Y. Malarvizhi, CHENNAI V. ITO, CHENNAI

ITA 1958/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81253 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-11-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 07-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: T BANUSEKAR
• Keywords: Benefit of exemption
• Section: 54F; 54; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! , '# $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NO.1958/MDS/2013 ( / ASSESSMENT YEAR : 2006-2007) Y. MALARVIZHI OLD NO.15, NEW NO.78, PARAMESWARI NAGAR EXTENSION I STREET, ADAYAR, CHENNAI 600 020. [PAN :BKVPM 1840E] ( !% /APPELLANT) VS THE INCOME TAX OFFICER, BUSINESS WARD IV(2), CHENNAI. ( &'!% /RESPONDENT) / APPELLANT BY : SHRI.T.BANUSEKAR, C.A., / RESPONDENT BY : SHRI. A.V. SREEKANTH, IRS, JCIT. /DATE OF HEARING : 10.11.2014. /DATE OF PRONOUNCEMENT : 10.11.2014. #( / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE PRESENT APPEAL BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-V, CHENNAI, DATED 02.07.2013 FOR THE ASSESSMENT YEAR 2006-2007. ITA NO.1958/MDS/2013. :- 2 -: 2. IN APPEAL, THE ASSESSEE HAS IMPUGNED THE FINDINGS O F FIRST APPELLATE AUTHORITY IN DENYING THE CLAIM OF EXEMPTI ON U/S.54/54F OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) 3. THE FACTS AS EMANATING FROM THE RECORDS AR E: THE ASSESSEE ALONGWITH THREE CO-OWNERS SOLD A PROPERTY AT PURASA IWALKAM HIGH ROAD, CHENNAI ON 23.01.2006 FOR A CONSIDERATION OF ` .40,00,000/- AND GOT 1/4 TH SHARE ` .10,00,000/- IN SALE PROCEEDS. THE ASSESSEE PURCHASED A PLOT ON 03.01.2007 AND ALLEGEDLY CONSTR UCTED A RESIDENTIAL BUILDING THEREON BETWEEN OCTOBER, 2007AND MARCH, 20 08. THE TOTAL AMOUNT INVESTED BY THE ASSESSEE IN THE NEW ASSET WA S ` .20,52,000/-. THE ASSESSEE CLAIMED EXEMPTION U/S.54 OF THE ACT ON HER SHARE OF CAPITAL GAINS ARISING FROM SALE OF JOINT PROPERTY. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM EXEMPTION U/S.54, AS THE N EW ASSET PURCHASED IS A VACANT LAND. AGGRIEVED BY THE ASSESSMENT ORDER D ATED 26.11.2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APP EALS) UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APP EAL OF THE ASSESSEE. 4. SHRI. T. BANUSEKAR, APPEARING ON BEHA LF OF THE ASSESSEE ITA NO.1958/MDS/2013. :- 3 -: SUBMITTED THAT THE ASSESSEE HAD SOLD RESIDENTIAL PR OPERTY ON 23.01.2006 AND INVESTED THE SALE PROCEEDINGS IN PUR CHASE OF RESIDENTIAL PLOT ON 3.1.2007 AND CONSTRUCTED BUILDI NG THEREON DURING THE PERIOD OCTOBER, 2007 AND MARCH, 2008. THE ASSE SSEE HAD COMPLIED WITH THE PROVISIONS LAID DOWN U/S. 54/54F AND THUS IS ELIGIBLE TO CLAIM EXEMPTION. THE LEARNED AUTHORIZED REPRESE NTATIVE FURTHER SUBMITTED THAT AS PER PROVISIONS OF SECTION 54 OF T HE ACT, THE TIME LIMIT FOR INVESTING THE AMOUNT IN PURCHASE OF RESIDENTIAL PROPERTY IS ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE OF SALE OF CAPIT AL ASSET OR THE SALE PROCEEDS SHALL BE UTILIZED FOR CONSTRUCTION OF RESI DENTIAL HOUSE WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET. FURTHER, SECTIONS 54(2)/ 54F(4) STIPULATES A CONDIT ION THAT IF THE AMOUNT OF CAPITAL GAIN IS NOT UTILIZED IN ACCORDANC E WITH THE PROVISIONS OF SECTION 54(1)/54F(1) BEFORE THE DATE OF FURNISHI NG OF RETURN OF INCOME U/S. 139, THE ASSESSEE SHOULD DEPOSIT THE S UM BEFORE FURNISHING SUCH RETURN IN THE SPECIFIED BANK UNDER CAPITAL GAIN ACCOUNTS SCHEME 1988 . IN THE PRESENT CASE, THE ASSESSEE HAS UTILIZED ENTIRE SALE PROCEEDS BEFORE THE DUE DATE OF FILING RETURN OF INCOME U/S. 139(4) RELEVANT TO THE ASSESSMENT YEAR 2006-07 I.E. 31.03.2008. THE RESIDENTIAL BUILDING WAS COMPLETED IN MARCH, 2008 I TSELF. THE LEARNED AR IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON SEVERAL DECISIONS OF ITA NO.1958/MDS/2013. :- 4 -: THE CO-ORDINATE BENCH OF THE TRIBUNAL AND THE FOLLO WING DECISIONS RENDERED BY DIFFERENT HONBLE HIGH COURTS TO SAY TH AT THE DUE DATE FOR FILING RETURN TO CLAIM EXEMPTION U/S.54/54F IS AS E NVISAGED U/S. 139(4) OF THE ACT. (I) CIT VS. MS. JAGRITIAGGARWAL, REPORTED AS 339 ITR 61 0 (P&H). (II) FATHIMA BAI VS. ITO, REPORTED AS 32 DTR (KAR) 243. (III) CIT VS. RAJESH KUMAR JALAN, REPORTED AS 286 ITR 274 (GAUHATI) 5. SHRI. A.V. SREEKANTH, REPRESENTING THE DEPARTMENT (DR), VEHEMENTLY SUPPORTED THE FINDINGS OF THE COMMISSIO NER OF INCOME TAX (APPEALS) AND SUBMITTED THAT THE ASSESSEE IS NO T ELIGIBLE FOR CLAIMING EXEMPTION U/S. 54 OR 54F OF THE ACT. A PER USAL OF SALE DEED WOULD SHOW THAT THE PROPERTY PURCHASED BY THE ASSES SEE IS A VACANT LAND AND NOT A RESIDENTIAL PROPERTY. THE LEARNED D R FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT COMPLIED WITH THE CONDITI ON LAID DOWN IN SECTION 54(2)/54F(4) BEFORE FILING OF RETURN U/S.13 9 OF THE ACT. THE LEARNED DR STRONGLY OPPOSED THE ARGUMENT RAISED BY THE AR OF THE ASSESSEE AND PRAYED FOR DISMISSING THE APPEAL. ITA NO.1958/MDS/2013. :- 5 -: 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REP RESENTATIVES OF BOTH SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHO RITIES BELOW, AS WELL AS, THE DECISIONS RELIED ON BY THE AR. IN APP EAL, THE ASSESSEE HAS RAISED AS MANY AS TEN GROUNDS. HOWEVER, THE LE ARNED AR OF THE ASSESSEE HAS CONFINED HIS SUBMISSION ONLY WITH RESP ECT TO CLAIM OF ASSESSEE U/S. 54/54F. THE AUTHORITIES BELOW HAVE RE JECTED THE CLAIM OF THE ASSESSEE U/S. 54 ON THE GROUND THAT AFTER SALE OF ORIGINAL ASSET, THE ASSESSEE HAS NOT INVESTED THE SALE PROCEEDS IN PURC HASE/CONSTRUCTION OF RESIDENTIAL HOUSE. THE PROPERTY PURCHASED BY TH E ASSESSEE IS A VACANT LAND. ON THE OTHER HAND, THE STAND OF THE ASSESSEE IS THAT THE ASSESSEE PURCHASED A LAND AND HAS CONSTRUCTED A RES IDENTIAL HOUSE THEREON BY INVESTING THE SALE PROCEEDS OF THE ORIGI NAL ASSET. THE AMOUNT HAS BEEN INVESTED IN CONSTRUCTION OF NEW RES IDENTIAL ASSET BEFORE THE DUE DATE OF FILING OF THE RETURN AS IS E NVISAGED U/S 139(4) OF THE ACT I.E. 31.03.2008 RELEVANT TO THE ASSESSMENT YEAR 2006-07. 7. THE FACT THAT THE ASSESSEE PURCHASED A V ACANT PLOT NO.12A &12B, CORPORATION OLD DOOR NO.50/1, NEW NO.78, PARA MESWARI NAGAR, FIRST STREET EXTENSION, ADYAR, CHENNAI 20, MEASURI NG 1216 SQ.FT ON 03.01.2007 HAS NOT BEEN DISPUTED BY THE REVENUE. TH E CASE OF THE ASSESSEE IS THAT A RESIDENTIAL BUILDING WAS CONSTRU CTED ON THE SAID PLOT ITA NO.1958/MDS/2013. :- 6 -: BEFORE THE DUE DATE OF FILING OF RETURN U/S. 139 FOR THE ASSESSMENT YEAR 2006-07. THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. JAGRITI AGGARWAL (SUPRA) WHILE ADJUDICAT ING THE ISSUE RELATING TO TIME LIMIT FOR MAKING DEPOSITS UNDER SCHEME VIZ A VIZ PURCHASE OF NEW PROPERTY FOR AVAILING EXEMPTION U/S.54 HAS HEL D, THAT DUE DATE FOR FURNISHING THE RETURN OF INCOME U/S. 139(1) OF THE ACT IS SUBJECT TO THE EXTENDED PERIOD PROVIDED U/S. 139(4) OF THE ACT . WHILE HOLDING SO THE HONBLE HIGH COURT CONSIDERED AND CONCURRED WITH THE DECISION OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CAS E OF FATHIMA BAI VS. ITO (SUPRA) AND THE DECISION OF HONBLE GAUHAT I HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALAN(SUPRA). 8. SO FAR AS THE TIME LIME FOR ASSESSEE TO INVEST THE AMOUNT OF CAPITAL GAINS IN PURCHASE /CONSTRUCTION OF NEW RESI DENTIAL ASSET OR INVESTMENT IN CAPITAL GAINS SCHEME, U/S.54(2)/54F(4 ) IS CONCERNED, IT HAS BEEN AFFIRMED BY THE HONBLE HIGH COURTS THAT T HE DUE DATE REFERS TO EXTENDED DUE DATE UNDER SUB-SECTION (4) OF SEC TION 139 OF THE ACT. 9. WE HAVE OBSERVED FROM THE RECORDS THAT THE ASSESSEE HAS NOT PLACED ON RECORD ANY DOCUMENT TO SHOW THAT THE RESI DENTIAL BUILDING WAS RAISED BEFORE THE DUE DATE OF FILING RETURN O F INCOME U/S.139(4) ITA NO.1958/MDS/2013. :- 7 -: OF THE ACT. THE FILE IS REMITTED TO THE ASSESSING OFFICER FOR LIMITED PURPOSE TO VERIFY FROM RECORDS, WHETHER THE RESIDEN TIAL BUILDING HAD COME INTO EXISTENCE BEFORE 31.03.2008. THE ASSESSE E IS DIRECTED TO PRODUCE RELEVANT DOCUMENTARY EVIDENCE BEFORE THE A SSESSING OFFICER TO SHOW THAT RESIDENTIAL BUILDING HAD COME INTO EXI STENCE BEFORE THE AFORESAID DATE. THE ASSESSING OFFICER AFTER VERIFY ING THE FACT SHALL GRANT BENEFIT OF EXEMPTION U/S. 54/54F, OF THE ACT, ACCORDINGLY. 10. IN RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 10 TH OF NOVEMBER, 2014 AT CHENNAI. SD/- SD/- ( . . . ) (DR. O.K. NARAYANAN) / VICE PRESIDENT ( ! ) (VIKAS AWASTHY) '# / JUDICIAL MEMBER !' /CHENNAI #$ /DATED:10.11.2014. K.V $% &'(' /COPY TO: 1. / APPELLANT 2. /RESPONDENT3. * ( )/CIT(A)4. * /CIT5. '+, - /DR 6. ,./ /GF. ITA NO.1958/MDS/2013. :- 8 -: