ACIT CENTRAL CIRCLE 1(1), CHENNAI vs. DR.S.SANKARALINGAM, CHENNAI

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -18, Chennai, dated 14.09.2017 and pertains to assessment year 2012-13.

The only issue arises for consideration is disallowance made by the Assessing Officer under Section 54F of the Income-tax Act, 1961 (in short 'the Act').

Dr. M. Srinivasa Rao, the Ld. Departmental Representative, submitted that there was search in the premises of the assessee. During the year under consideration, according to the Ld. D.R., the assessee sold a landed property at Door No.99, New Avadi Road to M/s J.K. Holding Company Pvt. Ltd. for a total sale consideration of ₹9 Crores. However, the sale deed was registered disclosing the sale consideration only at ₹6 Crores. The balance ₹3 Crores was received by the assessee in cash. However, the balance was deposited in the bank account in the name of the children of the assessee. Referring to the order of the assessment, the Ld. D.R. submitted that the assessee claimed the cost of acquisition at ₹1,04,31,924/- in the year 2006-07. Cost of construction was claimed to the extent of ₹2,28,91,064/-. The long term capital gains was ₹6,71,08,935/-. The assessee claimed exemption to the extent of ₹6,71,08,935/- and has not offered any capital gain for taxation. According to the Ld. D.R., the assessee has not constructed the house within a period of three years and also has not deposited in Capital Gains Account. Therefore, according to the Ld. D.R., the assessee is not eligible for deduction under Section 54F of the Act. Moreover, according to the Ld. D.R., the assessee claimed in the return of income only deduction under Section 54 of the Act. The CIT(Appeals), however, granted deduction under Section 54F of the Act. Referring to the assessment order, the Ld. D.R. submitted that the assessee has not indicated the provision under which the assessee was claiming deduction. The assessee claimed deduction under Section 54B/54D/54EC/54F/54G/54GA. The assessee has not indicated the section under which the claim was made. No revised return was also filed. Therefore, according to the Ld. D.R., the CIT(Appeals) is not justified in allowing the claim of the assessee.

On the contrary, Shri K.G. Raghunath, the Ld.counsel for the assessee, submitted that the assessee has deposited ₹1.40 Crores towards loan account and the balance of ₹4.60 Crores was deposited in the capital gain scheme which was confirmed by State Bank of India. According to the Ld. counsel, the balance amount of ₹2,99,50,000/- was deposited in State Bank of India in the name of the assessee, his wife and children. Before due date for filing of the return of income, according to the Ld. counsel, the Department seized the amount by withdrawing the same from bank account, therefore, the money was with the Department. The assessee was physically prevented from depositing the same in the Capital Gains Account, hence, the CIT(Appeals) allowed the claim of the assessee. The Ld.counsel further submitted that the due date for depositing in Capital Gains Account is the due date for return of income under Section 139(1) of the Act. Before the due date, the money was taken by the Department. Hence, according to the Ld. counsel, the assessee cannot be blamed for depositing the money in Capital Gains Account.

We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the property was sold for ₹9 Crores. The sale consideration disclosed in the sale deed was only ₹6 Crores. The assessee apparently received sale consideration to the extent of ₹3 Crores in cash. However, he deposited the same in S.B. Account in the names of self, his wife and children. It is not in dispute that ₹1.40 Crores was used for repayment of loan and ₹4.60 Crores was deposited in Capital Gains Account. The balance amount to the extent of ₹2,99,50,000/- was deposited in State Bank of India in the name of assessee, his wife and children and the same was taken over by the Department before the due date for filing of return of income. Therefore, as rightly submitted by the Ld.counsel for the assessee, the assessee was prevented from depositing the money in the Capital Gains Account. The total capital gain is ₹6,71,08,935/-. Hence, considering the deposit of ₹4.60 Crores in Capital Gains Account and the money taken by the Department to the extent of ₹2,99,50,000/-, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly allowed the claim of the assessee under Section 54F of the Act.

The Revenue has also raised an objection in respect of failure of the assessee to make a specific claim under specific provision. No doubt, the assessee has not made any specific claim. However, he claimed exemption under Section 54 of the Act in the return of income filed by him. The assessee has not indicated the specific provision. The return of income clearly shows that the assessee claimed deduction under Section 54B/54D/54EC/ 54F/54G/54GA. This Tribunal is of the considered opinion that that the provisions of Section 54 and 54F of the Act are beneficial provisions. Merely because the assessee has not made any specific reference, that cannot be a reason to disallow the claim of the assessee. It is not a case of the Revenue that the assessee is not eligible for deduction under Section 54F of the Act. Therefore, mere non-reference about specific section under which the assessee is making claim cannot be a reason to disallow the claim of the assessee. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

In the result, the appeal filed by the Revenue is dismissed.