SRI RAMAKRISHNAN NAIR SUKESH KUMAR,RANCHI vs. ACIT, CIRCLE-3, RANCHI

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ITA 194/RAN/2019Status: DisposedITAT Ranchi07 September 2022AY 2015-163 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that investment in an under-construction house within three years from the sale of the original property is admissible for deduction under Section 54F. The provision is beneficial and should be liberally construed.

What were the facts?

The assessee claimed a deduction under Section 54F for capital gains arising from the sale of property. The assessee invested a portion of the capital gain within two years and the remaining amount in the third year for an under-construction house.

What were the issues?

Whether investment in an under-construction house within three years qualifies for deduction under Section 54F. Whether interest under Sections 234A/B should be charged on returned or assessed income.

Which sections of the Income-tax Act were involved?

Section 54F,Section 234A,Section 234B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “RANCHI BENCH, RANCHI

Before: Shri Sanjay Garg & Shri Manish Borad

IN THE INCOME TAX APPELLATE TRIBUNAL “RANCHI BENCH, RANCHI VIRTUAL HEARING AT KOLKATA Before Shri Sanjay Garg, Judicial Member and Shri Manish Borad, Accountant Member Assessment Year: 2015-16 Sri Ramakrishnan Nair Sukesh Kumar.…...…..................……...…..….. Appellant Quarter No.R I/1, Birla Institute of Technology, Mesra, Ranchi-835215. [PAN: ABTPK1985G] vs. ACIT, Circle-3, Ranchi…..……………………….……….…………….. Respondent Appearances by: Shri Devesh Poddar, Advocate, appeared on behalf of the appellant. Shri Pranob Ku. Koley , Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : August 23, 2022 Date of pronouncing the order : September 07, 2022 ORDER

Per Sanjay Garg, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order dated 04.02.2019 of the Commissioner of Income Tax (Appeals), Ranchi [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). The assessee in this appeal has taken the following grounds of appeal:

“1. For that Ld. CIT(A) was not justified in confirming the addition of Rs.2,69,248/- out of the total deduction claimed u/s 54F for Rs.73,21,565/-. Ld. CIT(A) confirming the said disallowance observe that the amount invested in 2 years from the sale can only be allowed. On the other hand, we claimed that deduction for amount shall be upto investment made in 3 years as a flat in under construction business shall amount to residential house under consideration for which time period for deduction u/s 54F is 3 years. As such, ld. CIT(A) was not justified in confirming the above said addition.

2.

For that interest u/s 234A/B should be charged on the returned income and not on the assessed income following the decision of Hon’ble Jharkhand High Court. 1

Assessment Year: 2015-16 Sri Ramakrishnan Nair Sukesh Kumar

3. For that other grounds in detail shall be argued at the time of hearing.”

2. The short dispute involved in this appeal is relating to the disallowance of deduction claimed by the assessee u/s 54F of the Act. The assessee had sold an immovable property and earned capital gains of Rs.73,21,565/-. The assessee invested a sum of Rs.75 lakhs for purchasing a new under construction house. Out of aforesaid Rs.75 lakhs, the assessee paid/invested Rs.70,21,565/- within the specified two years from the date of sale of immovable property and paid/invested the remaining amount in the third year. The ld. CIT(A) has restricted the deduction u/s 54F to the extent of Rs.70,52,317/- paid within the specified two years.

3.

As per the provision of section 54F, if an assessee invests an amount of capital gain for purchase of new house within two years or constructs a new house within three years, then the deduction of capital gains is admissible.

4.

In this case, since the assessee had made investment/purchased an under- construction house, therefore, in our view, the amount spent on the under-construction house within the three years from the date of sale of immovable property will be admissible for deduction. It has been time and again held that since the provision of section 54F are beneficial and are aimed at for promoting of housing for citizens, the same should be liberally construed. In view of this, the appeal of the assessee is allowed and it is held that the assessee is entitled to the deduction of capital gains u/s 54F for Rs.73,21,565/-.

Assessment Year: 2015-16 Sri Ramakrishnan Nair Sukesh Kumar

5.

In the result, the appeal of the assessee stands allowed.

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