VARUN J.MAHER,CHENNAI vs. ACIT NON CORPORATE CIRCLE 10, CHENNAI

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER

‘’The appellate order dated 24-11-2017 in (A) 12/2013-14 passed by the Commissioner of Income-tax (Appeals) 12, Chennai, is erroneous, opposed to law and facts of the appellant's case.

Ld. Counsel for the assessee submitted that assessee had 2. claimed exemption u/s.54 of the Income Tax Act, 1961 (in short ‘’the Act’’) on long term capital gains arising from sale of immovable property at Uma Complex on 10.10.2007 for a consideration of �53,37,500/-. As per the ld. Authorised Representative, exemption was claimed based on advance given to one M/s.Narendra Properties Ltd, Chennai on 31.10.2007 for acquiring an new property. However, as per the ld. Authorised Representative, due to unforeseen circumstances, agreement entered with M/s.Narendra Properties Ltd, had to be rescinded on 24.09.2009. As per the ld. Authorised Representative, since new asset could not be constructed within stipulated period of three years mentioned in Section 54 of the Act, long term capital gains claimed as exempt in the impugned assessment year, was offered to tax in the return of income filed for the assessment year 2010-2011. As per the ld. Authorised Representative, taxes were also paid in full. Submission of the ld. Authorised Representative was that assessee was pleading only for refund of the tax paid in assessment year 2010-2011, if capital gains was subjected to tax in the impugned assessment year.

Per contra, ld. Departmental Representative submitted that 3.

ld. Commissioner of Income Tax (Appeals) at para 9.2 of his order had given clear directions to the ld. Assessing Officer in this regard.

According to him, there could be no grievance for the assessee.

We have considered the rival contentions and perused the 4. orders of the authorities below. Claim u/s.54 of the Act was denied by the ld. Assessing Officer for a reason that new property proposed to be acquired by the assessee was a commercial one and not a residential house. Be that as it may, the agreement entered with M/s.Narendra Properties Ltd, was rescinded by the assessee on 24.09.2009. Capital gains claimed as exempt in the impugned assessment year was offered for taxation in the return filed for assessment year 2010-2011. Observation of the ld. Commissioner of Income Tax (Appeals) as it appears at para 9.2 of his order is reproduced hereunder:-

‘’9.2 Section 54 has taken into consideration circumstances where assesses couldnot invest in residential property. In such circumstances, the assessee's only option is to invest the un utilised claim in the capital gains accounts scheme within the time limit u/s 139(1) of the IT Act. It is clear from the facts of the case that the appellant had neither invested the capital gains amount in a new residential house nor deposited the unutilised amount in the Capital Gains Accounts Scheme before the due date as prescribed. Therefore, I confirm the ₹40,49,641/-. addition of made in the assessment order for AY 2008-09. However, the Assessing Officer shall examine the claim of disclosure of capital gains in AY 2010-11 to avoid any double taxation’’.

What we find is that ld. Commissioner of Income Tax (Appeals) had given a clear direction to the ld. Assessing Officer to avoid double taxation, while examining the disclosure of capital gains made by the assessee in his return for assessment year 2010-2011. We are sure that ld. Assessing Officer will refund any excess tax paid by the assessee since capital gains stand assessed in the impugned assessment year. In such circumstances, we do not find any reason to interfere with the orders of the lower authorities.

In the result, the appeal of the assessee is dismissed. 5.

Order pronounced on Thursday, the 10th day of May, 2018, at Chennai.