P.R.Raajakoomaran, CHENNAI V. ITO, CHENNAI

ITA 1742/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3967 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 09-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: P KUMAR
• Section: 143(3); 54F; 148; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' # . $ , & ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.1742/MDS/2016 ( / ASSESSMENT YEAR: 2005-06) MR. P.R.RAAJAKOOMARAN, 22, OLD NO.84, GODOWN STREET, CHENNAI-600 001. VS THE INCOME TAX OFFICER, BUSINESS WARD-IX(2), CHENNAI. PAN: AABPR5342M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. P.KUMAR, ADVOCATE /RESPONDENT BY : MR. SUPRIYO PAL, JCIT /DATE OF HEARING : 6 TH SEPTEMBER, 2016 /DATE OF PRONOUNCEMENT : 23 RD NOVEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 13, CHENNAI DATED 29.02.2016 IN ITA NO.61/CIT(A)-13 /2005- 06 PASSED UNDER SECTION 143(3) R.W.S. 147 & 250(6) OF THE ACT . 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS A PPEAL, HOWEVER, THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN UPHOLDING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD DENIED EXEMPTION UNDER 2 ITA NO.1742/MDS/2016 SECTION 54 OF THE ACT AMOUNTING TO RS.2,75,000/- SI NCE THE INVESTMENT IN THE RESIDENTIAL HOUSE PROPERTY WA S MADE IN THE NAME OF THE ASSESSEES WIFE MRS. JAYARADHA. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE ASSES SMENT YEAR 2005-06 ON 25.10.2005 ADMITTING TOTAL INCOME OF RS.1,01,972/- CLAIMING EXEMPTION UNDER SECTION 54 OF THE ACT AMOUNTING TO RS.2,75,000/- BEING SALE PROCEEDS INVE STED IN ANOTHER RESIDENTIAL HOUSE PROPERTY. SUBSEQUENTLY, T HE ASSESSMENT WAS REOPENED BY THE LEARNED ASSESSING OF FICER BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT DATED 24.03.2011 AND THEREAFTER ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT ON 20.12.2011 WHEREIN THE LEARNED ASSESSING OFFICER DENIED EXEMPTION UNDE R SECTION 54 OF THE ACT FOR RS.2,75,000/- BECAUSE THE RESIDENTIAL HOUSE WAS PURCHASED IN THE NAME OF THE ASSESSEES SPOUSE. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) SUSTAINED THE ORDER OF THE LEARNED ASSESS ING OFFICER IN DISALLOWING THE CLAIM OF EXEMPTION UNDER SECTION 54 OF THE ACT, AGAINST WHICH THE ASSESSEE IS APPEAL BE FORE US. 3 ITA NO.1742/MDS/2016 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE RELIED IN THE DECISIONS OF THE HONBLE HIGH COURTS IN THE FOLLOWING CASES, I) CIT VS. V.NATARAJAN ( 287 ITR 271) (MAD) , II) CIT VS. MRS.JENNIFER BHIDE (349 ITR 80) (KAR),III) CIT VS. KAMAL WAHAL (351 ITR 4) (DEL). HE FURTHER ARGUED BY STATI NG THAT ON SIMILAR FACTS, THE HONBLE JURISDICTIONAL HIGH COUR T AS WELL AS THE HONBLE KARNATAKA & DELHI HIGH COURT HAVE HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. IT WAS THEREFORE P RAYED THAT THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 54F MAY BE GRANTED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND RELIED IN THE ORDERS OF THE REVENUE AND PLEADE D THAT THE ADDITIONS MAY BE SUSTAINED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. AT THE OUTSET, WE FIND THAT SHRI P.R.RAAJAKOOMARAN, THE ASSESSEE AND HIS WIFE A RE HINDUS AND THEREFORE THE EXISTENCE OF HUF IS NOT IN DOUBT. ANY INDIVIDUAL WHO IS A HINDU CAN POOL IN HIS PERSO NAL ASSET 4 ITA NO.1742/MDS/2016 TO THE HUF AT ANY POINT OF TIME. FURTHER, THE PROPE RTY OF THE HUF CAN BE HELD IN THE NAME OF ANY COPARCENERS OF T HE HUF. IN THIS SITUATION, SALE OF THE PROPERTY OF THE ASSE SSEE AND SUBSEQUENT PURCHASE OF RESIDENTIAL HOUSE IN THE NAM E OF ANOTHER COPARCENER OF THE SAME HUF WILL ENTITLE THE BENEFIT OF SECTION 54F IN THE HANDS OF HUF. CONSIDERING THESE ASPECTS, WE ARE OF THE CONSIDERED VIEW THAT DISALLOWANCE OF DEDUCTION UNDER SECTION 54F IN THE HANDS OF THE ASSESSEE IS N OT WARRANTED. FURTHER, AS CITED BY THE LEARNED AUTHORI ZED REPRESENTATIVE, THE DECISION OF THE HONBLE DELHI H IGH COURT IN THE CASE CIT VS. KAMAL WAHAL REPORTED IN 351 ITR 4 (DEL) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE, WHEREIN THE HONBLE HIGH COURT HELD AS UNDER:- FOR THE PURPOSE OF SECTION 54F, THE NEW RESIDENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NOR IS IT NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVELY IN HIS NAME. MOREOVER, THE ASSESSEE HAD NOT PURCHASED THE NEW HOUSE IN THE NAME OF A STRANGER OR SOMEBODY WHO WAS UNCONNECTED WITH HIM. HE HAD PURCHASED IT ONLY IN THE NAME OF HIS WIFE. THERE WAS ALSO NO DISPUTE THAT THE ENTIRE INVESTMENT HAD COME OUT OF THE SALE PROCEEDS AND THAT THERE WAS NO CONTRIBUTION FROM THE ASSESSEES WIFE. THEREFORE, THE TRIBUNAL WAS RIGHT IN LAW IN ALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 54F. 5 ITA NO.1742/MDS/2016 8. FOLLOWING THE ABOVE DECISION OF THE HONBLE DELH I HIGH COURT, WE HEREBY DIRECT THE LEARNED ASSESSING OFFIC ER TO GRANT DEDUCTION OF RS. 2,75,000/- UNDER SECTION 54 OF THE ACT. 9. SINCE THE APPEAL OF THE ASSESSEE IS DISPOSED OFF ON MERITS IN HIS FAVOUR, THE GROUND OF REOPENING OF TH E ASSESSMENT UNDER SECTION 147 OF THE ACT HAS BECOME ACADEMIC AND HENCE WE FIND IT NOT NECESSARY TO ADJU DICATE THE SAME. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD NOVEMBER, 2016 SD/- SD/- ( ' # . $ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 23 RD NOVEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF