N.Hemavathi, CHENNAI V. ITO Non Corporate Ward 10(2), CHENNAI

ITA 2753/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4899 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 16-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAHADEVAN
• Assessee Lawyers: D ANAND
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.2753/CHNY/2017 ' #$' / ASSESSMENT YEAR : 2013-14 MS. N. HEMAVATHI, NO.42, JAWAHAR NAGAR, 1 ST MAIN ROAD, PERAVALLUR, CHENNAI - 600 082. PAN : AQRPN 3430 C V. THE INCOME TAX OFFICER, NON CORPORATE WARD 10(2), CHENNAI - 600 034. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI D. ANAND, ADVOCATE ()&' * + / RESPONDENT BY : SHRI B. SAHADEVAN, JCIT , # * -. / DATE OF HEARING : 27.03.2018 /0$ * -. / DATE OF PRONOUNCEMENT : 03.04.2018 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -12, CHENNAI, DATED 20.09.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF THE CLAIM OF THE ASSESSEE UNDER SECTION 54 OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.2753/CHNY/17 3. I HEARD SHRI D. ANAND, THE LD.COUNSEL FOR THE AS SESSEE AND SHRI B. SAHADEVAN, THE LD. DEPARTMENTAL REPRESENTATIVE. THE ASSESSEE INVESTED IN TWO HOUSE PROPERTIES FOR CLAIMING DEDUC TION UNDER SECTION 54 OF THE ACT. ADMITTEDLY, THE ASSESSEE SOLD A HOUSE PROPERTY AT OLD DOOR NO.19A, NETTAL GARDEN STREET, PERAMBUR, CHENNAI-11. THE ASSESSEE INVESTED IN A HOUSE PROPERTY AT MAMBAKKAM VILLAGE D URING THE FINANCIAL YEAR 2011-12. ADMITTEDLY, THE INVESTMENT IN THE PR OPERTY AT MAMBAKKAM VILLAGE WAS MADE BEFORE THE SALE OF THE PROPERTY. DURING THE FINANCIAL YEAR 2013-14 RELEVANT TO ASSESSMENT YEAR 2014-15, T HE ASSESSEE ALSO INVESTED A SUM OF 25,00,000/- IN A HOUSE PROPERTY AT AYANAVARAM. THE ASSESSEE CLAIMED DEDUCTION IN RESPECT OF BOTH THE I NVESTMENTS UNDER SECTION 54 OF THE ACT. THE ASSESSEE PLACED HIS REL IANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN CIT V. GUMANMAL JAIN IN T.C .A. NO.33 OF 2017 DATED 03.03.2017 AND CONTENDED THAT THE ASSESSEE CA N HAVE MORE THAN ONE HOUSE BEFORE 2015-16. 4. THE CIT(APPEALS) DISTINGUISHED THIS JUDGMENT OF MADRAS HIGH COURT ON THE GROUND THAT THE SUBJECT MATTER BEFORE THE MADRAS HIGH COURT WAS IN RESPECT OF DIFFERENT RESIDENTIAL UNITS IN ON E COMPLEX. IN THIS CASE, THE PROPERTIES ARE NOT WITHIN THE SAME COMPOUND. T HE ASSESSEE HAS PURCHASED TWO INDEPENDENT HOUSES ONE AT MAMBAKKAM V ILLAGE AND ANOTHER AT AYANAVARAM. THE PROPERTY AT MAMBAKKAM V ILLAGE WAS PURCHASED BEFORE THE SALE AND THE AYNAVARAM PROPERT Y WAS PURCHASED 3 I.T.A. NO.2753/CHNY/17 AFTER THE SALE OF THE PROPERTY. IN THE CASE BEFORE MADRAS HIGH COURT, THE ASSESSEE HAS SEVERAL INDEPENDENT UNITS CONSEQUENT T O THE JOINT DEVELOPMENT AGREEMENT WITH THE BUILDER FOR DEVELOPI NG THE PROPERTY. IN THOSE FACTUAL CIRCUMSTANCES, THE MADRAS HIGH COURT FOUND THAT EVEN THOUGH THE ASSESSEE HAS SEVERAL INDEPENDENT UNITS I N THE PROPERTY DEVELOPED BY THE DEVELOPER, IT HAS TO BE CONSTRUED AS A SINGLE UNIT FOR THE PURPOSE OF ALLOWING DEDUCTION UNDER SECTION 54 OF T HE ACT. IN THE CASE BEFORE US, THE ASSESSEE HAS PURCHASED TWO DIFFERENT HOUSES IN DIFFERENT CORNER OF THE CITY. ONE IS AT MAMBAKKAM VILLAGE AN D ANOTHER AT AYNAVARAM. IN FACT, THE PROPERTY AT MAMBAKKAM VILL AGE WAS PURCHASED BEFORE THE DATE OF SALE OF PROPERTY AND THE AYNAVAR AM PROPERTY WAS PURCHASED AFTER THE SALE OF PROPERTY. AS RIGHTLY O BSERVED BY THE CIT(APPEALS), THERE WAS NO COMMON AGREEMENT AND THE PROPERTIES ARE TOTALLY DIFFERENT AND PURCHASED AT DIFFERENT POINT OF TIME. THEREFORE, THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE LOWER AUTHORITY. 5. HOWEVER, THE ASSESSING OFFICER HAS ALLOWED EXEMP TION IN RESPECT OF PROPERTY AT MAMBAKKAM VILLAGE. IN FACT, THE INV ESTMENT MADE IN MAMBAKKAM VILLAGE PROPERTY WAS 21,62,136/-. THE INVESTMENT IN AYNAVARAM PROPERTY WAS 25,00,000/-. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE INVESTMENT MADE IN AYNAVARAM PROPE RTY BEING THE 4 I.T.A. NO.2753/CHNY/17 HIGHEST ONE, IT HAS TO BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF EXEMPTION UNDER SECTION 54 OF THE ACT. TO THAT EXT ENT, THE ORDER OF THE ASSESSING OFFICER NEEDS TO BE MODIFIED. ACCORDINGL Y, WHILE CONFIRMING THE ORDER OF THE ASSESSING OFFICER, THE ASSESSING O FFICER IS DIRECTED TO ALLOW EXEMPTION OF 25,00,000/- IN RESPECT OF AYNAVARAM PROPERTY ALONE INSTEAD OF THE PROPERTY AT MAMBAKKAM VILLAGE. 6. WITH THE ABOVE MODIFICATION, THE ORDER OF THE AS SESSING OFFICER IS CONFIRMED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 3 RD APRIL, 2018 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 3 RD APRIL, 2018 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-12, CHENNAI 4. PRINCIPAL CIT-3, CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.