Renuga Raghavan, CHENNAI V. ITO, CHENNAI

CO 110/CHNY/2016

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2683 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2016
• Court: TRIBUNAL
• Department Lawyers: T VASUDEVAN
• Assessee Lawyers: SHIVA SRINIVAS
• Keywords: Reopening of assessment; Tangible material
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , ! ' . #$ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1907/MDS./2016 AND C.O. NO.110/MDS.2016 / ASSESSMENT YEAR : 2009-10 THE ITO, NON CORPORATE WARD 23(2), 130-B,MUDICHUR ROAD, WEST TAMBARAM, CHENNAI-45. VS. SMT. RENUGA RAGHAVAN, 100/30,CHITLAPAKKAM SECOND MAIN ROAD, TAMBARAM SANATORIUM, CHENNAI-47. [PAN AFNPR 4514 C] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT D.R /RESPONDENT BY : SHRI T.VASUDEVAN, ADVOCATE / DATE OF HEARING : 22 - 12 - 2016 / DATE OF PRONOUNCEMENT : 25 - 01 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE AND THE CROSS OBJECTI ONS ARE FILED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-T AX (APPEALS)- 10,CHENNAI DATED 31.03.2016 PERTAINING TO ASSESSM ENT YEAR 2012-13. ITA NO.1907/16 :- 2 -: 2. IN REVENUE APPEAL, THE REVENUE CHALLENGED THE G RANT OF DEDUCTION U/S.54 OF THE ACT IN RESPECT OF FOUR FLAT S INVESTED BY THE ASSESSEE. 2.1. IN CROSS OBJECTIONS, THE ASSESSEE CHALLENGED THE REOPENING OF ASSESSMENT . 3. FIRST WE TAKE THE CROSS OBJECTIONS RELATING TO THE REOPENING OF ASSESSMENT . 4. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE HA D ENTERED INTO AN AGREEMENT WITH M/S.CASA GRANDA PVT LTD.,CHENNAI ON 05.09.2008 TO DEVELOP HER PROPERTY. AS PER THE DEVELOPMENT AGREE MENT, THE ASSESSEE GOT 4 FLATS FROM M/S.CASA GRANDA PVT LTD., CHENNAI IN LIEU OF 50% UDS. WHILE EXAMINING THE ASSESSEES CLAIM U/S. 54 OF THE ACT BY THE AO DURING THE ASSESSMENT PROCEEDINGS FOR ASSESS MENT YEAR 2012- 13, THE AO NOTED THAT THE LONG TERM CAPITAL GAINS S HOULD BE CONSIDERED IN THE EARLIER ASSESSMENT YEAR 2009-10 AS THE AGREE MENT ON 05.09.2008. FOR THIS REASON, THE AO RE-OPENED THE A SSESSMENT FOR ASSESSMENT YEAR 2009-10. AGGRIEVED WITH THE ACTION OF THE AO, THE ASSESSEE CARRIED THE APPEAL TO THE LD.CIT(A). ON AP PEAL, THE LD.CIT(A) OBSERVED THAT THE AO HAS REOPENED THIS ASSESSMENT AFTER VERIFYING THE DEVELOPMENT AGREEMENT PERTAINING TO THE ASSESSMENT YEAR 2009-10 WHILE EXAMINING THE ASSESSEES SUBMISSION DURING TH E ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2012-13. ACCORDING TO LD.CIT(A), THE ITA NO.1907/16 :- 3 -: REOPENING BASED ON TANGIBLE MATERIAL WHICH HAS COME TO THE AOS KNOWLEDGE DURING THE ASSESSMENT YEAR 2012-13 IS VAL ID. AGGRIEVED, THE ASSESSEE RAISED THE GROUND RELATING TO REOPENIN G OF ASSESSMENT IN HER CROSS OBJECTIONS BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F THE CIT(APPEALS) AND THE AO VALIDLY REOPENED THE ASSESSMENT ON THE B ASIS OF SUBSEQUENT YEARS ASSESSMENT PROCEEDINGS AND THE S AME IS CONFIRMED. HENCE, THE GROUND RAISED BY THE ASSESSEE REGARDING REOPENING OF ASSESSMENT IN HER C.O. IS REJECTED. 6. NEXT, COMING TO THE APPEAL OF REVENUE, THE MAIN GRIEVANCE OF REVENUE IS WITH REGARD TO DELETION OF ADDITION MADE U/S.54 OF THE ACT BY THE LD.CIT(A). 6.1 THE FACTS OF THE ISSUE ARE THAT THE AO WHILE E XAMINING THE ASSESSEES CLAIM OF DEDUCTION U/S.54, THE AO NOTICE D THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S.54 FOR THE CONSTRUCTION O F 4 FLATS. BY INTERPRETING THE PHRASE, A RESIDENTIAL HOUSE AS O NE RESIDENTIAL HOUSE, THE AO DENIED THE ASSESSEES CLAIM FOR FOUR FLATS, INSTEAD HE ALLOWED DEDUCTION U/S.54 FOR ONLY ONE FLAT. AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A). ON APPEAL, THE LD.CIT( A) RELLYING ON THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. K.R ITA NO.1907/16 :- 4 -: KARPAGAM IN 373 ITR 127, OBSERVED THAT THE ASSESSEE HAS RE-INVESTED IN NEWLY CONSTRUCTED FLATS WITHIN 3 YEARS FROM THE DATE OF DEVELOPMENT AGREEMENT, WHICH IS DEEMED TO BE THE DATE OF SALE O F THE ASSESSEES RESIDENTIAL HOUSE. THEREFORE, LD.CIT(A) DIRECTED TH E AO TO ALLOW DEDUCTION U/S.54 FOR THE REINVESTMENT OF LONG TERM CAPITAL GAINS IN FOUR FLATS FOR ASSESSMENT YEAR 2009-10 AND DIRECTED TO D ELETE THE ADDITION MADE IN A.Y.2012-13 AS IT IS ALREADY CONSIDERED IN ASSESSMENT YEAR 2009-10. AGGRIEVED WITH THE ORDER OF LD.CIT(A), THE DEPARTMENT IS IN APPEAL BEFORE THIS TRIBUNAL. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, IT IS AN ADMITTED FACT THAT T HE ASSESSEE IS EXCLUSIVELY OWNER OF THE SOLD FLATS IN THE SAME BLO CK. UNLESS AND UNTIL, THERE ARE MATERIALS TO SHOW THAT THE ASSESSEE IS NO T OWNER OF THAT PROPERTY EXCLUSIVELY THE PROVISIONS OF THE SECTION 54 CANNOT BE APPLIED SO AS TO DENY THE EXEMPTION U/S.54 OF THE ACT AS DE CIDED BY THE JURISDICTION HIGH COURT IN THE CASE OF DR.VASANTHI VS. CIT IN 252 ITR 336 AND IN THE CASE OF G.CHINNADURAI VS. ITO IN TD- 5657-HC- 2016(MADRAS)-O FOR ASSESSMENT YEAR 2011-12DATED 29. 08.2016. THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.54 OF THE AC T IN RESPECT OF FOUR INVESTMENTS IN FOUR FLATS. ACCORDINGLY, THIS GROUN D OF REVENUE IS DISMISSED. ITA NO.1907/16 :- 5 -: 8. SINCE WE HAVE DISMISSED THIS GROUND OF REVENUE, THE GROUND RAISED BY THE ASSESSEE IN HER C.O IN SUPPORT OF DED UCTION U/S.54 OF THE ACT IS ALSO INFRUCTUOUS. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE CROSS OBJECTIONS RAISED BY THE ASSESSEE STANDS DISM ISSED. ORDER PRONOUNCED ON 25 TH JANUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: JANUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF