Smt. Ranjana Ajay Chikhale, Navi Mumbai V. Income-tax Officer, Ward - 1, Panvel

ITA 740/PUN/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7615 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-07-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 08-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRINIVAS VENKATRAMAN
• Section: 54F; 143(1); 54

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . / ITA NO.740/PUN/2019 / ASSESSMENT YEAR : 2014-15 SMT. RANJANA AJAY CHIKHALE, B-1502, MANSAROVAR, NILKANTH HEIGHTS, POKHRAM ROAD, ROAD NO.2, THANE, NAVI MUMBAI. PAN : AGCPC2852J. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 1, PANVEL. . / RESPONDENT ASSESSEE BY : SHRI SHRINIVAS VENKATRAMAN. REVENUE BY : SHRI DINESH R. PARDESHI. PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 2, PUNE, DATED 01.03.2019 FOR A.Y. 2014-15. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FOR A .Y. 2014-15 DECLARING TOTAL INCOME AT RS.NIL. THE RETURN WAS INITITALLY PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELE CTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3 ) OF THE ACT / DATE OF HEARING : 11.09.2019 / DATE OF PRONOUNCEMENT: 16.10.2019 2 VIDE ORDER DATED 30.11.2016 AND THE TOTAL INCOME WAS DE TERMINED AT RS.39,16,385/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A) WHO VIDE ORDER DT.01.03.2019 (IN AP PEAL NO.522/2017-18) DISMISSED THE APPEAL OF ASSESSEE. AGGRIE VED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS R AISED THE FOLLOWING GROUNDS : 1. THE LEARNED CIT APPEALS ERRED IN SUSTAINING THE ADDITIONS MADE BY THE ASSESSING OFFICER MERELY ON THE BASIS THAT THE ASSE SSEE HAS NOT JOINED THE TWO RESIDENTIAL FLATS TO MAKE ONE RESIDENTIAL HOUSE PROPERTY WITHOUT APPRECIATING THE JUDICIAL PRECEDENTS. 2. THE LEARNED ASSESSING OFFICER ERRED IN RELYING O N THE DECISION IN CASE OF SUSHILA M. JHAVERI, WHEREIN THE FACTS ARE COMPLETEL Y DIFFERENT FROM THE PRESENT CASE. 3. THE LEARNED CIT APPEALS ERRED IN NOT APPRECIATIN G THE FACT THAT THE AMENDMENT MADE IN SECTION 54F OF THE INCOME TAX ACT , 1961 IS APPLICABLE PROSPECTIVELY AND NOT RETROSPECTIVELY. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESS EE HAD SOLD A PLOT OF LAND AT NAGPUR FOR A SALE CONSIDERATION RS.85,00,000 /- ON 23.01.2012 AND RE-INVESTED THE AMOUNT FOR PURCHASING O F TWO RESIDENTIAL HOUSES I.E., FLAT NO.505 AND 506, BUILDING NO.14, MOH AN PALMS, BADLAPUR, MUMBAI AND HAD CLAIMED DEDUCTION U/S 54F OF THE ACT FOR BOTH THE RESIDENTIAL FLATS. ON PERUSAL OF THE RECOR DS, AO FOUND THAT BOTH THE FLATS ARE ADJACENT FLATS WHICH ARE NOT COV ERED INTO ONE HOUSE AND ACCORDINGLY, HE HAD RESTRICTED THE CLAIM OF DE DUCTION U/S 54 OF THE ACT OF ASSESSEE ON ONE HOUSE ONLY BY HOLDING T HAT AS PER THE PROVISION OF SECTION 54F OF THE ACT, DEDUCTION WILL BE GIVEN FOR INVESTMENT IN ONE OF THE RESIDENTIAL UNITS ONLY. WHEN THE MATTER WAS 3 CARRIED BEFORE LD.CIT(A), HE CONFIRMED THE ACTION OF AO HOLDIN G THAT ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 54F ON TWO FLATS. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 4. BEFORE ME, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFOR E AO AND LD.CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HAD P URCHASED TWO ADJOINING RESIDENTIAL UNITS FOR RESIDENTIAL PURPOSES. IT WAS FURTHER SUBMITTED THAT THE AMENDMENT IN SECTION 54F MADE BY TH E FINANCE (NO.2) ACT, 2014 WAS W.E.F. FROM 01.04.2015 I.E., FROM A.Y. 2015-16 ONWARDS WHICH MADE THE RESTRICTION ON PURCHASE OR CON STRUCTION TO ONE RESIDENTIAL HOUSE IN INDIA MEANING THEREBY THAT PRIOR TO T HE AMENDMENT EVEN ON PURCHASE OF MORE THAN ONE RESIDENTIAL HOUSE ASS ESSEE WAS ELIGIBLE TO CLAIM DEDUCTION. LD.A.R. RELIED ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. GITA DUGGAL WHEREI N IT WAS HELD THAT SECTION 54F THE I.T.ACT DOES NOT REQUIRE THE RESID ENTIAL PROPERTY TO BE BUILT IN A PARTICULAR MANNER. LD.A.R. FURTHER SUBMITTED TH AT THE ISSUE IS COVERED BY THE DECISION OF HONBLE MADRAS HIGH CO URT IN THE CASE OF CIT VS. GUMANMAL JAIN REPORTED IN (2017) 394 ITR 666. FROM THE COPY OF THE DECISION OF HONBLE MADRAS HIGH COURT, HE POINTED THAT THE MADRAS HIGH COURT IN THE CASE OF GUMANMAL JAIN (SUPR A) HAS CONSIDERED THE AMENDMENT MADE TO SEC.54F OF THE ACT BY THE FINANCE ACT NO.2 OF 2014 AND AFTER CONSIDERING THE AMENDMENT, IT H AS HELD THAT PRIOR TO THE AMENDMENT, RESIDENTIAL HOUSE WOULD INCLUDE MUL TIPLE FLATS / RESIDENTIAL HOUSE AND HAS HELD THAT AS LONG AS FLATS ARE IN THE SAME ADDRESS/LOCATION EVEN THOUGH THEY ARE LOCATED IN DIFFEREN T BLOCKS / BUILDINGS, IT WAS NOT DISENTITLE THE ASSESSEE FROM GETTING T HE BENEFIT OF DEDUCTION U/S 54F OF THE ACT. HE THEREFORE RELYING ON T HE AFORESAID 4 DECISIONS SUBMITTED THAT ASSESSEE BE ALLOWED THE CLAIM U/ S 54F OF THE ACT. LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT ASSESSEE HAD SOLD A PLOT FOR A CONSIDERATION OF RS.85,00,000/- AND HAD RE-INVESTED THE S AME IN PURCHASING TWO RESIDENTIAL UNITS, BEING ADJOINING RESIDENTIA L UNITS. IT IS AN UNDISPUTED FACT THAT THE AFORESAID TWO FLATS PURCHASED BY THE ASSESSEE ARE IN THE SAME BUILDING. IT IS REVENUES CONTENTION THAT U/S 54F, ASSESSEE IS ELIGIBLE FOR DEDUCTION ONLY ON ONE UNIT AN D NOT ON TWO RESIDENTIAL UNITS. I FIND THAT HONBLE MADRAS HIGH COURT A FTER CONSIDERING THE AMENDMENT MADE TO SEC.54F OF THE ACT BY THE FINANCE (NO.2) ACT, OF 2014 HAS HELD THAT EVEN IF THE FLATS/APARTMENT S WERE IN DIFFERENT BLOCKS/BUILDINGS AND SO LONG AS THEY ARE AT THE SAME LOCATION/ADDRESS, ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT PRIOR TO 01.04.2015. IT HAD FURTHER HELD THAT PRIOR T O THE AMENDMENT MADE BY THE FINANCE ACT (NO.2) ACT, 2014 W.E.F. 0 1.04.2015 (FROM A.Y. 2015-16 ONWARDS), THE RESIDENTIAL HOUSE WOULD INCLU DE MULTIPLE FLATS / RESIDENTIAL UNITS. BEFORE ME, REVENUE HAS NO T POINTED OUT ANY CONTRARY BINDING DECISION IN ITS SUPPORT. I THER EFORE CONSIDERING THE FACT THAT THE IMPUGNED YEAR BEING A.Y. 2014-15 WH EREIN THE AMENDMENT MADE BY FINANCE (NO.2) OF ACT, 2014 WOULD NOT AP PLY AND RELYING ON THE AFORESAID DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF GUMANMAL JAIN (SUPRA), AM OF THE VIEW THAT AS SESSEE IS ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT ON BOTH THE FLATS. I THUS HOLD SO. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED. 5 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 16 TH DAY OF OCTOBER, 2019. SD/-- ( ANIL CHATURVEDI ) ! / ACCOUNTANT MEMBER PUNE; DATED : 16 TH OCTOBER, 2019. YAMINI '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-2, PUNE. THE PCIT 2, THANE. !'##$%, ' $% , () / DR, ITAT, SMC PUNE; '+,-/ GUARD FILE. / BY ORDER // TRUE COPY // . /0#1$2 / SR. PRIVATE SECRETARY ' $% , / ITAT, PUNE.