DINESH CHANDRA DUTTA, ALIGARH V. CIT A, ALIGARH

ITA 786/AGR/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1804 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 17-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SITA SRIVASTAVA
• Assessee Lawyers: I.A. SIDDIQI
• Keywords: Capital Gains
• Section: 54; 54F; 54EC

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO. 786/AGR/2018 ASSESSMENT YEAR: 2015-16 MR. DINESH CHANDRA DUTTA BHARGAVA C/O N.A. SIDDIQI, ADVOCATE, 7, ANON HOUSE, CIVIL LINES, ALIGARH. PAN: ABMPB3271D (APPELLANT) VS. DCIT, CIRCLE 4(1)(1), ALIGARH. (RESPONDENT) APPELLANT BY SH. I.A. SIDDIQI, ADVOCATE RESPONDENT BY SMT. SITA SRIVASTAVA, SR. DR ORDER PER LALIET KUMAR, J.M.: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YE AR 2915-16 IS DIRECTED AGAINST THE ORDER DATED 18.09.2018 PASSED BY LD. CI T(A), ALIGARH, CHALLENGING THE IMPUGNED ORDER ON THE GROUND THAT THE LD. CIT(A) WH ILE SUSTAINING THE DISALLOWANCE OF ASSESSEES CLAIM MADE U/S. 54/54F OF THE ACT BY ASSESSING OFFICER ON THE GROUND THAT THE LONG TERM CAPITAL GAINS EARNED BY THE ASSE SSEE WAS INVESTED IN PURCHASE OF TWO HOUSES/FLATS INSTEAD OF ONE RESIDENTIAL UNIT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE SO LD A RESIDENTIAL HOUSE IN AGRA ON 21.04.2014 FOR RS.1,20,00,000/- HAVING THE VALUE FO R THE PURPOSE OF STAMPS AT DATE OF HEARING 05.03.2021 DATE OF PRONOUNCEMENT 08 .03.2021 ITA NO. 786/AGR/2018 2 RS.1,22,78,000/-. OUT OF THE LONG TERM CAPITAL GAIN S, THE ASSESSEE INVESTED RS.15,00,000/- IN SPECIFIED BONDS U/S. 54EC AND ALS O INVESTED A SUM OF RS.43,85,000/- IN PURCHASE OF A FLAT IN JNC PRINCES PARK, KHASRA NO. 519, MOHIUDDINPUR, KANAWANI, NOIDA AND RS. 48,90,000/- I N ANOTHER FLAT IN DESIRE RESIDENCY, KHASRA NO. 520, MOHIUDDINPUR, KANAWANI, NOIDA. THE ASSESSING OFFICER OBSERVED THAT DEDUCTION U/S. 54 COULD BE ALLOWED ON LY IN RESPECT OF ONE FLAT. 3. THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A) WHO SUSTAINED THE DISALLOWANCE ON THE PREMISE THAT THE LEGAL POSITION HAS CHANGED W.E.F. 01.04.2015 AND IN SECTION 54, PHRASE A RESIDENTIAL HOUSE HAS BEEN SUBSTITUTED BY ONE RESIDENTIAL HOUSE IN INDIA. AGGRIEVED BY THE IMPUG NED ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) WHILE SUSTAINING THE DISALLOWANCE FAILED TO APPRECIATE THAT THE CHAN GED LEGAL POSITION IN SECTION 54 BY FINANCE ACT (BILL NO. 2) 2014 WAS NOT APPLICABLE IN THE YEAR UNDER CONSIDERATION, AS THE AMENDMENT WAS MADE EFFECTIVE FROM 01.04.2015 WI TH PROSPECTIVE EFFECT. THE TWO UNITS PURCHASED BY ASSESSEE ARE ADJACENT TO EAC H OTHER, AS IS EVIDENT BY KHASRA NO. 519 AND 520 AND THEREFORE, THE SAME SHOULD BE C ONSIDERED FOR DEDUCTION U/S. 54 AS PER LAW APPLICABLE IN THE YEAR UNDER CONSIDERATI ON. 5. PER CONTRA, THE LD. DR RELYING UPON THE IMPUGNED ORDER SUBMITTED THAT BOTH THE UNITS OF RESIDENTIAL FLATS PURCHASED BY THE ASS ESSEE SITUATE IN DIFFERENT SOCIETIES ITA NO. 786/AGR/2018 3 AND THE LEGISLATIVE INTENT HAS NEVER BEEN TO INVEST THE CAPITAL GAINS IN MULTIPLE RESIDENTIAL HOUSES. THEREFORE, THE IMPUGNED ORDER D OES NOT CALL FOR ANY INTERFERENCE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. THE ONLY QUESTION TO BE ADJUDI CATED IN THE INSTANT CASE IS WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S. 54/54F OF THE ACT IN THE ATTENDING CIRCUMSTANCES OF THE CASE OR NOT AND WHET HER THE CHANGED LEGAL POSITION OF SECTION 54, AS NOTED BY LD. CIT(A), IS APPLICABL E IN THE ASSESSMENT YEAR UNDER CONSIDERATION OR NOT. IT IS NOT IN DISPUTE THAT THE AMENDMENT IN SECTION 54 WAS MADE W.E.F. 01.04.2015, WHICH DOES NOT FALL WITHIN THE A SSESSMENT YEAR UNDER CONSIDERATION. THERE IS NOTHING ON RECORD FROM THE SIDE OF REVENUE TO JUSTIFY THAT THE SAID AMENDMENT WAS MADE APPLICABLE WITH RETROSP ECTIVE EFFECT. IN SUCH CIRCUMSTANCES. AS REGARDS THE DISALLOWANCE ON THE P REMISE OF INVESTMENT IN TWO RESIDENTIAL FLATS, WE FIND THAT IN THE CASE OF V.R. KARPAAM (SMT.) V. ITO (2013) 143 ITD 126 (CHENNAI)(TRIB.), TRIBUNAL HELD THAT A RES IDENTIAL HOUSE IN THE CONTEXT COULD NOT BE CONSTRUED AS A SINGULAR AND THE MEANIN G GIVEN IN SECTION 54 WOULD APPLY TO SECTION 54F ALSO. NEW ASSET DEFINED IN SEC TION 54F AS A RESIDENTIAL HOUSE HAS TO BE UNDERSTOOD IN PLURAL. IT IS NOT NECESSARY THAT ALL RESIDENTIAL UNITS SHOULD BE SINGLE DOOR NUMBER ALLOTTED. IN THIS DECISION, THE TRIBUNAL, FOLLOWING THE RATIO IN CIT V. K.G. RUKMINIAMMA (2011) 331 ITR 211 (KARN.)(HC), ALLOWED THE CLAIM OF ASSESSEE. IN VIEW OF THESE DECISIONS, WE FIND NO JU STIFICATION TO DISCARD THE CLAIM ITA NO. 786/AGR/2018 4 MADE BY THE ASSESSEE U/S. 54 OF THE ACT IN THE PRES ENT CASE. WE ARE, THEREFORE, NOT INCLINED TO SUSTAIN THE IMPUGNED ORDER. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/03/2021. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: MARCH, 2021 *AKS*