ITO Non Corporate Ward 12(1) , CHENNAI V. Srimurugan Paramasivam , CHENNAI

ITA 1993/CHNY/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6348 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 17-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S SRIDHAR DORAJCITD R
• Assessee Lawyers: N V BALAJI
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , #$ % , ( SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ./ ITA NO. 1993/CHNY/2017 / ASSESSMENT YEAR : 2013-14 THE INCOME TAX OFFICE, NON-CORPORATE WARD 12(1), ROOM NO.214,C-WING,2 ND FLOOR, 16,GREAMS ROAD,CHENNAI-6. V. SRI SRIMURUGAN PARAMASIVAM , PROP.M/S.S.R.TRANS, 158,CORAL MERCHANT STREET, MANNADY,CHENNAI 600 001. PAN : AGEPP 9305 M (-/ APPELLANT) (./-/ RESPONDENT) - 0 / APPELLANT BY: MR.S.SRIDHAR DORA,JCIT,D.R ./- 0 / RESPONDENT BY : MR.N.V.BALAJI,ADVOCATE 0 / DATE OF HEARING : 04.07.2019 0 / DATE OF PRONOUNCEMENT : 05.07.2019 / O R D E R PER VIKRAM SINGH YADAV, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A)-13, CHENNAI, DATED 06.06.2017 WHEREIN THE R EVENUE HAS CHALLENGED THE ACTION OF THE LD.CIT(A) IN ALLOWING THE EXEMPTION TO THE ASSESSEE U/S.54F OF THE ACT. 2. AT THE OUTSET,THE LD.AR SUBMITTED THAT ALONG WI TH HIS BROTHER,HE HAS SOLD THE IMPUGNED PIECE OF LAND AND THE CO-ORDI NATE BENCH OF THIS 2 I.T.A. NO.1993/CHNY/2017 TRIBUNAL HAS SINCE DECIDED THE MATTER IN THE CASE O F BROTHER OF THE ASSESSEE SHRI PARAMASIVAM GNANAVEL IN ITA NO.1920/M DS/2017 DATED 05.02.2018 WHEREIN UNDER IDENTICAL SET OF FACTS AND CIRCUMSTANCES OF THE CASE, THE DEDUCTION U/S.54F HAS BEEN ALLOWED. IN T HIS REGARD, OUR REFERENCE WAS DRAWN TO PARAS 7 & 7.1 OF THE DECISIO N OF CO-ORDINATE BENCH OF THIS TRIBUNAL WHICH READS AS UNDER:- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFU LLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS O F THE CASE IT IS APPARENT THAT THE LD.AO HAS DENIED THE BENEFIT OF S ECTION 54F TO THE ASSESSEE ONLY FOR THE REASON THAT HE HAS NOT DEPOSI TED THE SALE PROCEEDS IN THE CAPITAL GAIN SCHEME ACCOUNT WITHIN THE DUE DATE OF FILING THE RETURN U/S.139(1) OF THE ACT, THOUGH THE AMOUNT WAS PLACED WITH THE NATIONALIZED BANK AND INVESTED FOR THE PURCHASE OF A RESIDENTIAL HOUSE WITHIN THE TIME LIMIT STIPULATED U/S.54F OF THE ACT . WE FIND THIS IDENTICAL ISSUE HAVE BEEN ALREADY DECIDED IN FAVOUR OF THE AS SESSEE BY THIS BENCH OF THE TRIBUNAL IN ITA NO.2455/MDS/2017 VIDE ORDER DATED 30.01.2018. THE GIST OF THE ORDER IS REPRODUCED HER EIN BELOW:- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. AT THE OUTSET WE FI ND THIS ISSUE SQUARELY COVERED BY THE DECISION OF THE CHENNAI BEN CH OF THE TRIBUNAL IN ITA NO.1167/MDS/2016 VIDE ORDER DATED 15.09.2016 WHEREIN ON THE IDENTICAL SITUATION IT WA S HELD THAT SUCH SMALL TECHNICAL BREACH WILL NOT DISENTITLE THE ASSESSEE THE BENEFIT OF SECTION 54 OF THE ACT. THE GIST OF THE D ECISION IS REPRODUCED HEREIN BELOW FOR REFERENCE:- 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFUL LY PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE D ECISION OF SHRI MADHUVAN PRASAD VS. ITO, SUPRA THE CHENNAI BEN CH OF THE TRIBUNAL HAS ALLOWED THE BENEFIT OF SECTION 54 OF THE ACT BECAUSE THE ASSESSEE HAD FULFILLED ALL THE CONDITIO NS PRESCRIBED UNDER SECTION 54 OF THE ACT BARRING THE DEPOSIT OF THE SALE PROCEEDS IN THE CAPITAL GAIN SCHEME ACCOU NT AS PRESCRIBED UNDER SECTION 54(2) OF THE ACT. IN THAT DECISION RELIANCE WAS ALSO PLACED IN THE DECISION OF HONBLE APEX COURT 3 I.T.A. NO.1993/CHNY/2017 IN THE CASE OF MOTILAL PADAMPAT SUGARMILL CO.LTD. V S. STATE OF UTTAR PRADESH & ORS WHEREIN IT WAS HELD, THAT THUS THERE IS NO PRESUMPTION THAT EVERY PERSON KNOWS THE LAW. IT IS OFTEN SAID THAT EVERYONE IS PRESUMED TO KNOW THE LAW, BUT THAT IS NOT A CORRECT STATEMENT THERE IS NO SUCH MAXIM KNOWN TO T HE LAW. IN THE GIVEN CASE BEFORE US ALSO, IT IS NOT DISPUTED T HAT THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS PRESCRIBE D UNDER SECTION 54 OF THE ACT BARRING THE DEPOSIT OF THE SA LE PROCEEDS IN THE CAPITAL GAIN SCHEME ACCOUNT. MOREOVER, TH E FACTS REVEAL THAT THE ASSESSEE HAD DEPOSITED THE ENTIRE S ALE PROCEEDS IN HIS SAVINGS BANK ACCOUNT MAINTAINED WIT H NATIONALIZED BANK OUT OF WHICH HE HAS CONSTRUCTED H IS HOUSE. THE ONLY SMALL LACUNA ASSESSEE HAD MADE IS THAT THE ASSESSEE THOUGH HAD PLACED THE ENTIRE SALE PROCEEDS IN THE NATIONALIZED BANK HE HAS NOT TRANSFERRED THE SAME I N THE CAPITAL GAIN SCHEME ACCOUNT. CONSIDERING THESE FA CTS OF THE CASE AND THE DECISIONS OF THE TRIBUNAL AND THE HON BLE APEX COURT CITED ABOVE, WE ARE OF THE CONSIDERED VIEW TH AT FOR THIS SMALL TECHNICAL LAPSE OF THE ASSESSEE, THE BENEFIT OF SECTION 54 SHOULD NOT BE DENIED. SECTION 54 OF THE ACT IS A BE NEFICIAL PROVISION AND A BENEFICIAL INTERPRETATION HAS TO BE MADE AS FAR AS POSSIBLE FOR GIVING BENEFIT TO THE ASSESSEE. THE ASSESSEE HAD PROCEEDED TO COMPLY WITH THE PROVISIONS OF SECT ION 54 OF THE ACT BUT HAS ONLY MADE A SMALL TECHNICAL BREACH WHICH WE ARE OF THE CONSIDERED VIEW SHOULD NOT DISENTITLE TH E ASSESSEE FOR THE BENEFIT OF SECTION 54 OF THE ACT. THEREFORE , WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO GRANT THE B ENEFIT OF SECTION 54 OF THE ACT TO THE ASSESSEE AND ACCORDING LY DELETE THE ADDITION MADE BY HIM WHICH WAS FURTHER SUSTAINE D BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 7.1 FURTHER THE LD.CIT(A) HAS ALSO FOLLOWED THE DE CISIONS OF VARIOUS HIGHER JUDICIARY WHEREIN THE ISSUED IS HELD IN FAVO UR OF THE ASSESSEE IN SIMILAR CIRCUMSTANCES. THEREFORE WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. 7.1 SINCE THE ISSUE HAS BEEN ALREADY DECIDE IN FAV OUR OF THE ASSESSEE BY THE CHENNAI BENCH OF THE TRIBUNAL, BANG ALORE BENCH OF THE TRIBUNAL MENTIONED SUPRA AND ALSO BY THE HONBL E KARNATAKA HIGH COURT MENTIONED SUPRA, WHICH THE LD.CIT(A) HAS FOLL OWED, WE DO NOT FIND IT NECESSARY TO INTERFERE IN HIS ORDER. 4 I.T.A. NO.1993/CHNY/2017 3. THE LD.DR IS HEARD WHO HAS RELIED ON THE FINDIN GS OF LD. ASSESSING OFFICER. HE SUBMITTED THAT SINCE THE ASSESSEE HAS N OT DEPOSITED THE SALE CONSIDERATION BEFORE THE DUE DATE OF FILING OF THE RETURN OF INCOME, THE LD.ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE EXE MPTION SO CLAIMED BY THE ASSESSEE U/S.54F OF THE ACT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. DURING THE YEAR UNDER CONSIDER ATION, THE ASSESSEE ALONG WITH HIS BROTHER SHRI PARAMASIVAM GNANAVEL HA S A PIECE OF LAND AT NOOMBAL VILLAGE UNDER SURVEY NO.114 PART 3A COMPRIS ING OF 1.68 ACRES (BELONGING TO ASSESSEE) UNDER KUNDRATHUR SRO AMBATH UR CIRCLE, REGISTRATION DISTRICT OF THIRUVALLUR FOR TOTAL CONS IDERATION OF RS.1,87,00,000/- AND THE ASSESSEES SHARE THEREIN C OMES TO RS.96 LAKHS AND AFTER ALLOWING THE INDEXED COST OF LAND, THE AS SESSEE HAD CLAIMED THE LONG TERM CAPITAL GAINS U/S.54F OF THE ACT AMOUNTIN G TO RS.87,39,205/- AND THE WHOLE OF THAT HAS BEEN CLAIMED AS DEDUCTION U/S.54F OF THE ACT. AS PER THE FINDINGS OF THE LD.ASSESSING OFFICER, TH E ASSESSEE HAS MADE A TOTAL PAYMENT OF RS.83,22,500/- AND HAS ENTERED INT O A SALE AGREEMENT FOR A PURCHASE OF HOUSE PROPERTY ON 06.12.2013 AND HAS ALSO ENTERED INTO RENOVATION CONTRACT AGREEMENT FOR CARRYING OUT THE NECESSARY RENOVATION WITHIN A PERIOD OF 9 MONTHS FROM THE DAT E OF COMMENCEMENT OF WORK. HOWEVER, GIVEN THAT THE ASSESSEE HAS NOT SPENT ANY AMOUNT 5 I.T.A. NO.1993/CHNY/2017 TOWARDS PURCHASE OF THE NEW ASSET BEFORE THE DUE DA TE OF FILING OF THE RETURN OF INCOME AND THE AMOUNT HAS NOT BEEN INVEST ED IN THE SPECIFIED SCHEME OF CAPITAL GAINS, THE DEDUCTION CLAIMED U/S. 54F OF THE ACT HAS BEEN DENIED BY THE LD.ASSESSING OFFICER. 5. BEFORE THE LD.CIT(A), THE ASSESSEE CONTENDED T HAT THE ASSESSEE HAS PURCHASED A RESIDENTIAL HOUSE WITHIN TWO YEARS OF TRANSFER OF THE ORIGINAL ASSET, WHICH IS THE PRIME CONDITION SO SPE CIFIED U/S.54F OF THE ACT AND SINCE HE HAS SATISFIED THE SAID CONDITION, HE S HALL BE ELIGIBLE FOR EXEMPTION U/S.54F OF THE ACT. LD.CIT(A) RELYING ON THE ORDER OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE CIT VS. RAMACHANDR A RAO REPORTED IN 56 TAXMANN 163, HAS DIRECTED THE LD.ASSESSING OFFIC ER TO ALLOW THE CLAIM U/D.54F OF THE ACT FOR THE REASON THAT UNDISPUTEDLY THE ASSESSEE HAS PURCHASED A NEW RESIDENTIAL ASSET WITHIN TWO YEARS OF SALE OF THE ORIGINAL ASSET. 6. WE FIND THAT ON IDENTICAL SET OF FACTS, THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF B ROTHER OF THE ASSESSEE SHRI PARAMASIVAM GNANAVEL IN RESPECT OF THE SAME TR ANSACTION OF SALE OF THE LAND, HAS GIVEN THE RELIEF TO THE ASSESSEE IN T ERMS OF EXEMPTION U/S.54F OF THE ACT. THEREFORE, IN THE LIGHT OF FACT S AND CIRCUMSTANCES OF THE CASE, FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF BROTHER OF THE ASSESSEE SHRI PARAMAS IVAM GNANAVEL, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S.54F OF THE ACT. HOWEVER, AS FAR AS THE QUAN TUM OF EXEMPTION, WHICH 6 I.T.A. NO.1993/CHNY/2017 CAN BE ALLOWED TO THE ASSESSEE, WE FIND THAT THE AS SESSEE HAS SPENT AN AMOUNT OF RS.83,22,500/- TOWARDS PURCHASE AND RENOV ATION OF THE NEW HOUSE PROPERTY AGAINST HIS SHARE OF SALE CONSIDERAT ION AMOUNTING TO RS.96 LAKHS. THEREFORE, THE LD.ASSESSING OFFICER I S DIRECTED TO ALLOW THE EXEMPTION PROPORTIONATELY IN TERMS OF SECTION 54F(1 ) OF THE ACT. TO THIS LIMITED EXTENT, THE MATTER IS REMANDED BACK TO THE FILE OF LD.ASSESSING OFFICER. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05/07/2019 AT CHENNAI. SD/- SD/- ( ) ( ) (GEORGE MATHAN) (VIKRAM SINGH YADAV) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /CHENNAI, 6 /DATED, THE 05 TH JULY, 2019. KS SUNDARAM 0 .%# 8# /COPY TO: 1. -/ APPELLANT 2. ./- / RESPONDENT 3. 9 () /CIT(A) 4. 9 /CIT 5. # . /DR 6. /GF.