Smt. Meenakshi Sivaraman, CHENNAI V. ITO, CHENNAI

ITA 1478/CHNY/2008

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1291 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 04-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: V D GOPAL
• Keywords: Cost of acquisition
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 1478/MDS/2008 ASSESSMENT YEAR : 2005-06 SMT. MEENAKSHI SIVARAMAN, 18, AGAJA, NEW NO.13, OLD NO. 6, RAMAN STREET, T. NAGAR, CHENNAI-600 017. V. THE INCOME-TAX OFFICER, WARD-I(3), CHENNAI. (PAN: AAKPM4478N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.D. GOPAL RESPONDENT BY : SHRI P.B. SEKARAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-VI, CHENNAI IN ITA NO.115/07-08 DATED 25-04-2008 FOR THE ASSESSMENT YEAR 2005-06. 2. SHRI V.D. GOPAL, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI P.B. SEKARAN, LEARNED CIT-DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE ASSESSEE IS AN INDIVIDUAL. IT WAS THE SUBMISSION T HAT THE ASSESSEE OWNED 3 PLOTS OF LAND AT VELACHERY WHICH WERE SOLD DURING THE REL EVANT ASSESSMENT YEAR FOR A I.T.A. NO.1478/MDS/2008 2 TOTAL CONSIDERATION OF ` 41,66,838/-. IT WAS THE FURTHER SUBMISSION THAT T HE ASSESSEE ALSO OWNED TWO FLATS ONE BEING IN A BUILDI NG CALLED HARRIS TOWERS AND ANOTHER IN A BUILDING CALLED HASTI TOWERS. THE F LAT IN HASTI TOWERS WAS ALSO SOLD DURING THE RELEVANT ASSESSMENT YEAR FOR A TOTA L SALE CONSIDERATION OF ` 4,90,000/-. THE ASSESSEE HAD PURCHASED THE UNDIVIDE D INTEREST IN A PROPERTY WHICH ALSO CONSISTED OF TWO HOUSES, BEING GROUND FL OOR AND FIRST FLOOR DURING THE RELEVANT ASSESSMENT YEAR. THE ASSESSEE HAD CLAIME D EXEMPTION UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 IN RESPECT OF THE H ASTI TOWER FLAT WHICH WAS SOLD AGAINST THE PURCHASE OF THE NEW PROPERTY PURCH ASED IN CHENNAI. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD PURCHASED THE FIRS T FLOOR OF THE NEW PROPERTY FOR A TOTAL CONSIDERATION OF ` 59,95,100/- AND THE GROUND FLOOR WAS PURCHASED FR A TOTAL CONSIDERATION OF ` 49,05,100/-. IT WAS THE SUBMISSION THAT IN THE CO URSE OF ASSESSMENT PROCEEDINGS THOUGH THE ASSESSEE HAD O FFERED THE CAPITAL GAINS IN RESPECT OF THE HASTI TOWER FLAT AT ` 2,09,893/-. THE ASSESSING OFFICER WAS FAIR ENOUGH TO COMPUTE THE ACTUAL CAPITAL GAINS AT ` 1,99,609/-. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HOWEVER FAILE D TO GRANT THE ASSESSEE THE CLAIM OF SET OFF OF THE SALE CONSIDERATION RECEIVED IN RESPECT OF THE THREE PLOTS TO THE EXTENT OF ` 41,66,838/- AGAINST THE PURCHASE OF THE NEW PROPER TY AT ABIRAMAPURAM, CHENNAI BY HOLDING THAT WHEN THE PLOT S WERE SOLD THE ASSESSEE HAD ALREADY PURCHASED AND WAS THE OWNER OF THE PROP ERTY AT ABIRAMAPURAM, CHENNAI. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER FAILED TO APPRECIATE I.T.A. NO.1478/MDS/2008 3 THAT THOUGH THE ASSESSEE HAD PURCHASED THE FLAT AT ABIRAMAPURAM, STILL AS PER THE PROVISIONS OF SECTION 54F AS THERE WAS A DIFFER ENTIAL AMOUNT AVAILABLE IN RESPECT OF THE PURCHASE OF THE FLAT AT ABIRAMAPURAM AFTER THE SET OFF OF THE SALE PROCEEDS OF THE HASTI TOWER FLAT TO THE SALE PROCEE DS OF THE THREE PLOTS WAS AVAILABLE TO BE SET OFF IN VIEW OF THE PROVISIONS O F SECTION 54F AS THE TRANSACTION HAD TAKEN PLACE WITHIN ONE YEAR PRIOR TO THE DATE O F SALE. IT WAS THE FURTHER SUBMISSION THAT ALL THESE SUBMISSIONS WERE NOT BEFO RE THE ASSESSING OFFICER INSOFAR AS ALL THE EVIDENCES HAD NOT BEEN PRODUCED BEFORE THE ASSESSING OFFICER WHICH WERE IN THE NATURE OF THE PURCHASE DEEDS AS A LSO OTHER CONNECTED DOCUMENTS WHICH WERE PLACED IN THE PAPER BOOK. IT WAS ALSO THE SUBMISSION THAT THE CLAIM OF THE ASSESSING OFFICER THAT THE AS SESSEE WAS ALREADY IN POSSESSION OF MORE THAN ONE FLAT WOULD NOT SURVIVE IN VIEW OF THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF D. BAS APPA . IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT HE HAD N O OBJECTION IF THE ISSUES WERE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR R E-ADJUDICATION. 4. IN REPLY, THE LEARNED DR SUBMITTED THAT THE ASSE SSEE HAD BEEN GRANTED ADEQUATE OPPORTUNITY TO PRODUCE ALL THE EVIDENCES I N THE COURSE OF ASSESSMENT. IT WAS THE SUBMISSION THAT THE ORDER OF THE LEARNED CIT(A) WAS LIABLE TO BE SUSTAINED. I.T.A. NO.1478/MDS/2008 4 5. IN REPLY, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE EVIDENCES WERE PRODUCED BEFORE THE LEARNED CIT(A) W HO HOWEVER FAILED TO CONSIDER THE SAME IN THE RIGHT PERSPECTIVE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS T HE EVIDENCES WHICH HAVE NOW BEEN PRODUCED BEFORE US WERE NOT BEFORE THE LEA RNED ASSESSING OFFICER, IT WOULD NOT BE APPROPRIATE ON THE PART OF THIS TRIBUN AL TO EXAMINE SUCH EVIDENCES. IT IS ALSO NOTICED THAT WITHOUT THESE EVIDENCES IT WOULD NOT BE POSSIBLE TO REACH A CORRECT APPRECIATION OF THE FACTS. IN ANY CASE THE FACT THAT THE ASSESSING OFFICER HAS BEEN VERY FAIR IS EVIDENT FROM THE FACT THAT TH E ASSESSING OFFICER HAS COMPUTED THE CORRECT CAPITAL GAINS IN REGARD TO THE HASTI TOWER FLAT AND HAS NOT JUST BLINDLY ACCEPTED THE CAPITAL GAINS DECLARATION GIVEN BY THE ASSESSEE. THIS ACT OF THE ASSESSING OFFICER REQUIRES APPRECIATION. OBVIOUSLY, IF ALL THE EVIDENCES WERE BEFORE THE ASSESSING OFFICER HE WOULD HAVE BEE N IN A POSITION TO DRAW PROPER INFERENCES AS REGARDS THE LEVY OF CAPITAL GA INS. IN ANY CASE, EVEN AS PER THE PROVISIONS OF SECTION 54F AN ASSESSEE IS ENTITL ED TO THE BENEFIT OF SET OFF UPTO THE PURCHASE COST OF THE NEW HOUSE PROVIDED THE PUR CHASE HAS TAKEN PLACE WITHIN ONE YEAR PRIOR TO THE TRANSFER OF THE SOLD P ROPERTY. IT IS ALSO NOTICED THAT EXAMINATION OF THIS ASPECT WOULD REQUIRE THE EXAMIN ATION OF THE PURCHASE DOCUMENTS AND OTHER CONNECTED DOCUMENTS. IT WOULD ALSO HAVE TO BE EXAMINED AS TO WHETHER THE PROPERTY PURCHASED BY THE ASSESSE E IN ABIRAMAPURAM IS A SINGLE HOUSE OR TWO HOUSES AS ALSO THE ISSUE AS TO WHETHER FOR THE PURPOSE OF I.T.A. NO.1478/MDS/2008 5 SECTION 54F THE PROPERTY PURCHASED BY THE ASSESSEE IN ABIRAMAPURAM IS ONE RESIDENTIAL HOUSE OR NOT AND WHEN SUCH ACTUAL PURCH ASE WAS COMPLETED, ESPECIALLY IN VIEW OF THE FACT THAT THE GROUND FLOO R OF THE SAID PROPERTY ALONG WITH THE UNDIVIDED INTEREST HAS BEEN PURCHASED BY THE AS SESSEE ONLY ON 28.01.2005. IN THE CIRCUMSTANCES, THE ISSUES IN THIS APPEAL ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTIN G THE ASSESSEE ADEQUATE OPPORTUNITY TO SUBSTANTIATE HER CASE. IN THE CIRCU MSTANCES, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 07/01/2 011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 7 TH JANUARY, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE