ITO, CHENNAI V. Gopikrishnan Mohan, CHENNAI

ITA 3416/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6258 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 20-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SREENIVASANIRS
• Assessee Lawyers: K RAVI
• Keywords: Cost of acquisition
• Section: 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NO. 3416/MDS/2016 / ASSESSMENT YEAR : 2012-2013. THE INCOME TAX OFFICER, NON CORPORATE WARD 16(3), CHENNAI 600 034 VS. SHRI. GOPIKRISHNAN MOHAN, GOPI NISASZ, NO.2, AMBEDKAR STREET, GANDHI NAGAR, SALIGRAMAM, CHENNAI 600 093. [PAN AJLPM 7018G ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI. V. SREENIVASAN,IRS /RESPONDENT BY : SHRI. K. RAVI, ADVOCATE !' /DATE OF HEARING : 30-08-2017 #$ !' /DATE OF PRONOUNCEMENT : 06-09-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER REVENUE IN THIS APPEAL IS AGGRIEVED ON THE DIRECT IONS GIVEN BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-4 TO AL LOW DEDUCTION UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 (IN S HORT THE ACT) TO ITA NO.3416/MDS/2016 :- 2 -: THE ASSESSEE. AS PER THE REVENUE JUDGMENT OF HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. V.R. KARPAGAM 373 ITR 127 RELIED ON BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS DISTINGUISHABLE ON FACTS. 2. ASSESSEE ALONGWITH HIS MOTHER AND BROTHERS HAD DUR ING THE RELEVANT PREVIOUS YEAR SOLD 2400 SQ.FT OF LAND, BEA RING NUMBER 131 AT CHINMAYA NAGAR, CHENNAI AND A FLAT OF 625 SQFT BEA RING NO.132 FOR A SUM OF G.1,47,00,000/-. LONG TERM CAPITAL GAINS W ORKED OUT BY THE ASSESSEE WAS AS UNDER:- TOTAL SALE CONSIDERATION RECEIVED FOR 4900 SQ.FT : G1,47,00,000 ASSESSEES SHARE OF SALE CONSIDERATION RECEIVED FOR 3025 SQ. FT (2400 + 625) 3025/4900 X 1,47,00,000 : G90,75,000 LESS:- COST OF ACQUISITION (I) 20,000 X 785/125 : G1,25,600 (II) 1/4 TH SHARE OF G25,000 : G6,250 : G1,31,850 G70,74,400/- LONG TERM CAPITAL GAIN : G89,43,150/- (A) ASSESSEE CLAIMED EXEMPTION UNDER SECTION 54F OF THE ACT STATING THAT HE HAD CONSTRUCTED A BUILDING HAVING BUILTUP AREA OF 6395 SQ.FT ITA NO.3416/MDS/2016 :- 3 -: CONSISITING OF FIVE RESIDENTIAL UNITS. ONE UNIT WA S OCCUPIED BY THE ASSESSEE WHEREAS THE OTHER FOUR WERE LET OUT. THE LD. ASSESSING OFFICER DENIED THE EXEMPTION CITING THE FOLLOWING REASONS:- (I) WHAT WAS CONSTRUCTED BY THE ASSESSEE WAS FIVE RESID ENTIAL FLATS AND EXEMPTION UNDER SECTION 54F COULD BE GIV EN ONLY TO ONE RESIDENTIAL UNIT. (II) THOUGH ENTIRE CONSIDERATION WAS INVESTED FOR THE NE W BUILDING, UNUTILIZED AMOUNT WAS NOT KEPT IN AN ACCO UNT UNDER THE CAPITAL GAIN ACCOUNT SCHEME, BEFORE THE DUE DATE FOR FILING THE RETURN. 3. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). LD. COMMISSI ONER OF INCOME TAX (APPEALS) HELD IN FAVOUR OF THE ASSESSEE AFTER GIVING A FINDING THAT ASSESSEE HAD CONSTRUCTED MULTIPLE FLATS IN THE SAM E PLOT AND JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN V.R. KARPAGAM CASE (SUPRA) CLEARLY APPLIED. AS TO THE OBSERVATION OF THE LD. ASSESSING OFFICER, THAT ASSESSEE HAD FAILED TO KEEP THE UNUTILIZED AMOUNT U NDER A CAPITAL GAINS ACCOUNT SCHEME, LD. COMMISSIONER OF INCOME TA X (APPEALS) FOUND THAT ASSESSEE PERSONALLY SUPERVISED THE CONST RUCTION WORK NECESSITATING DAY-TO-DAY PAYMENTS AND HENCE SUCH A DEPOSIT WAS NOT REQUIRED. ITA NO.3416/MDS/2016 :- 4 -: 4. NOW BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE ASSA ILING THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) S UBMITTED THAT ASSESSEE FAILED TO KEEP THE UNUTILIZED AMOUNT IN AN ACCOUNT DESIGNED UNDER CAPITAL GAIN ACCOUNT SCHEME. FURTHER, AC CORDING TO HIM, EXEMPTION UNDER SECTION 54(F) OF THE ACT COULD NOT BE GIVEN WHEN MULTIPLE FLATS WERE CONSTRUCTED. 5. PER CONTRA, LD. AUTHORISED REPRESENTATIVE SUPPORTED THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONT ENTION. IT IS NOT DISPUTED THAT THE CONSTRUCTION DONE BY TH E ASSESSEE ON WHICH CLAIM UNDER SECTION 54F OF THE ACT WAS MADE WAS IN THE SAME PLOT. WHETHER CLAIM UNDER SECTION 54F OF THE ACT IS AVAIL ABLE FOR PURCHASE/CONSTRUCTION OF MULTIPLE UNITS WITHIN THE SAME PLOT/STRUCTURE STANDS ANSWERED IN FAVOUR OF THE ASSESSEE BY THE H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF V.R.KARPAG AM CASE (SUPRA). AS FOR FAILURE OF THE ASSESSEE TO KEEP THE UNUTILIZ ED AMOUNTS IN AN ACCOUNT UNDER CAPITAL GAINS ACCOUNTS SCHEME, ASSES SING OFFICER HAS HIMSELF OBSERVED AT PARA 1.1 OF HIS ORDER THAT ENTI RE NET CONSIDERATION RECEIVED BY THE ASSESSEE WAS INVESTED WITHIN THE PR ESCRIBED PERIOD FOR THE NEW CONSTRUCTION. THUS, WE FIND THAT LD. COMMI SSIONER OF INCOME ITA NO.3416/MDS/2016 :- 5 -: TAX (APPEALS) WAS JUSTIFIED IN ALLOWING THE CLAIM O F THE ASSESSEE. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED ON WEDNESDAY, THE 6TH DAY OF SE PTEMBER, 2017, AT CHENNAI. SD/- SD/- ( . . . % ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER &' / CHENNAI () / DATED: 6TH SEPTEMBER, 2017. KV )* + ,-, / COPY TO: 1 . / APPELLANT 3. . / % / CIT(A) 5. ,01 2 / DR 2. / RESPONDENT 4. . / CIT 6. 134 / GF