Abhijit Bhandari v. The Principal Commissioner of Income-tax-5, Chennai
[Citation -2017-LL-0602-115]

Citation 2017-LL-0602-115
Appellant Name Abhijit Bhandari
Respondent Name The Principal Commissioner of Income-tax-5, Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 02/06/2017
Assessment Year 2008-09
Judgment View Judgment
Keyword Tags capital gains account scheme • disallowance of expenditure • share purchase agreement • no objection certificate • cost of construction • immovable property • revisional power • revenue audit • indexed cost • sale of flat
Bot Summary: The reason given by the Assessing Officer, evidently, was that the flats purchased by the petitioner were two separate residential units and hence, the petitioner was not entitled to claim the benefit, which may otherwise have been available to him under Section 54F of the Act. To be noted the issue pertaining to deduction claimed by the petitioner, under Section 54F of the Act arose in the petitioner's appeal, as indicated above, only in the appeal preferred qua AY 2009-2010. The respondent, after considering the reply of the petitioner, proceeded to pass the impugned order on 26.02.2016, whereby, he set aside the assessment order dated 31.03.2014, pertaining to AY 2008-2009, passed under Section 143(3) read with Section 147 of the Act. The petitioner, being aggrieved, has preferred the instant writ petition. The mistake made by the Assessing Officer in AY 2008- 2009, as regards the petitioner's attempt to claim deduction under Section 54F of the Act was avoided by the Assessing Officer, while passing the assessment order dated 12.12.2011, vis-a-vis AY 2009- 2010. The Assessing Officer's view for AY 2009-2010, was overturned by the CIT(A), vide a common order dated 29.07.2013, passed qua AYs 2008-2009 and 2009-2010, the same was reversed by the Tribunal, vide its order dated 08.04.2015, by remanding the matter to the Assessing Officer to consider afresh the investment made in the Capital Gains Account Scheme by the petitioner in AY 2009-2010. Two inconsistent orders were on record, i.e., order dated 22.12.2010, pertaining to AY 2008- 2009, whereby, the deduction claimed by the petitioner under Section 54F of the Act was accepted, and the order dated 12.12.2011, 19 pertaining to AY 2009-2010, where, an opposite conclusion had been reached, i.e., the deduction claimed under Section 54F of the Act was not available.


IN HIGH COURT OF JUDICATURE AT MADRAS RESERVED ON : 18.01.2017 DELIVERED ON : 02.06.2017 Coram Honourable Mr.Justice RAJIV SHAKDHER Writ Petition No.11596 of 2016 and WMP No.9995 of 2016 Shri.Abhijit Bhandari .... Petitioner Vs Principal Commissioner of Income Tax-5, Aayakar Bhavan, Wanaparthy Block, 5th Floor, 121, Mahatma Gandhi Road, Chennai-600 034. ... Respondent *** Prayer : Writ Petition filed under Article 226 of Constitution of India praying for issuance of Writ of Certiorari or any other appropriate writ, direction or other in nature of writ, calling for records in C.No.2(24)/263/PCIT-5/CR-5/2015-16, dated 26.02.2016 on file of respondent relating to Assessment Year 2008-09, quashing same and pass such further or other order or orders that may deem fit and necessary in circumstances of case. *** For Petitioner : Mr.M.R.Senthil Kumar for M/s.G.Susheela and Anish Unni.K For Respondent : Ms.Hema Muralikrishnan ------ 2 ORDER 1. This Writ Petition is directed against order dated 26.02.2016, passed by respondent. said order pertains to Assessment Year (AY) 2008-09. This order has been passed by respondent in exercise of his powers under Section 263 of Income Tax Act, 1961 (in short "the Act"). 1.1. petitioner seeks to assail order, inter alia, on ground that it is contrary to law, and has been passed in exercise of "assumption of jurisdiction" and is beyond prescribed period of limitation. 2. In order to adjudicate upon issues raised in writ petition, one would require to notice following broad facts : 2.1. petitioner was, at relevant point in time, principal shareholder of company by name of Royal Images Direct Marketing Private Limited (in short referred to as "RIDM"). petitioner, along with other shareholders, entered into Share Purchase Agreement, dated 17.07.2006 (in short "SPA"), with another entity by name Accor Services. 2.2. As per SPA, sale of shares held in RIDM was staggered. Accordingly, 70% of shareholding in RIDM was to be 3 sold, by way of tranche, followed by sale of second and third tranches comprising of 30% and 10% of equity stake in RIDM. said three tranches of shares were required to be sold in three consecutive years, i.e., 2007-2008, 2008-2009 and 2009-2010. It appears that petitioner received advance in sum of Rs.15,82,86,273/-, in previous year 2006-2007, relatable to AY 2007-2008 towards sale of shares. record shows that 70% of shareholding was sold by petitioner on 05.05.2007, for total consideration of Rs.22,42,72,478/-, which included aforementioned sum received in form of advance. 2.3. petitioner, evidently, in order to avail of benefit of Section 54F of Act, took decision to invest amount received, in two residential flats located in Olumpus building situate in Altamount Road, Cumbulla Hill, Mumbai (hereafter collectively referred to as "flats"). These were flats bearing No.607 and 612. flats were, admittedly, adjacent to each other, in as much as they were located cheek to jowl. 2.4. In so far as flat No.612 was concerned, since, original owner of flat had passed away and rights in flat had devolved on legal heir of original owner by way of transmission under Section 29 of Maharashtra Co-operative 4 Societies Act, 1960 (in short "the 1960 Societies Act"), sale could not be effectuated for period of one year. 2.5. Having regard to this legal provision, request was made to housing society, in which, said flat was located for issuance of No Objection Certificate (in short "NOC"). Consequently, NOC qua flat No.612, was issued on 11.04.2006. 2.6. petitioner, thus, got executed two separate sale deeds with respect to subject flats. In so far as flat No.607 was concerned, sale was effectuated vide deed dated 23.05.2006, while in respect of flat No.612, sale deed was executed on 16.01.2007. 2.7. However, it is petitioner's case that, since, his intention was to convert two adjoining flats into single residential unit, upon receipt of NOC, he had commenced modification and renovation works in and about June 2006. 2.8. It appears that upon petitioner writing to qua flats to housing society, he was informed vide letter dated 08.02.2012, that, since, what he had in his possession was single residential unit, he would be entitled to single vote. 3. In interregnum, petitioner had filed his returns for AY 2008-2009, on 31.07.2008, in which, he had claimed deduction under 5 Section 54F of Act. Evidently, petitioner's return was taken up for scrutiny, whereupon, assessment order dated 22.12.2010, was passed. 3.1. record also seems to suggest that after assessment order had been passed, it was intimated to petitioner that Internal Revenue Audit had raised objection to acceptance of claim made by petitioner under Section 54F of Act. Consequently, petitioner's response was sought. petitioner claims that he furnished all details, which, he had filed, at time of original assessment proceedings as well, whereupon, Assessing Officer dropped proceedings initiated, pursuant to objection of Internal Revenue Audit. 3.2. record further shows that thereafter, petitioner received notice dated 20.03.2013, under Section 148 of Act, in respect of very same AY, i.e., AY 2008-2009, on ostensible ground that income chargeable to tax for said AY had escaped assessment. 3.3. Consequently, petitioner asked for reasons for issuance of notice under Section 148 of Act; whereupon, aspect pertaining to claim made by him under Section 54F of Act was, inter alia, brought to fore as reason for issuance of said 6 notice. 3.4. petitioner, filed his objections to same. Assessing Officer, after considering objections, passed assessment order, under Section 143(3) read with Section 147 of Act, on 31.03.2014. In said order, in so far as claim under Section 54F of Act was concerned, Assessing Officer made following observations, and sustained claim made by petitioner: "..... With regard to merits of case assessee vide letter dated 09.07.2013 submitted that assessee had sold shares of Royal Images Direct Marketing Private Limited shares on 05.05.2007. Annual Return filed by said company to ROC reflecting above fact has already been submitted at time of assessment. copy of same has been attached with this letter for your reference. This being case for purchase of flats by assessee on 23.05.2006 and 16.01.2007 is well within limits of one year, as prescribed by sub section Section (sic) 54F of Income Tax Act, 1961. For above reasons, deduction allowed under Section 54F cannot be withdrawn. details provided by assessee were verified and assessee's claim is found to be in order. ....." 4. While aforesaid proceedings were on, petitioner in 7 interregnum, filed his return for AY 2009-2010, whereby, he declared sale of second tranche of shareholding in RIDM, for total consideration of Rs.11,24,14,809/-. 4.1. To be noted, it is petitioner's case that he had paid, out of sum received, sum of Rs.40 lakhs as advance for purchase of immovable property situate in Alibaug in District Rajgad, Maharashtra, to enable him to construct residential property. In addition thereto, sum of Rs.6.10 Crores was invested by petitioner in Capital Gains Account, maintained with Bank of India. 4.2. return for AY 2009-2010 was also subjected to scrutiny and assessment order was passed under Section 143(3) of Act. This assessment order was passed on 12.12.2011. While passing assessment order, Assessing Officer disallowed claim made by petitioner for sum of Rs.6.50 Crores, under Section 54 of Act. reason given by Assessing Officer, evidently, was that flats purchased by petitioner were two separate residential units and hence, petitioner was not entitled to claim benefit, which may otherwise have been available to him under Section 54F of Act. 4.3. As would be evident from narration of facts above, 8 view of Assessing Officer in respect of this aspect of matter, in A.Y. 2009-2010 was different to that, which had taken in AY 2008- 2009. 4.4. petitioner, being aggrieved, challenged assessment order dated 12.12.2011, by preferring appeal with Commissioner of Income Tax (Appeals) [in short "CIT(A)"]. 4.5. CIT(A) vide order dated 29.07.2013, allowed appeal, and thus, sustained deduction claimed by petitioner under Section 54F of Act. It may be pertinent to note that by very same order, CIT(A) also dealt with appeal preferred by petitioner in respect of AY 2008-2009, as some of issues were common to two appeals preferred by him. To be noted, though, issue pertaining to deduction claimed by petitioner, under Section 54F of Act arose in petitioner's appeal, as indicated above, only in appeal preferred qua AY 2009-2010. 5. This time around, Revenue, was aggrieved and hence, carried matter in appeal to Income Tax Appellate Tribunal, Chennai (in short "the Tribunal"). 5.1. Tribunal vide common order dated 08.04.2015, dealt with two appeals filed by Revenue, being Appeal Nos.ITA 9 1899/Mds/2013 and ITA 1900/Mds/2013. Tribunal, by virtue of said order, dismissed appeal, bearing No.ITA 1899/Mds/2013, pertaining to AY 2008-2009 and, for statistical purposes, partly allowed appeal, bearing No.ITA 1900/Mds/2013, pertaining to AY 2009-2010. 5.2. Interestingly, in said order, Tribunal, broadly, adverted to three aspects, in so far as claim of petitioner under Section 54F of Act was concerned. first aspect related to investment made by petitioner in flats. second aspect, which Tribunal dealt with was investment made by petitioner in sum of Rs.6.10 Crores in Capital Gains Account, maintained with Bank of India. third aspect, which, Tribunal referred to in said order, was sum of Rs.40 lakhs paid by petitioner for purchasing immovably property, in Alibaug, in District, Rajgad, Maharashtra (in short Alibaug property ). 5.3. perusal of observations made in Tribunal's order would show that Assessee had constructed residential house on aforementioned Alibaug property in and about July 2011, which was funded from investment made in Capital Gains Account. petitioner appears to have claimed exemption under Section 54 of Act, to extent he utilized funds, in purchasing land and 10 constructing residential house thereon, albeit, within prescribed time frame of three years of moneys being invested in Capital Gains Account Scheme. 5.4. Tribunal's order, notes, that amount available in Capital Gains Account, as on 07.07.2011, had been utilized and that this fact stood disclosed in income tax returns filed qua previous year 2011-2012, relatable to AY 2012-2013. Accordingly, orders goes on to observe that sum of Rs.49,24,780/- had been offered for taxation by petitioner. 5.5. Therefore, having regard to aforesaid three aspects, Tribunal, as it is evident, remanded matter to Assessing Officer, with following observations made in paragraph 10 : "..... 10. After considering remand reports and order of first appellate authority, we find that there is no discussion by Assessing Officer about issue of investment in capital gains accounts scheme amounting to Rs.6,10,000/- and Rs.40,00,000/- and advance paid for purchase of property. It means that Assessing Officer has not given any comments regarding this issue. Being so, in our opinion, it is appropriate to remit this issue. being so, in our opinion, it is appropriate to remit this issue back to Assessing Officer, as there is violation of Rule 46A. Accordingly, we remit 11 issues for fresh consideration with regard to investment in capital gains accounts scheme and advance paid for purchase of property totalling at Rs.6,50,00,000/- back to Assessing Officer, as he has only considered investment in flat Nos.607 and 612, Altamount Road, Cumballa Hills, for which assessee has already claimed deduction u/w.54F for assessment year 2008-09 and allowed by Assessing Officer in assessment year 2008-09. Therefore, same cannot be considered once again in assessment year 2008-09 (sic 2009-2010). This issue to be decided afresh by Assessing Officer. ...." (emphasis is mine) 5.6. careful perusal of observations of Tribunal made in paragraph 9 of its order would show that in so far as investment made by petitioner in Alibaug property was concerned, doubt was, perhaps, raised, as said immovable property, on which, residential unit had been constructed was described as pieces and parcels of agricultural land. 6. I must indicate herein that there has been much debate on aspect as to whether or not Tribunal had reopened issue with regard to flats, in which, petitioner had made investment and claimed deduction under Section 54F of Act. In other words, 12 debate centered around point as to whether Tribunal had closed issue by sustaining stand of petitioner that two adjoining flats formed single residential unit, and not two separate units, as contended by Revenue. 6.1. Revenue did not rest with outcome of Tribunal proceedings and accordingly, issued Show Cause Notice dated 15.12.2015 (in short "SCN") to petitioner under Section 263 of Act. This SCN raised red flag with regard to petitioner's claim for deduction under Section 54F of Act to tune of Rs.4,88,78,900/, which was amount invested by petitioner in aforementioned flats. 6.2. petitioner filed response to same. respondent, after considering reply of petitioner, proceeded to pass impugned order on 26.02.2016, whereby, he set aside assessment order dated 31.03.2014, pertaining to AY 2008-2009, passed under Section 143(3) read with Section 147 of Act. 6.3. petitioner, being aggrieved, has preferred instant writ petition. 7.Mr.Senthil Kumar, who appears for petitioner, submitted that impugned order passed by respondent amounted to abuse of process of law, in as much as it was passed in disregard of 13 following facts and circumstances: (i) subject flats had been converted into single residential unit, after obtaining approval of concerned housing society. (ii) petitioner had one single vote as per regulations put in place by concerned housing society, based on rationale that subject flats formed one single residential unit. (iii) report of Surveyor dated 20.02.2012, which was on record, confirmed that flats comprised of one single residential unit. (iv) Revenue had undertaken survey of premises on 31.10.2013, whereupon, stand taken by petitioner that flats comprised of one single residential unit had been affirmed. (v) This aspect had been confirmed by CIT(A) vide order dated 29.07.2013, and therefore, contrary view taken by Assessing Officer, in respect of AY 2009-2010, with regard to sustainability of claim made by petitioner under Section 54F of Act had been set aside. Thus, view taken by CIT (A), in said order was not only binding on Assessing Officer, qua AY 2008-2009, but that upon re-assessment having been carried out vis-a-vis AY 2008-2009, vide order dated 31.03.2014, passed under Section 143(3) read with Section 147 of Act, conclusion had 14 been reached that exemption claimed by petitioner under Section 54F of Act, was in order had been validated. (vi) Tribunal, in its order dated 08.04.2015, had not disturbed finding that subject flats formed of single residential unit. Therefore, direction of remand issued by Tribunal qua other aspects, in respect of AY 2009-2010, would have no impact on findings reached by CIT(A), in its order dated 29.07.2013 that subject flats should be treated as one single residential unit. (vii) Lastly, in passing assessment order dated 31.03.2014, under Section 143(3) read with section 147 of Act, Assessing Officer had taken view, which was possible view, and therefore, proceedings taken out under Section 263 of Act would not be sustainable, as it could not be held that view taken by him was erroneous. In other words, according to learned counsel, unless, twin conditions provided in Section 263 of Act, are fulfilled; which are : that order passed by Assessing Officer is, both erroneous and prejudicial to interest of Revenue, no order can be passed under said provision. 7.1. In support of his submissions, learned counsel for petitioner relied upon following judgements : 15 (i).Malabar Industrial Co. Ltd. V. CIT, [2000] 243 ITR 83 (SC); (ii).CIT V. Max India Ltd., [2007] 295 ITR 282 (SC); (iii).CIT V. Mepco Industries Ltd., [2007] 294 ITR 121 (Mad); (iv).CIT V. Sak Soft Ltd., [2008] ITR 63 (Mad); (v).CIT V. K.G.Denim Ltd., [2009] 180 Taxman 590 (Mad); and (vi).CIT V. PVP Ventures Ltd., [2014] 101 DTR 161 (Mad). 8. As against aforesaid, Ms.Hema Muralikrishnan, made following submissions : (i). That alternative remedy, by way of appeal, was available to petitioner, and therefore, this writ petition ought not to be entertained. (ii). That order dated 22.12.2010, which was passed by Assessing Officer, in respect of AY 2008-2009, under Section 143(3) of Act, did not deal with exemption claimed by petitioner under Section 54F of Act, and consequently, assessment order passed said AY, was reopened and fresh assessment order under Section 143(3) read with Section 147 of Act was passed on 31.03.2014. It was emphasized that though petitioner's claim for exemption under Section 54F of Act was sustained, since, it was 16 inherently flawed, respondent chose to exercise his revisional power under Section 263 of Act, by serving SCN dated 15.12.2015, on petitioner. (iii) mistake made by Assessing Officer in AY 2008- 2009, as regards petitioner's attempt to claim deduction under Section 54F of Act was avoided by Assessing Officer, while passing assessment order dated 12.12.2011, vis-a-vis AY 2009- 2010. Though, Assessing Officer's view for AY 2009-2010, was overturned by CIT(A), vide common order dated 29.07.2013, passed qua AYs 2008-2009 and 2009-2010, same was reversed by Tribunal, vide its order dated 08.04.2015, by remanding matter to Assessing Officer to consider afresh investment made in Capital Gains Account Scheme by petitioner in AY 2009-2010. Since, Tribunal in its order dated 08.04.2015, did not deal with issue as to whether or not subject flats formed single residential unit, even while setting aside order for AY 2009- 2010, respondent had acted within four corners of jurisdiction vested in him, in exercising powers under Section 263 of Act. (iii)(a) In other words, learned counsel stressed on fact that in so far as Tribunal was concerned, in respect of AY 2008-2009, 17 issue before it, pertained to disallowance of expenditure under Section 14A of Act, and not deduction claimed by petitioner under Section 54F of Act, while, in so far as AY 2009-2010 was concerned, even though, issue pertaining to Section 54F arose for consideration, Tribunal did not adjudicate upon same. 9. I have heard learned counsels for parties and perused record. 9.1. Quite clearly, preliminary objection taken with regard to alternative remedy, by Ms.Hema, on behalf of Revenue, will not require any discussion, if, I were to come to conclusion that respondent had necessary leeway, in given facts and circumstances, to exercise power under Section 263 of Act. It is only if I come to different conclusion, would I be required to deal with this objection. Accordingly, in order to adjudicate upon matter, following admitted facts are required to be noticed : 9.2. petitioner had sold his shares held in RIDM, in three tranches over period spanning between 2007-2008 and 2009-2010. 9.3. 70% of shareholding in RIDM was sold on 05.05.2007, for total consideration of Rs.22,42,72,478/-. 9.4. petitioner had purchased subject flats on two separate dates, Flat No.607 was purchased on 23.05.2006, while flat 18 No.612 was purchased on 16.01.2017. These flats were purchased, quite clearly, within preceding one year of sale of shares, resulting in generation of capital gains. record shows that flat No.607 was sold for sum of Rs.1.67 Crores, while flat No.612 was sold for sum of Rs.3 Crores. 9.5. petitioner had claimed deduction under Section 54F of Act in sum of Rs.4,88,78,900/-, against admitted long term gains of Rs.21,39,19,223/-, after adjusting transfer expenses and indexed cost, against aforestated consideration in sum of Rs.22,42,72,478/- received qua sale of shares. 9.6. Though, return for AY 2008-2009 was taken up for scrutiny and order dated 22.12.2010, was passed, it was reopened and fresh assessment order under Section 143(3) read with Section 147 of Act was passed on 31.03.2014. record also shows that in so far as AY 2009-2010 was concerned, Assessing Officer did not accept petitioner's claim for deduction under Section 54F of Act, with respect to subject flats, on ground that they did not form single residential unit. Therefore, two inconsistent orders were on record, i.e., order dated 22.12.2010, pertaining to AY 2008- 2009, whereby, deduction claimed by petitioner under Section 54F of Act was accepted, and order dated 12.12.2011, 19 pertaining to AY 2009-2010, where, opposite conclusion had been reached, i.e., deduction claimed under Section 54F of Act was not available. 9.7. This led to filing of appeal with CIT(A). CIT(A), vide common order dated 29.07.2013, dealt with petitioner's appeal pertaining to AYs 2008-2009 and 2009-2010. 9.8. As correctly submitted by Ms.Hema, in respect appeal pertaining to AY 2008-2009, there was no grievance articulated by petitioner, with regard to his claim for deduction under Section 54F of Act, as same stood accepted by Assessing Officer via his order dated 22.10.2010. grievance of petitioner, thus, with respect to disallowance of deduction under Section 54F of Act stood articulated only qua AY 2009-2010. CIT(A), however, as noticed hereinabove, in his common order dated 29.07.2013, clearly, held that petitioner should be allowed deduction under Section 54F of Act, as aspects pertaining to claim had been considered in AY 2008-2009. This conclusion was reached by CIT(A), after adverting to entire history of transaction and material placed before him, which included, Surveyors report, to which, I have made reference above. 9.9. Moreover, in proceedings carried under Section 143(3) 20 read with Section 147 of Act, qua AY 2008-2009, after due scrutiny, Assessing Officer vide order dated 31.03.2014, came to very same conclusion, which is that deduction allowed under Section 54F of Act, via order dated 22.12.2010, could not be withdrawn. relevant observations made, in this regard, have already been extracted hereinabove by me. 9.10. While Revenue preferred appeals to Tribunal vide CIT (A)'s common order dated 29.07.2013, qua AY 2008-2009 and 2009-2010, it initiated proceeding under Section 263 of Act, against Assessing Officer's order dated 31.03.2014. Notably, issue pertaining to tenability of petitioner's claim for deduction under Section 54F of Act arose in both proceedings. 10. Tribunal, therefore, while adjudicating upon appeals preferred by Revenue for both AYs, i.e., AY 2008-2009 and 2009- 2010, was required to deal with issue, which is, as to whether subject flats formed one single residential unit. 11. fact that this issue came before Tribunal is quite evident, if, one were to peruse paragraph 9 of impugned order dated 08.04.2015. For sake of convenience, same is extracted 21 hereafter : "..... 9. In remand report, it was stated by Assessing Officer that transfer of assets involving financial transactions took place on 7.7.2008. assessee claimed ownership of Flat No.607 and 612 of Olympus Apartments. Assessing Officer emphasized on two conditions for claiming deduction u/s.54F. According to Assessing Officer, first condition is that assessee should not own more than one residential property. Assessing Officer is of opinion that while claiming deduction u/s.54F of Act, assessee as on date of transfer of long term capital gain, assessee should possess only one residential house property. It is brought out by Assessing Officer that assessee has bought properties on different dates, viz., flat Nos.607 and 612 on 23.5.2006 and on 16.1.2007 respectively and that assessee produced copies of permission for renovation by Olympus Co-operative Housing Property Ltd., for sale of flat No.612 layout of combined Flat Nos.607/612 of Olympus Apartments and certificate from V.S.Modi Associates. Assessing Officer's question is that on date of capital gain transaction, i.e., on 7.7.2008, how many residential properties assessee was holding. Assessing Officer states that submissions by 22 assessee did not support assessee's contention of holding single residential unit on date of transfer of capital gain and also no supporting documents were received from assessee regarding completion of renovation and occupation of assessee in combined residential unit of flat Nos.607 & 612. Further, according to Assessing Officer, second condition for disallowance is that assessee should have invested in residential house. Assessing Officer states that as per deduction of claim u/s.54F, assessee could invest either in purchase of residential property one year prior to date of transfer or 2 years after date of transfer or construct house within 3 years after date of transfer. In assessee's case Assessing Officer states that assessee has utilized amount in agricultural land located at Dhokawade Village, Alibag, Taluka of Rajgad District, which is evident from document describing property as 'pieces and parcels' of agricultural land. Assessing Officer also pointed out that assessee had not produced any proof like approval obtained from Municipal Corporation of competent Authority for construction of residential property for treating assessee's agricultural land as residential area." (emphasis is mine) 11.1. perusal of aforesaid extract would show that Tribunal was considering, not only issue as to whether or not 23 subject flats formed one residential unit, but also, was looking at investment made by petitioner in Alibaug property, on which, residential structure had been built by him. 11.2. Furthermore, perusal of paragraph 8 of Tribunal's order would also establish that it was also examining petitioner's claim that he had invested Rs.6.10 crores in Capital Gains Account scheme via Bank of India. This aspect is evident from perusal of following extract of Tribunal's order dated 08.04.2015 : ".... 8. We have heard both parties and perused orders of authorities below. In our opinion, Assessing Officer mixed up with investment on two flats at Mumbai. Commissioner of Income- tax (Appeals) observed that assessee has earned capital gains on sale of shares during year under consideration and deposited same in capital gain account scheme in July 2007 with Bank of India vide A/c No.006610110001298 amounting to Rs.6,10,00,000/-. amount paid as advance for purchase of land at Alibagh Taluka, Dhokawde Village, Maharashtra for Rs.40,00,000/- totalling to Rs.6,50,00,000/-. assessee has claimed exemption u/s.54F for coast (sic cost) of land at Rs.4,46,26,000/- including registration charges for land of 16940 sq.meters. assessee has completed 24 construction on this land by July 2011, i.e., within 3 years from date of investment made in capital gains accounts scheme. total amount of cost of construction incurred by assessee is at Rs.1,54,49,220/-. amount utilized as on 7.7.2011 out of investment made in capital gains accounts has been disclosed in income tax return for financial year 2011-12 relevant to assessment year 2012-13 and offered for taxation at Rs.49,24,780/-. Since assessee has constructed residential house within 3 years from date of investment in capital against accounts scheme, he claimed exemption u/s.54F of Act to extent of capital gains utilized in purchasing of land and construction completed thereon. Regarding these facts, Commissioner of Income Tax (Appeals) called for remand report and same was submitted by Assessing Officer vide remand report dated 31.07.2012. Later, second remand report dated 13.8.2012 was also submitted by Assessing Officer, which was considered by Commissioner of Income-tax (Appeals)." (emphasis is mine) 12. Tribunal, thus, as indicated in my narration above, was dealing with three aspects via its order dated 08.04.2015. First, as to whether subject flats formed single residential unit. Second, petitioner's claim that he had invested Rs.6.10 Crores in Capital Gains Accounts Scheme was borne out. Third, petitioner's claim 25 that he had invested money in Alibaug property, on which, he had, purportedly, constructed residential structure. 12.1. Tribunal, after discussing these three aspects of matter, confined remand only to last two aspects, that is, claim of petitioner with regard to investment of Rs.6.10 Crores in Capital Gains Scheme; and purported investment of Rs.40 lakhs made by him by way of advance towards purchase of Alibaug property. 12.2. issue with regard to claim of deduction under Section 54F of Act, (which arose, as correctly argued on behalf of Revenue, in its appeal filed qua A.Y. 2009-2010), was not remanded for reconsideration, as same had already been considered in AY 2008-2009. This is quite evident upon perusing paragraph 10 of Tribunal's order. relevant observations made, in this regard, have already been extracted hereinabove by me. 12.3. Having regard to aforesaid, in my view, Tribunal in its wisdom, thought it fit not to entertain appeal of Revenue, with regard to its challenge laid to deduction claimed by petitioner vis-a-vis subject flats under Section 54F of Act. 12.3. Therefore, in my opinion, since, Revenue did not assail order of Tribunal dated 08.04.2015, respondent could not 26 have exercised powers under Section 263 of Act to revisit issue once again, by setting aside order dated 31.03.2014, passed by Assessing Officer under Section 143(3) read with Section 147 of Act. 13. Furthermore, according to me, as correctly argued by Mr.Senthil, on behalf of appellant, view taken by Assessing Officer in its order dated 31.03.2014, was possible view, and therefore, would not, necessarily, as it sought to be projected on behalf of Revenue, be categorised as erroneous view. 13.1. perusal of impugned order would show that respondent has set aside order and directed Assessing Officer to revisit issue, as he, according to him, had faulted to take into account fact that subject flats had been purchased via two separate sale deeds, and had separate electricity meter connections. According to me, it appears that respondent was unnecessarily burdened by fact that subject flats were purchased by two separate sale deeds and had separate electricity meter connections. issue at hand, before Assessing Officer, in my opinion, was whether or not subject flats form single residential unit. 13.2. size of flat, or, that they had separate electricity 27 meter connections would not, necessarily, lead to conclusion that they were two separate residential units. Assessing Officer was required to look at other attendant circumstances, which included survey report, in reaching conclusion in matter. Notably, what was available on record, was not only survey report, but also material provided by concerned housing society. survey report, as it appears, did advert to fact that subject flats formed single residential unit. 13.3. learned counsel for Revenue has not assailed survey report before me. Therefore, quite clearly, there was material available to Assessing Officer to come to possible view, if not, definite view that subject flats formed single residential unit. 13.4. If, that be conclusion, then, clearly, respondent had no jurisdiction to initiate proceedings under Section 263 of Act and thereupon, proceed to pass impugned order. 14. In view of conclusion reached by me, preliminary objection taken by Ms.Hema Muralikrishnan, that writ petition ought not to be entertained, would have to be rejected. It would be trite to say that order passed without jurisdiction can be interfered with in Writ proceedings. 28 14.1. Furthermore, relegating petitioner, at this stage, to alternative remedy in respect of issue pertaining to AY 2008-2009, which has travelled by way of statutory remedies to Tribunal, once before, would be unfair to parties. existence of alternative remedy, as is articulated time and again by Court is not absolute bar. Superior courts often relegate parties to alternative remedy by way of self-limitation. As matter of fact law, as declared by Supreme Court, now, clearly, sets out that in appropriate cases, writ court has jurisdiction to entertain petition, even involving disputed questions of fact, notwithstanding fact that they arise out of contractual obligations. See observations of Supreme Court in ABL International Limited and another V. Export Credit Guarantee Corporation of India Limited, (2004) 3 SCC 553 in Paragraphs 27 and 28 at page 572 and in Union of India V. Aravali Minerals and Chemicals (India) (P) Limited, (2000) 9 SCC 558. 15. For foregoing reasons, impugned order is set aside. captioned writ petition is allowed. Resultantly, pending application shall stand closed. Given facts and circumstances of case, there shall, however, be no order as to costs. 29 Speaking Order 02.06.2017 Index : Yes / No Internet : Yes gg 30 To Principal Commissioner of Income Tax-5, Aayakar Bhavan, Wanaparthy Block, 5th Floor, 121, Mahatma Gandhi Road, Chennai-600 034. 31 RAJIV SHAKDHER,J. gg Order in Writ Petition Nos.11596 of 2016 Dated : 02.06.2017 http://www.judis.nic.in Abhijit Bhandari v. Principal Commissioner of Income-tax-5, Chennai
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