ADDL CIT 19(3), MUMBAI V. RAHUL UDAY TULJAPURKAR, MUMBAI

ITA 798/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100680 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 20-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHAMEJADR
• Keywords: Capital asset; Cost of acquisition; Fair market value
• Section: 143(3); 54

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.798/MUM/2013 ASSESSMENT YEAR: 2009-10 DY. C.I.T.19(3), ROOM NO.305, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, MUBMAI-400012 / VS. SHRI RAHUL UDAY TULJAPURKAR, 49A, BLOCK NO.1, GROUND FLOOR, HILL TOP ANNEXE, PALI MALA ROAD, BANDRA (WEST), MUMBAI-400050 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. ACUPT3699Q ITA NO.800/MUM/2013 ASSESSMENT YEAR: 2009-10 DY. C.I.T.19(3), ROOM NO.305, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, MUBMAI-400012 / VS. SHRI JAYA UDAY TULJAPURKAR, 49A, BLOCK NO.1, GROUND FLOOR, HILL TOP ANNEXE, PALI MALA ROAD, BANDRA (WEST), MUMBAI-400050 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO.AACPT3808R / REVENUE BY SHRI DHAMEJA-DR !' # / ASSESSEE BY SHRI DEEPAK TRALSHWALA $ % # & / DATE OF HEARING : 20/08/2015 % # & / DATE OF ORDER: 28/09/2015 RAHUL UDAY TULJAPURKAR & ORS. ITA NO.798 & 800/MUM/2013 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDERS BO TH DATED 30/11/2012 FOR A.Y. 2009-10 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, IN THE CASE OF THE AFOREMENTIONE D ASSESSEES. 2. DURING HEARING OF THESE APPEALS, THE LD. COUNSE L FOR THE ASSESSEE, SHRI DEEPAK TRALSHWALA, CONTENDED THA T THE IMPUGNED ISSUE IS COVED IN FAVOUR OF THE ASSESSEE B Y THE DECISION FROM HONBLE BOMBAY HIGH COURT IN 355 ITR 474 (BOM.) AND ALSO THE DECISION IN DCIT VS MANJULA J. SHAH (126 TTJ 145) (SB) WHICH HAS NOT AFFIRMED BY HONBLE JURISDICTIONAL HIGH COURT. ON THE OTHER HAND, SHRI DHAMEJA, LD. DR, DEFENDED THE CONCLUSION ARRIVED AT IN THE A SSESSMENT ORDER BUT DID NOT CONTROVERT THE ASSERTION OF THE L D. COUNSEL FOR THE ASSESSEE THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE SPECIAL BENCH AS WELL AS HONBLE JU RISDICTIONAL HIGH COURT. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE, TH E IDENTICAL ISSUE IS INVOLVED IN BOTH THE APPEALS WITH RESPECT TO ADOPTION OF FAIR MARKET VALUE AS ON 01/04/1981 FOR COMPUTING THE LONG TERM CAPITAL GAINS, THEREFORE, THESE CAN BE DI SPOSED OFF BY A COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. THE FACTS, IN BRIEF, ARE THAT IN THE CASE OF RAHUL UDAY TULJAPURKAR, THE ASSESSEE DECLARED INCOME OF RAHUL UDAY TULJAPURKAR & ORS. ITA NO.798 & 800/MUM/2013 3 RS.8,10,72,247/-, WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY; THEREFORE, NOTICE U/S 143(2) OF THE ACT WAS SERVED UPON THE AS SESSEE ALONG WITH QUESTIONNAIRE. THE ASSESSEE ATTENDED THE PROCEEDING. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINESS OF REAL ESTATE UNDER THE NAME M/S BHAKTAWA R REAL ESTATE SERVICES. THE ASSESSEE ALONG WITH SMT. JAYA TULJAPURKAR SOLD A PROPERTY FOR A CONSIDERATION OF RS.23 CRORES. THE ASSESSEE COMPUTED THE LONG TERM CAPITAL GAIN ON THE SALE OF THE AFORESAID PROPERTY AT RS.7,15,12,06 3/- (ONE HALF SHARE) AFTER TAKING INDEXED COST OF ACQUISITIO N AT RS.1,45,06,350/-. THE COST OF ACQUISITION OF THE P ROPERTY WAS TAKEN AT AS FAIR MARKET VALUE (HEREINAFTER FMV) AS ON 01/04/1981. THE ASSESSEE INVESTED THE SALE PROCEEDS FOR PURCHASING A NEW RESIDENTIAL HOUSE AT KHAR FOR A SU M OF RS.2,89,81,587/- AND CLAIMED EXEMPTION U/S 54 OF T HE ACT. THE LD. ASSESSING OFFICER CONTENDED THAT REQUIREMEN T OF SECTION 54 IS NOT MERELY THAT THE ASSET SHOULD BE R ESIDENTIAL FLAT BUT SOMETHING MORE AND THE EXEMPTION IS AVAILA BLE ONLY WHERE A BUILDING OR LAND, APPURTENANT THERETO, BEIN G A RESIDENTIAL HOUSE, IS SOLD, MEANING THEREBY, THE OW NERSHIP OF BUILDING AND LAND SHOULD BE OF THE SAME PERSON. TH E CLAIMED DEDUCTION WAS DENIED. 2.2. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEALS), THE FACTUAL POSITION ALONG WITH CASE LAWS WERE DISCUSSED INCLUDING CIT VS PODDAR CEMENTS PVT. LTD. AND OTHER CASES WHICH HAVE BEEN DISCUSSED IN PARA 3.7 ( PAGE-23 RAHUL UDAY TULJAPURKAR & ORS. ITA NO.798 & 800/MUM/2013 4 OF THE IMPUGNED ORDER) AND THE CLAIMED DEDUCTION WA S GRANTED TO THE ASSESSEE AGAINST WHICH THE REVENUE I S AGGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF K EPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT IN THE PRE SENT APPEALS, A FLAT IN COOPERATIVE HOUSING SOCIETY WAS TRANSFERRED AND NOT THE LAND, THEREFORE, THE CONTENTION OF THE LD. ASSESSING OFFICER AS WELL AS OF THE LD. DR THAT BUI LDING IS OWNED BY DIFFERENT PERSON AND LAND BY DIFFERENT IS NOT IN CONSONANCE WITH THE LANGUAGE USED IN THE SECTION. T HE FLAT TRANSFERRED IS A RESIDENTIAL PROPERTY AND THE INCOM E CHARGEABLE THEREFROM IS UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS IS EVIDENT FROM ASSESSMENT ORDER OF A. Y. 2008- 09 PASSED U/S 143(3) OF THE ACT DATED 27/12/2010, M EANING THEREBY, THE CONDITION OF RESIDENTIAL HOUSE, BEING TRANSFERRED, IS ALREADY MADE BY THE ASSESSEE. EVEN OTHERWISE, TH E ASSET TRANSFERRED IS LONG TERM CAPITAL ASSET. THE CONDITI ON ENSHRINED IN THE SECTION IS WITH RESPECT TO PURCHAS E OF ANOTHER PROPERTY WITHIN THE TIME SPECIFIED U/S 54 O F THE ACT. THE RATIO LAID DOWN IN SMT. SHASHI VERMA VS CIT (22 4 ITR 106) (MP), CIT VS SMT. BRINDA KUMARI (2001) 114 TAX MAN 266 (DEL.), CIT VS SMT. BHARTI C. KOTHARI (2000) 22 4 ITR 352 (CAL.), CIT VS CHANDAN BEN MAGANLAL 245 ITR 182 (GU J.), DIT VS MS. JENIFFER BHIDE (2011) 203 TAXMAN 208 (KARN.) , CIT VS RAHUL UDAY TULJAPURKAR & ORS. ITA NO.798 & 800/MUM/2013 5 MS. SEHAJADA BEGUM 173 ITR 397 (AP) SUPPORTS OUR VI EW. SINCE THE FACTS ARE IDENTICAL IN THE BOTH THE APPEA LS, THEREFORE, WE FIND NO INFIRMITY IN THE IMPUGNED ORD ERS PASSED BY THE LD. FIRST APPELLATE AUTHORITY BY HOLDING THA T THE ASSESSEES ARE ENTITLED TO CLAIM DEDUCTION U/S 54 OF THE ACT. FINALLY, BOTH THE APPEALS OF THE REVENUE ARE DISMIS SED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 20/08/2015. SD/ - (RAJESH KUMAR) SD/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ MUMBAI; ( DATED : 28/09/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1# / CIT(A)- , MUMBAI 5. 34 .# , 0 *+& * 5 , $ / DR, ITAT, MUMBAI 6. 6! 7$ / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI