ITO Non Corporate Ward 2(1), CHENNAI V. A.M.K.Shahul Hameed, CHENNAI

ITA 1253/CHNY/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9798 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 54F

Judgement Text

आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी जी. म॑॑जुनाथा, लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No.1253/Chny/2019 िनधाŊरण वषŊ/Assessment Years: 2012-13 The Income Tax Officer, Non Corporate Ward 2(1), Chennai 600 034. Vs. Shri A.M.K. Shahul Hameed, Old No. 5, New No. 9, Rangan Street, T. Nagar, Chennai 600 017. [PAN:AABPH6895F] (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri AR V. Sreenivasan, Addl. CIT ŮȑथŎ की ओर से/Respondent by : Shri B. Ramakrishnan, C.A. सुनवाई की तारीख/ Date of hearing : 03.01.2022 घोषणा की तारीख /Date of Pronouncement : 24.01.2022 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: The appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Chennai dated 11.01.2019 relevant to the assessment year 2012-13. 2. Brief facts of the case are that the assessee filed his return of income for the assessment year 2012-13 on 01.06.2013 admitting total income of ₹.10,82,700/-. The case was selected for scrutiny and after following due process, the assessment was completed under section I.T.A. No.1253/Chny/19 2 143(3) r.w.s. 147 of the Income Tax Act, 1961 [“Act” in short] by assessing the income of the assessee at ₹.2,68,26,030/- consequent to the denial of benefit claimed under section 54F of the Act on two counts viz., (i) delay in completion of construction of residential units and (ii) deduction was claimed on multiple properties. On appeal, by following the decisions Hon’ble Jurisdictional High Court, the ld. CIT(A) has held that the assessee is eligible for the deduction under section 54F of the Act. 3. Aggrieved, the Revenue is in appeal before the Tribunal. By relying upon the grounds appeal, the ld. DR has strongly supported the assessment order passed by the Assessing Officer. 4. On the other hand, the ld. Counsel for the assessee has strongly supported the order passed by the ld. CIT(A) besides relying upon the decisions of the Hon’ble Jurisdictional High Court. 5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Against the claim of deduction under section 54/54F of the Act, the Assessing Officer denied the claim of the assessee on the ground that the said I.T.A. No.1253/Chny/19 3 property was not completed even as on 04.03.2016. On appeal, after considering the submissions of the assessee, the ld. CIT(A) has observed as under: 4.2.1 As regards the issue of delay in completion of construction of residential units it is the contention of the appellant that the delay was attributable to the builder. To resolve the issue on hand it is pertinent here to refer to the decision of the Hon’ble High Court of Madras in the case of CIT v. Sardarmal Kothari [2008] 302 ITR 286 (Madras) wherein it was declared as follows: In order to get the benefit under section 54F, the assessee need not complete the construction of the house and occupy the same. Circular No. 667, dated 18.10.1993 ([1993] 204 ITR (St.) 103) would not in any way advance the case of the revenue to come to the conclusion that in order to have the benefit under section 54F, the construction should have been completed. This view was further elaborated by the Hon’ble High Court of Karnataka in the case of CIT vs. B.S. Shanthakumari (supra) as follows: Section 54F is a beneficial provision which promotes for construction of residential house. Such provision has to be construed liberally for achieving the purpose for which it is incorporated in the statute. The intention of the Legislature would clearly indicate that it was to encourage investments in the acquisition of a residential plot and completion of construction of a residential house in the plot so acquired A bare perusal of said provision does not even remotely suggest that it intends to convey that such construction should be completed in all respects in three years and/or make it habitable. The essence of said provision is to ensure that the assessee who received the consideration would invest same by constructing a residential house. Once it is established that consideration so received on transfer of long-term capital asset has been invested in constructing a residential house, it would satisfy the ingredients of section 54F. I.T.A. No.1253/Chny/19 4 Respectfully following the decision of the jurisdictional High Court in the case of CIT Vs. Sardarmal Kothari (supra) and the view endorsed by the Hon'ble High Court of Karnataka in the case of CIT Vs. B.S. Shanthakumari (supra), I hold that the appellant is eligible for the deduction u/s.54F even though the construction of the new asset was not completed within three years by the appellant. The appellant succeeds on this ground. 6. While holding that the assessee is eligible for claiming deduction under section 54F of the Act even though the construction of the new asset was not completed within three years, the ld. CIT(A) has respectfully followed the decision of the Hon’ble Jurisdictional High Court in the case of CIT v. Sardarmal Kothari 302 ITR 286 (Mad), which was duly endorsed by the Hon’ble High Court of Karnataka in the case of CIT v. B.S. Shanthakumari [2015] 233 Taxman 347 (Karnataka). Thus, we find no infirmity in the order passed by the ld. CIT(A). 7. With regard to the denial of deduction claimed on multiple properties under section 54F of the Act, the ld.CIT(A) has observed and held as under: “4.2.1 With regard to the issue of the appellant claiming deduction on multiple properties, the appellant contends that the word 'a' appearing in the section 54F should not be construed in singular, but should be understood in plural. It is relevant here to refer to the decision of the Hon'ble High Court of Madras in the case of CIT Vs. V.R. Karpagam (supra) wherein it was declared as follows: I.T.A. No.1253/Chny/19 5 The amendment to section 54F by the Finance (No. 2) Act, 2014 which will come into effect only from 01-04-2015, makes it very clear that the benefit of section 54F will be applicable to constructed, one residential house in India and that clarifies the situation in the present case, i.e, post amendment, viz. from 01- 04-2015, the benefit of section 54F will be applicable to one residential house in India. Prior to the said amendment, it is clear that a residential house would include multiple flats/residential units. In the decision in Dr. Smt. P. K. Vasanthi Rangarajan v. CIT (23 taxmann.com 299/209 Taxman 628) this Court, while dealing with the benefit of exemption under Section 54F, followed the above-said decision of this Court in T.C.(A)No.656 of 2005 and granted the benefit to the assessee under section 54F on the investment made in the four flats. Hence, the above-said decisions of this Court make it clear that the property should be assessed as one unit, even though different flats are available. Respectfully following the decision of the jurisdictional High Court in the case of CIT Vs. V.R. Karpagam (supra), I hold that the appellant is eligible for the deduction u/s.54F though the deduction was claimed on multiple properties. The appellant succeeds on this ground. 8. On perusal of the case law relied on by the ld. CIT(A) in his appellate order, we find that the ld. CIT(A) has rightly followed the decision of the Hon’ble Jurisdictional High Court in the case of CIT v. V.R. Karpagam 373 ITR 127 (Mad), wherein, the Hon’ble Madras High Court has referred to the decision taken by the Hon’ble Karnataka High Court in the case of CIT v. Smt. K.G. Rukminiamma [2011] 331 ITR 211 (Kar.) to hold that the assessee is eligible for the deduction claimed under section 54F of the Act. The ld. DR could not controvert the above decisions of various High Courts. Thus, the ground raised by I.T.A. No.1253/Chny/19 6 the Revenue is devoid of merits and accordingly, the grounds raised by the Revenue are dismissed. 9. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on 24 th January, 2022 at Chennai. Sd/- Sd/- [जी. म॑जुनाथा, लेखा सद˟] [वी दुगाŊ राव, Ɋाियक सद˟] (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 24.01.2022 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ (अपील)/CIT(A), 4. आयकर आयुƅ/CIT, 5. िवभागीय Ůितिनिध/DR & 6. गाडŊ फाईल/GF.