SANJAY S. DUTT,MUMBAI vs. ASST 11(1), MUMBAI

Shri Stany Saldana appearing on behalf of the assessee submitted at the outset that the only issue he is pressing in this appeal is with respect to denial of exemption u/s.54F of the Act. The property sold was jointly owned by the assessee with his father Late Shri Sunil Dutt in the ratio of 27:73. The Tribunal in the case of assesse’s father in for assessment year 2004-05 decided on 10/12/2019 has held that the assessee therein is eligible to claim exemption u/s. 54F of the Act. The case of the assessee is on same footing. The ld. Representative for the assessee referred to para 24 of Tribunal order dated 10/12/2019(supra).

Shri B.K.Bagchi representing the Department defended the impugned order. However, the ld.Departmental Representative fairly admitted that the issue relating to exemption u/s. 54F has been decided by the Tribunal in the case of assessee’s father who was joint owner of the property.

We have heard the submissions of rival sides and have examined the orders of authorities below. The solitary issue urged in the present appeal by the ld. Representative for the assessee is with regard to assessee’s claim of exemption under section 54F of the Act. Undisputedly, the assessee was joint owner of property having 27% share. The 73% share in property was that of assessee’s father.We find that the issue of exemption under section 54F of the Act had cropped up in the appeal of assessee’s father before the Tribunal in ITA No.2972/Mum/2012. The Co-ordinate Bench decided the issue in favour of the assessee by observing as under:

Coming to the exemptions, we notice that the development agreement was entered by the assesse along with his son with share of 73:27 between them and it is clear that there exist 2 penthouses and two individual assessees. Therefore, each assessee will get separate exemption u/s 54F of the Act. This benefit is legally available to both the assessees. There are catena of cases in which courts have held that when there exists two portion of flats with one kitchen then the whole combined portion of the area will be treated as one single unit for the purpose of granting exemption u/s 54 as well as 54F. Accordingly, we direct the AO to grant exemption u/s 54F of the Act to each assessee and as per their choice. On record, assessee prefers to get penthouse occupied by his daughter as exemption u/s 54F and by legally AO should allow this penthouse as exemption u/s 54F of the Act. Accordingly, this ground raised by the assessee is allowed.” Taking into consideration undisputed facts of the case and the decision of Co- ordinate Bench, we hold that the assessee is eligible for exemption under section 54F of the Act, hence, ground No.7 of appeal by assessee is allowed for parity of reasons.

In so far as other issues raised in grounds of appeal, no submissions were made by the ld. Authorized Representative of the assessee, hence, dismissed. In the result, appeal by the assessee is partly allowed in the terms aforesaid.

This appeal by the Revenue is directed against the order of CIT(A) -4, Mumbai dated 14/01/2015 for the assessment year 2005-06. The Revenue in appeal has raised solitary ground assailing the finding of CIT(A) in allowing Long Term Capital Gains on sale of land, whereas the agreement entered into by the assessee with the buyers of flats does not state that ownership of the land has been transferred to the buyers.

The ld. Authorized Representative of the assessee appearing on behalf of the assessee stated at the outset that the issue raised by the Revenue in appeal has already been adjudicated by the Tribunal in the case of assessee’s father in ITA No. 2972/Mum/2012(supra). The ld.Authorized Representative of the assessee referred to the findings of the Tribunal at para -35 of the said order.

The ld.Departmental Representative representing the Department vehemently supported the assessment order, however, the ld.Departmental Representative admitted that the issue has been adjudicated by the Tribunal in the case of assessee’s father in assessment year 2004-05.

Both sides heard. The Assessing Officer has disputed the claim of assessee in respect of sale of land as Long Term Capital Gain. The Assessing Officer rejected the contention of assessee that sale consideration includes consideration for land. In First Appellate proceedings, the CIT(A) granted relief to the assessee by following the order of his predecessor in the case of assessee’s father and the decision of Tribunal in the case of ACIT vs. Jaimal K. Shah, 137 ITD 376. The CIT(A) allowed assessee’s claim of Long Term Capital Gains is to be charged on sale of land. We find that there is no contrary material to dislodge the findings of CIT(A). Further this issue has been considered by the Co-ordinate Bench in the case of Late Shri Sunil Dutt, father of the assessee. The assessee and Late Shri Sunil Dutt were having joint ownership of the property in the ratio of 27:73. The Co-ordinate Bench decided this issue in favour of the assessee by observing as under:-

The ld. Authorized Representative of the assessee submitted that the CIT(A) has decided the appeals for 2011-12 and 2012-13 in an ex-parte proceedings. These appeals were originally fixed for hearing before CIT(A) -4, Mumbai. The assessee initially received notice for appearing before the CIT(A) -4. The assessee appeared and filed written submissions. Thereafter, on account of restructuring in the Department, these appeals by the assessee were transferred to CIT(A) -7, Mumbai. Due to change in the jurisdiction after restructuring there was confusion, the assessee was following up before the CIT(A) -4, whereas the appeals were decided in ex-parte proceedings by the CIT(A) -7. The ld. Authorized Representative of the assessee for the assessee submitted that the assessee has prima-facie good case in his favour. If an opportunity is given to the assessee, the assessee would present its case before the CIT(A).

On the other hand, the ld. Departmental Representative vehemently defended the orders of CIT(A) for assessment years 2011-12 and 2012-13, respectively. The ld. Departmental Representative submitted that a perusal of the impugned orders would show that various notices were issued to the assessee. Despite service of notice, the assessee failed to appear before the CIT(A). The ld. Departmental Representative vehemently prayed for upholding the order of CIT(A) and dismissing the appeals of assessee.

Both sides heard. The assessee in these appeals for assessment years 2011-12 and 2012-13 has assailed ex-parte orders by the First Appellate Authority for the respective assessment years. A perusal of the impugned orders reveal that several notices were issued to the assessee and purportedly served as well. The assessee has only submitted written submissions and none appeared on behalf of the assessee for personal hearing. Taking into consideration entirety of facts, we deem it appropriate to restore these appeals back to the file of CIT(A) for denovo adjudication after affording reasonable opportunity of hearing to the assessee, in accordance with law. The assessee is directed to appear before the First Appellate Authority on service of notice and co-operate in the proceedings. The impugned orders for assessment year 2011-12 and 2012-13 are set-aside and the appeals by the assessee are allowed for statistical purpose.

To sum up: is dismissed and ITA No.91/Mum/2020 & 92/Mum/2020 are allowed for statistical purpose.