Deputy Commissioner of Income-tax, V. Milind Shivaji Dedge, Pune

ITA 721/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9387 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 15-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Section: 143(3); 54B; 54F; 54; 2

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.721/PUN/2016 / ASSESSMENT YEAR : 2011-12 DY. COMMISSIONER OF INCOME TAX, CIRCLE 6, PUNE. . / APPELLANT V/S MILIND SHIVAJI DEDGE, AT AND POST KHADAKWASLA, TALUKA HAVELI, PUNE 411 041. PAN : AJZPD1342C. . / RESPONDENT ASSESSEE BY : NONE. REVENUE BY : SHRI VIVEK AGGARWAL. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS) PUNE -5, PUNE DT.13.01.2016 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM CAPITAL GAI NS AND OTHER SOURCES. ASSESSEE FILED HIS RETURN OF INCOME FO R A.Y. 2011-12 ON 31.10.2012 DECLARING TOTAL INCOME OF RS.6,82,632/ -. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER ASSE SSMENT WAS / DATE OF HEARING : 23.01.2018 / DATE OF PRONOUNCEMENT: 07.02.2018 2 FRAMED U/S 143(3) OF THE ACT VIDE ORDER DT.24.03.2014 AND T HE TOTAL INCOME WAS DETERMINED AT RS.93,46,986/-. AGGRIEVED BY TH E ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.13.01.2016 (IN APPEAL NO.PN/CIT(A)-5,/ITO WD.1(3), PUNE/308/014-15) DECIDED THE ISSUE IN FAVOUR OF THE ASSE SSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPE AL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) IS CORRECT IN ALLOWING THE DEDUC TION U/S 54B OF THE ACT AS CLAIMED BY THE ASSESSEE. 2. FOR THIS AND SUCH OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LD.CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAS EARNED LONG TERM CAPITAL GAINS AND CLAIMED EXEMPTION U/S 54B AND 54F OF THE ACT. THE ASSESSEE WAS ASKED TO JUSTIFY THE CLAIM OF EXEMPTION. ASSESSEE INTER-ALIA SUBMITTED THAT ASSE SSEE HAD EXECUTED JOINT DEVELOPMENT AGREEMENT ON 29.12.2010 WITH NANDED CITY DEVELOPMENT AND CONSTRUCTION COMPANY LIMITED, PUNE FO R TRANSFER OF AGRICULTURAL LAND SITUATED AT VILLAGE NANDED, TA LUKA HAVELI, DISTRICT PUNE. IT WAS SUBMITTED THAT ASSESSEE WAS ENTITLED 30% OF THE SALE CONSIDERATION ON THE SALE OF BUILT-UP AREA WHILE 60% IN CASE OF SALE OF LAY OUT PLOT. IT WAS FURTHER SUBMITTED T HAT THE EXPECTED COMPLETION OF TOWNSHIP PROJECT WAS OVER TO 8 T O 10 YEARS AND ONLY AT THE END OF THE PROJECT THE TOTAL CONSIDER ATION COULD BE PRECISELY WORKED OUT AND THEREFORE SUBMITTED THAT THE PROVISIONS OF CAPITAL GAIN DO NOT APPLY. WITHOUT PREJUDICE TO THE NON-APPLICABILITY OF CAPITAL GAINS, IT WAS SUBMITTED THAT ASSESSEE HAS PURCH ASED 3 ANOTHER AGRICULTURAL LAND AND HAD CLAIMED EXEMPTION U/S 5 4B AND 54F OF THE ACT AND THEREFORE NO CAPITAL GAIN WAS LEVIABLE . THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO T HE AO. AO NOTICED THAT THE TRANSFER OF THE LAND HAS TAKEN PLACE ON 29.12.2010 AND THE NEW ASSETS WERE PURCHASED ON 19.10.2012 AND 19.12.2012 AND THE VALUE OF THE TOTAL DEDUCTION CLAIMED ON ACCOUNT O F NEW PURCHASES OF ASSETS WAS RS.96,24,486/-. AO WAS OF THE V IEW THAT AS PER THE PROVISIONS OF SEC.54B(2) OF THE ACT, THE UNUTILIZE D AMOUNT OF CAPITAL GAINS HAD TO BE DEPOSITED IN CAPITAL GAIN ACCOUNT SCHEME. IN THE CASE OF THE ASSESSEE, AO NOTICED THAT MONEY HAS NOT BEEN ROUTED THROUGH CAPITAL GAIN ACCOUNT NOR HAS ASSESSEE P ROVIDED ANY PROOF OF SUCH DEPOSITS. HE THEREFORE CONCLUDED THAT AS SESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 54B OF THE ACT AND ACCORDINGLY D ENIED THE CLAIM OF DEDUCTION OF RS.86,66,354/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER : 3.2 I HAVE PERUSED THE MATERIAL ON RECORD AND THE SUBMISSIONS MADE BY THE APPELLANT CAREFULLY. IT IS SEEN THAT THE AO DID NOT ALLOW THE DEDUCTION U/S.54B FOR THE REASON, THAT THE APPELLANT FILED RETURN U/S.139 (4) OF THE ACT AND NOT U/S.139(1). THOUGH THE APPELLANT FULFILLED THE COND ITION U/S. 54B(1), ACCORDINGLY TO THE AO, THE APPELLANT COULD NOT COMPLY WITH THE PROVISIONS OF SECTION 54B(2) OF THE ACT, R EGARDING DEPOSIT OF UNUTILIZED AMOUNT IN A CAPITAL GAIN ACCO UNT SCHEME. ON SIMILAR FACTS, VARIOUS TRIBUNALS HAVE DECIDED TH E ISSUE IN THE APPELLANTS FAVOUR INCLUDING THE PUNE TRIBUNAL IN THE CASE OF SATYABHAMA N. BHOSALE VS. INCOME TAX OFFICER, PU NE IN ITA NO.1028/PN/2014 DATED 12.08.2015 FOR AY 2007-08. TH E HON'BLE BENCH IN PARA 12 OF THE ORDER HELD AS UNDER : PARA 12- THE ISSUE ARISING IN THE PRESENT APPEAL B EFORE US IS IDENTICAL TO THE ISSUE BEFORE THE PUNJAB & HA RYANA HIGH COURT IN CIT VS. JAGRITI AGGARWAL (SUPRA), WHE REIN THOUGH THE DEDUCTION WAS CLAIMED U/S. 54 OF THE ACT , WE FIND THAT THE PROVISIONS OF SECTION 54F OF THE A CT ARE PARA METERIA TO THE SAID SECTION 54 OF THE ACT. FUR THER, THE TRIBUNAL IN ACIT VS. SMT. ASHA ASHOK BOOB (SUPR A) HAD APPLIED THE PROVISIONS OF SECTION 54F OF THE AC T TO 4 ADJUDICATE THE ISSUE. IN THE FACTS OF THE PRESENT C ASE, THE DUE DATE OF FILING THE RETURN OF INCOME AS PER SECT ION 139(4) OF THE ACT IS 31-03-2008 AND SINCE THE ASSES SEE HAD MADE THE INVESTMENT FOR THE PURPOSE OF RESIDENTI AL HOUSE PROPERTY ON 24.03.2008 I.E. WITHIN THE DUE DA TE PROVIDED U/S. 139(4) OF THE ACT, THE ASSESSEE IS EL IGIBLE TO CLAIM THE DEDUCTION U/S.54 OF THE ACT. ACCORDING LY, IT IS DIRECTED THAT THE DEDUCTION CLAIMED U/S.54 OF TH E ACT BE ALLOWED TO THE ASSESSEE. 3.3. RESPECTFULLY FOLLOWING THE FINDINGS OF THE HON 'BLE TRIBUNAL AS QUOTED ABOVE, AS THE APPELLANT HAD DEPO SITED THE AMOUNT OF CAPITAL GAINS UNDER THE CAPITAL GAINS ACC OUNT SCHEME WITHIN THE TIME SPECIFIED U/S. 139(4) OF THE ACT, I DIRECT THE AO TO ALLOW THE DEDUCTION U/S. 54B OF THE ACT A S CLAIMED BY THE APPELLANT. THE APPELLANT GETS RELIEF OF RS.8 666354/-. THE GROUND NO. 1 RAISED BY THE APPELLANT IS ACCORDI NGLY ALLOWED. 4. THE APPELLANT HAS FURTHER RAISED GROUND NO. 2 ST ATING THAT IT CRAVES LEAVE TO ADD, ALTER, OMIT OR SUBSTITUTE THE ABOVE GROUND OF APPEAL AT THE TIME OF HEARING OF THE APPEAL. NO SUCH OPTION HAS BEEN EXERCISED BY THE APPELLANT DURING THE APPE LLATE PROCEEDINGS. THEREFORE, IT IS CLEAR THAT THIS GROUN D OF APPEAL IS ACADEMIC IN NATURE AND NO DECISION IS REQUIRED IN R ESPECT OF THIS GROUND OF APPEAL. FOR THE STATISTICAL PURPOSE, THIS GROUND SHOULD BE TAKEN AS DISMISSED. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPE AL BEFORE US. 4. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED. LD.D.R. HOWEVER SUBMITTED THAT THE ISSUE IN THE PRESENT CASE IS DIRECTLY COVERED IN REVENUES FAVOUR BY THE DECISION OF HONBLE B OMBAY HIGH COURT IN THE CASE OF HUMAYUN SULEMAN MERCHANT REPORTE D IN (2016) 387 ITR 421 (BOM) AND THE DECISION OF HONBLE BOMBA Y HIGH COURT IN THE CASE OF RASIKLAL M. PARIKH VS. ACIT IN ITA NO.314 OF 2013 ORDER DT.10.03.2017. HE THEREFORE SUBMITTED THAT SIN CE THE ISSUE IS DIRECTLY COVERED BY THE DECISIONS OF HONBLE BOMB AY HIGH COURT AND THERE BEING NO CONTRARY BINDING DECISION, THE C ASE MAY BE DECIDED ACCORDINGLY. 5 5. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO THE DENIAL OF DEDUCTION FOR THE REASON THAT THE UN-UTILIZED AMOUNT OF CAPITAL GAINS WAS NOT DEPOSITED IN THE CAPITAL GAIN ACCOUNT SCHEME AS REQUIRED U/S 54B(2) OF THE ACT. WE FIND THAT HONBLE BOMBAY HIGH C OURT IN THE CASE OF HUMAYUN SULEMAN MERCHANT (SUPRA) HAS HELD TH AT THE AMOUNT OF CAPITAL GAINS WHICH HAS NOT BEEN UTILIZED IN CONST RUCTION AND FOR PURCHASE OF PROPERTY BEFORE THE FILING OF RETURN OF INCOME HAS NECESSARILY TO BE DEPOSITED IN SPECIFIED ACCOUNT FOR CLAIMING EXEMPTION. IT HAS FURTHER HELD THAT THE PORTION OF CONSID ERATION WHICH HAS NEITHER BEEN UTILIZED NOR INVESTED IS NOT ELIGIBLE FOR EXEMPTION. THE AFORESAID DECISION IN THE CASE OF HUMAYUN S ULEMAN MERCHANT (SUPRA) HAS ALSO BEEN FOLLOWED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF RASIKLAL M. PARIKH (SUPRA). WE FIND THA T THOUGH THE DECISION HAS BEEN RENDERED IN RELATION TO SEC .54F(4) OF THE ACT BUT THE REQUIREMENT OF DEPOSITING THE UNUTILIZED A MOUNT OF CAPITAL GAINS IN SEC.54B(2) AND 54F(4) ARE IDENTICAL. BEFORE US, NO CONTRARY BINDING DECISION HAS BEEN PLACED BY THE ASSESSE E IN ITS SUPPORT. WE THEREFORE ARE OF THE VIEW THAT SINCE THE UN UTILIZED PORTION OF THE CAPITAL GAINS IN THE PRESENT CASE WAS NOT DEPOSITED IN THE CAPITAL GAIN ACCOUNT SCHEME, ASSESSEE IS NOT ELIGIBLE FO R DEDUCTION U/S 54F(B) OF THE ACT. WE FURTHER FID THAT LD.CI T(A) WHILE DECIDING THE ISSUE HAD RELIED ON THE DECISION OF PUNE ITAT WHICH IN TURN HAD RELIED UPON THE DECISION OF HONBLE PUNJAB AND H ARYANA HIGH COURT. BUT NOW SINCE THE JURISDICTIONAL HIGH COURT OF BOMBAY HAS HELD THAT DEPOSIT OF UNUTILIZED CAPITAL GAIN IS MANDATORY FOR 6 CLAIMING EXEMPTION, WE SET ASIDE THE ORDER OF LD.CIT(A) AND U PHELD THE ORDER OF AO. THUS, THE GROUNDS OF REVENUE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED . ORDER PRONOUNCED ON 7 TH DAY OF FEBRUARY, 2018. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 7 TH FEBRUARY, 2018. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. THE CIT(A), PUNE-5, PUNE. . THE PR.CIT, PUNE-4, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $+,-/ GUARD FILE. / BY ORDER // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.