Sri. Basavaraj Sriraj, Bangalore V. ITO-Ward-2(3)(3), Bangalore

ITA 1750/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8540 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-02-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 06-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R V SREENIVA SAN J
• Section: 54; 54F; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC B BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 1750/BANG/2016 ASSESSMENT YEAR : 2013-14 SHRI BASAVARAJ SRIRAJ, NO. 6, 4 TH FLOOR, M.K. PUTTALINGAIAH ROAD, 3 RD STAGE, KARTO BUILDING, PADMANABHANAGAR, BANGALORE 560 070. PAN: ASBPS 8378J VS. THE INCOME-TAX OFFICER, W-2(3)(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SMT. PRATIBHA R., ADVOCATE RESPONDENT BY : SHRI A.R.V. SREENIVASAN, JCIT(DR)(ITAT) DATE OF HEARING : 16.02.2017 DATE OF PRONOUNCEMENT : 23.02.2017 O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT (APPEALS)-7, BANGALORE DATED 27/07/2016 FOR THE ASS ESSMENT YEAR 2013- 14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - ITA NO. 1750/BANG/2016 PAGE 2 OF 5 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) HAS ERRED IN CONFIRMING THE ORDER IN THE MANNER WHICH HE DID. 2. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAS FULFILLED THE CONDITIONS U/S. 54F OF THE ACT AND THEREFORE HIS CLAIM OF EXEMPTION WAS VALID AND TENABLE AND LIABLE TO BE ALLOWED. 3. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAS INVESTED IN THE FLAT RS. 62,32,000/- AND NOT RS. 47,56,500/- AND AL SO THE APPELLANT FURNISHED THE COPY OF AGREEMENTS TO PROVE THE CLAIM WAS GENUINE. ACCORDINGLY, THE ADDITION CONFIRMED BY THE CIT(A) HAS TO BE DELETED GRANTING EXEMPTION U/S.54F OF THE ACT IN FULL. 4. THE LEARNED COMMISSIONER(A) OUGHT TO HAVE ACCEPTED THE EXPLANATION OF THE APPELLANT AND THE EVIDENCE PRODUCED AND OUGHT TO HAVE ALLOWED THE EXEMPTION U/S.54F OF THE ACT AS CLAIMED BY THE APPELLANT. 5. WITHOUT PREJUDICE, THE DISALLOWANCE/ADDITION AS CONFIRMED IS EXCESSIVE, ARBITRARY AND UNREASONABLE AND OUGHT TO BE DELETED IN TOTO. 6. THE LEARNED COMMISSIONER(A) ERRED IN CONFIRMING THE INTEREST U/S.234A, 234B AND 234C OF THE ACT. 7. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 3. IT WAS SUBMITTED BY THE LD. AR OF ASSESSEE THAT IN RESPECT OF ASSESSEES CLAIM FOR DEDUCTION U/S. 54 OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) TO THE EXTEN T OF RS. 62.32 LAKHS, THE AO HAS ALLOWED DEDUCTION OF RS. 47,56,500/- ONLY ON THIS BASIS THAT AS PER THE SALE DEED REGISTERED ON 31/10/2014, THE PRICE P AID BY THE ASSESSEE IS ITA NO. 1750/BANG/2016 PAGE 3 OF 5 ONLY RS. 47,56,500/-. IN THIS REGARD, SHE SUBMITTE D THAT COPY OF CONSTRUCTION AGREEMENT IS AVAILABLE AT PAGES 31 TO 43 OF THE PB BETWEEN THE ASSESSEE AND M/S. REDDY STRUCTURES PVT. LTD., A S PER WHICH, THE COST OF CONSTRUCTION WAS FIXED AT RS. 38,06,513/-. THEREAF TER, IT WAS SUBMITTED THAT COPY OF SALE DEED DATED 31/10/2014 IS AVAILABLE AT PAGES 44 TO 64 OF THE PB AND AS PER INTERNAL PAGE 6 OF THIS SALE DEED, TH IS VALUE OF RS. 47,56,500/- IS ONLY TOWARDS UNDIVIDED INTEREST OF L AND IN RESPECT OF APARTMENT NO. 104, BLOCK A ON THE FIRST FLOOR HAVIN G BUILT UP AREA OF 1245 SQ. FT. ALONG WITH A CAR PARKING AREA. SHE SUBMITT ED THAT IN ADDITION TO THE COST OF LAND, COST OF CONSTRUCTION IS ALSO REQUIRED TO BE CONSIDERED FOR THE PURPOSE OF DEDUCTION U/S. 54 OF THE ACT. 4. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AU THORITIES BELOW. HE ALSO SUBMITTED THAT IF IT IS ACCEPTED THAT COST OF CONSTRUCTION IS ALSO REQUIRED TO BE CONSIDERED, THEN THE MATTER MAY BE RESTORED B ACK TO THE FILE OF CIT(APPEALS) FOR A FRESH DECISION. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT DEDUCTION U/S. 54 IS ALLOWABLE FOR ACQUISITION OF NEW HOUSE PROPERTY AND NEW HOUSE PROPERTY COMPRISES OF VALUE OF LAND AS WELL AS COST OF CONST RUCTION AND THEREFORE, THE AOS ACTION IS NOT PROPER TO RESTRICT THE AMOUNT OF DEDUCTION U/S. 54 TO THE VALUE OF LAND ONLY EXCLUDING THE COST OF CONSTRUCTI ON OF THE FLAT. WHEN BOTH THE AMOUNTS ARE CONSIDERED, THE TOTAL EXCEEDS THE A MOUNT OF CAPITAL GAIN. THE AO HAS STATED IN PARA 5 OF THE ASSESSMENT ORDER THAT ASSESSEE HAS ITA NO. 1750/BANG/2016 PAGE 4 OF 5 NOT FURNISHED ANY EVIDENCE WITH RESPECT TO THE CONS TRUCTION OF THE HOUSE ON THE SITE PURCHASED. HENCE AS PER THE ASSESSMENT OR DER ALSO, THE AMOUNT OF RS. 47,56,500/- IS ONLY THE COST OF THE LAND. C OPY OF AGREEMENT BETWEEN THE ASSESSEE AND DEVELOPER IS AVAILABLE ON PAGES 17 TO 30 OF PB AS PER WHICH, ASSESSEE HAS PAID RS. 30 LAKHS OUT OF WHICH RS. 25.37 LAKHS WAS TOWARDS VALUE OF LAND AND THE BALANCE AMOUNT OF RS. 4.63 LAKHS WAS TOWARDS PART OF CONSTRUCTION VALUE. AS PER THE CON STRUCTION AGREEMENT AVAILABLE ON PAGES 31 TO 43 OF THE PB, COST OF CONS TRUCTION WAS DETERMINED AT RS. 38,06,513/- AND AFTER ADJUSTING THE ADVANCE AMOUNT OF RS. 4.63 LAKHS, THE BALANCE AMOUNT PAYABLE WAS RS. 33,43,573 /-. UNDER THESE FACTS, IN MY CONSIDERED OPINION, THE DEDUCTION CLAI MED BY THE ASSESSEE U/S. 54 OF THE ACT OF RS. 62.32 LAKHS IS ALLOWABLE IN FU LL AND NO PART OF THE SAME CAN BE DISALLOWED. I, THEREFORE, DELETE THE DISALL OWANCE. 6. IN THE RESULT, APPEAL BY THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF FEBRUARY, 2017. SD/- (A.K. GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 23 RD FEBRUARY, 2017. / DS / MS/ ITA NO. 1750/BANG/2016 PAGE 5 OF 5 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.