SIYALAM JAGANATHAN, CHENNAI V. ITO, NCW - 20 (3), CHENNAI

ITA 3079/CHNY/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0406 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 04-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Valuation report; Capital Gains
• Section: 234B

Judgement Text

आयकर अपीलीय अिधकरण ‘सी’ ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, CHENNAI माननीय -ी महावीर िसंह, उपा23 एवं माननीय -ी मनोज कु मार अ8वाल ,लेखा सद; के सम3। BEFORE HON’BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.3079/Chny/2019 (िनधाDरण वषD / Assessment Year: 2016-17) Shri Siyalam Jaganathan No.17, Jothi Nagar, 3 rd Main Street, Annanur, Chennai – 600 109. बनाम/ V s. ITO, Non-Corporate Ward-20(3), Chennai. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . ARG P J -1 5 5 9 - A (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Ms. R. Sridevi (C.A) – Ld. AR थ की ओरसे/Respondent by : Shri G. Johnson (Addl. CIT) –Ld. DR सुनवाई की तारीख/ Date of Hearing : 10-01-2022 घोषणा की तारीख / Date of Pronouncement : 10-01-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of the order of learned Commissioner of Income Tax (Appeals)-14, Chennai [CIT(A)] dated 10.09.2019 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.143(3) of the Act on 04.12.2018. The grounds of appeal read as under: ITA No.3079/Chny/2019 - 2 - 1. The A.O has erred in determining the Capital Gains to the sum of Rs.35,06,099/-. 2. The A.O has erred in computation of Cost of Construction by not allowing the correct proportionate share of the assessee in Cost of Construction. 3. The A.O. has erred in levying capital gain tax, Interest u/s 234B and 234D. 4. The Appellant craves leave additional grounds to allow the correct cost of Indexed Cost of Acquisition. 5. The A.O has erred in disallowing the Capital Gains Exemption u/s.54 when the assessee has invested the sale proceeds in residential property. 6. The Commissioner of Income Tax -(appeals) has not considered the investment made by the assessee thereby rejecting 54 of Rs.26,39,000/-. 7. The Commissioner of Income Tax- Appeals has not considered the Correct computation of Indexed Cost of Acquisition in his order u/s 250(6). 8. The Assessee also prays to file further grounds of appeal during the course of appellate proceedings. 2. Having heard rival submissions and after going through the orders of lower authorities, our adjudication would be as under. 3. During assessment proceedings, it transpired that the assessee sold a residential house property situated at Koratur Village, Chennai along with his son for sum of Rs.99.50 Lacs on 16.07.2016. The assessee’s share therein was Rs.73.66 Lacs. Against the capital gains of Rs.35.06 Lacs, the assessee claimed deduction u/s 54 for investment made in certain land for Rs.50.54 Lacs on 01.09.2015. Since the assessee had only invested only in a piece of land and not in a residential house and not even started construction within the stipulated period i.e.16.07.2018, Ld. AO held that no such deduction would be available to the assessee. 4. During appellate proceedings, the assessee drew attention to the fact that correct indexed cost of acquisition as attributable to the assessee would be Rs.48.16 Lacs and not Rs.36.43 Lacs as taken by Ld. AO. At the same time, the assessee summitted that it also did construction in another land owned by him which was situated at ITA No.3079/Chny/2019 - 3 - Illuppaividhuti Village, Orathanadu Taluk, Tanjavur district. In support, the assessee submitted documents relating to construction and also filed valuation report etc. wherein cost of construction was shown as Rs.26.39 Lacs. However, since no such documents were submitted to Ld. AO, the claim was not accepted by Ld. CIT(A). The plea of adoption of correct cost of construction was also rejected since the assessee could not submit any evidence in this regard. Aggrieved, the assessee is in further appeal before us. 5. So far as the correct computation of capital gain is concerned, Ld. AR has placed on record computations for the submission that assessee’s share in the property sold during the year was to the extent of 78.22%. The assessee’s share in land would be Rs.60.72 Lacs whereas assessee’s share in building would be 17.11 Lacs. In other words, the correct sale consideration as attributable to the assessee would be Rs.77.83 Lacs. On cost of acquisition side, the assessee’s share in land would be Rs.0.47 Lacs which would be indexed to Rs.1.69 Lacs. The assessee’s share in construction would be Rs.28.15 Lacs which would be indexed to Rs.48.16 Lacs. In other words, correct cost of acquisition of land and construction would be Rs.49.86 Lacs. The difference of Rs.77.83 Lacs and Rs.49.86 Lacs i.e. Rs.27.96 Lacs would be correct capital gains in the hands of the assessee. We find the complete computations have been provided by Ld. AR on record, in this regard. Therefore, Ld. AO is directed to verify the computations and adopt correct capital gains as submitted by the assessee. 6. Regarding deduction u/s 54, we find that the assessee has purchased a certain land for Rs.10.90 which is situated at Illuppaividhuti Village, Orathanadu Taluk, Tanjavur District. The ownership is evidenced ITA No.3079/Chny/2019 - 4 - by sale document dated 15.10.2013 as placed on record. It is the submissions of Ld. AR that the assessee has undertaken construction of this property also and the same is eligible for deduction u/s 54. The valuation report dated 27.12.2018 has also been placed on record. We find that these documents would have material bearing on assessee’s claim of deduction u/s 54. Therefore, we direct Ld. AO to verify these documents and ascertain the assessee’s eligibility to claim deduction u/s 54 with respect to this construction. If found eligible, the deduction, as applicable, would be granted to the assessee. The assessee is directed to furnish requisite documentary evidences in this regard. 7. The appeal stand allowed for statistical purposes to the extent indicated in the order. Order pronounced on 10 th January, 2022. Sd/- (MAHAVIR SINGH) उपा23 /VICE PRESIDENT Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद; / ACCOUNTANT MEMBER चे)ई / Chennai; िदनांक / Dated : 10-01-2022 EDN/- आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 2. यथ /Respondent 3. आयकर आयु (अपील)/CIT(A) 4. आयकर आयु /CIT 5. िवभागीय ितिनिध/DR 6. गाड फाईल/GF