ACIT, CHENNAI V. Jothi S.Kalyankumar, CHENNAI

ITA 90/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4601 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2017
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2017
• Court: TRIBUNAL
• Department Lawyers: SURPIYO PAL
• Assessee Lawyers: G VARDHINI KARTHIK
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ ITA NO.: 90/MDS/2017 / ASSESSMENT YEARS: 2012-13 THE ASST. COMMISSIONER OF INCOME TAX, NON CORPORATE WARD 7(1), CHENNAI 34. V. SHRI JOTHI S KALYANKUMAR, C-BLOCK, NO.64, 1 ST MAIN ROAD, ANNA NAGAR, CHENNAI 40. PAN: AALPK7836P ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI SURPIYO PAL, JCIT /RESPONDENT BY : SMT. G. VARDHINI KARTHIK, ADVO CATE / DATE OF HEARING : 12.04.2017 / DATE OF PRONOUNCEMENT : 05.05.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-7, CHENNAI DATED 03.11.2016. 2. THE ONLY GROUND IN THIS APPEAL IS WITH REGARD TO DELETION OF DISALLOWANCE MADE U/S.54F OF THE ACT WHEN THE ASSES SEE HAD 2 I.T.A. NO.90/MDS/2017 PURCHASED MULTIPLE DWELLING UNITS VIDE SEPARATE DOC UMENTS AND THE REGISTRATIONS. 3. THE FACTS OF THE ISSUE ARE THAT THE AO HAS RESTRIC TED THECLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT TO 50 PER CE NT ON THE GROUND THAT THE ASSESSEE HAS BEEN GIVEN TWO RESIDENTIAL U NITS, AND AS PER THE ACT HE IS ENTITLED TO MAKE THE CLAIM ONLY AGAINST O NE UNIT. IN RESPONSE, THE ASSESSEE HAS VEHEMENTLY DISPUTED THE ACTION OF THE AO, AND CITED FOLLOWING JUDICIAL PRECEDENTS IN SUPPORT: ( I) CIT VS. SYED ALI ADIL [2013] 357 ITR 418(AP) (II) CIT VS. ANAND BASAPPA [2009] 3091TR 329(KER) (III) CIT VS. SMT RUKANIAMMA [2011] 3311TR 211 (KAR .) (IV) CIT VS. GITA DUGGUL 214 TAXMANN 51(DELHI ) 3.1 FURTHER, LD.A.R SUBMITTED THAT THE SPECIAL LEA VE PETITIONS FILED BY THE INCOME-TAX DEPARTMENT ON THIS ISSUE HAS BEEN DI SMISSED IN THE CASE OF CIT VS. ANAND BASAPPA 1320 1TR (ST) 19 AND ALSO IN THE CASE OF CIT VS. GITA DUGGAL 120141 228 TAXMANN 62 (SC). NO DOUB T THERE HAS BEEN AN AMENDMENT TO SECTION 54 BY THE FINANCE (NO.2) AC T, 2014 WHEREBY THE PHRASE A RESIDENTIAL HOUSE HAS BEEN SUBSTITUT ED BY ONE RESIDENTIAL HOUSE. BUT THEN THIS AMENDED PROVISIONS ARE APPLIC ABLE ONLY FROM 1 APRIL 2015 I.E.,FOR AND FROM ASSESSMENT YEAR 2015-1 6. 3 I.T.A. NO.90/MDS/2017 3.2 MORE RECENTLY, THE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. V.R. KARPAGAMT [2O15] 373 1TR 127 (MAD) HAS HELD TH AT:- THE AMENDMENT TO SECTION 54F EFFECTIVE FROM APRIL 1, 2015 MAKES IT CLEAR THAT THE BENEFIT OF SECTION 54F WILL BE APPLI CABLE TO ONE RESIDENTIAL HOUSE IN INDIA. PRIOR TO THE AMENDMENT, IT WAS CLEA R THAT A RESIDENTIAL HOUSE WOULD INCLUDE MULTIPLE RESIDENTIAL UNITS. IN THAT CASE, THE ASSESSEE ENTERED INTO AN AGREEMENT WITH A DEVELOPER FOR DEVELOPMENT OF A PIECE OF LAND. UNDER THE AGREE MENT THE ASSESSEE WAS TO RECEIVE 43.75 PER CENT OF THE BUILT UP AREA AFTER THE DEVELOPMENT. THE 43.75 PER CENT BUILT UP AREA WAS TRANSLATED INT O FIVE FLATS. THIS WAS IN LIEU OF 56.2 5 PER CENT OF THE UDS GIVEN TO THE DEV ELOPER. ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54F ON THE VALUE OF THE FIVE FLATS. AO GRANTED THE BENEFITS OF EXEMPTION IN RESPECT OF ONE FIAT. CIT(A) HELD THAT THE ASSESSEE WAS ENTITLED TO THE BENEFIT IN RESPECT OF ONE SINGLE FLAT WITH THE LARGEST AREA. APPELLANT TRIBUNAL HELD THAT THE ASSESSEE WAS ELIGIBLE FOR EXEMPTION ON ALL THE FIVE FLATS RECEIVED BY HER IN LIEU OF THE UDS SHE HAD PARTED WITH. THIS FINDING WAS UPHELD BY THE JURISDI CTIONAL HIGH COURT. THE PROVISIONS OF SECTION 54 ARE PAN MATERIAL WITH SECTION 54F. IT IS ACCORDINGLY REQUESTED THAT THE HONBLE COMMISSIONER OF INCOME-TAX MAY BE PLEASED TO DIRECT THE LEARNED ASSESSING OFFICER TO ALLOW DEDUCTION UNDER SECTION 54 WITH REFERENCE TO THE ENTIRE INVES TMENT MADE BY THE APPELLANT. 3.5 ON APPEAL, THE LD.CIT(A) FOLLOWING THE DECISI ON OF JURISDICTIONAL HIGH COURT IN THE CASE OF V R KARPAGAM (SUPRA), LD. CIT(A) DIRECTED THE LD. ASSESSING OFFICER TO GRANT THE DEDUCTION UNDER SECTION 54F OF THE ACT 4 I.T.A. NO.90/MDS/2017 WITH RESPECT TO BOTH THE UNITS AS CLAIMED AND DECID ED THE CASE IN FAVOUR OF ASSESSEE. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. SINCE LD.CIT(A) RIGHTLY PLACED RELIANCE ON THE JURISDICTIONAL HIGH COURT IN THE CASE OF V R KARPAGAM (SUPRA) WHEREIN I T WAS DIRECTED TO GRAND RELIEF U/S.54F OF THE ACT IN RESPECT OF BOTH THE RESIDENTIAL UNITS CLAIMED BY THE ASSESSEE, WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF LD.CIT(A) AND THE SAME IS CONFIRMED. THE GROUND RAI SED BY THE REVENUE STANDS DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 05 TH MAY, 2017 AT CHENNAI. SD/- SD/- ( . ) ( ) (G. PAVAN KUMAR) (CHANDRA POOJARI) /JUDICIAL MEMBER / ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 05 TH MAY, 2017. K S SUNDARAM. /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF.