R.Nandakumar, CHENNAI V. ACIT, CHENNAI

ITA 1849/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8251 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 09-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 13-08-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: T T DURAIRAJ KANDIAR
• Keywords: Capital asset
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1849/MDS/2015 / ASSESSMENT YEAR : 2009-10 SHRI R NANDAKUMAR PLOT NO.46 & 47 SIDCO INDUSTRIAL ESTATE THIRUMUDIVAKKAM CHENNAI 600 044 VS. THE ASSTT. COMM ISSIONER OF INCOME-TAX CORPORATE CIRCLE 2(2) CHENNAI [PAN ABVPN 1062 B ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI T T DURAIRAJ KANDIAR, CA /RESPONDENT BY : SHRI P RADHAKRISHN AN, JCIT / DATE OF HEARING : 09 - 12 - 2015 ! / DATE OF PRONOUNCEMENT : 07 - 01 - 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)-6, CHENNA I, DATED 21.4.2015 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. SHRI T T DURAIRAJ KANDIAR, LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE SOLD HIS FLAT IN GREEN PEACE ALLENDALE, 79 TH STREET, ASHOK NAGAR, CHENNAI, FOR A SUM OF ` 51 LAKHS ITA NO.1849/15 :- 2 -: ON 19.2.2009. THE LONG TERM CAPITAL GAIN WAS COMPU TED AT ` 15,46,263/-. THE ASSESSEE CLAIMED EXEMPTION U/S 54 OF THE ACT IN RESPECT OF THE INVESTMENT MADE IN THE NEW FLAT. AC CORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE PURCHASED THE LAND O N 1.12.2006 AND ENTERED INTO AN AGREEMENT FOR CONSTRUCTION ON 20.11 .2006 WITH M/S GREEN PEACE CONSTRUCTIONS PVT. LTD. THE CONSTRUCTI ON WAS, IN FACT, COMPLETED ON 16.7.2008. THE ASSESSING OFFICER, HOW EVER, FOUND THAT THE CONDITIONS SPECIFIED IN SEC. 54 OF THE ACT WAS NOT COMPLIED WITH, THEREFORE, HE DISALLOWED THE CLAIM OF THE ASSESSEE U/S 54 OF THE ACT. ON APPEAL BY THE ASSESSEE, THE CIT(A) FOUND THAT T HE ENTIRE CONSTRUCTION WAS HAPPENED PRIOR TO THE SALE OF THE HOUSE PROPERTY, THEREFORE, THE PROVISIONS OF SEC. 54 ARE NOT APPLIC ABLE. ACCORDING TO THE LD. REPRESENTATIVE, U/S 54 OF THE ACT, THE AS SESSEE IS ENTITLED TO CLAIM EXEMPTION IF THE CAPITAL GAIN ARISING OUT OF THE TRANSFER OF THE RESIDENTIAL HOUSE IS INVESTED ONE YEAR BEFORE THE D ATE OF THE SALE OR THREE YEARS AFTER THE DATE OF THE SALE OF THE RESID ENTIAL HOUSE. THE HOUSE PROPERTY WAS ADMITTEDLY SOLD ON 23.2.2009, TH EREFORE, THE INVESTMENT MADE BY THE ASSESSEE FOR CONSTRUCTION O F THE FLAT PURSUANT TO THE AGREEMENT WITH M/S GREEN PEACE CONSTRUCTIONS PVT. LTD BEFORE ONE YEAR FROM 23.3.2009 IS ENTITLED FOR EXEMPTION. 3. ON THE CONTRARY, SHRI P RADHAKRISHNAN, LD. DEPARTME NTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE ADMITTE DLY PURCHASED THE ITA NO.1849/15 :- 3 -: UNDIVIDED SHARE OF THE LAND FROM M/S GREEN PEACE CO NSTRUCTIONS PVT. LTD ON 1.12.2006 AND ENTERED INTO AN AGREEMENT FOR CONSTRUCTION OF THE FLAT ON 20.11.2006. THE CONSTRUCTION OF THE FL AT WAS COMPLETED ON 16.7.2008. THE ASSESSEE IN FACT SOLD THE RESIDENT IAL HOUSE ONLY ON 23.2.2009, THEREFORE, THE ASSESSING OFFICER HAS RIG HTLY REJECTED THE CLAIM OF THE ASSESSEE. ON A QUERY FROM THE BENCH WHY THE INVESTMENT MADE BY THE ASSESSEE ONE YEAR BEFORE T HE SALE OF THE HOUSE PROPERTY COULD NOT BE ALLOWED, THE LD. DR CLA RIFIED THAT THE DETAILS OF THE PAYMENT MADE BY THE ASSESSEE IS NOT AVAILABLE ON RECORD. THEREFORE, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF THE ACTUAL DA TE ON WHICH THE INVESTMENT WAS MADE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SEC. 54 OF THE ACT. SECT ION 54 OF THE ACT CLEARLY SAYS THAT CAPITAL GAIN ARISING OUT OF THE T RANSFER OF THE CAPITAL ASSET BEING A RESIDENTIAL HOUSE, THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR THREE YEARS AFTER THE DATE OF SA LE, CONSTRUCTED ONE RESIDENTIAL HOUSE IN INDIA THEN HE IS ENTITLED FOR EXEMPTION IN RESPECT OF THE CAPITAL GAIN. IN THE CASE BEFORE US, THE A SSESSEE, ADMITTEDLY, SOLD THE PROPERTY ON 23.2.2009. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE PURCHASED THE UNDIVIDED SHARE AS EARLY AS 1.12.2006 AND ITA NO.1849/15 :- 4 -: ENTERED INTO AN AGREEMENT FOR CONSTRUCTION ON 20.11 .2006. THEREFORE, IT IS OBVIOUS THAT IN PURSUANCE TO THE AGREEMENT FO R CONSTRUCTION DATED 20.11.2006 THE ASSESSEE PURCHASED THE UNDIVIDED SH ARE OF THE LAND ON 1.12.2006. PROBABLY, THE CONSTRUCTION MAY BE UN DER PROGRESS. THE ASSESSEE INVESTED IN THE CONSTRUCTION OF THE NEW FL AT. THE CONDITION PRESCRIBED IN SEC. 54 OF THE ACT IS THAT THE SALE P ROCEEDS HAS TO BE INVESTED FOR CONSTRUCTION OF A NEW RESIDENTIAL HOUS E ONE YEAR BEFORE THE DATE OF THE SALE OF RESIDENTIAL HOUSE, THEREFOR E, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHATEVER INVESTMENT MAD E BY THE ASSESSEE IN THE CONSTRUCTION OF THE FLAT PURSUANT TO THE AGREEMENT ENTERED INTO WITH M/S GREEN PEACE CONSTRUCTIONS PVT . LTD ONE YEAR BEFORE 23.2.2009 IS ELIGIBLE FOR EXEMPTION. AS RIG HTLY POINTED OUT BY THE LD. DR, THE DATE OF THE ACTUAL PAYMENT MADE BY THE ASSESSEE IS NOT AVAILABLE ON RECORD. THEREFORE, ONLY FOR THE P URPOSE OF VERIFYING THE DATE OF THE ACTUAL PAYMENT MADE BY THE ASSESSE E, THE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ASSESSING OFFICER IS DIRECTED TO VERIFY THE ACTUAL DATE OF PAYMENT MA DE BY THE ASSESSEE TO M/S GREEN PEACE CONSTRUCTIONS PVT. LTD. IF THE PAYMENT IS MADE ONE YEAR BEFORE THE DATE OF SALE OF HOUSE PROPERTY ON 23.2.2009, SUCH PAYMENT SHALL BE ALLOWED U/S 54 OF THE ACT. ITA NO.1849/15 :- 5 -: 5. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE ASSE SSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JANUARY, 2016, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 07 TH JANUARY, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF