Moturi Lakshmi, CHENNAI V. ITO, CHENNAI

MA 136/CHNY/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7047 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 07-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS S VIJAYA PRABHA
• Assessee Lawyers: B RAMANA KUMAR
• Keywords: Capital asset
• Section: 54F; 68; 54; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , !' . #$#% , & '' ( [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] M.P.NO.136/CHNY/2018 ( IN ./I.T.A. NO.234/CHNY/2 017) / ASSESSMENT YEAR : 2013-2014. MOTURI LAKSHMI, 12 ROSY TOWERS, 2 ND FLOOR, 7, NUNGAMBAKKAM HIGH ROAD, NUNGAMBAKKAM, CHENNAI 600 034 . [PAN AAPPM 2847N] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(5) CHENNAI 600 034. (PETITIONER) ( )*+, /RESPONDENT) PETITIONER BY : SHRI. B. RAMANA KUMAR, ADVOCATE RESPONDENT BY : MRS. S. VIJAYA PRABHA, JCIT. /DATE OF HEARING : 10-08-2018 /DATE OF PRONOUNCEMENT : 10-08-2018 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ASSESSEE THROUGH THIS MISCELLANEOUS PETITION STATE S THAT THE BENCH DID NOT CONSIDER THE CASE LAWS WITH IDENTICA L FACTS NAMELY THAT OF CO-ORDINATE BENCH IN THE CASE OF DEVICHAND KANTHILAL SHAH VS. ITO, (2017) 165 ITD 336 AND ACIT VS. P.R. CHOCKALINGAM (2012) 135 ITD 75, THAT OF HONBLE APEX COURT IN THE CASE OF SH. SANJEEV LAL VS. CIT, M.P NO . 136/CHNY/2018 :- 2 -: (2014) 365 ITR 389, THAT OF HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. BHARTI MASHRA (2014) 98 DTR 1 AND THAT OF H ONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. J.R. SUBRAMANYA B HAT, (1987) 165 ITR 571 AND DECISION OF HYDERABAD BENCH OF THE TRIB UNAL IN THE CASE OF DCIT VS. SRI VIDYASAGAR DONTINENI, (2015) 68 SO T 441 . CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE WAS THAT BENEF IT U/S.54 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) COULD B E ALLOWED EVEN FOR CONSTRUCTION OF A RESIDENTIAL HOUSE DONE WITHIN ONE YEAR PERIOD PRIOR TO THE DATE OF TRANSFER GIVING ARISE TO THE CAPITAL GA INS ON WHICH SUCH DEDUCTION WAS SOUGHT BY THE ASSESSEE. AS PER THE LD . AUTHORISED REPRESENTATIVE, ASSESSEE HAD ACTUALLY EFFECTED A PU RCHASE OF A FLAT OF WHICH CONSTRUCTION WAS IN PROGRESS. AS PER THE LD. AUTHORISED REPRESENTATIVE, THIS TRIBUNAL HAD WENT AGAINST THE ORDERS OF THE CO- ORDINATE BENCH WHILE HOLDING AGAINST THE ASSESSEE. AS PER THE LD. AUTHORISED REPRESENTATIVE, JUDGMENT OF HONBLE DELH I HIGH COURT IN THE CASE OF BHARTI MASHRA (SUPRA ) WAS DIRECTLY ON THE ISSUE. 2. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBMITT ED THAT THERE WERE NO MISTAKES IN THE ORDER OF THE TRIBUNAL AMENABLE TO ANY RECTIFICATION. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS. WHAT WAS HELD BY THIS TRIBUNAL AT PARA 11 I S REPRODUCED HEREUNDER:- M.P NO . 136/CHNY/2018 :- 3 -: 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. VIZ-A-VIZ CL AIM OF EXEMPTION U/S.54 OF THE ACT WHAT IS LAID DOWN BY TH E STATUTE IS REPRODUCED HEREUNDER:- 1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDU AL OR A HINDU UNDIVIDED FAMILY THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET BEIN G BUILDINGS OR LANDS APPURTENANT THERETO, AND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS CHARGEABL E UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGI NAL ASSET), AND THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TH E TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERI OD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE, THEN INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY ,-- (I) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER TH AN THE COST OF THE RESIDENTIAL HOUSE SO PURCHASED OR CONSTRUCTED (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE DIFFERENCE BETWEEN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET S HALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING F ROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE NIL; OR (II) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET, THE CAPITAL GA IN SHALL NOT BE CHARGED UNDER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET AN Y CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PER IOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. THE TERMINOLOGY USED IS PURCHASE OF A RESIDENTIAL HOUSE WITHIN ONE YEAR BEFORE OR TWO YEARS AFTER FROM THE DATE OF TRANSFER OR CONSTRUCTION OF A RESIDENTIAL HOUSE WIT HIN THREE M.P NO . 136/CHNY/2018 :- 4 -: YEARS FROM THE DATE OF TRANSFER. COPY OF THE AGREE MENT DATED 26 TH JULY, 2012 BETWEEN THE ASSESSEE WITH M/S. AARTHIK PROPERTIES LIMITED IS AVAILABLE ON RECORD. SCHEDU LE C GIVES THE SPECIFICATION WITH WHICH THE APARTMENT IS TO B E CONSTRUCTED. CLAUSE 1 TO 4 OF THIS AGREEMENT IS AL SO RELEVANT AND REPRODUCED HEREUNDER:- 1.THE VENDOR SHALL AGREE TO SELL THE SCHEDULE 'B' 'ROPERTY TO THE PURCHASER OR TO THEIR NOMINEES, AS MENTIONED IN THE SCHEDULE'B' PROPERTY TO A TOTAL SALE CONSIDERATION OF RS.44,36,OOO/- (RUPEES FORTY FOUR LAKHS THIRTY SIX THOUSAND ONLY) AND THE PURCHASER SHALL BUY THE SAID SCHEDULE 'B' PROPERTY FOR THE ABOVE SALE CONSIDERATION AND HAVE AGREED TO THE TERMS OF PAYMENT TO BE MADE AS PER THE TERMS SET HEREUNDER. 2. (A) AN ADVANCE PAYMENT OF RS.17, 18,000/- (RUPEES SEVENTEEN LAKHS EIGHTEEN THOUSAND ONLY) IS PAID BY CHEQUE NO.1 07405 DATED 26/07/2012, DRAWN ON ICICI BANK, NUMGAMBAKKAM BRANCH FOR A SUM OF RS.17, 18,000 /- (RUPEES SEVENTEEN LAKHS EIGHTEEN THOUSAND ONLY), AT THE TIME OF SIGNING OF THIS AGREEMENT. (B). BALANCE AMOUNT OF RS, 27, 18,000/- (RUPEES TWE NTY SEVEN LAKHS EIGHTEEN THOUSAND ONLY) WILL BE PAID BY THE PURCHASER TO AND IN FAVOUR OF THE VENDOR THROUGH TH E SALE DEED AND. BUILDER'S AGREEMENT. (C) THE SALE DEED AND BUILDERS AGREEMENT WILL BE EN TERED INTO ON OR BEFORE 60 DAYS FROM THE DATE OF THIS AGR EEMENT. 3. IT IS AGREED BETWEEN THE VENDOR AND THE PURCHASER THAT THE CONSTRUCTION OF THE SAID PROPERTY HAS COMM ENCED AND THE SAME WILL BE COMPLETED IN ALL RESPECT WITHI N 24 MONTHS AS PER THE SPECIFICATIONS LAID DOWN IN SCHED ULE 'C. 4. ALL CHARGES TOWARDS THE COST OF REGISTRATION OF UNDIVIDED SHARE, COST OF CAR PARK AND ALL OTHER DEPOSITS FOR STATUTORY CHARGES TO BE LEVIED BY THE GOVERNMENT WILL BE BORN E BY THE PURCHASER AS PER THE BUILDERS AGREEMENT. IT IS CLEAR THAT ON THE DATE WHEN ASSESSEE ENTERED INTO THE AGREEMENT, THE CONSTRUCTION HAD ONLY COMMENCED. T HE AGREEMENT WAS FOR CONSTRUCTION OF THE FLAT AND GIV ING IT TO THE ASSESSEE IN A BUILT UP CONDITION. IT WAS NOT THE PURCHASE OF AN ALREADY BUILT RESIDENTIAL HOUSE. O NCE THE M.P NO . 136/CHNY/2018 :- 5 -: PAYMENTS WERE FOR CONSTRUCTION, ONLY THE AMOUNTS PAID BY THE ASSESSEE WITHIN A PERIOD OF THREE YEARS FROM TH E DATE OF TRANSFER OF ASSET, GIVING RISE TO THE CAPITAL GAINS COULD BE CONSIDERED FOR DEDUCTION U/S.54 OF THE ACT. THE DA TE OF TRANSFER OF THE ASSET GIVING RISE TO THE CAPITAL GA INS WAS 15 TH NOVEMBER, 2012 AND THE PAYMENTS MADE BY THE ASSESSE E TO M/S. AARTHIK PROPERTIES LIMITED AFTER THE SAID DATE WAS H5,00,000/- ONLY. WE ARE THEREFORE OF THE OPINION THAT LOWER AUTHORITIES WERE JUSTIFIED IN RESTRICTING THE CLAIM U/S.54 OF THE ACT TO THE AMOUNTS PAID BY THE ASSESSEE AFT ER 15.11.2012. THE TRIBUNAL HAS ANALYZED SECTION 54 OF THE ACT AN D HELD THAT THE TIME PERIOD OF ONE YEAR PRIOR TO THE DATE OF TRANSFER G IVING RISING TO THE CAPITAL GAINS, WAS AVAILABLE ONLY FOR AN INVESTMENT IN THE NATURE OF PURCHASE OF A RESIDENTIAL HOUSE AND NOT FOR CONST RUCTION OF A RESIDENTIAL HOUSE. THE TWO DECISIONS MAINLY RELIED ON BY THE AS SESSEE AT THE TIME OF HEARING WAS THAT OF DEVICHAND KANTHILAL SHAH (SUPRA) AND SANJEEV LAL (SUPRA). THIS TRIBUNAL HAD DULY CONSIDERED THESE AS WELL AS OTHER JUDGMENTS CITED BY THE ASSESSEE WHILE COMING TO THE CONCLUSION REPRODUCED ABOVE. THAT APART, IN THE CASES RELIED ON BY THE ASSESSEE THE INVESTMENTS MADE WITHIN ONE YEAR PRIOR TO THE DATE OF TRANSFER WERE FOR ACQUIRING FLAT OR SIMILAR PROPERTY AND NOT CONSTRUCTION. A S AGAINST THIS, THE TRIBUNAL HAD CLEARLY ANALYZED AGREEMENT ENTERED BY THE ASSESSEE WITH M/S. AARTHIK PROPERTIES LIMITED, WH ICH WENT TO SHOW THAT ASSESSEE HAD ENGAGED THE SAID PARTY FOR CONSTR UCTION OF THE FLAT AND NOT A PURCHASE OF A READY BUILD FLAT. AS FOR T HE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF BHARTI MASHRA (SUPR A) THE JUDGMENT WAS M.P NO . 136/CHNY/2018 :- 6 -: ON SECTION 54F AND NOT SECTION 54 OF THE ACT. WE A RE THUS UNABLE TO FIND ANY MISTAKE IN THE ORDER OF THE TRIBUNAL OF TH E NATURE MENTIONED BY THE ASSESSEE MUCH LESS ANY MISTAKE WHICH IS APPARE NT ON THE FACTS OF THE RECORD. WHAT IS RECTIFIABLE U/S.254(2) OF THE I NCOME TAX ACT, 1961 (IN SHORT THE ACT) IS ONLY A GLARING AND APPARE NT MISTAKE AND NOT ONE WHICH REQUIRE LONG ARGUMENTS AND DEBATES ON THE I SSUES INVOLVED. WE THUS DO NOT FIND ANY MERIT IN THIS MISCELLANEOUS PE TITION FILED BY THE ASSESSEE. 4. IN THE RESULT, THE MISCELLANEOUS PETITION OF THE A SSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 10 TH AUGUST, 2019, AT CHENNAI. SD/- SD/- ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( !' . #$#% ) (ABRAHAM P. GEORGE) & / ACCOUNTANT MEMBER !' / CHENNAI #$ / DATED: 10 TH AUGUST, 2018 KV $!% &' ( )!( / COPY TO: 1 . PETITIONER 3. / ( ) / CIT(A) 5. (01 &2 / DR 2. &345 / RESPONDENT 4. / / CIT 6. 16 7 / GF M.P NO . 136/CHNY/2018 :- 7 -: