TMI Blog2018 (6) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri R P Meena ORDER Per G S Pannu, Accountant Member The captioned four appeals pertain to two different assessees belonging to the same family and involve certain common issues therefore, they have been clubbed heard together and consolidated order is being passed for the sake of convenience and brevity. 2. The cross appeals in the case of Abhishek Lodha in ITA Nos.1193 2260/Mum/2016 are being taken up as lead case in order to appreciate the controversy. These are appeals directed against the order of the CIT(A)-48, Mumbai, dated 04.01.2016, which in turn has arisen out of the order passed by the Assessing Officer u/s. 153A r.w.s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to A.Y. 2009-10. 3. The respective grounds of appeal raised by the assessee and the Revenue read as under: ITA No.1193/Mum/2016 1) On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of deduction u/s 54F on the payment of ₹ 50,00,000 made on 20/02/2010 as this amount was paid beyond the due date of filing return of income u/s 139(1), and the appellant had not de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... units, assessee claimed exemption u/s. 54F of the Act to the extent of Long term capital gains of ₹ 15,78,12,238/-. The Assessing Officer disallowed assessee s claim for exemption u/s. 54F of the Act primarily on two grounds; firstly, qua the acquisition of new residential house, it was noted that the assessee had purchased three flats in Lodha Costeria, Nepean Sea Road, Mumbai, for a consideration of ₹ 16 crore and one more flat i.e. 1704 was also allotted to the assessee in lieu of tenancy right in Krishna Kunj Building, Nepean Sea Road, Mumbai. The claim of the assessee was that all the four units constituted one residential house, in as much as, the same were being used as a common house with common kitchen and common passage. The Assessing Officer however, disagreed and held each flat to be an independent residential unit and, according to him the assessee had purchased three residential houses and, therefore, was ineligible for exemption u/s. 54F of the Act. Secondly, the Assessing Officer noted that the fourth flat acquired by the assessee in lieu of tenancy rights was an independent new asset acquired within a period which was prohibited by the proviso to claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the Assessing Officer in the remand report. Thus, so far as the reasons taken by the Assessing Officer in the assessment order to deny the claim of exemption u/s. 54F is concerned, the CIT(A) disagreed with the Assessing Officer. This decision of the CIT(A) is challenged by the Revenue by way of aforestated Grounds of appeal 7. The third objection of the Assessing Officer taken during the appellate proceedings to the effect that borrowed funds were used by the assessee to acquire the three flats, also did not find favour with the CIT(A). On this aspect also the CIT(A) relied upon the judgment of Hon ble Bombay High Court in the case of CIT vs. Dr. P S Parischa (ITA 1825 of 2009). As per the CIT(A) there is no requirement in law that only the original sale proceeds from the old asset were to be utilized for the purchase of the new residential house, and that the only requirement of law was that assessee should purchase the new residential house within specified period and that the source of funds is quite irrelevant. Notably, this aspect of the controversy has become final in as much as the Revenue has not raised any specific plea in the Grounds of appeal on this aspe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. The aforesaid position continues to prevail before us and, therefore, we find no reasons to distract from the conclusion of the CIT(A) on this aspect, which is in line with the ratio of Hon ble Bombay High Court in the case of Devdas Naik (supra). For the same factual reason that the four flats constitute one residential unit, the other plea of the Assessing Officer that Unit No.1704 was an independent residential unit is also not tenable. The remand report submitted by the Assessing Officer before the CIT(A) clearly establishes that the fourth unit is neither a single asset nor independent residential house and, in fact, in para 4.8 of his order, the CIT(A) categorically records that all the flats were allotted to the assessee on the same date i.e. 01.04.2010. Furthermore, the CIT(A) noted that the fourth flat was received by the assessee in lieu of surrender of tenancy rights and it was not acquired against price in money . In this situation, the CIT(A) referred to the judgment of Hon ble Supreme Court in the case of CIT vs. T N Aravinda Reddy (120 ITR 46) to say that acquisition of fourth unit could not be construed as purchase since it was not against price in money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer shall allow the assessee reasonable opportunity of being heard and thereafter pass an order limited to the aforesaid aspect as per law. The appeal of the Revenue is dismissed and that of the assessee is partly allowed. 11. In so far as the other cross grounds in the case of Abhinandan Lodha in ITA Nos. 1994 2661/Mum/2016 are concerned, it was on a common ground between the parties that the facts and circumstances of the case are identical to those in the case of Abhishek Lodha (supra). Therefore, our finding in the cross appeals in ITA Nos.1993 2660/Mum/2016 in the earlier paras shall apply mutatis mutandis in these appeals also. 12. Before parting, it is to be mentioned that the total investment in new property claimed by the assessee is ₹ 16,81,82,220/- as against ₹ 16 crore considered by the CIT(A). In this case also the CIT(A) restricted the claim of exemption to ₹ 14,75,00,000/- as against ₹ 15,78,12,288/- claimed by the assessee by holding that the amount of ₹ 1,25,00,000/- (50 lacs + 75 lacs) was paid beyond the period prescribed u/s. 139(1) of the Act. In this case also the Assessing Officer is directed to examine the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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