Smt. Kantha Bhandari, CHENNAI V. ITO, CHENNAI

ITA 3060/CHNY/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0163 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-05-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 01-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M KARUNAKARAN
• Keywords: Cost of acquisition; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , ! BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI S.JAYARAMAN, ACCOUNTANT MEMBER / I.T.A. NO.3060/CHNY/2016 /ASSESSMENT YEAR : 2013-14 SMT. KANTHA BHANDARI 12/16, KUPPUSAWAMY ROAD, SRINIVASA NAGAR, CHETPUT CHENNAI-600 031 VS THE INCOME TAX OFFICER, NON CORPORATE WARD-3(4) CHENNAI-600 034 PAN: AAEPB4998A ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. M.KARUNAKARAN, ADVOCATE /RESPONDENT BY : MR. AR V.SREENIVASAN, JCIT /DATE OF HEARING : 28.03.2019 /DATE OF PRONOUNCEMENT : 29.03.2019 / O R D E R PER S.JAYARAMAN, AM: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI, IN ITA NO. 145/ 2015-16/A.Y.2013- 14/CIT(A)-4 DATED 26.09.2016 FOR ASSESSMENT YEAR 20 13-14. 2. FOR THE ASSESSMENT YEAR 2013-14, THE ASSESSEE HAS ARRIVED LONG TERM CAPITAL GAINS AFTER DEDUCTING INDEXED COST OF ACQUISITION AT 13,93,075/- BASED ON THE VALUE OF PROPERTY AT 17,85,490/- COMPRISING RS.9.00 LAKHS TOWARDS PURCHASE OF PROPE RTY AND THE BALANCE BEING COST OF PROPERTY INCLUDING IMPROVEMENT AND S TAMP DUTY. THE A O HELD , INTER ALIA, THAT IN THE SALE CUM CONSTRUCTIO N AGREEMENT DATED 2 ITA NO.3060/CHNY/2018 20.04.2012, IT IS MENTIONED THAT THE EXISTING STRUC TURE HAS BEEN DEMOLISHED AFTER OBTAINING NECESSARY APPROVAL FR OM CONCERNED AUTHORITIES IN THE YEAR OF 2009 AND APPROVAL FOR C ONSTRUCTION OF THE FLATS HAS BEEN OBTAINED IN THE YEAR 2010. SINCE THE ASS ESSEE HAS SOLD ONLY AN UDS LAND IN THE PROPERTY ALONG WITH CONSTRUCTED AREA THROUGH SALE CUM CONSTRUCTION AGREEMENT DATED 20.04.2012, AND T HE ASSESSEE HAS DEMOLISHED THE EXISTING STRUCTURE IN 2009 ITSELF A ND CONSTRUCTED THE NEW FLAT, HE HELD THAT THE ASSESSEE IS NOT ENTITLED FOR THE CLAIM. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED A N APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIE VED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE LD.AR SUBMITTED THAT THE VALUE OF PROPERTY A T 17,85,490/- WAS APPEARING IN THE BALANCE SHEET AS EARLY AS ON 3 1.3.1995 WHICH COMPRISES THE COST OF LAND AND COST OF BUILDING. IN THIS REGARD, HE INVITED OUR ATTENTION TO THE PAPER BOOK WHEREIN A COPY OF T HE THE BALANCE SHEET AS ON 31.03.1995, 96, 99 & 2000, WERE PLACED. HE IN VITED OUR ATTENTION TO THE SALE CUM CONSTRUCTION AGREEMENT WHEREIN UNDE R CLAUSE (I) IT IS STATED THAT THE EXISTING BUILDING WAS DEMOLISHED AFTER OBTAINING NECESSARY APPROVALS FROM THE CONCERNED AUTHORITIES VIDE LETTER NO.W.D.C. NO.DA/WEC07/00017/2009 DATED 05.05.2009. WITHOUT DEMOLITION OF THE BUILDING, THE ASSESSEE WOULD NO T HAVE DEVELOPED THE 3 ITA NO.3060/CHNY/2018 PROPERTY AND WOULD NOT HAVE REALIZED THE CONSIDERAT ION OF LAND AS SUCH. HE HAS ALSO INVITED OUR ATTENTION TO THE COPY OF TH E PLAN APPROVAL ISSUED BY CORPORATION OF CHENNAI DATED 25.02.2010 TOWARDS THE PROPERTY. IT IS SUBMITTED THAT THE ASSESSEE HAD NOT ENTERED INTO ANY JOINT DEVELOPMENT AGREEMENT FOR CONSTRUCTION OF FLAT WIT H ANY OF THE DEVELOPERS BUT THE FLATS WERE CONSTRUCTED BY ENGAG ING A CONTRACTOR BY THE ASSESSEE THEMSELVES, THEREFORE, THE VALUE OF TH E DEMOLISHED PROPERTY REQUIRES TO BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS EITHER IN THE COST OF ACQUI SITION OR IN THE COST OF IMPROVEMENT U/S.55(1)(B) .PER CONTRA, LD.DR SUPPORT ED THE ORDERS THE LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. SINCE THE PROPERTY VALUE DISCLOSED TO TH E DEPARTMENT STOOD AT 17,85,490/- AS EARLY AS 31.3.1995 AND THE ASSESS EES PLEA THAT IT HAD NOT ENTERED INTO ANY JOINT DEVELOPMENT AGREEMEN T FOR CONSTRUCTION OF FLAT WITH ANY OF THE DEVELOPERS BUT FLATS WERE CONS TRUCTED BY ENGAGING A CONTRACTOR BY THEMSELVES, THEREFORE, THE VALUE OF THE DEMOLISHED PROPERTY REQUIRES TO BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF LONG TERM CAPITAL GAINS EITHER IN THE COST OF ACQUI SITION OR IN THE COST OF IMPROVEMENT U/S.55(1)(B) REQUIRES A FRESH EXAMINATI ON. THEREFORE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT THIS ISSUE BACK 4 ITA NO.3060/CHNY/2018 TO THE FILE OF THE AO FOR FRESH EXAMINATION. THE AS SESSEE SHALL LAY RELEVANT MATERIALS IN SUPPORT OF ITS CONTENTION B EFORE THE AO AND COMPLY WITH THE REQUIREMENTS OF THE AO IN ACCORDAN CE WITH LAW. THE AO IS FREE TO CONDUCT APPROPRIATE ENQUIRY AS DEEMED F IT, BUT HE SHALL FURNISH ADEQUATE OPPORTUNITY TO THE ASSESSSEE ON THE MATERIAL ETC. TO BE USED AGAINST IT AND DECIDE THE MATTER IN ACCOR DANCE WITH LAW. 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 29 TH MARCH, 2019. SD/- SD/- ( . . . ) (. ) ( N.R.S.GANESAN) (S.JAYARAMAN) ( / JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) /CHENNAI, /DATED 29 TH MARCH, 2019 SOMU #$% &% /COPY TO: APPELLANT 2. RESPONDENT 3. ( () /CIT(A) 4. ( /CIT 5. % ##- /DR 6. 0 /GF