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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-VI, Chennai, dated 26.06.2014 and pertains to assessment year 2010-11.
Shri A.V. Sreekanth, the Ld. Departmental Representative, submitted that the only issue arises for consideration is disallowance of claim made by the assessee under Section 54 of the Income-tax Act, 1961 (in short 'the Act'). According to the Ld. D.R., the assessee entered into an agreement of sale in respect of his property with one Shri J. Ashok Kumar Lunia and Smt. Prithi Bala. The sale consideration was `3,15,00,000/-. The transaction of sale resulted in capital gain of `3,11,72,359/-. The assessee claimed deduction under Section 54 of the Act on the ground that the same was invested in another property. The Assessing Officer, after referring to the copy of sale deed dated 09.12.2009, found that what was sold by the assessee is only a vacant land and not a building. Therefore, the assessee is not eligible for exemption under Section 54 of the Act. Since the assessee was owner of more than one house at the time of sale of property, the assessee has no eligibility for exemption under Section 54 of the Act.
According to the Ld. D.R., the alternative claim made by the assessee under Section 54F of the Act also cannot be considered since the assessee was owning more than one residential house at the time of sale. Hence, the CIT(Appeals) is not justified in allowing the claim of the assessee.
On the contrary, Sh. N. Devanathan, the Ld.counsel for the assessee, submitted that admittedly the assessee entered into an agreement for sale of his property at Harrington Road, Chetpet, Chennai, on 02.12.2009. The agreed sale consideration was `3,15,00,000/-. The capital gain arising on such transaction was `3,11,72,359/-. The assessee’s claim before the Assessing Officer was disallowed under Section 54 of the Act on the ground that what was sold by the assessee is only a vacant land, therefore, the Assessing Officer found that the assessee is not eligible for deduction under Section 54 of the Act. Referring to the claim of the assessee under Section 54F of the Act, the Assessing Officer rejected the claim of the assessee on the ground that the assessee was having more than one residential house at the time of sale.
Referring to the order of the CIT(Appeals), the Ld.counsel submitted that the CIT(Appeals), after considering the material available on record, found that what was sold by the assessee is a land along with permanent structure which was exclusively used for residential purpose. In view of this finding by the CIT(Appeals) on facts, according to the Ld. counsel, what was sold by the assessee is a residential building and not vacant site. This specific finding of the Commissioner was not challenged by the Revenue.
4. Referring to the paper-book, the Ld.counsel for the assessee submitted that the property in question was assessed by the Chennai Corporation in respect of the building existed. The details of property tax assessment show that there was a building.
Referring to the agreement said to be entered into between the assessee and the purchaser of the building, a copy of which is available at page 1 of the paper-book, the Ld.counsel submitted that in the Schedule of agreement, it is clearly mentioned that ground and building bearing old No.37, New No.66, Harrington road, Chetpet, Chennai was sold by the assessee. A copy of the property tax assessment in respect of the very same door number clearly indicates that there was a building. In the sale deed executed by the assessee, there was no reference about the building, but it does not mean that there was no building at all. The agreement said to be entered into between the parties, which is not in dispute, clearly indicates the existence of building. Moreover, the property which was in existence was assessed to property tax also. Therefore, according to the Ld. counsel, the CIT(Appeals) rightly found that the assessee is eligible for deduction under Section 54 of the Act.
We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the assessee entered into an agreement for sale of property at Harrington Road, Chetpet, Chennai, with shri J. Ashok Kumar Lunia and Smt. Priti Bala, on 16.10.2009. The Schedule of agreement, which is available at page 1 of the paper-book, clearly shows that what was agreed to be sold by the assessee and the purchasers are house and land. In the copy of sale deed said to be executed on 02.12.2009 within a span of two months, there was no reference about the existence of the building. The property tax details said to be downloaded from website of Corporation of Chennai show that the assessee has paid the property tax in respect of the building at Old No.66 New No.125, Harrington Road.
In view of the reference made about the existence of building in the agreement between the parties and property tax assessment, it cannot be said that what was sold by the assessee is only a vacant land and not the building. Merely because there was no reference in the sale deed that cannot be said that the assessee has sold only the vacant land. In those factual situation, the CIT(Appeals), after examining the material available on record, found that the assessee has sold residential house, therefore, eligible for deduction under Section 54 of the Act. In view of the above factual situation, 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.
Order pronounced on 30th September, 2016 at Chennai.