SUDHAKAR RAM, V. ACIT 20(3),

MA 124/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9062 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 27-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIV
• Assessee Lawyers: DIVYESH I SHAH
• Section: 54F

Judgement Text

MA NO.124 OF 2012 SUDHAKAR RAM MUMBAIE BENCH PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER SHRI AMIT SHUKLA, JUDICIAL MEMBER AND M.A.NO.124/MUM/2012 (ARISING OUT OF ITA NO.4962/MUM/2008) (ASSESSMENT YEAR: 2005-06) SUDHAKAR RAM, 18-B/4, TAKSHASHILA, MAHAKALI CAVES ROAD, ANDHERI (E) MUMBAI 400093 PAN: AAIPR 8221 N VS. ACIT 20(3), ROOM NO.506, PIRAMAL CHAMBERS, PAREL, MUMBAI - 12 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI DIVYESH I SHAH DEPARTMENT BY: SHRI RAJIV, DR DATE OF HEARING: 10/8/2012 DATE OF PRONOUNCEMENT: 31/8/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS AN APPLICATIN FILED AGAINST THE ORDER OF TH E ITAT IN ITA NO.4692/MUM/2008 DATED 31/10/2011 ON REVENUE APPEAL . THE ISSUE IN REVENUE APPEAL WAS WITH REFERENCE TO THE G RANTING OF BENEFIT UNDER SECTION 54F AND TREATING TWO APARTMEN TS PURCHASED BY ASSESSEE AS ONE RESIDENTIAL UNIT. ON THE ISSUE O F ALLOWING BENEFIT OF SECTION 54F, THE ITAT AFFIRMED THE DECISION OF T HE CIT (A) ON WHICH ASSESSEE HAS NO GRIEVANCE AS STATED IN PARA-4 OF THE APPLICATION. ASSESSEE IS AGGRIEVED ABOUT THE BENEFI T BEING ALLOWED UNDER SECTION 54F TO ONLY ONE OF THE FLAT AND NOT T O THE TWO UNITS ALLOWED BY THE CIT (A). THE ITAT REVERSED THE CONCL USION OF THE CIT (A) ON THE FOLLOWING REASONS: A) THE APPLICANT HAS PURCHASED TWO SEPARATE FLATS UNDE R TWO SEPARATE AGREEMENTS. B) ALTHOUGH BOTH FLATS ARE SITUATED ON THE SAME FLOOR, FROM THE DRAWING/DESIGN OF THE FLATS FILED IN THE PAPER BOOK, IT IS CLEAR THAT THE TWO FLATS ARE NOT ADJACENT TO EACH O THER BUT MA NO.124 OF 2012 SUDHAKAR RAM MUMBAIE BENCH PAGE 2 OF 4 ARE OPPOSITE TO EACH OTHER AND ARE SEPARATED FROM E ACH OTHER BY COMMON PASSAGE, LOBBY, STAIRCASE ETC. C) COUNSEL FOR THE APPLICANT CONCEDED THAT THERE IS NO AGREEMENT WITH THE BUILDER THAT THE PASSAGE AND STA IRCASE ETC., ARE TO BE EXCLUSIVELY USED BY THE APPLICANT A ND BY ANY OTHER OWNER IN THE SAME BUILDING. D) MERELY BECAUSE THE APPLICANT HAS LET OUT TWO FLATS TO ONE PERSON FOR USE AS A SINGLE UNIT DOES NOT ENTITLE TH E APPLICANT TO CLAIM BENEFIT OF DEDUCTION UNDER SECTI ON 54F FOR BOTH THE UNITS. E) THE CERTIFICATE OBTAINED FROM THE ARCHITECT WAS ONL Y A SELF- SERVING DOCUMENT. 2. ASSESSEE IS AGGRIEVED BY THE AFORESAID FINDINGS TO SUBMIT THAT HON'BLE ITAT DID NOT TAKE REFERENCE TO THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SMT. K.G. RUKMINI AMMA, 196 TAXMAN 87 AND FURTHER NO OPPORTUNITY WAS GIVEN TO P ROVIDE EVIDENCE TO ESTABLISH THAT BOTH THE FLATS CONSISTED ONE UNIT. IT WAS THE SUBMISSION THAT ASSESSEE FILED SEVERAL DOCUMENT S AND FINDINGS TO SUBSTANTIATE THAT IT CONSISTED ONE UNIT ON THE B ASIS OF WHICH THE CIT (A) ALLOWED ASSESSEES CONTENTION, WHEREAS THE TRIBUNAL ON THE VERY SAME FINDINGS CONCLUDED OTHERWISE. 3. APART FROM THE ABOVE ISSUE, IN THE ALTERNATE ASSESS EE ALSO RAISED THE CONTENTION WITH REFERENCE TO THE AMOUNT QUANTIFIED FOR RELIEF UNDER SECTION 54F. IT WAS SUBMITTED THAT THE COST OF TWO FLATS ARE AS UNDER: FLAT NO.701 ` .1,01,46,000/- FLAT NO.702 ` .1,05,34,500/- 4. IT WAS SUBMITTED THAT THE TRIBUNAL HAS ALLOWED THE BENEFIT UNDER SECTION 54F ONLY FOR AN AMOUNT OF ` .95,85,000/-(APPEARS TO BE A TYPOGRAPHICAL ERROR SINCE CORRECT AMOUNT SHOUL D BE ` .96,85,000/- AS NOTED IN PAGE 2 OF THE IMPUGNED ORD ER). IT WAS FURTHER SUBMITTED THAT THE TRIBUNAL HAS TAKEN ONLY INTO ACCOUNT THE AMOUNT PAID TO THE BUILDER AND NOT TAKEN INTO THE C ONSIDERATION THE STAMP DUTY, REGISTRATION CHARGES, BROKERAGE AND REN OVATION CHARGES MA NO.124 OF 2012 SUDHAKAR RAM MUMBAIE BENCH PAGE 3 OF 4 INCURRED BY ASSESSEE. IT WAS SUBMITTED THAT THE DED UCTION SHOULD BE ALLOWED ON HIGHER AMOUNT THAN WHAT WAS QUANTIFIE D BY THE ITAT AS THE RELEVANT DETAILS ARE PLACED IN PAGE 16 OF TH E PAPER BOOK. 5. WE HAVE HEARD THE LEARNED COUNSEL AND THE LEARNED D R. WITH REFERENCE TO THE CONTENTION THAT TWO FLATS PURCHASE D SHOULD BE CONSIDERED AS ONE UNIT, THE CONTENTION OF ASSESSEE CANNOT BE ACCEPTED AS THE ITAT ON THE BASIS OF THE PAPER BOOK FILED ALONG WITH EVIDENCE PLACED BEFORE THE AUTHORITIES CAME TO A CO NCLUSION THAT THESE TWO FLATS EVEN THOUGH SITUATED ON THE SAME FL OOR ARE NOT ADJACENT TO THE OTHER BUT OPPOSITE TO EACH OTHER AN D HAS SEPARATED FROM EACH OTHER BY COMMON PASSAGE, STAIRCASE ETC. F URTHER ON THE STATEMENT GIVEN BY THE COUNSEL THAT THERE IS NO AGR EEMENT WITH THE BUILDER THAT THE PASSAGE AND STAIRCASE ETC., ARE TO BE EXCLUSIVELY USED BY ASSESSEE AND NOT BY ANY OTHER OWNER IN THE SAME BUILDING, A CONCLUSION HAS BEEN DRAWN BY THE ITAT. SINCE ANY OTHER DECISION WOULD ONLY AMOUNT TO REVIEW OF THE ORDER WHICH WAS NOT PERMITTED UNDER THE PROVISIONS OF SECTION 254(2) AS HELD BY T HE HON'BLE BOMBAY HIGH COURT IN THE CASE OF RAMESH ELECTRIC AN D TRADING CO 203 ITR 497(BOM). ACCORDINGLY THE CONTENTION ABOUT TREATING THE TWO FLATS AS ONE UNIT AND REQUEST FOR REMANDING THE MATTER TO AO FOR VERIFICATION IS REJECTED. 6. HOWEVER, THE ALTERNATE CONTENTION ABOUT THE COST OF FLATS, FOR WHICH THE DEDUCTION UNDER SECTION 54F WAS ALLOWABLE ON ONE. AS SEEN FROM THE PAGE 16 OF THE PAPER BOOK, ASSESSEE H AS FURNISHED THE COST INCLUDING THE STAMP DUTY, REGISTRATION AND BROKERAGE CHARGES FOR FLAT NO.701 AT ` 1,01,46,000/- AND FOR FLAT NO.702 AT ` 1,05,34,500/-. HOWEVER, THE ITAT CONSIDERED THE COS T OF FLAT NO.701 ONLY AT THE CONSIDERATION OF ` 96,85,000/-. ASSESSEE ALSO MENTIONED THAT AN AMOUNT OF ` 25,33,000/- WAS ALSO SPENT ON RENOVATION ETC., TOTAL CLAIM ON BOTH THE FLATS WAS TO THE TUNE OF ` 2,32,13,500/- WHICH WAS THE CLAIM BEFORE THE CIT (A ) ON WHICH WAS ALLOWED BY HIM. THUS, THERE IS A MISTAKE IN ARRIVIN G AT THE AMOUNT OF ` 95,85,000/- IN PARA 6.1 AND ALSO THE FLAT NUMBER. T HEREFORE, TO THAT EXTENT THE ORDER STANDS MODIFIED AS UNDER: MA NO.124 OF 2012 SUDHAKAR RAM MUMBAIE BENCH PAGE 4 OF 4 SINCE FLAT NO.702 GIVES MAXIMUM BENEFIT TO ASS ESSEE THE COST BEING ` `` ` .1,05,34,500/- ASSESSEE, IN OUR OPINION THAT HE IS ENTITLED IN DEDUCTION UNDER SECTION 54F TO THIS EXT ENT. FURTHER THE AMOUNT SPENT ON RENOVATION CHARGES AND ARCHITEC T CHARGES OF ` `` ` .25,33,000/- SHOULD BE VERIFIED TO THE EXTENT THEY ARE INCLUDIBLE AS COST FOR THE FLAT NO.702. AO AFTER DU E VERIFICATION CAN ALSO CONSIDER THE AMOUNT OUT OF THIS CLAIM. WE HOLD AND DIRECT ACCORDINGLY. THE GROUND RAISED BY ASSESSEE I S ACCORDINGLY PARTLY ALLOWED 7. IN THE RESULT MISCELLANEOUS APPLICATION FILED BY AS SESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2012. SD/- SD/- (AMIT SHUKLA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 31 ST AUGUST, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI