RASIKLAL M. PARIKH Vs. ASSISTANT COMMISSIONER OF INCOME TAX
HIGH COURT OF BOMBAY
Rasiklal M. Parikh
ASSISTANT COMMISSIONER OF INCOME TAX
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A.K.MENON, J. -
(1.) By this Chamber Summons taken out on behalf of the appellant in a pending Income Tax Appeal, the appellant seeks amendments as set out in Exhibit C and which read as follows:
"1. After paragraph (xiv) at page 6, add following paragraphs:
(xv) After prolonged correspondence with builder as set out at page 115 to 118 of appeal, disputes arose and ultimately matter was amicably settled and compromised through arbitration award.
Hereto Annexed And Marked As Exhibit 'L' Is Copy Of Award Dated 09.05.2014.
(xvi) Thereafter award is implemented by executing sale deeds of flats allotted."
Appellant Craves Leave To Refer And Rely Upon Sale Deeds Dated 27.12.2014 When Produced."
In effect what the appellant also seeks is the inclusion in the appeal paper book of a copy of an Arbitral award dated 9th May, 2014.The Chamber Summons is opposed by Mrs. Bharucha on behalf of the Revenue.
(2.) It is the case of the appellant that before the Income Tax Appellate Tribunal the appellant had challenged the correctness of the order dated 7th January, 2011 passed by the Commissioner of Income Tax (Appeals) which upheld the order of Assessing Officer in relation to assessment year 2006-07. The appellant-assessee had been denied the benefit of exemption under Section 54F of the Income Tax Act (the Act). While disposing of the appeal, the Tribunal observed, as did the Commissioner that as per Section 54F the assessee was supposed to construct a residential house within three years or purchase a residential house within two years of receipt of sale proceeds of a capital asset in order to avail the benefit of the said Section and to save himself from the payment from capital gains tax. The admitted position is that within the period allowed in law, the assessee had not entered into any agreement to purchase the flat(s) nor did he construct a residential house. It was not the case of the appellant-assessee that the consideration received from disposal of the asset had been appropriated towards purchase of new premises. The appellant assessee merely relied upon a letter of allotment dated 7th October, 2005. No agreement was entered into during the period of three years contemplated by Section 54F. That apart, the amount of capital gain which would have accrued was not deposited in the designated capital gain account under the Scheme of the Act by the due date of filing his return.
(3.) It was the assesee's case before the Tribunal that having booked the flat on 9th floor of 'C' wing of the project known as Abrol Vastu Park, the building did not receive the necessary sanction and hence the flats were not constructed. The contention of the assessee that he had invested a sum of Rs. 1.33 crores before the due date for filing the return, was rejected since sub-clause (4) of Section 54 entailed that the amount of net consideration received (in this case pursuant to surrender of tenancy) would be required to be deposited in a designated account before filing such a return. In conclusion the Tribunal observed that the construction was still under progress even on the date of the hearing before the Tribunal i.e. on 8th October, 2012. The Tribunal denied the benefit of exemption on the basis of the aforesaid set of facts.;
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