D.Chaitanya, CHENNAI V. ITO, CHENNAI

ITA 1018/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4278 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: R BALAJI
• Section: 143(3); 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! ' . #$ , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NOS. 1018/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) SHRI D. CHAITANYA, NO.1, JAGDISWARAN STREET, T.NAGAR, CHENNAI 600 017. VS THE INCOME TAX OFFICER, XII(3), CHENNAI PAN: AGNPD0343A ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI R.BALAJI, CA /RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT /DATE OF HEARING : 25.04.2017 ! /DATE OF PRONOUNCEMENT : 22.06.2017 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI DATED 31.12.2015 IN ITA NO.93/ CIT(A)- 2/2014-15 FOR THE ASSESSMENT YEAR 2011-12 PASSED U/ S.250(6) R.W.S. 143(3) OF THE ACT. 2 ITA NO. 1018/MDS/201 6 2. THE APPEAL WAS FILED BY THE ASSESSEE WITH A DEL AY OF 12 DAYS. THE LD. AR SUBMITTED THAT THE DELAY HAD OCCU RRED SINCE THE ASSESSEE WAS ILL AND WAS UNABLE TO FURNISH THE RELE VANT PAPERS TO HIS AUDITOR. THEREFORE THE LD. AR PLEADED THAT TH E DELAY MAY BE CONDONED. THE LD. DR STRONGLY OBJECTED TO THE SUBM ISSION OF THE LD. AR. AFTER HEARING BOTH SIDES, WE ARE OF THE CO NSIDERED VIEW THAT THE DELAY OF 12 DAYS IN FILING THE APPEAL SHOU LD BE CONDONED BECAUSE THE DELAY WAS BEYOND THE CONTROL OF THE ASS ESSEE. THEREFORE WE HEREBY CONDONE THE DELAY AND PROCEED T O HEAR THE APPEAL ON MERITS. 3. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD. COMMI SSIONER OF INCOME TAX(APPEALS) HAS ERRED IN CONFIRMING THE ORD ER OF THE LD.AO WHO HAD DENIED THE DEDUCTION CLAIMED U/S.54F OF THE ACT, ON THE GROUND THAT INVESTMENT HAS BEEN MADE IN TWO FLATS. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL EARNING INCOME FROM HOUSE PROPERTY AND C APITAL GAINS, FILED HIS RETURN OF INCOME ADMITTING LOSS OF RS.5,7 2,460/-. INITIALLY THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT. TH EREAFTER THE 3 ITA NO. 1018/MDS/201 6 CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT O RDER WAS PASSED U/S.143(3) OF THE ACT, WHEREIN THE LD.AO DEN IED THE BENEFIT OF SECTION 54F OF THE ACT, BECAUSE THE ASSE SSEE HAD PURCHASED MORE THAN ONE FLAT VIOLATING THE PROVISIO NS OF THE ACT AND COMPUTED THE TAXABLE CAPITAL GAIN AT RS.3,48,30 ,718/-. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD COMPUTE D LONG TERM CAPITAL GAINS AS RS.3,46,63,127/- AND CLAIMED DEDUCTION U/S.54F OF THE ACT. WITH RESPECT TO THE SAME, THE ASSESSEE HAD FURNISHED THE FOLLOWING DETAILS:- 1. COPY OF SALE DEED DATED 01.04.2010 FOR SALE OF ASS ESSEES 1/6 TH SHARE OF INTEREST IN PROPERTY AT DORAISWAMY ROAD (D OC. NO.725 OF 2010) FOR RS.3,50,00,000/- (ASSESSEES SHARE) 2. ASSESSEE PURCHASED RESIDENTIAL FLATS AT FLAT NO.120 1. LODHA ARIA. TJ ROAD, MUMBAI 400015 BY SALE DEED DATED 07.04.201 0 (REGISTERED AS DOC NO,2923/2010) COPY ENCLOSED DOOR NO. 1201A 12 TH FLOOR AND FLAT NO. 1201B - 12 TH FLOOR UNDER THE SALE DEED DATED 07.04.2010 (REGISTERED AS DOC NO. 2925/2 010) COPY OF DOCUMENT ENCLOSED. 3. A COPY OF PLAN FOR THE TWO FLATS PURCHASED IS ENCLO SED SHOWING THAT IT IS A SINGLE RESIDENTIAL FLAT THOUGH ACQUIRED UND ER TWO SALE DEEDS WITH TWO DIFFERED DOOR NOS. 4. THESE TWO FLATS ARE LEASED OUT TO A SINGLE PERSON M R.PAUL HANDLEY (COPY OF LEASE DEED ENCLOSED) THE ASSESSEE HAD FURTHER SUBMITTED BEFORE THE LD.AO THAT:- 4 ITA NO. 1018/MDS/201 6 I. THE TWO ADJOINING FLATS PURCHASED BY THE ASSESSE E HAVING TWO DIFFERENT DOOR NUMBERS HAVE BEEN CONSOLIDATED A S ONE SINGLE RESIDENTIAL FLAT. II. THUS THE PROVISIONS OF SECTION 54F OF THE ACT A RE COMPLIED WITH. HOWEVER REJECTING THE CLAIM OF THE ASSESSEE, THE LD .AO DENIED THE BENEFIT OF SECTION 54F OF THE ACT BY HOL DING THAT THE ASSESSEE HAD PURCHASED MULTIPLE FLATS AND NOT A SIN GLE RESIDENTIAL UNIT AS PROVIDED UNDER THE ACT. ON APPE AL, THE LD.CIT(A) ALSO ENDORSED THE VIEW OF THE LD.AO AND H ELD THE ISSUE AGAINST THE ASSESSEE. 6. BEFORE US THE LD.AR SUBMITTED THE DECISION OF TH E HONBLE JURISDICTIONAL HIGH COURT IN THE CASE CIT VS. SRI G UMANMAL JAIN, TCA NO.33 OF 2017, ORDER DATED 03.03.2017, WHEREIN IT WAS HELD THAT THE ASSESSEE IS ENTITLED TO THE BENEFIT OF SEC TION 54F OF THE ACT, FOR THE MULTIPLE FLATS ACQUIRED BY HIM. THERE FORE, IT WAS PLEADED THAT THE BENEFIT OF SECTION 54F MAY BE GRAN TED TO THE ASSESSEE. THE LD.DR VEHEMENTLY ARGUED IN SUPPORT O F THE ORDER 5 ITA NO. 1018/MDS/201 6 OF THE LD. REVENUE AUTHORITIES, HOWEVER COULD NOT S UCCESSFULLY CONTROVERT TO THE SUBMISSIONS OF THE LD.AR. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE FACTS O F THE CASE, IT IS APPARENT THAT THE REVENUE AUTHORITIES HAD DENIED TH E BENEFIT OF DEDUCTION U/S.54F OF THE ACT TO THE ASSESSEE ONLY F OR THE REASON THAT THE ASSESSEE HAD ACQUIRED TWO ADJOINING FLAT, WHICH HE CONVERTED INTO ONE UNIT. HOWEVER ON PERUSING THE O RDER OF THE HONBLE JURISDICTIONAL HIGH COURT CITED BY THE LD.A .R SUPRA ON SIMILAR FACTS, WE FIND THE ISSUE TO BE HELD IN FAVO UR OF THE ASSESSEE. THEREFORE, FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT WE HAVE NO HESITATION TO HOLD THAT IN THE CASE OF THE ASSESSEE, BENEFIT OF SECTION 54F SHOULD BE GRANTED, EVEN IF HE HAS ACQUIRED MORE THAN ONE ADJOINING RES IDENTIAL FLATS AND CONVERTED THEM INTO ONE RESIDENTIAL UNIT, PROVI DED ALL THE OTHER PORTIONS OF THE ACT ARE COMPLIED WITH. ACCORDINGLY WE REMIT BACK THE MATTER TO THE FILE OF LD.AO, TO CONSIDER THE IS SUE IN THE LIGHT OF OUR ABOVE OBSERVATION AND THE DECISION OF THE HONB LE JURISDICTIONAL HIGH COURT CITED SUPRA AND THE OTHER RELEVANT PROVISIONS OF THE ACT. 6 ITA NO. 1018/MDS/201 6 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED ON THE 22 ND JUNE, 2017 AT CHENNAI. SD/- SD/- ( ! ' . #$ ) ( . ) ( DUVVURU RL REDDY ) ( A . MOHAN ALANKAMONY ) ' #$ /JUDICIAL MEMBER #$ / ACCOUNTANT MEMBER %' /CHENNAI, &# /DATED 22 ND JUNE, 2017 JR # () *) /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. - ( )/CIT(A) 4. - /CIT 5. )./ 0 /DR 6. /1 /GF