TaxTMI 
TaxTMI 
2022 (8) TMI 437
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.... during the year under consideration the assessee Dilip B.Mundada sold a property on 30.03.2013 for Rs.1,51,00,000/-. The assessee claimed to have purchased two flats as under : Name of Person in whose name property purchased Flat No. Purchase Agreement date Amount Mrs. UMA Dilip Mundada 401 11/08/2011 46,22,890/- 401 27/07/2012 Supplementary deed for 401 Dilip B.Mumdada 402 26/06/2012 70,57,701/- 3. The assessee had claimed deduction u/s 54F in the computation of Long Term capital gain. The Assessing Officer allowed the claim of the assessee only for Flat No.402. 3.1 Aggrieved by the order of the AO, the assessee filed the appeal before the Ld.Commissioner of Income Tax(Appeal). The Ld.CIT(A) has discussed the said issue in para 6.7 of the order which is reproduced here as under : "6.7 The appellant contention has been considered in light of the above judgements and facts of the case. However, not only on many aspects the appellant case distinguish from the above cases, but also fails on merit too.Looking at the facts of the appellant's case, Agreement for purchasing Flat no. 401 was executed on 11-08- 2011 in the name of Mrs. Uma Mundada, wife of the....
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....nverted the said two flats into one flat. Therefore the AR pleaded that the assessee is entitled for deduction u/s 54F. 6. Ld.Departmental representative (DR) relied on the orders of the lower authorities. Ld. DR specifically invited our attention to the fact that the Flat No.401 which was purchased in the name of Mrs.Uma Mundada on 11/08/2011, means more than one years before the sale of the impugned property at Hadapsar Pune. Hence anyway the assessee will not be eligible. The Ld.DR submitted that the two flats were purchased separately, by separate agreements. As per the building plan the Flat No's.401 and 402 are separate flats, hence assessee cannot make them one flat. If assessee has removed one wall between the two flats then it is an illegal act. The payments for Flat No.401 were made by Mrs. Mundata who is an independent assessee having her own PAN and source of income. 7. Heard both the parties, perused the records. It is a fact that the assessee had sold a property on 30.3.2013 for Rs.1,51,00,000/- and there was capital gain on said transaction. The assessee claimed 54F benefit. 7.1 The Section 54F as applicable for the relevant Assessment Year is reproduced here as u....
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....he Flat No.401 is registered in the name of Mrs.UmaMundada. Mrs.UmaMundada is an independent assessee having PAN: ABHPM7236J and in the Purchase Agreement her occupation is mentioned as Household and Business. Mrs. Uma Mundada is partner in a firm and has earned income from the firm. Thus it is an admitted fact that Mrs.UmaMundadais an independent person having business. She had a bank account in Mahesh Sahakari Bank, Nanapeth Branch. This bank account is in her own name and type of account is "individual". 8.2. The section 54F have two important phrases, "an assessee being an individual" .. and "the assessee has purchased". Thus the section starts with the word "an assessee being an individual" and then refers to the same assessee as "the assessee has purchased" means the assessee who has sold the asset has to purchase the new asset withing the specified time period. The section 54F uses the word, "purchased a residential house", here the word purchased is used, it does not mean invested. The purchase has to be a legal purchase. To have an effective purchase the name of the person must be mentioned in the document. In this case the purchase agreement is in the name of the wife of....
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....ng Officer that the investment claimed to have been made by the assessee in the residential property/flat in Kanungo Co-operative Group Housing Society Ltd. was not in its name but the same was in the joint name of two individuals viz., Smt. Chanan Devi Sachdeva and Shri Vipin Malik. Before us, the learned DR has strongly supported and substantiated this ground given by the Assessing Officer for disallowing the claim of the assessee for deduction under section 54F by referring to the various certificates and receipts issued by the said society wherein the names of individuals were appearing without any indication of HUF. The learned counsel for the assessee, on the other hand, has relied on the possession certificate issued by the society on 30-4-2000 wherein both the individual names were appearing with Shri Vipin Malik being mentioned as Karta of M/s. Vipin Malik, HUF. He has also contended that Smt. Chanan Devi Sachdeva being the oldest member of the assessee-HUF, her name was given as member for the sake of convenience. After careful examination of all these documents as well as keeping in view all the facts and circumstances of the case, we find it difficult to agree with the ....
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.... and the investment made in construction of the said property was in its own name. On the contrary, the documentary evidence placed on record clearly shows that the said membership was standing in the joint name of Smt. Chanan Devi Sachdeva and Shri Vipin Malik in their individual capacity and an attempt to show the same as held on behalf of the HUF on the basis of possession certificate was clearly made as an afterthought to claim deduction under section 54F from the capital gain arising from sale of property belonging to HUF." 10. Clearly, therefore, there was no question of applicability of section 54F in the aforesaid facts and circumstances. " Unquote. 8.5. Hon'ble Bombay High Court in the case of Prakash vs ITO 312 ITR 40(BOM) has held as under : Quote " 17. In light of above, the reasoning given by the Tribunal by maintaining the order passed by the Assessing Officer, need no interference. The reasonings, as given, are as under:- "8. . . . .A plain reading of section 54F would show that it is the assessee who has to invest the capital gain in the new construction of a residential house in his name. The expression that the assessee has purchased or constructed a new ....
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....ed notice under section 139(2) of the Act calling upon the assessee (TimajiDhanjode) who had filed his return; who was alive at the relevant time. The Assessing Officer held that the investment by the deceased assessee in the name of his adopted son not calling for an exemption and, therefore, demanded capital tax. Against the order, the appeal filed by the deceased was allowed on 25-1-1989 and after remand, CIT(A) reversed the order of Assessing Officer on 11- 2-1998, therefore, the department appeal dated 1-5-1998 against the same, even after the death of the assessee on 9-5-1991, against the appellant being the only legal heirs, is maintainable. Question No. 2 ...NO:- The appellant does not qualify for the exemption under section 54F of the Income-tax Act." Unquote. 8.5. Learned ITAT Pune in the case of Vandana Maruti Pathare vs ITO in ITA 2223 /Pune /2017 vide order dated 16/03/2022 has held as under : Quote , "4. I have heard both the sides and gone through the relevant material on record. At the outset, it is necessary to mention that the ld. AR did not press any other ground, except the ground No. 2 through which the denial of exemption u/s 54B has been assailed. Al....
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..... When discordant views are rendered by different High Courts, an inferior authority under one of such High Courts, is bound to follow its jurisdictional High Court notwithstanding that other view of the non-jurisdictional High Court may sound more appealing on individual level vis-a-vis the view of the jurisdictional High Court. The principle of following a view in favour of the assessee when contrary views are available, applies to the authorities acting under a neutral High Court, namely, which has not expressed any opinion - for or against - on that point. Once the jurisdictional High Court decides a particular issue in a particular manner, that manner has to be mandatorily followed by all the authorities acting under it so long as it holds the field and is not deactivated by the Hon'ble Supreme Court. In that view of the matter, I am bound to follow the view taken by the Hon'ble jurisdictional High Court. The ld. AR failed to draw my attention towards any other subsequent decision rendered by the Hon'ble Bombay High Court in favour of the assessee on this issue. I, therefore, hold that the authorities below were justified in making the assessee not eligible to exem....