RUPANG C. SUCHDE, PUNE v. ITO 23(3)(4), MUMBAI

CO 84/MUM/2016 | 2011-2012
Pronouncement Date: 19-10-2016 | Result: Dismissed

Appeal Details

RSA Number 8419923 RSA 2016
Assessee PAN BHHPS1959P
Bench Mumbai
Appeal Number CO 84/MUM/2016
Duration Of Justice 4 month(s) 18 day(s)
Appellant RUPANG C. SUCHDE, PUNE
Respondent ITO 23(3)(4), MUMBAI
Appeal Type Cross Objection
Pronouncement Date 19-10-2016
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 19-10-2016
Assessment Year 2011-2012
Appeal Filed On 01-06-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D MUMBAI BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SHRI ASHWANI TANEJA ACCOUNTANT MEMBER ITA NO.7183/M/2014 ASSESSMENT YEAR: 2011-12 OFFICE OF THE ITO 24(3)(4) 702 7 TH FLOOR PIRAMAL CHAMBERS LALBAUG MUMBAI - 400012 VS. SHRI RUPANG C SUCHDE C/O KIRAN KANANI & ASSOCIATES CA 71/A RASTA PETH OPP ISRAIL CHURCH NARASIMHA APARTMENTS PUNE 411 011 PAN: BHHPS1959P (APPELLANT) (RESPONDENT) CO NO.84/M/2016 (ITA NO.7183/M/2014) ASSESSMENT YEAR: 2011-12 SHRI RUPANG C SUCHDE C/O KIRAN KANANI & ASSOCIATES CHARTERED ACCOUNTANTS 71/A RASTA PETH OPP ISRAIL CHURCH NARASIMHA APARTMENTS PUNE 411 011 PAN: BHHPS1959P VS. OFFICE OF THE ITO 24(3)(4) 702 7 TH FLOOR PIRAMAL CHAMBERS LALBAUG MUMBAI - 400012 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI ASHWIN KASHINATH A.R. REVENUE BY : SHRI VACHASPAT TRIPATHI D.R. DATE OF HEARING : 04.10.2016 DATE OF PRONOUNCEMENT : 19.10.2016 O R D E R PER SANJAY GARG JUDICIAL MEMBER: THE ABOVE TITLED APPEAL BY THE REVENUE AND THE CRO SS OBJECTIONS BY THE ASSESSEE HAVE BEEN PREFERRED AGAINST THE ORDER DATE D 24.09.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. ITA NO.7183/M/2014 & CO NO.84/M/2016 SHRI RUPANG C SUCHDE 2 2. AT THE OUTSET THE LD. A.R. OF THE ASSESSEE HAS STATED AT BAR THAT HE DOES NOT PRESS THE CROSS OBJECTION FILED BY THE ASSESSEE . THE CROSS OBJECTION OF THE ASSESSEE IS THEREFORE DISMISSED AS NOT PRESSED. 3. NOW COMING TO THE APPEAL OF THE REVENUE. THE RE VENUE IN THIS APPEAL HAS AGITATED THE ACTION OF THE LD. CIT(A) IN ALLOWI NG THE CLAIM OF THE ASSESSEE UNDER SECTION 54 OF THE ACT FOR REINVESTMENT OF LON G TERM CAPITAL GAINS IN HOUSE PROPERTY IN SAUDI ARABIA. AT THE OUTSET THE LD. A .R. OF THE ASSESSEE HAS STATED THAT THE FACTS IN THIS CASE HAVE NOT BEEN DISPUTED. THE LEGAL PROPOSITION INVOLVED IN THIS CASE IS WHETHER THE ASSESSEE IS EL IGIBLE TO CLAIM BENEFIT UNDER SECTION 54 OF THE ACT ON PURCHASE OF A RESIDENTIAL HOUSE OUTSIDE INDIA. HE HAS STATED THAT THE ISSUE IS NOW SQUARELY COVERED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF LEENA JUGALKISHOR SHAH VS. ACIT (2016) 72 TAXMAN.COM 185 AND FURTHER BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF I TO VS. SHRI FAROKH JAL DEBBO ITA NO.4650/M/2013 VIDE ORDER DATED 05.02.16 . FURTHER HE HAS ALSO RELIED UPON THE FOLLOWING DECISIONS IN THIS RESPECT : 1. GIRDHAR MOHANANI VS. ITO (ITA NO.4591/M/2013) DA TED 06.05.2010 2. ITO VS. DR. GIRISH M. SHAH (ITA NO.3582/M/2009 D ATED 17.02.2010 3. N. RANGANATHAN VS. ITO 33 ITR (TRIB) 444 4. VINAY MISHRA V. ACIT (141 ITD 301) 5. ACIT VS. IQBAL JAFAR 151 ITD 364 4. WE HAVE GONE THROUGH THE DECISION OF THE HONBLE GUJARAT HIGH COURT (SUPRA). CONSIDERING THE IDENTICAL ISSUE THE HON BLE GUJARAT HIGH COURT WHILE ANALYSING THE PROVISION OF SECTION 54F HAS OBSERVED THAT THERE WAS NO CONDITION IN SECTION 54F BEFORE ITS AMENDMENT BY FI NANCE (2) ACT 2004 WHICH CAME INTO EFFECT W.E.F. 01.04.15 THAT SALE P ROCEEDS ARISING OUT OF TRANSFER OF CAPITAL ASSET SHOULD BE INVESTED IN A R ESIDENTIAL HOUSE SITUATED IN INDIA. THAT THE SAID AMENDMENT BROUGHT IN SECTION 54F HAS BEEN MADE APPLICABLE PROSPECTIVELY. THE HONBLE HIGH COURT H AS FURTHER HELD THAT EVEN ITA NO.7183/M/2014 & CO NO.84/M/2016 SHRI RUPANG C SUCHDE 3 WHEN THE LANGUAGE OF A TAXING PROVISION IS AMBIGUOU S OF CAPABLE OF MORE MEANING THAN ONE THEN COURT HAS TO ADOPT THE INTER PRETATION WHICH FAVOURS THE ASSESSEE. THE HONBLE HIGH COURT HAS FURTHER HELD THAT SECTION 54F OF THE ACT BEFORE ITS AMENDMENT WAS CLEAR THAT THE ASSESSEE SH OULD INVEST IN A RESIDENTIAL HOUSE AND THAT THE WORDS IN INDIA COULD NOT BE IM PORTED INTO THE LANGUAGE OF THE SECTION. THE CONCLUDING PART OF THE ORDER OF T HE HONBLE GUJARAT HIGH COURT IS REPRODUCED AS UNDER: 9. WE HAVE HEARD LEARNED COUNSEL FOR THE PARTIES. WE HAVE PERUSED THE ORDER OF THE TRIBUNAL. THERE IS NO FINDING RECORDED BY THE A UTHORITIES BELOW THAT THE APPELLANT-ASSESSEE HAS NOT INVESTED THE SALE PROCEE DS IN A RESIDENTIAL HOUSE. IT IS ALSO NOT IN DISPUTE THAT THE APPELLANT HAS NOT PURC HASED THE RESIDENTIAL HOUSE IN UNITED STATES OF AMERICA. IN FACT SHE HAS PURCHASE D A RESIDENTIAL HOUSE IN U.S.A. OUT OF THE CAPITAL GAIN ON SALE OF THE PLOT IN INDI A AND THUS SHE HAS FULFILLED THE CONDITIONS STIPULATED IN SECTION 54F OF THE INCOME- TAX ACT. SHE HAS INVESTED THE CAPITAL GAINS IN A RESIDENTIAL HOUSE WITHIN THE STI PULATED TIME. THERE WAS NO CONDITION IN SECTION 54F OF THE INCOME-TAX ACT AT T HE RELEVANT TIME THAT THE CAPITAL GAIN ARISING OUT OF TRANSFER OF CAPITAL ASSET SHOUL D BE INVESTED IN A RESIDENTIAL HOUSE SITUATED IN INDIA. THE LANGUAGE OF SECTION 54F OF T HE INCOME-TAX ACT BEFORE ITS AMENDMENT WAS THAT THE ASSESSEE SHOULD INVEST CAPIT AL GAIN IN A RESIDENTIAL HOUSE. IT IS ONLY AFTER THE AMENDMENT TO SECTION 54F OF TH E INCOME-TAX ACT BY THE FINANCE (NO. 2) ACT 2014 WHICH CAME INTO EFFECT WITH EFFE CT FROM 1.4.2015 THAT THE ASSESSEE SHOULD INVEST THE SALE PROCEEDS ARISING OU T OF SALE OF CAPITAL ASSET IN A RESIDENTIAL HOUSE SITUATED IN INDIA WITHIN THE STIP ULATED PERIOD. THUS ON A PLAIN READING OF SECTION 54F OF THE INCOME-TAX ACT BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT LEAVES NO ROOM FOR ANY DOUBT THAT THE A SSESSEE SHOULD RESTRICT HER INVESTMENT WITHIN INDIA OR OUTSIDE INDIA. THE ONLY CONDITION WAS THAT THE ASSESSEE SHOULD INVEST IN A RESIDENTIAL HOUSE. THE TRIBUNAL HAS WRONGLY INTERPRETED SECTION 54F OF THE INCOME-TAX ACT BY HOLDING THAT THE ASSES SEE SHOULD PURCHASE THE RESIDENTIAL HOUSE SITUATED IN INDIA. PRIOR TO AMEND MENT TO SECTION 54F OF THE ACT THE ONLY CONDITION STIPULATED WAS INVESTMENT IN A R ESIDENTIAL HOUSE. WHEN THE SECTION 54F OF THE INCOME-TAX ACT WAS CLEAR AND UNA MBIGUOUS THERE IS NO SCOPE FOR IMPORTING INTO THE STATUTE THE WORDS WHICH ARE NOT THERE. SUCH IMPORTATION WOULD BE NOT TO CONSTRUE BUT TO AMEND THE STATUTE. IF THE RE IS ANY DEFECT IN THE ACT IT CAN BE REMEDIED ONLY BY THE LEGISLATION AND NOT BY JUDI CIAL INTERPRETATION. 10. IN THE PRESENT CASE THE ASSESSEE HAS PURCHASED THE RESIDENTIAL HOUSE IN U.S.A. OUT OF THE SALE PROCEEDS OF THE PLOT IN INDIA AND T HUS SHE HAS FULFILLED THE CONDITIONS OF SECTION 54F OF THE INCOME-TAX ACT BEFORE ITS AME NDMENT BY THE FINANCE (NO. 2) ACT. MOREOVER WHEN THE LANGUAGE OF A TAXING PROVIS ION IS AMBIGUOUS OR CAPABLE OF MORE MEANINGS THAN ONE THEN THE COURT HAS TO ADOPT THE INTERPRETATION WHICH FAVOURS THE ASSESSEE. SECTION 54F OF THE ACT BEFORE ITS AMENDMENT WAS CLEAR THAT THE ASSESSEE SHOULD INVESTMENT IN A RESIDENTIAL HOU SE. THE LANGUAGE OF SECTION IS CLEAR AND UNAMBIGUOUS. THEREFORE WE CANNOT IMPORT INTO THE STATUTE THE WORDS 'IN INDIA' AS INTERPRETED BY THE AUTHORITIES. THUS TAK ING INTO CONSIDERATION THE ABOVE FACTS WE ARE OF THE OPINION THAT BENEFIT OF SECTIO N 54F BEFORE ITS AMENDMENT CAN ITA NO.7183/M/2014 & CO NO.84/M/2016 SHRI RUPANG C SUCHDE 4 BE EXTENDED TO A RESIDENTIAL HOUSE PURCHASED OUTSID E INDIA. IN THAT VIEW OF THE MATTER THE APPEAL IS ALLOWED. THE ORDER OF THE TRI BUNAL IS SET ASIDE. WE ANSWER THE QUESTION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 5. A SIMILAR VIEW HAS BEEN ADOPTED IN THE FOLLOWING CASES OF THE TRIBUNAL: 1. MUMBAI BENCH IN THE CASE OF GIRDHAR MOHANANI VS . ITO (ITA NO.4591/M/2013) DATED 06.05.2010 2. MUMBAI BENCH IN THE CASE OF ITO VS. DR. GIRISH M. SHAH (ITA NO.3582/M/2009 DATED 17.02.2010 3. CHENNAI BENCH IN THE CASE OF N. RANGANATHAN VS. ITO 33 ITR (TRIB) 444 4. BANGALORE BENCH IN THE CASE OF VINAY MISHRA V. ACIT (141 ITD 301) 5. LUCKNOW BENCH IN THE CASE OF ACIT VS. IQBAL JAF AR 151 ITD 364 6. IN THE LIGHT OF ABOVE DECISIONS OF THE TRIBUNAL WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS IS SUE. THE ORDER OF THE LD. CIT(A) IS THEREFORE UPHELD. 7. IN THE RESULT THE CROSS OBJECTIONS OF THE ASSES SEE AS WELL AS THE APPEAL OF THE REVENUE ARE HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 19.10.2016. SD/- SD/- (ASHWANI TANEJA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 19.10.2016. * KISHORE SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR ITAT MUMBAI.