ITO, CHENNAI V. Shri A.P. Rajmohan, CHENNAI

ITA 2807/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4945 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 13-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 28-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: P RAJASEKHARAN CA
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.2807/MDS/2016 * +* / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, NON CORPORATE WARD 17(4), CHENNAI - 600 034. V. SHRI A.P. RAJMOHAN, NO.48/83, PUDUPET STREET, ALANDUR, CHENNAI - 600 016. PAN: AJJPR 0649 A (-./ APPELLANT) (/0-./ RESPONDENT) ./ ITA NO.2808/MDS/2016 * +* / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, NON CORPORATE WARD 17(2), CHENNAI - 600 034. V. SHRI A.P. MADANMOHAN, NO.48/83, PUDUPET STREET, ALANDUR, CHENNAI - 600 016. PAN: AGZPM 4775 H -. 1 2 / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT /0-. 1 2 / RESPONDENT BY : SHRI P. RAJASEKHARAN, CA ' 1 3& / DATE OF HEARING : 13.03.2017 45+ 1 3& / DATE OF PRONOUNCEMENT : 07.04.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THESE APPEALS OF THE REVENUE ARE DIRECTED AGAINS T THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, 2 I.T.A. NOS.2807 & 2808/MDS/16 CHENNAI, DATED 27.07.2016 AND PERTAIN TO ASSESSMENT YEAR 2007- 08. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IN THESE APPEALS IS DEDUCTION CLAIMED BY THE ASSESSEES UNDER SECTION 54 F OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. WE HAVE HEARD SHRI A.V. SREEKANTH, THE LD. DEPAR TMENTAL REPRESENTATIVE AND SHRI P. RAJASEKHARAN, THE LD. RE PRESENTATIVE FOR THE ASSESSEES. THE CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEES BY PLACING RELIANCE ON THE JUDGMENT OF MA DRAS HIGH COURT IN CIT V. SMT. V.R. KARPAGAM IN TAX CASE (APP EAL) NO.301 OF 2014. THE CIT(APPEALS) HAS ALSO PLACED RELIANCE IN THE ASSESSEES OWN CASE ALLOWED BY THIS TRIBUNAL. 4. THIS IS SECOND ROUND OF LITIGATION BEFORE THIS T RIBUNAL. IN THE FIRST ROUND OF LITIGATION, THIS TRIBUNAL IN I.T.A. NO. 1493/MDS/2013 & 1495/MDS/2013 DATED 15.05.2015, FOUND THAT IN VIEW OF JUDGMENT OF MADRAS HIGH COURT IN V.R. KARPAGAM (SUPRA), ASSESSE ES ARE ELIGIBLE FOR EXEMPTION EVEN THOUGH MULTIPLE FLATS W ERE ALLOTTED TO THEM IN LIEU OF COST OF 60% OF THE LAND. THIS TRIB UNAL HAS OBSERVED AT PARA 12 ON PAGES 12 AND 13 AS FOLLOWS:- 3 I.T.A. NOS.2807 & 2808/MDS/16 12. NOW COMING TO THE ISSUE OF EXEMPTION UNDER SECTIO N 54F OF THE ACT, THE ASSESSEES ENTRUSTED THE CONSTRUCT ION OF THE BUILDING TO THE BUILDER IN LIEU OF 60% OF THE LANDED AREA TRANSFERRED TO THE BUILDER. THEREFORE, THE ASSESSEES, FROM THE DATE ON WHICH THE TRANSFER WAS MADE BY ENTERING INTO AGREEMENT FOR JOINT DEVELOPMENT, A RE IN THE PROCESS OF CONSTRUCTING THE RESIDENTIAL HOUSE. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ASSESSEES ARE ENTITLED FOR EXEMPTION UNDER SECTI ON 54F OF THE ACT. NOW THE OBJECTION OF THE DEPARTMENT IS THAT THE ASSESSEES GOT MULTIPLE FLATS, ALMOST EIGHT FLATS EACH, IN LIEU OF THE LAND TRANSFERRED TO THE BUILDE R. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSES SEES RECEIVED EIGHT FLATS/RESIDENTIAL UNITS FROM THE BUI LDER IN LIEU OF COST OF THE LAND TRANSFERRED TO THE BUILDER , WHETHER THE ASSESSEES ARE ENTITLED FOR EXEMPTION UND ER SECTION 54F OF THE ACT? WE HAVE GONE THROUGH THE JUDGMENT OF MADRAS HIGH COURT IN V.R. KARPAGAM (SUP RA). IN THIS CASE, THE ASSESSEE OBTAINED FIVE INDEPENDEN T FLATS IN A MULTI-STORIED CONSTRUCTION AND CLAIMED EXEMPTIO N AS INDEPENDENT UNIT UNDER SECTION 54F OF THE ACT. THE MADRAS HIGH COURT, AFTER REFERRING TO THE AMENDMENT MADE WITH EFFECT FROM 1.4.2015, FOUND THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F OF THE ACT . IN VIEW OF THE JUDGMENT OF THE MADRAS HIGH COURT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSEES ARE ELIGIBLE FOR EXEMPTION EVEN THOUGH MULTIPLE FLAT S WERE ALLOTTED TO THEM IN LIEU OF COST OF 60% OF THE LAND A LLOTTED TO THE BUILDER. 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. 4 I.T.A. NOS.2807 & 2808/MDS/16 ORDER PRONOUNCED ON 7 TH APRIL, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 7 TH APRIL, 2017. KRI. 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENTS 3. ' :3 () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT-9, CHENNAI 5. 8; /3 /DR 6. * < /GF.