A.V.Chandramohan, CHENNAI V. ITO NCW 16(2), CHENNAI

ITA 2903/CHNY/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7401 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MATHIVANAN
• Assessee Lawyers: P RAJASEKARAN
• Section: 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2903/CHNY/2017 ( )( / ASSESSMENT YEAR : 2007-08 SHRI A.V. CHANDRAMOHAN, NO.43/48, PUDUPET STREET, ALANDUR, CHENNAI - 600 016. PAN : AJAPC 4063 E V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 16(2), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI P. RAJASEKARAN, CA -.+, / 0 / RESPONDENT BY : SHRI M. MATHIVANAN, ADDL. CIT 1 / 2% / DATE OF HEARING : 26.06.2018 3') / 2% / DATE OF PRONOUNCEMENT : 24.07.2018 / 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) -4, CHENNA I, DATED 29.08.2017 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.2903/CHNY/17 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS EXEMP TION CLAIMED BY THE ASSESSEE UNDER SECTION 54F OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. SHRI P. RAJASEKARAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT IN THE CASE OF CO-OWNERS, NAMELY, SH RI A.P. RAJMOHAN AND SHRI A.P. MADANMOHAN, THIS TRIBUNAL VI DE ORDER DATED 07.04.2017 IN I.T.A. NO.2807/MDS/2016 AND I.T .A. NO.2808/MDS/2016 RESPECTIVELY, ALLOWED THE CLAIM UN DER SECTION 54F OF THE ACT ON THE VERY SAME PROPERTY. ACCORDIN G TO THE LD. REPRESENTATIVE, WHEN THE ORDER OF THIS TRIBUNAL WAS BROUGHT TO THE NOTICE OF THE CIT(APPEALS), HE SIMPLY DISTINGUISHED THE CASE ON THE GROUND THAT THE ORDER OF THIS TRIBUNAL RELATES TO M ULTIPLE FLATS. ACCORDING TO THE LD. REPRESENTATIVE, WHEN THE JOINT DEVELOPMENT AGREEMENT WAS ENTERED INTO BETWEEN THE ASSESSEE AND OTHER CO- OWNERS, AND THE DEVELOPER, THE BUILDER AGREED TO HA NDOVER THE CONSTRUCTED AREA TO THE ASSESSEE AND OTHER CO-OWNER S. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE COST OF PR OPORTIONATE SHARE OF LAND IS DEEMED TO BE INVESTED ON THE CAPITAL ASS ET AND HANDING OVER THE CONSTRUCTED FLATS IS IMMATERIAL. 3 I.T.A. NO.2903/CHNY/17 4. REFERRING TO SECTION 54F OF THE ACT, THE LD. REP RESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE HAS TO IN VEST THE CAPITAL GAIN IN THE NEW ASSET WITHIN THE TIME LIMIT PROVIDE D FOR FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. IF NOT, THE SAME HAS TO BE DEPOSITED IN THE CAPITAL GAIN ACCOUNT. IN THIS CASE, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE ADMITTEDLY HAS NOT RECEIVED ANY PORTION AND THE COST OF PROPORTIONATE SHARE OF LAND HAS TO BE USED FOR CONSTRUCTION OF THE FLAT ALLOTTED TO THE A SSESSEE, THEREFORE, ON THE DATE OF JOINT DEVELOPMENT AGREEMENT, THE ASS ESSEE HAS INVESTED THE FUNDS. MERELY BECAUSE THERE WAS A DEL AY IN CONSTRUCTION, ACCORDING TO THE LD. REPRESENTATIVE, IT CANNOT BE A REASON TO DENY THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT. 5. ON THE CONTRARY, SHRI M. MATHIVANAN, THE LD. DEP ARTMENTAL REPRESENTATIVE, SUBMITTED THAT THIS TRIBUNAL IN THE CASE OF CO- OWNERS, NAMELY, SHRI A.P. RAJMOHAN AND SHRI A.P. MA DANMOHAN, FOUND THAT THEY ARE ELIGIBLE FOR DEDUCTION UNDER SE CTION 54F OF THE ACT EVEN THOUGH THEY WERE ALLOTTED MULTIPLE FLATS. IN THE CASE BEFORE US, ACCORDING TO THE LD. D.R., IT IS NOT THE CASE O F MULTIPLE FLATS, BUT THE POSSESSION WAS HANDED OVER TO THE ASSESSEE IN T HE SUBSEQUENT 4 I.T.A. NO.2903/CHNY/17 YEAR, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR E XEMPTION UNDER SECTION 54F OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F OF THE ACT IN CASE THE CAPITAL GAIN WAS INVESTED IN CONSTRUCTION OF FLAT O R IT WAS DEPOSITED IN CAPITAL GAINS ACCOUNT WITHIN THE TIME LIMIT PROV IDED FOR FILING THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. IN THE CASE BEFORE US, ON THE DATE OF JOINT DEVELOPMENT AGREEMENT, THE ASSESSEE AGREED TO TAKE THE CONSTRUCTED FLAT. IN OTHER WORD S, THE COST OF PROPORTIONATE SHARE OF LAND WAS RETAINED BY THE DEV ELOPER AND THE SAME WAS USED FOR CONSTRUCTION OF BUILDING. THEREF ORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CAPITAL GAIN WAS INVESTED IN THE NEW ASSET, HENCE, ELIGIBLE FOR EXEMPTION UNDER SECT ION 54F OF THE ACT. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, ORDERS OF BOTH TH E AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW EXEMPTION PROVIDED UNDER SECTION 54F OF THE ACT. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 5 I.T.A. NO.2903/CHNY/17 ORDER PRONOUNCED ON 24 TH JULY, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 24 TH JULY, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.