KHEMCHAND FAGWANI MUMBAI vs ITO 4(1)(3) MUMBAI

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, , , , मुंबई यायपीठ मुंबई यायपीठ ए , मुंबई । मुंबई । मुंबई । मुंबई । IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “A”, MUMBAI सवौी जोिगदर सह, याियक सदय एवं एवं एवं एवं राजेि, लेखा सदःय, के सम" । Before Shri Joginder Singh, JM and Shri Rajendra, AM ITA NO.7876/MUM/2010 (A.Y.

2007-08) Shri Khemchand Fagwani 51, Violet Villa, West Avenue, Santa Cruz (W) Mumbai-400 058. बनाम बनाम बनाम बनाम/ Vs.

The ITO 4(1)(3) Room No.637A, Aayakar Bhavan, M.K.

Road Mumbai-400 020. (अपीलाथ& /Appellant) (ू(यथ&/Respondent) अपीलाथ& क) ओर से क) ओर से क) ओर से क) ओर से /Appellant by : Shri Hiro Rai ू(यथ& क) ओर से क) ओर से क) ओर से क) ओर से /Respondent by : Shri Jeevanlal Lavadiya सुनवाई क) तार,ख / / / / Date of Hearing : 10.09.2014 घोषणा क) तार,ख / Date of Pronouncement : 10.09.2014 आदेश आदेश आदेश आदेश / / / / O R D E R PER JOGINDER SINGH (JM)/ जोिगदर सह, याियक सदय: The assessee is aggrieved by the impugned order dated 21/09/2010 of the ld.

First Appellate authority.

Ground nos.1 and 2 pertains to disallowance of exemption u/s.

54 of the Act amounting to Rs.23,77,683/- which as per the assessee was without appreciating the details and submissions filed before the ld.

CIT(A) for claiming such exemption.

2.

During hearing of this appeal the ld.

Counsel for the assessee, Shri Hiro Rai contended that sale proceeds were duly invested in purchasing ITA NO.7876/MUM/2010 (A.Y.

2007-08) 2 a residential flat at Thane, therefore, the assessee is entitled to claim exemption u/s.

54 of the Act.

It was further submitted that letter of allotment along with proof of payment were duly submitted at assessment as well as First Appellate Stage.

On the other hand Shri Jeevanlal Lavadiya-ld.

DR defended the conclusion by submitting that the assessee did not produce any agreement with respect to the investment in the residential flat, therefore, the claimed exemption u/s. ption u/s.

54 of the Act was rightly denied.

2.1 We have considered the rival submissions and perused the material available on record.

We note that the claimed exemption u/s.

54 of the Act was denied to the assessee by the ld.

AO on the plea that assessee did not produce any purchase agreement with regard to investment in the residential flat at Thane.

Still there is no dispute that an allotment letter dated 9/9/10 along with evidence of payment was duly submitted before the authorities.

If the allotment letter and proof of payment is produced it cannot be said that the assessee did not invest in the purchase of new property.

Section 54 of the Act speaks about investment of capital gains arising from transfer of a long term capital asset within a specified time.

As per s/s.

2 to Sec.54 if such proceeds / capital gains, if not invested /utilized for purchase of new asset, within specific time then such proceeds will have to be deposited in a specified ITA NO.7876/MUM/2010 (A.Y.

2007-08) 3 bank account and has to be utilized in any scheme which the Central Govt. notifies and proof of such shall be accompanied with the return.

There is no requirement in the Act that necessarily the assessee has to produce the agreement more specifically when the letter of allotment along with proof of payment/investment was duly produced before the concerned authorities.

The ratio laid down in Smt.

Jyothi K.

Mehta (2001) 201 Taxmann 79 (Kar.), Smt.

Sashi Verma, 224 ITR 106(M.P.), CIT vs.

Smt.

Brinda Kumari (2001) (114 Taxmann 266 (Del.), CIT vs.

Bharti C.

Kothar,i 244 ITR 352 (Cal.), CIT vs.

Dr.

Laxmichand Narpal Nagda 211 ITR 804 (Bom.), CIT vs.

Shehzada Begum 173 ITR 379 (AP) supports our view.

In the case of Shehzada Begum it was held by the Hon’ble Andhra Pradesh High Court that date of taking over possession of property purchased (in the present case investment in the new property within the specified time) and not the registration of sale in favour of the assessee, is relev , is relevant for computing the prescribed time limit.

To our mind to attract Sec.54 and Sec.54EC of the Act what is material is the investment of sale consideration in acquiring the new property or investment of the amount in bonds set out in sec.54EC is to be seen and once the sale consideration is invested in any of these manner the assessee would be entitled to the benefit conferred under this provision.

In view of the available facts, clear position of provisions ITA NO.7876/MUM/2010 (A.Y.

2007-08) 4 of the Act and the ratio laid down in the aforementioned judicial pronouncements the ground raised by the assessee is allowed.

3.

The next ground pertains to levy of interest u/s.

234B of the Act for which the liability of the assessee was strongly denied.

Since we have decided the claim of exemption u/s.

54 of the Act in favour of the assessee, therefore, levy of interest u/s.

234B of the Act is consequential in nature.

4.

Finally the appeal of the assessee is allowed.

Order pronounced in the open court in the presence of ld.

Representative from both sides at the conclusion of the hearing on 10th Day of September, 2014 . आदेश क) घोषणा 1दनांकः 10.09.2014 को क) गई । Sd/- Sd/- (Rajendra) (Joginder Singh) लेखा सदःय लेखा सदःय / ACCOUNTANT MEMBER याियक सदःय याियक सदःय / JUDICIAL MEMBER मुंबई Mumbai; 1दनांक Dated : 10th Sept.

2014.

JV. आदेश क) ूितिल:प अमे:षत/Copy of the Order forwarded to : 1. अपीलाथ& / The Appellant 2. ू(यथ& / The Respondent.

3. आयकर आयु<(अपील) / The CIT, Mumbai.

4. आयकर आयु< / CIT(A)-13, Mumbai 5. :वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai 6. गाड फाईल / Guard file. आदेशानुसार आदेशानुसार/ BY ORDER, स(या:पत ूित //True Copy// उप उप उप उप/सहायक पंजीकार सहायक पंजीकार (Dy./Asstt.

Dy./Asstt.

Registrar) आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, , , , मुंबई / ITAT, Mumbai