R.Narayanasamy, CHENNAI V. ITO, Cuddalore

ITA 1397/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4558 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 20-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDAKUMAR IRS
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Capital asset; Benefit of exemption
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C (SMC) BENCH : CHENNAI [BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER ] ./I.T.A. NO.1397/MDS/2016 / ASSESSMENT YEAR : 2008-2009. SHRI. R. NARAYANASAMY, NO.28, VATAKKURATHA VEETHI, TURAIYUR 621 010. TRICHY DIST. [PAN AADPN 4478Q] VS. THE INCOME TAX OFFICER, WARD I(2) CUDDALORE ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI. A.S. SRIRAMAN, ADVOCATE /RESPONDENT BY : SHRI. V. NANDAKUMAR, IRS, JCIT. /DATE OF HEARING : 18-05-2017 /DATE OF PRONOUNCEMENT : 18-05-2017 / O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)- PUDUC HERRY, IN APPEAL NO.584/CIT(A)-PDY/2013-2014, DATED 05.04.2016 FOR T HE ASSESSMENT YEAR 2008-2009. 2. SHRI. A.S. SRIRAMAN REPRESENTED ON BEHALF OF THE AS SESSEE AND SHRI. V. NANDAKUMAR REPRESENTED ON BEHALF OF TH E REVENUE. ITA NO. 1397/MDS/2016 :- 2 -: 3. IT WAS SUBMITTED BY THE LD. AUTHORISED REPRESENTATI VE THAT THE ONLY ISSUE IN THE APPEAL IS AGAINST THE ACTION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN SUSTAINING THE REJECTION OF THE CLAIM OF DEDUCTION U/S. 54F OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT) IN THE COMPUTATION OF LONG TERM CAPITA L GAINS. IT WAS SUBMITTED THAT THE ASSESSEE IS AN INDIVIDUAL AND HA D SOLD TWO PIECES OF LANDS AT VELLI THIRUMUTHAM VILLAGE, SRIRANGAM TA LUK FOR A CONSIDERATION OF G20,54,645/- ON 22.11.2007. AFTER DEDUCTING THE INDEXED COST OF THE LAND, LONG TERM CAPITAL GAINS W AS DETERMINED AT G17,68,425/-. ASSESSEE HAD PURCHASED A FLAT ON THE SECOND FLOOR, J.C. ABODE AT A CONSIDERATION OF G17,27,657/-. ASSESSEE HAD MADE A INITIAL PAYMENT FOR THE PURCHASE OF THE SAID FLAT ON 10.04. 2006 AND THE FINAL PAYMENT WAS MADE ON 22.11.2007 FOR AN AMOUNT OF G27 ,379/-. ASSESSEE HAD OBTAINED UNDIVIDED INTEREST IN THE LAN D REGISTERED IN THE NAME OF THE ASSESSEE IN RESPECT OF THE FLAT PURCHAS ED ON 14.06.2006 AND THE BALANCE PAYMENT HAVE BEEN MADE IN RESPECT O F THE CONSTRUCTION OF THE FLAT ON VARIOUS DATES AS BEEN E XTRACTED IN THE CHART IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AT PAGE 5 AT PARA 7.2. AS PER THE AGREEMENT BETWEEN ASSESS EE AND THE PROMOTER, THE CONSTRUCTION OF THE FLAT WAS TO BE CO MPLETED WITHIN 30.06.2007. THE COMPLETION CERTIFICATE OF THE BUI LDER SHOWED THAT THE CONSTRUCTION OF THE PROPERTY WAS COMPLETED ON 03.03 .2008. IT WAS ITA NO. 1397/MDS/2016 :- 3 -: SUBMITTED THAT ON THE GROUND THAT THE FLAT HAD BEEN PURCHASED BY THE ASSESSEE MORE THAN ONE YEAR BEFORE THE SALE OF THE PLOTS OF THE LAND ON WHICH CAPITAL GAINS WERE LEVIABLE. LD. ASSESSIN G OFFICER DENIED THE ASSESSEE BENEFIT OF EXEMPTION U/S. 54F OF THE ACT. ON APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) REJECTED ASSES SEES CLAIM ON THE GROUND THAT NO ADDITIONAL OR SUPPORTING EVIDENC E HAD BEEN PRODUCED OTHER THAN THE COMPLETION CERTIFICATE OF T HE BUILDER, THAT THE CONSTRUCTION OF THE PROPERTY WAS COMPLETED ON 03.3. 2008. IT WAS SUBMITTED THAT AS THE LAST PAYMENT FOR THE PURCHASE /CONSTRUCTION OF THE FLAT WAS WITHIN ONE YEAR PROVIDED BEFORE THE SA LE OF THE CAPITAL ASSET WHICH GAVE RISE TO THE LEVY OF CAPITAL GAINS, ASSESSEE WAS ENTITLED FOR THE CLAIM OF DEDUCTION U/S. 54F OF THE ACT. 4. IN REPLY, THE LD. DEPARTMENTAL REPRESENTATIVE VEHE MENTLY SUPPORTED THE ORDERS OF THE LD. ASSESSING OFFICER A ND THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS PER TH E PROVISIONS OF SEC. 54F OF THE ACT, IF THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED OR WITHIN A PERIOD OF THREE YE ARS AFTER THAT DATE CONSTRUCTED, ONE RESIDENTIAL HOUSE, THEN ASSESSEE I S ENTITLED FOR BENEFIT OF DEDUCTION U/S. 54F OF THE ACT. ADMITTEDLY, THE DATE OF SALE OF CAPITAL ASSET IS 22.11.2007. THUS, AS PER THE PROVISIONS O F SEC. 54F(1) OF THE ITA NO. 1397/MDS/2016 :- 4 -: ACT, IF THE ASSESSEE HAS WITHIN THE PERIOD FROM 22. 11.2006 AND 22.11.2009 PURCHASED OR HAS CONSTRUCTED A RESIDENTI AL HOUSE BEFORE 22.11.2010, HE WOULD BE ENTITLED FOR BENEFIT OF DED UCTION U/S. 54F OF THE ACT. THE LAST PAYMENT MADE BY THE ASSESSEE TO THE BUILDER OF THE FLAT ADMITTEDLY IS 22.11.2007 WHICH WAS THE SAME DA TE ON WHICH THE ASSESSEE TRANSFERRED THE CAPITAL ASSET. THIS FACT OF THE PAYMENT TO THE BUILDER ON 22.11.2007 STANDS UNDISPUTED. THE COMPL ETION CERTIFICATE BY THE BUILDER IS ALSO DATED 03.03.2008. THIS HAD NOT BEEN DISPUTED OR DISPROVED. THUS CLEARLY THE PAYMENTS TO THE BUIL DER ARE WITHIN THE PERIOD STIPULATED U/S. 54F(1) OF THE ACT. THIS BEI NG SO, I AM OF THE VIEW THAT ASSESSEE IS ENTITLED TO DEDUCTION U/S. 54 F OF THE ACT AS CLAIMED. IN THE CIRCUMSTANCES, ORDERS OF THE LOWER AUTHORITIES STANDS REVERSED AND LD. ASSESSING OFFICER IS DIRECTED TO G RANT ASSESSEE THE BENEFIT OF DEDUCTION U/S. 54F OF THE ACT AS CLAIMED . 6. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON THURSDAY, THE 18TH OF MAY , 2017, AT CHENNAI. SD/- ( GEORGE MATHAN) / JUDICIAL MEMBER !' / CHENNAI #$ / DATED:18TH MAY, 2017 KV $%&& '(&)( / COPY TO: & 1. / APPELLANT 3. & *&+, / CIT(A) 5. (-.& / / DR 2. / RESPONDENT 4. & * / CIT 6. .0&1 / GF ITA NO. 1397/MDS/2016 :- 5 -: