Dismissed

The Commissioner of Income Tax-Ii, Pune v. Late Jameelunnisa Begum L/H a K M Iqbal

Bombay HC16 Aug 2016ITXA/244/2014

Case brief

AI extract

What is this about?

The Supreme Court dismissed this income tax appeal against the Tribunal. Upholding the Tribunal's view that a development agreement allowed a three-year concession for constructing a new house under Section 54, the Court held the framed questions did not raise a substantial point of law.

What did the court decide?

Appeal dismissed; no substantial question of law held to exist.

The Commissioner of Income Tax-Ii, Pune Vs Late Jameelunnisa Begum… — Income Tax | Bombay HC (2016)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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INCOME TAX APPEAL NO. 244 OF 2014

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The Commissioner of Income Tax-II, Pune

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.. Appellant

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v/s.

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Late Jameelunnisa Begum

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.. Respondent

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Mr. Suresh Kumar i/b Vipul Bajpayee, Ms. Samiksha Kanani for the appellant

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Mr. Mihir Naniwadekar for the respondent

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CORAM : M.S. SANKLECHA & A.K. MENON, J.J.

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^th AUGUST, 2016.

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P.C.

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This Appeal under Section 260-A of the Income Tax Act, 1961

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(the Act) challenges the order dated 28^th May, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 2005-06.

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The Revenue urges the following questions of law for our consideration :-

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“(i) Whether on the facts and circumstances of the case and

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in law, the Tribunal erred in allowing deduction u/s 54 of the Act relying on the development agreement dated 31.05.2004?

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(ii) Whether on the facts and circumstances of the case and in law, the Tribunal erred in holding that the development agreement was an agreement for construction of residential and other properties by the developer on behalf of the assessee and therefore extended period of three years would be available to the assessee?”

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The respondent assessee was owner of a plot with a residential house thereon. On 31^st May, 2004 the respondent assessee entered into a development agreement with a builder M/s. Sana Associates. The above agreement recorded the fact that actual and physical possession of the plot with house was given by the respondent assessee to it. It provided that the developer will construct residential and commercial complex. It further provided that 46% of the constructed area would be handed over to the respondent assessee as it belong to her and the balance would be owned by the developer. The respondent assessee claimed the benefit of exemption of Rs. 33.83 lakhs under Section 54 of the Act on account of the amount being invested in construction of a house. However, the Assessing Officer

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disallowed the claim holding that this is a case of purchase of new house. Therefore, this purchase has to take place within two years from the date of the transfer of the asset and in this case it is on 7^th December, 2006. Thus, beyond a period of two years.

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Being aggrieved, the respondent assessee carried the issue in appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. By order dated 31^st October, 2011, the CIT(A) held on consideration of terms of the agreement with the Developer that it was an agreement for construction of residential and other properties. Thus, a period of three years for construction was available from the date of handing over the possession. Admittedly, the construction was completed within 3 years. Therefore, the respondent assessee was entitled to exemption under Section 54 of the Act.

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Being aggrieved, the Revenue filed an appeal to the Tribunal. By the impugned order, the Tribunal on consideration of the clauses of the agreement, concluded that Section 54 of the Act is applicable and the respondent assessee is entitled to the exemption as the new premises has been constructed within a period of 3 years from the date of the transfer.

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We find that the impugned order of the Tribunal has followed its decision in the case of Jatinder Kumar Madan Vs. Income Tax Officer, in ITA No.6921/Mum/2010, (order dated 25^th April, 2012). Mr. Suresh Kumar, learned Counsel for the Revenue, upon being asked, very fairly states that no appeal has been preferred against the order of the Tribunal in Jatinder Kumar Madan (supra) . No distinguishing features have been shown to us in the present facts, which would warrant us taking a different view. Further, two authorities have concurrently held that the possession of constructed residential premises was available to the assessee within a period of 3 years from the date of the transfer. Even otherwise, the view taken by the impugned order is a possible view.

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In the above circumstances, the questions as framed do not give rise to any substantial question of law. Thus, not entertained.

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Accordingly, the appeal is dismissed. No order as to costs.

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(A.K. MENON, J.) (M.S. SANKLECHA, J.)

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Uday S. Jagtap

The Commissioner of Income Tax-Ii, Pune v. Late Jameelunnisa Begum L/H a K M Iqbal

Case brief

What is this about?

What did the court decide?

The Commissioner of Income Tax-Ii, Pune v. Late Jameelunnisa Begum L/H a K M Iqbal

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

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