KHEMCHAND FAGWANI, MUMBAI V. ITO 4(1)(3), MUMBAI

ITA 7876/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83780 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 15-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JEEVAN LAL LAVADIYA
• Keywords: Capital asset
• Section: 234B; 54

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , ! , ' BEFORE SHRI JOGINDER SINGH, JM AND SHRI RAJENDRA, A M ITA NO.7876/MUM/2010 (A.Y. 2007-08) SHRI KHEMCHAND FAGWANI 51, VIOLET VILLA, WEST AVENUE, SANTA CRUZ (W) MUMBAI-400 058. # # # # / VS. THE ITO 4(1)(3) ROOM NO.637A, AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ( %& / // / APPELLANT) ( '(%& / RESPONDENT) %& ) * ) * ) * ) * /APPELLANT BY : SHRI HIRO RAI '(%& ) * ) * ) * ) * /RESPONDENT BY : SHRI JEEVANLAL LAVADIYA # ) +, / / / / DATE OF HEARING : 10.09.2014 -./ ) +, / DATE OF PRONOUN CEMENT : 10.09.2014 0 0 0 0 / / / / O R D E R PER JOGINDER SINGH (JM)/ : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 21/09/2010 OF THE LD. FIRST APPELLATE AUTHORITY. G ROUND NOS.1 AND 2 PERTAINS TO DISALLOWANCE OF EXEMPTION U/S. 54 OF TH E ACT AMOUNTING TO RS.23,77,683/- WHICH AS PER THE ASSESSEE WAS WITHOU T APPRECIATING THE DETAILS AND SUBMISSIONS FILED BEFORE THE LD. CIT(A) FOR CLAIMING SUCH EXEMPTION. 2. DURING HEARING OF THIS APPEAL THE LD. COUNSEL FO R THE ASSESSEE, SHRI HIRO RAI CONTENDED THAT SALE PROCEEDS WERE DULY INV ESTED IN PURCHASING ITA NO.7876/MUM/2010 (A.Y. 2007-08) 2 A RESIDENTIAL FLAT AT THANE, THEREFORE, THE ASSESSE E IS ENTITLED TO CLAIM EXEMPTION U/S. 54 OF THE ACT. IT WAS FURTHER SUBMIT TED THAT LETTER OF ALLOTMENT ALONG WITH PROOF OF PAYMENT WERE DULY SUB MITTED AT ASSESSMENT AS WELL AS FIRST APPELLATE STAGE. ON TH E OTHER HAND SHRI JEEVANLAL LAVADIYA-LD. DR DEFENDED THE CONCLUSION B Y SUBMITTING THAT THE ASSESSEE DID NOT PRODUCE ANY AGREEMENT WITH RES PECT TO THE INVESTMENT IN THE RESIDENTIAL FLAT, THEREFORE, THE CLAIMED EXEMPTION U/S. 54 OF THE ACT WAS RIGHTLY DENIED. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE CLAI MED EXEMPTION U/S. 54 OF THE ACT WAS DENIED TO THE ASSESSEE BY THE LD. AO ON THE PLEA THAT ASSESSEE DID NOT PRODUCE ANY PURCHASE AGREEMENT WIT H REGARD TO INVESTMENT IN THE RESIDENTIAL FLAT AT THANE. STILL THERE IS NO DISPUTE THAT AN ALLOTMENT LETTER DATED 9/9/10 ALONG WITH EVIDENC E OF PAYMENT WAS DULY SUBMITTED BEFORE THE AUTHORITIES. IF THE ALLOT MENT LETTER AND PROOF OF PAYMENT IS PRODUCED IT CANNOT BE SAID THAT THE ASSE SSEE DID NOT INVEST IN THE PURCHASE OF NEW PROPERTY. SECTION 54 OF THE ACT SPEAKS ABOUT INVESTMENT OF CAPITAL GAINS ARISING FROM TRANSFER O F A LONG TERM CAPITAL ASSET WITHIN A SPECIFIED TIME. AS PER S/S. 2 TO SEC .54 IF SUCH PROCEEDS / CAPITAL GAINS, IF NOT INVESTED /UTILIZED FOR PURCHA SE OF NEW ASSET, WITHIN SPECIFIC TIME THEN SUCH PROCEEDS WILL HAVE TO BE DE POSITED IN A SPECIFIED ITA NO.7876/MUM/2010 (A.Y. 2007-08) 3 BANK ACCOUNT AND HAS TO BE UTILIZED IN ANY SCHEME W HICH THE CENTRAL GOVT. NOTIFIES AND PROOF OF SUCH SHALL BE ACCOMPANI ED WITH THE RETURN. THERE IS NO REQUIREMENT IN THE ACT THAT NECESSARILY THE ASSESSEE HAS TO PRODUCE THE AGREEMENT MORE SPECIFICALLY WHEN THE LE TTER OF ALLOTMENT ALONG WITH PROOF OF PAYMENT/INVESTMENT WAS DULY PRO DUCED BEFORE THE CONCERNED AUTHORITIES. THE RATIO LAID DOWN IN SMT. JYOTHI K. MEHTA (2001) 201 TAXMANN 79 (KAR.), SMT. SASHI VERMA, 224 ITR 106(M.P.), CIT VS. SMT. BRINDA KUMARI (2001) (114 TAXMANN 266 (DEL .), CIT VS. SMT. BHARTI C. KOTHAR,I 244 ITR 352 (CAL.), CIT VS. DR. LAXMICHAND NARPAL NAGDA 211 ITR 804 (BOM.), CIT VS. SHEHZADA BEGUM 173 ITR 379 (AP) SUPPORTS OUR VIEW. IN THE CASE OF SHEHZADA BEGUM IT WAS HELD BY THE HONBLE ANDHRA PRADESH HIGH COURT THAT DATE OF TAKI NG OVER POSSESSION OF PROPERTY PURCHASED (IN THE PRESENT CASE INVESTME NT IN THE NEW PROPERTY WITHIN THE SPECIFIED TIME) AND NOT THE REG ISTRATION OF SALE IN FAVOUR OF THE ASSESSEE, IS RELEVANT FOR COMPUTING T HE PRESCRIBED TIME LIMIT. TO OUR MIND TO ATTRACT SEC.54 AND SEC.54EC O F THE ACT WHAT IS MATERIAL IS THE INVESTMENT OF SALE CONSIDERATION IN ACQUIRING THE NEW PROPERTY OR INVESTMENT OF THE AMOUNT IN BONDS SET O UT IN SEC.54EC IS TO BE SEEN AND ONCE THE SALE CONSIDERATION IS INVESTED IN ANY OF THESE MANNER THE ASSESSEE WOULD BE ENTITLED TO THE BENEFI T CONFERRED UNDER THIS PROVISION. IN VIEW OF THE AVAILABLE FACTS, CL EAR POSITION OF PROVISIONS ITA NO.7876/MUM/2010 (A.Y. 2007-08) 4 OF THE ACT AND THE RATIO LAID DOWN IN THE AFOREMENT IONED JUDICIAL PRONOUNCEMENTS THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 3. THE NEXT GROUND PERTAINS TO LEVY OF INTEREST U/S . 234B OF THE ACT FOR WHICH THE LIABILITY OF THE ASSESSEE WAS STRONGL Y DENIED. SINCE WE HAVE DECIDED THE CLAIM OF EXEMPTION U/S. 54 OF THE ACT I N FAVOUR OF THE ASSESSEE, THEREFORE, LEVY OF INTEREST U/S. 234B OF THE ACT IS CONSEQUENTIAL IN NATURE. 4. FINALLY THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 10 TH DAY OF SEPTEMBER, 2014 . 0 ) -./ 1 #2 10.09.2014 . ) 9 SD/- SD/- (RAJENDRA) (JOGINDER SINGH) ! ! ! ! / ACCOUNTANT MEMBER ! ! ! ! / JUDICIAL MEMBER MUMBAI; 1 # DATED : 10 TH SEPT. 2014. JV. 0 ) '+: ;:/+ 0 ) '+: ;:/+ 0 ) '+: ;:/+ 0 ) '+: ;:/+/ COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. < ( ) / THE CIT, MUMBAI. 4. < / CIT(A)-13, MUMBAI 5. :?9 '+# , , / DR, ITAT, MUMBAI 6. 9@ A / GUARD FILE. 0# 0# 0# 0# / BY ORDER, (:+ '+ //TRUE COPY// B BB B/ // /C C C C (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI