INCOME TAX OFFICER (IT)-2(1)(1), MUMBAI V. SHRI JAIDEEP NAGESH DESAI, MUMBAI

ITA 832/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6826 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 09-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT SOMAIYA
• Section: 143(3); 201; 147; 54

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI R.C. SHARMA ( A M) & SHRI PAWAN SINGH ( J M) I.T.A. NO. 832 /MUM/ 201 8 (ASSESSMENT YEAR 20 09 - 10 ) ITO(IT) - 2(1)(1) 17 TH FLOOR, ROOM NO. 1727, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400 021. V S . SHRI JAIDEEP NAGESH DESAI FLAT NO. 2 SNEHADEEP SOCIETY M.K. NAUPADA, THANE MAHARASHTRA - 400602. PAN : AMKPD3041L ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY NONE DEPARTMENT BY SHRI NISHANT SOMAIYA DATE OF HEARING 27 . 2 . 201 9 DATE OF PRONOUNCE MENT 28 . 2 . 201 9 O R D E R PER R.C. SHARMA (AM) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A) FOR A.Y. 2009 - 10 IN THE MATTER OF ORDER PASSED U/S. 143(3) READ WITH SECTION 147 OF THE I.T. ACT. 2. GRIEVANCE OF THE REVENUE RELATE TO ALLOWING DEDUCTION U/S. 54 OF THE ACT. 3. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT THE ASSESSEES CASE WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM DDIT(INV) WITH REGARD TO DEPOSIT OF CHEQUE IN RESPECT O F HOUSE PROPERTY SOLD BY THE ASSESSEE. FROM THE RECORD, WE FIND THAT /ASSESSEE PURCHASED RESIDENTIAL HOUSE IN DECEMBER 2002, FOR RS. 65 LAKHS INCLUDING (STAMP DUTY AND REGISTRATION) FROM NRE FUNDS. THIS PROPERTY WAS SOLD IN 2008 FOR RS. 1.75 CRS. AND THE E NTIRE SALE PROCEEDS WERE DEPOSITED IN HSBC BANK ACCOUNT. OUT OF THE SALE PROCEEDS, RS. 22 LAKHS WAS PLACED AS FIXED DEPOSITS IN HSBC BANK AND ALSO UTILIZED FOR PURCHASE OF RESIDENTIAL PROPERTY IN DUBAI IN NOVEMBER, 2008. 2 IN COMPUTATION OF INCOME, THE ASSES SEE HAS CLAIMED EXEMPTION U/S. 54 OF THE ACT WITH RESPECT TO NEW RESIDENTIAL PROPERTY PURCHASED IN DUBAI. HOWEVER, THE ASSESSING OFFICER DECLINED THE ASSESSEES CLAIM ON THE PLEA THAT THE HOUSE PROPERTY WAS NOT PURCHASED IN INDIA THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S. 54 OF THE ACT. 4. BY THE IMPUGNED ORDER, LEARNED CIT(A) ALLOWED ASSESSEES CLAIM AFTER OBSERVING AS UNDER : - 4. THE REASON FOR APPEAL IS DISALLOWANCE OF CLAIM U/S 54 (RELATING TO COMPUTATION OF TAXABLE LONG TERM CAPITAL GAI N) ON THE GROUND THAT INVESTMENT IN NEW RESIDENTIAL HOUSE IS LOCATED OUTSIDE INDIA. THIS ASPECT IS TO BE VIEWED IN THE CONTEXT OF SITUATION PRIOR TO AMENDMENT MADE BY FINANCE ACT 2014. THE ASSESSING OFFICER HELD THAT INVESTMENT OUTSIDE INDIA IS NOT ELIGIBL E FOR DEDUCTION UNDER SECTION 54. 5. THE LATEST JUDICIAL POSITION ON THE MATTER IS AS UNDER: A. THE DECISION OF HON. ITAT IN CASE OF LEENA J. SHAH HAS BEEN REVERSED BY GUJARAT HIGH COURT IN [201 7] 392 ITR 18 B. IN ITO VS MR. NISHANT LALIT JADHAV I TA NO. 6883/MUM/2014 DATED 26. 04.201 7 HON. ITAT, MUMBAI HAS FOLLOWED ABOVE DECISION. BOTH THE ABOVE HAS RULED THAT PRIOR TO 01.04.2015, THERE IS NO EXPLICIT INVESTMENT IN NEW RESIDENTIAL HOUSE IS TO BE MADE IN INDIA. 6. SINCE THE MATTER STANDS IN FAVOUR OF ASSESSEE AS PER LATEST JUDICIAL POSITION, THE SAME NEED TO BE FOLLOWED. ACCORDINGLY I DIRECT ASSESSING OFFICER TO GRANT DEDUCTION UNDER SECTION 54 ON BASIS OF ACTUAL INVESTMENT IN DUBAI ON RESIDENTIAL PROPERTY. 5. AS PER THE ORDER OF THE AS SESSING OFFICER, THERE IS NO DISPUTE WITH REGARD TO FACT OF ASSESSEES HA VING PURCHASED A NEW HOUSE PROPERTY IN DUBAI. AMENDMENT WAS BROUGHT OUT BY THE FINANCE ACT, 2014, ACCORDING TO WHICH DEDUCTION U/S. 54 OF THE ACT CAN BE GRANTED ONLY WITH RESPECT TO N EW HOUSE PROPERTY IN INDIA. LEARNED CIT(A) ALLOWED THE ASSESSEES CLAIM AFTER FOLLOWING DECISION OF HON'BLE GUJARAT HIGH COURT, WHEREIN IT HAS BEEN CLEARLY HELD THAT AMENDMENT IS W.E.F. A.Y. 2015 - 16 AND SINCE INVESTMENT MADE PRIOR TO AMENDMENT, THE AMENDED PROVISIONS WILL NOT BE APPLICABLE AND ASSESSEE WILL 3 BE ALLOWABLE DEDUCTION U/S. 54 OF THE ACT. NO CONTRARY DECISION WAS PLACED ON RECORD BY LEARNED DR. 6. ACCORDINGLY, W E DO NOT FIND ANY INFIRMITY IN FOR ALLOWING ASSESSEES CLAIM FOR DEDUCTION U/S. 54 OF THE ACT. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 28 . 2 . 201 9 . SD/ - SD/ - (PAWAN SINGH ) (R.C. SHARMA ) J U DICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 28 / 2 / 20 1 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR P RIVATE S ECR ETARY ) PS ITAT, MUMBAI