ACIT vs. Sagar Nitin Parikh (ITAT Mumbai)
by editorThe sold a flat on 27.03.2008 and generated Long term capital gain of Rs.1.55 crores thereon. The assessee claimed deduction u/s 54 of the Act pertaining to the cost of another flat. The assessee had booked the flat with M/s Life Style Property Venture in the year 2004 and the agreement was registered on 01-12-2004. […]
ACIT vs. Sagar Nitin Parikh (ITAT Mumbai)
| COURT: | ITAT Mumbai |
| CORAM: | Amit Shukla (JM), B. R. Baskaran (AM) |
| SECTION(S): | 54 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | deduction |
| COUNSEL: | Sanjay R. Parikh |
| DATE: | July 3, 2015 (Date of pronouncement) |
| DATE: | July 15, 2015 (Date of publication) |
| AY: | 2008-09 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 54: Booking a flat which is going to be constructed by the builder is a case of "construction" of the flat. If the flat is booked prior to the date of transfer of the old flat, deduction u/s 54 is not available. The date of receiving possession of the new flat cannot be regarded as the date of "purchase" of the new flat | |
The sold a flat on 27.03.2008 and generated Long term capital gain of Rs.1.55 crores thereon. The assessee claimed deduction u/s 54 of the Act pertaining to the cost of another flat. The assessee had booked the flat with M/s Life Style Property Venture in the year 2004 and the agreement was registered on 01-12-2004. He paid the consideration in instalments as per the agreement. He finally got the possession on 30th June, 2007. The assessee claimed that the date of possession of flat should be considered as the date of purchase of flat, where as the AO took the view that the date of purchase should be considered as the date of entering of agreement, viz., 1.12.2004. Since the deduction u/s 54 of the Act could be availed, inter alia, only if the residential house was purchased within one year prior to the date of house giving rise to capital gain and since the date of purchase of flat, according to AO, fell beyond the period of one year, the AO rejected the claim for deduction u/s 54 of the Act. The CIT(A), however, agreed with the contentions of the assessee and accordingly allowed the deduction u/s 54 of the Act. On appeal by the department to the Tribunal HELD allowing the appeal:
The booking of a flat which is going to be constructed by a builder has to be considered as a case of "Construction of flat". Deduction u/s 54 is available only if the assessee constructs a new house within three years after the date of transfer. In the instant case, the assessee has constructed a house prior to the date of transfer of original house, in which case, the assessee is not entitled to claim deduction u/s 54 of the Act in respect of the cost of new flat (Hilla J.B.Wadia 216 ITR 376 (Bom), ACIT Vs. Sunder Kaur Sujan Singh (3 SOT 206) and Kishore H Galaiya Vs. ITO (137 ITD 229) followed)
Related Judgements
- Pradeep Kumar Chowdhry vs. DCIT (ITAT Hyderabad) A flat which is newly constructed by a builder on behalf of the assessee is in no way different from a house constructed. Section 54F being a beneficial provision has to be interpreted so as to give the benefit of residential unit viz., flat instead of house in the…
- ITO vs. Narinder Kaur Bhatia (ITAT Mumbai) (i) The assessee purchased a residential flat on 08.01.1981, which was sold on 07.02.2007 for a sale consideration of Rs.1,25,00,000/-. The long term capital gain on such sale amounted to Rs.1,14,63,650/-. Before the said sale, assessee had entered into an…Read more ›
- ITO vs. Lotia Co.op Hsg. Soc. (ITAT Mumbai) Where the assessee was a co.op society and it and its members entered into a development agreement with a builder pursuant to which Tranferable Development Rights (TDR) entitled to be received under the Development Control Regulations was assigned to the developer for the repairs and redevelopment of the…
- Dilip Anand Vazirani vs. ITO (ITAT Mumbai) The assessee had received advance amounts much earlier to the execution of development agreement, probably on the strength of the MOU. The property was encumbered with tenancy rights of many persons and the release of tenancy right was completed only…Read more ›
- CIT vs. Dr. P. S. Pasricha (Bombay High Court) S. 54 provides that if an assessee has LTCG on transfer of a residential house and he purchases or constructs a residential house within the specified period then the amount appropriated towards the new house shall be deducted from the LTCG. The assessee sold a house and used the…
PFA
CIT vs. M/s Mechmen (Madhya Pradesh High Court)
by editorThe fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). The question as to whether that may influence the opinion of the Assessing Officer having jurisdiction over such other person, also cannot be the basis to take any other view.
CIT vs. M/s Mechmen (Madhya Pradesh High Court)
| COURT: | Madhya Pradesh High Court |
| CORAM: | A. M. Khanwilkar CJ, K. K. Trivedi J |
| SECTION(S): | 153C, 158BC |
| GENRE: | Domestic Tax |
| CATCH WORDS: | satisfaction, Search assessment |
| COUNSEL: | A. P. Shrivastava |
| DATE: | July 10, 2015 (Date of pronouncement) |
| DATE: | July 15, 2015 (Date of publication) |
| AY: | 2000-01 to 2006-07 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 153C: Even if the AO of the searched person and of the "other person" (i.e. the assessee) is the same, the proper satisfaction has to be recorded before assuming jurisdiction over the assessee. Failure to record satisfaction renders the assessment order null and void | |
The High Court had to consider whether the assessment order passed u/s 153C could be quashed on the ground that the AO had not recorded his satisfaction even though the AO making the assessment of the searched person was himself having jurisdiction over such other person (i.e. the assessee). It also had to consider whether the law laid down in Manish Maheshwari vs. ACIT 289 ITR 341 and CIT vs. Calcutta Knitwears 362 ITR 673 (SC), which were rendered in the context of section 158BD, were applicable to section 153C of the I.T. Act. HELD by the High Court:
(i) The dissimilarity of the form of two provisions of s. 158BC and s. 153C would make no difference to the purpose underlying. The power bestowed on the Assessing Officer having jurisdiction – be it under Section 153C or Section 158BD – is identical. The legal position as applicable to Section 158BD regarding satisfaction in the first instance of the first Assessing Officer forwarding the items to the Assessing Officer having jurisdiction; and in the second instance of the Assessing Officer having jurisdiction whilst sending notice to such other person (other than the person referred to in Section 153A), must apply proprio vigore. The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). The question as to whether that may influence the opinion of the Assessing Officer having jurisdiction over such other person, also cannot be the basis to take any other view. As a matter of fact, the other Assessing Officer to whom the items are handed over, before issuing notice must himself be satisfied after due verification of the items received and the disclosures made by the other person in the returns for the relevant period already filed by the other person before him. For the same reason, we must reject the argument of the Department that the discretion of the Assessing Officer having jurisdiction will be impaired in any manner, if he were to hold a different view. Similarly, as there is no provision either express or implied (in the Act) to dispense with the requirement of satisfaction, if the Assessing Officer happens to be the same, as in this case, the argument of the Department must be negatived.
(ii) After receipt of the materials, the Assessing Officer having jurisdiction is expected to conduct enquiry and due verification of the relevant facts; before forming his prima facie satisfaction. The Assessing Officer having jurisdiction will be well within his rights to form an independent view before issuing notice to the other person (person other than the person referred to in Section 153A) under his jurisdiction on the basis of his own enquiry. In our opinion, the view formed by the Assessing Officer after his own enquiry does not entail sitting in appeal over the satisfaction of the first Assessing Officer, who had handed over the items to him.
(iii) Accordingly, the condition precedent for resorting to action under Section 158BD delineated by the Supreme Court in the case of Manish Maheshwari 289 ITR 341 and in the recent case of Commissioner of Income Tax-III Vs. Calcutta Knitwears 362 ITR 673, would apply on all fours mandating satisfaction of the Assessing Officer(s) dealing with the case at the respective stages referred to in Section 153C.
Related Judgements
- DCIT vs. Aakash Arogya Mindir P.Ltd (ITAT Delhi) On a plain reading of Section 153C, it is evident that the Assessing Officer of the searched person must be "satisfied" that inter alia any document seized or requisitioned "belongs to" a person other than the searched person. It is…Read more ›
- ACIT vs. Inlay Marketing Pvt. Ltd (ITAT Delhi) (i) It must not be lost sight of that s. 153C of the Act and 158BD of the Act are draconian in nature when accounts of the person or entity other than the person searched are reopened automatically and revenue…Read more ›
- Pepsi India Holdings Private Ltd vs. ACIT (Delhi High Court) (i) First of all, it is nobody's case that the Jaipuria Group had disclaimed these documents as belonging to them. Unless and until it is established that the documents do not belong to the searched person, the provisions of Section…Read more ›
- Tanvir Collections Pvt. Ltd vs. ACIT (ITAT Delhi) It is a clear-cut proposition that the recording of satisfaction by the AO having jurisdiction over the person searched is an essential and prerequisite condition for bestowing jurisdiction to the AO of the 'other person.' On a close comparative study, it is overt that in so far as…
- R. L. Allied Industries vs. ITO (ITAT Delhi) As per Section 153A(1)(b), the Assessing Officer is empowered to assess or reassess the total income of the six assessment years immediately preceding the assessment year relevant to the assessment year in which search is conducted. Thus, in other words,…Read more ›
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