Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘A’ (SMC
Before: SHRI ABRAHAM P. GEORGE]
आदेश / O R D E R
In this appeal filed by the assessee, which is directed against an order dated 06.04.2018 of Commissioner of Income-tax (Appeals)-2, Chennai, it has taken altogether ten grounds of which grounds 1, 2, 7, 8, 9 & 10 are general, needing no specific adjudication.
ITA No.1281 /Mds/2018. :- 2 -:
Vide its ground No.3, assessee assails computation of capital 2. gains considering the value of a property at �30,00,000/- against �18,77,000/- assessed by the Department Valuation Officer. Ld. Counsel for the assessee submitted that assessee was a casual labour.
According to him, assessee along with his four family members had sold a property at Velachery, Chennai, during the relevant previous year, by executing a power of attorney in favour of one Shri.
Radhakrishnan. As per the ld. Authorised Representative assessee’s father was murdered on a dispute with regard to the above property and therefore legal heirs, including assessee had sold it under distress.
Contention of the ld. Authorised Representative was that consideration shown in the sale deed though only �25,00,000/- assessee by mistake, in the return of income, had calculated his share taking the consideration as �30,00,000/-. As per Ld. Authorised Representative, the ld. Assessing Officer had referred the valuation of the property to the Valuation Cell of the Department, applying on Section 50C of the Income Tax Act, 1961 (in short ‘’the Act’’). The valuer, as per the Ld.AR, had fixed the value of the property at �18,77,000/-. According to the ld. Authorised Representative, assessee at the best could have been assessed for the 1/5th share in �25,00,000/- and nothing done.
ITA No.1281 /Mds/2018. :- 3 -:
Submission of the ld. Authorised Representative was that lower authorities had taken advantage of the ignorance and an error committed by the assessee, while filing the return.
Per contra, ld. Departmental Representative submitted that assessee himself had shown the sale consideration received by him as 1/5th of �30,00,000/-. According to him, assessee could not now turn around and say that consideration received was only �25,00,000/-
I have considered the rival contentions and perused the 4. orders of the authorities below. Contention of the assessee is that the sum received was erroneously considered by him as �30,00,000/-, against actual amount of �25,00,000/- mentioned in the deed. It is not disputed that the value fixed for the property by the Department Valuation Officer u/s.50C of the Act was only �18,77,000/- though he adopted a higher value of �25,00,000/- considering what was mentioned in the Sale Deed. I am of the opinion that lower authorities ought not have taken advantage of the mistake committed by the assessee in showing the consideration at a higher amount than what was mentioned in the sale deed. Especially so, since Valuation cell of the Department valued the property at �18,77,000/-. I therefore direct the lower authorities to recompute the capital gains adopting 1/5th consideration of �25,00,000/- as the sum received by the ITA No.1281 /Mds/2018. :- 4 -: assessee on sale of the property at Velachery, Chennai. Ground No.3 is treated as partly allowed.
Vide its grounds 4 to 6, grievance raised by the assessee is with regard to disallowance of a claim u/s.54F of the Act.
Ld. Counsel for the assessee submitted that assessee had 6. claimed deduction u/s.54F of the Act on investment in constructing a new house property. As per the ld. Authorised Representative, ld. Assessing Officer considered this to be an extension of a building owned by the assessee. Contention of the ld. Authorised Representative was that there was a valuation done by the Department Valuer and the Department valuer had found that there was a construction of 60 sq.m. of RCC famed structure in the open terrace on the first floor of an existing structure. As per the ld. Authorised Representative, this consisted of a single room with toilet.
Thus, according to him, assessee was eligible for claiming deduction u/s.54F of the Act.
Per contra, ld. Departmental Representative submitted that construction was only an addition made to the existing residential house owned by the assessee which was held jointly with other family
ITA No.1281 /Mds/2018. :- 5 -: members. Thus, according to him, assessee was not eligible for claiming deduction u/s.54F of the Act.
I have considered the rival contentions and perused the orders of the authorities below. In his valuation report dated 17.03.2016 based on an inspection of the construction done by the assessee, the Departmental Valuer has clearly stated that assessee had invested �5,23,000/- for a property at No.32, Avvai Colony, Mannappan Street, Kotturpuram, Chennai-85. Description of the property as it appears in the said valuation report of Assistant Valuation Officer, Valuation Cell of the Department is reproduced hereunder:-
Sl.No Description Details 3.1 Ownership History The original bulding consisting of ground floor and part of first floor was purchased by (late) Shri. J. Srinivasan (Husband of the assessee) 3.2 Various Interest Not applicable 3.3 Land Area Not applicable 3.4 Built up area Not applicable 3.5 Usage/Tenancy New portions had been constructed and is under occupation as seen on the date of inspection i.e. on 09.03.2016
ITA No.1281 /Mds/2018. :- 6 -:
Sl.No Description Details 3.6.1 General According to the assessee & physical inspection made by the undersigned, the assessee has constructed around 60sq.m. of R.C.C. Framed structure in the open terrace on the first floor of the existing structure which is a ground floor plus part first floor residential building. Also a similar construction above this portionin second floor and a single room with toilet both above it in terrace floor.
According to the assessee the construction was carreiud out between 21.01.2008 & 19.10.2008. The building material were purchased by himself. The construction workers were hired by him and the work was superevised by him 3.6.2 Foundation and Plinth No approved drawings were produced by the assessee. Hence, foundation details could not be ascertained. Superstructure is with walls made with bricks plastred 3.6.3 Superstructure on both sides A.Common Area; Staircase portion, stair treas, risers 3.6.4 flooring etc., are finished with CC flooring.Approach areas and foot path are provided with cement concrete pavements. B. Interior floor are (FF & SF) Rectified title floring is provided in hall, bed rooms and balcony. In toilets anti-skid tiles flooringis provided and wall dado finished with decorative tiles. 3.6.5 Joinery Second class country wood penalled/ flush doors & windows are provided 3.6.6 Roofing RCC roof finished 3.6.7 Finishing Inside:- distempering and outside water proof cement panting, doors and windows: painted 3.6.8 Internal water supply Toilets are provided with EWC pan with normal and Sanitary fitting for water supply Installaions 3.6.9 Internal electrical Concelaed wiring is done with normal switches installations and normal light fitting and ceiling fans. 3 phase electrical connection is available. 3.6.10 External services Water supply and sewage disposal are from the existing nearby corporation lines. One overhead water tank of 950 litres capacity is constructed above the terrace for water storage.
ITA No.1281 /Mds/2018. :- 7 -:
A reading of the above does indicate that fresh construction was not a simple addition of a room with toilet, but there was open terrace etc., and separate staircase also. In my opinion the claim of the assessee that the newly constructed area can be construed as a new residential unit, cannot brushed aside. I am of the opinion that assessee ought not have been denied the deduction u/s.54F of the Act. I set aside the orders of the lower authorities and direct the Ld.AO to allow the claim of the assessee. Grounds 4 to 6 are allowed.
In the result, appeal of the assessee is partly allowed.
Order pronounced on the 30th day of October, 2018, at Chennai.