K.Nandakumar, Trivandrum V. ACIT, Trivandrum

ITA 485/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0997 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-02-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: R SRIDHAR
• Section: 54; 263

Judgement Text

1 ITA NO.485/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 485/COCH/2011 (ASSESSMENT YEAR 2006-07) SHRI K NANDAKUMAR VS THE A.C.I.T., CIR.1(1) TC 2/2526(3), T K V NAGAR TRIVANDRUM GOLF LINKS ROAD TRIVANDRUM 695 003 PAN : ACKPN7957N (APPELLANT) (RESPONDENT) APPELLANT BY : R SRIDHAR RESPONDENT BY : SMT. S VIJAYAPRABHA DATE OF HEARING : 14-02-2013 DATE OF PRONOUNCEMENT : 28-02-2013 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER PASSED U/S 263 OF THE A CT DATED 03-02-2011 FOR THE ASSESSMENT YEAR 2006-07. 2 ITA NO.485/COCH/2011 2. THERE IS A DELAY OF 33 DAYS IN FILING THE APPEAL BEFORE THIS TRIBUNAL. SHRI R SRIDHAR, THE LD.REPRESENTATIVE FOR THE TAXPA YER SUBMITTED THAT THE ORDER OF THE ADMINISTRATIVE COMMISSIONER WAS RECEIV ED ON 15-03-2011. THE TAXPAYER WAS OUTSIDE INDIA; HENCE, HE COULD NOT FILE THE APPEAL WITHIN THE PRESCRIBED PERIOD. THEREFORE, THERE WAS A DELA Y OF 33 DAYS IN FILING THE APPEAL. WE HEARD THE LD.DR ALSO. THIS TRIBUNAL FI NDS THAT THERE IS A SUFFICIENT CAUSE ON THE PART OF THE TAXPAYER IN NOT FILING THE APPEAL IN TIME. ACCORDINGLY, THE DELAY OF 33 DAYS IS CONDONED AND T HE APPEAL IS ADMITTED. 3. COMING TO THE MERIT OF THE APPEAL, SHRI R SRIDHA R, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT T HE ADMINISTRATIVE COMMISSIONER IN EXERCISE OF HIS JURISDICTION U/S 26 3 OF THE INCOME-TX ACT FOUND THAT THE CAPITAL GAIN WHICH WAS NOT UTILISED FOR PURCHASE OF THE HOUSE WAS NOT DEPOSITED BEFORE THE DUE DATE FOR FILING TH E RETURN OF INCOME U/S 139(1) AS PROVIDED IN SECTION 54(2) OF THE ACT. AC CORDING TO THE LD.REPRESENTATIVE, IN FACT, THE TAXPAYER HAS PURCHA SED A HOUSE WITHIN THE SPECIFIED PERIOD, THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY ALLOWED THE CLAIM OF THE TAXPAYER U/S 54 OF THE ACT. REFERRING TO THE PROVISIONS OF SECTION 54, THE LD.REPRESENTATIVE SUBMITTED THAT SE CTION 54 IS A BENEFICIAL 3 ITA NO.485/COCH/2011 PROVISION, THEREFORE, IT HAS TO BE INTERPRETED LIBE RALLY. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT NEW HOUSE PROPERTY WAS PURCHASED ON 21-11-2007 FOR A SUM OF RS.2,70,00,000 . THIS IS WITHIN THE TIME LIMIT FOR INVESTMENT U/S 54 OF THE ACT. THERE FORE, MERELY BECAUSE THERE WAS A TECHNICAL BREACH FOR NON DEPOSITING THE AMOUNT AS REQUIRED U/S 54(2) OF THE ACT, THE DEDUCTION U/S 54 OF THE ACT C ANNOT BE REJECTED. REFERRING TO THE UNREPORTED DECISION OF THE CHENNAI BENCH OF THIS TRIBUNAL IN SHRI MADHUVAN PRASAD VS ITO, ITA NO.2485/MDS/200 4 ORDER DATED 17 TH OCTOBER, 2005, COPY OF WHICH IS FILED BY THE TAXPAY ER, THE LD.REPRESENTATIVE SUBMITTED THAT ON IDENTICAL CIRCUMSTANCES, THE CHEN NAI BENCH OF THIS TRIBUNAL FOUND THAT A TECHNICAL BREACH CANNOT BE A REASON TO DISALLOW THE CLAIM OF THE TAXPAYER. 4. ON THE CONTRARY, SMT. S VIJAYAPRABHA, THE LD.DR SUBMITTED THAT IN CASE THE TAXPAYER COULD NOT PURCHASE THE HOUSE AS P ROVIDED U/S 54 OF THE ACT, THE CAPITAL GAIN HAS TO BE DEPOSITED IN THE SP ECIFIC ACCOUNT BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S 139(1) OF THE ACT FOR CLAIMING EXEMPTION U/S 54 OF THE ACT. IN THIS CASE, EVEN TH OUGH THE TAXPAYER PURCHASED THE HOUSE ON 21-11-2007 THE AMOUNT WAS NO T DEPOSITED WITHIN 4 ITA NO.485/COCH/2011 THE DUE DATE AS PROVIDED IN SECTION 54(2) OF THE AC T. THEREFORE, THE TAXPAYER IS NOT ELIGIBLE FOR EXEMPTION U/S 54 OF TH E ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE QUES TION WHETHER THE CAPITAL GAIN WAS DEPOSITED AS REQUIRED U/S 54(2) OF THE ACT WAS NOT SUBJECT MATTER BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICE R SIMPLY FOUND THAT THE NEW HOUSE PROPERTY WAS PURCHASED ON 21-11-2007 WHIC H IS WITHIN THE TIME LIMIT PROVIDED U/S 54 OF THE ACT. THE QUESTION ARI SES FOR CONSIDERATION IS WHEN THE TAXPAYER PURCHASED THE HOUSE WITHIN THE TI ME LIMIT PROVIDED IN 54 OF THE ACT CAN THE CLAIM BE DISALLOWED MERELY BE CAUSE THE CAPITAL GAIN WAS NOT DEPOSITED IN THE CAPITAL GAIN ACCOUNT BEFOR E THE DUE DATE PROVIDED IN SECTION 139(1) OF THE ACT? THE ADMINISTRATIVE C OMMISSIONER FOUND THAT THE EXEMPTION PROVISIONS SHOULD BE INTERPRETED LIBE RALLY. HOWEVER, HE FURTHER OBSERVED THAT SINCE THE CAPITAL GAIN WAS NO T DEPOSITED IN THE SPECIFIED ACCOUNT AS PROVIDED IN SECTION 54(2), THE EXEMPTION HAS TO BE DENIED. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ADMINISTRATIVE COMMISSIONER OUGHT TO HAVE GIVEN AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE MATTER IN ACCORDANCE WITH LAW INSTEA D OF DENYING THE CLAIM 5 ITA NO.485/COCH/2011 OUTRIGHTLY. THEREFORE, THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT THE MATTER NEEDS TO BE CONSIDERED BY THE ASSESSING OFFI CER. ACCORDINGLY, THE ORDER OF THE ADMINISTRATIVE COMMISSIONER IS MODIFIE D AND THE ASSESSING OFFICER IS DIRECTED TO EXAMINE WHETHER THE TAXPAYER IS ELIGIBLE FOR EXEMPTION U/S 54 OF THE ACT WHEN THE CAPITAL GAIN A MOUNT WAS NOT DEPOSITED IN THE SPECIFIED ACCOUNT AS PROVIDED IN S ECTION 54(2) OF THE ACT?, ESPECIALLY WHEN THE HOUSE PROPERTY WAS PURCHASED WI THIN THE TIME LIMIT PROVIDED U/S 54 OF THE ACT AND THEREAFTER DECIDE TH E ISSUE IN ACCORDANC EWITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO TH E TAXPAYER WITHOUT BEING INFLUENCED BY ANY OF THE OBSERVATIONS MADE BY THE ADMINISTRATIVE COMMISSIONER IN THE IMPUGNED ORDER. ACCORDINGLY, T HE ORDER OF THE ADMINISTRATIVE COMMISSIONER IS MODIFIED. 6. IN THE RESULT, APPEAL OF THE TAXPAYER IS PARTLY ALLOWED WITH ABOVE OBSERVATION. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH FEBRUARY, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 28 TH FEBRUARY, 2013 PK/- 6 ITA NO.485/COCH/2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH 7 ITA NO.485/COCH/2011 1. DATE OF DICTATION : 18-02 2. DATE OF PLACING THE DRAFT ORDER BEFORE THE MEMBER : 19-02 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.PS : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER: 5. DATE OF RETURN OF THE ORDER TO PS AFTER APPROVAL : 6. DATE OF PRONOUNCEMENT : 7. DATE ON WHICH THE FILE ALONG WITH THE ORDER SENT TO BC : 8. NO. OF PAGES OF DICTATION PADS ATTACHED TO THE FILE : 08 9. NO. OF PAGES OF DRAFT COPY OF THE ORDER ATTACHED TO THE FILE :