ITO, CHENNAI V. Shri A.Prem Kumar, CHENNAI

ITA 2050/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0911 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: B RAGHAV PRASAD ACA
• Keywords: Capital asset
• Section: 54F; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] I.T.A.NO. 2050/MDS/2012 ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER BUSINESS WARD II(2) CHENNAI VS SHRI A. PREM KUMAR OLD NO.3, NEW NO.5 7 TH STREET, NANDANAM EXTENSION NANDANAM, CHENNAI 600 035 [PAN AAIPK 7758 F] (APPELLANT) (RESPONDENT) I.T.A.NO. 2055/MDS/2012 ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER WARD I(2) CHENNAI VS SMT. P. JEEVARANI OLD NO.3, NEW NO.5 7 TH STREET, NANDANAM EXTENSION NANDANAM, CHENNAI 600 035 [PAN AACPJ 7878 B] (APPELLANT) (RESPONDENT) APPELLANT BY : DR. S. MOHARANA, CIT/DR RESPONDENT BY : SHRI B. RAGHAV PRASAD, ACA DATE OF HEARING : 29-01-2013 DATE OF PRONOUNCEMENT : 31-01-2013 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THESE ARE THE APPEALS FILED BY THE REVE NUE AGAINST SEPARATE ORDERS OF THE CIT(A)-VI, CHENNAI, DATED 3.8.2012. I.T.A.NO.2050 & 2055/12 :- 2 -: 2. THE REVENUE HAS TAKEN THE FOLLOWING COMMON GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS CONTR ARY TO LAW AND FACTS OF THE CASE. 2. THE LD CIT(APPEALS) ERRED IN HOLDING THAT THE AS SESSEE IS ELIGIBLE FOR EXEMPTION U/S.54F EVEN THE INVESTMENT IN CAPITAL GAINS SCHEME WAS MADE AFTER THE DUE DATE OF FILING THE RETURN U/S.139(1) OF THE ACT 2.1 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT T HERE IS AN OBLIGATION CAST ON THE PART OF THE ASSESSEE TO DEPO SIT THE CONSIDERATION NOT UTILIZED BEFORE THE DATE OF FURNI SHING THE RETURN U/S.139(1) OF ACT BY A SPECIFIC PERIOD. 2.2 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH E FACT THAT THE SPECIFIC PERIOD IN THIS CASE CANNOT BE LAT ER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB SECTION ( 1) OF SEC.139 OF THE ACT. 2.3 IT IS SUBMITTED THAT THE DECISION OF HON'BLE HI GH COURT OF GAUHATI IN THE CASE OF CIT VS. RAJESH KUMAR JALAN A RE DISTINGUISHABLE TO THE FACTS OF THE CASE AS THE ISS UE WAS CLAIM OF EXEMPTION OF RESIDENTIAL HOUSE PROPERTY U/ S.54 OF THE ACT. 2.4 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH E FACT THAT THE DUE DATE FOR FILING OF RETURN U/S.139(1) I N THE INSTANT CASE WAS 31.07.2009 AND THE ASSESSEE'S JOINT INVEST MENT OF RS.26.08 LAKHS(50 % OF RS.52.17 LAKHS) UPTO THE DATE OF FILING OF RETURN ALONE QUALIFIES FOR EXEMPTION U/S.54F ; 2.5 IT IS SUBMITTED THAT THE DECISION OF THE JURISD ICTIONAL ITAT IN THE CASE OF R.K.P. ELAYARAJAN VS DCIT, CIRCLE I, VE LLORE (23 TAXMANN.COM.206) RELIED UPON BY THE CIT(A) HAS NOT BECOME FINAL AND AN APPEAL HAS BEEN FILED BEFORE THE HON'B LE HIGH COURT AND PENDING. I.T.A.NO.2050 & 2055/12 :- 3 -: 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YE AR UNDER CONSIDERATION THE ASSESSEE, SHRI A. PREM KUMAR, SO LD SHARE OF AN IMMOVABLE PROPERTY FOR A CONSIDERATION OF ` 60 LAKHS AT FIELD NO.180B, IN SRINIVASA GARDEN, PADUR VILLAGE, CHINGELPATTU TA LUK. THE ASSESSEE CLAIMED EXEMPTION U/S 54F OF ` 58,60,718/- ON THE GROUND THAT AN AMOUNT OF ` 51,48,094/- WAS PAID TO CHETTINAD HOUSING TOWARDS INVESTMENT IN NEW ASSET AS HIS SHARE ALONGWITH HI S WIFE AND DEPOSITED ` 7,50,000/- IN CAPITAL GAINS ACCOUNT SCHEME TO BE U TILIZED FOR CONSTRUCTION. ACCORDING TO THE ASSESSING OFFIC ER, AS PER THE PROVISIONS OF SECTION 54F(4), THE ASSESSEE WAS R EQUIRED TO DEPOSIT THE AMOUNT OF THE NET CONSIDERATION IN A CAPITAL GA INS ACCOUNT SCHEME NOT LATER THAN THE DUE DATE FOR FURNISHING OF RETUR N BY THE ASSESSEE U/S 139(1) OF THE ACT AND SINCE THE DUE DATE WAS 31 .7.2009 AND THE DEPOSIT WAS MADE BY THE ASSESSEE ON 25.2.2010, HE DISALLOWED THE CLAIM U/S 54F OF THE ACT. THE ASSESSING OFFICER N OTICED THAT THE ASSESSEE TOGETHER WITH HIS WIFE MADE PAYMENT TO THE EXTENT OF ` 52,17,625/- WHEREIN THE SHARE OF EACH OF THE ASSES SEES WAS ` 26,08,813/- BEFORE 31.7.2009 AND HENCE, HE RESTRICT ED THE DEDUCTION U/S 54F TO ` 25,48,253/-. SIMILARLY, THE ASSESSEE, SMT. P. J EEVARANI, I.T.A.NO.2050 & 2055/12 :- 4 -: SOLD OF HER SHARE IN IMMOVABLE PROPERTY FOR A CON SIDERATION OF ` 60 LAKHS AT FIELD NO.180B, IN SRINIVASA GARDEN, PADUR VILLAGE, CHINGELPATTU TALUK AND FOR THE SAME REASONS, THE A SSESSING OFFICER RESTRICTED THE DEDUCTION U/S 54F TO ` 25,48,253/-. 4. THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER. BEFORE THE CIT(A), THE ASSESSEE RELIED O N THE DECISION OF THIS TRIBUNAL IN THE CASE OF R.K.P.ELAYARAJAN VS DCIT, [ 2012] 23 TAXMANN.COM 206(CHENNAI) AND SUBMITTED THAT IN THE SIMILAR FACTUAL CIRCUMSTANCES, THE TRIBUNAL HAS UPHELD THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54F. IT WAS FURTHER SUBMITTED THAT AT PARA 14 OF ITS ORDER, THE TRIBUNAL HAS DISTINGUISHED THE FACTS OF THE CASE IN THE JUDGMENT CIT VS V.R.DESAI, 197 TAXMAN 52(KERALA), WHICH WAS RELIED UPON BY THE ASSESSING OFFICER IN THE ASSESSEES C ASE TO DENY A PART OF DEDUCTION U/S 54F OF THE ACT. IT WAS ARGUED THAT IN THE SAID JUDGMENT, THE TRIBUNAL ALSO CONSIDERED THE JUDGMENT S OF THE HON'BLE P&H HIGH COURT IN THE CASE OF CIT VS MS. JAGRITI AG GARWAL [2011] 203 TAXMAN 203, DECISION OF THE HON'BLE GAUHATI HIGH CO URT IN THE CASE OF CIT VS RAJESH KUMAR JALAN [2006] 157 TAXMAN 398 (GA U) AND THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF FATIMA BAI VS ITO [2009] 32 DTR (KAR.) 243. HENCE, IT WAS PRA YED BEFORE THE CIT(A) TO ALLOW DEDUCTION U/S 54F OF THE ACT FOR ` 58,60,718/- AS THE I.T.A.NO.2050 & 2055/12 :- 5 -: SAME WAS INVESTED IN NEW HOUSE PROPERTY BEFORE THE DUE DATE OF FILING OF RETURN U/S 139(1) OF THE ACT. 5. THE CIT(A), AFTER CONSIDERING THE SUBMISSIONS, ALLO WED THE APPEAL OF THE ASSESSEE. 6. THE CIT/DR RELIED ON THE DECISION OF THE HON'BLE KE RALA HIGH COURT IN THE CASE OF CIT VS V.R. DESAI (SUPRA). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSIN G THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAIL ABLE ON RECORD, WE FIND THAT IN THE RETURN OF INCOME FILED THE ASSESSEE CLAIMED DEDUCTION U/S 54F OF ` 58,60,718/- ON THE GROUND THAT AN AMOUNT OF ` 51,48,094/- WAS PAID TO CHETTINAD HOUSING TOWARDS I NVESTMENT IN NEW ASSET AS HIS SHARE ALONGWITH HIS WIFE, AND DEPO SIT IN CGAS OF ` 7,50,000/- TO BE UTILIZED FOR CONSTRUCTION. AS THE ASSESSEE HAD INVESTED ` 25,48,253/- IN THE PURCHASE OF NEW HOUSE PROPERTY UPTO THE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF T HE ACT WHICH WAS 31.7.2009, HE RESTRICTED THE CLAIM FOR DEDUCTION U/ S 54F TO THE ASSESSEE TO THAT AMOUNT AND DISALLOWED THE BALANCE AMOUNT OF CLAIM FOR DEDUCTION OF ` 31,03,590/-. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HON'BLE P&H HIGH COURT IN THE CASE OF CIT VS MS. JAGRITI AGGARWAL (SUPRA) AND THE DECISION OF THIS TRIBUNAL IN THE CASE OF R.K.P. ELAYARAJAN VS DCIT(S UPRA) WHERE IT HAS I.T.A.NO.2050 & 2055/12 :- 6 -: BEEN HELD THAT FOR UTILIZATION OF CAPITAL GAINS FOR PURCHASE OR CONSTRUCTION OF NEW HOUSE PROPERTY BEFORE THE DUE D ATE OF FURNISHING OF RETURN OF INCOME U/S 139 MEANS THE DATE AS PRES CRIBED NOT ONLY U/S 139(1) BUT ALSO U/S 139(4) OF THE ACT. THE FI NDINGS OF THE CIT(A) READ AS UNDER: 6.2 DURING APPEAL PROCEEDINGS THE AR FILED WRITTEN SUBMISSION ENCLOSING COPIES OF VARIOUS JUDGEMENTS R ELIED IN SUPPORT OF THE GROUND. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE AR. THE DECISIONS RELIED ON BY T HE AR DURING APPEAL PROCEEDINGS WERE ALSO RELIED ON BEFOR E THE AO. IN THE CASE OF R.K.P. ELAYARAJAN VS DCIT. HON'B LE ITAT CHENNAI 'B' BENCH IN SIMILAR FACTUAL CIRCUMSTANCES UPHELD THE CLAIM OF APPELLANT FOR DEDUCTION U/S 54F. IN PA RA 14 OF THE JUDGEMENT THE TRIBUNAL ALSO DISTINGUISHED THE F ACTS OF THE CASE IN THE JUDGEMENT CIT VS V.R. DESAI (197 TA XMAN 52) (KER) WHICH HAS BEEN RELIED ON BY THE AO IN THE APPELLANT'S CASE TO DENY PART OF THE DEDUCTION U/S 54F. IN THE SAID JUDGEMENT THE TRIBUNAL ALSO CONSIDERED THE JUDGEMENTS OF PUNJAB & HARYANA HIGH COURT, KARNATAK A HIGH COURT AND GUWAHATI HIGH COURT RELIED ON BY THE APPELLANT. THE RELEVANT PORTION OF THE JUDGEMENT OF THE TRIBUNAL IS REPRODUCED HEREUNDER: 13 . THUS, IN THE INSTANT CASE, WE FIND THAT THE ELIGIBL E NEW ASSET WAS NOT PURCHASED WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TO OK PLACE. THUS, THE AMOUNT WHICH IS NOT UTILIZED BY THE ASSE SSEE FOR THE PURCHASE OF NEW ASSET BEFORE THE DATE OF FURNIS HING THE RETURN OF INCOME U/S 139 WAS REQUIRED TO BE DE POSITED AS PER THE PROVISIONS OF SUB-SECTION(4) FOR AVAILIN G DEDUCTION U/S 54F IN RESPECT OF THOSE AMOUNTS ALSO . IN OTHER WORDS, AS PER THE PLAIN LANGUAGE EMPLOYED IN THE ABOVE SUB-SECTION(4), ONLY THE AMOUNT WHICH WAS ACT UALLY UTILIZED BY THE ASSESSEE FOR THE PURPOSE OF PURCHA SE OF THE NEW RESIDENTIAL HOUSE BEFORE THE DATE OF FURNIS HING OF THE RETURN OF INCOME U/S 139 SHALL ONLY BE ELIGIB LE FOR COMPUTATION OF DEDUCTION U/S 54F(1) OF THE ACT. WE FIND THAT IN THE INSTANT CASE IT IS NOT IN DISPUTE THAT THE RETURN OF INCOME FOR THE RELEVANT YEAR WAS FILED BY THE ASSE SSEE ON 9.1.2009, WHICH IS THE DATE OF FURNISHING OF RETURN OF I.T.A.NO.2050 & 2055/12 :- 7 -: INCOME U/S 139 BY THE ASSESSEE. THUS, IN OUR CONSIDERED VIEW, THE AMOUNT UTILIZED BY THE ASSESS EE FOR PURCHASE OF NEW RESIDENTIAL HOUSE BEFORE 9.1.2009 QUALIFIES FOR CONSIDERATION WITH REFERENCE TO WHICH DEDUCTION U/S 54F(1) IS TO BE COMPUTED. THUS, THE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT ONLY THE AMOUNT W HICH WAS UTILIZED BY THE ASSESSEE BEFORE 31.3.2008 ONLY QUA LIFIES FOR DEDUCTION U/S 54F OF THE ACT. THE ASSESSEE C LAIMED BEFORE US THAT ` 15 LAKHS WAS UTILIZED BY HIM FOR T HE PURCHASE OF NEW RESIDENTIAL FLAT ON OR BEFORE 9.1.2 009. WE, THEREFORE, SET ASIDE THE ORDERS OF THE LOWER AU THORITIES ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO V ERIFY THE AMOUNT WHICH WAS INVESTED BY THE ASSESSEE BEFORE T HE DATE OF FURNISHING OF RETURN OF INCOME U/S 139 BY THE ASSESSEE AND THEREAFTER ALLOW THE DEDUCTION U/S 54 F(1) WITH REFERENCE TO THE SAID AMOUNT AS PER LAW. NEED LESS TO MENTION THAT HE SHALL ALLOW REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE ADJU DICATING THE ISSUE AFRESH. 14. BEFORE PARTING WITH THIS APPEAL, WE WOULD LIK E TO OBSERVE THAT THE DECISION RELIED ON BY THE DR IS DISTINGUISHABLE ON FACTS AND IS NOT APPLICABLE FOR DECIDING THE ISSUE UNDER CONSIDERATION. IN THAT CASE, THE H ON'BLE KERALA HIGH COURT FOUND THAT CONSIDERATION FOR TRAN SFER OF LONG TERM CAPITAL ASSET WAS ACTUALLY NOT UTILIZED B Y THE ASSESSEE EITHER FOR CONSTRUCTION OF NEW RESIDENTIAL HOUSE OR FOR DEPOSITING THE SAME IN ANY BANK UNDER THE NO TIFIED SCHEME OF 54F OF THE ACT. THE HON'BLE HIGH COURT F OUND THAT THE ASSESSEE ALLOWED THE PARTNERSHIP FIRM TO RETAIN THE CONSIDERATION AMOUNT WITH THE FIRM FOR ITS BUSI NESS PURPOSES. WE FIND THAT THE FACTS INVOLVED BEFORE US ARE NOT SIMILAR AND THE ISSUE INVOLVED IS ALSO QUITE DI FFERENT. THE ISSUE BEFORE US IS WHETHER THE AMOUNT WHICH WAS UTILIZED BY THE ASSESSEE FOR MAKING INVESTMENT IN PURCHASE OF NEW RESIDENTIAL HOUSE BEFORE THE DATE OF FILING OF RETURN U/S 139(4) QUALIFIES FOR DEDUCTION U/S 54F(1) OR ONLY THE AMOUNT WHICH WAS UTILIZED FOR INVESTMENT I N PURCHASE OF NEW RESIDENTIAL HOUSE BEFORE THE DUE DA TE OF FILING OF RETURN U/S 139(1) ALONE QUALIFIES FOR DE DUCTION U/S 54F(1) OF THE ACT. WE FIND THAT ON THE ABOVE ISSUE VIEW TAKEN BY US ABOVE IN THIS ORDER IS FULLY SUPPORTED BY THE DECISION OF THE HON'BLE P&H HIGH COURT IN THE CASE OF CIT VS JAGRITI AGGARWAL (SUPRA) WHEREIN IT WAS HELD THA T SECTION 139 INCLUDES SECTION 139(4) ALSO. THEREFO RE, THE APPEAL OF THE ASSESSEE IS ALLOWED IN THE MANNER IN DICATED ABOVE. 15. IN THE RESULT, THE APPEAL OF THE A SSESSEE IS ALLOWED. I.T.A.NO.2050 & 2055/12 :- 8 -: 6.3 THEREFORE, RESPECTFULLY FOLLOWING THE JUDGE MENT OF JURISDICTIONAL TRIBUNAL, I DIRECT THE AO TO ALLOW DEDUCTION CLAIME D U/S 54F. THESE GROUNDS OF APPEAL ARE ALLOWED. 8. NO SPECIFIC ERROR COULD BE POINTED OUT BY THE CIT/D R IN THE ORDER OF THE CIT(A). THE CIT/DR HAS RELIED ON THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS V.R . DESAI (SUPRA) WHICH HAS BEEN CONSIDERED BY THE CHENNAI A BENCH OF THE TRIBUNAL IN THE CASE OF R.K.P. ELAYARAJAN VS DCIT(SUPRA) AND TH EN ALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY GOOD AND JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF T HE CIT(A) WHICH IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE IN BOTH THE CASES ARE DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENU E ARE DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 31 ST OF JANUARY, 2013, AT CHENNAI. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 31 ST JANUARY, 2013 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR