ITO, CHENNAI V. Alamelu Chidambaram, CHENNAI

ITA 960/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8251 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 26-09-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 13-04-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N V BALAJI
• Keywords: Capital asset; Salary income
• Section: 143(3); 54F; 54; 139

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER I T.A. NO. 960 /MDS/201 6 A SSESSMENT YEAR : 201 2 - 1 3 THE INCOME TAX OFFICER, NON - CORPORATE WARD 16(1), ROOM NO. 523 - B, FIFTH FLOOR, NEW BLOCK, 121, MAHATMA GANDHI ROAD, CHENNAI 600 034. VS. SMT. ALAMELU CHIDAMBARAM, OLD NO. 140, NEW NO. 11, 7 TH STREET, FIRST SECTOR, K.K. NAGAR, CHENNAI 600 078. [PAN:AAHPC0310N] ( / APPELLANT ) ( / RESPONDENT ) I T.A. NO. 1105/MDS/2016 A SSESSMENT YEAR :2012 - 13 SMT. ALAMELU CHIDAMBARAM, OLD NO. 140, NEW NO. 11, 7 TH STREET, FIRST SECTOR, K.K. NAGAR, CHENNAI 600 078. VS. THE INCOME TAX OFFICER, NON - CORPORATE RAN GE 1(1), CHENNAI. ( / APPELLANT ) ( / RESPONDENT ) DEPARTMENT BY : SHRI A.V. SREEKANTH, JCIT ASSESSEE BY : SHRI N.V. BALAJI, ADVOCATE / DATE OF HEARING : 26 . 09 .201 6 / DATE OF P RONOUNCEMENT : 26 . 10 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : BOTH THE CROSS APPEAL S FILED BY THE REVENUE AS WELL AS ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX ( APPEALS ) I.T.A. NO S . 960 & 1105 /M/16 2 4 , C HENNAI , DATED 0 4 . 0 1 .20 1 6 RELE VANT TO THE ASSESSMENT YEAR 20 1 2 - 1 3 . IN THE APPEAL OF THE REVENUE, ONLY EFFECTIVE GROUND RAISED IS THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CREDIT OF THE AMOUNT WHICH WAS APPROPRIATED BEFORE FILING OF RETURN OF INCOME. IN THE A PPEAL FILED BY THE ASSESSEE, THE ONLY EFFECTIVE GROUND RAISED IS WITH REGARD TO CONFIRMATION OF DISALLOWANCE TO THE EXTENT OF .15,42,553/ - OUT OF THE CLAIM FOR DEDUCTION OF .85,30,711/ - MADE UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME ON 21.02.2014 ADMITTING T OTAL INCOME AT .43,310/ - . THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY AS LARGE DEDUCTION UNDER SECTION 54/54F OF THE ACT HAS BEEN CLAIMED BY THE ASSESSEE. THE ASSESSEE EARNED INCOME FROM SALARY, OTHER SOURCES AND INCOME FROM LONG TERM CAPIT AL GAINS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS OBSERVED THAT TO CLAIM DEDUCTION UNDER SECTION 54F OF THE ACT, THE ASSESSEE WAS REQUIRED TO FILE THE RETURN OF INCOME ON OR BEFORE THE DUE DATE AND IF THE ASSESSEE HAS NOT UTI LIZED THE CAPITAL GAINS, SHE SHOULD HAVE DEPOSITED THE SAID AMOUNT IN THE RELEVANT ACCOUNT BEFORE THE DATE OF FILING OF RETURN OF INCOME. HOWEVER, THE ASSESSEE HAS FILED BELATED RETURN OF INCOME ON 21.02.2014 AND NOT DEPOSITED THE CAPITAL GAINS IN THE RELE VANT ACCOUNT BEFORE THE DATE OF FILING OF RETURN OF INCOME, THE ASSESSING I.T.A. NO S . 960 & 1105 /M/16 3 OFFICER HAS COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT BY MAKING ADDITION OF .85,30,711/ - ON ACCOUNT OF DISALLOWANCE OF DEDUCTION UNDER SECTION 54F OF THE ACT. 3. T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS CONSIDERING VARIOUS DECISIONS, THE LD. CIT(A) HAS HELD THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM THE DEDUCTION UNDER SECTION 54F O F THE ACT AS SHE HAS FAILED TO INVEST IN THE NEW PROPERTY OR DEPOSIT THE ENTIRE AMOUNT IN THE CAPITAL GAINS SCHEME ACCOUNT BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME AND ON THE OTHER HAND, HE HAS DIRECTED THE ASSESSING OFFICER TO ALLOW THE CREDIT O F THE AMOUNT WHICH WAS APPROPRIATED BEFORE FILING OF RETURN OF INCOME. 4. ON BEING AGGRIEVED, BOTH THE REVENUE AS WELL AS ASSESSEE ARE IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT ONCE THE LD. CIT(A) HAS HELD THAT THE ASSESSEE IS NOT ENT ITLED TO CLAIM DEDUCTION UNDER SECTION 54F OF THE ACT, HE CANNOT PASS A CONTRADICTING DIRECTION TO THE ASSESSING OFFICER TO ALLOW RELIEF/CREDIT TO THE ASSESSEE TO THE EXTENT SHE HAS APPROPRIATED THE AMOUNT OF .69,88,158/ - TOWARDS ACQUIRING NEW RESIDENTIAL FLAT OUT OF THE TOTAL APPROPRIATION OF .85,30,711/ - UNDER THE PROVISIONS OF SECTION 54F(4) OF THE ACT BEFORE THE FILING OF THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT. FURTHER, THE LD. DR HAS ARGUED THAT THE LD. CIT(A) HAS EMPOWERED TO EITHER ENHANCE OR REDUCE THE ASSESSMENT, BUT NOT I.T.A. NO S . 960 & 1105 /M/16 4 EMPOWERED TO MAKE CERTAIN VERIFICATION, WHICH TANTAMOUNT TO SETTING ASIDE THE ISSUE. 5. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ONCE THE LD. C IT(A) HAS FOUND ANY FAULT WITH THE ASSESSEE SINCE THE ASSESSEE HAS APPROPRIATED THE CAPITAL GAINS INCOME TOWARDS ACQUIRING NEW RESIDENTIAL FLAT BEFORE THE FILING OF THE RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT, HE CANNOT SUSTAIN THE PART DISALLOWAN CE TO THE EXTENT OF .15,42,553/ - OUT OF TOTAL APPROPRIATION OF .85,30,711/ - AND PRAYED THAT THE DISALLOWANCE SUSTAINED TO THE EXTENT OF .15,42,553/ - SHOULD BE DELETED. 6. WE HAVE HEARD BOTH PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE SOLD TWO OF HER PLOT AT SRIPERUMBUTHUR, KANCHIPURAM DISTRICT, TAMIL NADU FOR A CONSIDERATION OF .90 LAKHS THROUGH AN AGREEMENT FOR SALE DATED 03.12.2011. THE ASSESSING OFFICER ALLOWED TH E INDEXED COST OF THE LANDS TO THE EXTENT OF .4,69,289/ - . UPON THE SALE OF THE PLOTS, THE ASSESSEE PURCHASED A FLAT AT THE TOWNSHIP PROJECT HIRANANDANI UPSCALE EGATTUR, OMR . SINCE THE INVESTMENT HAS BEEN MADE WITHIN THE PERIOD ALLOWED UNDER SECTION 54 F OF THE ACT, THE ASSESSEE HAS CLAIMED A DEDUCTION OF .85,30,711/ - UNDER SECTION 54F OF THE ACT. SINCE THE ASSESSEE HAS FILED BELATED RETURN OF INCOME ON 21.02.2014 AND NOT DEPOSITED THE CAPITAL GAINS IN THE RELEVANT ACCOUNT BEFORE THE DATE OF FILING OF R ETURN OF INCOME, THE I.T.A. NO S . 960 & 1105 /M/16 5 ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. WHILE CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER, THE LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO VERIFY AS TO WHETHER THE ASSESSEE H AS APPROPRIATED TOWARDS PURCHASE OF RESIDENTIAL FLAT OUT OF TOTAL APPROPRIATION BEFORE THE DUE DATE UNDER SECTION 139(1) OF THE ACT TO CLAIM THE DEDUCTION UNDER SECTION 54F(4) OF THE ACT. IN OTHER WORDS, THE LD. CIT(A) SUSTAINED THE DISALLOWANCE TO THE EXTENT OF .15,42,553/ - AND GRANTED RELIEF TO THE EXTENT OF .69,88,158/ - . 7. IN THE CASE OF FATHIMA BAI V. ITO 32 DTR (KAR) 243 AS WELL AS IN THE CASE OF CIT V. RAJESH KUMAR JALAN 286 ITR 274 (GAU), THE HON BLE HIGH COURTS HAVE OBSERVED AND HELD THAT D UE DATE FOR THE ASSESSEE TO INVEST THE AMOUNT OF CAPITAL GAINS IN PURCHASE/CONSTRUCT OF NEW RESIDENTIAL ASSET OR INVESTMENT IN CAPITAL GAINS SCHEME UNDER SECTION 54F OF THE ACT REFERS TO THE 'EXTENDED DUE DATE' UNDER SECTION 139(4) OF THE ACT . ACCORDINGLY, S O FAR AS THE TIME LIMIT FOR THE ASSESSEE TO INVEST IN PURCHASE O R CONSTRUCTION OF RESIDENTIAL ASSET AND THE TIME LIMIT AVAILABLE UNDER SECTION 139(4) ARE REQUIRED TO BE TAKEN INTO ACCOUNT WHILE CONSIDERING THE CLAIM OF DEDUCTION UNDER SECTION 54F(4) OF T HE ACT, WHICH APPEARS TO HAVE NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW . T HE INTERMEDIARY PERIOD, I.E., AFTER THE SALE OF CAPITAL ASSET TILL THE DATE OF INVESTMENT, THE FUND SHOULD HAVE BEEN DEPOSITED IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN AND I.T.A. NO S . 960 & 1105 /M/16 6 UTILIZED IN ACCORDANCE, ANY SCHEME WITH CENTRAL GOVERNMENT NOTIFIED IN OFFICIAL GAZETTE FRAMED IN THIS BEHALF AND THE ASSESSEE IS REQUIRED TO FILE PROOF FOR SUCH DEPOSIT. THE ABOVE CRUCIAL FACT WAS NOT CONSIDERED BY THE AUTHORITIES BEL OW. 8. THOUGH THE ASSESSEE HAS SUBMITTED BEFORE THE LD. CIT(A) THAT SHE HAS PROVIDED THE DETAILS OF THE DOCUMENTS RELATING TO SALE OF PLOTS, PURCHASE OF UNDIVIDED INTERESTS IN LAND, CONSTRUCTION AGREEMENT, HANDING OVER OF THE FLATS, EXPENDITURE INCURRED IN CONNECTION WITH THE NEW FLAT AND HER BANK ACCOUNT COPIES IN SUPPORT OF HER CLAIM FOR INVESTMENT IN NEW FLAT WITHIN TIME, BUT THE DETAILS WERE NOT BROUGHT ON RECORD AND THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS VERY CRYPTIC . BEFORE US, TH E ASSESSEE HAS NOT FILED ANY DETAILS WITH REGARD TO THE DATE OF ACQUISITION OF NEW ASSET OR WHETHER THE ASSESSEE HAS DEPOSITED THE NET CONSIDERATION WHICH WAS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFOR E THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE OR WHICH WAS NOT UTILIZED BY THE ASSESSEE FOR THE PURCHASE OF NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139 OF THE ACT. 9. UNDER THE ABOVE FACTS AND CIRCU MSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE ISSUE TO THE FILE OF A SSESSING O FFICER FOR FRESH CONSIDERATION TO EXAMINE AND VERIFY AS TO WHETHER THE ASSESSEE FULFILS ALL THE I.T.A. NO S . 960 & 1105 /M/16 7 CONDITIONS AS LAID DOWN U NDER SECTION 54F OF THE ACT AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 10 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE REVENUE AS WELL AS ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 26 TH OCTOBER , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 26 . 1 0 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.