ITO, Tiruppur V. Sri S. Sathishkumar, Udamalpet

ITA 3110/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7423 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: NITHYA SANKARAN
• Section: 143(3); 68; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! . , % !& BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER, AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ ITA NO.3110/MDS/2016 / ASSESSMENT YEAR : 2013-14 THE INCOME TAX OFFICER, WARD 2(4), TIRUPUR 641 602 V. SHRI S. SATISHKUMAR, NO.50, SIVACHELLAMMAL LAYOUT, S.V. MILLS POST, UDUMALPET 642 128. PAN: AJCPS1711K ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT /RESPONDENT BY : MS. NITHYA SANKARAN, CA /DATE OF HEARING : 15.03.2017 /DATE OF PRONOUNCEMENT : 23.03.2017 / O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), COIMB ATORE IN APPEAL NO.54/16-17 DATED 07.09.2016 PASSED U/S. 250 (6) R.W.S. 143(3) OF THE ACT. 2 I.T.A. NO.3110/MDS/2016 2. THE LD. CIT(A) HAS ERRED IN GRANTING DEDUCTION U /S.54 OF THE ACT BY HOLDING THAT THE PURCHASE OF LAND AND APPROV AL OF PLAN WITHIN THE PERIODS STIPULATED U/S.54 OF THE ACT ARE SUFFIC IENT FOR CLAIMING DEDUCTION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL, ENGAGED IN BUSINESS AND EARNED INCOME F ROM HOUSE PROPERTY, INCOME FROM CAPITAL GAINS AND INCOME FROM OTHER SOURCE DURING THE RELEVANT ASSESSMENT YEAR. HE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 31.07.2013 ADMIT TING INCOME OF RS.2,75,210/-. INITIALLY THE RETURN WAS PROCESS ED U/S.143(1) OF THE ACT, SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTIN Y UNDER CASS AND FINALLY ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 31.03.2016, WHEREIN THE LD. AO DISALLOWED THE CLAIM OF DEDUCTION U/S.54 OF THE ACT FOR RS.57,27,550/- AND ALSO MADE ADDITION INVOKING SECTION 68 OF THE ACT FOR RS.17,05,881/-. 4. THE ASSESSEE HAD SOLD HIS RESIDENTIAL HOUSE FOR RS.65,10,000/- DURING THE RELEVANT ASSESSMENT YEAR AND HAD CLAIMED EXEMPTION U/S.54 OF THE ACT, CITING THE COS T OF THE VACANT 3 I.T.A. NO.3110/MDS/2016 SITE PURCHASED BY HIM DURING THE RELEVANT ASSESSMEN T YEAR AS RS.27,83,580/- AND COST OF CONSTRUCTION RS.30,50,00 0/-. THE LD. AO DEPUTED HIS INSPECTOR TO VERIFY THE CONSTRUCTION OF THE RESIDENTIAL HOUSE. SUBSEQUENTLY THE INSPECTOR IN HIS REPORT S TATED THAT THE ASSETS SOLD BY THE ASSESSEE AND PURCHASED BY THE AS SESSEE DOES NOT FALL UNDER THE CATEGORY OF RESIDENTIAL HOUSE SO AS TO QUALIFY FOR DEDUCTION U/S.54 OF THE ACT. FURTHER THE ASSESSEE COULD ONLY PRODUCE THE APPROVAL PLAN OF THE RESIDENTIAL PROPER TY AND THE SALE DEED; HOWEVER HE COULD NOT PRODUCE THE COMPLETION C ERTIFICATE OR THE HOUSE TAX / WATER TAX RECEIPTS ETC. THEREFORE THE LD. AO DISALLOWED THE CLAIM OF DEDUCTION U/S.54 OF THE ACT . 5. ON APPEAL, THE LD. CIT(A) HELD THAT PURCHASE OF LAND AND APPROVAL OF PLAN WITHIN THE PERIOD STIPULATED IN SE CTION 54 OF THE ACT ARE SUFFICIENT EVIDENCE AND ACCORDINGLY ALLOWED THE CLAIM OF DEDUCTION U/S.54 OF THE ACT, AGGRIEVED BY WHICH THE REVENUE IS IN APPEAL BEFORE US. 6. THE LD. DR VEHEMENTLY ARGUED BEFORE US STATING T HAT THE ASSESSEE HAS NOT FULLY COMPLIED WITH THE PROVISIONS OF THE ACT, 4 I.T.A. NO.3110/MDS/2016 BECAUSE HE HAD NOT PROVED THAT THE CONSTRUCTION OF THE RESIDENTIAL HOUSE WAS COMPLETED. HENCE, HE PLEADED THAT THE OR DER OF THE LD. AO MAY BE REINSTATED. ON THE OTHER HAND THE LD. AR RELIED ON THE ORDER OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. THE LD. AO HAS NOT GIVEN ANY CATEGORICAL FINDING AS TO THE NATURE OF PROPERTY SOLD BY THE AS SESSEE AND THE BUILDING CONSTRUCTED BY THE ASSESSEE. HE SIMPLY RE JECTED THE CLAIM OF THE ASSESSEE FOR GRANTING DEDUCTION U/S.54 OF TH E ACT, BY STATING THAT THE IMMOVABLE PROPERTY SOLD BY THE ASSESSEE AN D THE PROPERTY CONSTRUCTED BY THE ASSESSEE DO NOT FALL UNDER THE C ATEGORY OF RESIDENTIAL HOUSE ONLY BASED ON THE BLUNT STATEMENT OF HIS INSPECTOR, WHO HAS NOT ELABORATELY NARRATED THE FACTS WITH ANY COGENT EVIDENCE. HOWEVER AFTER EXAMINING THE ISSUE, THE L D. CIT(A) HAD GRANTED RELIEF TO THE ASSESSEE RELYING UPON THE APP ROVAL PLAN AND THE PURCHASE DEED OF THE LAND. THOUGH THE COMPLETI ON CERTIFICATE WAS NOT OBTAINED BY THE ASSESSEE, THE LD.A.O HAS AL SO NOT EXAMINED THE ISSUE AND BROUGHT OUT ANY MATERIALS TO SUGGEST THAT THE RESIDENTIAL HOUSE IS NOT INHABITABLE. IN THIS SITUATION, WE DO NOT 5 I.T.A. NO.3110/MDS/2016 FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF TH E LD. CIT(A) ON THIS ISSUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON 23 RD MARCH, 2017 AT CHENNAI. SD/- SD/- ( . ) )) ) (G. PAVAN KUMAR) /JUDICIAL MEMBER ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 23 RD MARCH, 2017. JR. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT, 5. /DR 6. /GF.