Keeping In View All The Submissions Made Atthe Bar, The Order Of The Tribunal Is Set Aside. The Matter Is Remanded To Assessing Officer For Fresh Consideration. v. Income

IN THB HIGH COURT OF KARNATAKA AT BANGALORE DATEKD THIS THE 0[‘T]DAY OF AUGUST 2012 BEHEKORE THE HON’BLE MR.JUSTICE K.SREBDHAR RAO AND THR HON’ BLE MR.JUSTICBKR B.MANOQH ITA NO 1090/ 2006 BETWRBN SRI.ZAMBER MIRJAAGED ABOUT 47 YEARS,R/AT.NO.44, MAYFAIR APARTMENTS,NO.31, BERLIE STREET,LANGFORD TOWN,BANGALORE._ APPELLANT (BY SRIA.SHANKAR, ADVOCATE) AN THERE JOINT COMMISSIONER OF INCOME TASPL RANGE, Il BANGALORE. ... RESPONDENT (BY SRI.M THIRUMALESH, ADVOCATE) KREKR THIS LT.A. FILED U/S.260-A OF I.T.ACT, 1961|ARISING OUT OF ORDERS DATEBD O2-05-06 AND | 03-02-06 PASSED IN MISC.P.NO.48/BANG/06 AND ITANO.22/BANG/04 FOR THE ASSESSMENT YEAR 1996-97, PRAYING TO FORMULATE THE SUBSTANTIALQUESTIONS OF LAW STATED THEREIN AND TO ALLOWTHR APPBKEAL AND SEHIT-ASIDE THE ORDERS PASSEDTHE ITAT IN MISC.P.NO.48/BANG/O06 MARKED ASANNEXURE-A DTD:02-05-06 AND ITA NO.22/BANG/04DATKBD O3-02-06 MARKBD AS ANNBXUREB-C ANDIRBCT THR RESPONDENT ASSBSSING OFFICKR TOCOMPUTE THE GAIN LIABLE TO TAX U/S.495 OF THEACT AND TO GIVE CONCESSIONS/EXEMPTION ASPRESCRIBED U/S.54 OF THE ACT, IN THE INTERESTOF JUSTICE AND EQUITY. THIS APPKAL COMING ON FOR FINAL HBARING|THIS DAY,SREEDHAR RAO, J.JDELIVERED THREKFOLLOWING: JUDGMENT The assessee sold the residential house in the.assessing year 1996-1997 and the net capital gain from|the same is Rs.1,38,17,596/-. The assessee had entered|into an agreement with one Sri.Surat Prasad for the|purchase of property at Koramangala and had paid a_sum of Rs.20,00,000/- as advance. From out of the sale|realisation of the property sold, the assessee deposited a|sum of Rs.57,50,000/-, a part of the sale realisation in| the capital gain account. The transactions with Sri.SuratPrasad fell out. The assessee alter litigation in the Courtsobtained refund of Rs.20,00,000/- from Sri.Surat Prasad.From out of the said amount Rs.17,40,000/- wasinvested in the capital gain account immediately. Theassessee purchased a residential flat for a sum ofRs.66,08,630/- . The assessee in the returns has soughtdeduction of Rs.91,63,4604/- towards exemption undersection o4F. The Assessing Officer allowed the exemptionby an order passed under Section 143(3) dated17.02.1999.. 2. The Assessing Officer later on issued notice|under Section 154 on the ground that the exemptioneranted under Section o4F is incorrect and that theassessee would be entitled to exemption only underSection54|andtheexemptioneranted|towardsRs.20,00,000/- was disallowed. CIT appeals confirmedthe order of the Assessing Officer, so also the Appellant Tribunal confirmed the rejection of exemption granted inrespect of Rs.20,00,000/-. However, under Section 54Fsranted partial relief to an extent of Rs.6,67,493/-.. 3.The assessee made an application Misc.Petition No.48/Bang/06 (in ITA No.221/Bang/04) undersection 254(2) of the IT Act i.e, for rectification to grantexemption to an extent of Rs.97,50,000 + 20,00,000 =71,90,000/ instead of Rs.51,63,464/-.Misc. petition wasdismissed. Aggrieved by the said order, assessee is inappeal before this Court. 4. The following substantial question of law has|been formulated in the memorandum of appeal and onreconsideration of the substantial question of law,following substantial question of law is framed forconsideration: “Whethertheassessingofficerwhilepassing rectification order under Section 154Should have to give benefits to assessee available under Section 54, even though there isno claim made by the assessee to that effect’?| oS. Learned counsel for the appellant submits that,the Appellant Tribunal has committed a mistake indeclaring that the assessee is entitled to benefit undersection 04, but while computing the benefit has followedthe Section S4F. Thus states that, it has resulted inwrong computation of the benefit under Section 54. 4. The following substantial question of law has|been formulated in the memorandum of appeal and onreconsideration of the substantial question of law,following substantial question of law is framed forconsideration: “Whethertheassessingofficerwhilepassing rectification order under Section 154Should have to give benefits to assessee available under Section 54, even though there isno claim made by the assessee to that effect’?| oS. Learned counsel for the appellant submits that,the Appellant Tribunal has committed a mistake indeclaring that the assessee is entitled to benefit undersection 04, but while computing the benefit has followedthe Section S4F. Thus states that, it has resulted inwrong computation of the benefit under Section 54. 6. The learned counsel for the appellant further|submitted that, the Assessing Officer in the course of rectification order assumes that the amount invested in|the capital gain account scheme, has to be given due|deduction while computing the benefit, whether or not|assessee makes an application to that effect and also|when the assessee has made wrong calculation andclaims lesser benefits, it is the duty upon the AssessingOfficer to grant benefit entitled to under law. TS|Thelearnedcounselfor.therespondentstrenuously submitted that, the fact that whether the|assessee had invested Rs.20,00,000/- in the capital gain|account within the prescribed time is the fact to be|considered and also it is further to be found out that,|whether the assessee fulfills all the requirements ofsection 54 to claim benefits under the said Section, thesaid aspect requires further investigation of the facts bythe Assessing Officer. 8. Keeping in view all the submissions made atthe bar, the order of the Tribunal is set aside. The matter |is remanded to Assessing Officer for fresh consideration.TheassessingOfficershallalsokeep.1nNmind |the decision of this Court inFathima Bai Vs. Income TaxOfficerreported89(2009)32DTR(Kar) |243 with respect of deposit of Rs.17,40,000/- in |the capital gain accountscheme as to whether |it is within the _ stipulated period. The Assessing Officer shall consider the claim of the assessee fordeductions under Section 54 as required under law. 9. Accordingly, ITA is allowed. od/-JUDGE.od/-|JUDGE. KSR/DR|