V.Shyamanand, CHENNAI V. DCIT, CHENNAI

ITA 1214/CHNY/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3138 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 16-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.1214/CHNY/2017 ) *) / ASSESSMENT YEAR : 2013-14 SHRI V. SHYAMANAND, OLD NO.7, NEW NO.17, MANGESH STREET, T. NAGAR, CHENNAI - 600 017. PAN : AASPS 3207 R V. THE DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 2, CHENNAI - 600 034. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : NONE ./,- 0 1 / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 2 0 3% / DATE OF HEARING : 21.10.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 08.11.2019 / 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 03.03.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE NOTICE OF HEARING WAS SERVED ON THE ASSESSEE BY RPAD. THE REGISTRY HAS PLACED ON RECORD THE POSTAL ACKNOW LEDGEMENT AS PROOF OF SERVICE OF NOTICE. INSPITE OF SERVICE OF NOTICE BY RPAD, THE 2 I.T.A. NO.1214/CHNY/17 ASSESSEE CHOSE NOT TO APPEAR BEFORE THIS TRIBUNAL W HEN THE APPEAL WAS TAKEN UP FOR HEARING. THEREFORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOS E THE APPEAL ON MERIT. 3. SHRI AR.V. SREENIVASAN, THE LD. D.R. SUBMITTED T HAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISALLOWANCE OF T HE CLAIM OF THE ASSESSEE UNDER SECTION 54 OF THE INCOME-TAX ACT, 19 61 (IN SHORT 'THE ACT'). ACCORDING TO THE LD. D.R., THE ASSESSE E SOLD A PROPERTY AND CONSTRUCTED ANOTHER BUILDING. THE ASSESSEE SOL D THE LAND AT PADI FOR A SUM OF 2,03,00,000/- ON 24.01.2013. THE ASSESSEE ADMITTED CAPITAL GAIN OF 69,64,628/- AND CLAIMED EXEMPTION UNDER SECTION 54 OF THE ACT IN RESPECT OF A NEW HOUSE PRO PERTY. ACCORDING TO THE LD. D.R., THE COST OF CONSTRUCTION OF THE BU ILDING WAS 1,00,65,780/-. THE ASSESSING OFFICER FOUND THAT WH AT WAS SOLD BY THE ASSESSEE IS A VACANT LAND, THEREFORE, THE ASSES SEE CAN CLAIM DEDUCTION ONLY UNDER SECTION 54F OF THE ACT. ACCOR DING TO THE LD. D.R., THE ASSESSING OFFICER FOUND THAT THE MUNICIPA L CORPORATION OF CHENNAI ASSESSED THE PROPERTY AS NON-RESIDENTIAL. THEREFORE, THE ASSESSEE WAS FOUND TO BE NOT ENTITLED FOR DEDUCTION UNDER SECTION 54F ALSO. ON A QUERY FROM THE BENCH, AS PER THE VA LUATION REPORT, IT 3 I.T.A. NO.1214/CHNY/17 APPEARS THAT THE TOTAL BUILT-UP AREA WAS 7053.81 SQ .FT., OUT OF WHICH, 1021.25 SQ.FT. WAS FOUND TO BE COMMERCIAL, THEREFOR E, WHY PROPORTIONATE ALLOWANCE UNDER SECTION 54F OF THE AC T IN RESPECT OF RESIDENTIAL PORTION COULD BE ALLOWED? THE LD. D.R . SUBMITTED THAT THE PROPERTY WAS ASSESSED AS NON-RESIDENTIAL PROPER TY BY THE MUNICIPAL CORPORATION, THEREFORE, THE ASSESSEE IS N OT ENTITLED FOR DEDUCTION UNDER SECTION 54F ALSO. 4. HAVING HEARD THE LD. D.R., WE PERUSED THE MATERI AL AVAILABLE ON RECORD. THE ASSESSING OFFICER FOUND THAT THE AS SESSEE STARTED CONSTRUCTION OF THE PROPERTY BEFORE THE SALE OF PRO PERTY, THEREFORE, NOT ADMISSIBLE FOR DEDUCTION. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE LANGUAGE EMPLOYED IN SE CTION 54F OF THE ACT, THE ASSESSEE CAN CLAIM UNDER SECTION 54F OF TH E ACT IN RESPECT OF INVESTMENT MADE WITHIN A PERIOD OF ONE YEAR BEFO RE THE DATE OF SALE OF PROPERTY IN RESPECT OF PURCHASE. HOWEVER, THE ASSESSEE MAY ALSO CLAIM THE COST OF CONSTRUCTION IF IT IS MA DE WITHIN THREE YEARS AFTER THE DATE OF SALE OF THE PROPERTY. IN T HIS CASE, THE DATE OF PURCHASE OF NEW PROPERTY IS NOT AVAILABLE ON RECORD . THE ASSESSEE APPEARS TO HAVE INVESTED IN THE CONSTRUCTION OF THE PROPERTY FROM THE FINANCIAL YEAR 2011-12 TO 2013-14. MOREOVER, O UT OF TOTAL 4 I.T.A. NO.1214/CHNY/17 CONSTRUCTION OF 7053.81 SQ.FT., 1021.25 SQ.FT. OF T HE BUILDING APPEARS TO HAVE BEEN COMMERCIAL IN NATURE. FROM THE VALUAT ION REPORT, IT APPEARS THAT THERE ARE SOME RESIDENTIAL PORTIONS AL SO CONSTRUCTED. MOREOVER, COPY OF PROPERTY TAX ASSESSMENT IS NOT A VAILABLE ON RECORD. THEREFORE, THIS TRIBUNAL IS NOT IN A POSIT ION TO DECIDE WHETHER THE ASSESSEE HAS CONSTRUCTED THE BUILDING W ITHIN THE PRESCRIBED PERIOD OR THE ASSESSEE HAS CONSTRUCTED C OMMERCIAL COMPLEX OR A PORTION OF WHICH WAS COMMERCIAL IN NAT URE. 5. SINCE THE MATERIAL DOCUMENTS ARE NOT AVAILABLE O N RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSUE RAISED BY THE ASSESSEE IS REMITTED BACK TO THE FILE OF THE ASSESS ING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER AND B RING ON RECORD THE DATE OF PURCHASE OF THE NEW ASSET AND WHETHER T HE ASSESSEE HAS DEPOSITED IN THE CAPITAL GAIN ACCOUNT AS REQUIR ED UNDER STATUTORY PROVISION IN RESPECT OF THE CAPITAL GAIN WHICH WAS NOT UTILISED BEFORE THE DUE DATE OF RETURN OF INCOME AN D THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFT ER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5 I.T.A. NO.1214/CHNY/17 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 8 TH NOVEMBER, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 8 TH NOVEMBER, 2019. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-2, CHENNAI-34 4. PRINCIPAL CIT- 1, CHENNAI 5. 9< .3 /DR 6. =) > /GF.