Ananya Srikanth , Chennai V. ITO, Non-Corporate Ward -3(1), Chennai

CO 175/CHNY/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3758 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 06-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: G BASKAR
• Keywords: Revised return
• Section: 143(3); 54F; 54; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . , ! BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2115/CHNY/2017 ( / ASSESSMENT YEAR: 2014-15) THE INCOME TAX OFFICER, NON-CORPORATE WARD 3(1), CHENNAI. VS SMT. ANANYA SRIKANTH, NEW NO.11, SUBBARAYA AVENUE, ABHIRAMAPURAM, ALWARPET, CHENNAI 600 018. PAN: BGRPS5102H ( /APPELLANT) ( /RESPONDENT) & C.O. NO.175/CHNY/2017 (IN ITA NO. 2115/CHNY/2017) SMT. ANANYA SRIKANTH, NEW NO.11, SUBBARAYA AVENUE, ABHIRAMAPURAM, ALWARPET, CHENNAI 600 018. VS THE INCOME TAX OFFICER, NON-CORPORATE WARD 3(1), CHENNAI. PAN: BGRPS5102H ( /APPELLANT) ( /RESPONDENT) / REVENUE BY : SMT. VIJAYAPRABHA, JCIT /ASSESSEE BY : SHRI G. BASKAR, ADVOCATE '# /DATE OF HEARING : 04.04.2018 '# /DATE OF PRONOUNCEMENT : 30.05.2018 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-4, CHENNAI, DATED 22.06.2017 IN ITA NO. 159/2016-17/A. Y.2014- 15/CIT(A)-4 FOR THE ASSESSMENT YEAR 2014-15 PASSED U/S.250(6) 2 ITA NO.2115/CHNY/201 7 & CO NO.175/CHNY/2017 R.W.S. 143(3) OF THE ACT. THE ASSESSEE HAS ALSO RAI SED CROSS OBJECTION AGAINST THE ORDER OF THE LD.CIT(A). 2. REVENUES APPEAL:- THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS APPE AL HOWEVER THE CRUXES OF THE ISSUES ARE THAT:- (I) THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE ALT ERNATIVE CLAIM OF THE ASSESSEE FOR GRANTING DEDUCTION U/S.54F OF THE ACT INSTEAD OF SECTION 54 OF THE ACT IS NOT A FRESH CLAIM AND T HEREFORE THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CA SE GOETZE INDIA LTD., VS. CIT REPORTED IN 157 TAXMANN 1 IS NO T APPLICABLE. (II) THE LD.CIT(A) HAS ERRED IN DIRECTING THE LD.AO TO GRANT THE BENEFIT OF INDEXATION FROM THE PERIOD OF HOLDING OF THE ASSET BY THE PREVIOUS OWNER SINCE THE ASSESSEE HAD ACQUIRED THE PROPERTY FROM HER FATHER BY WAY OF SETTLEMENT DEED FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN TH E CASE CIT VS. MANJULA J SHAH REPORTED IN 355 ITR 474. 3. ASSESSEES CROSS OBJECTION:- THE ASSESSEE HAS RAISED THREE GROUNDS IN ITS CROSS OBJECTION HOWEVER THE CRUXES OF THE ISSUES ARE THAT:- 3 ITA NO.2115/CHNY/201 7 & CO NO.175/CHNY/2017 (I) THE LD.CIT(A) HAS ERRED IN NOT GRANTING EXEMPTI ON U/S.54 OF THE ACT. (II) THE LD.CIT(A) HAS RIGHTLY ALLOWED THE ALTERNAT IVE CLAIM OF THE ASSESSEE BY GRANTING DEDUCTION U/S.54F OF THE ACT, FOR ALL THREE FLATS. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL FILED HER ORIGINAL RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 ON 30.07.2014 ADMITTING TOTAL INCOME O F RS.2,67,830/-, INCOME FROM HOUSE PROPERTY OF RS.2,4 8,720 AND INCOME FROM OTHER SOURCES RS.29,113/-. LATER THE AS SESSEE FILED REVISED RETURN ON 31.07.2014 AND SUBSEQUENTLY THE A SSESSEE FILED ANOTHER REVISED RETURN ON 07.08.2015 ADMITTING TOTA L INCOME OF RS.2,67,830/- DECLARING INCOME FROM HOUSE PROPERTY OF RS.2,48,720/-, INCOME FROM OTHER SOURCES OF RS.29,1 13/- AND LONG TERM CAPITAL GAINS AMOUNTING TO RS.2,47,36,884/- AN D SET OFF THE SAME BY CLAIMING DEDUCTION U/S.54 OF THE ACT. INIT IALLY THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY THE CASE WAS SELECTED FOR LIMITED SCRUTINY UNDER CASS AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED ON 21.09.2016. FINALLY ASSESSME NT ORDER WAS PASSED U/S.143(3) OF THE ACT ON 29.12.2016 WHEREIN THE LD.AO 4 ITA NO.2115/CHNY/201 7 & CO NO.175/CHNY/2017 MADE ADDITION OF RS.3,59,15,045/- TOWARDS LONG-TERM CAPITAL GAINS WITH RESPECT TO THE TRANSFER OF HER SHARE IN THE PROPERTY. REVENUES APPEAL:- 5. GROUND NO. 2(I) : ALTERNATE CLAIM OF DEDUCTION U /S.54F OF THE ACT INSTEAD OF THE ORIGINAL CLAIM OF DEDUCTION U/S. 54 OF THE ACT IN THE RETURN OF INCOME:- THE ASSESSEE HAD CLAIMED DEDUCTION U/S.54F OF THE A CT IN HER RETURN OF INCOME WHICH WAS DENIED BECAUSE THE LD.AO OPINED THAT THE INTENTION OF THE ASSESSEE WAS TO SELL THE PLOT AND NOT THE BUILDING. ALTERNATIVELY THE ASSESSEE CLAIMED DEDUCT ION U/S.54F OF THE ACT. HOWEVER THE LD.AO DENIED THE CLAIM OF DEDU CTION U/S.54F OF THE ACT RELYING ON THE DECISION OF THE HONBLE A PEX COURT IN THE CASE GOETZE INDIA LIMITED VS. CIT REPORTED IN 157 T AXMANN 1, BY HOLDING THAT THE ASSESSEES CLAIM FOR DEDUCTION U/S .54F OF THE ACT IS A FRESH CLAIM MADE DURING THE COURSE OF ASSESSME NT PROCEEDINGS AND NOT CLAIMED IN THE RETURN OF INCOME FILED BY HER. ON APPEAL THE LD.CIT(A) RELYING IN THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS HIGH COURT IN THE CASE CIT VS . MALIND LABORATORIES PVT. LTD., WHEREIN IT WAS HELD THAT ST ATE AUTHORITIES SHOULD NOT RAISE TECHNICAL PLEAS IF THE CITIZENS HA VE LAWFUL RIGHT. THE 5 ITA NO.2115/CHNY/201 7 & CO NO.175/CHNY/2017 HONBLE MADRAS HIGH COURT HAD RELIED IN THE DECISIO N OF THE HONBLE APEX COURT IN THE CASE RAM LAL VS. REVA COAL FIELD LTD., REPORTED IN AIR (1962) WHILE ARRIVING AT SUCH DECISION. THE LD.CIT(A) FURTHER OPINED THAT THE RATIO LAID DOWN IN THE CASE GOETZE INDIA LTD., IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE I N THE CASE GOETZE INDIA LTD., THE ISSUE WAS WITH RESPECT TO AN ALTOGE THER FRESH CLAIM. AT THE OUTSET, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) ON THIS ISSUE, BECAUSE THE ASSESSEE HAD A LREADY MADE A CLAIM OF DEDUCTION U/S.54 OF THE ACT WITH RESPECT T O THE LONG TERM GAIN ARISING FROM THE TRANSFER OF HER PROPERTY. THE LD.REVENUE AUTHORITIES DENIED THE CLAIM BECAUSE THE CONDITIONS STIPULATED U/S.54 OF THE ACT WAS NOT COMPLIED. HOWEVER THE ASS ESSEE HAD COMPLIED WITH THE PROVISIONS OF SECTION 54F OF THE ACT AND CONSIDERING THE SAME, THE LD.CIT(A) HAD GRANTED REL IEF TO THE ASSESSEE BY RELYING ON THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS HIGH COURT CITED SUPRA. HENCE WE DO NOT FIN D IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THI S ISSUE. THEREFORE WE HEREBY UPHOLD THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. 6. GROUND NO. 2(II) : BENEFIT OF INDEXED COST OF AC QUISITION FROM THE ORIGINAL DATE OF PURCHASE OF THE PROPERTY BY TH E ASSESSEES 6 ITA NO.2115/CHNY/201 7 & CO NO.175/CHNY/2017 FATHER SINCE THE ASSESSEE HAD ACQUIRED THE PROPERTY FROM HER FATHER BY WAY OF SETTLEMENT DEED:- THE ASSESSEE HAD CLAIMED INDEXED COST OF ACQUISITI ON AS ON 01.04.1981 BECAUSE THE PROPERTY WAS ORIGINALLY A CQUIRED BY HER FATHER BEFORE 01.04.1981 WHICH WAS SUBSEQUENTLY TRA NSFERRED TO HER BY WAY OF SETTLEMENT DEED DATED 23.01.2012. HOW EVER THE LD.AO HAD REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD ACQUIRED THE PROPERTY ONLY ON 23.0 1.2012. ON APPEAL, THE LD.CIT(A) FOLLOWING THE DECISIONS OF TH E HONBLE BOMBAY HIGH COURT IN THE CASE CIT VS. MANJULA J SHA H REPORTED IN 355 ITR 474, ARUN SHUNGLOO TRUST VS. CIT REPORTED I N (2012) 18 TAXMANN.COM 261 (DEL), CIT VS. RAMAN KUMAR SURI REP ORTED IN (2013) 212 TAXMAN 411 (BOM) AND CIT VS. GAUTAM MANU BHAI AMIN REPORTED IN (2013) 218 TAXMAN 319 (GUJ) ALLOWED THE CLAIM OF THE ASSESSEE. WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD.CIT(A) IN THIS ISSUE BECAUSE THE HIGHER JUDICIARY HAD CONS ISTENTLY HELD THAT INDEXATION BENEFIT CAN BE AVAILED IN RESPECT OF THE PERIOD HELD BY THE PREVIOUS OWNER IN THE CASE OF SUCCESSION OF PRO PERTY. THEREFORE WE HEREBY UPHOLD THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. 7 ITA NO.2115/CHNY/201 7 & CO NO.175/CHNY/2017 ASSESSEES CROSS OBJECTION: 7. GROUND NO. 3(I) : DENIAL OF DEDUCTION U/S.54 OF THE ACT:- THE LD.AO HAD DENIED THE BENEFIT OF DEDUCTION U/S.5 4 OF THE ACT BECAUSE HE OPINED THAT THE LAND OWNERS HAD ONLY TRANSFERRED THEIR UNDIVIDED SHARE IN THE LAND TO TH E DEVELOPER AFTER DEMOLISHING THE RESIDENTIAL HOUSE IN THE LAND. HOWE VER THE CLAIM OF THE ASSESSEE WAS THAT THEY HAD ENTERED INTO JOINT V ENTURE AGREEMENT WITH THE DEVELOPER HANDING OVER POSSESSIO N OF THE LAND ALONG WITH RESIDENTIAL HOUSE WHICH WAS SUBSEQUENTLY DEMOLISHED FOR THE PURPOSE OF PROMOTING RESIDENTIAL BUILDING P ROJECT. ON APPEAL, THE LD.CIT(A) CONCURRED WITH THE VIEW OF THE LD.AO, HOWEVER GRANTED THE BENEFIT OF DEDUCTION U/S.54F OF THE ACT . 7.1 BEFORE US THE LD.AR DID NOT SERIOUSLY PRESS THI S GROUND, THEREFORE WE DO NOT FIND IT NECESSARY TO ADJUDICATE THE GROUND RAISED BY THE ASSESSEE IN HER CROSS OBJECTION. 8. GROUND NO. 3(II) : IN SUPPORT OF THE ORDER OF TH E LD.CIT(A) FOR GRANTING DEDUCTION U/S.54F OF THE ACT FOR ALL THREE FLATS: 8 ITA NO.2115/CHNY/201 7 & CO NO.175/CHNY/2017 SINCE THE CROSS OBJECTION RAISED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LD.CIT(A) WHICH WE HAD UPHELD, THE GROUND RAISED BY THE ASSESSEE STANDS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOW ED. ORDER PRONOUNCED ON THE 30 TH MAY, 2018 AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER &' /CHENNAI, () /DATED 30 TH MAY, 2018 RSR ) +, -, /COPY TO: 1. / ASSESSEE 2. /REVENUE 3. 1 ( )/CIT(A) 4. 1 /CIT 5. ,23 4 /DR 6. 35 /GF