ACIT 28 (2), MUMBAI vs. SMT. PUNITA SANJAY BIDRA , MUMBAI

This appeal by the Revenue is directed against order dated 07/01/2019 passed by the Ld. Commissioner of Income-tax (Appeals)-26, Mumbai [in short, the ‘Ld. CIT(A)’] for assessment year 2012-13, raising following grounds:

1. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the disallowances of deduction made by A.O. u/s 54 F of the Act by holding that assessee was holding only one residential house property on the date of transfer of original asset

Smt. Punita Sanjay Bindra. 2 Smt. Punita Sanjay Bindra ITA No. whereas assessee was whereas assessee was owning two house properties on the owning two house properties on the date of sale of shares? date of sale of shares? 2. "whether on the facts and in the circumstances of the case 2. "whether on the facts and in the circumstances of the case 2. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) I was correct in holding that date of and in law, the Ld. CIT (A) I was correct in holding that date of and in law, the Ld. CIT (A) I was correct in holding that date of transfer of Flat at Country Park would be 09.05.2011 instead transfer of Flat at Country Park would be 09.05.2011 instead transfer of Flat at Country Park would be 09.05.2011 instead of 08.05.2012 when the gift deed was registered? 5.2012 when the gift deed was registered? 5.2012 when the gift deed was registered? 3. "Whether on the facts and in the circumstances.on the case 3. "Whether on the facts and in the circumstances.on the case 3. "Whether on the facts and in the circumstances.on the case and in law, the Ld. CIT (A) was correct in holding that the date and in law, the Ld. CIT (A) was correct in holding that the date and in law, the Ld. CIT (A) was correct in holding that the date of transfer of shares would be 30.06.2011 instead of of transfer of shares would be 30.06.2011 instead of of transfer of shares would be 30.06.2011 instead of 30.04.2011, the day on which the s 30.04.2011, the day on which the shares of the assessee hares of the assessee were sold to Future Ventures of India Ltd.? were sold to Future Ventures of India Ltd.? 4. "whether on the facts and in the circumstances of the case 4. "whether on the facts and in the circumstances of the case 4. "whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was correct in holding that notional and in law, the Ld. CIT (A) was correct in holding that notional and in law, the Ld. CIT (A) was correct in holding that notional rent shall be calculated from 01.04.2011 to 09.05.2011 rent shall be calculated from 01.04.2011 to 09.05.2011 rent shall be calculated from 01.04.2011 to 09.05.2011 instead of 01.04.2011 to 08.05.2012, the day on which gift of 01.04.2011 to 08.05.2012, the day on which gift of 01.04.2011 to 08.05.2012, the day on which gift deed was registered? deed was registered? 2. Briefly stated facts of the case that the assessee an individual, stated facts of the case that the assessee an individual, stated facts of the case that the assessee an individual, filed return of income for the year under consideration on filed return of income for the year under consideration on filed return of income for the year under consideration on 29/09/2012 declaring total income of ₹46,82,616/- 29/09/2012 declaring total income of -. The return of income filed by the assessee was selected for a scrutiny and the income filed by the assessee was selected for a scrutiny and the income filed by the assessee was selected for a scrutiny and the statutory notices under the Income nder the Income-tax Act, 1961 (in in short, the Act) were issued and complied with. The Assessing Officer observed that were issued and complied with. The Assessing Officer observed that were issued and complied with. The Assessing Officer observed that during the year under consideration the during the year under consideration the assessee sold 15000 shares see sold 15000 shares of “BIBA apparels Private Limited” for a sale consideration of BIBA apparels Private Limited” for a sale consideration of BIBA apparels Private Limited” for a sale consideration of ₹6,38,97,750/-. The assessee computed long . The assessee computed long-term capital gain of term capital gain of ₹6,16,28,964/-but claimed deduction under section 54F of the but claimed deduction under section 54F of the but claimed deduction under section 54F of the Act amounting to ₹6,26,55, 6,26,55,132/- against the long-term capital gain. term capital gain. The Assessing Officer however held that the assessee did not satisfy The Assessing Officer however held that the assessee did not satisfy The Assessing Officer however held that the assessee did not satisfy the conditions required for claiming deduction under section 54F of the conditions required for claiming deduction under section 54F of the conditions required for claiming deduction under section 54F of Smt. Punita Sanjay Bindra. 3 Smt. Punita Sanjay Bindra ITA No. the Act, therefore, he rejected the claim of deduction under section , therefore, he rejected the claim of deduction under section , therefore, he rejected the claim of deduction under section 54F of the Act. The Assessin . The Assessing Officer also added notional income g Officer also added notional income from house property in relation to from house property in relation to flat of the house property of the house property along with addition for cash deposit. In this manner, the Assessing Officer with addition for cash deposit. In this manner, the Assessing Officer with addition for cash deposit. In this manner, the Assessing Officer assessed the total income to ₹6,27,92,420/-in assessment order assessed the total income in assessment order dated 30/03/2015 p dated 30/03/2015 passed under section 143(3) of the assed under section 143(3) of the Act. On further appeal, the Ld. CIT(A) deleted the further appeal, the Ld. CIT(A) deleted the disallowance of claim disallowance of claim under section 54F of the of the Act and also deleted the addition for and also deleted the addition for notional income from house property. Aggrieved, the Revenue is in notional income from house property. Aggrieved, the notional income from house property. Aggrieved, the appeal before the ITAT ITAT (in short, the Tribunal) by way of raising by way of raising grounds as reproduced above. grounds as reproduced above.

Smt. Punita Sanjay Bindra. 4 Smt. Punita Sanjay Bindra ITA No.

Rs. Rs. Rs. Consideration received on 30.04.2011 Consideration received on 30.04.2011 6,38,97,750 Invested in house property and claimed deduction u/s Invested in house property and claimed deduction u/s 1,09,83,090 1,09,83,090 54F Invested in Capital gains scheme on 21.05.2012 and Invested in Capital gains scheme on 21.05.2012 and 4,66,72,042 4,66,72,042 claimed deduction u/s 54F claimed deduction u/s 54F Invested in NHAI bonds Invested in NHAI bonds on 30.09.2011 u/s 54EC 50,00,000 50,00,000 6,26,55,132 6,26,55,132 6,26,55,132 5.2 For ready reference For ready reference, the relevant provisions of section 54F he relevant provisions of section 54F are reproduced as under: reproduced as under:

54F. Capital gain on transfer of certain. capital assets not to Capital gain on transfer of certain. capital assets not to Capital gain on transfer of certain. capital assets not to be charged in case of investment in residential house. be charged in case of investment in residential house. be charged in case of investment in residential house.—(1) Where, in the case of an assessee being an individual, the Where, in the case of an assessee being an individual, the Where, in the case of an assessee being an individual, the capital gain arises from the transfer of any long capital gain arises from the transfer of any long capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section being a residential house (hereafter in this section being a residential house (hereafter in this section referred to as the original asset), and the assessee has, referred to as the original asset), and the assessee has, referred to as the original asset), and the assessee has, within a period of one year before or after the date on within a period of one year before or after the date on within a period of one year before or after the date on which the transfer took place purchased, or has within which the transfer took place purchased, or has within which the transfer took place purchased, or has within a period of three years after that a period of three years after that date constructed, a date constructed, a residential house residential house (hereafter in this section referred to as the (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance new asset), the capital gain shall be dealt with in accordance new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say, with the following provisions of this section, that is to say, with the following provisions of this section, that is to say,— (a) if the cost of the new asset is not less (a) if the cost of the new asset is not less than the net than the net consideration in respect of the original asset, the whole of consideration in respect of the original asset, the whole of consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; such capital gain shall not be charged under section 45; such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net (b) if the cost of the new asset is less than the net (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the consideration in respect of the original asset, so much of the consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same gain as bears to the whole of the capital gain the same gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net proportion as the cost of the new asset bears to the net proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: consideration, shall not be charged under section 45: consideration, shall not be charged under section 45: Provided that nothing contained in this sub Provided that nothing contained in this sub-section shall apply section shall apply where the assessee owns where the assessee owns on the date of the transfer of the on the date of the transfer of the original asset, or purchases, within the period of one year original asset, or purchases, within the period of one year original asset, or purchases, within the period of one year after such date, or constructs, within the period of three years after such date, or constructs, within the period of three years after such date, or constructs, within the period of three years after such date, any residential house, the income from which after such date, any residential house, the income from which after such date, any residential house, the income from which is chargeable under the head Inco is chargeable under the head "Income from house property", me from house property", other than the new asset. other than the new asset.

Smt. Punita Sanjay Bindra. 5 Smt. Punita Sanjay Bindra ITA No.

Explanation. Explanation.—For the purposes of this section,— (i) "long-term capital asset" means a capital asset which is not term capital asset" means a capital asset which is not term capital asset" means a capital asset which is not a short-term capital asset; term capital asset; (ii) "net consideration", in relation to the transfer of a capit (ii) "net consideration", in relation to the transfer of a capit (ii) "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or asset, means the full value of the consideration received or asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as accruing as a result of the transfer of the capital asset as accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively reduced by any expenditure incurred wholly and exclusively reduced by any expenditure incurred wholly and exclusively in connection with such transfer. in connection with such transfer. (2) Where the assessee purchases, with (2) Where the assessee purchases, within the period of one in the period of one year after the date of the transfer of the original asset, or year after the date of the transfer of the original asset, or year after the date of the transfer of the original asset, or constructs, within the period of three years after such date, constructs, within the period of three years after such date, constructs, within the period of three years after such date, any residential house, the income from which is chargeable any residential house, the income from which is chargeable any residential house, the income from which is chargeable under the head "Income from house property", other t under the head "Income from house property", other t under the head "Income from house property", other than the new asset, the amount of capital gain arising from the transfer new asset, the amount of capital gain arising from the transfer new asset, the amount of capital gain arising from the transfer of the original asset not changed under section 45 on the of the original asset not changed under section 45 on the of the original asset not changed under section 45 on the basis of the cost of such new asset as provided in clause (a), basis of the cost of such new asset as provided in clause (a), basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub or, as the case may be, clause (b), of sub-section (1), shall b section (1), shall be deemed to be income chargeable under the head "Capital deemed to be income chargeable under the head "Capital deemed to be income chargeable under the head "Capital gains" relating to long gains" relating to long-term capital assets of the previous year term capital assets of the previous year in which such residential house is purchased or constructed. in which such residential house is purchased or constructed. in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three (3) Where the new asset is transferred within a period of three (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its m the date of its purchase or, as the case may be, its m the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the construction, the amount of capital gain arising from the construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on transfer of the original asset not charged under section 45 on transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause, the basis of the cost of such new asset as provided in clause, the basis of the cost of such new asset as provided in clause, (a) or, as the ca (a) or, as the case may be, clause (b), of sub-section (I) shall be section (I) shall be deemed to be income chargeable under the head "Capital deemed to be income chargeable under the head "Capital deemed to be income chargeable under the head "Capital gains" relating to long gains" relating to long-term capital assets of the previous year term capital assets of the previous year in which such new asset i in which such new asset is transferred.” 5.3 The Ld. Assessing Officer has summari Assessing Officer has summarised the conditions of sed the conditions of section 54F as under: 4F as under:

“Thus, the exemption w/s 54F is denied to an assessee if Thus, the exemption w/s 54F is denied to an assessee if Thus, the exemption w/s 54F is denied to an assessee if- (i) The assessee already owns more than one residential (i) The assessee already owns more than one residential (i) The assessee already owns more than one residential house on the date of Transfer of original assets (Proviso a(i) to house on the date of Transfer of original assets (Proviso a(i) to house on the date of Transfer of original assets (Proviso a(i) to 54F(1)];

Smt. Punita Sanjay Bindra. 6 Smt. Punita Sanjay Bindra ITA No.

(ii) After purchasing/constructing the qualifying new house ) After purchasing/constructing the qualifying new house ) After purchasing/constructing the qualifying new house within the prescribed period, he purchases within one year of within the prescribed period, he purchases within one year of within the prescribed period, he purchases within one year of the transfer of original asset (proviso 1() to section 54F(1) the transfer of original asset (proviso 1() to section 54F(1) the transfer of original asset (proviso 1() to section 54F(1) another residential house, income from which is taxable under another residential house, income from which is taxable under another residential house, income from which is taxable under the head income from house property'. the head income from house property'. (iii) After purchasing/constructing the qualifying new house ) After purchasing/constructing the qualifying new house ) After purchasing/constructing the qualifying new house within the prescribed period, he constructs another residential within the prescribed period, he constructs another residential within the prescribed period, he constructs another residential house, income from which is taxable under the head income house, income from which is taxable under the head income house, income from which is taxable under the head income from house property; within three y from house property; within three years of the date of transfer ears of the date of transfer of original asset. (Proviso a(ji) to section 54F(1)). of original asset. (Proviso a(ji) to section 54F(1)). (iv) The assessee purchases or constructs a residential house (iv) The assessee purchases or constructs a residential house (iv) The assessee purchases or constructs a residential house in addition to the qualifying new house within two or three in addition to the qualifying new house within two or three in addition to the qualifying new house within two or three years respectively. The additional house should be years respectively. The additional house should be years respectively. The additional house should be such, income from which is taxable under the head income from income from which is taxable under the head income from income from which is taxable under the head income from house property' (seotion 54F(2)]; house property' (seotion 54F(2)]; (ii) The assessee transfers the qualifying new house within ) The assessee transfers the qualifying new house within ) The assessee transfers the qualifying new house within three years of the date of purchas three years of the date of purchase /construction (section e /construction (section 54F(3)’ 5.4 The dispute between the parti The dispute between the parties is in respect of one of the in respect of one of the conditions of section 54F of the of section 54F of the Act that on the date of transfer of ct that on the date of transfer of original asset, the assessee should not be owner of more than one original asset, the assessee should not be owner of more than one original asset, the assessee should not be owner of more than one residential house property residential house property, other than the new asset , other than the new asset. The date of purchase of house proper purchase of house property as well as date of sale/transfer of ty as well as date of sale/transfer of original asset i.e. shares of Biba apparel shares of Biba apparel pvt ltd, is is also disputed. For understanding of of the controversy, it is relevant to reproduce the controversy, it is relevant to reproduce events leading to generation of long events leading to generation of long-term capital and consequent term capital and consequent deduction claimed, as under , as under: S No. Event Date as per Date as per assessee Assessing Officer 1. Property co-owned with Husband at owned with Husband at B-5, Dorabjee 2. (a) Assessee Assessee registered as first 22/05/2007 22/05/2007

Smt. Punita Sanjay Bindra. 7 Smt. Punita Sanjay Bindra ITA No.

Co-owner 3. (b) Assessee’s ’s name name was was 25/04/2013 25/04/2013 changedas second Co as second Co-owner 2. Purchase Purchase of of flat flat at at Shobha Shobha 23/07/2010 23/07/2010 Carnation, Pune for₹.1,21,49, 750/- Carnation, Pune 30/06/2011 30/04/2011 3. Sale of shares i.e. original asset Sale of shares i.e. original asset The assessee sold shares sold shares under Agreement dated 20/12/2010 dated 20/12/2010 for sale for shares of Biba apparel and sale for shares of subsequent subsequent amendment amendment dated dated 30/04/2011 and and filed annual return to Registrar of companies on egistrar of companies on 30/06/2011 and claimed sale of 30/06/2011 and claimed sale of shares as on 30/06/2011 as on 30/06/2011 4. Purchase of flat at a Country Park Purchase of flat at a Country Park 06/05/2011 06/05/2011 for an amount of ₹ 1, 26, 13, 120/- for an amount of 09/05/2011 08/05/2012 5. Gift of flat at a Country Park to Gift of flat at a Country Park to daughter (i) gift gift dead dead unregistered unregistered dated 9/05/2011, which was submitted before the was submitted before the Ld. Ld. CIT(A) CIT(A) additional additional evidence evidence (ii) gift deed registered on gift deed registered on 08/05/2012, which was 08/05/2012, which was filed before the Assessing filed before the Assessing Officer Officer 6. Rs.4, 66, 72, 042/ 42/-was deposited in 24/05/2012 24/05/2012 Capital gain scheme of State Bank scheme of State Bank of India Invested ₹ 50, 00, 000/ 7. 50, 00, 000/-in non- 30/09/2011 30/09/2011 convertible convertible redeemable redeemable taxable taxable bonds bonds of of National National Highway Highway authority of India authority of India 8. Invested Rs.4, 36, 55, 000/ , 36, 55, 000/-in 07/12/2012 07/12/2012 purchase of house property at 301, purchase of house property at 301, Marvel , Pune 5.5 The Assessing officer has noted The Assessing officer has noted that the assessee initially by assessee initially by letter dated 26/12/2014 submitted to consider letter dated 26/12/2014 submitted to consider purchase of flat purchase of flat on 06/05/2011 at Countr at Country Park as new asset for claiming deduction y Park as new asset for claiming deduction under section 54F of the Act amounting to ₹1,09,83,090/ under section 54F of the 1,09,83,090/-, however

Smt. Punita Sanjay Bindra. 8 Smt. Punita Sanjay Bindra ITA No. subsequently by letter dated 11/03/2015 submitted that exemption subsequently by letter dated 11/03/2015 submitted that exemption subsequently by letter dated 11/03/2015 submitted that exemption of the Act amounting to ₹1,09,83,090/ under section 54F 1,09,83,090/-was claimed in respect of flat at claimed in respect of flat at ‘Shoba Carnation’.

5.6 The assessee has taken the date of sale of shares as on The assessee has taken the date of sale of shares as on The assessee has taken the date of sale of shares as on 30/06/2011 and therefore the contention of the assessee that as on 30/06/2011 and therefore the contention of the assessee that as on 30/06/2011 and therefore the contention of the assessee that as on the date of the transfer of shares the assessee fulfilled the the date of the transfer of shares the assessee the date of the transfer of shares the assessee conditions of not owning more than one residential house other conditions of not owning more than one residential house other conditions of not owning more than one residential house other than the new asset, because the flat at Country Park was gifted to , because the flat at Country Park was gifted to , because the flat at Country Park was gifted to the daughter on 09/05/2011 i.e. prior to the transfer of shares. the daughter on 09/05/2011 i.e. prior to the transfer of shares. the daughter on 09/05/2011 i.e. prior to the transfer of shares. Whereas, the Assessing Officer has taken the date of the sale of Whereas, the Assessing Officer has taken the date of the sale Whereas, the Assessing Officer has taken the date of the sale shares as on 30/04/2011 and therefore according to him, the shares as on 30/04/2011 and therefore according to him, the shares as on 30/04/2011 and therefore according to him, the assessee owned two residential properties assessee owned two residential properties other than new asset ( i.e. other than new asset ( i.e. Country Park ) , first, flat at , first, flat at ‘Shoba Carnation’ and second, co and second, co- ownership in building at ownership in building at ‘Dorabjee Paradise’, and thus no , and thus not entitled for deduction under section 54F of the for deduction under section 54F of the Act, for either ct, for either investment in new asset i.e. flat at Country Park or investment in capital gain new asset i.e. flat at Country Park or investment in capital gain new asset i.e. flat at Country Park or investment in capital gain scheme or in NHAI bonds. scheme or in NHAI bonds.

5.7 The Assessing Officer also noted various investments in The Assessing Officer also noted various investments in The Assessing Officer also noted various investments in property made by the ass property made by the assessee along with her daughter Anahita essee along with her daughter Anahita Bindra. The relevant observations Assessing Officer is reproduced Bindra. The relevant observations Assessing Officer is reproduced Bindra. The relevant observations Assessing Officer is reproduced as under:

“vii. On going through the details on record, it is seen that On going through the details on record, it is seen that On going through the details on record, it is seen that the assessee had also made investments in the six other the assessee had also made investments in the six other the assessee had also made investments in the six other properties during the ye properties during the year as under:

Smt. Punita Sanjay Bindra. 9 Smt. Punita Sanjay Bindra ITA No. i Flat No 701 Corolla Realty), i Flat No 701 Corolla Realty), ii. Flat No 702 Corolla Realty Flat No 702 Corolla Realty iii. Flat Flat A-2-702 A Siddarth iv) Flat A-2-602 Siddarth properties 602 Siddarth properties properties [v) Row houses no 13 at Wagoli [v) Row houses no 13 at Wagoli (vi) Row houses no 14 at Wagoli (vi) Row houses no 14 at Wagoli Pune Pune In response to query made, the assessee submitted that all In response to query made, the assessee submitted that all In response to query made, the assessee submitted that all the above 6 properties are in the name of their daughter the above 6 properties are in the name of their daughter the above 6 properties are in the name of their daughter Anahita Bindra, and the assesseee is only the consenting Anahita Bindra, and the assesseee is only the consenting Anahita Bindra, and the assesseee is only the consenting party. It is relevant to note here that : party. It is relevant to note here that : a)All the properties have been shown by a)All the properties have been shown by the assessee as her the assessee as her assets in the statement filed during assessment proceedings. assets in the statement filed during assessment proceedings. assets in the statement filed during assessment proceedings. b)The assessee's daughter was only 19 years old then and b)The assessee's daughter was only 19 years old then and b)The assessee's daughter was only 19 years old then and she was a student with no source of income. The assessee she was a student with no source of income. The assessee she was a student with no source of income. The assessee has made the major payments towards the purchase of these has made the major payments towards the purchase of these has made the major payments towards the purchase of these flats. The assessee has vide letter dated 05.02.2015 ts. The assessee has vide letter dated 05.02.2015 ts. The assessee has vide letter dated 05.02.2015 submitted that she had invested in properties under submitted that she had invested in properties under submitted that she had invested in properties under construction as an inyestor but had given the same as gift construction as an inyestor but had given the same as gift construction as an inyestor but had given the same as gift before receiving possession of the proderty to her daughter before receiving possession of the proderty to her daughter before receiving possession of the proderty to her daughter Anahita Bindra. Anahita Bindra.” 5.8 The Ld. Assess Assessing ing Officer Officer rejected rejected the the claim claim of of deduction/exemption under deduction/exemption under section 54F of the Act mainly on three ct mainly on three grounds. Firstly, he rejected the contention of the assessee that , he rejected the contention of the assessee that , he rejected the contention of the assessee that name of the assessee name of the assessee in registered deed for sale of property namely in registered deed for sale of property namely ‘Dorabjee Paradise’isas a isas a second co-owner. The Assessing Officer owner. The Assessing Officer noted that in original registered sale deed noted that in original registered sale deed vide agreement dated ide agreement dated 22/05/2007, the assessee was the first co 22/05/2007, the assessee was the first co-owner of the property owner of the property which has been subsequently changed on 25/04/2013 by way of which has been subsequently changed on 25/04/2013 by way of which has been subsequently changed on 25/04/2013 by way of application only. The application only. The learned Assessing Officer relied on the Assessing Officer relied on the decision of the Hon’ble Karnataka High Court in the case of CIT Hon’ble Karnataka High Court in the case of CIT Hon’ble Karnataka High Court in the case of CIT vs MJSiwani 46 taxmann.com 170 Siwani 46 taxmann.com 170, wherein it is held that co wherein it is held that co-

Smt. Punita Sanjay Bindra. 10 Smt. Punita Sanjay Bindra ITA No. owner is the owner of house in which he has share and that his ner is the owner of house in which he has share and that his ner is the owner of house in which he has share and that his right, title and interest is right, title and interest is exclusive to the extent of a share in that exclusive to the extent of a share in that and he is the owner of the entire undivided house till it is he is the owner of the entire undivided house till it is he is the owner of the entire undivided house till it is partitioned. The relevant finding of the Assessing Officer is partitioned. The relevant finding of the Assessing Officer is partitioned. The relevant finding of the Assessing Officer is reproduced as under: reproduced as under:

“7.1 Applicability of the proviso of sec 54F in this case: 7.1 Applicability of the proviso of sec 54F in this case: 7.1 Applicability of the proviso of sec 54F in this case: The assessee owns two houses as on the date of transfer ee owns two houses as on the date of transfer ee owns two houses as on the date of transfer a) The assessee is the sole owner of D1, Flat No 1037, Shoba a) The assessee is the sole owner of D1, Flat No 1037, Shoba a) The assessee is the sole owner of D1, Flat No 1037, Shoba Carnation b) The assessee is also the co b) The assessee is also the co-owner in B-5, Dorabjee Paradise 5, Dorabjee Paradise alongwith alongwith alongwith her her her husband. husband. husband. The The The assessee assessee assessee authorized authorized authorized representatives have vide the representatives have vide their letter dated 20.03.2015 stated ir letter dated 20.03.2015 stated that the developers had made an error by including the that the developers had made an error by including the that the developers had made an error by including the assessee's name as the first name and the second name of assessee's name as the first name and the second name of assessee's name as the first name and the second name of her husband in the agreement for purchase of the property her husband in the agreement for purchase of the property her husband in the agreement for purchase of the property and that her husband had applied for rectification t and that her husband had applied for rectification t and that her husband had applied for rectification to change his name as the first name and the assesses name as the his name as the first name and the assesses name as the his name as the first name and the assesses name as the second name. On going through the application it is seen that second name. On going through the application it is seen that second name. On going through the application it is seen that the same is dated 25.04.2013 whereas the property was the same is dated 25.04.2013 whereas the property was the same is dated 25.04.2013 whereas the property was purchased as the assessee's name as the first purchaser vide purchased as the assessee's name as the first purchaser vide purchased as the assessee's name as the first purchaser vide agreement date agreement dated 22.05.2007. Hence, the assessee's claim d 22.05.2007. Hence, the assessee's claim that she does not have an interest is not acceptable and is that she does not have an interest is not acceptable and is that she does not have an interest is not acceptable and is merely is an afterthought. merely is an afterthought. The question here is Whether exemption under section 54F The question here is Whether exemption under section 54F The question here is Whether exemption under section 54F would be allowable where assessee is already a co would be allowable where assessee is already a co would be allowable where assessee is already a co-owner of another flat? t? In this context the Hon'ble Karnataka High Court has held in In this context the Hon'ble Karnataka High Court has held in In this context the Hon'ble Karnataka High Court has held in the case ofCIT, Central Circle Bangalore v/s M.J.SiwANI 46 the case ofCIT, Central Circle Bangalore v/s M.J.SiwANI 46 the case ofCIT, Central Circle Bangalore v/s M.J.SiwANI 46 taxmann.com 170 (Karnataka) that Section 54F provides that taxmann.com 170 (Karnataka) that Section 54F provides that taxmann.com 170 (Karnataka) that Section 54F provides that if the assessee has a residential house he cannot seek the if the assessee has a residential house he cannot seek the if the assessee has a residential house he cannot seek the benefit of long te benefit of long term capital gain. Under this provision, merely rm capital gain. Under this provision, merely because, the words residential house are preceded by article because, the words residential house are preceded by article because, the words residential house are preceded by article a would not exclude a house shared with any other person. a would not exclude a house shared with any other person. a would not exclude a house shared with any other person. Even if the residential house is shared by an assessee, his Even if the residential house is shared by an assessee, his Even if the residential house is shared by an assessee, his

Smt. Punita Sanjay Bindra. 11 Smt. Punita Sanjay Bindra ITA No. right and ownership in the hous right and ownership in the house, to whatever extent, is e, to whatever extent, is exclusive and nobody can take away his right in the house exclusive and nobody can take away his right in the house exclusive and nobody can take away his right in the house without due process of law. In other words, co without due process of law. In other words, co-owner is the owner is the owner of a house in which he has share and that his right, owner of a house in which he has share and that his right, owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his title and interest is exclusive to the extent of his title and interest is exclusive to the extent of his share and that he is the owner of the entire undivided house till it is that he is the owner of the entire undivided house till it is that he is the owner of the entire undivided house till it is partitioned. The analogy applied by the Tribunal based on the partitioned. The analogy applied by the Tribunal based on the partitioned. The analogy applied by the Tribunal based on the judgment of the Supreme Court in Banarsi Dass Gupta judgment of the Supreme Court in Banarsi Dass Gupta judgment of the Supreme Court in Banarsi Dass Gupta (supra), wherein, the Supreme Court considered the provisions (supra), wherein, the Supreme Court considered the provisions (supra), wherein, the Supreme Court considered the provisions contained in section 32 of the Act, would not apply to the facts d in section 32 of the Act, would not apply to the facts d in section 32 of the Act, would not apply to the facts of the present case. The right of a person, may be one half, in of the present case. The right of a person, may be one half, in of the present case. The right of a person, may be one half, in the residential house cannot be taken away without due the residential house cannot be taken away without due the residential house cannot be taken away without due process of law or it continues till there is a partition of such process of law or it continues till there is a partition of such process of law or it continues till there is a partition of such residential hou residential house.Thus, the view expressed by the Tribunal on se.Thus, the view expressed by the Tribunal on this issue cannot be accepted. Thus, the order passed by this issue cannot be accepted. Thus, the order passed by this issue cannot be accepted. Thus, the order passed by revenue authorities rejecting assessee's claim was to be revenue authorities rejecting assessee's claim was to be revenue authorities rejecting assessee's claim was to be restored. From the above, it is clear that the assessee already owns From the above, it is clear that the assessee already owns From the above, it is clear that the assessee already owns joint ownership joint ownership with her husband. Hence, the assessee is not usband. Hence, the assessee is not entitled for deduction u/s 54F ofthe Act. entitled for deduction u/s 54F ofthe Act.” 5.9 Secondly, the AO the AO rejected the claim on the ground that rejected the claim on the ground that assessee purchased a residential house i.e. flat at Country park, assessee purchased a residential house i.e. flat at Country assessee purchased a residential house i.e. flat at Country other than the new asset, within a period of one year from the date other than the new asset, within a period of one year from the date other than the new asset, within a period of one year from the date of the transfer of the original asset. of the transfer of the original asset.

5.10 Thirdly, he rejected , he rejected the claim on the ground that deduction on the ground that deduction under section 54F in respect of under section 54F in respect of ₹1,09,83,900/- -claimed to be invested in flat at ‘C flat at ‘Country Park’, which was gifted away to her , which was gifted away to her daughter within a year. The relevant observation of the Assessing daughter within a year. The relevant observation of the Assessing daughter within a year. The relevant observation of the Assessing Officer is reproduced as under: Officer is reproduced as under:

“8.1. The asessee is not eligible for deduction W/s 54F in 8.1. The asessee is not eligible for deduction W/s 54F in 8.1. The asessee is not eligible for deduction W/s 54F in respect of Rs 1,09,83,900 claimed to be invested in Count respect of Rs 1,09,83,900 claimed to be invested in Count respect of Rs 1,09,83,900 claimed to be invested in Country Park and claimed in the return of income filed as the assessce Park and claimed in the return of income filed as the assessce Park and claimed in the return of income filed as the assessce

Smt. Punita Sanjay Bindra. 12 Smt. Punita Sanjay Bindra ITA No. flouts the following condition as the asset has been gifted flouts the following condition as the asset has been gifted flouts the following condition as the asset has been gifted away to her daughter within a year away to her daughter within a year “…..Where the new asset is transferred within a period of Where the new asset is transferred within a period of Where the new asset is transferred within a period of three years from the date of its purc three years from the date of its purchase or, as the case may hase or, as the case may be, its construction, the amount of capital gain arising from the be, its construction, the amount of capital gain arising from the be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on transfer of the original asset not charged under section 45 on transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause the basis of the cost of such new asset as provided in clause the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), (a) or, as the case may be, clause (b), of sub-section (1) shall section (1) shall be deemed to be income chargeable under the head "Capital be deemed to be income chargeable under the head "Capital be deemed to be income chargeable under the head "Capital gains" relating to long gains" relating to long-term capital assets of the previous year term capital assets of the previous year in which such new asset is transferred. in which such new asset is transferred.” 5.11 The Assessing Officer accordingly rejected the claim of he Assessing Officer accordingly rejected the claim of he Assessing Officer accordingly rejected the claim of deduction of ₹1,09,83,900/ 1,09,83,900/-under section 54F, observing as under: under section 54F, observing as under:

“9. To summarize, it is seen that if the assessee claims 9. To summarize, it is seen that if the assessee claims 9. To summarize, it is seen that if the assessee claims deduction u/s 54F on investment in Shobha Carnation vide deduction u/s 54F on investment in Shobha Carnation vide deduction u/s 54F on investment in Shobha Carnation vide agreement dated 23.07 agreement dated 23.07.2010 the first and second provisos to .2010 the first and second provisos to section 54F are not satisfied since: section 54F are not satisfied since: The assessee held a residential house jointly with her The assessee held a residential house jointly with her The assessee held a residential house jointly with her husband and the assessee subsequently within a year of husband and the assessee subsequently within a year of husband and the assessee subsequently within a year of transfer ) purchased a residential property viz 'Country Park" transfer ) purchased a residential property viz 'Country Park" transfer ) purchased a residential property viz 'Country Park" on 6/5/2011 within a period of one year after the date of 2011 within a period of one year after the date of 2011 within a period of one year after the date of transfer of the original asset. Hence, the assessee is not transfer of the original asset. Hence, the assessee is not transfer of the original asset. Hence, the assessee is not eligible for deduction u/s 54F of the Act on account of eligible for deduction u/s 54F of the Act on account of eligible for deduction u/s 54F of the Act on account of investment in this residential property. investment in this residential property. Further, if the asséssee's alternate claim for de Further, if the asséssee's alternate claim for de Further, if the asséssee's alternate claim for deduction on account of investment in 'Country Park" on 6/5/2011 is account of investment in 'Country Park" on 6/5/2011 is account of investment in 'Country Park" on 6/5/2011 is considered then again the assessee owns one house solely considered then again the assessee owns one house solely considered then again the assessee owns one house solely and has interest in another residential property jointly with and has interest in another residential property jointly with and has interest in another residential property jointly with her husband as on the date of transfer and further has her husband as on the date of transfer and further has her husband as on the date of transfer and further has transferred this transferred this property to her daughter within a period of property to her daughter within a period of three years vide gift deed on 08.05.2015 which was duly three years vide gift deed on 08.05.2015 which was duly three years vide gift deed on 08.05.2015 which was duly registered contravening the provisions of section54F(3) of the registered contravening the provisions of section54F(3) of the registered contravening the provisions of section54F(3) of the Act wherein it states that Where the new asset is transferred Act wherein it states that Where the new asset is transferred Act wherein it states that Where the new asset is transferred within a period of three years within a period of three years from the date of its purchase, ... from the date of its purchase, ... shall be deemed to beIncome chargeable under the head shall be deemed to beIncome chargeable under the head shall be deemed to beIncome chargeable under the head "Capital gains". "Capital gains".”

Smt. Punita Sanjay Bindra. 13 Smt. Punita Sanjay Bindra ITA No.

5.12 The deduction under section 54F of the he deduction under section 54F of the Act for investment in ct for investment in capital gain scheme and NHAI amounting to ₹4,36,55,000/ capital gain scheme and NHAI amounting to 4,36,55,000/-was also rejected observin also rejected observing as under:

9.2. Parking of funds in Capital Gain Account Scheme: 9.2. Parking of funds in Capital Gain Account Scheme: 9.2. Parking of funds in Capital Gain Account Scheme: As in the case of section 34, this provision also provides for As in the case of section 34, this provision also provides for As in the case of section 34, this provision also provides for parking of funds to be invested in new house in the specified parking of funds to be invested in new house in the specified parking of funds to be invested in new house in the specified account with the specified bank or institution in accordance account with the specified bank or institution in accordance account with the specified bank or institution in accordance with the Capital Gain Account Scheme 1988 Appendix h the Capital Gain Account Scheme 1988 Appendix h the Capital Gain Account Scheme 1988 Appendix-IF]. All the provisions relating to deposit, withdrawal and utilization the provisions relating to deposit, withdrawal and utilization the provisions relating to deposit, withdrawal and utilization as well as consequences for not utilizing the deposit within the as well as consequences for not utilizing the deposit within the as well as consequences for not utilizing the deposit within the prescribed period apply to section 54F in the same manner as prescribed period apply to section 54F in the same manner as prescribed period apply to section 54F in the same manner as section 54. The assessee has invested an amount of Rs. 4,66,72,042/ The assessee has invested an amount of Rs. 4,66,72,042/ The assessee has invested an amount of Rs. 4,66,72,042/- in Capital gains scheme on 21/5/2012 and claimed deduction Capital gains scheme on 21/5/2012 and claimed deduction Capital gains scheme on 21/5/2012 and claimed deduction u/s 54F of the IT Act. u/s 54F of the IT Act. On the date of deposit into the Capital gains scheme on On the date of deposit into the Capital gains scheme on On the date of deposit into the Capital gains scheme on 21/5/2012, the assessee owns one house solely viz. D1, Flat 21/5/2012, the assessee owns one house solely viz. D1, Flat 21/5/2012, the assessee owns one house solely viz. D1, Flat No 1037, Shoba Carnation and has interest in another No 1037, Shoba Carnation and has interest in another No 1037, Shoba Carnation and has interest in another residential property jointly with her husband as on the date of residential property jointly with her husband as on the date of residential property jointly with her husband as on the date of transfer viz. B transfer viz. B-5, Dorabjee Paradise. ii.the assessee has investment in 'Country Park on 6/5/2011 ii.the assessee has investment in 'Country Park" on 6/5/2011 ii.the assessee has investment in 'Country Park" on 6/5/2011 after the transfer of the original ass after the transfer of the original asset and has transferred this et and has transferred this property to her daughter within a period of three 'vears vide property to her daughter within a period of three 'vears vide property to her daughter within a period of three 'vears vide gift deed on 08.05.2015. This purchase is again a purchase of gift deed on 08.05.2015. This purchase is again a purchase of gift deed on 08.05.2015. This purchase is again a purchase of a new asset other than the purchase made vide amounts a new asset other than the purchase made vide amounts a new asset other than the purchase made vide amounts invested in Capital gains scheme on 21.05.2012. Th invested in Capital gains scheme on 21.05.2012. Th invested in Capital gains scheme on 21.05.2012. The amount of Rs.4,66,72,042/ of Rs.4,66,72,042/- was invested in Capital Gains Scheme on was invested in Capital Gains Scheme on 21.05.2012 and subsequently used in purchase of residential 21.05.2012 and subsequently used in purchase of residential 21.05.2012 and subsequently used in purchase of residential property being 301, Marvel Div property being 301, Marvel Diva, Pune on 7thDecember, 2012 December, 2012 for an amount of Rs. 4,36,55,000/ for an amount of Rs. 4,36,55,000/-. Thus, the assessee is not Thus, the assessee is not eligible for deduction u/s 54F in eligible for deduction u/s 54F in respect of Rs. Rs. 4,36,55,000/- amounts invested in Capital amounts invested in Capital gains scheme on 21.05.2012. gains scheme on 21.05.2012.”

Smt. Punita Sanjay Bindra. 14 Smt. Punita Sanjay Bindra ITA No.

The AO has noticed that the Appellant was also a co The AO has noticed that the Appellant was also a co The AO has noticed that the Appellant was also a co-owner of the flat at Dorabjee paradise with her husband and treated the flat at Dorabjee paradise with her husband and treated the flat at Dorabjee paradise with her husband and treated Dorbajee paradise house as the second Dorbajee paradise house as the second house of the appellant house of the appellant and denied the benefit of section 54F of the Income Tax Act, and denied the benefit of section 54F of the Income Tax Act, and denied the benefit of section 54F of the Income Tax Act, 1961. In this regard the AR of the Appellant submitted that although In this regard the AR of the Appellant submitted that although In this regard the AR of the Appellant submitted that although the appellant was a co the appellant was a co-owner of the flat but her name was owner of the flat but her name was just included in the property for the sake o just included in the property for the sake of convenience. Often f convenience. Often the name of a spouse is added to provide a sense of comfort, the name of a spouse is added to provide a sense of comfort, the name of a spouse is added to provide a sense of comfort, to ensure ease of succession on death. All the funds to ensure ease of succession on death. All the funds to ensure ease of succession on death. All the funds contributed towards the purchase of the Bungalow were of her contributed towards the purchase of the Bungalow were of her contributed towards the purchase of the Bungalow were of her husband. As per the recent ITAT ruling in the case of Dr husband. As per the recent ITAT ruling in the case of Dr husband. As per the recent ITAT ruling in the case of Dr Vandana Bulchandani Vs Income Tax Officer dana Bulchandani Vs Income Tax Officer -11(3)(4), ITA No. 978/Mum/2013 978/Mum/2013 (Assessment (Assessment year year 2009- 2009 -10) dated 10.08.2016 F" Bench Mumbai on the identical issue clearly 10.08.2016 "F" Bench Mumbai on the identical issue clearly 10.08.2016 "F" Bench Mumbai on the identical issue clearly stated that "Property Co stated that "Property Co - Ownership doesn't mean joint I Ownership doesn't mean joint I-T liability and also "Co liability and also "Co-Holder of Property can't be taxed as roperty can't be taxed as payments for purchase of property was made by her husband payments for purchase of property was made by her husband payments for purchase of property was made by her husband and that her name was just added as a matter of and that her name was just added as a matter of and that her name was just added as a matter of convenience. Receipts of payment made by her husband convenience. Receipts of payment made by her husband convenience. Receipts of payment made by her husband wherein the payment was made for the purchase of Dorabjee wherein the payment was made for the purchase of Dorabjee wherein the payment was made for the purchase of Dorabjee Bungalow conf Bungalow confirmed by Dorabjee Developers were also irmed by Dorabjee Developers were also furnished. It was stated that Bungalow Dorabiee was shown furnished. It was stated that Bungalow Dorabiee was shown furnished. It was stated that Bungalow Dorabiee was shown as Self occupied Property in the Income Tax returns of her as Self occupied Property in the Income Tax returns of her as Self occupied Property in the Income Tax returns of her husband i.e. Sanjay Bindra. Income Tax returns of Sanjay husband i.e. Sanjay Bindra. Income Tax returns of Sanjay husband i.e. Sanjay Bindra. Income Tax returns of Sanjay Bindra for AY 2008 Bindra for AY 2008-2009 and AY 2012-2013 we 2013 were filed. On going to the facts of the case it is evidenced that Appellant going to the facts of the case it is evidenced that Appellant going to the facts of the case it is evidenced that Appellant

Smt. Punita Sanjay Bindra. 15 Smt. Punita Sanjay Bindra ITA No. was merely a co owner of the bungalow and has no monetary was merely a co owner of the bungalow and has no monetary was merely a co owner of the bungalow and has no monetary contribution towards purchase of bungalow. contribution towards purchase of bungalow. I have gone through the assessment order, bank statements, I have gone through the assessment order, bank statements, I have gone through the assessment order, bank statements, confirmation of confirmation of Dorabjee Developer and submissions made by Dorabjee Developer and submissions made by the appellant and am of the view that appellant's name has the appellant and am of the view that appellant's name has the appellant and am of the view that appellant's name has been included for the sake of convenience. The property been included for the sake of convenience. The property been included for the sake of convenience. The property belongs to her husband and cannot be included in the belongs to her husband and cannot be included in the belongs to her husband and cannot be included in the appellant's name. Reliance is placed on "ITAT appellant's name. Reliance is placed on "ITAT ruling in the ruling in the case of Dr Vandana Bulchandani Vs Income Tax Officer case of Dr Vandana Bulchandani Vs Income Tax Officer case of Dr Vandana Bulchandani Vs Income Tax Officer - 11(3)(4) (Assessment year 2009 11(3)(4) ITA No.978/Mum/2013 (Assessment year 2009 11(3)(4) ITA No.978/Mum/2013 (Assessment year 2009-10) dated 10.08.2016 "F" Bench Mumbai on theidentical issue dated 10.08.2016 "F" Bench Mumbai on theidentical issue dated 10.08.2016 "F" Bench Mumbai on theidentical issue clearly stated that "Property Co clearly stated that "Property Co - Ownership doesn't mean Ownership doesn't mean joint I-T liabilit T liability and also "Co-Holder of Property can't be Holder of Property can't be taxed. Therefore, the AO is not right holding that appellant taxed. Therefore, the AO is not right holding that appellant taxed. Therefore, the AO is not right holding that appellant was owner of second house and thereby not eligible for was owner of second house and thereby not eligible for was owner of second house and thereby not eligible for deduction u/s 54F. deduction u/s 54F.” 6.1 Secondly, the ld CIT(A) held that the ld CIT(A) held that the flat at ‘Country Park Country Park’ was gifted to the daughter on 09/05/2011 i.e. the date of unregistered o the daughter on 09/05/2011 i.e. the date of unregistered o the daughter on 09/05/2011 i.e. the date of unregistered gift deed. Relevant finding of the Ld. CIT(A) . Relevant finding of the Ld. CIT(A) is reproduced as under: reproduced as under:

“In this regard the AR of the Appellant submitted that the In this regard the AR of the Appellant submitted that the In this regard the AR of the Appellant submitted that the appellant entered into a Gift Deed to transfer the flat "Country appellant entered into a Gift Deed to transfer the flat "Country appellant entered into a Gift Deed to transfer the flat "Country Park" to her daughter on Ogl May 2011, although the gift deed k" to her daughter on Ogl May 2011, although the gift deed k" to her daughter on Ogl May 2011, although the gift deed got registered on 8th May 2012. The relevant clauses of got registered on 8th May 2012. The relevant clauses of got registered on 8th May 2012. The relevant clauses of section 2(47) of the Income Tax Act and as per Section 53A of section 2(47) of the Income Tax Act and as per Section 53A of section 2(47) of the Income Tax Act and as per Section 53A of the Transfer of Property Act, 1882, clearly mentions that the Transfer of Property Act, 1882, clearly mentions that the Transfer of Property Act, 1882, clearly mentions that transfer does not mer transfer does not merely includes "sale, relinquishment or ely includes "sale, relinquishment or exchange but also includes transaction allowing of the exchange but also includes transaction allowing of the exchange but also includes transaction allowing of the possession of any immovable property to be taken or retained possession of any immovable property to be taken or retained possession of any immovable property to be taken or retained in part performance of a contract. Mere non registration of gift in part performance of a contract. Mere non registration of gift in part performance of a contract. Mere non registration of gift deed does not mean that transfer of c deed does not mean that transfer of capital asset has not apital asset has not taken place. The term 'capital asset' in Section 2114) refers to taken place. The term 'capital asset' in Section 2114) refers to taken place. The term 'capital asset' in Section 2114) refers to property of any kind 'held' by an Assessee. There is no property of any kind 'held' by an Assessee. There is no property of any kind 'held' by an Assessee. There is no reference to 'owner' or 'owned'. Section 53A of the Transfer of reference to 'owner' or 'owned'. Section 53A of the Transfer of reference to 'owner' or 'owned'. Section 53A of the Transfer of Property Act allows the doctrine of part Property Act allows the doctrine of part-performan performance to be applied to the agreement which, though required to be applied to the agreement which, though required to be applied to the agreement which, though required to be registered, is not registered. The appellant relied on the registered, is not registered. The appellant relied on the registered, is not registered. The appellant relied on the decision in case of CIT vs. Podar Cement (P.) Ltd [1997] 226 IT decision in case of CIT vs. Podar Cement (P.) Ltd [1997] 226 IT decision in case of CIT vs. Podar Cement (P.) Ltd [1997] 226 IT 625/92 Taxman 541 (SC), wherein it was held that 625/92 Taxman 541 (SC), wherein it was held that 625/92 Taxman 541 (SC), wherein it was held that Smt. Punita Sanjay Bindra. 16 Smt. Punita Sanjay Bindra ITA No. registration for the registration for the purpose of conferring ownership right was purpose of conferring ownership right was not necessary as regards taxability of income in respect of not necessary as regards taxability of income in respect of not necessary as regards taxability of income in respect of income from house property. Following the view taken by the income from house property. Following the view taken by the income from house property. Following the view taken by the Supreme Court in above case the Full Bench of the Gujarat Supreme Court in above case the Full Bench of the Gujarat Supreme Court in above case the Full Bench of the Gujarat High Court in CIT v.Mormasji Manchar High Court in CIT v.Mormasji Mancharji Vaid [2001] 250 IT ji Vaid [2001] 250 IT 542/118 Taxman 276 has held that capital gain on the 542/118 Taxman 276 has held that capital gain on the 542/118 Taxman 276 has held that capital gain on the transfer has to be assessed to tax in the assessment year transfer has to be assessed to tax in the assessment year transfer has to be assessed to tax in the assessment year relevant to previous year within which the date of execution of relevant to previous year within which the date of execution of relevant to previous year within which the date of execution of deed of transfer falls and not in the subsequent assessment deed of transfer falls and not in the subsequent assessment deed of transfer falls and not in the subsequent assessment year in which the deed is registered. It was contended that year in which the deed is registered. It was contended that year in which the deed is registered. It was contended that her daughter was allowed the possession of the property at her daughter was allowed the possession of the property at her daughter was allowed the possession of the property at "Country Park" and there was part performance of a contract "Country Park" and there was part performance of a contract "Country Park" and there was part performance of a contract i.e. gift deed was executed but got registered at a later stage. i.e. gift deed was executed but got registered at a later stage. i.e. gift deed was executed but got registered at a later stage. Keeping in Keeping in view the above the appellant has very well view the above the appellant has very well followed the provisions correctly and gifted the property to her followed the provisions correctly and gifted the property to her followed the provisions correctly and gifted the property to her daughter on 09' May 2011. daughter on 09' May 2011. I have gone through the Assessment order and submissions have gone through the Assessment order and submissions have gone through the Assessment order and submissions made by the appellant. On a careful reading of the section made by the appellant. On a careful reading of the section made by the appellant. On a careful reading of the section 2(47), Transfer of Property Act, and decision relied upon by Transfer of Property Act, and decision relied upon by Transfer of Property Act, and decision relied upon by the appellant the date of transfer of flat at Country Park the appellant the date of transfer of flat at Country Park the appellant the date of transfer of flat at Country Park would be considered as 09.05.2011 when the first gift deed would be considered as 09.05.2011 when the first gift deed would be considered as 09.05.2011 when the first gift deed was made. Therefore the AO was not correct in holding that was made. Therefore the AO was not correct in holding that was made. Therefore the AO was not correct in holding that the gift of property was the gift of property was made on 08-05-2012 instead of 09 2012 instead of 09-05- 2011.” 6.2 Thirdly, he held held that the date of transfer of shares of BIBA the date of transfer of shares of BIBA Apparel p ltd i.e., the original asset, the original asset, was on 30/06/2011, as per the as on 30/06/2011, as per the egistrar of companies (ROC). The annual return filed before the annual return filed before the Registrar of companies relevant finding of the Ld. CIT(A) is reproduced as under: finding of the Ld. CIT(A) is reproduced as under: finding of the Ld. CIT(A) is reproduced as under:

“In this regard the AR of the Appellant stated that the transfer In this regard the AR of the Appellant stated that the transfer In this regard the AR of the Appellant stated that the transfer of shares reflected in annual return is 30" June 2011 which is of shares reflected in annual return is 30" June 2011 which is of shares reflected in annual return is 30" June 2011 which is the actual date of transfer of shares. For the purpose of the actual date of transfer of shares. For the purpose of the actual date of transfer of shares. For the purpose of section 54F date of section 54F date of transfer of original asset will be 30l June transfer of original asset will be 30l June 2011, the actual transfer of shares get effective from the date 2011, the actual transfer of shares get effective from the date 2011, the actual transfer of shares get effective from the date when the Director's approval is received and same is reflected when the Director's approval is received and same is reflected when the Director's approval is received and same is reflected in Annual return filed with the ROC. The same view was in Annual return filed with the ROC. The same view was in Annual return filed with the ROC. The same view was taken in the case of Mrs. Hami taken in the case of Mrs. Hami Aspi Balsara (Taxpaver) V Aspi Balsara (Taxpaver) V ACIT. (2009 ACIT. (2009-TIOL-789-ITAT-MUM] wherein TAT had made MUM] wherein TAT had made

Smt. Punita Sanjay Bindra. 17 Smt. Punita Sanjay Bindra ITA No. reference to the Supreme Court decision of "Vasudev reference to the Supreme Court decision of "Vasudev reference to the Supreme Court decision of "Vasudev Ramchandra Shelat vs. Pranlal Jayanand Thakkar case 1974 Ramchandra Shelat vs. Pranlal Jayanand Thakkar case 1974 Ramchandra Shelat vs. Pranlal Jayanand Thakkar case 1974 AIR 1728, 1975 SCR (1) 534 dated 17.07.1974".Therefore the AIR 1728, 1975 SCR (1) 534 dated 17.07.1974".Therefore the AIR 1728, 1975 SCR (1) 534 dated 17.07.1974".Therefore the date of transfer of share is 30.06.2011 as per the Annual ransfer of share is 30.06.2011 as per the Annual ransfer of share is 30.06.2011 as per the Annual return filed. I have gone through the Assessment order and submissions I have gone through the Assessment order and submissions I have gone through the Assessment order and submissions made by the appellant and of the view that date of transfer of made by the appellant and of the view that date of transfer of made by the appellant and of the view that date of transfer of shares will be the date on which the actual transfer of shares shares will be the date on which the actual transfer of shares shares will be the date on which the actual transfer of shares takes place ie. in this case on 30.06.2011. The transfer would e ie. in this case on 30.06.2011. The transfer would e ie. in this case on 30.06.2011. The transfer would would be considered complete when the delivery of share would be considered complete when the delivery of share would be considered complete when the delivery of share certificate along with transfer deed is handed over to the certificate along with transfer deed is handed over to the certificate along with transfer deed is handed over to the purchaser. In the present case the physical delivery of the purchaser. In the present case the physical delivery of the purchaser. In the present case the physical delivery of the shares took place on 30th Ju shares took place on 30th June 2011. The date of agreement ne 2011. The date of agreement is not relevant in this case and thus the date of transfer of is not relevant in this case and thus the date of transfer of is not relevant in this case and thus the date of transfer of shares i.e. 30l June 2011 will be considered for capital gains shares i.e. 30l June 2011 will be considered for capital gains shares i.e. 30l June 2011 will be considered for capital gains purpose.I agree with the contention of the apellant and held purpose.I agree with the contention of the apellant and held purpose.I agree with the contention of the apellant and held that the date of transfer of share shou that the date of transfer of share should be taken as 30 ld be taken as 30-06- 2011 for computation the capital gain and deducted thereof. 2011 for computation the capital gain and deducted thereof. 2011 for computation the capital gain and deducted thereof.”

Smt. Punita Sanjay Bindra. 18 Smt. Punita Sanjay Bindra ITA No. decision has been summarised by the ld AO, which has been summarised by the ld AO, which has been summarised by the ld AO, which has been extracted above.

7.1 In view of the decision of the n view of the decision of the Hon’ble High Court, we do not Hon’ble High Court, we do not find any error in the order of the Assessing Officer and therefore find any error in the order of the Assessing Officer and therefore find any error in the order of the Assessing Officer and therefore accordingly, we set aside the finding of the Ld. CIT(A) and restore we set aside the finding of the Ld. CIT(A) and restore we set aside the finding of the Ld. CIT(A) and restore the finding of Assessing Officer. the finding of Assessing Officer. 7.2 The second dispute second dispute, is in respect of date of date of gift deed of property namely flat at ‘ flat at ‘Country Park’. Before the Assessing Officer, . Before the Assessing Officer, the assessee filed registered gift deed of the property which is dated the assessee filed registered gift deed of the property which is dated the assessee filed registered gift deed of the property which is dated 08/05/2012, whereas before the Ld. CIT(A) the assessee filed 08/05/2012, whereas before the Ld. CIT(A) the assessee filed 08/05/2012, whereas before the Ld. CIT(A) the assessee filed another another another gift gift gift deed, deed, deed, which which which is is is unregistered, unregistered, unregistered, but but but dated da da 09/05/2011(which is available on page 47 to 54 of the is available on page 47 to 54 of the is available on page 47 to 54 of the paperbook) and submitted that same might be admitted as additional evidence. submitted that same might be admitted as additional evidence. submitted that same might be admitted as additional evidence. As appear from the impugned As appear from the impugned order, the Ld. CIT(A) has neither the Ld. CIT(A) has neither given any finding on admission of the same as additional evidence given any finding on admission of the same as additional ev given any finding on admission of the same as additional ev nor provided any opportunity to the Assessing Officer for his nor provided any opportunity to the Assessing Officer for his nor provided any opportunity to the Assessing Officer for his comment as per the comment as per the Rule 46A of the Income-tax R Rules, 1962 ( in short the Rules) , therefore the decision relying upon the said , therefore the decision relying upon the said , therefore the decision relying upon the said additional evidence is in additional evidence is in violation of principles of natural justice. of natural justice. Therefore, we feel it appropriate to set aside the finding of the Ld. feel it appropriate to set aside the finding of the Ld. feel it appropriate to set aside the finding of the Ld. CIT(A) on the issue in dispute and restore this issue back to the file CIT(A) on the issue in dispute and restore this issue back to the file CIT(A) on the issue in dispute and restore this issue back to the file of the Ld. CIT(A) for following the provisions rule 46A. The Ld. of the Ld. CIT(A) for following the provisions rule 46A. The Ld. of the Ld. CIT(A) for following the provisions rule 46A. The Ld. CIT(A) may direct the assesse CIT(A) may direct the assessee to produce the original copy of the e to produce the original copy of the said gift deed for verification of date of the purchase of the stamp or said gift deed for verification of date of the purchase of the stamp or said gift deed for verification of date of the purchase of the stamp or Smt. Punita Sanjay Bindra. 19 Smt. Punita Sanjay Bindra ITA No. notarization at the at the end of the Assessing Officer. Before us the nd of the Assessing Officer. Before us the assessee has also filed assessee has also filed a letter from the cooperative Housing Society letter from the cooperative Housing Society of Country Park building related to transfer of the property, which ark building related to transfer of the property, which ark building related to transfer of the property, which is available on page 52 to 55 of the paperbook. The Ld. CIT(A) may available on page 52 to 55 of the paperbook. The Ld. CIT(A) may available on page 52 to 55 of the paperbook. The Ld. CIT(A) may also forward the same to the Assessing Officer for verification of also forward the same to the Assessing Officer for verification also forward the same to the Assessing Officer for verification actual date of gift / possession actual date of gift / possession from the records of the from the records of the cooperative Housing Society. 7.3 The third dispute third dispute is regarding date of transfer of shares of is regarding date of transfer of shares of BIBA Apparels. The learne BIBA Apparels. The learned counsel drawn our attention to share l drawn our attention to share transfer cum purchase agreement available on page 1to 46 of the transfer cum purchase agreement available on page 1to 46 of the transfer cum purchase agreement available on page 1to 46 of the paperbook. The learne The learned counsel also referred to the l also referred to the Annual Return filed under provisions of the C filed under provisions of the Company Act, 1956 having detail of having detail of share capital available on page 61 to 70 of the paperbook. He share capital available on page 61 to 70 of the paperbook. He share capital available on page 61 to 70 of the paperbook. He referred to the page No. 70 of t referred to the page No. 70 of the paperbook according to which he paperbook according to which, on 30/06/2011 shares in the 30/06/2011 shares in the name of the assessee stands transferred name of the assessee stands transferred to Future ventures India Ltd. Further the learne to Future ventures India Ltd. Further the learned co counsel referred to the decision dated 25/11/1976 of Hon’ble Supreme Court in the to the decision dated 25/11/1976 of Hon’ble Supreme Court in the to the decision dated 25/11/1976 of Hon’ble Supreme Court in the case of Mannallal Khetan and others Vs Kedarnath Khetan and others Vs Kedarnath Khetan vin Khetan and others Vs Kedarnath Civil Appeal No. 1805 Civil Appeal No. 1805 to 1808 of 1968 wherein in para 16 it is wherein in para 16 it is held that the provisions contained in section 108 of companies Act, held that the provisions contained in section 108 of companies held that the provisions contained in section 108 of companies 1956 states that a company shall not register a transfer of shares 1956 states that a company shall not register a transfer of shares 1956 states that a company shall not register a transfer of shares unless a proper instrument of transfer duly stamped and executed unless a proper instrument of transfer duly stamped and unless a proper instrument of transfer duly stamped and by or on behalf of the transferor and by or on behalf of the of the transferor and by or on behalf of the of the transferor and by or on behalf of the transferee has been delivered to the company along with a transferee has been delivered to the company along with a transferee has been delivered to the company along with a Smt. Punita Sanjay Bindra. 20 Smt. Punita Sanjay Bindra ITA No. certificate relating to shares certificate relating to shares or debentures or if no such certificate or debentures or if no such certificate is in existence along with a letter of allotment of the shares. The is in existence along with a letter of allotment of the shares. The is in existence along with a letter of allotment of the shares. The learned counsel of the assessee was asked to produce such an l of the assessee was asked to produce such an l of the assessee was asked to produce such an instrument of transfer of shares duly stamped and executed instrument of transfer of shares duly stamped and executed instrument of transfer of shares duly stamped and executed between the parties, which was then forwarded to the company for between the parties, which was then forwarded to the company for between the parties, which was then forwarded to the company for change of the name of the shareholder in the register of change of the name of the shareholder in the register of change of the name of the shareholder in the register of shareholders of the company shareholders of the company. The learned counse el expressed his inability in producing such a certificate readily. In our opinion, the inability in producing such a certificate readily. In our opinion, the inability in producing such a certificate readily. In our opinion, the actual date of the transfer of the shares is not the date of the actual date of the transfer of the shares is not the date of the actual date of the transfer of the shares is not the date of the memorandum of understanding for transfer of the shares or name memorandum of understanding for transfer of the shares or name memorandum of understanding for transfer of the shares or name of the shareholder al of the shareholder along with date appearing in the annual return in the annual return of shareholder of company. of shareholder of company. 7.4 Since no such instrument of transfer executed between the ince no such instrument of transfer executed between the ince no such instrument of transfer executed between the parties duly stamped parties duly stamped has been produced before us, therefore in the interest of substantial justice, we restore this issue in dispute also interest of substantial justice, we restore this issue interest of substantial justice, we restore this issue to the file of the Ld. CIT(A), with the direction to assessee to produce to the file of the Ld. CIT(A), with the direction to assessee to produce to the file of the Ld. CIT(A), with the direction to assessee to produce all the necessary documentary evidence including the instrument of all the necessary documentary evidence including the all the necessary documentary evidence including the transfer transfer transfer executed executed executed between between between the the the parties parties parties duly duly duly stamped, stamped, stamped, for for for determination of the actual date of the determination of the actual date of the transfer of the shares. The transfer of the shares. The finding of the Ld. CIT(A) on the issue in dispute is accordingly set finding of the Ld. CIT(A) on the issue in dispute is accordingly set finding of the Ld. CIT(A) on the issue in dispute is accordingly set aside. 7.5 In view of above discussion, the grounds raised by the Revenu 7.5 In view of above discussion, the grounds raised by the Revenu 7.5 In view of above discussion, the grounds raised by the Revenue on the issue of deduction u/s the issue of deduction u/s 54F of the Act are restored back to the file of 54F of the Act are restored back to the file of in accordance with law after of verification of Ld CIT(A) for deciding afresh A) for deciding afresh in accordance with law after

Smt. Punita Sanjay Bindra. 21 Smt. Punita Sanjay Bindra ITA No. date of sale of shares of Biba apparel and date of gift of flat at date of sale of shares of Biba apparel and date o date of sale of shares of Biba apparel and date o Country Park as directed above. as directed above.