Sri.K.K.Venugopal, Cochin V. The DCIT, Ernakulam

MA 46/COCH/2015

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6175 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 16-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: V V SEKHAR
• Section: 143(3); 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJARI, AM & SHRI GEORGE GEORGE K, JM MA NO. 46 /COCH/201 5 : ASST.YEAR 2007 - 200 8 (ARISING OUT OF ITA NO. 278/COCH/2013 ) SRI. K.K.VENUGOPAL KALAPURACKAL HOUSE MARADU KOCHI 682 034. PAN : ABQPV0711N . VS. THE DY.COMMISSIONER OF INCOME - TAX CIRCLE - 2(2) , ERNAKULAM . (APP L ICA NT) (RESPONDENT) APPLICANT BY : SRI. V.V.SEKHAR, CA RESPONDENT BY : SRI. A.DHANARAJ, SR.DR DATE OF HEARING : 23.03.2018 DATE OF PRONOUNCEMENT : 23 .03.2018. O R D E R PER GEORGE GEORGE K, JM THIS MISCELLANEOUS APPLICATION AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST ITATS ORDER DATED 10.01.2014 IN ITA NO.278/COCH/2013. THE RELEVANT ASSESSMENT YEAR IS 2007 - 2008. 2. THE BRIEF FACTS OF THE CASE ARE AS FOLLOW: - 2.1 THE ASSESSEE IS AN INDIVIDUAL. FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2007 - 2008, THE ASSESSEE HAD SOLD 5.5 CENTS OF LAND IN SURVEY NO.182/6 AT MARADU VILLAGE, KANAYANNOOR TALUK AND A RESIDENTIAL HOUSE THEREIN HAVING A PLINTH AREA OF 1250 SQ.FT. FOR RS.61,00,000 (AS PER REGISTERED DOCUMENT NO.1159/2007 DATED 08.03.2007). FOR THE ASSESSMENT YEAR 2007 - 2008, THE RETURN OF INCOME WAS FILED ON 21.01.2009 DECLARING NET TAXABLE INCOME OF RS.7,83,953 BEING LONG TERM M A NO. 46 / COCH /201 5 SRI. K.K.VENUGOPAL . 2 CAPITAL GAIN ARISING FROM SALE OF LAND AND RESIDENTIAL BUILDING. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T.ACT VIDE ORDER DATED 18.12.2009. IN THE ASSESSMENT COMPLETED, THE ASSESSING OFFICER HAD RESTRICTED THE CLAIM OF DEDUCTION U/S 54 OF THE I.T. ACT TO RS.14,11,428 AS AGAINST THE CLAIM OF RS.33,33,805. THE RELEVANT OBSERVATION OF THE ASSESSING OFFICER IN RESTRICTING THE CLAIM OF EXEMPTION U/S 54 OF THE I.T.ACT READS AS FOLLOW: - 3.2 'PARA 12: EXEMPTION U/S.54: THE ASSESSEE HAS CLAIMED AN AMOU NT OF RS . 33 , 33 , 805/ - U/S. 54 IN RESPECT OF RESIDENTIAL HOUSE PROPERTY AND LAND. ON VERIFICATION OF THE RECORDS, IT IS SEEN THAT THE ASSESSEE HAS PURCHASED 4.2 CENTS OF LAND FOR AN AMOUNT OF RS. 7.40,000/ - . THE ASSESSEE HAD OBTAINED PERMISSION TO CONSTRUCT A RESIDENTIAL BUILDING ON THE ABOVE PROPERTY VIDE BUILDING PERMIT DATED 26 - 04 - 2007 FROM MARADU GRAMA PANCHAYAT. BUT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE REGARDING THE CONSTRUCTION OF THE RESIDENTIAL HOUSE TILL 31 - 07 - 2007, WHICH IS THE DUE DATE OF F ILING OF RETURN. AS PER SEC. 54 OF THE ACT, EXEMPTION CAN BE GIVEN FOR THE AMOUNT SPENT ON PURCHASE OR CONSTRUCTION OF THE RESIDENTIAL HOUSE UPTO DUE DATE OF FILING OF RETURN, I .E. 31 - 07 - 2007. THE HOUSE CONSTRUCTION WAS COMPLETED ON 30 - 01 - 2 009 AS PER THE O CCUPANCY , CERTIFICATE SUBMITTED BY THE ASSESSEE. THE TOTAL COST OF CONSTRUCTION FOR THE RESIDENTIAL HOUSE CLAIMED BY THE ASSESSEE IS RS. 47 LAKHS. THEREFORE, ONLY A PROPORTIONATE AMOUNT CAN BE TAKEN AS COST OF CONSTRUCTION UP TO 31 - 07. 2007. THE TOTAL PERIOD OF CONSTRUCTION OF THE HOUSE IS 21 MONTHS. THE PROPORTIONATE AMOUNT OF THE TOTAL CONSTRUCTION COST OF THE HOUSE DURING THE PERIOD FROM 26 - 04 - 2007 TO 31 - 07 - 2007 COMES TO RS. 6,71,4281 / - . THEREFORE AN AMOUNT OF RS . 14,11,428 / - (1 , 40,000 + 671428) WILL BE ALLOWED AS EXEMPTION U / S. 54 OF THE I. T.ACT.' M A NO. 46 / COCH /201 5 SRI. K.K.VENUGOPAL . 3 2.2 THE VIEW TAKEN BY THE ASSESSING OFFICER IN RESTRICTING THE CLAIM OF DEDUCTION WAS CONFIRMED BY THE CIT(A). ON FURTHER APPEAL TO THE TRIBUNAL, THE MATTER WAS REMANDED TO THE A.O. FOR DE NOVO CONSIDER ATION. THE TRIBUNAL DIRECTED THE A.O. TO REEXAMINE THE ISSUE AS TO THE BENEFIT OF EXTENDED DATE OF FILING OF RETURN U/S 139(4) OF THE ACT, AFTER CONSIDERING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF PRAKASH NATH KHANNA & ANR. V. CIT & ANR. [(20 04) 266 ITR 1 (SC)] . 2.3 AGGRIEVED BY THE ORDER OF THE ITAT, THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS APPLICATION WITH THE FOLLOWING PRAYERS (IN THE REVISED MISCELLANEOUS APPLICATION) : - PRAYER IN THE LIGHT OF THE ABOVE IT IS HUMBLY PRAYED THAT THE CASE MAY BE REMANDED BACK TO THE ASSESSING OFFICER FOR A DENOVO DISPOSAL FOR CONSIDERING THE EXTENDED DATE FOR FILING RETURN U/S 139 (4) AND FOR ENQUIRY WITH REGARD TO CORRECT DATE OF COMPLETION OF CON STRUCTION AND ALSO TO QUANTIFY THE CORRECT AMOUNT OF EXEMPTION ALLOWABLE U/S 54. ALTERNATIVELY, SINCE THE INVESTMENT IN CONSTRUCTION OF NEW RESIDENTIAL HOUSE HAS BEEN COMPLETED WITHIN THE STIPULATED TIME OF 3 YEARS AS PER SECTION 54 [I.E. 3 YEARS FROM 8 - 3 - 2007], IN THE INSTANT CASE EVEN BEFORE THAT PERIOD [ I.E. 1 - 10 - 2007], THE ENTIRE AMOUNT OF RS 47 LAKHS INVESTED IN CONSTRUCTION OF NEW HOUSE MAY BE ALLOWED AS EXEMPTION U/S 54 OR PROPORTIONATE EXEMPTION ON RS 47 LAKHS MAY BE ORDERED TO BE ALLOWED FOR PERIOD UPTO 30 - 7 - 2007 BY ADOPTING 1 - 10 - 2007 AS THE CORRECT DATE OF COMPLETION OF CO NSTRUCTION AS CERTIFIED BY THE MARADU MUNICIPALITY. 2.4 THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS DULY HEARD. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL. WHEN THE INCOME - TAX APPEAL WAS HEARD BEFORE THE TRIBUNAL ON 19.12.2013, THE LEARNED COUNSEL FOR THE ASSESSEE M A NO. 46 / COCH /201 5 SRI. K.K.VENUGOPAL . 4 HAD SPECIFICALLY RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF MUTHULETCHUMI JANARDHAN V. DCIT IN ITA NO.372/COCH/2011 DATED 07.12.2012, REPORTED IN [(2012) 34 CCH 0193 (COCHIN TRIB.)]. THE ABOVE ORDER OF THE TRIBUNA L HAD HELD THAT THE TIME LIMIT FOR THE PURPOSE OF INVESTMENT IS AVAILABLE UP TO THE DATE OF FILING OF THE RETURN U/S 139(4) OF THE I.T.ACT. IT IS SUBMITTED THAT THE ORDER OF THE TRIBUNAL HAS ATTAINED FINALITY SINCE NO APPEAL WAS PREFERRED AGAINST THE ORDER OF THE TRIBUNAL IN THE CASE OF MUTHULETCHUMI JANARDHAN V. DCIT (SUPRA) . WE FIND FROM THE TRIBUNAL ORDER DATED 10.01.2014 IN ITA NO.278/COCH /2013, THERE IS A SPECIFIC REFERENCE MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE TO THE ABOVE SAID ORDER OF THE TRIBUNAL. HOWEVER, THE TRIBUNAL IN ITS ORDER HAS NOT CONSIDERED THE ABOVE ORDER OF THE TRIBUNAL, WHICH IS IN FAVOUR OF THE ASSESSEE. NOT CONSID ERING THE CO - ORDINATE BENCH ORDER OF THE TRIBUNAL, TANTAMOUNT TO A MISTAKE APPARENT ON RECORD AND THE SAME HAS BEEN SO HELD BY THE HONBLE APEX COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. V. CIT [(2007) 295 ITR 466 (SC)] . 3.1 THE TRIB UNAL IN ITS ORDER DATED 10.01.2014 HAS REMANDED THE MATTER WITH THE DIRECTION TO CONSIDER THE EXEMPTION U/S 54 OF THE I.T.ACT FOLLOWING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF PRAKASH NATH KHANNA & ANR. V. CIT & ANR. (SUPRA) . THE JUDGMENT OF THE HONBLE SUPREME COURT WAS RENDERED IN A DIFFERENT CONTEXT WITH REFERENCE TO INITIATION OF PROSECUTION PROCEEDINGS U/S 276CC OF THE I.T.ACT AND NOT WITH REFERENCE TO EXEMPTION U/S 54 OF THE I.T.ACT. THE FACTS OF THE SAID CASE IS ENTIRELY DIFFERENT FROM THE FACTS OF THE PRESENT CASE. THE HONBLE APEX COURT IN THE CASE OF XAVIER J.PULIKKAL V. DCIT [(2015) 379 M A NO. 46 / COCH /201 5 SRI. K.K.VENUGOPAL . 5 ITR 535 (SC)] HAD SPECIFICALLY MENTIONED THAT THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF PRAKASH NATH KHANNA & ANR. V. CIT & ANR. (SUPRA) IS NOT APPLICABLE IN CONSIDERING THE CLAIM OF EXEMPTION U/S 54 OF THE I.T.ACT. IN THE LIGHT OF THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. V. CIT (SUPRA) AND XAVIER J.PULIKKAL V. DCIT (SUPRA) , WE ARE OF THE VIEW THAT THERE IS A MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL IN ITA NO.278/COCH/2013 DATED 10.01.2014. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE, TAKING INTO ACCOUNT THE CO - ORDINATE BENCH OF TH E TRIBUNAL IN THE CASE OF MUTHULETCHUMI JANARDHAN V. DCIT (SUPRA) AND ALSO TH E OTHER JUDICIAL PRONOUNCEMENTS, WHICH HAS HELD THE TIME LIMIT FOR THE PURPOSE OF INVESTMENT IS AVAILABLE UPTO THE DATE OF FILING OF THE RETURN U/S 139(4) OF THE I.T.ACT. IT IS ORDERED ACCORDINGLY. 4. IN THE RESULT, THE M A FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 23 RD DAY OF MARCH, 2018 . SD/ - SD/ - (CHANDRA POOJARI) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER C OCHIN ; DATED : 23 RD MARCH, 2018 . DEVDAS* M A NO. 46 / COCH /201 5 SRI. K.K.VENUGOPAL . 6 COPY OF THE ORDER FORWARDED TO : BY ORDER (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPLICANT. 2. THE RESPONDENT. 3. THE CIT(A) - II , KOCHI. 4. THE CIT, KOCHI . 5. DR, ITAT, COCHIN 6. GUARD FILE.