Sri Ramaiah Harish , Bangalore V. Income Tax Officer Ward-7(2)(4), Bangalore

ITA 789/BANG/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2362 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 15-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital Gains
• Section: 54; 143(3); 54F; 234B; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO. 789 /BANG/201 9 ASSESSMENT YEAR : 20 1 5 - 1 6 SHRI RAMAIAH HARISH, 100, PRUTHVI NILAYA, 4 TH CROSS, RK LAYOUT, 2 ND STAGE, PADMANABHANAGAR, BENGALURU - 560 070. PAN : AARPH 6742 D VS. INCOME TAX OFFICER, WARD 7(2)(4), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI. C. H. SUNDAR RAO, CIT(DR)(ITAT), BENGALURU DATE OF HEARING : 22 . 0 7 .201 9 DATE OF PRONOUNCEMENT : 04 . 0 9 .201 9 O R D E R PER JASON P BOAZ, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-7, BENGALURU, DATED 01.03.2019 FOR ASSESSMENT YEARS 2015-16. 2. WHEN THE CASE WAS CALLED FOR HEARING ON 22.07.2019, NONE APPEARED ON BEHALF OF THE ASSESSEE. IT IS SEEN FROM THE RECORD THAT THE NOTICE FIXING THE HEARING OF THIS APPEAL ON 22.07.2019, DISPATCHED BY RPAD, WAS DULY SERVED AT THE GIVEN ADDRESS OF THE ASSESSEE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AS LAID OUT ABOVE, IT APPEARS TO US THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE PRESENT APPEAL AND ITA NO.789/BANG/2019 PAGE 2 OF 12 THEREFORE WE PROCEED TO DISPOSE OFF THE SAME ON MERITS WITH THE ASSISTANCE OF THE LEARNED DR FOR THE REVENUE AND THE MATERIAL ON RECORD. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER:- 3.1 THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2015-16 ON 25.12.2016 DECLARING INCOME OF RS.6,29,300/-. THE CASE WAS TAKEN UP FOR SCRUTINY FOR THIS ASSESSMENT YEAR AND THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 28.12.2017, WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.2,94,63,569/-, DUE TO THE RE- COMPUTATION OF LONG TERM CAPITAL GAINS (LTCG) AT RS.2,88,34,269/- ON SALE OF PROPERTY AT SURVEY NO.357/7, BEGUR VILLAGE, BEGUR HOBLI, BENGALURU, VIDE SALE DEED DATED 23.01.2015 FOR A CONSIDERATION OF RS. 10 CRORES; THE ASSESSEES SHARE BEING 50% THEREOF. THE ASSESSING OFFICER (AO) COMPUTED THE ASSESSEES SHARE OF 50% OF THE LTCG ON SALE OF THE SAID PROPERTY AS UNDER:- THE AO ACCORDINGLY RESTRICTED THE ASSESSEES CLAIM FOR EXEMPTION UNDER SECTION 54F OF THE ACT TO ONE UNIT. 3.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 28.12.2017 FOR ASSESSMENT YEAR 2015-16, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) 7, BENGALURU, CHALLENGING THE CIT(A)S ORDER UPHOLDING THE RESTRICTION OF EXEMPTION UNDER SECTION ITA NO.789/BANG/2019 PAGE 3 OF 12 54F OF THE ACT TO ONE UNIT / FLAT IN THE CONSTRUCTED 4 TH FLOOR RESIDENTIAL BUILDING CONSISTING OF 1 TWO BEDROOM FLAT ON THE FIRST FLOOR AND 4 ONE BEDROOM FLATS ON THE 2 ND , 3 RD AND 4 TH FLOORS OF THE SAID BUILDING. THE CIT(A), AFTER CONSIDERING THE ASSESSEES SUBMISSIONS / JUDICIAL PRONOUNCEMENTS CITED AND THE PROVISIONS OF THE ACT, PROCEEDED TO DISMISS THE ASSESSEES APPEAL. 4.1 THE ASSESSEE, BEING AGGRIEVED BY THE ORDER OF CIT(A) 7, BENGALURU, DATED 01.03.2019 FOR ASSESSMENT YEAR 2015-16 HAS FILED THIS APPEAL BEFORE THE TRIBUNAL WHEREIN HE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT, ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3. THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD INVESTED PROCEEDS FROM CAPITAL GAINS IN CONSTRUCTION OF A RESIDENTIAL PROPERTY AS REQUIRED UNDER SECTION.54F OF INCOME TAX ACT, 1961. 4. THE LEARNED CIT [A] OUGHT TO HAVE APPRECIATED THAT THE JUDGEMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS K.G.RUKMINIAMMA 331 ITR 211 RELIED UPON ACTUALLY SUPPORTS THE STAND OF THE APPELLANT FOR THE CLAIM OF DEDUCTION U/S.54F OF INCOME TAX ACT, 1961 AND THUS THE ASSESSMENT MADE WITHOUT GIVING DEDUCTION U/S.54F DESERVES TO BE VACATED. 5. THE LEARNED CIT [A] OUGHT TO HAVE APPRECIATED THAT IF THE RESIDENTIAL PROPERTY BUILT IS ASSESSED TO PROPERTY TAX AS SINGLE UNIT, THE APPELLANT'S CLAIM IS STILL TENABLE INSPITE OF AMENDMENT MADE TO SECTION 54/54F BY FINANCE ( NO.2) ACT, 2014 RESTRICTING THE DEDUCTION TO ONE RESIDENTIAL HOUSE. ITA NO.789/BANG/2019 PAGE 4 OF 12 6. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST U/S 234-A AND 234-B OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO BE CANCELLED. 7. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 5. GROUND NOS. 2 TO 5 EXEMPTION / DEDUCTION UNDER SECTION 54F OF THE ACT 5.1 WE HAVE HEARD THE LEARNED DR FOR REVENUE IN THE MATTER, CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE OTHER MATERIAL ON RECORD. THE MATTER BEFORE US; I.E., THE ASSESSEES CLAIM FOR EXEMPTION / DEDUCTION UNDER SECTION 54F OF THE ACT AGAINST THE ASSESSEES SHARE OF LTCG ON SALE OF THE AFORESAID PROPERTY AT SURVEY NO.357/7, BEGUR VILLAGE AND HOBLI, BENGALURU SOUTH TALUK VIDE SALE DEED DATED 23.01.2015. WE FIND THAT THE CIT(A) HAS DEALT WITH ELABORATELY WITH THE ISSUE FOR CONSIDERATION BEFORE US AT PARAS 4 TO 4.7 OF THE IMPUGNED ORDER; WHICH IS EXTRACTED HEREUNDER:- ITA NO.789/BANG/2019 PAGE 5 OF 12 ITA NO.789/BANG/2019 PAGE 6 OF 12 ITA NO.789/BANG/2019 PAGE 7 OF 12 ITA NO.789/BANG/2019 PAGE 8 OF 12 ITA NO.789/BANG/2019 PAGE 9 OF 12 ITA NO.789/BANG/2019 PAGE 10 OF 12 ITA NO.789/BANG/2019 PAGE 11 OF 12 5.2 AS CORRECTLY OBSERVED BY THE CIT(A) (SUPRA), SECTION 54(1) / 54F(1) OF THE ACT HAVE BEEN AMENDED BY FINANCE (NO.2) ACT, 2014 W.E.F. 01.04.2015 AND AS PER THE AMENDED PROVISIONS, THE ASSESSEE IS ENTITLED TO EXEMPTION THEREUNDER ONLY IF THE INVESTMENT IS MADE IN THE PURCHASE OR CONSTRUCTION OF ONE RESIDENTIAL HOUSE OR UNIT. THE PRESENT APPEAL IN THE CASE ON HAND IS FOR ASSESSMENT YEAR 2015-16 AND THEREFORE THE AFORESAID AMENDED PROVISIONS OF SECTION 54(1) / 54F(1) OF THE ACT W.E.F. 01.04.2015 SQUARELY APPLY TO THE ASSESSEE IN THE CASE ON HAND FOR THE YEAR UNDER CONSIDERATION. IN THE CASE ON HAND, THE ASSESSEE HAS CONSTRUCTED A BUILDING OF GROUND PLUS 4 FLOORS; THE GROUND FLOOR BEING FOR PARKING; PLUS, ONE 2 BED ROOM FLAT ON THE 1 ST FLOOR AND 4 ONE BEDROOM FLATS ON EACH OF THE OTHER 3 FLOORS. IN THE FACTUAL AND LEGAL MATRIX OF THE CASE, AS NARRATED ABOVE, WE HAVE NO HESITATION IN UPHOLDING THE ORDERS OF THE AUTHORITIES BELOW IN RESTRICTING THE ASSESSEES ENTITLEMENT FOR EXEMPTION UNDER SECTION 54 / 54F OF THE ACT IN THE CASE ON HAND TO ONE FLAT / UNIT AS PER THE AMENDED PROVISIONS OF SECTION 54(1) /54F(1) OF THE ACT OPERATIONAL W.E.F. 01.04.2015 I.E., FOR ASSESSMENT YEAR 2015-16; WHICH IS THE YEAR UNDER CONSIDERATION IN THE PRESENT APPEAL. WITH DUE RESPECT, THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE IN THE GROUNDS OF APPEAL RAISED (SUPRA), WOULD NOT COME TO THE RESCUE OF THE ASSESSEE AS THEY WERE RENDERED IN THE CONTEXT OF THE SECTION 54(1) / 54F(1) OF THE ACT AS IT STOOD PRIOR TO THE AMENDMENT THERETO BY FINANCE (NO.2) ACT, 2014 W.E.F. 01.04.2015. CONSEQUENTLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 6. GROUND NOS.1 AND 7 (SUPRA), BEING GENERAL IN NATURE, NO ADJUDICATION IS CALLED FOR THEREON. 7. GROUND NO.6 CHARGING OF INTEREST UNDER SECTION 234A AND 234B OF THE ACT 7.1 IN THIS GROUND (SUPRA), THE ASSESSEE DENIES HIMSELF LIABLE TO BE CHARGED INTEREST U/S 234A AND 234B OF THE ACT. THE CHARGING OF INTEREST IS CONSEQUENTIAL ITA NO.789/BANG/2019 PAGE 12 OF 12 AND MANDATORY AND THE AO HAS NO DISCRETION IN THE MATTER. THIS PROPOSITION HAS BEEN UPHELD BY THE HONBLE APEX COURT IN THE CASE OF ANJUM H. GHASWALA (252 ITR 1) (SC) AND WE, THEREFORE, UPHOLD THE ACTION OF THE AO IN CHARGING THE ASSESSEE THE AFORESAID INTEREST U/S 234A AND 234B OF THE ACT. THE AO IS, HOWEVER, DIRECTED TO RE-COMPUTE THE INTEREST CHARGEABLE U/S 234A AND 234B OF THE ACT, IF ANY, WHILE GIVING EFFECT OF THIS ORDER. 8. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2015-16 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 4 TH DAY OF SEPTEMBER, 2019. SD/- SD/ - SD/ - (N. V. VASUDEVAN) VICE PRESIDENT (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE. DATED: 4 TH SEPTEMBER, 2019. /NS/* COPY TO:W 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.