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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI G. MANJUNATHA
आयकर अपीलीय अिधकरण, ‘बी’ �यायपीठ,चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI �ी महावीर �संह, उपा�य� एवं �ी जी. मंजुनाथ, लेखा सद�य के सम� BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.: 2717/CHNY/2017 िनधा�रण वष�/Assessment Year: 2011 - 12 Shri Cellan Gunaseelan, The ACIT, No.6, Jayammal Road, vs. Non-Corporate Circle 3(1), Teynampet, Chennai. Chennai – 600 018. PAN: AAMPG 2229F (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri S. Sridhar, Advocate ��यथ� क� ओर से/Respondent by : Shri Chinthapalli Mehar Chand, JCIT सुनवाई क� तार�ख/Date of Hearing : 20.09.2022 घोषणा क� तार�ख/Date of Pronouncement : 20.09.2022 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-4, Chennai, in ITA No.141/2016-17/A.Y.2011-12/CIT(A)-4 dated 27.09.2017. The assessment was framed by the ACIT, Non-Corporate Circle 3(1), Chennai for the assessment year 2011-12 u/s.147 (3) r.w.s 144 of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 27.09.2017.
2 ITA No.2717/Chny/2017 2. The first issue in this appeal of assessee is as regards to reopening of assessment and assumption of jurisdiction by the AO u/s.147 of the Act, confirmed by the CIT(A). At the outset, the ld.counsel for the assessee has not pressed this issue and hence, the same is dismissed as not-pressed.
The next issue on merits is as regards to the order of CIT(A) confirming the action of AO in disallowing the claim of deduction u/s.54F of the Act, while computation of long term capital gain.
We have heard rival contentions and gone through facts and circumstances of the case. The assessee sold one property at Bangalore for a sale consideration of Rs.51,00,000/- on which capital gain to the extent of Rs.49,03,008/- was earned. The assessee before AO and before CIT(A) claimed deduction u/s.54F of the Act on account of purchasing of vacant land and construction of residential house on it. According to the authorities below, the land in question was not residential but it was a vacant industrial land and hence, assessee is not entitled to claim of depreciation. The claim was disallowed.
Now before us, the ld.counsel for the assessee made only one submission that the assessee has already declared this long term
3 ITA No.2717/Chny/2017 capital gain in assessment year 2014-15 and he drew our attention to the copy of income-tax return acknowledgment filed with the Tribunal along with the computation of income for the relevant assessment year 2014-15. The ld.counsel for the assessee drew our attention to the relevant long term capital gain declared, which reads as under:- Capital Gain (July 2013) Sale Consideration of property sold at Bangalore 5,100,000.00 Less: Indexed cost of acquisition (61785*711/223) 196,992.00 4,903,008.00
The ld.counsel stated that as per the provisions of section 45 of the Act, the long term capital gain which was not utilized for construction of residential house that was actually declared in assessment year 2014-15 as per the above computation and copy of return of income filed before us. The ld.counsel stated that although the capital gain arising in assessment year 2011-12 and he intended to invest in purchase and construction of residential house but within three years, he could not do so. He declared the long term capital gain in assessment year 2014-15 instead of 2011-12.
When these facts were confronted to ld. Senior DR, he only stated that the matter can be restored back to the file of the AO for verification of these facts.
4 ITA No.2717/Chny/2017 6. After hearing both the sides and going through the facts, we direct the AO to verify whether the assessee has declared this capital gain in assessment year 2014-15 arising out of sale of this property sold at Bangalore for a sum of Rs.51,00,000/- out of which capital gain arises is Rs.49,03,008/-. In term of the above, we partly allow the appeal of assessee and matter restored back to the file of the AO for verification of facts.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 20th September, 2022 at Chennai.
Sd/- Sd/- (महावीर �सह ) (जी. मंजुनाथ) (MAHAVIR SINGH) (G. MANJUNATHA) उपा�य� /VICE PRESIDENT लेखा सद�य/ACCOUNTANT MEMBER चे�ई/Chennai, �दनांक/Dated, the 20th September, 2022 RSR आदेशक��ितिलिपअ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकरआयु� (अपील)/CIT(A) 4. आयकरआयु� /CIT 5. िवभागीय�ितिनिध/DR 6. गाड�फाईल/GF.