Smt Anuradha Rajendra Gupta , Bangalore V. Income Tax Officer Ward-7(2)(1), Bangalore

MA 6/BANG/2020

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4803 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 16-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Keywords: Capital asset
• Section: 54F; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER [ M P NO. 6 /B ANG /20 20 (IN ITA NO.3255/BANG/2018)] (ASSESSMENT YEAR: 20 1 5 - 1 6 ) SMT. ANURADHA RAJENDRA GUPTA, NO.1600, EAST END, MAIN ROAD, JAYANAGAR, BENGALURU 560 069. APPLICANT VS. THE ITO, WARD - 7(2)(1), BENGALURU . RESPONDENT APPLICANT BY : SHRI. H. GURUSWAMY, ITP REVENUE BY : SHRI. MANJEET SINGH , ADDL. C IT DATE OF HEARING : 0 7 / 0 2 /20 20 DATE OF PRONOUNCEMENT : 24 / 0 2 /20 20 O R D E R PER A. K. GARODIA, AM: THIS MISCELLANEOUS PETITION (MP) IS FILED BY THE ASSESSEE AND IT IS CONTENDED IN THIS MP THAT THERE ARE CERTAIN APPARENT MISTAKES IN THE IMPUGNED TRIBUNAL ORDER. 2. IN THE COURSE OF HEARING OF THE MP, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT THE TRIBUNAL HAD DECIDED THE ISSUE AGAINST ASSESSEE AS PER THE PROVISIONS OF PROVISO A(II) OF SECTION 54F(1) WITHOUT CONSIDERING PROVISO (B). HE SUBMITTED THAT SINCE THE WORD USED BETWEEN PROVISO (A) AND (B) IS AND, BOTH THE PROVISO HAVE TO BE EXAMINED SIMULTANEOUSLY AND AS PER THE MP NO. 6/BANG/2020 (IN ITA NO.3255/BANG/2018) PAGE 2 OF 6 PROVISIONS CONTAINED IN PROVISO (B), EVEN IF THE ASSESSEE IS OWNING MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET, IT HAS TO BE SEEN AS TO WHETHER INCOME FROM SUCH RESIDENTIAL HOUSES IS CHARGEABLE UNDER THE HEAD I NCOME FROM HOUSE PROPERTY. HE SUBMITTED THAT SINCE THIS ASPECT WAS NOT EXAMINED AND DECIDED, THERE IS AN APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER WHICH SHOULD BE RECTIFIED OR THIS TRIBUNAL ORDER SHOULD BE RECALLED FOR THE PURPOSE OF DECIDING AFRESH AFTER CONSIDERING THIS PROVISO (B) TO SECTION 54F(1). LEARNED DR OF THE REVENUE SUBMITTED THAT THERE IS NO MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE REPRODUCE THE PROVISO TO SECTION 54F(1) WHICH READS AS UNDER: 54F. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; MP NO. 6/BANG/2020 (IN ITA NO.3255/BANG/2018) PAGE 3 OF 6 (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER SECTION 45: [PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY WHERE (A) 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) CONSTRUCTS 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 ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY'. 4. AS PER THE PROVISIONS CONTAINED IN PROVISO TO SECTION 54F(1) AS REPRODUCED ABOVE, SECTION 54F(1) WILL NOT APPLY IF THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE DATE OF THE TRANSFER OF ORIGINAL ASSET AS WELL AS IN SOME OTHER SITUATIONS, SUCH AS WHERE THE ASSESSEE PURCHASES ANY RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET AND THE INCOME FROM SUCH MP NO. 6/BANG/2020 (IN ITA NO.3255/BANG/2018) PAGE 4 OF 6 RESIDENTIAL HOUSE OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. NOW WE REPRODUCE PARA 11 OF THE IMPUGNED TRIBUNAL ORDER AS PER WHICH THE ISSUE IN DISPUTE WAS DECIDED BY THE TRIBUNAL. THIS PARA IS AS UNDER: 11. IN RESPECT OF THE APPLICABILITY OF THIS PROVISO, THIS IS THE ONLY SUBMISSION OF LD. AR OF ASSESSEE IN PARA 13 OF WRITTEN SUBMISSIONS AS REPRODUCED ABOVE THAT SINCE AS PER THE CLAIM OF THE ASSESSEE, DEDUCTION IS ALLOWABLE IN RESPECT OF THE PROPERTY PURCHASED ON 28.04.2014 AND THE ASSESSEE HAS NOT PURCHASED ANY OTHER PROPERTY AFTER THIS DATE, THIS PROVISO IS NOT APPLICABLE. IN THIS REGARD, WE FIND NO MERIT IN THIS CONTENTION OF LD. AR OF ASSESSEE BECAUSE AS PER THE PROVISO (A)(II) OF SECTION 54F (1) AS REPRODUCED ABOVE, THIS IS NOT THE REQUIREMENT THAT NO OTHER PROPERTY OTHER THAN THE NEW PROPERTY SHOULD BE PURCHASED AFTER THE PURCHASE OF NEW ASSET. IN FACT, THE REQUIREMENT OF THE PROVISO IS THIS THAT IF THE ASSESSEE PURCHASES ANY RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET WITHIN THE PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET, DEDUCTION IS NOT ALLOWABLE U/S. 54F (1). HENCE WHETHER THE DEDUCTION U/S. 54F (1) IS ALLOWABLE IN RESPECT OF SECOND PROPERTY OR FIRST PROPERTY, IT IS NOT MATERIAL BECAUSE IN BOTH THE SITUATIONS, THE PROVISO WILL BE OPERATING AND AS A RESULT, THE ASSESSEE WILL NOT BE ELIGIBLE FOR DEDUCTION U/S. 54F (1). IN VIEW OF THESE FACTS AND LEGAL POSITION, WE HOLD THAT THERE IS NO INFIRMITY IN THE ORDER OF CIT(A) AS PER WHICH HE HAS HELD THAT ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S. 54F (1) IN THE FACTS OF PRESENT CASE. 5. AS PER THE ABOVE PARA REPRODUCED FROM THE TRIBUNAL ORDER, IT IS SEEN THAT THERE IS DISCUSSION IN RESPECT OF PROVISO A (II) OF SECTION 54F(1) BUT THERE IS NO DISCUSSION ABOUT PROVISO (B) AND THERE IS NO FINDING THAT THE INCOME FROM HOUSES PURCHASED BY THE MP NO. 6/BANG/2020 (IN ITA NO.3255/BANG/2018) PAGE 5 OF 6 ASSESSEE AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET IS CHARGEABLE TO INCOME TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IN PARA 10 OF THE IMPUGNED TRIBUNAL ORDER, IT IS NOTED BY THE TRIBUNAL THAT THE ASSESSEE PURCHASED TWO HOUSE PROPERTIES ON 25.04.2014 AND 28.04.2014. ONE OF THESE TWO PROPERTIES IS NEW ASSET FOR WHICH DEDUCTION IS CLAIMED U/S 54F. PROVISO WILL BE APPLICABLE IF THE CONDITION PRESCRIBED IN PROVISO (B) THAT INCOME IS TAXABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY FOR THE SECOND HOUSE IS SATISFIED. IN PARA NO.11 OF THE IMPUGNED TRIBUNAL ORDER AS REPRODUCED ABOVE, THERE IS NO DISCUSSION OR FINDING ON THIS ASPECT AS TO WHETHER INCOME FROM PROPERTY PURCHASED ON THESE TWO DATES IS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY OR NOT. THERE MAY BE VARIOUS REASONS DUE TO WHICH INCOME FROM HOUSE PROPERTY MAY NOT BE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND SINCE THIS ASPECT WAS NOT EXAMINED AND DECIDED BY THE TRIBUNAL IN THE IMPUGNED TRIBUNAL ORDER, WE FIND FORCE IN THE SUBMISSION OF THE LEARNED AR OF THE ASSESSEE THAT THERE IS APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER TO THIS EXTENT. HENCE, WE FEEL IT PROPER TO RECALL THIS EX-PARTE TRIBUNAL ORDER FOR A FRESH DECISION ON THIS LIMITED ASPECT AS TO WHETHER THE INCOME FROM THESE TWO HOUSE PROPERTIES PURCHASED BY THE ASSESSEE ON 25.04.2014 AND 28.04.2014 ARE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY OR NOT AND THEREAFTER MP NO. 6/BANG/2020 (IN ITA NO.3255/BANG/2018) PAGE 6 OF 6 DECIDE ABOUT THE APPLICABILITY OF THE PROVISO TO SECTION 54F(1) OF THE IT ACT, 1961. WE ORDER ACCORDINGLY. REGISTRY IS DIRECTED TO FIX THIS APPEAL FOR FRESH HEARING ON THIS LIMITED ASPECT IN REGULAR COURSE. NOTICE SHOULD BE ISSUED TO BOTH SIDES. 6. IN THE RESULT, MISCELLANEOUS PETITION FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- ( BEENA PILLAI ) JUDICIAL MEMBER (A. K. GARODIA) ACCOUNTANT MEMBER PLACE : BANGALORE DATED : 24/02/2020 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE