Suryakantham Seelam, Visakhapatnam V. THE ITO, Visakhapatnam

ITA 563/VIZ/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6778 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 30-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J P ANAND
• Keywords: Gift
• Section: 54F; 54

Judgement Text

ITA NO.563/VIZAG/2013 SMT. SURYAKANTHAM SEELAM, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.563/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) SMT. SURYAKANTHAM SEELAM VISAKHAPATNAM ITO, WARD - 5(2), VISAKHAPATNAM [PAN NO. CAAPS7534R ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI D.J.P. ANAND, DR / DATE OF HEARING : 08.08.2017 / DATE OF PRONOUNCEMENT : 18.08.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) {CIT(A)}, VISA KHAPATNAM VIDE ITA NO.0692/11-12/ITO,WARD-5(2)/VSP/2013-14 DATED 3 1.5.2013 FOR THE ASSESSMENT YEAR 2009-10. ITA NO.563/VIZAG/2013 SMT. SURYAKANTHAM SEELAM, VISAKHAPATNAM 2 2. THE ASSESSEE FILED RETURN OF INCOME DECLARING TO TAL INCOME OF ` 3,87,590/-. DURING THE ASSESSMENT YEAR, THE ASSESS EE SOLD THE PROPERTY, WHICH WAS RECEIVED BY GIFT DEED NO.2659/2 008 ON 3.7.2008 FROM HER SON LAKSHMIKANTA RAO. SUBSEQUENTLY, THE S AID GIFTED PROPERTY WAS SOLD BY THE ASSESSEE VIDE SALE DEED NO.2780/200 8 DATED 25.7.2008 FOR A CONSIDERATION OF ` 36,96,000/-. THE ASSESSEE DID NOT DECLARE THE CAPITAL GAINS ON SALE OF THE PROPERTY, HENCE THE A. O. EXAMINED THE ISSUE AND TREATED SALE OF GIFTED PROPERTY AS SHORT TERM C APITAL GAINS AND BROUGHT TO TAX THE AMOUNT OF ` 34,79,400/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED EXEMPTION U/S 54F OF THE ACT BUT NO EVIDENCE WAS FURNISHED BEFORE THE A.O., THUS THE A .O. DECLINED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 54F OF THE AC T ON ACCOUNT OF TWO REASONS. FIRSTLY, THE LD. A.O. HELD THAT TRANSACTI ON AS SHORT TERM CAPITAL GAINS AND NOT ENTITLED FOR DEDUCTION U/S 54F OF THE ACT. SECONDLY, THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE FOR ACQUIRI NG THE NEW PROPERTY AS REQUIRED U/S 54F OF THE ACT. AGGRIEVED BY THE O RDER OF THE A.O., THE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) AND T HE LD. CIT(A) DECIDED THE TRANSACTION AS LONG TERM CAPITAL GAINS IN FAVOUR OF ASSESSEE AND WITH REGARD TO THE ASSESSEES CLAIM FOR DEDUCTI ON U/S 54F OF THE ACT, THE LD. CIT(A) DECIDED AGAINST THE ASSESSEE. HENCE , THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.563/VIZAG/2013 SMT. SURYAKANTHAM SEELAM, VISAKHAPATNAM 3 3. APPEARING FOR THE ASSESSEE, THE LD. A.R. ARGUED REFERRING TO PAPER BOOK PAGE NOS. 22 TO 24 THAT THE ASSESSEE SOLD THE VACANT SITE AND ACQUIRED A NEW PROPERTY I.E. RESIDENTIAL HOUSE BY S ALE AGREEMENT DATED 15.9.2008. THE LD. A.R. FURTHER ARGUED THAT THOUGH THE PROPERTY WAS NOT REGISTERED THE ASSESSEE HAS MADE THE FULL PAYME NT AND TAKEN POSSESSION OF THE PROPERTY. HENCE THE LD. A.R. SUB MITTED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 54F OF THE A CT. THE LD. A.R. ALSO RELIED ON THE DECISION OF HONBLE HIGH COURT IN THE CASE OF BALRAJ VS. CIT 254 ITR 0022, WHEREIN IT WAS HELD THAT FOR CLAIMIN G THE EXEMPTION U/S 54, IT IS NOT NECESSARY THAT THE ASSESSEE SHOULD BE COME THE OWNER OF THE PROPERTY PURCHASED BY HIM BY REGISTRATION OF DO CUMENT. 4. ON THE OTHER HAND, THE LD. D.R. ARGUED THAT THE ASSESSEE DID NOT ACQUIRE THE PROPERTY BUT ONLY ENTERED INTO A SALE A GREEMENT FOR ACQUIRING THE PROPERTY. AS PER THE SALE AGREEMENT, THE ASSESSEE MADE THE ADVANCE PAYMENT FOR PURCHASE OF THE PROPERTY AN D THE ASSESSEE DID NOT BECOME THE OWNER OF THE PROPERTY. AS PER SETTL ED LAW OWNERSHIP DOES NOT TRANSFER IN FAVOUR OF THE PURCHASER UNLESS THE DOCUMENT IS REGISTERED. AS PER THE PROVISIONS OF SECTION 54F O F THE ACT, THE ASSESSEE REQUIRED TO PURCHASE THE PROPERTY WITHIN ONE YEAR F ROM THE END OF THE RELEVANT ASSESSMENT YEAR OR CONSTRUCT A RESIDENTIAL HOUSE WITHIN 3 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. SINC E THE ASSESSEE HAS ITA NO.563/VIZAG/2013 SMT. SURYAKANTHAM SEELAM, VISAKHAPATNAM 4 NOT PURCHASED THE PROPERTY WITHIN ONE YEAR, THE ASS ESSEE IS NOT ENTITLED FOR DEDUCTION U/S 54F OF THE ACT AND ARGUED THAT TH ERE IS NO ERROR IN THE ORDER OF THE LD. CIT(A) AND NO INTERFERENCE IS CALL ED FOR. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED AN A GREEMENT FOR PURCHASE OF PROPERTY IN GAJUWAKA SUB-REGISTRAR OFFI CE AREA AND THE PANCHAYAT, LAKSHMIPURAM VILLAGE, INAM PATTA 2933, V INAYAKNAGAR WITH 401 SQ.YD. OF LAND WITH 300 SQ.FT. ACC ROOF HOUSE F ROM K. RAMESH BABU AND OTHERS. THE ASSESSEE ALSO PAID THE FULL CONSID ERATION OF ` 30 LAKHS WHICH IS EVIDENCED BY THE SALE AGREEMENT WITHIN ONE YEAR FROM THE DATE OF SALE OF THE PROPERTY. DURING THE COURSE OF HEAR ING, THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS TAKEN POSSESSION OF THE ABOVE PROPERTY AND RESIDING IN THE SAME HOUSE AND DUE TO SOME DISP UTES, THE PROPERTY COULD NOT BE REGISTERED. THE LD. A.R. FURTHER SUBM ITTED THAT THE ENTIRE CONSIDERATION RECEIVED BY THE ASSESSEE WAS PAID IN FULL FOR PURCHASE OF HOUSE AND NO AMOUNT WAS LEFT WITH THE ASSESSEE. WHE N THE ASSESSEE HAS MADE THE FULL PAYMENT AND TAKEN POSSESSION OF T HE HOUSE IN THE INTEREST OF JUSTICE THE DEDUCTION SHOULD BE ALLOWED . THE LD. A.R. FURTHER SUBMITTED THAT WHEN THE FULL PAYMENT WAS MADE IF TH E DEDUCTION IS NOT GRANTED, IT WOULD CAUSE INJURY TO JUSTICE AND THE A SSESSEE WOULD BE ITA NO.563/VIZAG/2013 SMT. SURYAKANTHAM SEELAM, VISAKHAPATNAM 5 PLACED WITH UNDUE HARDSHIP. THE LD. D.R. DID NOT P RODUCE ANY EVIDENCE TO CONTROVERT THE SUBMISSION MADE BY THE ASSESSEE. SINCE THE ASSESSEE HAS PAID THE COMPLETE CONSIDERATION TO THE VENDOR O F THE LAND, WHICH IS DULY ACKNOWLEDGED BY THE VENDOR, MERELY BECAUSE OF THE REGISTRATION IS PENDING WE ARE OF THE VIEW THAT DEDUCTION ALLOWABLE U/S 54 OF THE ACT SHOULD NOT BE REJECTED. THIS VIEW IS UPHELD BY HON BLE DELHI HIGH COURT IN THE CASE OF BALRAJ VS. CIT REPORTED IN 254 ITR 0 22. THEREFORE, WE DIRECT THE A.O. TO ALLOW THE DEDUCTION U/S 54F OF T HE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 18 TH AUG17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 18.08.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SMT. SURYAKANTHAM SEELAM, D.NO.5 -5, VIVEKANANDA NAGAR, OLD DIARY FARM, VISAKHAPATNAM 2. / THE RESPONDENT THE ITO, WARD-5(2), VISAKHAPATN AM 3. + / THE CIT-1, VISAKHAPATNAM 4. + ( ) / THE CIT (A), VISAKHAPATNAM ITA NO.563/VIZAG/2013 SMT. SURYAKANTHAM SEELAM, VISAKHAPATNAM 6 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM