K.Dhanalakshmi, Cuddalore V. ITO, Cuddalore

ITA 1620/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8128 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 13-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Section: 54F

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 ./ ITA NO.1620/MDS/2015 ( )( / ASSESSMENT YEAR : 2007-08 SMT. K. DHANALAKSHMI, NO.2, PENNAIYARU STREET, MANJAKUPPAM, CUDDALORE 607 001. PAN : AKDPD 8339 C V. THE INCOME TAX OFFICER, WARD I(1), O/O THE JOINT COMMISSIONER OF INCOME TAX, S.N. CHAVADI, CUDDALORE-607 002. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. V. PARAMESWARAN, CA SH. M. ANANTHA KRISHNAN, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 1 / 2% / DATE OF HEARING : 21.12.2015 3') / 2% / DATE OF PRONOUNCEMENT : 05.02.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERR Y, DATED 26.02.2015 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.1620/MDS/15 2. SHRI V. PARAMESWARAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTION 54F OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT' ). THE ASSESSEE CONSTRUCTED A RESIDENTIAL HOUSE BY UTILIZING THE SA LE CONSIDERATION AND CLAIMED EXEMPTION UNDER SECTION 54F OF THE ACT. HOWEVER, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE ON THE GROUND THAT THE ASSESSEE HAS CONSTRUCTED A MARRIAGE HALL, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTI ON UNDER SECTION 54F OF THE ACT. REFERRING TO THE COPY OF THE BUILD ING PLAN APPROVED BY CUDDALORE MUNICIPALITY, THE LD. REPRESENTATIVE C LARIFIED THAT THE CUDDALORE MUNICIPALITY APPROVED FOR RESIDENTIAL HOU SE AND IN FACT, A RESIDENTIAL BUILDING WAS CONSTRUCTED. AFTER COMPLE TION OF THE RESIDENTIAL BUILDING, THE SAME WAS CONVERTED INTO K ALYANA MANDAPAM. THEREFORE, ACCORDING TO THE LD. REPRESENT ATIVE, ONCE THE ASSESSEE HAS CONSTRUCTED RESIDENTIAL HOUSE AS P ER APPROVED PLAN, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F OF THE ACT AND THE SUBSEQUENT CONVERSION CANNOT BE A R EASON TO DISALLOW THE CLAIM OF THE ASSESSEE. THE LD. REPRES ENTATIVE PLACED HIS RELIANCE ON THE DECISION OF HYDERABAD BENCH OF THIS TRIBUNAL IN N. REVATHI V. ITO (2015) 153 ITD 285 AND SUBMITTED THAT ON 3 I.T.A. NO.1620/MDS/15 IDENTICAL CIRCUMSTANCES, THE HYDERABAD BENCH HELD T HAT MERELY BECAUSE THE BUILDING IS USED AS KALYANA MANDAPAM, E XEMPTION UNDER SECTION 54F OF THE ACT CANNOT BE DENIED. 3. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT EXEMPTION UNDER SECT ION 54F OF THE ACT IS GRANTED WHEN THE ASSESSEE PURCHASED OR CONST RUCTED A RESIDENTIAL HOUSE IN INDIA. IN THE CASE BEFORE US, EVEN THOUGH THE APPROVED PLAN WAS FOR RESIDENTIAL BUILDING, THE ASS ESSEE ADMITTED BEFORE THE ASSESSING OFFICER THAT SHE CONSTRUCTED A MARRIAGE HALL BY UTILIZING THE SALE PROCEEDS OF THE LAND. REFERRING TO THE COPY OF THE PROPERTY ASSESSMENT, THE LD. D.R. SUBMITTED THAT TH E PROPERTY WAS ASSESSED AS MARRIAGE HALL WITH EFFECT FROM 01.04.20 08. THEREFORE, EVEN THOUGH THE BUILDING WAS APPROVED AS RESIDENTIA L HOUSE, IT WAS NOT CONSTRUCTED AS RESIDENTIAL HOUSE, IT WAS CONSTR UCTED AS MARRIAGE HALL AND THE ASSESSMENT WAS ALSO MADE AS MARRIAGE H ALL. ACCORDING TO THE LD. D.R., SINCE THE ASSESSEE HAS C ONSTRUCTED MARRIAGE HALL, SHE CANNOT CLAIM ANY EXEMPTION UNDER SECTION 54F OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ON THE BASIS OF 4 I.T.A. NO.1620/MDS/15 THE APPROVED BUILDING PLAN, THE ASSESSEE CLAIMS THA T A RESIDENTIAL HOUSE WAS CONSTRUCTED. HOWEVER, IT WAS SUBSEQUENTL Y CONVERTED AS MARRIAGE HALL. WE ARE UNABLE TO UPHOLD THE CONT ENTION OF THE ASSESSEE. ADMITTEDLY, CUDDALORE MUNICIPALITY APPRO VED THE CONSTRUCTION OF RESIDENTIAL HOUSE ON 28.02.2007 AND IT WAS COMPLETED BEFORE 01.04.2008. NO ASSESSMENT WAS MADE BY THE CUDDALORE MUNICIPALITY AS RESIDENTIAL HOUSE. IF TH E CLAIM OF THE ASSESSEE THAT A RESIDENTIAL HOUSE WAS CONSTRUCTED A ND THAT WAS CONVERTED INTO MARRIAGE HALL IS TRUE, THEN THE FIRS T ASSESSMENT WOULD BE AS RESIDENTIAL HOUSE. UNFORTUNATELY, NO SUCH AS SESSMENT WAS MADE BY CUDDALORE MUNICIPALITY AFTER COMPLETION OF RESIDENTIAL HOUSE. THE FIRST ASSESSMENT ITSELF IS MARRIAGE HAL L. THEREFORE, IT IS OBVIOUS THAT THE ASSESSEE HAS CONSTRUCTED ONLY MARR IAGE HALL AND NOT RESIDENTIAL HOUSE. 5. WE HAVE CAREFULLY GONE THROUGH THE DECISION OF H YDERABAD BENCH IN N. REVATHI (SUPRA). THE HYDERABAD BENCH H AS CATEGORICALLY OBSERVED AT PARA 11OF ITS ORDER THAT IF THE CONSTRUCTION IS MADE IN SUCH A WAY THAT IT IS NOT NORMALLY FOR R ESIDENTIAL USE BUT PURELY COMMERCIAL USE, THEN IT CANNOT BE CONSIDERED TO BE A RESIDENTIAL HOUSE. THEREFORE, THE PRIMARY FACT WHI CH IS REQUIRED TO 5 I.T.A. NO.1620/MDS/15 BE EXAMINED IS WHETHER THE BUILDING IS CONSTRUCTED FOR RESIDENTIAL USE OR NOT. IN THE CASE BEFORE US, EVEN THOUGH THE BUILDING PLAN WAS APPROVED FOR CONSTRUCTION OF RESIDENTIAL HOUSE, THE FIRST ASSESSMENT WAS MADE BY THE MUNICIPALITY AS MARRIAGE HALL. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE DECISION OF HYDERABAD BENCH MAY NOT BE APPLICABLE T O THE FACTS OF THE CASE. IN VIEW OF THE ABOVE FACTUAL ASPECT, THI S TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE ORDER OF THE CIT(APPEALS) IS CONFI RMED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED ON 5 TH FEBRUARY, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 5 TH FEBRUARY, 2016. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A), PUDUCHERRY 4. 1 92 /CIT, PUDUCHERRY 5. 7: -2 /DR 6. ;( < /GF.