SAVITRI DEVI MANTRI, MUMBAI v. ITO 14(2)(3), MUMBAI

ITA 8333/MUM/2011 | 2008-2009
Pronouncement Date: 21-11-2014 | Result: Allowed

Appeal Details

RSA Number 833319914 RSA 2011
Assessee PAN AAPPM2621L
Bench Mumbai
Appeal Number ITA 8333/MUM/2011
Duration Of Justice 2 year(s) 11 month(s) 12 day(s)
Appellant SAVITRI DEVI MANTRI, MUMBAI
Respondent ITO 14(2)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 21-11-2014
Date Of Final Hearing 30-04-2014
Next Hearing Date 30-04-2014
Assessment Year 2008-2009
Appeal Filed On 09-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH M UMBAI BEFORE HONBLE S/SHRI VIJAY PAL RAO (JM) AND B.R.BASKARAN (AM) . . ./I.T.A. NO.8333/MUM/2011 ( / ASSESSMENT YEAR : 2008-2009) SMT. SAVITRI DEVI MANTRI CHURUWALA AND ASSOCIATES 506 LAXMI MALL LAXMI INDUSTRIAL ESTATE NEW LINK ROAD ANDHERI (W) MUMBAI-400053 / VS. INCOME TAX OFFICER 14(2)(3) MUMBAI. ( / APPELLANT) .. ( / RESPONDENT) ./ ./ PAN/GIRNO.:AAPPM2621L ! / APPELLANT BY : SHRI JITENDRA SINGH ' ! /RESPONDENT BY SHRI NEIL PHILIP # ' $% / DATE OF HEARING : 19.11.2014 &' ' $% /DATE OF PRONOUNCEMENT : 21.11.2014. / O R D E R PER B.R.BASKARAN ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 15.9.2011 PASSED BY THE LD. CIT(A)-25 MUMBAI AND I T RELATES TO THE ASSESSMENT YEAR 2008-09. THE APPEAL IS BARRED BY LIMITATION BY 10 DAYS. THE ASSESSEE HAS FILED A PETITION SEEKING FOR CONDONATION OF DELAY. HAVING HEARD THE PARTIES AND ALSO ON HAVING REGARD TO THE SUBMISSIONS MADE IN TH E PETITION WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD . CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN ENHANCING THE AM OUNT OF SHORT TERM CAPITAL GAINS ARISING ON SALE OF OLD INDUSTRIAL GALA. I.T.A. NO.8333/MUM/2011 2 3. THE FACTS RELATING TO THE ABOVE SAID ISSUE A RE STATED IN BRIEF. THE ASSESSEE SOLD HER BUSINESS PREMISES LOCATED AT DHANRAJ INDUS TRIAL ESTATE LOWER PAREL MUMBAI ON 6.6.2007 AT RS.73 00 000/-.THE ABOVE SAID ASSET WAS FORMING PART OF BLOCK OF ASSETS AND DEPRECATION WAS CLAIMED THEREO N. THE ASSESSEE HAD PURCHASED A PROPERTY FOR AN AMOUNT OF RS.64 14 350/ - DURING THE YEAR UNDER CONSIDERATION. ACCORDINGLY THE ASSESSEE COMPUTED STCG AT RS.2 83 745/- BY ADDING THE VALUE OF NEW HOUSE PROPERTY TO THE OPE NING WDV OF THE BLOCK AND DEDUCTED THERE FROM THE SALE VALUE OF INDUSTRIAL G ALA REFERRED ABOVE. THE ASSESSEE CLAIMED THAT THE NEW PROPERTY WAS PURCHASE D FOR OFFICE PURPOSES. THE AO NOTICED THAT THE NEW PROPERTY IS A RESIDENTIAL F LAT AND THE SAME IS ALSO SITUATED IN A RESIDENTIAL ZONE. ACCORDINGLY HE RE JECTED THE CLAIM OF THE ASSESSEE THAT THE SAID FLAT WAS PURCHASED FOR OFFICE PURPOSE . ACCORDINGLY THE AO RECOMPUTED THE STCG AT RS.72 07 910/- WITHOUT ADDIN G THE COST OF NEW PROPERTY TO THE WDV OF BLOCK. THE LD. CIT(A) ALSO CONFIRMED THE ORDER OF THE AO AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US . 4. AT THE TIME OF HEARING THE LD. COUNSEL INVITED OUR ATTENTION TO THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. IN THE ADDITIONAL G ROUND THE ASSESSEE HAS RAISED AN ALTERNATIVE CONTENTION FOR ALLOWING DEDUC TION U/S 54F OF THE ACT IN RESPECT OF THE VALUE OF NEW PROPERTY REFERRED ABOVE AGAINST THE CAPITAL GAIN WORKED OUT BY THE ASSESSING OFFICER. THE LD. COUNS EL SUBMITTED THAT THE CAPITAL GAINS ARISING ON SALE OF FACTORY BUILDING FORMING PART OF BLOCK OF ASSET IS ASSESSED AS STCG DUE TO THE LEGAL FICTION EMBODIED IN SECTION 50 OF THE INCOME TAX ACT 1961 (THE ACT). HE FURTHER SUBMI TTED THAT THE PROVISIONS OF SECTION 50 OF THE ACT CANNOT CONVERT NATURE OF THE ASSET FROM LONG TERM CAPITAL ASSET TO SHORT TERM CAPITAL ASSET. HE SUBMITTED T HAT THE IMPUGNED PROPERTY WAS PURCHASED ON 1.11.1981 AND HENCE THE SAID ASSET IS LONG TERM CAPITAL ASSET AS PER THE DEFINITION GIVEN IN INCOME TAX ACT. AC CORDINGLY HE SUBMITTED THAT THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION U/S 54F OF THE ACT IN RESPECT OF VALUE OF NEW HOUSE PROPERTY AGAINST THE STCG COMPUTED U/S 50 OF THE ACT. FOR THIS PROPOSITION THE LD. COUNSEL RELIED UPON THE DECISI ON OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ACE BUILDERS PVT. LTD. (2006) 281 ITR 210 (BOM); WHEREIN THE HONBLE HIGH COURT HAS HELD THAT THE A SSESSEE WOULD BE ENTITLED TO EXEMPTION U/S 50E OF THE ACT IN RESPECT OF GAIN ARI SEN ON SALE OF LONG TERM I.T.A. NO.8333/MUM/2011 3 CAPITAL ASSET EVEN IF IT IS ASSESSED AS STCG U/S 50 OF THE ACT DUE TO LEGAL FICTION EMBODIED U/S 50 OF THE ACT. THE LD. COUNSEL ALSO P LACED RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S JAI HIND RUBBER PRODUCTS PVT LTD V/S ACIT IN ITA NO.2296/MUM /20112 (AY-2007-08) DATED 3.8.2011 WHEREIN THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT WAS FOLLOWED. 5. THE LD. DR ON THE CONTRARY SUBMITTED THAT THE ASSESSEE HAS RAISED THE ALTERNATIVE CONTENTION SEEKING DEDUCTION U/S 54F OF THE ACT FOR THE FIRST TIME BEFORE THE TRIBUNAL. HE SUBMITTED THAT THE SAID C LAIM REQUIRES VERIFICATION OF CERTAIN FACTUAL ASPECTS AND COMPLIANCE OF CONDITION S PRESCRIBED U/S 54F OF THE ACT. ACCORDINGLY HE PLEADED THAT THIS ISSUE BE RE STORED TO THE FILE OF THE AO. 6. HAVING HEARD THE RIVAL CONTENTIONS WE FIND MERI T IN THE SUBMISSION OF LD A.R THAT THE ALTERNATIVE CONTENTION OF THE ASSESSE E SEEKING DEDUCTION U/S 54F OF THE ACT NEEDS TO BE EXAMINED AT THE END OF THE AO SINCE IT REQUIRES VERIFICATION OF FACTS AND ALSO VERIFICATION OF COMPLIANCE OF THE VARIOUS CONDITIONS PRSCRIBED IN THAT SECTION. THE LD A.R CONCEDED THAT THE ASSESSE E WOULD NOT PRESS THE MAIN GROUNDS IF THE ALTERNATIVE CONTENTION IS ACCEPTED. ACCORDINGLY WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THIS ISSUE RELATING TO THE ALTERNATIVE CONTENTION TO THE FILE OF AO WITH A DIRECTION TO EXAMINE THE CLA IM OF THE ASSESSEE IN TERMS OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF ACE BUILDERS (SUPRA) AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD. 7. SINCE THE ALTERNATIVE CONTENTION HAS BEEN CONSID ERED AND SET ASIDE TO THE FILE OF THE ASSESSING OFFICER THE MAIN GROUND RAIS ED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. I.T.A. NO.8333/MUM/2011 4 8. IN THE RESULT THE APPEAL OF THE ASSESSEE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 21ST NOV 2014 . &' # () * + 21ST NOV 2014 ' ' - SD SD ( / VIJAY PAL RAO ) ( . . / B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ( # MUMBAI: 21ST NOV 2014. . . ./ SRL SR. PS !'# $#%! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. # 0$ ( ) / THE CIT(A)- CONCERNED 4. # 0$ / CIT CONCERNED 5. 6. 1 $ 2 % 2 ( # / DR ITAT MUMBAI CONCERNED 3 4 / GUARD FILE. 5 # / BY ORDER TRUE COPY 6 (ASSTT. REGISTRAR) % 2 ( # /ITAT MUMBAI