ACIT, CHENNAI V. Jayasathya Suresh, CHENNAI

ITA 2932/CHNY/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6145 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 03-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M PALANICHAMY ACIT
• Assessee Lawyers: D ANAND
• Keywords: Capital asset
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . , ' , % & BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.2932/MDS/2014 %' ' /ASSESSMENT YEAR: 2010-11 THE ASST. COMMISSIONER OF INCOME- TAX, CIRCLE-3, CHENNAI-600 034. VS. MRS. JAYASATHYA SURESH, AMBOJINI, POES ROAD, 2 ND STREET, TEYNAMPET, CHENNAI-600 018. [PAN: AEWPJ 9922 L ] ( ( /APPELLANT) ( )*( /RESPONDENT) ASSESSEE BY : MR.D.ANAND, ADV. DEPARTMENT BY : MR.M. PALANICHAMY, ACIT , /DATE OF HEARING : 21.09.2017 , /DATE OF PRONOUNCEMENT : 21.09.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.2932/MDS/2014 IS AN APPEAL FILED BY THE REV ENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-V , CHENNAI, IN ITA NO.199/13-14(A)-V DATED 19.08.2014 FOR THE AY 2010- 11. 2. MR.M. PALANICHAMY, ACIT, REPRESENTED ON BEHALF O F THE REVENUE AND MR.D.ANAND, ADV., REPRESENTED ON BEHALF OF THE ASSE SSEE. ITA NO.2932/MDS/2014 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.DR THAT THE ONLY ISSU E IN THE REVENUES APPEAL WAS AGAINST THE ACTION OF THE LD.CIT(A) IN A LLOWING THE ASSESSEES CLAIM FOR EXEMPTION U/S.54 IN RESPECT OF THE INVEST MENT MADE BY THE ASSESSEE IN THE 2 ND & 3 RD FLOOR AT NO.2, RADHA KRISHNA STREET, T.NAGAR, CHENNAI. IT WAS A SUBMISSION THAT THE ASSESSEE HAD SOLD A RESIDENTIAL FLAT AT MRC NAGAR, RA PURAM, CHENNAI, ON 04.11.2009 FOR A CONSIDERATION OF RS.4.50 CR. IT WAS A SUBMISSION THAT THIS HAD RESU LTED IN LONG TERM CAPITAL GAINS OF RS.1,42,97,874/-. THE ASSESSEE HAD CLAIME D TO HAVE INVESTED RS.1.75 CR. TOWARDS CONSTRUCTION OF THE 2 ND & 3 RD FLOOR AT NO.2, RADHA KRISHNA STREET, T.NAGAR, CHENNAI. IT WAS A SUBMISS ION THAT IN THE COURSE OF THE ASSESSMENT, THE AO HAD DISALLOWED THE CLAIM OF EXEMPTION U/S.54 IN RESPECT OF THE INVESTMENT IN THE RESIDENTIAL HOU SE AT RADHA KRISHNA STREET, T.NAGAR, CHENNAI, ON THE GROUND THAT THE SA ID PROPERTY WAS PURCHASED BY THE ASSESSEE DURING THE AY 2008-09 REL EVANT TO THE FY 2007-08. IT WAS A SUBMISSION THAT THE AO HAD OBTAI NED THE CORPORATION TAX DETAILS FROM THE CHENNAI CITY MUNICIPAL CORPORA TION TO SHOW THAT THE CORPORATION TAX WAS BEING PAID IN THE NAME OF THE A SSESSEE RIGHT FROM THE AY 2008-09 AND CONSEQUENTLY THE ASSESSEE WAS NOT EN TITLED TO THE BENEFIT OF DEDUCTION U/S.54 OF THE ACT. IT WAS A SUBMISSIO N THAT THE LD.CIT(A) HAD ALLOWED THE ASSESSEES CLAIM FOR EXEMPTION U/S. 54 HOLDING THAT THE ASSESSEE HAD PRODUCED THE LETTER OF THE BUILDER, M/ S.REAL VALUE PROMOTERS PVT. LTD. DATED 24.02.2010 REGARDING THE COMPLETION OF THE RESIDENTIAL HOUSE. IT WAS A SUBMISSION THAT THE ORDER OF THE L D.CIT(A) WAS LIABLE TO BE REVERSED. ITA NO.2932/MDS/2014 :- 3 -: 4. IN REPLY, THE LD.AR DREW OUR ATTENTION TO THE SA LE DEED DATED 04.11.2009 ENTERED INTO BETWEEN THE ASSESSEE AND M/ S.INDO INTERNATIONAL LTD., WHEREIN AT PAGE NO.6, IT HAS BEEN MENTIONED T HAT THE SALE CONSIDERATION IS AN AMOUNT OF RS.4.50 CR. AND THE SAID AMOUNT HAS BEEN PAID TO THE VENDOR BY THE PURCHASER BY DISCHARGING AN EQUITABLE MORTGAGE BY DEPOSITING OF TITLE DEEDS WITH M/S.AXIS BANK LTD ., TO AN EXTENT OF RS.3.30 CR. AND BALANCE OF RS.1.20 CR. BEING PAID T O M/S.REAL VALUE PROMOTERS PVT. LTD. IT WAS A SUBMISSION THAT THUS AN AMOUNT OF RS.1.20 CR. WAS PAID TO M/S.REAL VALUE PROMOTERS PVT. LTD. FROM THE SALE CONSIDERATION OF RS.4.50 CR. ON THE SALE OF THE FLA T OWNED BY THE ASSESSEE AT MRC NAGAR, CHENNAI. FURTHER, THE LD.AR DREW OUR ATTENTION TO THE LETTER OF M/S.REAL VALUE PROMOTERS PVT. LTD., DATED 24.02.2010 WHICH WAS A COMPLETION CERTIFICATION INFORMING THAT THE CONST RUCTION OF THE 2 ND & 3 RD FLOOR OF THE RESIDENTIAL BUILDING AT NO.2, RADHA KR ISHNA STREET, T.NAGAR, CHENNAI, WITH INDEPENDENT KITCHEN IS COMPLETE IN AL L RESPECTS AND IS READY FOR OCCUPATION. IT WAS A SUBMISSION THAT THE AO HA S RELIED UPON CERTAIN CORPORATION TAX PAYMENTS FOR THE AY 2008-09. IT WA S A SUBMISSION THAT THE CORPORATION TAX WAS ORIGINALLY BEING LEVIED AT RS.3,957/-, THE SAID CORPORATION TAX HAD BEEN REVISED IN RESPECT OF THE SAID PROPERTY ONLY IN 2007-08 RAISING IT TO RS.14,170/-. THE REVISING OF CORPORATION TAX FROM RS.3,957/- TO RS.14,170/- DID NOT MEAN THAT THE 2 ND & 3 RD FLOOR OF THE PROPERTY EXISTED IN 2007-08 ITSELF. IT WAS A SUBMI SSION THAT THE PAYMENT FOR THE CONSTRUCTION OF THE 2 ND & 3 RD HAD BEEN COMPLETED ONLY ON 04.11.2009 BY PAYMENT OUT OF THE SALE CONSIDERATION IN RESPECT OF THE FLAT ITA NO.2932/MDS/2014 :- 4 -: SOLD BY THE ASSESSEE. IT WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE SUSTAINED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMIT TEDLY, THERE IS NO DISPUTE REGARDING THE FACTUM OF THE LONG TERM CAPIT AL GAINS HAVING ARISEN ON ACCOUNT OF THE SALE OF THE ASSESSEES FLAT AT MR C NAGAR. THE ONLY DISPUTE IS IN REGARD TO THE ALLOWANCE OF THE EXEMPT ION U/S.54 IN RESPECT OF THE CONSTRUCTION OF THE 2 ND & 3 RD FLOOR OF THE RESIDENTIAL BUILDING AT DOOR NO.21, RADHAKRISHNAN STREET, T.NAGAR, CHENNAI-600 0 17. THE PROVISIONS OF SEC.54 REQUIRE THAT THE ASSESSEE SHOULD HAVE EIT HER PURCHASED ANOTHER RESIDENTIAL HOUSE WITHIN ONE YEAR BEFORE THE DATE O F THE SALE OF THE CAPITAL ASSET GIVING RISE TO LONG TERM CAPITAL GAINS OR SUC H PURCHASES HAS BEEN DONE WITHIN TWO YEARS AFTER THE DATE ON WHICH THE T RANSFER TOOK PLACE OR WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONS TRUCTED A RESIDENTIAL HOUSE IN INDIA. THE FACT THAT M/S.REAL VALUE PROMO TERS PVT. LTD., WAS DOING THE CONSTRUCTION OF THE ASSESSEES RESIDENTIA L HOUSE AT 2 ND & 3 RD FLOOR, NO.21, RADHAKRISHNAN STREET, T.NAGAR, CHENNA I-600 017, IS ALSO AN UNDISPUTED FACT. THIS BEING SO, A PERUSAL OF THE S ALE DEED OF THE ASSESSEE DATED 04.11.2009 CLEARLY SHOWS THAT AN AMOUNT OF RS .1.20 CR. HAS BEEN PAID TO M/S.REAL VALUE PROMOTERS PVT. LTD. OUT OF T HE SALE CONSIDERATION OF THE ASSESSEES FLAT AT MRC NAGAR. OBVIOUSLY, NO BU ILDER WOULD HAND OVER THE POSSESSION OF ITS BUILDING UNLESS FULL CONSIDER ATION IS PAID AND THE CONSTRUCTION IS COMPLETED. WHEN THIS SALE DEED IS READ ALONG WITH THE COMPLETION CERTIFICATION ISSUED BY THE M/S.REAL VAL UE PROMOTERS PVT. LTD. ITA NO.2932/MDS/2014 :- 5 -: DATED 24.02.2010 IT BECOMES CLEAR THAT THE ASSESSEE HAS COMPLETED THE CONSTRUCTION OF HER RESIDENTIAL HOUSE AT 2 ND & 3 RD FLOOR NO.21, RADHAKRISHNAN STREET, T.NAGAR, CHENNAI-600 017 WITH IN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE CAPITAL ASS ET BEING THE FLAT AT MRC NAGAR WHICH HAS GIVEN RISE TO LONG TERM CAPITAL GAI NS. THIS BEING SO, WE FIND NO ERROR IN THE ORDER OF THE LD.CIT(A) WHICH C ALLS FOR ANY INTERFERENCE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 21 , 2017, AT CHENNAI. SD/- SD/- ( . ) ( ABRAHAM P GEORGE, ) /ACCOUNTANT MEMBER ( ' ) (GEORGE MATHAN) % /JUDICIAL MEMBER /CHENNAI, 1 /DATED: SEPTEMBER 21, 2017. TLN , )%23 43 /COPY TO: 1. ( /APPELLANT 4. 5 /CIT 2. )*( /RESPONDENT 5. 3 )%% /DR 3. 5 ( ) /CIT(A) 6. ' /GF