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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 22.03.2016 in ITA No.150/CIT(A)-
2/2014-15 for the assessment year 2011-12 passed U/s.250(6) r.w.s. 143(3) of the Act.
The assessee has raised several grounds in her 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 disallowed the claim of deduction U/s.54F of the Act.
The brief facts of the case are that the assessee is an individual, filed her return of income for the assessment year 2011-12 on 01.08.2011 admitting total income of Rs.10,65,444/-.
Initially the return was processed U/s.143(1) of the Act. Subsequently the case was selected for scrutiny and the finally the assessment was completed U/s.143(3) of the Act on 28.03.2014, wherein the Ld.AO disallowed the claim of deduction of Rs.3,47,00,559/- U/s.54F of the Act.
During the course of scrutiny assessment, it is revealed that the assessee had sold her jointly owned property on 01.04.2010 along with the other co-owners, wherein the assessee’s share was Rs.3,50,00,000/-. On 30.08.2010, the assessee purchased another property Plot No.28A measuring 8550 sq.ft., of land at Casuarina Drive, Neelangarai, Chennai – 41, for purchase consideration of Rs.3,88,31,370/-. Thereafter the assessee claimed deduction U/s.54F of the Act in her return of income. To evidence the claim of the assessee for having constructed residential house, she produced certificate from her architect M/s. Architecture Incorporated Chennai, stating that she had constructed a residential house of studio type extending to 38 sq.m viz., 408.88 sq.ft., and the construction was completed on 07.03.2013. However, the Ld.AO rejected her claim of deduction U/s.54F of the Act, because of the following reasons:
1) The assessee had only purchased a vacant land. 2) As on date the assessee could not produce completion certificate from civic authorities with respect to the construction of a residential house.
3) The assessee had not produced property tax recipt with respect to her newly constructed residential house from Chennai Corporation.
4) The assessee has not produced sewage tax and water tax receipts from the Chennai Metro Water Board, etc.,
From the above, it is apparent that the Ld.AO did not place much reliance in the certificate issued by the Architect, and insisted upon furnishing certificate from the relevant State Government Authorities. Since, the assessee could not produce the same; the Ld.AO had rejected the claim of deduction U/s.54F to the assessee.
On appeal, the Ld.CIT(A) accepted the certificate issued by the Architect that the construction of the house was completed on 07.03.2013. However, restricted the benefit of deduction U/s.54F of the Act, to cost of construction of 409 sq.ft., building and the value of land to the extent of 2000 sq.ft., including corresponding, stamp duty, by relying on the decision of the Hon’ble High Court of Kerala in the case Smt. Asha George vs. ITO, Thrissur, in IT Appeal No.114 of 2012, vide order dated 16.01.2013. The Ld.CIT(A) also distinguished the cases relied by the assessee viz., 1. ACIT vs. Omprakash Goyal, IT Appeal no.647(JP) of 2011 2. ACIT vs. Narendra Mohan Uniyal (2009) 34 SOT 152 (Delhi) and held that these decisions does not be apply to the case of the assessee. Aggrieved by the order of the Ld.CIT(A), the assessee is on appeal before us.
The Ld.AR submitted that the assessee had purchased one residential plot and constructed a residential house of 409 sq.ft., which she could only afford. He further argued stating that the land purchased by the assessee is indivisible and only one residential house can be built. He therefore argued that the assessee is entitled for the claim of deduction U/s.54F of the Act, by relying on the case laws cited before the Ld.CIT(A) supra. The Ld.DR on the other hand relied on the order of the Ld.AO and the Ld.CIT(A) and further argued by submitting that the assessee had not furnished the proof of construction of the house even to the extent of 409 sq.ft.
We have heard the rival submission and carefully perused the material available on record. From the facts of the case, it appears that the Ld.AO as well as the Ld.CIT(A) has not examined the issue in detail. If the assessee has purchased a residential plot which is indivisible, capable of housing only one residential unit, then the assessee will be eligible to the claim deduction U/s.54F of the Act, even though she could construct only a portion of the house which is inhabitable. It appears from the claim of the assessee that the residential plot purchased by her is indivisible. Further it appears that this fact was not verified by the Ld.AO. Moreover, the assessee has also not produced any reliable proof such as certificate issued from the State Government Authorities or any other relevant authorities to establish that she has constructed a residential house of 409 sq.ft., with in the stipulated period as per the provisions of the Act. In this situation, we are of the considered view that the entire issue has to be looked into by the Ld.AO afresh. Therefore, in the interest of justice, we hereby remit the matter back to the file of Ld.AO for de-nova consideration.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on the 22nd June, 2017 at Chennai.