ITO, NON-CORPORATE WARD -3(1), CHENNAI vs. ANANYA SRIKANTH, CHENNAI

आदेश / O R D E R

Per A. Mohan Alankamony, AM:-

CO No.175/Chny/2017 r.w.s. 143(3) of the Act. The assessee has also raised cross objection against the order of the Ld.CIT(A).

The Revenue has raised several grounds in its appeal however the cruxes of the issues are that:-

(i) The Ld.CIT(A) has erred in holding that the alternative claim of the assessee for granting deduction U/s.54F of the Act instead of Section 54 of the Act is not a fresh claim and therefore the ratio laid down by the Hon’ble Apex Court in the case Goetze

India Ltd., vs. CIT reported in 157 taxmann 1 is not applicable.

(ii) The Ld.CIT(A) has erred in directing the Ld.AO to grant the benefit of indexation from the period of holding of the asset by the previous owner since the assessee had acquired the property from her father by way of settlement deed following the decision of the Hon’ble Bombay High Court in the case CIT vs. Manjula J Shah reported in 355 ITR 474.

The assessee has raised three grounds in its cross objection however the cruxes of the issues are that:-

CO No.175/Chny/2017 (i) The Ld.CIT(A) has erred in not granting exemption U/s.54 of the Act.

(ii) The Ld.CIT(A) has rightly allowed the alternative claim of the assessee by granting deduction U/s.54F of the Act, for all three flats.

CO No.175/Chny/2017 made addition of Rs.3,59,15,045/- towards Long-term Capital Gains with respect to the transfer of her share in the property.

Revenue’s Appeal:-

The assessee had claimed deduction U/s.54F of the Act in her return of income which was denied because the Ld.AO opined that the intention of the assessee was to sell the plot and not the building. Alternatively the assessee claimed deduction U/s.54F of the Act. However the Ld.AO denied the claim of deduction U/s.54F of the Act relying on the decision of the Hon’ble Apex Court in the case Goetze India Limited vs. CIT reported in 157 taxmann 1, by holding that the assessee’s claim for deduction U/s.54F of the Act is a fresh claim made during the course of assessment proceedings and not claimed in the return of income filed by her.

On appeal the Ld.CIT(A) relying in the decision of the Hon’ble Jurisdictional Madras High Court in the case CIT vs. Malind Laboratories Pvt. Ltd., wherein it was held that State Authorities should not raise technical pleas if the citizens have lawful right. The CO No.175/Chny/2017 Hon’ble Madras High Court had relied in the decision of the Hon’ble Apex Court in the case Ram Lal Vs. Reva Coal Field Ltd., reported in AIR (1962) while arriving at such decision. The Ld.CIT(A) further opined that the ratio laid down in the case Goetze India Ltd., is not applicable to the facts of the present case since in the case Goetze India Ltd., the issue was with respect to an altogether fresh claim.

At the outset, we do not find any infirmity in the order of the Ld.CIT(A) on this issue, because the assessee had already made a claim of deduction U/s.54 of the Act with respect to the long term gain arising from the transfer of her property. The Ld.Revenue Authorities denied the claim because the conditions stipulated U/s.54 of the Act was not complied. However the assessee had complied with the provisions of Section 54F of the Act and considering the same, the Ld.CIT(A) had granted relief to the assessee by relying on the decision of the Hon’ble Jurisdictional Madras High Court cited supra. Hence we do not find it necessary to interfere with the order of the Ld.CIT(A) on this issue. Therefore we hereby uphold the order of the Ld.CIT(A) on this issue.

CO No.175/Chny/2017 father since the assessee had acquired the property from her father by way of settlement deed:-

The assessee had claimed indexed cost of acquisition as on 01.04.1981 because the property was originally acquired by her father before 01.04.1981 which was subsequently transferred to her by way of settlement deed dated 23.01.2012. However the Ld.AO had rejected the claim of the assessee on the ground that the assessee had acquired the property only on 23.01.2012. On appeal, the Ld.CIT(A) following the decisions of the Hon’ble Bombay High Court in the case CIT vs. Manjula J Shah reported in 355 ITR 474, Arun Shungloo Trust vs. CIT reported in (2012) 18 taxmann.com 261 (Del), CIT vs. Raman Kumar Suri reported in (2013) 212 taxman 411 (Bom) and CIT vs. Gautam Manubhai Amin reported in (2013) 218 taxman 319 (Guj) allowed the claim of the assessee. We do not find any infirmity in the order of the Ld.CIT(A) in this issue because the higher Judiciary had consistently held that indexation benefit can be availed in respect of the period held by the previous owner in the case of succession of property. Therefore we hereby uphold the order of the Ld.CIT(A) on this issue.

CO No.175/Chny/2017 Assessee’s Cross Objection:

The Ld.AO had denied the benefit of deduction U/s.54 of the Act because he opined that the land owners had only transferred their undivided share in the land to the developer after demolishing the residential house in the land. However the claim of the assessee was that they had entered into joint venture agreement with the developer handing over possession of the land along with residential house which was subsequently demolished for the purpose of promoting residential building project. On appeal, the Ld.CIT(A) concurred with the view of the Ld.AO, however granted the benefit of deduction U/s.54F of the Act.

7.1 Before us the Ld.AR did not seriously press this ground, therefore we do not find it necessary to adjudicate the ground raised by the assessee in her cross objection.

CO No.175/Chny/2017 Since the cross objection raised by the assessee is in support of the order of the Ld.CIT(A) which we had upheld, the ground raised by the assessee stands allowed.

Order pronounced on the 30th May, 2018 at Chennai.