DCIT, CHENNAI V. Ajit Thomas, CHENNAI

ITA 1453/CHNY/2015

• Counselvise Citation: 145321714 RSA 2015
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 09-09-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 15-06-2015
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: T BANUSEKARC A
• Section: 54F; 27; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1453 /MDS./2015 ( !' #' / ASSESSMENT YEAR :2012-13) DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(1), CHENNAI 600 034. VS. MR.AJIT THOMAS , DIR.A.V.THOMAS LEATHER & ALLIED, 64, RUKMANI LAKSHMIPATHY SALAI, EGMORE, CHENNAI 600 008. PAN AAPT 8581 H ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : MR.DR.B.NISCHAL, JCIT, D.R ()$% & ' / RESPONDENT BY : MR.T.BANUSEKAR, C.A * + & ,- / DATE OF HEARING : 09.09.2015 .# & ,- /DATE OF PRONOUNCEMENT : 06.11.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, CHENNA I DATED ITA NO.1453/MDS/2015 2 26.02.2015 IN ITA NO.256/14-15/A-1 PASSED UNDER SEC .143(3) READ WITH SECTION SEC. 250 OF THE ACT. 2. THE REVENUE HAS RAISED THREE ELABORATE GROUNDS IN ITS APPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE REVENUE I S AGGRIEVED BY THE ORDER OF THE LD. CIT (A), WHO HAD ALLOWED DEDUCTION U/S.54F TO THE TUNE OF ` 2,47,52,000/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 20.07.201 2 ADMITTING HIS TOTAL INCOME AS ` 78,57,110/-. THE RETURN WAS TAKEN FOR SCRUTINY AND ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 2 8.11.2014 WHEREIN THE LD. ASSESSING OFFICER DISALLOWED THE CL AIM OF EXEMPTION BY THE ASSESSEE U/S.54F OF THE ACT IN RESPECT OF RE INVESTMENT MADE IN PURCHASE OF HOUSE PROPERTY. 4. THE LD. ASSESSING OFFICER DISALLOWED THE CLAIM OF EXEMPTION U/S.54F OF THE ACT BECAUSE ACCORDING TO HIM THE AS SESSEE WAS HOLDING MORE THAN ONE RESIDENTIAL HOUSE PROPERTY WH ICH WAS EVIDENT ITA NO.1453/MDS/2015 3 FROM THE INCOME FROM HOUSE PROPERTY SCHEDULE SUB MITTED BY THE ASSESSEE. THE ASSESSEE HAD EXPLAINED BEFORE THE LD. ASSESSING OFFICER THAT THE SECOND HOUSE PROPERTY NO.24, VIJAY ARAGHAVACHARI ROAD, T NAGAR, CHENNAI-17 WAS SETTLED BY HIM IN FAV OR OF HIS SPOUSE MRS.SHANTHI THOMAS ON 24.02.2003 VIDE SETTLEMENT DE ED. THEREFORE, THE PROPERTY IS NOW OWNED BY MRS.SHANTHI THOMAS WIT H ALL RIGHTS AND TITLES AND INTEREST OVER THE PROPERTY. ONLY FOR TH E LIMITED PURPOSE OF THE REQUIREMENTS U/S.4(1)(A) OF THE WEALTH TAX ACT, THE PROPERTY WAS INCLUDED IN THE WEALTH TAX ACT ASSESSMENT OF THE AS SESSEE. IT WAS THEREFORE ARGUED THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S.54F OF THE ACT BECAUSE AS ON THE DATE OF THE SALE, THE ASSESSEE HAS ONLY ONE RESIDENTIAL PROPERTY. HOWEVER, THE LD. ASSESSI NG OFFICER REJECTED THE CLAIM OF THE ASSESSEE BECAUSE AS PER SECTION 27 (I) OF THE INCOME TAX ACT OWNERSHIP OF THE PROPERTY LIES WITH THE ASS ESSEE. 5. ON APPEAL, THE LD. CIT (A) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER:- 4.2 I HAVE GONE THROUGH THE FACTS AND CIRCUMSTAN CES OF THE CASE. AS SEEN FROM THE FACTS OF THE CASE, BY THE TIME SHOLINGANAL LUR LAND WAS SOLD IN 2011, THE T.NAGAR PROPERTY WAS ALREADY TRANSFERRED BY THE APPELLANT TO HIS WIFE ITA NO.1453/MDS/2015 4 MRS.SHANTI THOMAS AS PER SETTLEMENT DEED DATED 24.2 .2003. AS SUCH, ON THE DATE OF TRANSFER OF SHOLINGANALLUR LAND THE APP ELLANT WAS HAVING ONLY ONE PROPERTY I.E., THE RESIDENTIAL HOUSE AT KODAIKANAL. THEREFORE, THE PRESUMPTION OF THE AO THAT THE APPELLANT WAS IN POS SESSION OF TWO RESIDENTIAL HOUSES ON THE DATE OF TRANSFER IS NOT T RUE. THE LD.AR BESIDES FILING THE SETTLEMENT DEED DATED 24.2.2003, HAS ALS O FILED THE DETAILS OF WATER SUPPLY RECEIPTS FROM CHENNAI METROPOLITAN WAT ER SUPPLY AND SEWERAGE BOARD(CMWSSB), RECEIPTS OF PROPERTY TAX TO THE CORPORATION OF CHENNAL, ELECTRICITY BILL AND ENCUMBRANCE CERTIFICA TE FROM REGISTRATION DEPARTMENT WHEREIN THE NAME OF THE OWNER WAS MENTIO NED AS SHANTI THOMAS INDICATING THAT MRS. SHANTI THOMAS WAS THE O WNER OF THE PROPERTY BY THE TIME SHOLINGANALLUR LAND WAS SOLD. THE ABOVE DETAILS SHOW THAT THE APPELLANT WAS NOT HAVING TWO HOUSES AT THE TIME OF TRANSFER OF SHOLINGANALLUR LAND PROPERTY. THE AO HAS ALSO NOT G IVEN ANY REASON AS TO WHY SHE HAS NOT BELIEVED THE SETTLEMENT DEED DATED 24.2.2003. THE AO SEEMS TO HAVE DENIED THE EXEMPTION ON THE GROUND TH AT AS PER S.27(1) THE APPELLANT IS A DEEMED OWNER OF THE PROPERTY AND HEN CE HE IS NOT ELIGIBLE FOR EXEMPTION U/S 54F. SHE HAS FAILED TO NOTE THAT S.27 (1) IS A DEEMING PROVISION APPLICABLE ONLY FOR SS.22 TO 26 IN COMPUT ING THE ANNUAL VALUE OF THE PROPERTY AND SUCH DEEMING PROVISION APPLICABLE ONLY FOR SS.22 TO 26 IN COMPUTING THE ANNUAL VALUE OF THE PROPERTY AND SUCH DEEMING PROVISIONS CANNOT BE EXTENDED TO DENY THE EXEMPTION U/S.54F OF THE ACT. IN VIEW OF THE ABOVE, L FIND THE DENIAL OF EXEMPTION OF S.54F IS N OT IN ORDER AND I DIRECT THE AO TO WITHDRAW THE DISALLOWANCE. 6. BEFORE US, THE LD. D.R. ARGUED IN FAVOUR OF THE ORD ER OF THE LD. ASSESSING OFFICER WHEREAS THE LD. A.R., RELIED UPON THE ORDER OF THE LD. CIT (A). ITA NO.1453/MDS/2015 5 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF T HE CASE, IT IS EVIDENT AND NOT DISPUTED THAT THE ASSESSEES SECOND HOUSE P ROPERTY AT 24, VIJAYARAGHAVACHARI ROAD, T NAGAR, CHENNAI-17 WAS TR ANSFERRED TO HIS WIFE VIDE SETTLEMENT DEED DURING THE YEAR 2003. THE LD. ASSESSING OFFICER HAS INVOKED THE DEEMING PROVISION S OF THE ACT TO HOLD THAT THE ASSESSEE IS THE OWNER OF THE PROPERTY . IT IS A WELL RECOGNIZED RULE OF INTERPRETATION ENDORSED BY VARIO US HIGHER JUDICIARIES THAT A FICTION CREATED BY ANY PROVISION S OF THE ACT CANNOT BE SUPER IMPOSED ON ANOTHER PROVISIONS OF THE ACT W HICH HAS A FICTION. SECTION.54F OF THE ACT IS A PROVISION GRA NTING DEDUCTION TO THE ASSESSEE AND THEREFORE, IT HAS A FICTION. HENCE, WH ILE INTERPRETING THE PROVISION 54F OF THE ACT, ANY OTHER PROVISION OF TH E ACT, WHICH HAS A FICTION, CANNOT BE SUPER IMPOSED. HENCE, IN THE GI VEN CASE BEFORE US, FOR THE PURPOSE OF SECTION.54F OF THE ACT, IT H AS TO BE CONSTRUED THAT THE ASSESSEE IS NOT THE OWNER OF THE RESIDENTI AL HOUSE AT 24, VIJAYARAGHAVACHARI ROAD, T NAGAR, CHENNAI-17 AND TH EREFORE HE HAS ONLY ONE HOUSE, ACCORDINGLY HE IS THE ENTITLED TO C LAIM OF EXEMPTION ITA NO.1453/MDS/2015 6 U/S.54F OF THE ACT AS HELD BY THE LD. CIT (A). HENC E, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD. CI T (A). 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 6 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 6 TH NOVEMBER, 2015. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. 7' 8+ /GF