Sushila Gulecha, CHENNAI V. ITO, CHENNAI

ITA 1664/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7836 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 06-12-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 03-06-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Assessee Lawyers: D ANAND
• Keywords: Reopening of assessment
• Section: 54F

Judgement Text

, A/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A /SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A.NO.1664 /MDS./2016 ( / ASSESSMENT YEAR :2005-06) SMT.SUSHILA GULECHA, NO.402,MINT STREET, CHENNAI 600 079. VS. THE ITO, WARD VIII(3), CHENNAI-6. PAN AARPS 1707 R ( / APPELLANT ) ( / RESPONDENT ) ! ' # / APPELLANT BY : MR.D.ANAND,ADVOCATE $% ! ' # / RESPONDENT BY : MR.A.V.SREEKANTH,JCIT, D.R & ' ' ( ) / DATE OF HEARING : 07.12.2016 *+ ' ( ) /DATE OF PRONOUNCEMENT : 22.12.2016 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-5, CHENNA I DATED 28.03.2016 PERTAINING TO ASSESSMENT YEAR 2005-06. ITA NO. 1664/MDS/2016 2 2. THERE WAS A DELAY OF 07 DAYS IN FILING THIS AP PEAL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR C ONDONATION OF DELAY. WE HAVE HEARD THE LD. REPRESENTATIVE AND TH E LD. DR. THE LD.A.R EXPLAINED THAT THE DELAY WAS DUE TO MIXING O F THE DOCUMENTS IN THE OFFICE OF CHARTERED ACCOUNTANT AND THE DELAY IS FILING THE APPEAL IS NEITHER WILLFUL NOR WANTON AND ONLY DUE TO INADVERT ENCE. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEA L WITHIN THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY O F 7 DAYS IN FILING THE APPEAL AND ADMIT THE APPEAL. 3. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD TO CHALLENGING THE REOPENING OF ASSESSMENT. AT THE TIME OF HEARING, TH E LD.A.R DID NOT PRESS THIS GROUND. ACCORDINGLY, THIS GROUND IS DISMISSED AS NOT PRESSED. 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HA D INVESTED THE SALE PROCEEDS OF THE SHARES AMOUNTING TO RS.61.15 L ACS IN THE A.Y.2004-05 (LTCG) FOR PURCHASING LAND AND OLD BUIL DING AT ORMS ROAD VALUED AT RS.62.64 LACS. THE HOUSE WAS IN A DI LAPIDATED STATE ITA NO. 1664/MDS/2016 3 AND WAS NOT IN A HABITABLE CONDITION. AT THE TIME O F PURCHASING THE AFORESAID PROPERTY, THE APPELLANT HAD ONLY ONE RESI DENTIAL PROPERTY AT MINT STREET. THE ASSESSEE CLAIMED BENEFIT UNDER SE CTION 54F DURING THE A.Y.2005-06 ON SALE OF SHARES AND INVESTMENT IN RESIDENTIAL HOUSE DURING THE A.Y.2005-06. THE SAID CLAIM MADE B Y THE ASSESSEE WAS DISALLOWED BY THE ASSESSING OFFICER BY OBSERVIN G THAT THE ASSESSEE HAD NOT ACQUIRED ANY NEW RESIDENTIAL PROPE RTY AND THAT THE ASSESSEE ALREADY OWNS 2 HOUSE PROPERTY ONE AT ORME S ROAD AND THE OTHER AT MINT STREET. AGGRIEVED WITH THE ORDER OF L D. ASSESSING OFFICER, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A ). 4.1 ON APPEAL, LD.CIT(A) HAD SOUGHT DETAILS REGAR DING THE DATE OF PURCHASE AND SALE OF SHARES VIDE HIS LETTER DATED 8 .03.2016. THE ASSESSEE HAD REQUESTED FOR TIME TO FURNISH THE AFO RESAID VIDE HIS LETTER DATED 21.03.2016. THE LD.CIT(A) DECLINED TO GRANT TIME TO THE APPELLANT AND DISMISSED THE APPEAL BY OBSERVING THA T THE ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54F. THE ASSESSEE HAD TO PROVE THAT HE DID NOT OWN MORE THAN ONE RESIDENTIAL HOUSE , OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF ORIGINAL ASSE T (SHARES). ACCORDING TO LD.CIT(A), THE ASSESSEE HAS TO ESTABL ISH THAT THE ITA NO. 1664/MDS/2016 4 ORIGINAL ASSETS WERE TRANSFERRED AFTER THE DEMOLITI ON OF THE BUILDING AT ORMES ROAD. HOWEVER, IN SPITE OF GIVING SUFFICIENT OPPORTUNITY THE APPELLANT FAILED TO PROVE THAT HE DID NOT OWN MORE THAN ONE RESIDENTIAL PROPERTY, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET (SHARES). HENCE, THE LD.CIT(A ) CONFIRMED THE ORDER OF LD. ASSESSING OFFICER. AGAINST THIS ASSESS EE IS IN APPEAL BEFORE US. 5. BEFORE US, LD.A.R SUBMITTED THAT THE UNDISPUTED FACT IS THAT THE DEMOLITION ORDER OF CORPORATION OF CHENNAI IS DATED 2.03.2005. AS PER PROVISO TO SUB CLAUSE (A)(I) OF SECTION 54F(1), SEC TION 54F SHALL NOT APPLY IF THE ASSESSEE OWNS MORE THAN ONE RESIDENTIA L HOUSE , OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF ORIG INAL ASSET. THUS IT IS REQUIRES TO BE SEEN WHETHER THE ORIGINAL ASSET (SHA RES) WERE SOLD PRIOR TO 2.03.2005 OR SUBSEQUENT TO 2.03.2005 TO EN SURE WHETHER THE APPELLANT COULD BE ENTITLED FOR BENEFIT UNDER SECTI ON 54F. THE LD.A.R PRAYED THAT THE ISSUE MAY BE REMITTED BACK TO THE F ILE OF THE ASSESSING OFFICER OR TO CIT(A) TO VERIFY THE DATE O F SALE OF SHARES AND THEREAFTER TO GIVE CONSEQUENT RELIEF TO THE ASSESSE E , IF THE ASSESSEE IS SO ENTITLED. ITA NO. 1664/MDS/2016 5 6. ON THE OTHER HAND, LD.D.R SUPPORTED THE ORDER O F LOWER AUTHORITIES AND ARGUED THAT THE ASSESSEE HAS NOT PR OVIDE THAT HE IS OWING NOT MORE THAN ONE RESIDENTIAL HOUSE BEFORE T HE LOWER AUTHORITIES OTHER THAN THE NEW ASSET, ON THE DATE O F TRANSFER OF RESIDENTIAL ASSET. SINCE THE ASSESSEE HAS TO ESTABL ISH THAT THE ORIGINAL ASSET HAS BEEN TRANSFERRED AFTER THE DEMOLITION OF THE BUILDING SITUATED AT ORMES ROAD I.E. AFTER 02.03.2005. AS SU CH THE REVENUE AUTHORITIES DENIED THE CLAIM OF ASSESSEE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE SOLD THE SHARES IN THE ASSESS MENT YEAR UNDER CONSIDERATION AND CLAIMED DEDUCTION U/S.54F OF THE ACT. IT IS AN ADMITTED FACT THAT AT THE TIME OF SALE, ASSESSEE OW NING TWO RESIDENTIAL PROPERTIES, ONE IS AT MINT STREET AND ANOTHER AT O RMES ROAD. THE CLAIM OF ASSESSEE IS THAT THE RESIDENTIAL PROPERTY ORMES ROAD WAS DEMOLISHED VIDE ORDER FROM CORPORATION OF CHENNAI D ATED 02.03.2005. AS SUCH THE ASSESSEE IS ENTITLED FOR DE DUCTION U/S.54F OF THE ACT. HOWEVER, THE ASSESSEE NOT DENIED THE FACT THAT THE ASSESSEE IS OWNING ONE MORE RESIDENTIAL HOUSE AT MINT STREET . AS PER SEC.54F, THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE O THER THAN THE ITA NO. 1664/MDS/2016 6 NEW ASSET, ON THE DATE OF TRANSFER OF ORIGINAL ASSE T, THE ASSESSEE DOES NOT ENTITLE FOR DEDUCTION U/S.54F OF THE ACT. BEING SO, THE ASSESSEE HAD NOT FULFILLED WITH THE CONDITION LAID DOWN IN PROVISO (A)(I) IN SEC.54F OF THE ACT. ACCORDINGLY, DENIAL OF EXEMP TION U/S.54F OF THE ACT BY THE LOWER AUTHORITIES IS JUSTIFIED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON 22 ND DECEMBER, 2016 AT CHENNAI. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND DECEMBER, 2016 . K S SUNDARAM. , ' $(-. /.( / COPY TO: 1 . ! / APPELLANT 3. & 0( () / CIT(A) 5. .3 4 $(5 / DR 2. $% ! / RESPONDENT 4. & 0( / CIT 6. 4 6 7 ' / GF