M.Muruganandam, CHENNAI V. ACIT, CHENNAI

ITA 2882/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8704 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 18-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 24-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: K MEENAKSHISUNDARAM ITP
• Keywords: Rectification of order; Salary income; Valuation report
• Section: 143(3); 54F; 147; 148; 54

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I T.A. NO. 2882 /MDS/201 4 / ASSESSMENT YEAR :20 1 0 - 1 1 SHRI M. MURUGANANDAM, #28, BESANT AVENUE, ADYAR, CHENNAI 600 020. [PAN:AAEPM0717E] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE IV, CHENN AI 600 034. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI K. MEENAKSHISUNDARAM, ITP / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT / DATE OF HEARING : 23 . 0 5 .20 1 6 / DATE OF P RONOUNCEMENT : 22 . 0 7 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE WAS HEARD AND DISPOSED OF VIDE ORDER OF THE TRIBUNAL DATED 29.01.2016. HOWEVER, BY MEANS OF MISCELLANEO US PETITION , THE ASSESSEE SOUGHT FOR RECTIFICATION OF MISTAKE BY RECALLING THE ORDER OF THE TRIBUNAL PASSED IN I.T.A. NO. 2882/MDS/2014 DATED 29.01.2016 AS THE TRIBUNAL HAS NOT CONSIDERED ONE OF THE GROUNDS RAISED BY THE ASSESSEE. ACCORDINGLY, VIDE ORDER D ATED 22.04.2016 IN M.P. NO. 18/MDS/2016 , THE ORDER OF THE TRIBUNAL DATED 29.01.2016 HAS BEEN RECALLED I.T.A. NO . 2882 /M/ 14 2 FOR LIMITED PURPOSE TO ADJUDICATE ONE OF THE GROUNDS RAISED BY THE ASSESSEE. THE RELEVANT PARAGRAPH IN M.P. NO. 18/MDS/2016 DATED 22.04.2016 IS REPRODUCED AS UNDER: 4. AFTER HEARING BOTH SIDES AND PERUSING THE MATERIALS ON RECORD, WE AGREE WITH THE SUBMISSION OF THE LEARNED AUTHORIZED REPRESENTATIVE BECAUSE THE GROUND PERTAINING TO THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT RAISED BY THE ASSESSEE IN ITS APPEAL REMAINS TO BE ADJUDICATED. THEREFORE, FOR THAT LIMITED PURPOSE, WE HEREBY RECALL THE TRIBUNAL ORDER AND FURTHER DIRECT THE REGISTRY TO POST THE APPEAL FOR HEARING ON 23.05.2016. THE REGISTRY SHALL ALSO INTIMATE THE DATE OF HEARING TO BOTH TH E PARTIES. 2. IT IS TO BE NOTED THAT THERE IS A MISTAKE IN MENTIONING SECTION AS SECTION 54F INSTEAD OF SECTION 54 IN THE ABOVE ORDER OF THE TRIBUNAL DATED 22.04.2016. 3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD. NOW TH E ISSUE BEFORE US FOR ADJUDICATION IS WITH REGARD TO ALLOWABILITY OF SECTION 54 OF THE ACT. THE TRIBUNAL , VIDE ITS ORDER DATED 29.01.2016 , ADJUDICATED THE ISSUE OF ESTIMATION OF COST OF CONSTRUCTION AND DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE COST O F CONSTRUCTION @ .1,100/ - PER SQ.FT. INSTEAD OF .950/ - AS ADOPTED BY THE REVENUE. CONSEQUENTLY, THE ASSESSING OFFICER IS REQUIRED TO ADOPT THE COST OF CONSTRUCTION AS DIRECTED BY THE TRIBUNAL FOR ALLOWABILITY OF EXEMPTION UNDER SECTION 54 OF THE ACT. ACC ORDINGLY, IN THE INTEREST OF JUSTICE, WE REMIT THE ISSUE TO THE FILE OF THE I.T.A. NO . 2882 /M/ 14 3 ASSESSING OFFICER TO EXAMINE AS TO WHETHER THE ASSESSEE FULFILS ALL THE CONDITIONS AS STIPULATED UNDER SECTION 54 OF THE ACT AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER ALLOW ING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 22 ND JU LY , 2016 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 22 . 0 7 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4 . / CIT , 5. / DR & 6. / GF. I.T.A. NO . 2882 /M/ 14 4 , , IN THE INCOM E TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . . . , . , BEFORE SHRI N.R.S.GANESAN , JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER ./ I.T.A.NO . 2882 / MDS/201 4 ( / ASSE SSMENT YEAR: 2010 - 11 ) MR. M.MURUGANANDAM 28, BESANT AVENUE, ADYAR, CHENNAI - 600 020. VS ASSISTANT COMMISSIONER OF INCOME TAX , BUSINESS CIRCLE - IV , CHENNAI - 34. PAN: AAEPM0717E ( / APPELLANT) ( / RESPONDENT ) / APPELLANT BY : MR. K.MEENAKSHISUNDHARAM, ITP /RESPONDENT BY : MR. A.V.SREEKANTH, JCIT / DATE OF HEARING : 1 8 TH JANUARY, 201 6 / DATE OF PRONOUNCEMENT : 29 TH JANUARY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM : THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LD.CIT(A) - V , CHENNAI DATED 21 . 1 0. 2014 IN ITA NO .1112 / 13 - 14 (A) - V PASSED UNDER SECTION 147 READ WITH SECTION 143(3) OF THE ACT. 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS APPEAL, HE ADMITTED BEFORE US THAT THE ONLY GROUND HE DESIRES TO PRESS IS THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE LEARNED ASSESSING OFFICER WHO HAD VALUED THE COST OF CONSTRUCTION OF THE I.T.A. NO . 2882 /M/ 14 5 PROPERTY AT RS. 950/ - PER SQ.FT AS AGAINST RS. 1200/ - PER SQ.FT AS CLAIMED BY THE ASSESS EE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES, FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2010 - 11 BELATEDLY ON 28. 02 .2013. SUBSEQUENTLY NOTICE UNDER SEC TION 148 OF THE ACT WAS ISSUED AND THEREAFTER ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT ON 3 0 .12.2013, WHEREIN HE MADE CERTAIN ADDITIONS ONE AMONGST THEM WAS ON ACCOUNT OF COST OF CONSTRUCTION FOR ARRIVING AT THE LONG TERM CAPITAL GAINS. THE LEARNED ASSESSING OFFICER HAD MADE THE ADDITION BECAUSE THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE FOR THE CONSTRUCTION COST OF THE BUILDING . WHILE DOING SO, HE OBSERVED AS FOLLOWS: - THE ASSESSEE COULD NOT PRODUCE ANY BILLS AND EVIDENCES FOR ADDITION OF CONSTRUCTION AS THE CONSTRUCTION TOOK PLACE DURING THE YEAR 2003 - 04. WHEREAS, THE AR FILED APPROVED VALUATION REPORT DATED 19.11.2007 FILED TO CANARA BANK, HABIBULLAH ROAD BRANCH, T.NAGAR, CHENNAI - 17. ON PERUSAL OF THE VALUATION R EPORT WHICH WAS DONE ON 19.11.2007 IT IS NOTED THAT COST OF CONSTRUCTION WAS TAKEN AS RS.1200/ - PER SQ.FT IN THE YEAR OF 2007. WHEREAS BUILDING WAS CONSTRUCTED DURING THE YEAR 2003 - 04. HENCE, ASSESSEE IS REQUIRED TO EXPLAIN WHY COST OF CONSTRUCTION CANNOT BE TAKEN ON ESTIMATED BASIS AND ESTIMATED AS RS.950/ - PER SQ.FT. AS THERE IS NO EVIDENCES FOR THE CLAIM OF EXPENDITURE. THIS ESTIMATED AMOUNT IS ARRIVED BASED ON THE VALUATION REPORT AND MARKET INFORMATION IN RESPONSE TO THIS, ASSESSEE HAS ACCEPTED RS.950/ - PER SQ.FT AS COST FOR THE COMPUTATION OF CAPITAL I.T.A. NO . 2882 /M/ 14 6 GAINS. HENCE COST OF CONSTRUCTION AMOUNTS TO R S 6175950/ - (6501 SQ.FT. *950). ON APPEAL, LEARNED CIT(A) UPHELD THE ORDER OF THE LEARNED ASSESSING OFFICER BY AGREEING WITH HIS VIEW. 4. LEARNED AR VEHEMENTLY ARGUED IN SUPPORT OF THE C LAIM OF THE ASSESSEE AND BY PLACING RELIANCE IN THE VALUATION REPORT SUBMITTED BY HIM. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDERS OF THE REVENUE. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATE RIALS AVAILABLE ON RECORD. AFTER EXAMINING THE FILE OF THE ASSESSEE , IT WAS DECIDED BY THE BENCH TO ESTIMATE THE COST OF CONSTRUCTION BECAUSE THE ASSESSEE HA D NOT MAINTAINED HIS BOOKS OF ACCOUNTS AND BILLS & VOUCHERS IN ORDER TO ESTABLISH THE COST OF CONST RUCTION. THEREFORE, IT WAS SUGGESTED BY THE BENCH THAT THE COST OF CONSTRUCTION MAY BE ADOPTED AS RS. 1 1 00/ - PER SQ.FT ., CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WHICH BOTH THE PARTIES ACCEPTED. HENCE, IN THE INTEREST OF JUSTICE AND TO END PROT RACTED LITIGATION, WE HEREBY DIRECT THE LEARNED ASSESSING OFFICER TO ESTIMATE THE COST OF CONSTRUCTION @ I.T.A. NO . 2882 /M/ 14 7 RS 1 1 00/ - PER SQ.FT INSTEAD OF RS.950/ - PER SQ.FT. , AS ADOPTED BY THE REVENUE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER P RONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2016 SD/ - SD/ - ( . . . ) ( . ) ( N.R.S.GANESAN ) ( A.MOHAN ALANKAMONY ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / CHENNAI, / DATED 29 TH JANUARY, 2016 S OMU / COPY TO: 1. APPELLANT 2. RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF .