9911796707
TMI Blog2017 (1) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance out of interest expenditure Rs. 5,77,205/- (iii) Disallowance of 20% of film production expenses Rs. 8,62,000/- (iv) Addition on account of unreconciled income Rs. 1,69,318/- (v) Disallowance of exemption under section 54 Rs. 1,60,65,590/- 2.2 Aggrieved by the order of assessment dated 11.03.2013 for A.Y. 2010-11, the assessee preferred an appeal before the CIT(A)-3, Mumbai. The learned CIT(A) disposed off the appeal vide the impugned order dated 22.09.2014 allowing the assessee partial relief. In doing so, the learned CIT(A) allowed the assessee's claim for exemption under section 54 of the Act, deleted the disallowance of 20% of professional expenses and allowed the assessee partial relief on the disallowances made by the Assessing Officer (AO) on account of interest expenses and film production expenses. 3. Both Revenue and the assessee are aggrieved by the impugned order of the CIT(A)-3, Mumbai dated 22.09.2014 for A.Y. 2010-11and have preferred appeals on issues that have been held against them. These cross appeals will be disposed off hereunder in seriatum. 4. Revenue's appeal in ITA No. 7232/Mum/2014 for A.Y. 2010-11 4.1 In this appeal Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment in the new property has not been made from out of the sale consideration of the original asset at Oshiwara. The learned A.R. of the assessee reiterated submissions put for before the learned CIT(A) that the provisions of section 54 of the Act do not prohibit the assessee from purchasing new asset in joint names or from out of borrowed funds. It is contended that on both these issues, the learned CIT(A) agreed with the assessee's contentions and directed the AO to allow the assessee exemption under section 54 of the Act on facts and also by following the decision of the Hon'ble Karnataka High Court in the case of DIT(IT) vs. Jennifer Bhide (2012) 349 ITR 80 (Kar). 4.4.1 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. The facts of the matter as emanate from the record are that the assessee had purchased flats at Oshiwara, Mumbai on 12.07.2004 for total consideration of Rs. 42,73,300/- which he sold on 25.11.2009 for Rs. 2,16,08,967/-. The assessee had purchased two flats No. 3205 & 3206 at Oberoi Springs on 05.08.2009 for Rs. 3,26,47,674/- in joint names with his wife. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain [is greater than the cost of [the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of section 54 is that the assessee should acquire a residential house within the period of one year before or two years after the date on which transfer took place. Nowhere, it has been mentioned that the same funds must be utilized for the purchase of the another residential house. The requirement of the law is that the assessee should purchase a residential house within the specified period and source of funds is quite irrelevant. [Para 9]" 1.4 With regard to the issue of purchase of new asset in joint name, the provisions of section 54 do not prohibit the same. This issue came up before the Karnataka High Court in the matter DIT vs. Mrs. Jennifer Bhide, (115 Taxman.com 82) (Kar.), In that case the facts were that the assessee sold her residential property and invested part of sale proceed on purchase of residential property and bonds. She claimed exemption under sections 54 and 54EC in respect of said investment. On verification, the Assessing Officer observed that aforesaid property and bonds were not purchased in the name of the assessee alone but were also in the name of her husband. He therefore, held that if the ownership of the property is shared with someone else, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefit conferred under this provision. In the absence of an express provision contained in these section that the investment should be in the name of the assessee only, any such interpretation would amount to Court introducing the said word in the provision which is not there. It amounts the courts legislating when the Parliament has deliberately not used those words in the said section. [Para 7] In the instant case, the assessee has purchased the property jointly with her husband. She has invested the money in rural bonds jointly with her husband, it is nobody's case that her husband contributed any portion of the consideration for acquisition of the property as well as bonds. The source for acquisition of the property and the bonds is the sale consideration. It is not in dispute. Once the sale consideration is utilized for the purpose mentioned under sections 54 and 54EC, the assessee is entitled to the benefit of those provision. As the entire consideration has flown from the assessee and no consideration has flown from her husband, merely because either in the sale deed or in the bond her husband's name is also mentioned, in law he would not have any right. In that vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 6. Assessee's appeal in ITA No. 6872/Mum/2014 for A.Y. 2010-11 6.1 In this appeal, the assessee has raised the following grounds: - "1. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming disallowance of interest to the extent of Rs. 248,325/-. 2. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming disallowance of 1/20th of the following expenses of film production house (Pushpa Krishna Creations) except where payments have been made by cheques: - _ Dress & Costumes Rs. 16,27,046/- _ Dancers Wages Rs. 1,38,08,200/- _ Salary Rs. 16,32,000/- _ Technical Remuneration Rs. 1,72,827/- 3. That the order of the Ld AO is bad in law and on facts. 4. The Appellant craves leave to add or amend the foregoing grounds of appeal. 5. Tat the orders of Ld CIT(A) and the Ld AO are bad in law and on facts. 6. The Appellant craves leave to add or amend the foregoing grounds of appeal." 7. At the outset of the hearing, the learned A.R. of the assessee has submitted that all the grounds raised from Sr. No. 1 to 6 (supra) are not being pressed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
