MRS. KULJEET KAUR GANDHI, MUMBAI v. ITO 20(1)(1), MUMBAI

ITA 3709/MUM/2009 | 2004-2005
Pronouncement Date: 06-08-2010 | Result: Allowed

Appeal Details

RSA Number 370919914 RSA 2009
Assessee PAN AEEPK5831P
Bench Mumbai
Appeal Number ITA 3709/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 28 day(s)
Appellant MRS. KULJEET KAUR GANDHI, MUMBAI
Respondent ITO 20(1)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 06-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 06-08-2010
Assessment Year 2004-2005
Appeal Filed On 08-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI BEFORE SHRI S V MEHROTRA ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 3709/MUM/2009 (ASSESSMENT YEAR: 2004-05) KULJEET KAUR GANDHI OFFICE NO.5 SHRI SAI RAM CO-OP.SOC. RAM MANDIR ROAD GOREGAON (W) MUMBAI-400104 PAN:AEEPK5831P .APPELLANT VS ITO 20(1)(1) MUMBAI . RESPONDENT ASSESSEE BY : SHRI VIPUL JOSH I REVENUE BY : DR.HARGOVIND SI NGH O R D E R PER VIJAY PAL RAO JM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 15.10.2008 OF CIT(A)-XX MUMBAI F OR THE ASSESSMENT YEAR 2004-05. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS APPEAL READS AS UNDER : THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO WHEREBY THE AO RESTRICTED THE APPELLANTS CLAIM OF EXEMPTION U/S 54F OF THE IT ACT 1961 TO THE EXTENT OF RS.4 74 666/- ITA NO. 3709/MUM/2009 (ASSESSMENT YEAR: 2004-05) 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL EARNING INCOME FROM SALARY HOUSE PROPE RTY CAPITAL GAINS INCOME FROM OTHER SOURCES AND BUSINE SS INCOME. THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS OF RS.20 51 850/- ON SALE OF SHARES AGAINST WHICH SHE HAS CLAIMED EXEMPTION U/S 54 OF THE INCOME TAX ACT 196 1 TO THE EXTENT OF RS.19 82 910/- BEING INVESTMENT MADE IN THE PURCHASE OF RESIDENTIAL HOUSE BY TAKING A LOAN OF RS.15 LAKHS FROM ICICI BANK. THE ASSESSEE PURCHASED THE SAID RESIDENTIAL HOUSE ON 19.3.2003 AND SUBSEQUENTLY SOL D CERTAIN SHARES ON 12.02.2004 ON WHICH SHE EARNED THE CAPITA L GAIN OF RS.50 51 850/-. THE PURCHASE CONSIDERATION OF THE HOUSE WAS RS.19 82 910/-. THE ASSESSEE CLAIMED EXEMPTIO N U/S 54F OF THE ACT TO THE SAID EXTENT. THE AO REDUC ED THE AMOUNT OF LOAN OF RS.15 LAKHS FROM THE AMOUNT INVES TED IN THE RESIDENTIAL HOUSE AND CALCULATED THE EXEMPTION AT RS.4 74 666/-. 4. ON APPEAL THE CIT(A) CONFIRMED THE RESTRICTIO N OF EXEMPTION MADE BY THE AO VIDE IMPUGNED ORDER. 5. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEA RNED DR AND CONSIDERED THE RELEVANT RECORD. AT THE OUTS ET WE NOTE THAT THE SIMILAR ISSUE HAS BEEN CONSIDERED BY H BENCH OF THIS TRIBUNAL IN THE CASE OF MR.HARMEET GANDHI V/S ITO IN ITA NO.286/MUM/2009 (AY 2004-05) VIDE ORDER DATED ITA NO. 3709/MUM/2009 (ASSESSMENT YEAR: 2004-05) 3 30.4.2010. THE RELEVANT PARAGRAPH NO.11 OF THE ABO VE ORDER FOR THE SAKE OF CONVENIENCE IS REPRODUCED BE LOW: 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEES. WE HAVE ALSO GONE THROUGH THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE AO DISALLOWED THE CLAIM OF THE ASSESSEE U/ S 54F OF THE ACT ON THE GROUND THAT THE INVESTMENT IN PURCHASE OF HOUSE/CONSTRUCTION OF THE HOUSE MUST BE OUT OF CAPITAL GAIN ONLY. SINCE THE ASSESSEE IN THE INSTANT CASE HAS TAKEN A LOAN FOR PURCHASE OF HOUSE WHICH IS PURCHASED ONE YEAR BEFORE THE SALE OF THE SHARES THE ASSESSEE SHOULD HAVE REPAID THE SAID LOAN OUT OF THE CAPITAL GAIN INCOME TO BECOME ELIGIBLE FOR THE SAID DEDUCTION. HE ACCORDINGLY DENIED THE BENEFIT U/S 54F WHICH HAS BEEN UPHELD BY THE CIT(A). WE FIND THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DR.P.S.PASRICHAS HAS HELD THAT AS PER THE REQUIREMENT OF SECTION 54 THE ASSESSEE SHOULD ACQUIRE A RESIDENTIAL HOUSE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE. NOW WHERE IT HAS BEEN MENTIONED THAT THE SAME FUNDS MUST BE UTILIZED FOR THE PURCHASE OF ANOTHER RESIDENTIAL HOUSE. ACCORDING TO THE SAID DECISION THE REQUIREMENT OF LAW IS THAT THE ASSESSEE SHOULD PURCHASE A RESIDENTIAL HOUSE WITHIN THE SPECIFIED PERIOD AND SOURCE OF FUNDS IS QUIRE IRRELEVANT. WE FIND THE ABOVE DECISION OF THE TRIBUNAL HAS BEEN UPHELD BY THE HONBLE HIGH COURT VIDE INCOME TAX APPEAL NO.1825 OF 2009. SIMILARLY WE FIND THE TRIBUNAL IN THE CASE OF MILAN SHARAD RUPAREL (SUPRA) AS RELIED ON BY THE LEARNED DR HAS HELD THAT IT IS NOT NECESSARY THAT THE SAME FUNDS MUST B E USED FOR PURCHASE OF THE NEW RESIDENTIAL HOUSE BUT THE FUNDS SHOULD BE AVAILABLE WITH THE ASSESSEE FOR ITS INVESTMENT IN THE RESIDENTIAL HOUSE. THE VARIOU S OTHER DECISIONS RELIED ON BY THE LEARNED COUNSEL FO R THE ASSESSEE ALSO SUPPORT HIS CASE. IN THIS VIEW O F THE MATTER WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 54F OF TH E ACT ON ACCOUNT OF CAPITAL GAIN ARISING ON SALE/TRANSFER OF SHARES FOR THE HOUSE PURCHASED BY HIM ONE YEAR PRIOR TO SALE OF SUCH SHARES. THE ITA NO. 3709/MUM/2009 (ASSESSMENT YEAR: 2004-05) 4 CIT(A)S ORDER IS ACCORDINGLY SET ASIDE THE GROUND S RAISED BY THE ASSESSEE ARE ALLOWED 6. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-O RDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF MR.HARMEET GA NDHI V/S ITO (SUPRA) WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON 6.08.2010 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 6TH AUG 2010 SRL:13710 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. DR A BENCH MUMBAI BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI