Shri C.Lingesan, CHENNAI V. ACIT, NCC - 15 (1), CHENNAI

CO 86/CHNY/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9943 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-09-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 11-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Condonation of delay
• Section: 143(3); 54F

Judgement Text

आयकर अपीलीय अिधकरण, ‘बी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI ी महावीर सह, उपा य एवं ी जी. मंजुनाथ, लेखा सद य के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1828/Chny/2019 & C.O No.86/Chny/2019 (Arising in ITA No.1828/Chny/2019) िनधा रण वष /Assessment Year: 2013-14 The Asst. Commissioner of Income Tax, Non Corporate Circle-15(1), Chennai. Vs. Shri Lingesan, Old No.1/163, New No.1/279, Old Mahavalipuram Road, Semmancheri, Chennai – 600 119. [PAN: ABPPL-8184-N] ( अपीलाथ /Appellant) ( यथ /Respondent/Cross Objector) अपीलाथ की ओर से/ Assessee/ Cross Objector by : Shri G. Moorthi, Advocate थ की ओर से /Revenue by : Shri Chinthapalli Meher Chand, JCIT सुनवाई क तारीख/Date of Hearing : 21.09.2022 घोषणा क तारीख /Date of Pronouncement : 21.10.2022 आदेश / O R D E R Per Mahavir Singh, Vice President : This appeal by the Revenue and Cross Objections by assessee, both are arising out of the order of Commissioner of Income Tax (Appeals)-15, Chennai, in Appeal No.157/2018-19/CIT(A)-15 dated 22.03.2019. The Assessment was framed by Asst. Commissioner of ITA No.1828/Chny/2019 & CO No.86/Chny/2019 :- 2 -: Income Tax, Non Corporate Circle-15(1), Chennai for the relevant Assessment Year 2013-14 vide order dated 21.12.2018 u/s. 143(3) r/w s. 147 of the Income Tax Act, 1961 (hereinafter ‘the Act’). 2. At the outset, it is noticed that the appeal filed by Revenue is barred by limitation by 06 days. The revenue has filed affidavit for condonation of delay stating as under: “In this case, The Assistant commissioner of Income Tax, Non Corporate Circle15 (1), Chennai is directed to file an appeal to the Income Tax Appellate Tribunal against the order of The Commissioner of Income Tax (Appeals)-15, Chennai in ITA NO '157/18-17 /CIT (A)-15 dated 22/03/2019 for the Assessment Year 2013-14 received in this office on 09/04/2019 in the case of Shri LINGESAN PAN ABPPL8184N. I request you to kindly condone the delay of 06 days in filing the Income Tax Appeal Papers, in the above case, for the Assessment Year 2013-14. The appeal could not filed in time. I humbly request again that the delay may be condoned.” We see that the delay is very small and cause seems reasonable, which was not contested by the assessee. Hence, we condone the delay in filing of this appeal by Revenue and admit the appeal for adjudication. 3. The only issue in this appeal of Revenue is as regards to the order of CIT(A) deleting the disallowance of claim of deduction u/s. 54F of the Act on the reason that the assessee earned only one residential house. For this, the Revenue has raised the following effective grounds as under: ITA No.1828/Chny/2019 & CO No.86/Chny/2019 :- 3 -: 1. The order of the Ld. CIT(A) is contrary to the law and facts of the case. 2. The Ld. CIT(A) erred in arriving at the conclusion that the assessee was entitled to benefit of deduction u/s 54F as he owned only residential house. 2.1 The Ld CIT(A) erred in holding that Plot No.6 Ganesh Nagar, Sholinganallur owned by the assessee was a vacant plot and not a residential property. 2.2 The Ld CIT(A) failed to consider the sale deed dated 4.7.2012 which clearly mentioned that the house property was a plot in the layout of Ganesh Nagar together with super structure and electrical connection and superstructure alone was valued at Rs.3,75,000/-. 2.3 The Ld.CIT(A) ought to have appreciated that the building on the housing plot was capable of habitation. 2.4 The Ld. CIT(A) erred in facts and law in holding that the assessee owned only one residential house. 4. The brief facts of the case are that the assessee sold his ancestral land located at Muttukkadu Village near Chennai on 22.02.2013 for a sale consideration of Rs. 6.45 Crore. The assessee declared Long Term Capital Gain (LTCG) at Rs. 6.44 Crore and out of that reinvested the above LTCG in two properties i.e., a vacant land at No.6, Ganesh Nagar, Sholinganallur for a sum of Rs. 26 Lakhs, and a residential house near Kalapakkam for a sum of Rs. 3.21 Crore. The assessee paid LTCG tax amounting to Rs. 70,45,300/- on the balance LTCG of Rs. 3.22 Crore. The A.O while framing assessment noted that the vacant land purchased i.e., Plot No.18, Ganesh Nagar is a commercial property, which is leased to a hospital and Plot No.6, Ganesh Nagar is a vacant land. But, the A.O noted from the entire ITA No.1828/Chny/2019 & CO No.86/Chny/2019 :- 4 -: facts that Plot No.6 is a house having annual rental value of Rs. 1,200/- and he noted that the assessee has seized a second house and hence, not entitled to claim for deduction. For this, he observed as under: “AR's submission's are duly considered. After receiving submissions made by the assessee himself before the IT Authority (with respect to the sale deed dated 09.06.2012 Plot No.6) indicates that the there was a (i) structure of 1500 sq feet (750sq ground floor & 750sq at first floor). (ii) With 2 electric points. (iii) One electric pump. (iv) The house also had a annual rental value of Rs.1200/- (v) The value of a building is calculated as Rs.3,75,000/- by the local authority. The upon observation it is found that AR's contention is not true, house under demolished/ dilapidated condition can't have a electric pump, 2 electric points & a annual rental value assessed. Moreover the building value is calculated (Excluding from land value) to be around Rs.3,75,000/- this clearly indicated that the house wasn't in a demolished condition. With the above discussion, it is beyond doubt that the said area had a house property which is liveable. (Any family is residing in the said house property or not is immaterial). With this the assesee is bound to have more than one house property during the time period of purchase of the 3rd house property and hence is ineligible to claim deduction u/s 54F.” Aggrieved, the assessee preferred appeal before CIT(A). 5. The CIT(A) held that the property purchased by the assessee i.e., Plot No.6, Ganesh Nagar is a vacant land and not house and hence, he allowed the claim of LTCG to the assessee by observing in paras 4.3.4 & 4.3.5 as under: “4.3.4 I have considered both the points of view. After perusal of revenue documents placed before the CIT(A) which were already furnished before the AO during the assessment proceedings, I am ITA No.1828/Chny/2019 & CO No.86/Chny/2019 :- 5 -: convinced that the second property was only a vacant land and not a residential property. from the appellant's submission, it is clear that the appellant had only one residential property at the time of sale of ancestral land which resulted in LTCG. 4.3.5 : In view of the above .appellant's submission with supporting documents, ;I am of the consider opinion that the appellant is entitled to claim deduction u/.s 54F. : Therefore, the AO is directed to allow the appellant's claim of deduction u/s 54F. The appellant's ground is allowed.” Aggrieved, the Revenue is in appeal before the Tribunal. 6. We have heard both the sides, perused the material available on record and gone through the facts and circumstances of the case. Before us, the Ld. counsel for the assessee first of all stated that Plot No.6 at Ganesh Nagar is a vacant plot and not a house. He stated that the entire revenue records proved it that this is a plot, but he stated that the amendment brought in by the Finance (No.2) Act, 2014 in s. 54(1) of the Act by which words “a residential house” were replaced by “one residential house” was applicable from A.Y 2014-15 and assessee can claim reinvestment exemption from multiple units. The Ld. counsel for the assessee stated that this issue is decided by Hon’ble Madras High Court in the case of CIT vs. Gunmanmal Jain [2017] 80 taxmann.com 21 (Mds.), wherein it was held that amendment was made to s. 54F of the Act with regard to word “a” by Finance (No.2) Act, 2014 with effect only from 01.04.2015 withdrawing deduction for more than one flat (residential house). Prior to said amendment, a residential house would multiple flats/residential units. ITA No.1828/Chny/2019 & CO No.86/Chny/2019 :- 6 -: 7. In view of the above, we are of the view that the amendment in the provisions of s. 54(1) replacing the word “a residential house” by “one residential house” was brought in Finance (No.2) Act, 2014 w.e.f 01.04.2014 and will apply for A.Y 2015-16. The relevant assessment year before us is 2013-14 and hence, the assessee is eligible for claim of deduction u/s. 54F of the Act, though there may be multiple units. Accordingly, the appeal of the Revenue is dismissed. 8. As regards to the cross objection of the assessee, since we have adjudicated the issue in Revenue’s appeal and dismissed the Revenue’s appeal, we need not to go into the issue raised in cross objection of the assessee. The Cross Objection of the assessee has become infructuous and dismissed. 9. In the result, the appeal of the Revenue is dismissed & C.O of the assessee is dismissed as infructuous. Order pronounced on 21 st October, 2022. Sd/- Sd/- (जी. मंजुनाथ) (G. Manjunatha) लेखा लेखालेखा लेखा सद य सद यसद य सद य /Accountant Member (महावीर िसंह) (Mahavir Singh) उपा / Vice President चे ई/Chennai, दनांक/Dated: 21 st October, 2022. EDN/- आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF ITA No.1828/Chny/2019 & CO No.86/Chny/2019 :- 7 -: