Income-tax Officer, V. Shri Vilas Balram Patil, Mumbai

ITA 923/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6941 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-12-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Salary income
• Section: 143(3); 54

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.923/PUN/2015 / ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD-4, SATARA. . / APPELLANT V/S SHRI VILAS BALRAM PATIL, MANAGING DIRECTOR, DADASAHEB PHALKE CHITRANAGARI, GOREGAON (EAST), MUMBAI 400 065. PAN : AHAPP4895M. . / RESPONDENT ASSESSEE BY : SHRI SUHAS BORA. REVENUE BY : SHRI MUKESH JHA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A)-4, PUNE DT. 31.03 .2015 FOR THE ASSESSMENT YEAR 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOME FROM SALARY AND OTHER SOURCES. ASSESSEE FILED HIS RETURN OF INC OME FOR / DATE OF HEARING : 13.12.2017 / DATE OF PRONOUNCEMENT: 20.12.2017 2 A.Y. 2009-10 ON 29.07.2009 DECLARING TOTAL INCOME OF RS.1,83,040/- WHICH WAS REVISED ON 30.03.2011 WITH TOTAL TA XABLE INCOME TO RS.3,12,140/-. THE CASE WAS SELECTED FOR SCRUTIN Y AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT V IDE ORDER DT.30.12.2011 AND THE TOTAL TAXABLE INCOME WAS DETERMINED AT RS.3,12,139/- AND THE TAXABLE LONG TERM CAPITAL GAINS AT RS.1,26,41,650/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE ORDER DT.31.03.2015 (IN APPEAL NO.PN/CIT(A)-4/ITO, WD-4/597/2011-12) GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN DS : 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (AP PEALS) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN ALLOWING THE EXEMPTION U/S 54 OF THE INCOME TAX ACT , THOUGH THE ASSESSEE HAS FAILED TO FOLLOW THE PROCEDURE LAID DO WN U/S 54(2) OF THE ACT OF DEPOSITING THE UNUTILIZED CAPITAL GAINS AMOUNT IN THE SPECIFIED CAPITAL GAINS ACCOUNT SCHEME BEFORE THE D UE DATE OF FILING RETURN OF INCOME U/S 139(1) OF THE ACT. 3. FOR THIS AND SUCH OTHER REASONS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LD.CIT(A) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. BEFORE US, AT THE OUTSET, LD.D.R. SUBMITTED THAT THOUGH THE REVENUE HAS RAISED VARIOUS GROUNDS BUT THE SOLE CONTRO VERSY IS WITH RESPECT TO ALLOWING EXEMPTION U/S 54 OF THE ACT. 3 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICE D THAT ASSESSEE HAD SOLD FLAT NO.C-501 AT MEERA CO-OP HO USING SOCIETY LTD., JOGESHWARI, MUMBAI ON 30.03.2009 FOR A TOTAL CONSIDERATION OF RS.1,65,00,000/- DECLARED LONG TERM CAPITAL GAINS OF RS.1,26,41,650/- AND HAD CLAIMED IT AS EXEMPT U/S 54 OF THE ACT BY INVESTING THE CAPITAL GAINS IN A RESIDENTIAL PROPERTY ON 26.04.2010. AO NOTICED THAT THE PROPERTY PURCHASED ON 26.04.2010 WAS AFTER ONE YEAR FROM THE DATE OF SALE OF FLAT AT MEERA CO-OP HOUSING SOCIETY. AO WAS OF THE VIEW THAT AS PER SEC.54 OF THE ACT, THE ASSESSEE SHOULD HAVE PURCHASED R ESIDENTIAL FLAT WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE OR WITHIN A PERIOD OF THREE YEARS AFTER THE DATE CONSTRUCTED A RESIDENTIAL HOUSE AND THE BALANC E AMOUNT WHICH WAS NOT UTILIZED BY THE ASSESSEE FOR THE PURPOSE O F CONSTRUCTION OF NEW ASSET SHOULD HAVE BEEN DEPOSITED IN A SPECIFIED BANK ACCOUNT BEFORE FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT. IN CASE OF THE ASSESSEE, AO NOTICED THAT AS SESSEE HAD FAILED TO DEPOSIT THE AMOUNT OF CAPITAL GAINS IN THE CAPITAL GAIN ACCOUNT AS REQUIRED U/S 54(2) OF THE ACT BEFORE THE DAT E OF FURNISHING OF RETURN U/S 139(1) OF THE ACT. HE ACCORDINGLY DENIED THE CLAIM OF THE DEDUCTION U/S 54 OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO RELYING ON THE DECISION OF HONBLE GAUHATI HIGH COURT IN T HE CASE OF CIT VS. RAJESH KUMAR JALAN (2006) 286 ITR 274 AND THE DECISION OF HONBLE KARANATAKA HIGH COURT IN THE CASE OF F ATIMA BHAI VS. ITO REPORTED IN 32 DTR 243 DECIDED THE ISSUE IN FAVOUR OF 4 THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVE NUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, AT THE TIME OF HEARING, THE LD.A.R. AT THE O UTSET FAIRLY SUBMITTED THAT THOUGH THE ISSUE HAS BEEN DECIDED BY HONBLE CIT(A) BY RELYING ON THE DECISION OF OTHER HIGH COURTS BUT THE ISSUE IN THE PRESENT CASE IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF HUMAYUN SULEMAN MERC HANT VS. CCIT IN ITA NO.545 OF 2012 ORDER DT.18.08.2016. HE TH EREFORE SUBMITTED THAT THE APPEAL BE DECIDED ACCORDINGLY. LD.D.R. DID NOT OBJECT TO THE CONTENTION OF LD.A.R. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO GRANTING OF BENEFITS U/S 54 OF THE ACT. IT IS AN UNDISPUTE D FACT THAT ASSESSEE HAS EARNED LONG TERM CAPITAL GAINS ON SALE OF FLAT WHICH WAS SOLD ON 30.03.2009 AND THE ENTIRE AMOUNT OF CAPITAL GA IN IS AT RS.1,26,41,650/- WAS NOT UTILIZED FOR THE PURCHASE OF RESIDE NTIAL FLAT TILL THE TIME OF FILING OF RETURN U/S 139(1) OF THE ACT I.E., UPT O 29.07.2009. THE NEW FLAT WAS PURCHASED BY THE ASSESSEE ON 26.04.2010 I.E., AFTER ONE YEAR FROM THE DATE OF TRANSFER OF O RIGINAL FLAT. IT IS ALSO AN UNDISPUTED FACT THAT THE CAPITAL GAIN E ARNED ON SALE OF FLAT WAS NOT DEPOSITED IN THE SPECIFIED BANK ACCOUN T TILL THE TIME OF PURCHASE OF NEW FLAT. ON THE ISSUE OF DEPOSIT OF UN UTILIZED CAPITAL GAINS IN SPECIFIED BANK ACCOUNT, WE FIND THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF HUMAYUN SULEMAN MERCHA NT (SUPRA) HAS HELD THAT THE MANDATE OF SEC.54F(4) OF THE AC T IS CLEAR 5 THAT THE AMOUNT WHICH HAS NOT BEEN UTILIZED EITHER IN PUR CHASE / CONSTRUCTION OF HOUSE BEFORE FILING RETURN OF INCOME HAS TO BE DEPOSITED IN THE ACCOUNT DULY NOTIFIED BY CENTRAL GOVERNM ENT FOR CLAIMING EXEMPTION. WE ARE THEREFORE OF THE VIEW THAT IN T HE PRESENT CASE, FOLLOWING THE DECISION OF HONBLE HIGH COURT IN THE CASE OF HUMAYUN SULEMAN (SUPRA), AO WAS JUSTIFIED IN DENYIN G THE CLAIM OF DEDUCTION U/S 54 OF THE ACT. IT IS A SETTLE D LAW THAT THE DECISIONS OF HIGH COURTS ARE BINDING ON THE SUB-ORDIN ATE COURTS, AUTHORITIES AND THE TRIBUNALS SITUATED WITHIN ITS JURISDICTIONAL TERRITORY AND THEREFORE IN THE PRESENT CASE THE DECISION OF HONBLE BOMBAY HIGH COURT, BEING THE JURISDICTION AL HIGH COURT IS BINDING ON US. BEFORE US, ASSESSEE HAS NO T PLACED ANY CONTRARY BINDING DECISION IN ITS SUPPORT. WE THEREFOR E SET ASIDE THE ORDER OF LD.CIT(A) AND UPHOLD THE ORDER OF AO. THUS, THE GROUNDS OF REVENUE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED . ORDER PRONOUNCED ON 20 TH DAY OF DECEMBER, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 20 TH DECEMBER, 2017. YAMINI 6 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-4, PUNE. PR.CIT-3, PUNE. '#$ %%&',) &', / DR, ITAT, B PUNE; $+,-/ GUARD FILE. / BY ORDER // TRUE COPY // ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.