Balak Ram, Ghaziabad V. ITO), Ward-1(5), Ghaziabad

ITA 8318/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6831 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: EKTA VISHNOI
• Assessee Lawyers: SANJAY PARASHAR
• Keywords: Question of law
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 8318/DEL/2018 ASSESSMENT YEAR: 2009-10 BALAK RAM, VS. ITO, WARD-1(5), GARH DIDAULI, GHAZIABAD MURADNAGAR, GHAZIABAD UTTAR PRADESH-201206 (PAN: BPXPR8270) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. ANOOP SHARMA, ADV. & SH. SANJAY PARASHAR, ADV. REVENUE BY : MS. EKTA VISHNOI, SR. DR. ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 25.07.2018 PASSED BY THE LD. CIT(A), GHAZIABAD RELATING TO AS SESSMENT YEAR 2009- 10. 2. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL AND STAT ED THAT ASSESSEE HAS SUBMITTED ALL THE DOCUMENTS BEFORE THE REVENUE AUTH ORITIES WHICH HAVE NOT BEEN PROPERLY APPRECIATED. HE FURTHER STATED T HAT THE ASSESSEE HAS PURCHASED THE HOUSE IN THE NAME OF HIS WIFE WHICH I S NOT PROHIBITED BY ANY LAW OF THE INCOME TAX ACT, 1961. HE ARGUED THA T SECTION 54 F OF THE INCOME TAX ACT MANDATE THAT THE HOUSE SHOULD BE PUR CHASED BY THE ASSESSEE AND IT DOES NOT MEAN THAT THE HOUSE SHOULD BE PURCHASED IN THE NAME OF ASSESSEE ONLY. THERE ARE MANY CASES CITED BY THE TRIBUNAL AS WELL AS BY THE HONBLE HIGH COURT DECIDING THE ISSU E IN DISPUTE IN FAVOUR OF THE ASSESEE. IN SUPPORT OF HIS CONTENTION, HE RE LIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS . KAMAL WAHAL (2013) 351 ITR 4 (DELHI). 2 3. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS P ASSED BY THE REVENUE AUTHORITIES AND STATED THAT THE BENEFIT OF SECTION 54 F CAN BE GIVEN IF THE ASSESSEE HAS PURCHASED THE HOUSE IN HI S NAME ONLY AND NOT IN THE NAME OF HIS WIFE. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE IMPUGNED ORDER AND THE CASE LAWS CITED BY THE A SSESSES AR. I AM OF THE VIEW THAT LD. CIT(A) HAS RIGHTLY HELD THAT THE COMPUTATION OF LONG TERM CAPITAL GAIN (LTCG) PRESUMING THE SHARE OF ASS ESSEE TO BE @1/7 TH WHEREAS ACCORDING TO THE ASSESSEE HIS SHARE SHOULD HAVE BEEN COMPUTED @1/9 TH . LD. CIT(A) HAS ACCEPTED THE CONTENTION OF THE A SSESSEE AND ISSUED THE DIRECTIONS TO THE AO TO RE-COMPUTE THE C APITAL GAIN BY TREATING THE 1/9 TH INSTEAD OF 1/7 TH . BUT HOWEVER, THE CLAIM OF ASSESSEE UNDER SECTION 54F HAS BEEN REJECTED BY THE LD. CIT(A) MAI NLY ON THE GROUND THAT ASSESSEE HAS NOT MADE THE INVESTMENT IN THE NE W PROPERTY IN THE NAME OF HIMSELF AND NOT IN THE NAME OF OTHER PERSON MEANING THEREBY LD. CIT(A) HAS REJECTED THE CLAIM U/S. 54F IN SPITE OF THE FACT THAT ASSESSEE HAS PURCHASED THE HOUSE IN THE NAME OF HIS WIFE. IN MY VIEW THIS FINDING OF THE LD. CIT(A) HAS BEEN CONSIDERED AND REJECTED BY THE VARIOUS ORDER OF THE TRIBUNAL AND THE HONBLE HIGH COURT INCLUDIN G THE DECISION OF THE HONBLE DELHI HIGH COURT DECISION IN THE CASE OF C IT VS. KAMAL WAHAL (2013) 351 ITR 4 (DELHI), THE RELEVANT PORTION THER EOF IS REPRODUCED AS UNDER:- WE HAVE NOT HESITATION IN AGREEING WITH THE VIEW TAKEN BY THE TRIBUNAL. APART FROM THE FACT THAT THE JUDGEMENTS OF THE MADRAS AND KARNATAKA HIGH COURTS (SUPRA) ARE IN FAVOUR OF COURTS (SUPRA) ARE IN FAVOUR OF THE ASSESSEE, THE REVENUE FAIRLY BROUGHT TO OUR NOTICE A SIMILAR VIEW OF THIS COURT IN CIT V. RAVINDER KUMAR ARORA [2012] 342 ITR 38 (DELHI). THAT WAS ALSO A CASE WHICH AROSE UNDER SECTION 54F OF THE ACT. THE NEW RESIDENTIAL PROPERTY WAS ACQUIRED IN THE JOINT NAMES OF THE ASSESSEE AND HIS WIFE. THE INCOME-TAX AUTHORITIES RESTRICTED THE DEDUCTION UNDER SECTION 54F TO 50 PER CENT. ON THE FOOTING THAT THE DEDUCTION WAS NOT AVAILABLE ON THE PORTION OF THE INVESTMENT 3 WHICH STANDS IN THE NAME OF THE ASSESSEE'S WIFE. THIS VIEW WAS DISAPPROVED BY THIS COURT. IT NOTED THAT THE ENTIRE PURCHASE CONSIDERATION WAS PAID ONLY BY THE ASSESSEE AND NOT A SINGLE PENNY WAS CONTRIBUTED BY THE ASSESSEE'S WIFE. IT ALSO NOTED THAT A PURPOSIVE CONSTRUCTION IS TO BE PREFERRED AS AGAINST A LITERA L CONSTRUCTION, MORE SO WHEN EVEN APPLYING THE LITERAL CONSTRUCTION, THERE IS NOTHING IN THE SECTI ON TO SHOW THAT THE HOUSE SHOULD BE PURCHASED IN THE NAME OF THE ASSESSEE ONLY. AS A MATTER OF FACT, SECTION 54F IN TERMS DOES NOT REQUIRE THAT THE NEW RESIDENTIAL PROPERTY SHALL BE PURCHASED IN THE NAME OF THE ASSESSEE; IT MERELY SAYS THAT THE ASSESSEE SHOULD HAVE PURCHASED / CONSTRUCTED A RESIDENTIAL HOUSE. THIS COURT IN THE DECISION CITED ALONE ALSO NOTICED THE JUDGMENT OF THE MADRAS HIGH COURT (SUPRA) AND AGREED WITH THE SAME, OBSERVING THAT THOUGH THE MADRAS CASE WAS DECIDED IN RELATION TO SECTION 54 OF THE ACT, THAT SECTION WAS IN PARI MATERIA WITH SECTION 54F. THE JUDGMENT OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. GURNAM SINGH [2010] 327 ITR 278 (P&H) IN WHICH THE SAME VIEW WAS TAKEN WITH REFERENCE TO SECTION 54F WAS ALSO NOTICED BY THIS COURT. IT THUS APPEARS TO US THAT-THE PREDOMINANT JUDICIAL VIEW, INCLUDING THAT OF THIS COURT, IS 'T HAT FOR THE PURPOSES OF SECTION 54F, THE NEW RESIDENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NOR IS IT NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVELY IN HIS NAME. IT IS MORE- OVER TO BE NOTED THAT THE ASSESSEE .IN THE PRESENT CASE HAS NOT PURCHASED THE NEW HOUSE IN THE NAME OF A STRANGER OR SOME BOD WHO IS UNCONNECTED WITH HIM. HE HAS PURCHASED IT ON IN THE NAME OF HIS WIFE. THERE IS ALSO NO DISPUTE THAT THE ENTIRE INVESTMENT HAS COME OUT OF THE SALE PROCESS AND THAT THERE WAS NO CONTRIBUTION FROM THE ASSESSEE'S WIFE. HAVING REGARD TO THE RULE OF PURPOSIVE CONSTRUCTION AND THE OBJECT WHICH SECTION 54F SEEKS TO ACHIEVE AND RESPECTFULLY AGREEING WITH THE JUDGMENT OF THIS COURT, WE ANSWER THE SUBSTANTIAL QUESTION OF LAW FRAMED BY US IN THE AFFIRMATIVE, IN FAVOUR OF THE ASSESSEE AND AGAINST 4 THE REVENUE. THE APPEAL IS ACCORDINGLY DISMISSED WITH NO ORDER AS TO COSTS. 4.1 AFTER GOING THROUGH THE AFORESAID FINDINGS OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAMAL WAHAL, I A M OF THE VIEW THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF T HE ASSESSEE AND THEREFORE, RESPECTFULLY FOLLOWING THE SAME, THE AD DITION IN DISPUTE IS DELETED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 24/10/2019. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 24/10/2019 SRB COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES