G.Ramesh, CHENNAI V. ITO, CHENNAI

ITA 180/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9044 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 02-02-2016
• Court: TRIBUNAL
• Department Lawyers: P RADHA KRISHNANJ
• Assessee Lawyers: V S MANOJ
• Keywords: Capital asset

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , . !' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.180/MDS./2016 / ASSESSMENT YEAR : 2011-12 SHRI G.RAMESH, NO.3C, NEW NO.5C, MURUGESAN STREET, T.NAGAR, CHENNAI 600 017. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-17(1), CHENNAI. [PAN AAGPR 8955 F ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI V.S.MANOJ,ADVOCATE /RESPONDENT BY : SHRI P.RADHAKRISHNAN,JCIT,DR / DATE OF HEARING : 08 - 06 - 201 6 !' / DATE OF PRONOUNCEMENT : 22 - 06 - 2016 ' / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, CHENNAI DAT ED 17.12.2015 PERTAINING TO ASSESSMENT YEAR 2011-12. ITA NO.180/MDS./16 :- 2 -: 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL I S WITH REGARD TO NON-GRANTING OF EXEMPTION U/S.54F OF THE ACT ON THE REASON THAT THE RETURN FILED BY THE ASSESSEE U/S.139(4), AS SUCH TH E BENEFIT U/S.54F IS DENIED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE SOL D THE PROPERTIES SITUATED AT NELANKARAI AND CHENGLEPET AND DECLARED CAPITAL GAINS FROM THESE TWO PROPERTIES AT 77,15,927/-. THE ASSESSEE CLAIMED EXEMPTION U/S.54F OF THE ACT ON INVESTMENT IN A FLAT FOR ` 68,82,120/- AND THEREBY DECLARED NET TAXABLE CAPITAL GAINS AT ` 8,33,807/-. THE AO WAS OF THE OPINION THAT THE ASSESSEE HAS FILED THE RETURN OF I NCOME NOT U/S.139(1) OF THE ACT AND IT WAS FILED BELATEDLY U/S.139(4) OF THE ACT, AS SUCH THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S.54F OF T HE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A ). ON APPEAL, THE LD.CIT(A) CONFIRMED THE SAME. AGAINST THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, LD.A.R RELIED ON THE FOLLOWING JUDGM ENTS. 1. K. RAMACHANDRA RAO (2014) TS 876- KAR 2. RAJESH KUMAR JALAN (20016) 286 ITS 274, GAUHATI 3. SAM GLOBAL SECURITIES LTD (2013) TIOL 707 DELHI 4. METALMAN AUTO PVT LTD. (2011) 336 ITR 434 (P& H ) 5. SHRI SAMBANDAM UDAYKUMAR (2012) TIOL 217 KAR 6. FATHIMA BAI ITA NO. 435 OF 2004- KAR 7. SHRI JAGTAR SINGH CHAWLA (2013) TS 112 (PUNJAB & HARYANA) 8. PADMANAB PANDURANG PAWAR (2015) TS 348 9. R.K.P.ELAYARAJAN (2012) 23 TAXMANN.COM 206 10. NIPUN MEHROTRA (2008) 297 ITR 110 11. ORISSA METAL INDUSTRIES PVT. LTD. (1992) 196 IT R 803 12. TRUSTEES OF TULSIDAS GOPALJ I CHARITABLE & CHAL ESHWAR TEMPLE TRUST (1994) 2071TR368 ITA NO.180/MDS./16 :- 3 -: 13. SHRI JAGATAR SINGH CHAWLA (2013) TIOL 254 14. SMT DHARAM SHOBA RANI (2014) TIOL 615 15. MR.PADMANABAH PANDURANG PAWAR (2015) TIOL 1129 16. SHRI R SRINIVAS (2015) TIOL 2623 17. SUMATHI PROCESS INDUSTRIES PVT. LTD.(1992) 196 ITR 803 FURTHER, LD.A.R SUBMITTED THAT THE FILING RETURN U/ S.139(4) DOES NOT DISENTITLE THE ASSESSEE TO CLAIM EXEMPTION U/S.54F OF THE ACT. ACCORDING TO LD.A.R THE DUE DATE FOR FALLING THE RE TURN OF INCOME U/S.139(4) TO BE CONSIDERED FOR GRANTING EXEMPTION U/S.54F OF THE ACT. ACCORDING TO HIM, THE DUE DATE OF FILING THE RETURN OF INCOME EXTENDED TO DUE DATE U/S.139(4) OF THE ACT. 5. THE LD.D.R RELIED ON THE ORDER OF LD.CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE THE ASSESSEE FILED THE RETURN OF INCOME ON 11.08.2011 FOR ASSESSMENT YEAR 2011-12. THERE WA S NO ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE FOR THIS ASS ESSMENT YEAR. AS PER SECTION 139(1) OF THE ACT, THE RETURN FOR ASSES SMENT YEAR 2011-12 MUS HAVE FILED ON OR BEFORE 31.07.2011. THE AO DEN IED THE EXEMPTION U/S.54F OF THE ACT ON THE REASON THAT THE RETURN FILED WITHIN THE EXTENDED TIME LIMIT AVAILABLE OF FILING OF RETU RN OF INCOME U/S.139(4) CANNOT BE CONSIDERED. IN OUR OPINION T HE KARNATAKA HIGH COURT IN THE CASE OF FATHLIMA BAI VS. ITO REPORTED IN 32 DTR 243, GAUHATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KU MAR JALAN REPORTED IN [2006] 286 ITR 274 (GAUHATI) HELD THAT DUE DATE FOR THE ASSESSEE TO ITA NO.180/MDS./16 :- 4 -: INVEST THE AMOUNT OF CAPITAL GAINS IN PURCHASE/CONS TRUCT OF NEW RESIDENTIAL ASSET OR INVESTMENT IN CAPITAL GAINS SC HEME U/S.54F OF THE ACT REFERS TO THE EXTENDED DUE DATE U/S.139(4) OF THE ACT. SO FAR AS THE TIME LIMIT FOR ASSESSEE TO INVEST IN PURCHASE O F CONSTRUCTION OF RESIDENTIAL ASSET, THE TIME LIMIT AVAILABLE U/S.139 (4) IS TO BE CONSIDERED TO THAT EXTENT WE ARE AGREEING WITH THE CONTENTION OF THE LD.A.R. HOWEVER, DURING THE INTERMEDIARY PERIOD I.E. AFTER THE SALE OF CAPITAL ASSET TILL THE DATE OF INVESTMENT, THE FUND HAS TO BE DEPOSITED IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE S PECIFIED IN AND UTILIZED IN ACCORDANCE, ANY SCHEME WITH CENTRAL GOV ERNMENT NOTIFIED IN OFFICIAL GAZETTE FRAMED IN THIS BEHALF AND THE ASSE SSEE SHALL FILE PROOF FOR SUCH DEPOSIT. THE AO IN THIS CASE OUT RIGHTLY REJECTED THE CLAIM OF ASSESSEE THAT THE ASSESSEE IS NOT UTILIZED THE CAPI TAL GAINS ON TRANSFER OF CAPITAL ASSET IN INVESTMENT IN RESIDENTIAL HOUSE AS SPECIFIED IN SECTION 54F(1) OF THE ACT ON THE REASON THAT THE AS SESSEE HAS NOT FILED THE RETURN OF INCOME WITHIN DUE DATE IN TERM OF SE C.139(1) OF THE ACT. HE HAS NOT EXAMINED THE OTHER CONDITIONS IN SEC.54F . FURTHER, LD.A.R PLEADED BEFORE US EVEN IF THE ASSESSEE HAS NOT DEEM ED DEPOSITED IN THE CAPITAL GAINS ACCOUNT SCHEME U/S.54F(4) , THE A SSESSEE WOULD BE ENTITLED FOR DEDUCTION U/S.54 OF THE ACT BY PLACING RELIANCE ON THE JUDGEMENT OF KARANATAKA HIGH COURT IN THE CASE OF C IT VS.SHRI R.SRINIVAS REPORTED IN 2015-TIOL-2623-HC KAR-II. HOWEVER, WE CAME ITA NO.180/MDS./16 :- 5 -: ACROSS THE DECISION OF SAME HIGH COURT IN THE CASE OF CIT VS. K.RAMCHANDRA RAO REPORTED IN 277 CTR 522 WHEREIN HE LD THAT AS PER SEC.54F(4), IN THE EVENT OF THE ASSESSEE NOT INVES TING THE CAPITAL GAINS EITHER IN PURCHASING THE RESIDENTIAL HOUSE OR IN CO NSTRUCTING A RESIDENTIAL HOUSE WITHIN THE PERIOD STIPULATED IN S . 54F(1), IF THE ASSESSEE WANTS THE BENEFIT OF S. 54F, THEN HE SHOUL D DEPOSIT THE SAID CAPITAL GAINS IN AN ACCOUNT WHICH IS DULY NOTIFIED BY THE CENTRAL GOVERNMENT. IN OTHER WORDS, IF HE WANTS CLAIM OF EX EMPTION FROM PAYMENT OF INCOME-TAX BY RETAINING THE CASH, THEN T HE SAID AMOUNT IS TO BE INVESTED IN THE SAID ACCOUNT NOTIFIED BY CENT RAL GOVERNFMENT ON THIS BEHALF. IF THE INTENTION IS NOT TO RETAIN CASH BUT TO INVEST IN CONSTRUCTION OR ANY PURCHASE OF THE PROPERTY AND IF SUCH INVESTMENT IS MADE WITHIN THE PERIOD STIPULATED THEREIN I.E. SECT ION 139(4), THEN SECTION 54F(4) IS NOT AT ALL ATTRACTED AND THEREFOR E, THE CONTENTION THAT THE ASSESSEE HAS NOT DEPOSITED THE AMOUNT IN THE BA NK ACCOUNT AS STIPULATED AND THEREFORE, HE IS NOT ENTITLED TO THE BENEFIT EVEN THOUGH HE HAS INVESTED THE MONEY IN CONSTRUCTION IS ALSO N OT CORRECT. THIS JUDGEMENT WAS NOT AT ALL CONSIDERED BY THE HONBLE HIGH COURT IN THE CASE OF SHRI R.SRINIVAS (SUPRA). THE SIMILAR VIEW WAS TAKEN BY THE KERALA HIGHH COURT IN THE CASE OF DR.XAVIER J.P ULLIKAL VS. DCIT REPORTED IN 104 DTR 134(KERALA). ITA NO.180/MDS./16 :- 6 -: 6.1 IN VIEW OF THE ABOVE DISCUSSION, WE ARE INCLIN ED TO REMIT THE ISSUE TO THE FILE OF AO TO EXAMINE THE FULFILLMENT OF THE CONDITIONS U/S.54F OF THE ACT THROUGH INTERMEDIARY PERIOD THAT IS FROM THE DATE OF SALE OF CAPITAL ASSET TO THE DATE OF ACTUAL INVESTM ENT IN RESIDENTIAL HOUSE. ACCORDINGLY, THE ISSUE IS REMITTED TO THE F ILE OF AO FOR FRESH CONSIDERATION AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JUNE, 2016, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 22 ND JUNE, 2016 K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( ,(- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( , / CIT 6. 02(3 / GF