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TMI Blog2024 (4) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived by the assessee on her registered email I.D. nor any real-time alert was sent on her registered mobile no. and only upon a random check on the e-filing portal, notice of hearing was found out by her. Pursuant thereto, the assessee filed written submissions before the learned CIT(A). In the affidavit, the assessee submitted that she was completely unaware of the impugned order as no intimation was received via email or SMS, and only upon checking the e-filing portal on 05/09/2023, she came to know about the impugned order. Thereafter, she immediately contacted her chartered accountant for further course of action and the present appeal was filed after compiling all the papers and preparing necessary grounds of appeal. Accordingly, the assessee has prayed for condonation of delay in filing the present appeal. On the other hand, the learned Departmental Representative ("learned DR") did not raise any serious objection against the prayer for condonation of delay in filing the present appeal. 3. We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon'ble Supreme Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that in the facts and the circumstances of the case, and in law, no such disallowance was called for. 3.3 Without prejudice to the above, assuming but not admitting that some disallowance was called for, it is submitted that the computation of the disallowance made by the Ld. CIT (A) is arbitrary, excessive, and not in accordance with the law. LIBERTY 4. The Appellant craves leave to add, alter, delete, or modify all or any of the above ground at the time of hearing." 5. During the hearing, the learned Authorised Representative ("learned AR"), at the outset, proceeded to place the arguments in respect of ground no.3 raised in the present appeal. The issue arising in ground no.3 pertains to the disallowance of deduction claimed by the assessee under section 54F of the Act. 6. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is an individual and during the year under consideration derived income from house property and income from other sources. The assessee filed her return of income on 30/07/2013 declaring a total income of Rs. 2,97,290. The return filed by the assessee was selected for scrutiny and statutory notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al capital asset. Accordingly, the deduction claimed by the assessee under section 54F of the Act to the tune of Rs. 61,65,546 was disallowed and added to the total income of the assessee. 8. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee and upheld the disallowance made by the AO under section 54F of the Act. Being aggrieved, the assessee is in appeal before us. 9. We have considered the submissions of both sides and perused the material available on record. The only issue which arises for our consideration, in the present case, is whether joint ownership of more than one residential house shall disentitle the assessee from claiming deduction under section 54F of the Act. In the present case, on 03/09/2012 the assessee sold agricultural land at Bhopal for a total consideration of Rs. 64 lakh and earned long-term capital gains of Rs. 61,65,564. Since the assessee deposited the capital gain consideration in the capital gain account scheme, accordingly it claimed deduction under section 54F of the Act in respect of investment in the new residential flat, which was purchased on 07/07/2015. In the present case, it is undisputed that the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chasing a residential house or constructing the residential house within the time stipulated therein. Proviso to sub section (1) states that the exemption contemplated under sub section (1) would not be available where an assessee owns a residential house as on the date of the transfer and that the income from the residential house is chargeable under the head "income from house property". The Finance Act, 2001 amended the proviso with effect from 2001-02 to permit exemption under Section 54F, even if the assessee has owned one residential house as on the date of transfer, other than the new asset, or purchase in investments any residential house other than the new asset within a period of one year or three years as the case may be, but after the date of transfer of the original asset and the income from such residential house other than the one owned on the date of transfer of the original asset is chargeable under the head "income from house property" 13. As far as the present case is concerned, contrary to the contention of the assessee, the assessee as well as her husband had offered 50% share each in the clinic in the income tax assessment and had claimed depreciation thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owns only one house at the Oberoi Palace Housing Society in this name at the time of the sale. It is the contention of the assessee that the other two properties are owned jointly with others and therefore it is not required to be considered for the purpose of condition of section 54F of the Act. The assessing officer relied on the order of the Hon'ble Supreme Court in the case of M. J. Siwani v. CIT [2015] 53 taxmann.com 318/232 Taxman 335 where the SLP filed by the taxpayer was dismissed. The Id Counsel stated that by way of the SLP, the Hon'ble Supreme Court did not concur with the finding of the Hon'ble Karnataka High Court in the case of CIT v. M. J. Siwani [2014] 46 taxmann.com 170/226 Taxman 394/366 ITR 356. Mere dismissal of the SLP does not constitute the judgment by the Supreme Court in the favour of the revenue. The Id Counsel placed reliance on the following judgments: i. Khoday Distilleries Ltd. v. Mahadeshwara Sahakara Sakkare Karkhane Ltd. [2009] 104 taxmann.com 25/262 Taxman 279 (SC) [Civil Appeal No. 2432/2019] ii. Smt. Tej Kumari v. CIT [2001] 114 Taxman 404/247 ITR 210 (Patna) (FB) 18. The Id Counsel further submitted that Hon'ble Madras Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The fact of the case as culled out from orders of lower authorities and submissions of the assessee are that the assessee's father late Shri Iqbal Ghaswala along with other five family members had inherited land being 142/148, Ghaswala Estate Jogeshwari (west), on which land, all the six members constructed 6 flats (ie one flat each on their own as per their requirements which were occupied by each owner namely Shri Mohd. Ali Suleman Ghaswalla (flat no. 201), Shri Sikander Suleman Ghaswalla (flat no. 202), Shri Abdul Rahim Ghaswalla (flat no. 301), Shri Munaf & Moinuddin Anwar Ghaswalla (legal heirs of late Shri Anwar Ghaswalla) (flat no. 302), Shri Ilyas & Zainul Ghaswalla (legal heirs of late Shri Iqbal Ghaswalla) (flat no. 401) and Shri Abdul Suttar Suleman Ghaswala (flat no. 402). According to assessee, all the members are owing/occupying one flat each for which they have been paying electricity bills. The assessee claimed to have filed those electricity bills before the Assessing officer coupled with confirmation letters from the owners of the other flats to the effect that none of them had any right/or interest of whatsoever nature in each other's flats. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use shared with any other person. Even if the residential house is shared by an assessee, his right and ownership in the house, to whatever extent, is exclusive and nobody can take away his right in the house without due process of law. In other words, co-owner is the owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his share and that he is the owner of the entire undivided house till it is partitioned. The andlogy applied by the Tribunal based on the judgment of the Supreme Court in Banarsi Dass Gupta (supra), wherein, the Supreme Court considered the provisions contained in section 32 of the Act, would not apply to the faces of the present case. The right of a person, may be one half, in the residential house cannot be taken away without due process of law or it continues till there is a partition of such residential house. Thus, the view expressed by the Tribunal on this issue cannot be accepted. Thus, the order passed by revenue authorities rejecting assessee's claim was to be restored. Thus, High Court held that in terms of provisions of section 54F, where assessee on date of sale of long term capital asset owns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iginal asset is chargeable under the head "income from house property". 13. As far as the present case is concerned, contrary to the contention of the assessee, the assessee as well as her husband had offered 50% share each in the clinic in the income tax assessment and had claimed depreciation thereon. So too 50% share in the property in the wealth tax proceedings is offered by the assessee and her husband. The note submitted to the Assistant Commissioner of Income Tax, City Circle 5(1), Madras, by the assessee discloses that the assessee owned 50% of the property in 828, Poonamallee High Road, Chennai, for use as residential property and 50% as clinic, so too for the property at Door No. 828A, Poonamallee High Road, Chennai. The facts thus reveal that as joint owners of the property. the assessee and her husband had shown 50% share with reference to the clinic and the residential portion in their respective returns. Thus, it is clear that as on the date of the transfer, the assessee did not own a residential house in her name only, the income from which was chargeable under the head "income from house property", to bring into operation, the proviso to section 54F. The rejection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urts, namely, Gauhati High Court and Karnataka High Court, have expressed conflicting views regarding levy of interest under sections 234B and 234C on deemed income under section 115J. Hon'ble Gauhati High Court has opined that when legal fiction is to be created for an obvious purpose, full effect to it should be given. Quoting Lord Asquith who said, "the statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to inevitable corollaries of that state of affairs", Hon'ble Gauhati High Court has held that there is no statutory exception excluding the operations of section 115J of the Act. Hon'ble Karnataka High Court, on the other hand, has held that the words 'for the purposes of this section' in Explanation to section 115J(1A) are relevant and cannot be construed to extend beyond the computation of liability to tax. In the opinion of the Hon'ble Karnataka High Court, when a deeming fiction is brought under the statute, it is to be carried to its logical conclusions but without creating further deeming fiction so as to include other provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBDT & Ors. [1988] 75 CTR (SC) 20: [1989] 175 ITR 523 (SC). it has been reiterated ITA No. 2237/Ahd/2014 Assessment Year: 2011-12 that the above principle of law is well established and there is no adopt about that. Hon'ble Supreme Court had, however, some occasion to deviate from this general principle of interpretation of taking statute which can be construed as exception to this general rule. It has been held that the rule of resolving ambiguities in favour of tax- payer does not apply to deductions, exemptions and exceptions which are allowable only when plainly authorised. This exception, laid down in Littman v. Barron 1952 (2) AIR 393 and followed by apex Court in Mangalore Chemicals & Fertilizers Lid. v. Dy. Commr. of CCT [1992] Suppl (1) SCC 21 and Novopa India Lad. v. CCE & C 1994 (73) ELT 769 (SC), has been summed up in the words of Lord Lohen, "in case of ambiguity, a taxing statute should be construed in favour of a tax payer does not apply to a provision giving tax payer relied in certain cases from a section clearly imposing liability". This exception, in the present case, has no application. The rule of resolving ambiguity in favour of the assessee does not also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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