S.Vanmathi, CHENNAI V. ITO Non Corporate Ward 5(2), CHENNAI

ITA 2268/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8839 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 01-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V M MAHIDAR
• Assessee Lawyers: D ANAND
• Keywords: Competent authority
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH : CHENNAI . . . , . , [BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER] ./I.T.A. NO.2268/CHNY/2018 / ASSESSMENT YEAR : 2014-15 SMT.S.VANMATHI P-6. OLD NO.P-11,19 TH STREET, ANNA NAGAR,CHENNAI-600040 VS. INCOME TAX OFFICER, NON-CORPORATE WARD-5(2), CHENNAI-600 006. (PAN:ACMPV1311R ) ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI D.ANAND, ADVOCATE /RESPONDENT BY : SHRI V.M.MAHIDAR, JCIT /DATE OF HEARING : 18.12 . 2018 /DATE OF PRONOUNCEMENT : 19 .12 . 201 8 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: ASSESSEE IN THIS APPEAL, WHICH IS DIRECTED AGAINST AN ORDER DATED 26.06.2018 OF COMMISSIONER OF INCOME TAX (APPEALS)- 7, CHENNAI, IS AGGRIEVED ON HER CLAIM FOR DEDUCTION UNDER SECTION 54 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) BEING DENIED CONSIDE RING IT TO BE NOT ELIGIBLE FOR SUCH CLAIM. 2. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HAD SOLD A PROPERTY BEARING NO.C-3/2, BHARATHIDASAN COLONY, K.K.NAGAR, CHENNAI ITA NO. 2268/CHNY/2018 :- 2 -: FOR A CONSIDERATION OF 35,00,000/-ON 12.03.2014. A S PER LEARNED AR, THE SAID FLAT WAS PURCHASED BY THE ASSESSEE ON 22.0 7.2004 FOR A PRICE OF 6,50,000/-. ACCORDING TO THE LEARNED AR, ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT, ON THE CAPIT AL GAINS, FOR AN INVESTMENT MADE IN CONSTRUCTION OF RESIDENTIAL FLAT AT A PROPERTY AT 435, MINT STREET, CHENNAI-79. AS PER THE LEARNED AR, AS SESSEE HAD ENTERED INTO CONSTRUCTION AGREEMENT DATED 28.03.2014 WITH A BUILDING CONTRACTOR AND PAID 18,00,000/- AND 11.25 LAKHS TOWARDS CONS TRUCTION COST. CONTENTION OF THE LEARNED AR WAS THAT LOWER AUTHORI TIES DID NOT ALLOW THE CLAIM OF THE ASSESSEE TAKING A VIEW THAT THE CLAIM WAS ON IMPROVEMENT. ACCORDING TO THE LEARNED AR, IT WAS TRUE THAT PROPE RTY WHEREIN CONSTRUCTION WAS DONE BY THE ASSESSEE WAS PURCHASED BY IT ON 29.07.2002 ALONG WITH BUILDING THEREON. HOWEVER, A CCORDING TO HIM, THE SAID BUILDING WAS DEMOLISHED AND DEDUCTION CLAIMED UNDER SECTION 54 OF THE ACT WAS ON THE NEW CONSTRUCTION. CONTENTION OF THE LEARNED AR WAS THAT LEARNED CIT(A) ALSO DECLINED TO CONSIDER THE C LAIM OF THE ASSESSEE TAKING A VIEW THAT ASSESSEE WAS ONLY CLAIMING THE COST OF IMPROVEMENT OF THE PROPERTY, WHEREAS DEDUCTION WAS AVAILABLE ON LY FOR INVESTMENT IN A NEW RESIDENTIAL HOUSE. FURTHER CONTENTION OF THE L EARNED AR WAS THAT ASSESSEE HAS PRODUCED BEFORE THE LEARNED CIT(A), AN APPROVED PLAN FOR DEMOLITION AND RECONSTRUCTION OF THE BUILDING AT M INT STREET. AS PER THE LEARNED AR, THE SAID PLAN WHICH HAD RECEIVED APPROV AL FROM THE ITA NO. 2268/CHNY/2018 :- 3 -: COMPETENT AUTHORITY ON 14.03.2012 CLEARLY INDICATE D THAT EARLIER BUILDING WAS DEMOLISHED AND NEW CONSTRUCTION PUT UP, AND THU S, ACCORDING TO THE LEARNED AR, ASSESSEE WAS ENTITLED FOR CLAIM OF DED UCTION UNDER SECTION 54 OF THE ACT. 3. PER CONTRA, LEARNED DR, SUBMITTED THAT ASSESSEE DID NOT PRODUCE ANY EVIDENCE BEFORE THE LOWER AUTHORITIES TO PROVE THAT THERE WAS A NEW CONSTRUCTION OF RESIDENTIAL HOUSE. AS PER THE LEARN ED DR, IT WAS ONLY AN IMPROVEMENT OF THE EXISTING BUILDING AND THEREFORE THE ASSESSEE WAS NOT ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 54 O F THE ACT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS. PLAN SHOWI NG PROPOSED DEMOLITION AND RECONSTRUCTION OF THE BUILDING AT NO .OLD NO.198, NEW NO.435, MINT STREET, GEORGE TOWN, CHENNAI-79 WHICH HAS BEEN PLACED ON RECORD BY THE LEARNED AR, SHOWS THAT APPROVAL FR OM THE COMPETENT AUTHORITY WAS RECEIVED ON 14.03.2012. NO DOUBT, IF THE ASSESSEE HAD DONE ONLY AN IMPROVEMENT TO AN EXISTING HOUSE, SHE WOULD NOT BE ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT. HOWEVER, WHERE ASSESSEE HAD ALREADY DEMOLISHED THE EXISTING CONSTR UCTION AND BUILT A NEW RESIDENTIAL HOUSE, SHE WILL BE ENTITLED TO DEDU CTION UNDER SECTION 54 OF THE ACT. WE ARE OF THE OPINION THAT THE LOWER AU THORITIES DID NOT GO INTO THIS ASPECT. IN THE CIRCUMSTANCES, THE MATTER REQUIRES A REVISIT BY THE ITA NO. 2268/CHNY/2018 :- 4 -: ASSESSING OFFICER. WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT THE ISSUE REGARDING ELIGIBILITY OF THE ASSESS EE FOR DEDUCTION UNDER SECTION 54 OF THE ACT BACK TO THE FILE OF THE ASSES SING OFFICER FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. 5. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 19 TH OF DECEMBER, 2018, AT CHENNAI. SD/- ( . . . ) ( N.R.S. GANESAN ) / JUDICIAL MEMBER SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER / CHENNAI / DATED:- 19 TH DECEMBER, 2018. SOMU / COPY TO: 1 . / APPELLANT 3. ( ) / CIT(A) 5. / DR 2. / RESPONDENT 4. / CIT 6. / GF