Meera Devi Jain, Kolkata v. ITO, Ward - 45(2), Kolkata, Kolkata

ITA 508/KOL/2010 | 2006-2007
Pronouncement Date: 09-09-2011 | Result: Allowed

Appeal Details

RSA Number 50823514 RSA 2010
Assessee PAN ACFPJ9254L
Bench Kolkata
Appeal Number ITA 508/KOL/2010
Duration Of Justice 1 year(s) 5 month(s) 27 day(s)
Appellant Meera Devi Jain, Kolkata
Respondent ITO, Ward - 45(2), Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 09-09-2011
Date Of Final Hearing 25-06-2010
Next Hearing Date 25-06-2010
Assessment Year 2006-2007
Appeal Filed On 12-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE /AND ! . '# . ) [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE SHR I C. D. RAO AM] $ $ $ $ / I.T.A NO. 508/KOL/2010 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2006-07 MEERA DEVI JAIN VS. INCOME-TAX OFFICER WD-45( 2) KOLKATA (PAN-ACFPJ 9254 L) (*+ /APPELLANT ) ( -*+/ RESPONDENT ) FOR THE APPELLANT: SHRI S. M. SURANA FOR THE RESPONDENT: SHRI K. R. MONDAL . / ORDER PER MAHAVIR SINGH JM ( ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXX KOLKATA PASSED IN APPEAL NO. 148/CIT(A)-XXX/WARD-45(2)/2008-09 DATED 29.12.2009. ASSESSMENT WAS FRAMED BY ITO WARD-45(2) KOLKATA U/S. 143(3)(II) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006- 07 VIDE HIS ORDER DATED 17.12.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) IN NOT ALLOWING DEDUCTION U/S. 54F OF THE ACT. FOR THIS THE ASSESSEE HAS RAISED FOLLOWING TWO EFFECTIVE GROUNDS: 2. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) SHOULD HAVE DIRECTED THE A.O. TO ALLOW EXEMPTION IN RESPECT OF THE INVESTMENT OF RS.3 04 400/- RS.10 00 000/- AND RS.3 00 000/- WHICH WAS ELIGIBLE FOR EXEMPTION U/S. 54F OF THE I. T. ACT 1961. 3. FOR THAT THE LD. A.O. ERRED IN DENYING THE EXEMP TION U/S. 54F WHEN THE CAPITAL FAIN EARNED BY THE ASSESSEE WAS DULY INVESTED FOR THE PU RPOSE OF ACQUISITION OF THE RESIDENTIAL HOUSES WITHIN THE TIME ALLOWED UNDER THE LAW. 3. BRIEF FACTS ARE THAT THE ASSESSEE CLAIMED THE SALE OF SHARES AS LONG TERM CAPITAL GAINS AND SAME WAS DEPOSITED IN CAPITAL GAIN ACCOUNT SCHE ME AS WELL AS PARTLY INVESTED IN THE PURCHASE OF LAND AND EXPENSES/INVESTED FOR CONSTRUC TION OF HOUSE I.E. RS.3 04 400/- RS.10 00 000/- AND RS.3 00 000/-. THE ASSESSEE CLA IMED THAT IT HAS SOLD SHARES FOR A TOTAL CONSIDERATION OF RS.45 91 110/- OUT OF WHICH IT HAS INVESTED IN THE PURCHASE OF LAND AT RS.18 37 547/- AND INVESTED IN CONSTRUCTION OF HOUS E AND CAPITAL GAIN ACCOUNT SCHEME THE BALANCE. THE ASSESSING OFFICER AFTER GOING THROUGH THE DETAILS NOTED IN HIS ASSESSMENT ORDER I.E. THE PROCEEDS OF SALE OF SHARES BY TABLE -1 AND INVESTMENT VIDE TABLE-2 AND FURTHER THE INVESTMENT MADE AND TIME LIMIT AT TABLE-3. IT SEEMS FROM THE ABOVE TABLES THAT IT IS NOT 2 ITA 508/K/2010 MEERA DEVI JAIN A.Y.06-07 DISPUTED FACTS THAT THESE INVESTMENTS ARE MADE WITH IN THE PRESCRIBED TIME LIMIT OF THREE YEARS FOR CLAIM OF EXEMPTION U/S. 54F OF THE ACT. NO DOU BT THE ASSESSEE HAS MADE INVESTMENT EARLIER BY BORROWING THE FUNDS OR OUT OF EARLIER IN VESTMENTS AS NOTED IN HIS ASSESSMENT ORDER AND THE CAPITAL GAIN ARISING OUT OF SALE OF SHARES IS SAVED AS SAVINGS. WHETHER THIS WILL FULFILL THE CONDITION AS PRESCRIBED FOR CLAIM OF EXEMPTION U/S. 54 OF THE ACT. THIS ISSUE HAS BEEN ANSWERED BY HONBLE KERALA HIGH COURT IN THE CASE O F ITO VS. K. C. GOPALAN (2000) 162 CTR 566 (KER) WHEREIN HONBLE KERALA HIGH COURT HA S DEALT THE ISSUE OF EXEMPTION U/S. 54 OF THE ACT AS UNDER: THE LEARNED STANDING COUNSEL FOR THE REVENUE CONTE NDED BEFORE US THAT SO LONG AS THE ASSESSEE HAS NO CASE THAT THE SALE CONSIDERATION RE CEIVED BY HIM WHILE DISPOSING OF HIS PROPERTY ON 28TH OCTOBER 1983 WAS UTILISED FOR THE PURPOSE OF ACQUIRING THE HOUSE PROPERTY AT CALICUT THE ASSESSEE IS NOT ENTITLED TO THE BEN EFIT OF S. 54. THE LEARNED COUNSEL SOUGHT TO PLACE RELIANCE ON THREE DECISIONS NAMELY STANES M OTORS (SOUTH INDIA) LTD. VS. CIT (1975) 100 ITR 341 (MAD) : TC 16R.144 CIT VS. SAMNUGGER J UTE FACTORY CO. LTD. (1953) 24 ITR 265 (CAL) : TC 26R.254 AND BASANT KUMAR ADITYA VIKR AM BIRLA VS. CIT (1968) 70 ITR 657 (CAL) : TC 26R.254 IN SUPPORT OF HIS CONTENTION. W E DO NOT FIND ANY MERIT IN THE ABOVE CONTENTION RAISED BY THE REVENUE. A MERE READING OF S. 54 WOULD MAKE IT CLEAR THAT THE STATUTE HAS NOT LAID OUT A CONDITION FOR THE ASSESSEE TO GE T THE BENEFIT UNDER S. 54 THAT THE SHOULD UTILISE THE ALE CONSIDERATION FOR THE PURPOSE OF AC QUISITION OF PROPERTY. SEC. 54 READS AS FOLLOWS: PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE. - W HERE A CAPITAL GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET TO WHICH THE PROVISIONS OF S. 53 ARE NOT APPLICABLE BEING BUILDINGS OR LANDS APPURTENANT THERETO THE INCOME OF WHICH IS CHARGEAB LE UNDER THE HEAD INCOME FROM HOUSE PROPERTY WHICH IN THE TWO YEARS IMMEDIATELY PRECE DING THE DATE ON WHICH THE TRANSFER TOOK PLACE WAS BEING USED BY THE ASSESSEE OR A PARENT O F HIS MAINLY FOR THE PURPOSE OF HIS OWN OR THE PARENTS OWN RESIDENCE AND THE ASSESSEE HAS WI THIN A PERIOD OF ONE YEAR BEFORE OR AFTER DATE PURCHASED OR HAS WITHIN A PERIOD OF ONE YEAR BEFORE OR AFTER DATE A HOUSE PROPERTY FOR THE PURPOSES OF HIS OWN RESIDENCE THEN INSTEAD OF THE CAPITAL GAINS BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION THAT IS TO SAY (I) IF THE AMOUNT OF CAPITAL GAINS IS GREATER THAN THE COST OF THE NEW ASSET THE DIFFERENCE BETWEEN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER S. 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR T HE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFE R WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION AS THE CASE MAY BE THE C OST SHALL BE NIL; OR (II) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER S. 45 AND F OR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRA NSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION AS THE CASE MAY BE THE C OST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. THE ASSESSEE HAS TO CONSTRUCT OR PURCHASE A HOUSE P ROPERTY FOR HIS OWN RESIDENCE IN ORDER TO GET THE BENEFIT OF S. 54. THE WORDING OF THE SECTIO N ITSELF WOULD MAKE IT CLEAR THAT THE LAW DOES NOT INSIST THAT THE SALE CONSIDERATION OBTAINED BY THE ASSESSEE ITSELF SHOULD BE UTILISED FOR THE PURCHASE OF HOUSE PROPERTY. THE MAIN PART OF S. 54 PROVIDES THAT THE ASSESSEE HAS TO PURCHASE A HOUSE PROPERTY FOR THE PURPOSE OF HIS OWN RESIDEN CE WITHIN A PERIOD OF ONE YEAR BEFORE OR AFTER THE DATE ON WHICH THE TRANSFER OF HIS PROPERT Y TOOK PLACE OR HE SHOULD HAVE CONSTRUCTED A HOUSE PROPERTY WITHIN A PERIOD OF TWO YEARS AFTER THE DATE OF TRANSFER. CLAUSES (I) AND (II) OF S. 54 WOULD ALSO MAKE IT CLEAR THAT NO PROVISION IS MADE BY THE STATUTE THAT THE ASSESSEE SHOULD UTILISE THE AMOUNT WHICH HE OBTAINED BY WAY OF SALE CONSIDERATION FOR THE PURPOSE OF MEETING THE COST OF THE NEW ASSET. 3 ITA 508/K/2010 MEERA DEVI JAIN A.Y.06-07 A READING OF SS. AND S4 OF THE ACT WOULD MAKE IT CL EAR THAT A SPECIAL PROVISION IS MADE IN RESPECT OF CAPITAL GAINS ARISING OUT OF TRANSFER OF PARTICULAR TYPE OF CAPITAL ASSET NAMELY HOUSE PROPERTY WHICH WAS BEING USED BY THE ASSESSEE OR A PARENT OF HIS FOR THE PURPOSE OF THEIR RESIDENCE. ENTITLEMENT OF THE EXEMPTION UNDER S. 54 RELATES TO THE COST OF THE ACQUISITION OF A NEW ASSET IN THE NATURE OF A HOUSE PROPERTY FO R THE PURPOSE OF HIS OWN RESIDENCE WITHIN THE SPECIFIED PERIOD. THE THREE DECISIONS RELIED ON BY THE LEARNED STANDING COUNSEL FOR THE REVENUE HAVE NO APPLICATION TO THE ISSUE RAISED IN THIS APPEAL. THE STATUTORY PROVISION IS CLEAR THAT IT DOES NOT CALL FOR A DIFFERENT INTERPR ETATION FROM WHAT HAS BEEN GIVEN TO IT BY THE CIT(A) AND THE TRIBUNAL. NO CONTRARY DECISION WAS POINTED OUT BY REVENUE AND FACTS ARE CLEARLY ADMITTED IN VIEW OF THE ABOVE FACTS WE ARE OF THE VIEW THAT ONCE THE ASSES SEE HAS MADE INVESTMENT OUT OF HIS OWN SAVINGS PRIOR TO THE DATE OF LIMITATION FOR EXPIRY OF INVESTMENT OF CAPITAL GAIN THE ASSESSEE HAS FULFILLED THE CONDITION IN VIEW OF THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF K. C. GOPALAN (SUPRA). EVEN THE ASSESSEE HAS MADE INVE STMENT PRIOR TO THE EXPIRY OF LIMITATION AND THE PROVISIONS OF SECTION 54F(1) CLEARLY SUGGES TS THAT EVEN THE INVESTMENT CAN BE MADE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFT ER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED OR WITHIN A PERIOD OF THREE YEARS AFTER T HAT DATE CONSTRUCTED BUT IN THE PRESENT CASE THE HOUSE IS CONSTRUCTED WITHIN THREE YEARS AND INV ESTMENT IS ALSO MADE WITHIN THREE YEARS. HENCE WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIG IBLE FOR SECTION 54F EXEMPTION AND WE ALLOW THE SAME. APPEAL OF THE ASSESSEE IS ALLOWED. 4. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . 5. ORDER IS PRONOUNCED IN OPEN COURT ON 09.09.2011 SD/- SD/- . '# '#'# '# . ! (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( #! #! #! #!) )) ) DATED : 9 TH SEPTEMBER 2011 /0 %12 3 JD.(SR.P.S.) . 4 5 6 5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT SMT. MEERA DEVI JAIN C/O CHAKRESH KUMA R JAIN 65 COTTON STREET KOLKATA-700 007. 2 -*+ / RESPONDENT ITO WD-45(2) KOLKATA 3 . .% ( )/ THE CIT(A) KOLKATA 4. .% / CIT KOLKATA 5 . >? % / DR KOLKATA BENCHES KOLKATA -5 / TRUE COPY .%@/ BY ORDER 2 /ASSTT. REGISTRAR .