GULAB GURUAPPA HULSURE,,AURANGABAD vs. INCOME-TAX OFFICER, WARD - 1(2),, AURANGABAD

आदेश / ORDER PER ANIL CHATURVEDI, AM :

2.1 Assessee is an individual stated to be having income from salary, house property and other sources. Assessee electronically filed its return of income for A.Y. 2013-14 on 30.07.2013 declaring

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total income of Rs.9,64,910/-. The case was taken up for scrutiny

and thereafter assessment was framed u/s 143(3) of the Act vide

order dt.30.03.2016 and the total income was determined at

Rs.47,63,180/-. Aggrieved by the order of AO, assessee carried the

matter before Ld.CIT(A), who vide order dt.05.10.2017 (in appeal

No.ABD/CIT(A)-1/93/2016-17) dismissed the appeal of assessee.

Aggrieved by the order of Ld.CIT(A), assessee is now in appeal and

has raised the following grounds :

“In our case the entire consideration has been received by the assessee Mr. Gulab Guruappa Hulsure intune Rupees 75,00,000/- and the entire consideration in addition to the advance of Rupees 31,70,735/- of State Bank of India Housing loan taken in the Name of Mr. Gulab Guruappa Hulsure Mr. Gulab Guruappa Hulsure which was entirely use for the purchase of new house property at. Flat No. at Flat No. 305 And 306, at Subhashnagar Co. Op Housing society, Subhash Nagar, Dharawi, Kumbharwada, Mumbai - 400017. Exemption U/s 54 should be given to the assessee on the facts and the points given in the appeal Here respected sir it should be keenly noted that the essence of the section 54 says that consideration received should be by the assessee and invested it should be by the assessee himself then and then only the deduction is allowed under this section. The addition of the name as a joint owner for purchase of new house property so as to avoid any further legal complications of property matters should not deny the full exemption of section 54 F.”

assessee but however written submissions were filed on behalf of the

assessee by the Registered Tax Practitioner by Sri Harihar

N. Shahane. It was submitted that the written submissions made be

considered while deciding the appeal.

that during the year under consideration, assessee had sold

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residential property at CIDCO, New Aurangabad and capital gain

derived on sale of such property was re-invested in acquiring new

property at Mumbai. AO noted that while calculating the capital

gains from the sale consideration of Rs.75 lacs assessee had

deducted indexed cost of acquisition of Rs.97,371/- and indexed

cost of construction at Rs.10,98,275/- aggregating to

Rs.11,95,646/- and the capital gains was worked out at

Rs.63,04,354/-. Further since assessee had purchased new

residential house at Rs.74,85,900/-, the taxable capital gains was

worked at Rs. Nil. AO noted that during the course of assessment

proceedings, assessee had failed to furnish any supporting

documents in respect of cost of plot and construction cost. He

accordingly denied the claim of indexed cost of plot and

construction. With respect to the claim of deduction u/s 54F of the

Act, AO noted that new flat purchased at Mumbai was in the name

of the assessee and Shri Atul G. Hulsure. AO was of the view that

for being eligible for deduction u/s 54F of the Act, the new asset

must be in the same name of the person in whose name the original

asset exists. In the present case since the new asset was acquired

in the name of the assessee and a relative, AO was of the view that

assessee was entitled for deduction only to the extent of 50%. He

accordingly restricted the deduction u/s 54F of the Act at 50% and

thus worked out the taxable capital gains at Rs.37,57,050/-.

Aggrieved by the order of AO, assessee carried the matter before

Ld.CIT(A), who upheld the order of AO in view of the fact that

assessee did not furnish any evidence. With respect to the cost

incurred for the purchase of asset. With respect to the AO’s

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action of granting deduction u/s 54 @ 50% to assessee, Ld.CIT(A)

agreed with the findings of AO and thus dismissed the grounds of

assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in

appeal.

a letter from CIDCO, Aurangabad to demonstrate the original value

of the asset which could be considered as cost of acquisition. With

respect to the claim of deduction u/s 54F of the Act, he placed

reliance on the decisions cited in the written submissions. It is

assessee’s submission that the investment in the new asset has been

made entirely by the assessee and no part of the purchase has been

funded by his son, Mr. Atul Hulsure. It is further his submission

that the name of the assessee’s son was only included to avoid any

future legal compilations after his demise. Ld.D.R. on the other

hand, supported the order of lower authorities.

and material on record. The issue in the present case is with respect

to the computation of long term capital gains and the claim of

deduction u/s 54F of the Act. It is Revenue’s contention that with

respect to cost of acquisition and construction of the asset sold, no

documents were furnished by the assessee to demonstrate the cost

of acquisition. Before me, assessee has furnished a letter from

CIDCO, Aurangabad as an evidence for the cost of acquisition.

Though it is a fact that the aforesaid document was not furnished by

the assessee before the lower authorities, but since it has been

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furnished now, I am of the view that in the interest the same needs

to be considered while computing the capital gains.

concerned, it is Revenue’s contention that since new asset was

purchased by the assessee jointly with his son, assessee is entitled

for deduction only to the extent of 50%. Before me, it is assessee’s

contention that the entire investment in the new house purchased

at Mumbai, for which the assessee has claimed deduction u/s 54F,

is out of assessee’s funds and no part of the purchase of new asset

has been financed by assessee’s son, Mr. Atul Hulsure, who is the

joint owner of property. It is further assessee’s contention that the

name of his son has been included as the joint owner to avoid any

future legal complications. The aforesaid contentions of the

assessee have not been controverted by Revenue before me. Before

me, Revenue has not placed any material on record to demonstrate

that the assessee was not the real owner of the new asset purchased

by the assessee. I find that Hon’ble Delhi High Court in the case of

CIT Vs. Ravinder Kumar Arora reported in (2012) 342 ITR 38 (Del)

has held that when the investments in the new house was made by

the assessee and for safety reasons, the name of his brother was

included, there was no justification in AO’s action in restricting the

deduction to 50% of the value of the new property. The Hon’ble

High Court has further held that Sec.54F of the Act mandates that

the house should be purchased by the assessee and it does not

stipulate that the house should be purchased in the name of

assessee only. It further held that Sec.54F of the Act is a beneficial

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provision and its objective is to provide impetus to the house

construction and so long as the purpose of house construction is

achieved, hyper-technicality should not impede the way of deduction

which the legislature has allowed. It further held that Sec.54F of the

Act is a beneficial provision which should be interpreted liberally in

favour of the exemption / deduction to the tax-payer and the

deduction should not be denied on hyper-technical ground. The

aforesaid decision of Hon’ble Delhi High Court was relied by

Mumbai Tribunal in the case of Jitendra V. Faria Vs. ITO (ITA

No.6792/Mum/2016 dt.27.04.2017) while deciding on identical

issue in favour of assessee. I therefore following the aforesaid

decisions hold that AO was not justified in restricting the deduction

u/s 54F of the Act to 50%. I therefore direct the AO to grant the

deduction of the entire amount invested by the assessee. In para 6

hereinabove, I have held that the cost of acquisition has to be

determined on the basis of CIDCO letter submitted before me. I

therefore restore the issue back to the file of AO and direct him to

decide the issue afresh as directed hereinabove after considering the

submissions of assessee and in accordance with law. Needless to

state that AO shall grant adequate opportunity of hearing to the

assessee. Assessee is also directed to furnish all the required details

called for by the AO. I therefore allow the grounds of appeal of

assessee for statistical purposes.

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Order pronounced on the 21st day of December, 2018.

Sd/- (ANIL CHATURVEDI) लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 21st December, 2018. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-1, Aurangabad. . 4. Pr. CIT-1, Aurangabad. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक सद�य” / DR, ITAT, “SMC” Pune; 6. गाड� फाईल / Guard file.

आदेशानुसार/ BY ORDER // True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.