DCIT, CHENNAI V. N.Shanmugham, CHENNAI

ITA 3299/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7439 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2017
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 15-03-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2016
• Court: TRIBUNAL
• Department Lawyers: R DURAIPANDIAN
• Section: 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' ! # . $ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.3299/MDS./2016 / ASSESSMENT YEAR : 2012-13 THE DEPUTY COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-2, CHENNAI 600 034. VS. MR.N.SHANMUGAM , NEW NO.18, DHANDAYUTHAPANI NAGAR, 2 ND STREET, KOTTURPURAM, CHENNAI 600 085. [PAN AAHPS 1578 A ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.R.DURAIPANDIAN, JCIT, D.R /RESPONDENT BY : NONE / DATE OF HEARING : 15.03.2017 / DATE OF PRONOUNCEMENT : 22 - 03 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2, CHENNA I DATED 30.09.2016 PERTAINING TO ASSESSMENT YEAR 2012-13. ITA NO3299.MDS./16/ :- 2 -: 2. NONE APPEARED ON BEHALF OF THE RESPONDENT ASSES SEE AND NO ADJOURNMENT PETITION WAS FILED. THE BENCH WAS OF TH E VIEW THAT THE APPEAL CAN BE DISPOSED OF WITHOUT THE ASSISTANCE OF THE ASSESSEE AND THEREFORE, THE APPEAL WAS HEARD EX-PARTE QUA THE RE SPONDENT-ASSESSEE AND DISPOSED OF BY CONSIDERING THE MATERIALS AVAILA BLE ON RECORD AFTER HEARING THE LD.D.R. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS FO R OUR ADJUDICATION. 2.1 THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION U/S. 54F OF THE IT ACT, CUMULATIVELY ON TWO INVESTMENTS, WITHOUT AP PRECIATING THE FACT THAT THE TWO PROPERTIES ARE DISTINCTLY SEPARAT E PROPERTIES, LOCATED AT TWO DIFFERENT PLACES AND PURCHASED SEPAR ATELY, AND CANNOT BE SAID TO BE FORMING A SINGLE INVESTMENT OR UNIT BY ANY MEANS OF SIMILARITIES. 2.2 THE LEARNED CIT(A) ERRED IN APPLYING THE DECISI ON OF THE HONBLE HIGH COURT IN THE CASE OF SMT. V.R. KARPAGAM ( TCA NO. 301/2014 ), WHEREAS THE FACTS OF THE PRESENT CASE A RE CLEARLY DISTINGUISHABLE FROM THE FACTS OF THE RELIED CASE, IN AS MUCH AS IN THE RELIED CASE, MULTIPLE FLATS ARE LOCATED IN THE SAME POSTAL DOOR NUMBER, WHEREAS IN THE PRESENT CASE IN HAND, THE PR OPERTIES ARE LOCATED AT TWO DIFFERENT PLACES, ONE AT GUINDY AND THE OTHER AT OKKIAM THORAIPAKKAM. ITA NO3299.MDS./16/ :- 3 -: 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED RETURN FOR ASSESSMENT YEAR 20 12-13 ON 25-09-2012 ADMITTING A TOTAL INCOME OF ` 1,27,72,054. THE CASE WAS TAKEN UP FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) DATED 06.08.2013 WAS ISSUED. THE ASSESSEE HA D SOLD SHARES OF GET POWER PVT. LTD DURING THIS YEAR FOR ` 2,25,79,091.64 AND THE CAPITAL GAINS ON SALE OF SUCH SHARES HAS BEEN OFFERED AS ` 1,01,13,656 AFTER CLAIMING EXEMPTION U/S 54F FOR INVESTING IN A RESIDENTIAL PR OPERTY IN GUINDY OF ` 50,00,000 AND DEPOSITING ` 65,00,000 IN THE SPECIAL CAPITAL GAIN A/C. THE AMOUNT FROM THE SPECIAL CAPITAL GAIN A/C HAD BEEN U TILISED FOR THE PURCHASE OF ANOTHER PROPERTY AT OKKIAM THORAIPAKKAM. THE ASS ESSEE WAS QUESTIONED FOR UTILISING FUNDS FROM THE SPECIAL CAPITAL GAIN A /C FOR PURCHASE OF A 2ND PROPERTY AT OKKIAM THORAIPAKKAM. IN RESPONSE, THE A SSESSEE SUBMITTED THAT HE HAD NOT ABLE TO FIND THE SINGLE INDIVIDUAL PROPE RTY TO SUIT ALL HIS REQUIREMENTS. SO, HE HAD TO GO FOR PURCHASE OF TWO PROPERTIES WHERE BOTH ARE ALLOWED FOR THE RESIDENTIAL PURPOSE. THE ASSESS ING OFFICER WAS OF THE VIEW THAT THE DEDUCTION U/S 54F CAN BE AVAILED FOR ONLY ONE PROPERTY. HENCE, THE ASSESSING OFFICER HAD PASSED THE ORDER BY NOT ALLOW ING THE EXEMPTION FOR THE 2 ND PROPERTY PURCHASED AT OKKIAM THORAIPAKKAM AND RAIS ING A DEMAND OF ` 16,12,880.00. AGGRIEVED BY THIS, THE ASSESSEE CARRI ED THE APPEAL BEFORE THE LD.CIT(A). 4.1 ON APPEAL, THE LD.CIT(A) ALLOWED THE CLAIM OF LD.CIT(A) BY PLACING RELIANCE IN THE JUDGEMENT OF JURISDICITIONAL HIGH C OURT IN THE CASE OF CIT VS. SMT. V.R.KARPAGAM IN 373 ITR 127(MDS.) WHEREIN HELD THAT PRIOR TO THE ITA NO3299.MDS./16/ :- 4 -: AMENDMENT, WITH REGARD TO A WORD RESIDENTIAL HOU SE TO INCLUDE MULTIPLE RESIDENTIAL UNITS. THUS, WHERE UNDER THE DEVELOPMEN T AGREEMENT, THE ASSESSEE WAS ENTITLED TO RECEIVE CERTAIN BUILT UP A REA, WHICH GOT TRANSLATED INTO 5 FLATS, EXEMPTION U/S.54F IN RESPECT OF FIVE PLOTS IN MULTI-STORY CONSTRUCTION WOULD BE AVAILABLE. ACCORDINGLY, LD.CI T(A) GRANTED EXEMPTION U/S.54F OF THE ACT. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE ASSESSEE ON THE SALE OF THE SHARE S INVESTED THE CAPITAL GAIN IN TWO RESIDENTIAL PROPERTIES ONE AT GUINDY AT ` 50 LAKHS AND ANOTHER PROPERTY AT OKKIAM THORAIPAKKAM AT ` 65 LAKHS AND CLAIMED EXEMPTION U/S.54F OF THE ACT AT ` 1,04,97,886/- THE AO CONSIDERED THE EXEMPTION U/S.54F PROPORTIONATELY TO THE TUNE OF ` 40,64,298/- IN RESPECT OF GUINDY PROPERTY ONLY. THE MAIN PLEA OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES IS THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.54F OF THE ACT IN RESPECT OF INVESTMENTS MADE IN BOTH THE RESIDENTIAL PROPERTIES AND PLACED RELIANCE IN THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. SMT. V.R.KARPAGAM (SUPRA). 5.1 IN OUR OPINION, THE ABOVE JUDGMENT HAVE NO AP PLICATION TO THE FACTS OF THE CASE. IN THE CASE BEFORE JURISDICTIONAL HIGH COURT, FIVE FLATS WERE SITUATED IN A MULTI STORY CONSTRUCTION AS A SINGLE RESIDENTIAL UNIT, AND NOT LOCATED AT DIFFERENT PLACES. HOWEVER, IN THE PRESEN T CASE, TWO RESIDENTIAL PROPERTY IS SITUATED AT TWO DIFFERENT PLACES, ONE I S AT GUINDY AND ANOTHER AT ITA NO3299.MDS./16/ :- 5 -: OKKIAM THORAIPAKKAM. BEING SO, BOTH THE RESIDENTIA L PROPERTIES CANNOT BE CONSIDERED AS A SINGLE UNIT SO AS TO GRANT DEDUCTIO N U/S.54F OF THE ACT. ACCORDINGLY, WE ARE REVERSING THE ORDER OF LD.CIT(A ) AND WE RESTORE THE ASSESSMENT ORDER. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED. ORDER PRONOUNCED ON 22 ND MARCH, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 22 ND MARCH, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF