ACIT, CHENNAI V. Shri K.Surendra Kumar, CHENNAI

ITA 1324/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51720 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 12-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K ME GHANATH CHOWHAN
• Assessee Lawyers: J K REDDY
• Section: 54F; 32; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 1324/MDS/2010 ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-III(1), CHENNAI. V. SHRI K. SURENDRA KUMAR, P/O M/S. SRINIVASA FOUNDATION, NO.7, VIDYODAYA FIRST CROSS STREET, T. NAGAR, CHENNAI-600 017. PAN : AAIPK7061R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.MEGHANATH CHOWHAN, JCIT RESPONDENT BY : SHRI J.K. REDDY, CA DATE OF HEARING : 10-08-2011 DATE OF PRONOUNCEMENT : 1 2/08/2011 O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-II, CHENNAI IN ITA NO. 160/08-09 DATED 23-04-2010 FOR THE ASSESSMENT YEAR 2006-07. I.T.A. NO. 1324/MDS/2010 2 2. SHRI K. MEGHANATH CHOWHAN, JCIT REPRESENTED ON B EHALF OF THE REVENUE AND SHRI J.K. REDDY, CA REPRESENTED ON BEHALF OF THE AS SESSEE. 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1.A ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE A.O. TO G IVE DEDUCTION U/S 54F OF ` 86,19,796/- BY RELYING ON THE JUDGEMENT OF ITAT MUMBAI BENCH IN THE CASE OF ITO V S RASIKLAL N. SATRA 280ITRSP 243. 1.B. THE LEARNED CIT(A) HAS FAILED TO NOTE THAT TH ERE ARE A NUMBER OF JUDGEMENTS TO THE EFFECT THAT THE ASSESSE E IS ELIGIBLE FOR DEDUCTION U/S 54F EVEN WHEN THE ASSESS EE ACQUIRES PARTIAL RIGHT IN RESIDENTIAL PROPERTY. 1.C THE LEARNED CIT(A) HAS FAILED TO APPRECIATE TH E RATIO OF THE JUDGEMENT OF ITAT DELHI-G BENCH IN THE CASE OF ITO MRS. KAMLESH BANSAL VS. ITO 109 TTJ 417 WHEREIN IT IS HE LD THAT THERE IS NO REQUIREMENT OF SECTION 54F THAT THE ASS ESSEE SHOULD BE EXCLUSIVE OWNER OF THE HOUSE IN ORDER TO CLAIM DEDUCTION U/S 54F. 1.D THE LEARNED CIT(A) HAS FAILED TO CONSIDER PROV ISO (B) TO SECTION 54F(1)(B) WHERE IT IS STIPULATED THAT IF TH E ASSESSEE OWNED THE OTHER HOUSE, THE INCOME OF WHICH IS CHARG EABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY THE ASS ESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 54F. 1.E THE LEARNED CIT(A) HAS FAILED TO CONSIDER THAT THE INCOME FROM HOUSE PROPERTY OF CO-OWNERS IS ALSO CHA RGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND AS SUCH I.T.A. NO. 1324/MDS/2010 3 THE ASSESSEES HAVING MORE THAN ONE CO-OWNED PROPERT Y ARE NOT ELIGIBLE TO CLAIM DEDUCTION U/S 54F. 2. THE APPELLANT CRAVES LEAVE TO, ADD TO AMEND OR ALTER THE ABOVE GROUNDS OF APPEAL AS MAY BE DEEMED NECESS ARY. 4. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE HAD SOLD SHARES HELD IN M/S. DREAMLAND GARDENS (MADRAS) PVT. LTD. FOR A SAL E CONSIDERATION OF ` 86,20,000/-. THE ASSESSEE HAD INVESTED IN THE RESI DENTIAL PROPERTY IN CHENNAI FOR A CONSIDERATION OF ` 1.32 CRORES. IT WAS THE SUBMISSION THAT THE ASSES SEE HAD CLAIMED DEDUCTION UNDER SECTION 54F OF THE INCOME T AX ACT, 1961. IT WAS SUBMITTED THAT AS IT WAS NOTICED THAT THE ASSESSEE OWNED TWO OTHER RESIDENTIAL PROPERTIES BEING 1/4 TH SHARE IN THE RESIDENTIAL PROPERTY ALONG WITH HIS M OTHER AND 1/2 SHARE IN ANOTHER RESIDENTIAL PROPERTY ALONG WIT H HIS SISTER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS THE C O-OWNER IN TWO HOUSE PROPERTIES AND AS THE ASSESSEE HELD MORE THAN ONE R ESIDENTIAL HOUSE, THE DEDUCTION U/S. 54F WAS NOT AVAILABLE TO THE ASSESSE E. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD HELD THAT THE ASSESSEE WAS E NTITLED TO THE DEDUCTION U/S 54F BY HOLDING THAT A JOINT OWNER OF A HOUSE COULD NOT BE HELD TO BE OWNING A RESIDENTIAL HOUSE. IT WAS THE SUBMISSION THAT ON I DENTICAL ISSUE THE ITAT CHENNAI BENCH IN THE CASE OF DR. P.K. VASANTHI RANGARAJAN I N ITA NO. 1753/MDS/2004 DATED 25-7-2005 HAD HELD THAT FOR THE PURPOSE OF SE CTION 54F, OWNING PART OF THE RESIDENTIAL PROPERTY, THOUGH NOT FULLY, AMOUNTS TO OWNING A RESIDENTIAL PROPERTY AS I.T.A. NO. 1324/MDS/2010 4 ENVISAGED IN SECTION 54F. IT WAS THE SUBMISSION TH AT THE LEARNED CIT(A) HAD RELIED UPON THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE OF ITO V. SASIKLAL N.SATRA REPORTED IN 280 ITR 243 (AT) (MUMBAI) TO HO LD THAT FOR THE PURPOSE OF SECTION 54F A PART OWNER CANNOT BE TREATED AS OWNIN G A RESIDENTIAL HOUSE. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE REVERSED. 5. IN REPLY, THE LEARNED AUTHORISED REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). HE ALSO DREW OUR ATTE NTION TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SETH BANARSI D ASS GUPTA V. CIT REPORTED IN 166 ITR 783 WHEREIN IT HAS BEEN HELD THAT A FRACTIO NAL OWNERSHIP WAS NOT SUFFICIENT FOR CLAIMING EVEN FRACTIONAL DEPRECIATIO N UNDER SECTION 32 OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET WE ARE NOW FACED WITH TWO CONTRARY JUDGMENTS ONE OF THE CO-ORDINAT E BENCH OF THIS TRIBUNAL AT CHENNAI WHICH IS IN FAVOUR OF THE REVENUE AND ANOTH ER BEING THE CO-ORDINATE BENCH OF THIS TRIBUNAL AT MUMBAI IN FAVOUR OF THE A SSESSEE. A PERUSAL OF THE DECISION OF THE DECISION OF THE CHENNAI BENCH IN TH E CASE OF DR. (SMT.) P.K. VASANTHI RANGARAJAN, REFERRED TO SUPRA, SHOWS THAT THE TRIBUNAL HAS NOT CONSIDERED THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF SETH BANARSI DASS GUPTA, REPORTED IN 166 ITR 783 (SC) WHEREAS TH E DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL AT MUMBAI HAS CONSIDERED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SETH BANARSI DASS GUPT A WHEREIN THE HON'BLE SUPREME COURT HAS INTERPRETED THE TERM OWN FOR TH E PURPOSE OF SECTION 32 AND I.T.A. NO. 1324/MDS/2010 5 WHEN A SIMILAR TERM IS AVAILABLE IN THE PROVISIONS OF SECTION 54 THE MEANING WOULD HAVE TO BE GIVEN TO THE TERM OWN IN SECTION 54F. IF THIS IS APPLIED, THEN IT WOULD BE THE DECISION OF THE CO-ORDINATE BENCH OF THIS TR IBUNAL AT MUMBAI IN THE CASE OF RASIKLAL N. SATRA WHICH WOULD HAVE TO BE APPLIED AN D AS THE ASSESSEE HEREIN IS ONLY A PART OWNER OF THE TWO RESIDENTIAL PROPERTIES , ONE BEING THE 1/4 TH OWNER WITH HIS OTHER AND THE ANOTHER BEING OWNER WITH HIS SISTER, THE ASSESSEE CANNOT BE HELD TO BE OWNING A RESIDENTIAL HOUSE AS REQUIRE D FOR THE PURPOSE OF THE BENEFIT U/S 54F. IN THE CIRCUMSTANCES, WE ARE OF T HE VIEW THAT THE FINDING OF THE LEARNED CIT(A) HOLDING THAT THE ASSESSEE IS ENTITLE D TO THE DEDUCTION U/S. 54F IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERF ERENCE. IN THE CIRCUMSTANCES, THE APPEAL OF THE REVENUE STANDS DISMISSED. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 12/08/2 011. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 12 TH AUGUST, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE