K.Shanthikumar, CHENNAI V. DCIT, CHENNAI

ITA 542/CHNY/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6781 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-08-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R ANITA
• Assessee Lawyers: S SRIDHAR
• Keywords: Capital asset; Avoidance of tax; Benefit of exemption; Capital Gains
• Section: 143(3); 54F; 201; 22; 27

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA , ACCOUNTANT MEMBER ./ I . T . A NO. 5 42 /CHNY/201 7 ASSESSMENT YEAR: 201 3 20 1 4 SHRI K. SHANTIKUMAR, FLAT NO.3F/2, DESIGA ROAD, MYLAPORE, CHENNAI 600 004. [PAN: AGEPS 4610C ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 2 , CHENNAI 600 034. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S. SRIDHAR , ADVOCATE /RESPONDENT BY : M R S . R. ANITA , J CIT / DATE OF HEARING : 24.08 .2021 / DATE OF PRONOUNCEMENT : 08.09 .2021 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE A SSESSEE IS AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX , (APPEALS) - 2 , CHENNAI IN I.T.A. NO. 19 3 /CIT(A) - 2/2015 - 16 , DATED 3 1 . 0 1 .201 7 RELE VANT TO THE ASSESSMENT YEAR 201 3 201 4. 2. F ACTS ARE IN BRIEF THAT , THE ASSESSEE IS AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION BY DECLARING A I . T . A NO . 542 /CHNY/201 7 : - 2 - : TOTAL INCOME OF RS.44,51,050/ - . SUBSEQUENTLY, THE CASE OF THE ASSESSEE WA S SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED AFTER FOLLOWING DUE PROCEDURES OF SECTION 143(3) OF THE INCOME TAX ACT, 1961 DATED 16.12.2015. 3. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAD NOTED THAT THE ASSESSEE DURING THE YEAR UNDER CO NSIDERATION HAD SOLD 50 CENTS OF LAND AT KAZHIPATTUR VILLAGE BY WAY OF TWO SALE DEEDS DATED 21.09.2012 FOR A CONSIDERATION OF RS.1,74,40,000/ - EACH. THE ASSESSEE HAD FURNISHED THE WORKING S OF THE CAPITAL GAINS ON THE ABOVE SALE OF LAND WHICH IS AT PAGE N O.2 OF THE ASSESSMENT ORDER. THE ASSESSEE AFTER CLAIMING DEDUCTION U/S.54F OF THE INCOME TAX ACT , 1961 TO THE TUNE OF RS.2,35,96,816/ - HA D ARRIVED AT NIL CAPITAL GAINS FROM THE SALE OF THE LAND. THE ASSESSEE VIDE HIS LETTER DATED 20.11.2015 HA D STATED A S UNDER: I HAVE CLAIMED EXEMPTION FOR THE ABOVE PROPERTY U/S.54F OF THE INCOME TAX ACT, 1961, AS I WAS OW N ING THE FOLLOWING PROPERTIES ONLY AT THE TIME OF SALE OF THE ABOVE LAND BY SALE DEED DATED 21.09.2012 A) RESIDENTIAL PROPERTY AT DESIKA RAOD, CHENNAI B) C OMMERCIAL PROPERTY AT ROYAPETTAH HIGH ROAD, CHENNAI I WAS OWNING SHARE IN TWO FLATS I.E. ONE AT BANGALORE AND ONE AT CHENNAI, ALONG WITH MY WIFE, MRS. KALYANI KUMAR AND SUBSEQUENTLY, I HAVE RELEASED MY SHARE IN THE ABOVE FLATS IN FAVOUR OF MY WIFE THR OUGH SETTLEMENT DEEDS DATED 31.08,.2012 AND 11.09.2012. I . T . A NO . 542 /CHNY/201 7 : - 3 - : 4 . THE ASSESSING OFFICER AFTER CONSIDERING THE ABOVE LETTER HAS OBSERVED AS UNDER: 3.1 IT IS VERY CLEAR THAT THE ASSESSEE WAS OWNING MORE THAN ONE PROPERTY BEFORE THE SALE OF LAND ON 21.09.2012 AN D THAT THE SETTLEMENT OF HIS SHARE IN THE TWO FLATS; ONE AT BANGALORE AND THE OTHER AT CHENNAI WAS DONE ONLY AROUND 20 DAYS BEFORE THE SALE OF LAND TOOK PLACE. IT IS ALSO PERTINENT TO NOTE THAT THE ENTIRE TRANSACTIONS OF SETTLEMENT, SALE AND PURCHASE OF N EW PROPERTY HAD TAKEN PLACE WITHIN A SHORT SPAN OF EIGHT MONTHS. 3.2 THE ASSESSEE, THOUGH MADE AN INVESTMENT IN PURCHASE OF A NEW FLAT AT AKKARAI TO THE TUNE OF RS.2,58,75, 120/ - WOULD NOT HAVE BEEN ELIGIBLE TO CLAIM DEDUCTION U/S.54F OF THE ACT, IF HE H AD BEEN OWNER OF MORE THAN ONE PROPERTY ON THE DATE OF SALE. HENCE, IN ORDER TO CLAIM DEDUCTION U/S.54F AND AVOID PAYING LONG TERM CAPITAL GAINS TAX, THE ASSESSEE HAD SETTLED HIS SHARE OF PROPERTIES AT BANGALORE AND CHENNAI IN HIS WIFES NAME. THEREFOR E, IT BECOMES EVIDENT THAT THE SETTLEMENT DEED WAS CLEARLY AN AFTERTHOUGHT AND A TAILOR - MADE ARRANGEMENT FOR EVADING PAYMENT OF TAX UNDER CAPITAL GAINS. 3.3 IT IS TO BE POINTED OUT THAT THE OBJECT OF THE ENACTMENT OF THE SECTION IS TO PREVENT AVOIDANCE OF TAX OR REDUCING THE INCIDENCE OF TAX ON THE PART OF THE ASSESSEE BY TRANSFER OF HIS ASSETS TO HIS WIFE OR MINOR CHILD. IT IS A SOUND RULE OF INTERPRETATION THAT A STATUTE SHOULD BE SO CONSTRUED AS TO PREVENT THE MISCHIEF AND TO ADVANCE THE REMEDY ACCOR DING TO THE TRUE INTENTION OF THE MAKERS OF THE STATUTE. THE ASSESSEE COULD HAVE BEEN EXTENDED THE BENEFIT, IF THE PROPERTY IS SETTLED IN THE NAME OF HIS SON OR MARRIED DAUGHTER HAD NOT IF IT WAS SETTLED IN FAVOUR OF HIS SPOUSE. 3.4 THE HONBLE SUPREME COURT IN THE CASE OF SEVANTILAL MANEKIAL SHETH (1968 AIR 697) HAD UPHELD THE ACTION OF THE ASSESSING OFFICER IN A CASE WHERE THE ASSESSEE HAD TRANSFERRED THE ASSETS IN HIS NAME TO HIS WIFES NAME AND THE INCOME ARISING OUT OF SALE OF SUCH ASSETS WAS ASSESS ED IN ASSESSEES HANDS. THUS, FOR THE PURPOSE OF INCOME TAX, THOUGH THE ASSETS WERE TRANSFERRED, THE INCOME FROM SALE OF ASSETS WAS ASSESSED IN ASSESSEES NAME DEEMING HIM AS THE OWNER OF THE SHARES. SO TRANS ACTION BETWEEN HUSBAND AND WIFE, UNLESS BECAUS E OF THE REASON TO LEAVE APART CANNOT BE CONSIDERED AS TRANSFER FOR THE PURPOSE OF THE INCOME TAX ACT. THE ASSESSEE, THEREFORE CONSTRUES TO BE THE OWNER OF THE SETTLED ASSET, AND ONLY THE TITLE OVER THE PROPERTY HAS CHANGED AND NOT THE TITLE OF OWNERSHIP. I . T . A NO . 542 /CHNY/201 7 : - 4 - : 3.5 IN THE PRESENT CASE, IT IS CLEARLY ESTABLISHED THAT THE SETTLEMENT OF SHARE OF PROPERTIES IN ASSESSEES NAME TO HIS WIFES NAME WAS A METHOD ADOPTED FOR AVOIDANCE OF TAX. HENCE, APPLYING T HE RATIO OF THE ABOVE DECISION OF THE HONBLE SUPREME COUR T, THE ASSESSEE IS DEEMED TO BE THE OWNER OF THE PROPERTIES SETTLED IN HIS WIFES FAVOUR FOR INCOME TAX PURPOSES. THUS, THE ASSESSEE IS FOUND TO OWN MORE THAN ONE PROPERTY AND HENCE, BECOME INELIG IBLE FOR THE CLAIM OF DEDUCTION U.S.54F. THEREFORE, THE CL AIM OF DEDUCTION U/S.54F OF THE ACT TO THE TUNE OF RS.2,35,96,816/ - IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME. 3.6 BASED ON THE ABOVE DISCUSSION, THE LONG TERM CAPITAL GAIN IS REWORKED DISALLOWING THE CLAIM OF DEDUCTION U/S.54F OF THE ACT . 5 . O N APPEAL , AFTER CONSIDERING THE SUBMISSIONS OF THE A SSESSEE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS OBSERVED THAT THE ASSESSING OFFICER HAS RIGHTLY FOLLOWED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SEVANTILAL MANEKLAL SHETH V S. COMMISSIONER OF INCOME TAX (CENTRAL), BOMBAY [1968 AIR 697] AND FURTHER OBSERVED THAT THE SETTLEMENT O F HALF THE SHARE OF THE PROPERTIES BY THE ASSESSEE IN THE NAME OF HIS WIFE, JUST A FEW DAYS BEFORE THE SALE OF THE LAND WAS THE METHOD ADOPTED FOR AVOI DANCE OF TAX AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 6 . ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE HA D SUBMITTED THAT AS ON THE DATE OF THE SALE OF PROPERTY, THE ASSESSEE IS H AVING ONLY ONE PROPERTY AND THUS HE IS ELIGIBLE FOR CLAIMING EXEMPTION I . T . A NO . 542 /CHNY/201 7 : - 5 - : U/S. 54F OF THE INCOME TA X ACT, 1961. HE FURTHER SUBMITTED THAT THE ASSESSEE HA S RELINQUISH ED HIS HALF SHARE OF PROPERTY IN FAVOUR OF HIS WIFE , I.E. TWO FLATS, ONE AT BANGALORE AND THE OTHER AT CHENNAI WHICH IS A GENUINE TRANSACTION AND WHICH IS LEGALLY ENFORCEABLE BY THE OPTION OF PARTIES AND SUBMITTED THAT THE TRANSACTION CANNOT BE SAID T O HAVE ENTERED ONLY TO AVOID TAX. 7 . IN SO FAR AS THE JUDGEMENT RELIED UPON BY THE ASSESSING OFFIC ER IN THE CASE OF SEVANTILAL MANEKLAL SHETH VS. COMMISSIONER OF INCOME TAX (CENTRAL), BOMBAY, IT WAS IN THE CONTEXT OF THE INDIAN INCOME TAX ACT , 1922 AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE . THE LEARNED COUNSEL FOR THE ASSESSEE HAS FURTHER SU BMITTED THAT RECENTLY THE HONBLE JURISDICTIONAL HIGH COURT OF MADRAS HAS DECIDED THE SINGLE ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF COMMISSIONER OF INCOME TAX, CHENNAI VS. MR. AJIT THOMAS REPORTED IN TAX CASE APPEAL NO.497 OF 2016 DATED 30 TH AUGUST , 2016 . THE SAME MAY BE FOLLOWED. 8. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HA D SUBMITTED THAT THE ASSE SSEE HAS RELINQUISHED HIS RIGHTS ON THE TWO PROPERTIES AND SETTLED THE SAME IN FAVOUR OF HIS WIFE ONLY WITH AN I . T . A NO . 542 /CHNY/201 7 : - 6 - : INTENSION TO AVOID PA YING TAX AND SUBMITTED THAT SECTION 54F OF THE INCOME TAX ACT, 1961 CANNOT BE GRANTED. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAD DECIDED THE CASE OF THE ASSESSEE BY DENYING SECTION 54F OF THE INCOME TAX ACT , 1961 TO THE ASS ESSEE I S A CORRECT PERSPECTIVE AND SUBMITTED THAT THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 9 . WE HAVE HEARD BOTH THE SIDES THROUGH VIDEO - CONFERENCING, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH T HE ORDERS OF THE AUTHORITIES BELOW. 10 . IN THIS CASE, THE ASSESSEE HAD SOLD A LAND ON 21.09.2012 AND OUT OF THE SALE PROCEEDS RECEIVED BY THE ASSESSEE, HAD INVESTED IN A RESIDENTIAL PROPERTY AND HAD CLAIMED EXEMPTION U/S.54F OF THE INCOME TAX ACT, 1961. ACCORDING TO THE ASSESSSEE, HE WAS HAVING ONLY ONE RESIDENTIAL PROPERTY AS ON THE DATE OF SALE OF THE LAND I.E.21.09.2012. PRIOR TO THE DATE OF SALE, THE ASSESSEE WAS HAVING HALF SHARE IN TWO FLATS HELD JOINTLY ALONG WITH HIS WIFE. SUBSEQUENTLY, HIS HALF SHARE WAS SETTLED IN FAVOUR OF HIS WIFE BY WAY OF SETTLEMENT DEED DATED 31 ST AUGUST, 2012 AND 11 TH SEPTEMBER, 2012 . I . T . A NO . 542 /CHNY/201 7 : - 7 - : 1 1 . FROM THE ABOVE FACTS, IT IS VERY CLEAR THAT ON THE DATE OF SALE OF THE LAND, THE ASSESSEE IS ONLY HAVING ONE RESIDENTIAL PROPERTY. TH E CASE OF THE ASSESSING OFFICER IS THAT, THE ASSESSEE HAS RELINQUISHED HIS RIGHT S ON THE TWO FLATS BY SETTL ING IN FAVOUR OF HIS WIFE ONLY TO AVOID TAX. THIS VIEW IS EVEN CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALSO. WE FIND THAT THE ASSESSEE HAS RELINQUISHED HIS HALF SHARE IN TWO PROPERTIES IN FAVOUR OF HIS WIFE. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE ASSESSEE HA D TRANSFERRED THE ENTIRE PROPERTY WHICH IS IN THE NAME OF THE ASSESSEE. IT IS AS A MATTER OF CONVENIENCE BETWEEN T HE HUSBAND AND WIFE , THIS ARRANGEMENT IS MADE AND THEREFORE IT CAN BE SAFELY CONCLUDED THAT THE RELINQUISHMENT OF THE HALF SHARE OF HIS TWO PROPERTIES IS A FAMILY ARRANGEMENT WHICH CANNOT BE CONSIDERED AS A TAX AVOIDANCE PLAN. IN VIEW OF THE ABOVE, THE AS SESSING OFFICER IS NOT CORRECT IN DENYING THE BENEFIT OF EXEMPTION U/S.54F OF THE INCOME TAX ACT, 1961 TO THE ASSESSEE. 1 2 . FURTHER, THE ASSESSING OFFICER HA S REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THOUGH THE ASSESSEE HAD TRANSFERRED THE PR OPERTY IN THE NAME OF HIS WIFE, YET HE IS THE OWNER OF THE I . T . A NO . 542 /CHNY/201 7 : - 8 - : PROPERTY. THEREFORE, HE IS NOT ENTITLED FOR CLAIMING THE EXEMPTION OF SECTION 54F OF THE INCOME TAX ACT, 1961 , BASED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SEVANTILAL MANEKLAL SHETH VS. COMMISSIONER OF INCOME TAX (CENTRAL), BOMBAY (SUPRA) . THE SAME IS CONFIRMED BY THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS). 1 3 . WE FIND THAT RECENTLY THE CO - ORDINATE BENCH OF THIS TRIBUNAL HAS CONSIDERED SECTION 27 OF THE INCOME TAX A CT, 1961 IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI VS. MR. AJIT THOMAS, CHENNAI IN I.T.A. NO.1453/MDS/2015 DATED 06.11.2015 HAS HELD THAT A FICTION CREATED BY ONE PROVISIONS OF THE ACT CANNOT BE SUPER - IMPOSED ON ANOTHER PROVISIONS OF THE AC T WHICH HAS A FICTION. SECTION 54F OF THE INCOME TAX ACT, 1961 IS A PROVISION GRANTING DEDUCTION TO THE ASSESSEE AND THEREFORE, IT HAS A FICTION. HENCE, WHILE INTERPRET ING THE PROVISION OF SECTION 54F OF THE INCOME TAX ACT, 1961, ANY OTHER PROVISION OF T HE ACT , WHICH HAS A FICTION, CANNOT BE SUPER - IMPOSED. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: 7. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF THE CASE, IT IS EVIDENT AND NOT DISPUTED THAT THE ASSESSEES SECOND HOUSE PROPERTY AT NO.24, VIJAYARAGHAVACHARI ROAD, T. NAGAR, CHENNAI 600 017 I . T . A NO . 542 /CHNY/201 7 : - 9 - : WAS TRANSFERRED TO HIS WIFE VIDE SETTLEMENT DEED DURING THE YEAR 2003. THE LEARNED ASSESSING OFFICER HAS INVOKED THE DEEMING PROVISIONS OF TH E ACT TO HOLD THAT THE ASSESSEE IS THE OWNER OF THE PROPERTY. IT IS A WELL RECOGNIZED RULE OF INTERPRETATION ENDORSED BY VARIOUS HIGHER JUDICIARIES THAT A FICTION CREATED BY ANY PROVISIONS OF THE ACT CANNOT BE SUPER - IMPOSED ON ANOTHER PROVISIONS OF THE AC T WHICH HAS A FICTION. SECTION 54F OF THE ACT IS A PROVISION GRANTING DEDUCTION TO THE ASSESSEE AND THEREFORE, IT HAS A FICTION. HENCE, WHILE INTERPRETING THE PROVISION 54F OF THE ACT, ANY OTHER PROVISION OF THE ACT, WHICH HAS A FICTION, CANNOT BE SUPER - IMPOSED. HENCE, IN THE GIVEN CASE BEFORE US, FOR THE PURPOSE OF SECTION 54F OF THE ACT, IT HAS TO BE CONSTRUED THAT THE ASSESSEE IS NOT THE OWNER OF THE RESIDENTIAL HOUSE AT NO.24 , VIJAYARAGHAVACHARI ROAD, T. NAGAR, CHENNAI 600 017 AND THEREFORE HE HAS ONLY ONE HOUSE, ACCORDINGLY HE IS ENTITLED TO CLAIM EXEMPTION U/S.54F OF THE ACT AS HELD BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). HENCE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ). 1 4 . AGAINST THE ORDER PASSED BY THE HONBLE TRIBUNAL, THE DEPARTMENT HAD CARRIED THE MATTER BEFORE THE HONBLE JURISDICTIONAL HIGH COURT OF MADRAS IN THE CASE OF COMMISSIONER OF INCOME TAX, CHENNAI VS. MR. AJIT THOMAS, CHENNAI, [TAX CASE APPEAL NO.497 OF 2016 DATED 30 TH AUGUST, 2016 ] (SUPRA) ; WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT OF MADRAS HAS OBSERVED AS UNDER: 11THEREFORE, IN THAT CASE, THE LEARNED SENIOR COUNSEL HAS INTERPRETED THE LANGUAGE OF SECTION 22 OF THE ACT IN THE CONTEXT OF THAT PARTICULAR SECTION, THE HONBLE SUPREME COURT HAS INTERPRETED THE MEANING OF OWNERSHIP. THE HONBLE SUPREME COURT HA S HELD THAT OWNER MEANS A PERSON WHO HAS GOT VALID TITLE LEGALLY CONVEYED TO HIM AFTER COMPLYING WITH THE REQUIREMENTS OF LAW SUCH AS THE TRANSFER OF PROPERTY ACT, THE REGISTRATION ACT, ETC. BUT, IN THE CONTEXT OF SECTION 22 OF THE INCOME TAX ACT, 1961, HAVING REGARD TO THE GROUND REALITIES AND FURTHER HAVING REGARD TO THE OBJECT OF THE INCOME TAX ACT, TO TAX THE INCOME, THE OWNE R IS A PERSON WHO IS ENTITLED TO RECEIVE INCOME FROM THE PROPERTY IN HIS OWN RIGHT. SO, IN I . T . A NO . 542 /CHNY/201 7 : - 10 - : THE AFORE CITED DECISIONS, THE HONBLE SUPREME COURT HAVE CONSIDERED THE PROVISIONS UNDER SECTION 22 AND 27 OF THE INCOME TAX ACT, 1961, FOR THE PURPOSE OF DETERMI NING ANNUAL VALUE OF THE PROPERTY. THEREFORE, THE DECISIONS OF THE HONBLE SUPREME COURT, CITED SUPRA BY THE REVENUE, DO NOT APPLY TO THE FACTS OF THIS CASE. WHEREAS, IN THIS CASE, AS CATEGORICALLY HELD BY THE COMMISSIONER OF INCOME TAX (APPEAL) AND TH E TRIBUNAL THAT SECTION 27(1) OF THE ACT IS A DEEMING PROVISION APPLICABLE ONLY FOR SECTIONS 22 TO 26, IN COMPUTING THE ANNUAL VALUE OF THE PROPERTY AND AS SUCH DEEMING PROVISIONS CANNOT BE EXTENDED TO DENY THE EXEMPTION UNDER SECTION 54F OF THE ACT. 12. THEREFORE , WE ARE OF THE CONSIDERED VIEW THAT SECTION 54F OF THE ACT, FOR GRANTING EXEMPTION APPLIES FOR THE PURPOSE OF CAPITAL GAINS OF TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN THE CASE OF INVESTMENT IN RESIDENTIAL HOUSE. TO THIS CONTEXT, SECTION 54F OF THE ACT WOULD APPLY AS AN INDEPENDENT PROVISION, TO THE INSTANT CASE. THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE INCOME TAX APPELLATE TRIBUNAL HAVE RIGHTLY COME TO THE CONCLUSION THAT SECTION 27II) OF THE ACT IS NOT APPLIC ABLE TO THE FACTS OF THE PRESENT CASE. FOR THE REASONS STATED SUPRA, WE ARE NOT INCLINED TO ENTERTAIN THE INSTANT APPEAL AND THE SUBSTANTIAL QUESTIONS OF LAW RAISED IN THIS TAX APPEAL, IS ANSWERED AGAINST THE REVENUE. 1 5 . WE, THEREFORE, RESPECTFULLY FOL LOWING THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL AND ALSO THE DECISION OF THE JURISDICTIONAL HIGH COURT OF MADRAS IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI VS. MR. AJIT THOMAS, CHENNAI (SUPRA) AND COMMISSIONER OF INCOME TAX, CH ENNAI VS. MR. AJIT THOMAS, CHENNAI, (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTITLED I . T . A NO . 542 /CHNY/201 7 : - 11 - : TO CLAIM THE BENEFIT OF SECTION 54F OF THE INCOME TAX ACT, 1961. ACCORDINGLY, WE CANCEL THE ORDERS PASSED BY BOTH THE LOWER AUTHORITIES AND WE DIRECT THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF CLAIM MADE BY THE ASSESSEE U/S.54F OF THE INCOME TAX ACT, 1961. IN SO FAR AS THE JUDGEMENT RELIED UPON BY THE ASSESSING O FFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN THE CASE OF SEVANTILAL MANEKLAL SHETH VS. COMMISSIONER OF INCOME TAX (CENTRAL), BOMBAY (SUPRA) , IT HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. 1 6 . IN THE RESULT, THE APPE A L FILED BY THE ASSESSEE IN I.T.A . NO. 5 42 /CHNY/201 7 IS ALLOWED. ORDER PRONOUNCED ON 8 TH SEPTEMBER , 2021 IN CHENNAI. SD/ - ( ) ( G. MANJUNATHA) /ACCOUNTANT MEMBER SD/ - ( ) ( V. DURGA RAO ) /JUDICIAL MEMBER / CHENNAI, / DATED: 8 TH SEPTEMBER , 2021 IA , SR. PS / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF