Srinivasamurthi Mathangi, Chennai V. ITO, Non Corporate Ward 1(3), Chennai

ITA 107/CHNY/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0143 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 08-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G D JAYANTHI ANGAYARKANNI
• Assessee Lawyers: N ANUSH SHANK E R
• Keywords: Business income
• Section: 68; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.107/CHNY/2018 & '& / ASSESSMENT YEAR : 2014-15 SMT. SRINIVASAMURTHI MATHANGI, NO.42, CD-4, SRI ADITYA APARTMENTS, 4 TH SEAWARD ROAD, VALMIKI NAGAR, THIRUVANMIYUR, CHENNAI - 600 041. PAN : AAMPM 7166 P V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 1(3), CHENNAI. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI N. ANUSH SHANKER, CA +,)* - . / RESPONDENT BY : MS. G.D. JAYANTHI ANGAYARKANNI, J CIT / - 0' / DATE OF HEARING : 28.08.2018 12' - 0' / DATE OF PRONOUNCEMENT : 19.09.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -2, CHENNA I, DATED 29.09.2017 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2 I.T.A. NO.107/CHNY/18 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS REJE CTION OF CLAIM OF THE ASSESSEE UNDER SECTION 54 OF THE INCOME-TAX ACT , 1961 (IN SHORT 'THE ACT') TO THE EXTENT OF 75,00,000/-. 3. SHRI N. ANUSH SHANKER, THE LD. REPRESENTATIVE FO R THE ASSESSEE, SUBMITTED THAT THE ASSESSEE IS CARRYING O N A PROPRIETARY BUSINESS IN THE NAME AND STYLE OF M/S WOODSTOCK. T HE ASSESSEE IS ALSO A PARTNER IN THE FIRM KNOWN AS M/S CHAMIERS. ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE EARNED INCOME BY U NDERTAKING MARRIAGE HALL DECORATIONS, ETC. DURING THE YEAR UN DER CONSIDERATION, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE S OLD A RESIDENTIAL HOUSE PROPERTY AT DOOR NO.7, 1 ST STREET, EAST ABHIRAMAPURAM, MYLAPORE, FOR A TOTAL CONSIDERATION OF 2,75,00,000/-. ON A QUERY FROM THE BENCH, THE LD. REPRESENTATIVE CLARIFIED TH AT THE PROPERTY WAS SOLD ON 11.12.2013. THE ASSESSEE PURCHASED A N EW PROPERTY ON 04.12.2013. THE ASSESSEE CLAIMED DEDUCTION UNDE R SECTION 54 OF THE ACT IN RESPECT OF CAPITAL GAIN. ACCORDING T O THE LD. REPRESENTATIVE, THE ASSESSING OFFICER DISALLOWED 75,00,000/- ON THE GROUND THAT THE ASSESSEE AVAILED HOME LOAN OF 75 LAKHS FOR THE PURPOSE OF PURCHASING A READY BUILT PROPERTY. HENCE, THE ASSESSING OFFICER FOUND THAT THE SALE CONSIDERATION OF THE PROPERTY 3 I.T.A. NO.107/CHNY/18 WAS NOT INVESTED IN THE NEW PROPERTY. ACCORDING TO THE LD. REPRESENTATIVE, THERE IS NO CONDITION THAT THE ASSE SSEE HAS TO INVEST THE VERY SAME SALE CONSIDERATION FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 54 OF THE ACT. REFERRING T O SECTION 54 OF THE ACT, THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSEE WAS GIVEN AN OPTION OF PURCHASING A NEW RESIDENTIAL HOU SE BEFORE ONE YEAR FROM THE DATE OF SALE. THEREFORE, ACCORDING T O THE LD. REPRESENTATIVE, IT IS OBVIOUS THAT THE ASSESSEE CAN INVEST ANY MONEY EITHER BORROWED OR OTHERWISE IN ACQUIRING A NEW HOU SE EVEN BEFORE SALE OF THE OLD ASSET. THEREFORE, MERELY BECAUSE T HE ASSESSEE HAS AVAILED HOUSING LOAN TO THE EXTENT OF 75 LAKHS, ACCORDING TO THE LD. REPRESENTATIVE, THE AUTHORITIES BELOW ARE NOT J USTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE TO THE EXTENT OF 75 LAKHS. 4. WE HEARD MS. G.D. JAYANTHI ANGAYARKANNI, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. ACCORDING TO THE LD. D.R., THE ASSESSEE HAS NOT INVESTED THE ACTUAL SALE CONSIDERA TION FOR PURCHASE OF NEW ASSET. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. ON A QUERY FROM THE BENCH, IF THE INTENTI ON OF THE PARLIAMENT IS TO INVEST THE VERY SAME SALE CONSIDER ATION FOR 4 I.T.A. NO.107/CHNY/18 ACQUIRING NEW ASSET, HOW ONE EXPECTS THE ASSESSEE T O PURCHASE A PROPERTY ONE YEAR BEFORE THE DATE OF SALE OF PROPER TY? THE LD. D.R. CLARIFIED THAT IN THAT CASE, THE ASSESSEE MAY HAVE A CASE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER AND THE CIT(APPEALS) DISALLOWED THE CLAIM O F THE ASSESSEE TO THE EXTENT OF 75 LAKHS ON THE GROUND THAT THE ASSESSEE HAS AVAILED HOME LOAN OF 75 LAKHS FOR PURCHASING A NEW ASSET. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS ELIGIBLE FOR DE DUCTION UNDER SECTION 54 OF THE ACT. THE DISPUTE IS ONLY WITH RE GARD TO 75 LAKHS BORROWED BY THE ASSESSEE AS A HOME LOAN. THE REVEN UE CONTENDS THAT THE ASSESSEE HAS NOT INVESTED THE VER Y SAME SALE CONSIDERATION FOR PURCHASING A NEW PROPERTY. WHEN THE PARLIAMENT FROM ITS WISDOM CLARIFIED THAT THE ASSESSEE CAN ACQ UIRE / PURCHASE A NEW ASSET ONE YEAR BEFORE THE SALE OF PROPERTY, THE ASSESSEE IS NOT EXPECTED TO INVEST THE VERY SAME SALE CONSIDERATION FOR PURCHASING A NEW ASSET. IN OTHER WORDS, EVEN IF THE ASSESSEE BORROWED HOME LOAN AND PURCHASED A NEW ASSET, THE ASSESSEE IS ELI GIBLE FOR EXEMPTION UNDER SECTION 54 OF THE ACT SINCE THE ASS ESSEE HAS ACTUALLY INVESTED IN THE NEW ASSET. THEREFORE, THI S TRIBUNAL IS 5 I.T.A. NO.107/CHNY/18 UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIE S. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 54 OF THE ACT IS DELETED. THE ASSESSING OFFICER IS DIRECTED TO GRANT DEDUCTION UNDER SECTION 54 OF THE ACT EVEN IN RESPECT OF HOME LOAN SAID TO BE BORROWED TO THE EXTENT OF 75 LAKHS. 6. THE ASSESSEE HAS ALSO RAISED ONE MORE GROUND WIT H REGARD TO THE ADDITION MADE BY THE ASSESSING OFFICER TO TH E EXTENT OF 67,12,516/- UNDER SECTION 68 OF THE ACT. 7. SHRI N. ANUSH SHANKER, THE LD. REPRESENTATIVE FO R THE ASSESSEE, SUBMITTED THAT THE DEPOSITS MADE IN THE B ANK ACCOUNT ARE ALL FROM BUSINESS RECEIPTS. ACCORDING TO THE LD. R EPRESENTATIVE, THE ASSESSEE COULD NOT PRODUCE NECESSARY EVIDENCE BEFOR E THE LOWER AUTHORITIES. SINCE THE ASSESSEE HAS NOW COLLECTED THE MATERIAL WITH REGARD TO CASH DEPOSIT/CHEQUE DEPOSITED IN THE BANK ACCOUNT, ACCORDING TO THE LD. REPRESENTATIVE, THERE IS NO NE ED FOR ANY ADDITION UNDER SECTION 68 OF THE ACT. 8. ON THE CONTRARY, MS. G.D. JAYANTHI ANGAYARKANNI, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE MAT ERIAL NOW FILED 6 I.T.A. NO.107/CHNY/18 BY THE ASSESSEE IS A FRESH MATERIAL AND THE ASSESSI NG OFFICER HAD NO OCCASION TO EXAMINE THE SAME. THEREFORE, THE LD . D.R. SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO T HE ASSESSING OFFICER FOR RECONSIDERATION. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE ADMITTEDLY COULD NOT FILE THE MATERIAL EVIDENCE BEF ORE THE ASSESSING OFFICER AND THE CIT(APPEALS). THEREFORE, THE CIT(A PPEALS) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R UNDER SECTION 68 OF THE ACT. NOW THE ASSESSEE CLAIMS THAT THE EN TIRE DEPOSITS WERE FROM BUSINESS RECEIPTS AND THE MATERIAL EVIDEN CE IS AVAILABLE, WHICH IS FILED BEFORE THIS TRIBUNAL IN THE FORM OF PAPER-BOOK. IN VIEW OF THIS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS RE-EXAMINATION BY THE ASSESSING OFFICER. ACC ORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION MADE UNDER SECTION 68 OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REC ONSIDER THE MATTER IN THE LIGHT OF THE MATERIAL FILED BY THE AS SESSEE BEFORE THIS TRIBUNAL AND THAT MAY BE FILED BEFORE THE ASSESSING OFFICER AND 7 I.T.A. NO.107/CHNY/18 THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WI TH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19 TH SEPTEMBER, 2018 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 19 TH SEPTEMBER, 2018. KRI. - +056 76'0 /COPY TO: 1. )*/ APPELLANT 2. +,)*/ RESPONDENT 3. / 80 () /CIT(A)-2, CHENNAI-34 4. PRINCIPAL CIT- 1, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.