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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Chandra Poojari, AM & Shri George George K, JM
Per George George K., JM
This appeal at the instance of the assessee is directed against CIT(A)’s order dated 14.12.2017. The relevant assessment year is 2013-2014.
The grounds raised read as follows:-
“1. The order dated 14-12-2017 in Appeal No. ITA No.272/E/CIT(A)-1/16-17 passed by the Ld. Commissioner of Income Tax (Appeals)-I, Kochi for the A Y 2013-14 confirming the addition made by the assessing officer is highly illegal, arbitrary, unjustified and is against the law and facts of the case.
ITA No.33/Coch/2018. 2 M/s Sri Srinivas Wheat Industries Pvt.Ltd. 2. The Ld. CIT (A) erred in confirming the order of the assessing officer assessing the long term capital gains of Rs. 4,76,17,672/-. 3. The CIT (Appeals) ought to have allowed the deduction claimed by the appellant under section 54 G of the Act to the tune of Rs 4,45,00,000/-. 4. The CIT (Appeals) ought to have noted that the appellant industrial undertaking was originally functioning in a highly congested urban area and adjoining to Baliga Madom Girls High School and due to the protest from the local people the appellant was constrained to shift the industrial undertaking from the urban area to a non-urban area, which was explained in detail by the appellant vide its letter dated 15/12/2015. The CIT (Appeals) and the assessing officer failed to take note of the intention of the legislature in introducing section 54G of the Act for granting exemption to such industrial undertakings. 5. The authorities below ought to have granted exemption under section 54G of the Act as claimed by the appellant for the A Y 2013-14.
For these and other grounds to be raised at the time of hearing, it is most respectfully prayed that this Honourable Tribunal may be pleased to set aside the order dated 14-12-2017 in Appeal No: ITA No. 272/E/CIT (A)-1/16-17 passed by the Ld. Commissioner of Income Tax (Appeals)-I, Kochi for the A Y 2013-14 and render justice.”
The brief facts of the case are as follows: The assessee is a company running an industrial undertaking engaged in the business of production of wheat products. During the previous year relevant to the concerned assessment year the assessee sold land on 17.07.2012 for a
ITA No.33/Coch/2018. 3 M/s Sri Srinivas Wheat Industries Pvt.Ltd. sum of Rs.5,92,50,000 and had worked out the long term capital gain at Rs.4,75,46,672. From the long term capital gain, the assessee had claimed deduction u/s 54G of the I.T.Act amounting to Rs.4,45,00,000. The Assessing Officer disallowed the claim of exemption u/s 54G of the I.T.Act vide assessment order dated 28.03.2016 completed u/s 143(3) of the I.T.Act. The Assessing Officer held that the assessee’s industrial unit was not located in a notified `urban area’ as per the provisions of section 54G of the I.T.Act and hence the assessee was not entitled to deduction u/s 54G of the I.T.Act.
Aggrieved by the assessment order in denying the claim of deduction u/s 54G of the I.T.Act, the assessee preferred appeal to the first appellate authority. The CIT(A) confirmed the view taken by the Assessing Officer.
Aggrieved by the order of the CIT(A), the assessee has filed the present appeal before the Tribunal. The learned Counsel for the assessee reiterated the submissions made before the Income-tax Authorities. The learned Departmental Representative, on the other hand, strongly supported the assessment order and the CIT(A)’s order.
We have heard the rival submissions and perused the material on record. Section 54G of the I.T.Act allows exemption of capital gains on transfer of assets in case of shifting the industrial undertaking from urban area. None of the places in Kerala State have been notified as an urban area under Explanation 2 to section 54G(1) of the Central
ITA No.33/Coch/2018. 4 M/s Sri Srinivas Wheat Industries Pvt.Ltd. Government. Hence, the deduction claimed by the assessee u/s 54G of the I.T.Act was rightly disallowed by the A.O. and the same was confirmed by the CIT(A). Hence, we see no reason to interfere with the order of the CIT(A) and we affirm the same. It is ordered accordingly.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced on this 19th day of March, 2019.
Sd/- Sd/- (Chandra Poojari) (George George K.) ACCOUNTANT MEMBER JUDICIAL MEMBER
Cochin ; Dated : 19th March, 2019. Devdas*
Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT (Central), Kochi 4. The CIT(A)-III, Kochi. 5. The DR, ITAT, Cochin. 6. Guard file. BY ORDER,
AR-ITAT- Cochin