Bimla Devi Jalan, Kolkata v. ACIT, CC - VII, Kolkata, Kolkata

ITA 544/KOL/2011 | 2007-2008
Pronouncement Date: 25-11-2011 | Result: Dismissed

Appeal Details

RSA Number 54423514 RSA 2011
Assessee PAN AELPJ0454L
Bench Kolkata
Appeal Number ITA 544/KOL/2011
Duration Of Justice 7 month(s) 18 day(s)
Appellant Bimla Devi Jalan, Kolkata
Respondent ACIT, CC - VII, Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-11-2011
Assessment Year 2007-2008
Appeal Filed On 07-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [ . . . . . . ! !! ! . ] [BEFORE SHRI N. VIJAYA KUMARAN J. M. & SHRI C. D. RAO A.M.] $ $ $ $ / I.T.A NO.544/KOL/2011 / // / ASSESSMENT YEAR : 2007-08 BIMLA DEVI JALAN -V S.- ASSTT. COMMISSIONER OF INCOME TAX KOLKATA. [PAN : AELPJ 0454 L] CC-VII KOLKATA. [ + + + + /APPELLANT ] ]] ] [ -.+ -.+ -.+ -.+/ // / RESPONDENT ] ]] ] + + + + / FOR THE APPELLANT : SHRI S. L. KOCHAR -.+ -.+ -.+ -.+ / FOR THE RESPONDENT : SHRI D. J. MEHTA 0 ! 0 ! 0 ! 0 ! /DATE OF HEARING : 16. 11. 2011 0 ! 0 ! 0 ! 0 ! /DATE OF PRONOUNCEMENT : 25.11.2011 [ /ORDER . . . . PER N. VIJAYA KUMARAN J. M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A) CENTRAL-II KOLKATA DATED 28.02.2011 FOR ASSESSMENT YEAR 2007-08. 2. THE GROUNDS URGED BY THE ASSESSEE ARE AS UNDER : 1. FOR THAT THE LD. CIT (A) ERRED IN OBSERVING THA T THE COST OF ACQUISITION OF TENANCY RIGHT WAS TO BE TAKEN AT NIL AND IN THAT VI EW OF THE MATTER NOT ALLOWING INDEXATION IN RESPECT OF THE AMOUNT SPENT BY THE APPELLANT IN ACQUIRING RIGHT TITLE & INTEREST IN THE FLAT TO DE TERMINE ASSESSABLE LONG TERM CAPITAL GAINS. 2. FOR THAT THE LD. CIT (A) OUGHT TO HAVE APP RECIATED THE FACTS OF THE CASE OF THE APPELLANT AND OUGHT TO HAVE RELIED UPON THE TER MS AND CONDITIONS EMBODIED IN THE AGREEMENT WHICH ESTABLISHED THE CAS E OF THE APPELLANT THAT THE AMOUNT OF RS.8.01 LACS WAS SPENT FOR ACQUI SITION OF CAPITAL ASSET [ ITA NO. 544/KOL/2011] 2 AND THEREFORE ON THE TRANSFER OF THE SAME THE AP PELLANT WAS ENTITLED TO DEDUCT THE INDEXED COST TO ARRIVE AT THE LONG TERM CAPITAL GAINS. 3. FOR THAT THE CASE OF THE APPELLANT SO FAR AS THE IN VESTMENT OF THE LONG TERM CAPITAL GAINS IN ACQUISITION OF RESIDENTIAL FL ATS ARE CONCERNED THE SAME OUGHT TO HAVE BEEN ACCEPTED BY THE APPELLANT A ND THE LD. CIT(A) ERRED IN ONLY TAKING NOTE OF THE AMOUNT OF RS.20 83 210/- RELATING TO FLAT AT GOA MIRAMAR FOR DEDUCTION. 4. FOR THAT THE APPELLANTS SUBMISSION THAT THE LONG T ERM CAPITAL GAINS RELATING TO SALE OF BANGALORE LAND AROSE IN THE AY 2006-07 OUGHT TO HAVE BEEN ACCEPTED BY THE LD. CIT(A) AND HE OUGHT TO HAV E ACCEPTED THE SUBMISSION OF THE APPELLANT THAT THE AFORESAID LONG TERM CAPITAL GAINS COULD NOT BE TREATED AS GAINS FOR THE AY 2007-08. 3. DURING HEARING LD. COUNSEL FOR THE ASSESSEE NOT PRESSED GROUND NO.4 WHICH RELATES TO ALLEGED LONG TERM CAPITAL GAINS. IN THE WRITTEN SUB MISSION ALSO LD. COUNSEL FOR THE ASSESSEE NOT PRESSED THE SAME. HENCE WE DISMISS THIS 4 TH GROUND AS NOT PRESSED. 4. GROUND NOS. 1 & 2 RELATING TO INDEXATION BENEFIT ON THE ACTUAL CLAIM OF RS.9 24 202/-. HOWEVER IN THE GROUND IT IS MENTIONED AS RS.8.01 L ACS. WHICH STOOD CORRECTED BY US AFTER CAREFUL CONSIDERATION OF FACTS AVAILABLE ON RECORD. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS ONLY QUANTIFICATION OF LONG TERM CAPITAL GAINS IN RESPECT OF FLAT AT JUHU MUMBAI IN THE ESTATE OF JAI HIND CO-OPERATIVE HOUSING SOCIETY. LD. COUNSEL CLAIMED RS.70.00 LAKHS FROM TH E GAIN AROSE ON THE SAID TRANSFER OF JUHU FLAT. TO NARROW DOWN THE ARGUMENT THE GAIN ON SURRENDER O F FLAT IS NOT IN DISPUTE. IT IS ONLY THE INDEXATION BENEFIT I.E. IN DISPUTE WHICH WAS DENIED BY THE DEPARTMENT AND STILL PERSISTENTLY CLAIMED BEFORE US ON BEHALF OF THE ASSESSEE. THE LD . COUNSEL SUBMITTED THAT ASSESSEE HAS PAID THIS AMOUNT OF RS.9 24 202/- TO ACQUIRE TENANCY RIGHT. H ENCE ASSESSEE COMPUTED THE CAPITAL GAIN AFTER APPLYING THE COST INDEXATION METHOD ON THE SECURITY DEPOSIT OF RS.9 24 202/- AND CLAIMED INDEXATION BENEFIT TO THE TUNE OF RS.18 51 567/- FR OM THE UNDISPUTED GAIN OF RS.70.00 LAKHS. ASSESSING OFFICER WAS OF THE VIEW THAT SECTION 55(2 )(A) IN RESPECT OF TENANCY RIGHTS IN THE CASE OF ACQUISITION OF SUCH RIGHT BY THE ASSESSEE BY PURCHA SE FROM THE PREVIOUS OWNER MEANS AMOUNTS OF PURCHASE PRICE AND IN OTHERS IT WILL BE NIL. ASSE SSING OFFICER FOUND THAT ASSESSEE HAS NOT PAID ANY PURCHASE PRICE FOR ACQUIRING THE TENANCY RIGHT FROM THE PREVIOUS YEAR. SHE HAS MADE SECURITY [ ITA NO. 544/KOL/2011] 3 DEPOSIT AGAINST THE PROPERTY. THEREFORE HE HAS TAK EN COST OF ACQUISITION AS NIL. ON APPEAL TO THE LD. CIT(A) LD. CIT(A) FOUND THAT ASSESSEE DID NOT PURCHASE THE TENANCY RIGHT FROM ANY PREVIOUS OWNER OF SUCH TENANCY RIGHT AND THE ONLY SECURITY D EPOSIT WAS MADE WITH THE OWNER AS A SECURITY AGAINST THE PROPERTY. THEREFORE THE COST OF ACQUIS ITION HAS BEEN RIGHTLY TAKEN AS NIL FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN. IN THAT WAY LD. CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER. 6. AGGRIEVED ON THIS LD. COUNSEL FOR THE ASSESSEE WHILE IN APPEAL BEFORE US CONTENDED THAT IT IS THE AMOUNT SPENT BY THE ASSESSEE AS PER TERMS AND CONDITIONS INVOLVED IN AGREEMENT WHICH WILL GO TO SHOW THAT THERE IS ACQUISITION OF CAPITA L ASSET AND THEREFORE ON THE TRANSFER OF THE SAME THE ASSESSEE WAS ENTITLED TO DEDUCT THE INDEX COST TO ARRIVE AT THE TAXABLE LONG TERM CAPITAL GAINS. LD. COUNSEL FURTHER SUBMITTED THAT THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. BRIGADIER PARMANAND [2006] 287 ITR 142 (ALL .) LD. COUNSEL SUBMITTED THAT RIGHT TO POSSESSION WILL ALSO BE A CAPITAL ASSET AND THE ASSESSEE PAYING THE ABOVE AMOUNT TO THE OWNER GOT THE RIGHT OF POSS ESSION. THEREFORE THIS WILL QUALIFY FOR THE BENEFIT. THIS IS THE ARGUMENT OF THE LD. COUNSEL. 7. ON THE OTHER HAND LD. DEPARTMENTAL REPRESENTATI VE VEHEMENTLY OPPOSED THAT IT IS AS NIL COST ONLY AND IT IS ONLY SECURITY DEPOSIT AND IT HA S NOTHING TO DO WITH THE ACQUISITION OF ANY CAPITAL ASSET. LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBM ITTED THAT ASSESSEE PAID THIS AMOUNT ONLY TO THE OWNER. IT IS NOT PAID TO ANY TENANT WHO CAN HAN D OVER THE POSSESSION FOR PURCHASE OF THE SAID POSSESSION. THEREFORE LD. DEPARTMENTAL REPRESENTAT IVE SUBMITTED THAT SECTION 55(2)(A) WILL COME INTO PLAY AND THE ASSESSEE HAS RIGHTLY DENIED THE I NDEXATION BENEFIT. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE PRECEDENTS. THE COMPUTATION OF TAXAB LE GAIN ARRIVED BY BOTH ASSESSEE AND DEPARTMENT IS AS UNDER :- AS PER LD. CIT(A) RECEIPT ON SURRENDER OF FLAT AT MBY RS.70 00 000 /- LESS : PAYMENT TO LANDLORD RS. 8 01 000/- RS.61 99 000/- [ ITA NO. 544/KOL/2011] 4 LESS : DEDUCTION U/S. 54F (FLAT AT MIRAMAR PANJIM GOA) RS.20 83 210/- RS.41 15 790/- AS PER THE ASSESSEE RECEIPT ON SURRENDER OF LAT AT MBY. RS.70 00 000 /- LESS : COST RS.9 24 000/- IN AUG. 1994 CALCULATION OF COST INFLATION RS.9 24 000 DIVIDED BY 259 X 519 RS.18 51 567/ - RS.51 48 433/- IN THIS CASE THE AMOUNT EXPENDED SHOULD HAVE A NEX US TO THE COST OF ACQUISITION OF CAPITAL ASSET. HERE IN THIS CASE AFTER PERUSING THE ARGUMENTS AS AVAILABLE AT ASSESSEES PAPER BOOK PAGES 5 TO 11 WHICH CLEARLY REVEALS THAT IT IS ONLY SECURITY DEPO SIT PAID BY THE ASSESSEE TO THE OWNER. THAT BEING THE CASE. THE DECISION RELIED BY THE LD. COUNSEL IN THE CASE OF CIT VS. BRIGADIER PARMANAND (SUPRA) WILL NOT SUPPORT THE CASE OF THE ASSESSEE A ND IT IS CLEARLY DISTINGUISHABLE. HENCE WE REJECT THE ARGUMENTS OF THE LD. COUNSEL CONFIRMING THE ORD ER OF THE LD. CIT(A) WHO HAS RIGHTLY DENIED THE INDEXATION BENEFIT TO THE ASSESSEE. 9. COMING TO THE SECOND ISSUE WHICH RELATES TO 54F DEDUCTION. 10. WE AFTER CAREFUL CONSIDERATION OF THE RIVAL SU BMISSIONS AND ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD OBSERVED THAT 54F DEDUCTION AVA ILABLE ONLY TO (A) RESIDENTIAL HOUSE AND THE ASSESSEE CLAIM IS PROJECTED NOT ONLY FOR GOA FLAT B UT IN ADDITION TO GOA FLAT HE CLAIMED 54F DEDUCTION FOR JAIPUR FLAT ALSO. THIS IS UNTENABLE. THE ASSESSEE CAN AVAIL BENEFIT 54F IN RESPECT OF (A) RESIDENTIAL HOUSE AND NOT FOR JAIPUR FLAT ALS O. THIS HAS BEEN PROPERLY CONSIDERED BY THE LD. CIT(A) AND LD. CIT(A) FOUND THAT ASSESSEE IS ENTITL ED TO DEDUCTION UNDER SECTION 54F TOWARDS (A) RESIDENTIAL HOUSE/FLAT IN GOA AND NOT FOR JAI PUR AS 54F DEDUCTION CAN NOT BE EXTENDED TO MORE THAN ONE RESIDENTIAL HOUSE. THE TRIBUNAL HAS BEEN C ONSISTENTLY HOLDING THAT THE ASSESSEE CAN CLAIM 54F DEDUCTION FOR ONLY ONE RESIDENTIAL HOUSE. HENCE WE HAVE NO HESITATION IN CONFIRMING THE ORDER OF LD. CIT(A). ACCORDINGLY THIS GROUND OF TH E ASSESSEE IS DISMISSED SUBJECT TO THE [ ITA NO. 544/KOL/2011] 5 CORRECTION THAT THE AMOUNT SPENT IS RS.9 24 202/- W HICH BOTH PARTIES AGREED UNDER THE HEAD PAYMENT TO LANDLORD AND IT IS NOT 8.01 LAKHS. ACCOR DINGLY THIS GROUND IS RECTIFIED. 11. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. 3 3 3 3 ! ! ! ! ORDER PRONOUNCED IN THE COURT ON 25.11.2011. SD/- SD/- [ . . ! !! ! . ] [ . . . . ] [ C. D. RAO ] [ N. VIJAYAK UMARAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER D ATED : 25TH NOVEMBER 2011. 0 - 7/ COPY OF THE ORDER FORWARDED TO: 1. + /APPELLANT : BIMLA DEVI JALAN C/O. S. L. KOCHAR ADVOCATE 86 CANNING STREET KOLKATA7 00 001. 2 . -.+ / RESPONDENT : ASSTT. COMMISSIONER OF INCOME TAX CC-VII 10 MIDDLETON ROW KOLKATA. 3. - / CIT 4. ()/ CIT(A) KOLKATA. 5. -/ DR KOLKATA BENCHES KOLKATA [. -/ TRUE COPY] / BY ORDER /ASSTT REGISTRAR [KKC AB C /SR.PS]