Vasala Balakrishnan Ravikrishnan , CHENNAI V. ACIT Non Corporate Circle 6 , CHENNAI

ITA 1967/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5698 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PUSHYA SEETHARAMAN
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1967/MDS/2017 & '& / ASSESSMENT YEAR : 2013-14 SHRI VASALA BALAKRISHNAN RAVIKRISHNAN, NO.6, SUNRISE AVENUE, AKKARAI, SHOLLINGANALUR, CHENNAI - 600 119. PAN : AAFPR 1666 N V. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 6, CHENNAI - 600 006. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SMT. PUSHYA SEETHARAMAN, SR. ADVOCATE +,)* - . / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT / - 0' / DATE OF HEARING : 22.11.2017 12' - 0' / DATE OF PRONOUNCEMENT : 30.11.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -5, CHENNA I, DATED 27.06.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2 I.T.A. NO.1967/MDS/17 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF THE CLAIM OF EXEMPTION UNDER SECTION 54 OF THE INCOME-T AX ACT, 1961 (IN SHORT 'THE ACT'). 3. SMT. PUSHYA SEETHARAMAN, THE LD. SR. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE DISCLOSED LONG TERM CAPITAL GAINS OF 76,78,300/- AND CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT ON THE INVESTMENT MADE IN NEW RESIDENTIAL H OUSE TO THE EXTENT OF 76,78,300/-. ACCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE SOLD A RESIDENTIAL PROPERTY AT DOOR NO.20, KALATHIAPPA STREET, CHOOLAI ALONG WITH HIS BROTHER FOR A TOTAL CONSIDERATION OF 2 CRORES BY MEANS OF REGISTERED SALE DEED DATED 22.10 .2012 AND 03.12.2012. THE ASSESSEES SHARE COMES TO 1 CRORE. ACCORDING TO THE LD. SR. COUNSEL, THE PROPERTY WAS ORIGINALLY PURCHASED BY THE ASSESSEES FATHER ON 27.10.1977. ON THE DEMISE OF THE ASSESSEES FATHER, THE ASSESSEE INHERITED THE PROPERTY ALONG W ITH HIS BROTHER AND MOTHER. ACCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE AND HIS BROTHER GOT THEIR MOTHERS SHARE BY MEANS OF SETTLE MENT DEED DATED 23.05.2012. 4. THE LD. SR. COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT THE CONSTRUCTION WAS STARTED BY MEANS OF AGREEMENT WITH A BUILDER 3 I.T.A. NO.1967/MDS/17 IN NOVEMBER, 2009. IN FACT, ACCORDING TO THE LD. S R. COUNSEL, THE CONSTRUCTION WAS COMMENCED IN THE MONTH OF APRIL, 2 010. DUE TO MISUNDERSTANDING IN THE FAMILY, THE CONSTRUCTION WA S HALTED MIDWAY. AFTER MEDIATION, THE CONSTRUCTION WAS STARTED ONCE AGAIN AND COMPLETED. ACCORDING TO THE LD. SR. COUNSEL, THE N EW HOUSE WAS ASSESSED TO PROPERTY TAX IN THE FIRST HALF OF FINAN CIAL YEAR 2012-13. THE LD. SR. COUNSEL HAS PLACED A COPY OF PROPERTY T AX DETAILS SAID TO BE DOWNLOADED FROM THE WEBSITE MAINTAINED BY CORPOR ATION OF CHENNAI. PLACING RELIANCE ON THE JUDGMENT OF KARNA TAKA HIGH COURT IN CIT V. J.R. SUBRAMANYA BHAT (1987) 165 ITR 571, THE LD. SR. COUNSEL SUBMITTED THAT IT IS IMMATERIAL ABOUT THE D ATE OF COMMENCEMENT OF CONSTRUCTION OF THE NEW BUILDING. WHAT IS MATERIAL IS COMPLETION OF CONSTRUCTION WITHIN TWO Y EARS FROM THE DATE OF SALE OF THE OLD ASSET. ACCORDING TO THE LD. SR. COUNSEL, SINCE THE OLD ASSET WAS SOLD AND NEW ASSET WAS CONSTRUCTED WI THIN TWO YEARS FROM THE DATE OF SALE, ACCORDING TO THE LD. SR. COU NSEL, THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 54 OF THE A CT. THE CIT(APPEALS) CONFIRMED THE ORDER OF THE ASSESSING O FFICER ON THE GROUND THAT THE COMMENCEMENT WAS STARTED BEFORE THE DATE OF SALE OF PROPERTY. THE LD. SR. COUNSEL HAS ALSO PLACED H ER RELIANCE ON THE 4 I.T.A. NO.1967/MDS/17 DECISION OF AHMEDABAD BENCH OF THIS TRIBUNAL IN ACI T V. SUBHASH SEVARAM BHAVNANI (2012) 23 TAXMANN.COM 94. 5. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT SECTION 54 OF THE ACT CLEARLY SAYS THAT FOR THE PURPOSE OF CLAIMING EXEMP TION, THE ASSESSEE WHO WITHIN A PERIOD OF ONE YEAR BEFORE OR THREE YEARS AFTER THE DATE ON WHICH TRANSFER TOOK PLACE, SHALL CONSTR UCT A RESIDENTIAL IN INDIA, IS ELIGIBLE FOR EXEMPTION. IN THIS CASE, AC CORDING TO THE LD. D.R., THE CONSTRUCTION WAS COMPLETED. HOWEVER, THE CONSTRUCTION WAS COMMENCED ONE YEAR BEFORE THE SALE OF THE PROPE RTY. THEREFORE, ACCORDING TO THE LD. D.R., IN VIEW OF TH E DECISION OF THIS BENCH OF THE TRIBUNAL IN MRS. HEMA HARATHI V. ITO I N I.T.A. NO.2922/MDS/2016 DATED 11.01.2017, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE ALONG WITH HIS BROTHER SO LD THE PROPERTY AND ACQUIRED A NEW LAND AND COMMENCED CONSTRUCTION. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE AS SESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54 OF THE ACT? THE LD. SR. COUNSEL BY 5 I.T.A. NO.1967/MDS/17 PLACING HER RELIANCE ON THE JUDGMENT OF KARNATAKA H IGH COURT IN J.R. SUBRAMANYA BHAT (SUPRA) SUBMITTED THAT COMMENC EMENT OF CONSTRUCTION IS IMMATERIAL FOR THE PURPOSE OF SECTI ON 54 OF THE ACT. THE BUILDING WAS CLAIMED TO BE COMPLETED. THE LD. SR. COUNSEL SUBMITTED THAT THE PROPERTY WAS ASSESSED TO PROPERT Y TAX BY CORPORATION OF CHENNAI. THESE FACTS WERE NOT TAKEN INTO CONSIDERATION BY THE AUTHORITIES BELOW. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSU E IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSIN G OFFICER SHALL RE- EXAMINE THE MATTER AFRESH AFTER CONSIDERING THE PRO PERTY TAX ASSESSMENT SAID TO BE MADE BY THE CORPORATION OF CH ENNAI AND THEREAFTER DECIDE THE ISSUE, AFTER CONSIDERING THE JUDGMENT OF KARNATAKA HIGH COURT IN J.R. SUBRAMANYA BHAT (SUPRA ) AND DECISION OF THIS BENCH OF THE TRIBUNAL IN MRS. HEMA HARATHI (SUPRA), IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE O PPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 I.T.A. NO.1967/MDS/17 ORDER PRONOUNCED ON 30 TH NOVEMBER, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 30 TH NOVEMBER, 2017. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT- 9, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.