UMA KACHHAWA,JAIPUR vs. ITO, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 409/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2007-08 cuke Uma Kachhawa, I.T.O., Vs. W/o- Shri Mool Singh Kachhawa, Ward 7(2), 1460, Khunteton Ka Rasta, Jaipur. Kishanpole Bazar, Jaipur. PAN No.: AEOPK 2725 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Poddar & Ms. Isha Kanoongo (Adv). jktLo dh vksj ls@ Revenue by : Smt. Poonam Roy (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 25/10/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 12/12/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M.

This is the appeal filed by the assessee emanates from the order of

the ld. CIT(A)-5, Jaipur dated 17/03/2017 for the A.Y. 2007-08, wherein

the assessee has raised following grounds of appeal: “1. Under the facts and circumstances of the case, the ld CIT(A) has erred in confirming the action of the ld Assessing Officer in passing the order U/s 147/144 of the Income Tax Act, 1961 which is void ab initio deserves to be quashed.

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of hearing, therefore, the same stands dismissed as not pressed.

adjudication, therefore, the same stands dismissed.

Rs. 7,25,630/- U/s 54 of the Income Tax Act, 1961 (in short the Act)

claimed by the assessee regarding second house purchase. The ld. CIT(A)

has dealt the issue of claim U/s 54 of the Act while deciding ground No. 5

in his order at para 6.1 to 6.4, which are reproduced hereunder:

“6.1 In the assessment order, the AO has granted deduction of Rs. 20,11,000 u/s 54 in respect of house purchased at Nemi Nagar Extension, Jaipur for Rs. 20,11,000 on 10-11-2006. The assessee has claimed further deduction of Rs. 1,51,030 on account of Stamp Duty and Registration charges in respect of this property and further deduction of Rs. 7,25,630 invested in another residential house in the joint names of the assessee and her daughter.

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6.2 In the Remand Report, the Assessing Officer has observed that Stamp Duty and Registration charges of Rs. 1,30,720 paid in respect of the new house at Nemi Nagar Extension, Jaipur is allowable. He has further stated that 50% of investment of Rs. 7,25,630 made in the second house purchased in the name of the assessee and her daughter can be allowed since assessee is 50% owner of the said property.

6.3 I have considered the remand report, the assessment order and the submissions of the appellant. As regards the stamp duty and registration charges in respect of the new house at Nemi Nagar Extension, Jaipur, it is seen that the correct allowable amount is Rs. 1,51,030 versus amount of Rs. 1,30,720 mentioned by the AO since registration charges of Rs. 20,110 and copying charges of Rs. 200 have not been considered by the AO in the Remand Report. Accordingly, the AO is directed to grant further deduction of Rs. 1,51,030 u/s 54 in respect of this amount.

6.4 Regarding further contention of the assessee claiming further deduction of Rs. 7,25,630 in respect of the second house purchased, it is observed that the claim of exemption u/s 54 is allowable only in respect of one new house property purchased. This was the legislative intent even before the specific amendment introduced in section 54 with effect from 01-04-2015. This view is supported by the decisions in the cases of Pawan Arya vs CIT (2011) 11 taxmann.com 312 (Punjab & Haryana) and DCIT vs. R.V. Lokupavan (2008) 25 SOT 420 ( Mumbai) . Accordingly, further claim of deduction of Rs. 7,25,630 is not allowable. This ground is partly allowed.

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of Rs. 50,00,000/- and the case was reopened by issuing notice U/s 148 of

the Act. The assessment was finalized determining total income of Rs.

27,42,560/-. The ld CIT(A) has granted part relief to the assessee. The

claim of assessee U/s 54 of the Act with regard to second house purchase

at Rs. 7,25,630/- was not allowed.

in the case of Smt. Syrtle D’Souza Vs. Income Tax Officer, Ward 19(3)(4),

Mumbai (2012) 24 taxmann.com 261 (Mum) has considered such issue

and decided as under:

“18. We have heard the rival submissions and perused the relevant material on record. The short controversy is as to whether exemption u/s 54 is available in respect of one house or more than one house. In the present case, the assessee was allotted two flats on two different stories which he claimed as eligible for exemption u/s 54. Admittedly there is no unity of construction between such flats. The Special Bench of the Tribunal in the case of Sushila M. Jhaveri (supra) has categorically held that the exemption u/s 54 is available only in respect of one house and not more than one. It is true that the Hon'ble Karnataka High Court in the case of D. Ananda Basappa (supra) has entitled the assessee to exemption u/s 54 in respect of two residential houses, however it is also equally true that the Hon'ble jurisdictional High Court in the case of K.C. Kaushik (supra) and the Hon'ble Punjab & Haryana High Court in Pawan Arya (supra)

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have held the assessee to be entitled to exemption u/s 54 only in respect of one residential house. The learned AR strongly argued that the judgment in the case of Karnataka High Court be followed in preference to that of the special bench of the Tribunal and other High Courts as noted above. A feeble unsuccessful attempt was made to distinguish the judgment of the Hon'ble jurisdictional High Court in the aforenoted case. In our considered opinion this contention deserves the fate of dismissal at the very outset for the reason that in the case of K. C. Kaushik (supra) it has been held that: "in the absence of any provision to the contrary, in my judgment, the petitioner is entitled to avail of the relief in respect of the capital gain arising on the sale of his flat in 1979 against the flat purchased in that year as also against the flat purchased on July 26, 1980. It has, of course, to be adjusted against one of the flats only…………..I am inclined to hold that it is for the petitioner to claim relief under this section against the purchase of any one of the flats provided that the other conditions mentioned in the section are satisfied". A cursory look at the mandate of the above judgment fairly indicates that the exemption u/s 54 is available only in respect of one house and not more than one house. The judgment of the Hon'ble jurisdictional High Court which is binding on the Tribunal, can under no circumstances, be ignored in preference to the judgment of any other Hon'ble High Courts. It is relevant to note that the decision of the Delhi Bench of the Tribunal in the case of Gita Duggal {supra) is distinguishable inasmuch as in that case the assessee was allotted basement and ground floor on which exemption was given but the said benefit was denied on the first floor and second floor as they were let out. There was no dispute that all the basement, ground floor, first floor and second floor constituted one residential house, for which the Tribunal was pleased to decide the issue of exemption

ITA 409/JP/2017 6 Uma Kachhawa Vs ITO in assessee's favour. The facts of the instant case are different inasmuch as the assessee was allotted two flats on two different stories. It is not the case of the assessee that both the flats on different floors were used as one residential house. Naturally it could not have been so for the reason of these two flats situated on different stories can not constitute one house. Respectfully following the judgment of the Hon'ble jurisdictional High Court and the special bench in the above referred cases, we hold that the learned CIT(A) was justified in restricting the benefit of exemption u/s 54 only in respect of one flat. This ground is not allowed.”

The Hon’ble Punjab & Haryana High Court in the case of Pawan Arya Vs

CIT (2011) 11 taxmann.com 312 (P&H) has held as under:

“As regard claim for exemption against acquisition of two houses under section 54, the same was not admissible in plain language of statute.

Thus, no substantial question of law arose from the Tribunal’s order. In the result, the assessee’s appeal was to be dismissed.”

Considering the factual aspect of this case and the case laws relied upon,

this ground of assessee’s appeal is dismissed.

Order pronounced in the open court on 12/12/2017.

Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 12th December, 2017

ITA 409/JP/2017 7 Uma Kachhawa Vs ITO

*Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Smt. Uma Kachhawa, Jaipur. 1. izR;FkhZ@ The Respondent- The I.T.O., Ward 7(2), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 409/JP/2017) 6.

vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत