ITO (IT) 3(1), MUMBAI vs. SURINDERSINGH D.KAMBOW, MUMBAI

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ITA 4854/MUM/2014Status: DisposedITAT Mumbai04 October 2016AY 2009-103 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal in limine. This was based on CBDT Circular No. 21 of 2015, which stated that appeals with a tax effect below Rs. 10,00,000/- are not maintainable, and this appeal did not fall under any exceptions.

What were the facts?

The Revenue filed an appeal against the CIT(A)'s order allowing the assessee's claim for exemption under Section 54F. The CIT(A) had directed the AO to allow the claim without appreciating that the flats were under construction and the issue of claiming exemption for multiple properties.

What were the issues?

The primary issue was the maintainability of the revenue's appeal due to low tax effect, as per CBDT circular. A secondary issue, though not decided on merits, concerned the eligibility for Section 54F exemption for flats under construction and for multiple properties.

Which sections of the Income-tax Act were involved?

Section 54F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI

Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)

For Appellant: Shri. Suman Kumar
Hearing: 04/10/2016Pronounced: 04/10/2016

This appeal has been filed by the revenue against order dated 10/01/2014 passed by the Ld CIT(Appeals)-10, Mumbai for the assessment year 2009-10.

2.

The revenue has challenged the impugned order on following effective grounds:-

1.

"On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in directing A.O to allow the claim of the assessee u/s 54F without appreciating the fact that;

a. The flats are still under construction and there is no evidence to suggest that two flats constitute one house property. The Ld. CIT(A) failed to appreciate the ratio laid down by Hon’ble Bombay High Court in the case of K C Kaushik vs. PB Rane Fifth ITO 84 CTR 62 wherein it was clearly concluded that if assessee purchases two house properties, he can claim exemption u/s 54 against any one of the properties. b. The builder cannot alter the BMC’s approved plan without getting prior permission.

3.

We notice that the tax effect in this case is below Rs.10,00,000/- and as per the CBDT Circular No. 21 of 2015, dated 10/12/2015, the present appeal is not maintainable. Ld. Departmental Representative fairly admitted that the tax effect in this case is below Rs. 10 lacs.

4.

We find that the issue raised in appeal does not fall under any of the exceptions specified in para 8 of the Circular. Since, it has been specifically clarified in the Circular aforesaid that the instruction will apply retrospectively to all the pending appeals; the present appeal filed by the revenue is not maintainable. We, therefore, dismiss the same in limine.

Order pronounced in the open court on 04th October, 2016

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