Commissioner of Income Tax vs Pankaj J. Sanghvi

Heard Miss Veena Mandlik, counsel for the appellant, on admission.

This appeal u/s 260A of the IT Act is directed against the order of the Tribunal dt. 8th Sept., 2006, passed in ITA No. 184/Ind/2000 for the asst. yr. 1996-97.

Before the Tribunal, the Revenue had filed an appeal against the order of CIT(A), Indore relating to return of income for the asst. yr. 1997-98, on the ground that the CIT(A) erred in deleting the addition of Rs. 11,70,233 made by the AO on account of disallowance of exemption claimed u/s 54F by the assessee. It was not disputed that the assessee had a net capital gain of Rs. 13,21,769, but on account of purchase of a residential house, the assessee claimed a sum of Rs. 11,70,233 as deduction. On appeal to the Tribunal the deduction disallowed was allowed and it is against the said order of the Tribunal granting, an allowance of Rs. 11,17,233 that the present appeal has been filed on the following question of law:

Whether the Tribunal was justified in holding that the mere agreement to transfer is sufficient for a transfer of property overlooking the provisions of Transfer of Property Act and Registration Act, 1908 ?

The precise submission of the learned Counsel is that in the year 1995-96 the assessee had already shown purchase of a flat in the sum of Rs, 7,71,525 and, therefore, the assessee was not entitled to claim Rs. 11,70,233 u/s 54F of the IT Act. The Tribunal has observed that insofar as the flat was concerned, the assessee was only a power of attorney holder and before the capital gains arose the flat had already been sold to M/s K.J. Agencies and M/s Sanghvi Farm & Nursery and eventually the flat was transferred to Tejasvi Grah Nirman Co-operative Society. It was also observed that the said flat had never been registered in the name of the assessee and the documents pertaining to these sales had already been brought on record.

The Tribunal observed that as on the date of the capital gain accruing on the shares, the assessee was not possessed of any residential accommodation and, therefore, he was entitled to deduction in accordance with the provisions made in Section 54F. In this view of the matter the Tribunal has dismissed the appeal of the Revenue.

Before us, it has not been disputed that the flat in question had never been registered in the name of the assessee. The assessee was merely a power of attorney holder and the conveyance deeds brought on record were clearly indicative of the transfer of the flat prior to capital gain. Under these circumstances, it could not be said that the assessee was already possessed of a residential house and could not, therefore, have claimed a deduction of Rs. 11,70,233. The findings of the Tribunal are findings of fact and the conclusions arrived at on due appreciation thereof. Under these circumstances, neither on facts nor on any question of law the order of the Tribunal suffers from any infirmity. This appeal is, accordingly, dismissed summarily.