TMI Blog2012 (8) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... eover, provisions of section 45 of the Transfer of the Property Act which provides that the share in the property will depend on the amount contributed towards the purchase consideration and as in the present case, the total contribution has come from the assessee, the exemption cannot be denied. Short-term capital loss on redemption of units - date of realization of cheque issued for purchase of units taken for determination of period of holding whereas assessee contending for date of tendering of cheque to be taken - revenue contended period of holding to be less than 3 months and thus hit by provisions of Section 94(7) - Held that:- Date of tendering the cheque should be taken as the date of the purchase of units. Once this date is taken for consideration, then the provisions of section 94(7) would ultimately not apply on the facts of the transaction - Decided in favor of assessee. - ITA Nos : 4285 & 4540/Mum/2009 - - - Dated:- 6-6-2012 - SHRI VIJAY PAL RAO, AND SHRI N. K. BILLAIYA, JJ. For the Appellant: Shri C. N. Vaze For the Respondent: Shri M. Rajan O R D E R Per N. K. BILLAIYA, A.M.: These cross appeals by the Revenue and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e documents submitted by the assessee, the Ld. CIT(A) held that the assessee has purchased two row houses vide two separate agreements and as both the agreements are separately registered with the authorities, even though subsequently both the houses are used as one single unit , at the time of purchase though were sold by the builder as two separate units. The Ld. CIT(A) finally rejected the contention of the assessee and held that there are two dwelling units and confirmed the findings of the A.O. As the Ld. CIT(A) has held that the assessee has purchased two dwelling units, he did not go into the issue of joint ownership. 4. Aggrieved by this finding of the Ld. CIT(A), the assessee is before us. 5. The learned Counsel appearing for the assessee reiterated its stand that the two row houses purchased by two separate deeds are nothing but one dwelling unit and, therefore, exemption u/s.54F cannot be denied. The counsel relied upon the decision of ITO vs. Ms. Sushila M. Jhaveri reported in 292 ITR 0001 TBOMS, wherein a similar matter was before the Bench, wherein the Bench has observed that the intention of the legislature is that investment should be made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oor of house 16A which itself show that both are the part of same building. We find that the A.O. at the assessment stage has rejected the claim and the submissions of the assessee. Without making any physical verification, we are of the opinion that this issue requires some due diligence on the part of the A.O. We, therefore, restore this matter back to the files of the A.O. The A.O. is directed to verify whether the dwelling unit bears a single municipal number. The A.O. is further directed to verify whether the dwelling units have only one access and common entrance. If the answers to both the aforesaid questions are in affirmative, then the ground floor and the first and second floor cannot be regarded as a separate residential house and to be treated as a single dwelling unit entitled for exemption u/s.54F. This would be in line with the findings of the decision of ITO vs. Ms. Sushila M. Jhaveri reported in 292 ITR 0001 TBOMS and to the decision of the Hon'ble Karnataka High Court in the case of CIT and Another vs. Ananda Basappa reported in [2009] 309 ITR 0329 7.1 On the second issue raised by the A.O. that the dwelling units so purchased are also in the joint name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for the purchase of units of Sundaram Bond Saver was actually realised on 30.12.2003 and, therefore, the period of holding before the redemption of the said units on 29.03.2004 was only 88 days i.e. less than 3 months. Therefore, the case of the assessee was hit by the provisions of section 94(7) of the Act. The A.O. was also of the view that the entire transaction of sale and purchase of mutual fund units was nothing but a colourable device for setting off of the capital gains arising on sale of shares. The A.O. denied the set off of Short Term Capital Loss and completed the assessment. The assessee assailed this finding of the A.O. before the Ld. CIT(A). 12. Before the Ld. CIT(A), the assessee strongly contented that the date of purchase of bond should be taken as 26.12.2003 and not as 30.12.2003 when the cheque was actually realised and is as per SEBI guidelines / Mutual Fund guidelines which permits the issue of units prior to the redemption of the cheque and, therefore, according to the assessee the date should be taken as 26.12.2003 and if this stand is taken, transaction of the assessee is clearly outside the purview of section 94(7) of the Act. The Ld. CIT(A) consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has been remanded back for de novo consideration. Therefore, reliance placed on the decision of Punjab 1-laryana High Court, in the case of Vaneet Jam (supra), is misplaced. Further, I find that the Bombay High Court in the case of CIT vs. Walfort Share Stock Brokers Pvt. Ltd., Appeal No. 18 of 2006, have taken a contrary view on similar facts and held: It is pertinent to note that the Apex Court in the case of Azadi Bachao Andolan (supra) has held that every transaction or arrangement which is perfectly permissible in law, but has the effect of reducing the tax burden of the assessee cannot be treated as illegitimate and ignored. In the present case, the assessee has demonstrated that the units were purchased for earning dividend income and that the sale of the units immediately after receiving the dividend was a commercial decision taken by the assessee. Even the majority decision in the case of Griffiths (supra,) supports the case of the assessee that the transaction in question was a trading transaction and in the absence of any allegation that it was a sham transaction, the ass was entitled to claim set off of the loss irrespective of the fiscal impact. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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