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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI A.MOHAN ALANKAMONY & SHRI DUVVURU RL REDDY
आदेश / O R D E R
Per A. Mohan Alankamony, AM:-
This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-2, Chennai dated 31.12.2015 in 2/2014-15 for the assessment year 2011-12 passed U/s.250(6) r.w.s. 143(3) of the Act.
The appeal was filed by the assessee with a delay of 12 days. The Ld. AR submitted that the delay had occurred since the assessee was ill and was unable to furnish the relevant papers to his auditor. Therefore the Ld. AR pleaded that the delay may be condoned. The Ld. DR strongly objected to the submission of the Ld. AR. After hearing both sides, we are of the considered view that the delay of 12 days in filing the appeal should be condoned because the delay was beyond the control of the assessee. Therefore we hereby condone the delay and proceed to hear the appeal on merits.
The assessee has raised several grounds in his appeal, however the crux of the issue is that the Ld. Commissioner of Income Tax(Appeals) has erred in confirming the order of the Ld.AO who had denied the deduction claimed U/s.54F of the Act, on the ground that investment has been made in two flats.
The brief facts of the case are that the assessee is an individual earning income from house property and capital gains, filed his return of income admitting loss of Rs.5,72,460/-. Initially the return was processed U/s.143(1) of the Act. Thereafter the case was selected for scrutiny and the assessment order was passed U/s.143(3) of the Act, wherein the Ld.AO denied the benefit of Section 54F of the Act, because the assessee had purchased more than one flat violating the provisions of the Act and computed the taxable capital gain at Rs.3,48,30,718/-.
During the course of assessment proceedings, it was observed by the Ld.AO that the assessee had computed long term capital gains as Rs.3,46,63,127/- and claimed deduction U/s.54F of the Act. With respect to the same, the assessee had furnished the following details:- 1. “Copy of sale deed dated 01.04.2010 for sale of assessee’s 1/6th share of interest in property at Doraiswamy Road (Doc. No.725 of 2010) for Rs.3,50,00,000/- (Assessee’s share) 2. Assessee purchased Residential Flats at Flat No.1201. Lodha Aria. TJ Road, Mumbai 400015 by sale deed dated 07.04.2010 (registered as Doc No,2923/2010) – Copy enclosed – Door No. 1201A – 12th Floor and Flat No. 1201B - 12th Floor under the sale deed dated 07.04.2010 (Registered as Doc No. 2925/2010) Copy of document enclosed. 3. A copy of plan for the two flats purchased is enclosed showing that it is a single residential Flat though acquired under two sale deeds with two differed Door Nos. 4. These two flats are leased out to a single person Mr.Paul Handley (Copy of Lease Deed enclosed)”
The assessee had further submitted before the Ld.AO that:- i. The two adjoining flats purchased by the assessee having two different door numbers have been consolidated as one single residential flat. ii. Thus the provisions of Section 54F of the Act are complied with.
However rejecting the claim of the assessee, the Ld.AO denied the benefit of Section 54F of the Act by holding that the assessee had purchased multiple flats and not a single residential unit as provided under the Act. On appeal, the Ld.CIT(A) also endorsed the view of the Ld.AO and held the issue against the assessee.
Before us the Ld.AR submitted the decision of the Hon’ble
jurisdictional High Court in the case CIT vs. Sri Gumanmal Jain, TCA No.33 of 2017, order dated 03.03.2017, wherein it was held that the assessee is entitled to the benefit of Section 54F of the Act, for the multiple flats acquired by him. Therefore, it was pleaded that the benefit of Section 54F may be granted to the assessee. The Ld.DR vehemently argued in support of the order of the Ld. Revenue authorities, however could not successfully controvert to the submissions of the Ld.AR.
We have heard the rival submissions and carefully perused the material available on record. From the facts of the case, it is apparent that the Revenue authorities had denied the benefit of deduction U/s.54F of the Act to the assessee only for the reason that the assessee had acquired two adjoining flat, which he converted into one unit. However on perusing the Order of the Hon’ble Jurisdictional High Court cited by the Ld.A.R supra on similar facts, we find the issue to be held in favour of the assessee. Therefore, following the decision of the Hon’ble Jurisdictional High court we have no hesitation to hold that in the case of the assessee, benefit of Section 54F should be granted, even if he has acquired more than one adjoining residential flats and converted them into one residential unit, provided all the other portions of the Act are complied with. Accordingly we remit back the matter to the file of Ld.AO, to consider the issue in the light of our above observation and the decision of the Hon’ble Jurisdictional High Court cited supra and the other relevant provisions of the Act.
In the result, appeal of the assessee is allowed for statistical purpose as indicated herein above.
Order pronounced on the 22nd June, 2017 at Chennai.