOVE ASSESSEE AND THUS ALLOWING EXCESS CLAIM OF RS. 50,00,000/ - . IN VIEW OF THE ABOVE , THE COMMISSIONER WAS OF THE VIEW THAT RS. 50,00,000/ - , WHICH WAS EXCESS DEDUCTION , WAS ALLOWED UNDER SECTIO N 54EC . TH EREFORE, THE COMMISSIONER AFTER HEARING THE ASSESSEE HAS 3 ITA NOS. 70 & 71/ PNJ/ 2013 (A.Y.2008 - 09) MR. ANANT JANARDAN THAKUR & MRS.POOJA ANNAT THAKUR VS. THE COMMISSIONER O F INCOME TAX, PANAJI. DISALLOWED THE SAME DIRECTING THE ASSESSING OFFICER TO PASS FRESH ORDER AFTER DISALLOWING THE CLAIM OF DEDUCTION U/S 54EC. 4.2. THE LEARNED AR SUBMITTED THAT AS PER THE PORTUGUESE CIVIL CODE THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER THE SECTION SEPARATELY FROM EACH HEAD. THE CIRCULAR HAS ALSO BE EN ISSUED BY THE BOARD VIDE LETTER NO. 1/36/68 - ED, DATED 12.12.1996, WHEREIN IT WAS STATED THAT A MARRIED INDIVIDUAL IN GOA, DAMAN AND DIU, WHO IS GOVERNED BY THE SYSTEM OF COMMUNITY OF PROPERTY AND WHO HAS NOT ENTERED INTO AN ANTE - NUPTIAL AGREEMENT OF THE NATURE REFERRED TO THEREIN, SHOULD BE ASSESSED SEPARATELY IN RESPECT OF HIS OR HER SHARE FOR THE PURPOSE OF WEALTH TAX ACT. THE BOARD HAS FURTHER ADVISED THAT THE EXEMPTION UNDER SECTION 5 IS ADMISSIBLE TO EACH ONE OF THE SPOUSE AS INDIVIDUALS. THE AO HAS DRAWN OUR ATTENTION TO THE CIRCULAR NO. 684 DATED 10.6.1994 AND CIRCULAR ISSUED BY BOARD THAT SECTION 5A PROVIDES THAT INCOME FROM ALL TH E SOURCES EXCEPT FROM SALARY SHOULD BE APPORTIONED BETWEEN EQUALLY HUSBAND AND WIFE AND SUCH INCOME SHALL NOT BE ASSESSED AS INCOME OF THE COMMUNITY OF PROPERTY. EVEN THE INCOME FROM PROFESSION WILL BE APPORTIONED EQUALLY BETWEEN THE HUSBAND AND THE WIFE. THE TOTAL INCOME SO APPORTIONED SHALL BE INCLUDED SEPARATELY IN THE TOTAL INCOME OF THE HUSBAND AND OF THE WIFE AND THE REMAINING PROVISIONS OF THE INCOME TAX ACT SHALL APPLY ACCORDINGLY AND THEY ARE HUSBAND AND WIFE CLAIM ING DEDUCTION UNDER THE PROVISIONS OF CHAPTER VI - A AND REBATE UNDER CHAPTER VIII SEPARATELY. 5. THE LEARNED DR RELIED UPON THE ORDER OF THE COMMISSIONER. 6. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. S ECTION 5A READ AS UNDER: - 5.A (1) WHERE THE HUSBAND AND WIFE ARE GOVE RNED BY THE SYSTEM OF COMMUNITY OF PROPERTY (KNOWN UNDER THE PORTUGUESE CIVIL CODE OF 1860 AS COMMUNIAO DOS BENS) IN FORCE IN THE STATE OF GOA AND IN THE UNION TERRITORIES OF DADRA AND NAGAR HAVELI AND DAMAN AND DIU, THE INCOME OF THE HUSBAND AND OF THE WIFE UNDER ANY HEAD OF INCOME SHALL NOT BE ASSESSED AS THAT OF SUCH COMMUNITY OF 4 ITA NOS. 70 & 71/ PNJ/ 2013 (A.Y.2008 - 09) MR. ANANT JANARDAN THAKUR & MRS.POOJA ANNAT THAKUR VS. THE COMMISSIONER O F INCOME TAX, PANAJI. PROPERTY (WHETHER TREATED AS AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUAL), BUT SUCH INCOME OF THE HUSBAND AND OF THE WIFE UNDER EACH HEAD OF INCOME (OTHER THAN UNDER THE HEAD SALARIES) SHALL BE APPORTIONED EQUALLY BETWEEN THE HUSBAND AND THE WIFE AND THE INCOME SO APP ORTIONE D SHALL BE INCLUDED SEPARATELY IN THE TOTAL INCOME OF THE HUSBAND AND OF THE WIFE RESPECTIVELY, AND THE REMAINING PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY. (2) WHERE THE HUSBAND OR, AS THE CASE MAY BE, THE WIFE GOVERNED BY THE AFORESAID SYSTEM OF C OMMUNITY OF PROPERTY HAS ANY INCOME UNDER THE HEAD SALARIES, SUCH INCOME SHALL BE INCLUDED IN THE TOTAL INCOME OF THE SPO USE WHO HAS ACTUALLY EARNED IT. THE ABOVE SECTION 5A STAT ES THAT INCOME FROM ALL SOURCES, EXCEPT FROM SALARY, SHOULD BE APPORTIONED EQUALLY BETWEEN THE HUSBAND AND THE WIFE AND BOTH HUSBAND AND WIFE ARE ENTITLED FOR DEDUCTION SEPARATELY UNDER THE VARIOUS PROVISIONS OF THE INCOME TAX ACT. THE BOARD HAS CLARIFIED THI S PROPOSITION IN CIRCULAR NO. 68 4 DATED 10.06. 2004 , WHICH R EAD AS UNDER. SECTION 5A PROVIDED THAT INCOME FROM ALL SOURCES, EXCEPT FROM SALARY, SHOULD BE APPORTIONED EQUALLY BETWEEN THE HUSBAND AND WIFE AND SUCH INCOME SHALL NOT BE ASSESSED AS INCOME OF THE COMMUNITY OF PROPERTY (WHETHER TREATED AS AN ASSOCIATI ON OF PERSONS OR AS A BODY OF INDIVIDUALS). EVEN THE INCOME FROM PROFESSION WILL BE APPORTIONED EQUALLY BETWEEN THE HUSBAND AND THE WIFE. THE INCOME SO APPORTIONED WILL BE INCLUDED SEPARATELY IN THE TOTAL INCOME OF THE HUSBAND AND OF THE WIFE AND THE REMAI NING PROVISIONS OF THE INCOME - TAX ACT SHALL APPLY ACCORDINGLY, SALARY INCOME WILL, HOWEVER, CONTINUE TO BE ASSESSED IN THE HANDS OF THE SPOUSE WHO HAS ACTUALLY EARNED IT. REFERENCE TO THE ASSOCIATION OF PERSONS CONSISTING OF THE HUSBAND AND WIFE GOVERNED B Y THE SYSTEM OF COMMUNITY OF PROPERTY IN FORCE IN GOA AND OTHER PLACES IN THE PROVISIONS OF THE INCOME - TAX ACT HAS BEEN DELETED SO THAT THE HUSBAND AND WIFE CAN CLAIM DEDUCTION UNDER THE PROVISIONS OF CHAPTER VI - A AND REBATE UNDER CHAPTER VIII SEPARATELY. IT IS CLEAR THAT THE HUSBAND AND THE WIFE CAN CLAIM DED UCTION UNDER THE PROVISIONS OF CHAPTER VI - A AND REBATE UNDER CHAPTER VIII SEPARATELY. WE FIND THAT SECTION 54EC SAYS TH AT WHEN THE ASSESSEE TRANSFERS THE PROPERTY AND INVEST S THE WHOLE OR ANY PART OF THE CAPITAL GAIN IN LONG TERM SPECIFIED ASSETS , THE ASSESSEE I S ENTITLED FOR DEDUCTION U/S. 54 EC OF THE ACT. WE FIND THAT SECTION 54EC TALKS ABOUT THE ASSESSEE AND DOES NOT TALK ABOUT THE HUSBAND AND THE WIFE. 5 ITA NOS. 70 & 71/ PNJ/ 2013 (A.Y.2008 - 09) MR. ANANT JANARDAN THAKUR & MRS.POOJA ANNAT THAKUR VS. THE COMMISSIONER O F INCOME TAX, PANAJI. AS PER SECTION 5A OF THE INCOME TAX ACT THE HUSBAND AND WIFE ARE SEPARATELY ASSESSED . T HEREFORE, THEY ARE SEPARATE ASSESSEE S AND WHEN THEY ARE SEPARATE ASSESSEE S, THEY ARE ENTITLED FOR DEDUCTION SEPA RATELY. IN THE RESULT, WE ALLOW THE APPEAL OF THE ASSESSEE S . 7 . IN THE RESU LT, THE BOTH APPEA LS ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COUR T ON 30.12. 2013 . SD/ - SD/ - ( P.K. BANSAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 30.12.2013 P.S. - *PK* COPY TO : ( 1 ) APPELLANT ( 2 ) RESPONDENT ( 3 ) CIT CONCERNED ( 4 ) CIT ( 5 ) D.R ( 6 ) GUARD FILE TRUE COPY, BY ORDER SR. PRIVATE SECRETARY, ITAT, PANAJI, GOA 6 ITA NOS. 70 & 71/ PNJ/ 2013 (A.Y.2008 - 09) MR. ANANT JANARDAN THAKUR & MRS.POOJA ANNAT THAKUR VS. THE COMMISSIONER O F INCOME TAX, PANAJI.