J.Devarajan, CHENNAI V. DCIT Business Circle III, CHENNAI

ITA 2975/CHNY/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7439 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: A S SRIRAMAN
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A (SMC) BENCH: CHENNAI . , BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER ./ ITA NO.2975/CHNY/2017 /ASSESSMENT YEAR: 2010-11 SHRI J. DEVARAJAN, PROP: GRAPHI KOLOR, PLOT NO.2, IRANDAM KATTALAI MAIN ROAD, PUTHUVEDU, KOVOOR POST, CHENNAI-600 122. VS. THE DY. COMMISSIONER- OF INCOME TAX, BUSINESS CIRCLE-III, CHENNAI-600 034. [PAN: AASPS 62 79 D ] ( $ /APPELLANT) ( %&$ /RESPONDENT) $ ' / APPELLANT BY : MR.A.S.SRIRAMAN, ADV. %&$ ' /RESPONDENT BY : MR. B.SAGADEVAN, JCIT ' /DATE OF HEARING : 02.07.2018 ' /DATE OF PRONOUNCEMENT : 03.07.2018 / O R D E R PER ABRAHAM P.GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE WHICH IS DIRE CTED AGAINST AN ORDER DATED 28.09.2017 OF COMMISSIONER OF INCOME TA X(APPEALS)-10, CHENNAI, IT IS AGGRIEVED ON DISALLOWANCE OF A DEDUC TION CLAIMED BY IT U/S.54 OF THE ACT. 2. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A SSESSEE WAS DENIED THE DEDUCTION CLAIMED U/S.54 OF THE ACT FOR A REASO N THAT THE CAPITAL GAINS ARISING FROM THE SALE OF THE PROPERTY WAS NOT DEPOS ITED IN A BANK ACCOUNT ITA NO.2975/CHNY/2017 :- 2 -: OPENED UNDER THE CAPITAL GAINS ACCOUNTS SCHEME. AS PER THE LD.AR, THE ASSESSEE HAD SOLD THE PROPERTY ON 05.06.2009 AND RE -INVESTED LONG TERM CAPITAL GAINS IN RESIDENTIAL FLAT. ACCORDING TO THE LD.AR, ASSESSEE HAD PAID RS.5,30,400/- ON 03.03.201 AND FURTHER SUM OF RS.31 .54 LAKHS ON 12.09.2011, TOWARDS COST OF CONSTRUCTION. CONTENTI ON OF THE LD.AR WAS THAT LOWER AUTHORITIES HAD TAKEN DUE DATE FOR FILIN G OF THE RETURN FOR THE IMPUGNED ASSESSMENT YEAR, WHICH WAS 07.08.2010, AS THE LAST DATE FOR DEPOSITING THE CAPITAL GAINS IN AN ACCOUNT OPENED U NDER CAPITAL GAINS ACCOUNTS SCHEME. ACCORDING TO THE LD.AR, ASSESSEE WAS DENIED THE DEDUCTION CLAIMED U/S.54 OF THE ACT DESPITE RE-INVE STING THE CAPITAL GAINS IN A NEW RESIDENTIAL FLAT, BEFORE THE END OF THE TH REE YEAR PERIOD ALLOWED U/S.54(1) OF THE ACT. RELIANCE PLACED ON THE DECIS IONS OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI P.SANKAR AN V. ITO IN ITA NO.1167/MDS/2016 DATED 15.09.2016 AND IN ACIT V. JU STICE T.S. ARUNACHALAM IN ITA NO.2455/MDS/2017 DATED 30.01.201 8. 3. PER CONTRA, THE LD.DR SUPPORTED THE ORDERS OF TH E LOWER AUTHORITIES. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED ON RECORD. 5. ONLY REASON ASSESSEE WAS DENIED ITS CLAIM U/S.54 OF THE ACT WAS THAT IT HAD NOT KEPT THE CAPITAL GAINS IN A BANK AC COUNT OPENED UNDER THE CAPITAL GAINS ACCOUNTS SCHEME. IN OTHER WORDS, ALL OTHER CONDITIONS FOR ITA NO.2975/CHNY/2017 :- 3 -: GIVING THE BENEFIT OF SEC.54 OF THE ACT WAS SATISFI ED BY THE ASSESSEE. IN THE CASE OF SHRI P.SANKARAN, CITED SUPRA, THE CO-OR DINATE BENCH OF THIS TRIBUNAL, IN A SIMILAR SITUATION, HAD HELD AS UNDER : 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE DECISION OF SHRI MADHUVAN PRASAD VS. ITO, SUPRA THE CHENNAI BENCH OF THE TRIBUNAL HAS ALLOWED THE BENEFIT OF SECTION 54 OF T HE ACT BECAUSE THE ASSESSEE HAD FULFILLED ALL THE CONDITIONS PRESCRIBED UNDER SECTION 54 OF T HE ACT BARRING THE DEPOSIT OF THE SALE PROCEEDS IN THE CAPITAL GAIN SCHEME ACCOUNT AS PR ESCRIBED UNDER SECTION 54(2) OF THE ACT. IN THAT DECISION RELIANCE WAS ALSO PLACED IN THE DE CISION OF HONBLE APEX COURT IN THE CASE OF MOTILAL PADAMPAT SUGARMILL CO.LTD. VS. STATE OF UTTAR PRADESH & ORS WHEREIN IT WAS HELD THAT THUS THERE IS NO PRESUMPTION THAT EVERY PERSO N KNOWS THE LAW. IT IS OFTEN SAID THAT EVERYONE IS PRESUMED TO KNOW THE LAW, BUT THAT IS N OT A CORRECT STATEMENT THERE IS NO SUCH MAXIM KNOWN TO THE LAW. IN THE GIVEN CASE BEFORE US ALSO, IT IS NOT DISPUTED THAT THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS PRESCRIBE D UNDER SECTION 54 OF THE ACT BARRING THE DEPOSIT OF THE SALE PROCEEDS IN THE CAPITAL GAIN S CHEME ACCOUNT. MOREOVER, THE FACTS REVEAL THAT THE ASSESSEE HAD DEPOSITED THE ENTIRE S ALE PROCEEDS IN HIS SAVINGS BANK ACCOUNT MAINTAINED WITH NATIONALIZED BANK OUT OF WHICH HE H AS CONSTRUCTED HIS HOUSE. THE ONLY SMALL LACUNA ASSESSEE HAD MADE IS THAT THE ASSESSEE THOUGH HAD PLACED THE ENTIRE SALE PROCEEDS IN THE NATIONALIZED BANK HE HAS NOT TRANSF ERRED THE SAME IN THE CAPITAL GAIN SCHEME ACCOUNT. CONSIDERING THESE FACTS OF THE CAS E AND THE DECISIONS OF THE TRIBUNAL AND THE HONBLE APEX COURT CITED ABOVE, WE ARE OF THE C ONSIDERED VIEW THAT FOR THIS SMALL TECHNICAL LAPSE OF THE ASSESSEE, THE BENEFIT OF SEC TION 54 SHOULD NOT BE DENIED. SECTION 54 OF THE ACT IS A BENEFICIAL PROVISION AND A BENEFICI AL INTERPRETATION HAS TO BE MADE AS FAR AS POSSIBLE FOR GIVING BENEFIT TO THE ASSESSEE. THE AS SESSEE HAD PROCEEDED TO COMPLY WITH THE PROVISIONS OF SECTION 54 OF THE ACT BUT HAS ONLY MA DE A SMALL TECHNICAL BREACH WHICH WE ARE OF THE CONSIDERED VIEW SHOULD NOT DISENTITLE THE AS SESSEE FOR THE BENEFIT OF SECTION 54 OF THE ACT. THEREFORE, WE HEREBY DIRECT THE LEARNED ASSESS ING OFFICER TO GRANT THE BENEFIT OF SECTION 54 OF THE ACT TO THE ASSESSEE AND ACCORDING LY DELETE THE ADDITION MADE BY HIM WHICH WAS FURTHER SUSTAINED BY THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS). 6. THAT PART, THE HONBLE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF CIT VS. JAGRITI AGRAWAL REPORTED IN 339 ITR 610 AND THE HONBLE GUWAHATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALA N REPORTED IN 286 ITR 274 HAVE TAKEN A VIEW THAT CONSIDERING THE INTENTIO N OF ENACTING AN ALLEVIATING PROVISION LIKE SEC.54 OF THE ACT, A LIB ERAL INTERPRETATION, ACCENTUATING THE PURPOSE OF SUCH ENACTMENT HAS TO B E PREFERRED OVER A STRICT INTERPRETATION. IN THE GIVEN CIRCUMSTANCES, I AM OF THE OPINION THAT THE ASSESSEE COULD NOT HAVE BEEN DENIED THE CLAIM M ADE IT U/S.54 OF THE ACT. THE AO IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. ITA NO.2975/CHNY/2017 :- 4 -: 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 03, 201 8, AT CHENNAI. SD/- ( . ) ( ABRAHAM P.GEORGE ) /ACCOUNTANT MEMBER /CHENNAI, . /DATED: JULY 03, 2018. TLN ' %/0 10 /COPY TO: 1. $ /APPELLANT 4. 2 /CIT 2. %&$ /RESPONDENT 5. 0 % /DR 3. 2 ( ) /CIT(A) 6. /GF