Eswari, Tiruppur V. ITO, Tiruppur

ITA 327/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8540 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 06-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Section: 54F

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL B SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER !./ ITA NO.327/MDS/2015 # $%# / ASSESSMENT YEAR : 2011-12 MRS. ESWARI, NO.3-1148, ATHIKADU THOTTAM, ANDIPALAYAM, KANAKKAMPALAYAM POST, PERUMANALLUR VIA, TIRUPUR 641 666. PAN : AAZPE 7851 Q V. THE INCOME TAX OFFICER, WARD I(4), SIXTY FEET ROAD, P.N. ROAD, TIRUPUR 641 602. ('(/ APPELLANT) ()*'(/ RESPONDENT) !./ ITA NO.378/MDS/2015 # $%# / ASSESSMENT YEAR : 2011-12 THE INCOME TAX OFFICER, WARD I(4), SIXTY FEET ROAD, P.N. ROAD, TIRUPUR 641 602. V. MRS. ESWARI, NO.3-1148, ATHIKADU THOTTAM, ANDIPALAYAM, KANAKKAMPALAYAM POST, PERUMANALLUR VIA, TIRUPUR 641 666. ('(/ APPELLANT) ()*'(/ RESPONDENT) #+, - . /ASSESSEE BY : SH. T. BANUSEKAR, CA SH. N. VIJAY KUMAR, CA /$ - . /REVENUE BY : SHRI N. MADHAVAN, JCIT 0 $ - ,1 / DATE OF HEARING : 17.06.2016 23% - ,1 / DATE OF PRONOUNCEMENT : 09.09.2016 2 I.T.A. NO. 327/MDS/15 I.T.A. NO.378/MDS/15 / O R D E R BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2011-1 2. I HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. LETS FIRS TAKE I.T.A. NO.327/MDS/2015 FILED BY T HE ASSESSEE. 2. SH. T. BANUSEKAR, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE SOLD A VACANT LAND INHE RITED FROM HER FATHER SHRI R. SUBRAMANIAM ON 10.01.2011. THE ASSE SSEE INVESTED IN REC BONDS IN TWO INSTALMENTS ON 31.03.2011 AND 3 0.06.2012 TO THE EXTENT OF ` 50 LAKHS AND ` 20 LAKHS RESPECTIVELY. THE ASSESSEE HAS ALSO TAKEN INITIATIVE FOR CONSTRUCTION OF RESID ENTIAL HOUSE AND OBTAINED APPROVAL FROM NERUPERICHAL PANCHAYAT UNION FOR CONSTRUCTION OF HOUSE ON 21.07.2011. THE ASSESSING OFFICER, HOWEVER, DISALLOWED THE INVESTMENT IN BONDS TO THE EXTENT OF ` 24,42,300/- ON THE GROUND THAT THE SAME WAS NOT DEP OSITED WITHIN THE TIME FRAME PROVIDED UNDER SECTION 139(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR FILING THE RETURN OF INCOME. ACCORDING TO 3 I.T.A. NO. 327/MDS/15 I.T.A. NO.378/MDS/15 THE LD. REPRESENTATIVE, THE ASSESSEE HAS INVESTED I N RESIDENTIAL PROPERTY TO THE EXTENT OF ` 22.42 LAKHS. IN FACT, THE APPROVAL WAS OBTAINED ON 21.07.2011 FROM PANCHAYAT UNION. THERE FORE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS NOT J USTIFIED. 3. ON THE CONTRARY, SHRI N. MADHAVAN, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE ADMITTE DLY SOLD A PROPERTY ON 10.01.2011. THE DUE DATE FOR FILING OF RETURN FOR THE ASSESSMENT YEAR 2011-12 IS 31.07.2011. THE ASSESSE E OBTAINED THE APPROVAL FROM PANCHAYAT UNION ON 21.07.2011. T HEREFORE, THE ASSESSEE COULD NOT HAVE CONSTRUCTED THE HOUSE BEFOR E 31.07.2011. HENCE, THE ASSESSEE HAS TO NATURALLY DEPOSIT THE SA ME IN THE CAPITAL GAINS ACCOUNT FOR THE PURPOSE OF CLAIMING D EDUCTION UNDER SECTION 54F OF THE ACT. SINCE THE DEPOSIT WAS NOT MADE, ACCORDING TO THE LD. D.R., THE ASSESSEE IS NOT ELIGIBLE FOR D EDUCTION. THE LD. D.R. PLACED HIS RELIANCE ON THE JUDGMENT OF APEX CO URT IN PRAKASH NATH KHANNA AND ANOTHER V. CIT (2004) 266 ITR 1. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE MATERIAL AVAILABLE ON RECORD IT APPEARS THAT THE PR OPERTY ORIGINALLY BELONGS TO ONE SHRI MUTHUSAMY GOUNDER. THE ASSESSE E INHERITED 4 I.T.A. NO. 327/MDS/15 I.T.A. NO.378/MDS/15 THE PROPERTY ON THE DEATH OF HER FATHER AND THE SAM E WAS SOLD ON 10.01.2011. THE ASSESSEE ADMITTEDLY INVESTED A SUM OF ` 50 LAKHS ON 31.03.2011. THE ASSESSING OFFICER ALLOWED THE C LAIM OF THE ASSESSEE WITH REGARD TO THIS DEPOSIT MADE IN REC BO NDS. A SUM OF ` 20 LAKHS WAS DEPOSITED ON REC BONDS ON 30.06.2012, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. HOWEVER, THE CIT(APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE. THE DISPUTE IS WITH REGARD TO ` 24,42,000/-. IN THE CASE BEFORE US, THE ASSESSEE H AS NOT DEPOSITED WITHIN THE DUE DATE FOR FILING OF RETURN OF INCOME. IN FACT, THE ASSESSEE FILED THE RETURN ON 06.02.2013 WITHIN THE TIME PROVIDED UNDER SECTION 139(4) OF THE ACT. THE RETURN WAS NO T FILED WITHIN THE TIME PROVIDED UNDER SECTION 139(1) OF THE ACT. THER EFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED BY THE ASSESSING OFFICER. ACCORDINGLY , THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT IS REMITTED BACK TO TH E FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REC ONSIDER THE ISSUE AFRESH AND FIND OUT WHETHER THE ASSESSEE HAS INVEST ED THE MONEY IN CONSTRUCTION OF PROPERTY AFTER GETTING APPROVAL OF PANCHAYAT UNION AND THEREAFTER DECIDE THE ISSUE AFRESH IN ACCORDANC E WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 5 I.T.A. NO. 327/MDS/15 I.T.A. NO.378/MDS/15 5. NOW COMING TO THE APPEAL OF THE REVENUE IN I.T.A . NO.378/MDS/2015, THE ONLY ISSUE ARISES FOR CONSIDER ATION IS WITH REGARD TO DISALLOWANCE OF ` 50 LAKHS AND ` 20 LAKHS INVESTED IN REC BONDS. 6. SHRI N. MADHAVAN, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED BEFORE THE ASSE SSING OFFICER THAT A SUM OF ` 50 LAKHS WAS INVESTED IN REC BONDS ON 31.03.2011 AND ANOTHER SUM OF ` 20 LAKHS WAS INVESTED ON 30.06.2011. ACCORDING TO THE LD. D.R., THE INVESTMENT WAS TO BE MADE WITHIN SIX MONTHS FROM THE DATE OF TRANSFER. THE INVESTMENT W AS NOT MADE WITHIN THE PERIOD OF SIX MONTHS, HENCE, ACCORDING T O THE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE CL AIM OF THE ASSESSEE. 7. ON THE CONTRARY, SH. T. BANUSEKAR, THE LD. REPRE SENTATIVE FOR THE ASSESSEE, SUBMITTED THAT ADMITTEDLY THE ASSESSE E DEPOSITED IN REC BONDS ON 30.06.2011, WHICH IS WITHIN THE DUE DA TE PROVIDED FOR FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. SINCE THE CAPITAL GAIN ARISING OUT OF TRANSFER OF PROPERT Y THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F OF THE ACT IN CASE THE 6 I.T.A. NO. 327/MDS/15 I.T.A. NO.378/MDS/15 MONEY WAS DEPOSITED BEFORE THE DUE DATE FOR FILING OF RETURN OF INCOME, THE LD. REPRESENTATIVE SUBMITTED THAT INVES TING IN REC BOND IS ONE OF THE METHODS PRESCRIBED BY THE LEGISL ATURE FOR INVESTING THE CAPITAL GAIN. THEREFORE, THE CIT(APP EALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE PROPERTY WAS SOLD ON 10.01.2011 AND THE ASSESSEE DE POSITED A SUM OF ` 50 LAKHS ON 31.03.2011 AND ANOTHER SUM OF ` 20 LAKHS ON 30.06.2011 IN REC BONDS. REC BOND, ADMITTEDLY, IS A CAPITAL GAIN BOND. SINCE THE DEPOSIT WAS MADE WITHIN THE DUE DA TE FOR FILING OF RETURN OF INCOME, THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT THE CIT(APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE A SSESSEE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 9. IN THE RESULT, ASSESSEES APPEAL IN I.T.A. NO. 327/MDS/2015 IS ALLOWED FOR STATISTICAL PURPOSES AND THE REVENUES APPEAL IN I.T.A. NO.378/MDS/2015 IS DISMISSED. 7 I.T.A. NO. 327/MDS/15 I.T.A. NO.378/MDS/15 ORDER PRONOUNCED ON 9 TH SEPTEMBER, 2016 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 5! /DATED, THE 9 TH SEPTEMBER, 2016. KRI. - ),67 87%, /COPY TO: 1. #+, /ASSESSEE 2. ASSESSING OFFICER 3. 0 9, () /CIT(A)-II, COIMBATORE 4. 0 9, /CIT-III, COIMBATORE 5. 7$: ), /DR 6. ;# < /GF.