Shr Peddakota Parvateesam Naidu, CHENNAI V. ITO, CHENNAI

ITA 2571/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4279 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 02-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2571/MDS/2016 ' (' / ASSESSMENT YEAR : 2012-13 SHRI PEDDAKOTA PARVATEESAM NAIDU, 2/297, JASMIN COURT, DOOR NO.405, MOUNT POONAMALLE RD, KATTUPAKKAM POST, CHENNAI - 600 056. PAN : AAHPP 4986 D V. THE INCOME TAX OFFICER, NON-CORPORATE CIRCLE 17(3), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 04.05.2017 2!( . 1$ / DATE OF PRONOUNCEMENT : 22.06.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI , DATED 25.07.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2 I.T.A. NO.2571/MDS/16 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF THE CLAIM OF ASSESSEE UNDER SECTION 54 OF THE INCOME-TA X ACT, 1961 (IN SHORT 'THE ACT'). 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE SOLD A RESIDENTIAL FLAT AT SHANTH I COLONY, ANNANAGAR, CHENNAI ON 07.04.2011, FOR A TOTAL CONSI DERATION OF ` 80,00,000/-. THE ASSESSEE HAS INVESTED THE SALE PR OCEEDS IN A NEW FLAT AND CLAIMED DEDUCTION UNDER SECTION 54 OF THE ACT. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE ON THE GROUND THAT THE ASSESSEE HAS INVESTED IN TWO FLATS. REFERRING TO THE JUDGMENT OF MADRAS HIGH COURT IN CIT V. V.R. KARPAG AM (2015) 373 ITR 127, THE LD.COUNSEL SUBMITTED THAT THE AMENDMEN T MADE BY FINANCE ACT, 2014 CAME INTO EFFECT WITH EFFECT FROM 01.04.2015. THEREFORE, ACCORDING TO THE LD. COUNSEL, EVEN IF TH ERE ARE TWO DIFFERENT FLATS, THE ASSESSEE IS ELIGIBLE FOR EXEMP TION. EVEN THOUGH THE ASSESSEE HAS INVESTED IN TWO FLATS, ACCORDING T O THE LD. COUNSEL, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISALLOWI NG THE CLAIM OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2012-13. ACCORDIN G TO THE LD. COUNSEL, A SIMILAR VIEW WAS ALSO TAKEN BY THIS TRIB UNAL IN SMT. HEMALATHA CHANDRAN V. ITO IN I.T.A. NO.603/MDS/2015 . 3 I.T.A. NO.2571/MDS/16 4. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT FOR THE PURPOSE OF C LAIMING EXEMPTION UNDER SECTION 54F OF THE ACT, THE ASSESSE E HAS TO INVEST IN ONE RESIDENTIAL UNIT. IN THIS CASE, ACCORDING T O THE LD. D.R., THE ASSESSEE HAS PURCHASED TWO FLATS, THEREFORE, THE AS SESSING OFFICER HAS RIGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE HAS INVESTED THE CAPITAL GAIN IN TWO RESID ENTIAL FLATS. THE QUESTION ARISES FOR CONSIDERATION IS FOR THE ASSESS MENT YEAR 2012- 13, WHETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F OF THE ACT WHEN THE INVESTMENT WAS MADE IN TWO FLATS? AFTER REFERRING TO AN IDENTICAL AMENDMENT MADE IN SECTION 54F OF THE ACT BY FINANCE ACT, 2014, THE MADRAS HIGH COURT IN THE CASE OF V.R. KARPAGAM (SUPRA) FOUND THAT THE AMENDMENT MAKES IT CLEAR THAT THE BENEFIT UNDER INCOME-TAX ACT WILL BE APPLICABLE FOR CONSTRUCTION OF ONE RESIDENTIAL HOUSE IN INDIA. THIS CLARIFIES THE PRESENT POSITION, I.E. POST AMENDMENT FROM 01.04.2015, THE BENEFIT OF SECTION 54F OF THE ACT WILL BE APPLICABLE TO ONE RESIDENTIAL HOUSE IN INDIA. PRIOR TO THIS AMENDMENT, IT WAS CLEAR THAT A RESIDENTIAL UNI T WOULD INCLUDE 4 I.T.A. NO.2571/MDS/16 MULTIPLE FLATS / RESIDENTIAL UNITS. THE MADRAS HIG H COURT FURTHER FOUND THAT THE PROPERTY SHOULD BE ASSESSED AS ONE R ESIDENTIAL UNIT. 6. EVEN THOUGH THE CIT(APPEALS) REPRODUCED THE ORDE R OF THE MADRAS HIGH COURT, IT IS NOT CLEAR FROM THE FACTS O F THE CASE WHETHER THE RESIDENTIAL UNITS PURCHASED BY THE ASSESSEE WER E COMPRISED IN ONE SINGLE UNIT. IN VIEW OF THE ABOVE, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE FACTS NEED TO BE CLARIF IED. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE A ND THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE JUD GMENT OF MADRAS HIGH COURT IN V.R. KARPAGAM (SUPRA) AND FIND OUT WH ETHER THE TWO FLATS PURCHASED BY THE ASSESSEE CONSTITUTE ONE UNIT OR NOT AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5 I.T.A. NO.2571/MDS/16 ORDER PRONOUNCED ON 22 ND JUNE, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 22 ND JUNE, 2017. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-5, CHENNAI 4. PRINCIPAL CIT-9, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.