Ramesh Chand, Kanpur V. Principal Commissioner of Income Tax-I, Kanpur

MA 39/LKW/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0925 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 30-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Assessee Lawyers: JAGDISH
• Section: 54F; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER M.A. NO.39/LKW/2018 [IN ITA NO. 252/LKW/2017] ASSESSMENT YEAR: 2013 - 14 RAMESH CHAND BANSA L 73/20, COLLECTOR GANJ KANPUR V. PRINCIPAL CIT - 1 KANPUR T AN /PAN : AAMPB6026F (APP LIC A NT) (RESPONDENT) APP LIC ANT BY: SHRI JAGDISH, ADVOCATE RESPONDENT BY: SHRI C. K. SINGH, D.R. DATE OF HEARING: 16 11 201 8 DATE OF PRONOUNCEMENT: 20 11 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS MISCELLANEOUS APPLICATION PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE TRIBUNAL DATED 24/8/2018 IN ITA NO.252/LKW/2017. 2 . THE FACTS IN THIS CASE ARE THAT AN APPEAL WAS FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT - 1, KANPUR UNDER SECTION 263 OF THE ACT. ONE OF THE AREA S, IN WHICH PRINCIPAL CIT HELD THAT ASSESSING OFFICER HAS NOT MADE ADEQUATE ENQUIRY REGARDING CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. THE RELEVANT OBSERVATIONS OF TH E TRIBUNAL ON THIS ISSUE ARE AS UNDER: - 11 . REVENUE HAS ALSO RAISED AN OBJECTION BEFORE US THAT PROPERTY PURCHASED WAS RESIDENTIAL - CUM - COMMERCIAL PROPERTY. ON THIS ISSUE WE TAKE GUIDANCE FROM THE DECISION OF THE CO - ORDINATE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF MAHAVIR PRASAD GUPTA M.A. NO.39/LKW/2018 PAGE 2 OF 5 VS. CIT [2006] 101 TTJ 1078 WHEREIN IT WAS HELD THAT SECTION 54F OF THE ACT ENVISAGES EXEMPTION OF LONG TERM CAPITAL GAIN IF THE NET CONSIDERATION THEREOF IS APPROPRIATED TOWARDS THE CONSTRUCTION OF A NEW RESIDENTIAL HOUSE . THE NEW PROPERTY, IN THIS CASE, HAS BEEN LET OUT FOR COMMERCIAL USE, AND THUS REVENUE SEEKS TO DENY THE EXEMPTION UNDER SECTION 54F. THEREAFTER DELHI TRIBUNAL HELD THAT THE USE OF THE PROPERTY IS NOT THE RELEVANT CRITERION TO CONSIDER THE ELIGIBILITY OF SECTION 54F BENEFIT. A BARE READING OF THE PROVISIONS OF SECTION 54F REFLECTS THAT WHAT IS REQUIRED IS INVESTMENT IN A NEW RESIDENTIAL HOUSE. THEREFORE, THE QUESTION THAT ARISES IN THE INSTANT CASE IS AS TO WHETHER THE INVESTMENT MADE IN THE NEW PROPERTY C ONSTRUCTED OR PROCURED BY THE ASSESSEE WAS FROM THE MONEY ASSESSEE RECEIVED FROM SALE OF IMMOVEABLE PROPERTY. WE OBSERVE THAT IN THE PRESENT CASE IT IS NOT DISPUTED BY THE DEPARTMENT THAT ASSESSEE HAS PURCHASED ANOTHER PROPERTY BY SELLING AGRICULTURAL LAN D, THEREFORE, INVESTMENT PART IS CLEAR AND IS PROVED. THE DEPARTMENT IS NOT AGREEABLE TO ALLOW DEDUCTION UNDER SECTION 54F OF THE ACT SINCE THE PROPERTY WAS PARTLY COMMERCIAL AND PARTLY RESIDENTIAL. SINCE WE HAVE ALREADY EXAMINED FROM THE DECISION OF THE CO - ORDINATE DELHI BENCH OF THE TRIBUNAL THAT INTENTION OF THE LEGISLATURE IS THAT IN ORDER TO GET ELIGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT, ONE HAS TO SEE WHETHER INVESTMENT IS COMPLETED OR NOT. IN THIS CASE OF THE ASSESSEE, INVESTMENT HAS ALR EADY BEEN PROVED. 12 . SIMILARLY, IN THE CASE OF M. HARINITHA READDY, HYDERABAD AND OTHERS VS. DEPARTMENT OF REVENUE IN ITA NO.1019 & 1021/HYD/2009, IT WAS HELD THAT MERE NON - RESIDENTIAL USE SUBSEQUENTLY WOULD NOT RENDER THE PROPERTY INELIGIBLE FOR BEING BENEFITTED UNDER SECTION 54F OF THE ACT IF IT IS OTHERWISE A RESIDENTIAL PROPERTY AND UPHELD THE VIEW OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF MAHAVIR PRASAD GUPTA VS. CIT (SUPRA). MEANING THEREBY, SUBSTANTIAL USE FOR RESIDENTIAL PURPOSE, AN INVESTM ENT SHOULD HAVE BEEN MADE BY THE ASSESSEE. IN THE INSTANT CASE, PROPERTY IS PARTLY RESIDENTIAL AND PARTLY COMMERCIAL, THEREFORE, RESIDENTIAL ASPECT IS ALREADY INVOLVED THEREIN AND WE M.A. NO.39/LKW/2018 PAGE 3 OF 5 HAVE EXAMINED THAT ASSESSEE HAS MADE INVESTMENT IN RESIDENTIAL PROPERTY OUT OF SALE PROCEEDS RECEIVED FROM SALE OF AGRICULTURAL LAND IN WHICH HE WAS CO - OWNER. 13 . NOW WE LOOK INTO THE PROVISO TO SECTION 54F OF THE ACT WHICH SPECIFIES THAT NOTHING CONTAINED IN THIS SUB - SECTION SHALL APPLY WHERE THE ASSESSEE,(I) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR(II) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR(III) CONSTRU CTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; AND(B) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE O RIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE ESSENCE OF THE PROVISO IS, THEREFORE, THAT DEDUCTION UNDER SECTION 54F OF THE ACT SHALL NOT BE APPLICABLE IN CASE AN ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE AT THE TIME WH EN NEW ASSET IS PROCURED. THIS ASPECT WAS NOT EXAMINED BY THE ASSESSING OFFICER AND NOTHING ON RECORD SHOWS THAT THIS ISSUE WAS ENQUIRED OR INVESTIGATED BY THE ASSESSING OFFICER TO VERIFY ELIGIBILITY OF DEDUCTION UNDER SECTION 54F OF THE ACT. 14 . SO FAR A LL OTHER FACTORS ARE CONCERNED, AS WE HAVE EXAMINED EARLIER THOUGH THE ASSESSEE QUALIFIES, HOWEVER, THE VERY FACT THAT PROVISO TO SECTION 54F OF THE ACT AND THE CONDITIONS SPECIFIED THEREIN HAS NOT BEEN ENQUIRED AND DEALT WITH BY THE ASSESSING OFFICER, SO AS TO WHETHER BENEFIT OF SECTION 54F OF THE ACT WAS ALLOWABLE TO THE ASSESSEE OR NOT HAS NOT BEEN EXAMINED AND TO THIS EXTENT WE HOLD THAT THE ORDER PASSED BY THE PR. COMMISSIONER OF INCOME - TAX STANDS GOOD. 3 . THE CONTENTION OF THE ASSESSEE IS THAT THE TRIBU NAL SHOULD NOT HAVE MADE ANY OBSERV ATION WITH REGARD TO THE APPLICATION OF PROVISO TO SECTION 54F OF THE ACT. THE LD. A.R. OF THE ASSESSEE TO THAT EXTENT M.A. NO.39/LKW/2018 PAGE 4 OF 5 SUBMITTED THAT THERE WAS A MISTAKE APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL, WHICH NEEDS RECTI FICATION . 4 . THE LD. D.R., ON THE OTHER HAND, PLACED RELIANCE UPON THE ORDER OF THE TRIBUNAL. 5 . WE HAVE PERUSED THE CASE RECORD AND HEARD THE RIVAL CONTENTIONS. THE ISSUE WAS WHETHER WITH REGARD TO THE DEDUCTION CLAIMED UNDER SECTION 54F OF THE ACT , THE PRINCI PAL CIT WAS CORRECT UNDER REVISIONARY JURISDICTION UNDER SECTION 263 OF THE ACT OR NOT AND WHETHER THE ASSESSING OFFICER HAS LOOKED INTO ALL THE ASPECTS BEFORE ALLOWING DEDUCTION UNDER SECTION 54F OF THE ACT. WHEN WE ANALYSED AND AS IS EVIDENT FROM THE OR DER OF THE TRIBUNAL DATED 24/8/2018 , WE FOU ND THAT PROVISO TO SECTION 54F OF THE ACT AND CONDITION SPECIFIED THERE IN HAS NOT BEEN ENQUIRED AND DEALT WITH BY THE ASSESSING OFFICER SO AS TO WHETHER BENEFIT OF SECTION 54F OF THE ACT WAS ALLOWABLE TO THE ASSES SEE OR NOT AND TO THIS EXTENT WE HAVE HELD THAT THE ORDER PASSED BY THE PRINCIPAL CIT STANDS GOOD. THE P ROVISIONS GRANTING DEDUCTION HAS TO BE TAKEN IN ENTIRETY AND CONDITIONS STIPULATED IN THE PROVISO ALSO SHOULD BE LOOKED INTO BY THE ASSESSING OFFICER B EFORE COMING TO A CONCLUSION. WE ARE OF THE CONSIDERED VIEW THAT S INCE THE TRIBUNAL HAS TAKEN A PARTICULAR VIEW IN THE LIGHT OF ASSESSEES CONTENTIONS AND THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE , THE FINDINGS OF THE TRIBUNAL CANNOT BE REVIEWED UNDE R THE GARB OF RECTIFICATION. 6 . WE, THEREFORE, FIND NO MERIT IN THIS MISCELLANEOUS APPLICATION OF THE ASSESSEE, AS NO ERROR APPARENT IN THE ORDER OF THE TRIBUNAL IS POINTED OUT. THE LD. COUNSEL FOR THE ASSESSEE HAS TRIED TO DISPUTE THE FINDINGS OF THE TRIBUN AL AND SEEKING A REVIEW OF THE ORDER OF THE TRIBUNAL , WHICH IS NOT PERMISSIBLE UNDER SECTION 254(2) OF THE ACT AND WE ACCORDINGLY REJECT THIS MISCELLANEOUS APPLICATION. M.A. NO.39/LKW/2018 PAGE 5 OF 5 7 . IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 20 / 1 1 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH NOVEMBER , 201 8 JJ: 1611 COPY FORWARDED TO: 1 . APP LIC ANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR BY ORDER ASSISTANT REGISTRAR 1. DA TE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEM ENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON T HE ORD ER 9. DATE OF DESPATCH OF THE ORDER