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04-09-2019, Ramaiah Harish, Section 54F, 54, 234A, Tribunal Bangalore

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1 week 2 days ago #10700 by amit
Section - 54F, 54, 234A, 234B
Order Date - 04-09-2019
Favouring - Revenue
Court - Tribunal Bangalore
Appellant - Ramaiah Harish
Respondent - ITO
Justice - N. V. VASUDEVAN VP & JASON P. BOAZ AM
Citation - 919Taxpundit30
Appeal No. - ITA No.789/Bang/2019
Asstt. Year - 2015-16

Order

PER : Jason P Boaz, A.M

This appeal by the assessee is directed against the order of CIT(A)-7, Bengaluru, dated 01.03.2019 for Assessment Years 2015-16.

2. When the case was called for hearing on 22.07.2019, none appeared on behalf of the assessee. It is seen from the record that the notice fixing the hearing of this appeal on 22.07.2019, dispatched by RPAD, was duly served at the given address of the assessee. In view of the facts and circumstances of the case, as laid out above, it appears to us that the assessee is not interested in pursuing the present appeal and therefore we proceed to dispose off the same on merits with the assistance of the learned DR for the Revenue and the material on record.

3. Briefly stated, the facts of the case are as under:-

3.1 The assessee filed his return of income for Assessment Year 2015-16 on 25.12.2016 declaring income of Rs.6,29,300/-. The case was taken up for scrutiny for this Assessment Year and the assessment was concluded under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) vide order dated 28.12.2017, wherein the assessee’s income was determined at Rs.2,94,63,569/-, due to the recomputation of Long Term Capital Gains (LTCG) at Rs.2,88,34,269/- on sale of property at Survey No.357/7, Begur Village, Begur Hobli, Bengaluru, vide sale deed dated 23.01.2015 for a consideration of Rs 10 Crores; the assessee’s share being 50% thereof. The Assessing Officer (AO) computed the assessee’s share of 50% of the LTCG on sale of the said property as under:-

The AO accordingly restricted the assessee’s claim for exemption under section 54F of the Act to one unit.

3.2 Aggrieved by the order of assessment dated 28.12.2017 for Assessment Year 2015-16, the assessee preferred an appeal before the CIT(A) – 7, Bengaluru, challenging the CIT(A)’s order upholding the restriction of exemption under section 54F of the Act to one unit / flat in the constructed 4th Floor residential building consisting of 1 two bedroom flat on the first floor and 4 one bedroom flats on the 2 nd, 3rd and 4th Floors of the said building. The CIT(A), after considering the assessee’s submissions / judicial pronouncements cited and the provisions of the Act, proceeded to dismiss the assessee’s appeal.

4.1 The assessee, being aggrieved by the order of CIT(A) – 7, Bengaluru, dated 01.03.2019 for Assessment Year 2015-16 has filed this appeal before theTribunal wherein he has raised the following grounds:-

1. The orders of the authorities below in so far as they are against the appellant, are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. The learned CIT[A] is not justified in upholding the disallowance of deduction under Section 54F of the income Tax Act, 1961 under the facts and in the circumstances of the appellant's case.

3. The learned CIT[A] ought to have appreciated that the appellant had invested proceeds from capital gains in construction of a residential property as required under Section.54F of Income Tax Act, 1961.

4. The learned CIT [A] ought to have appreciated that the judgement of the Hon'ble Karnataka High Court in the case of CIT vs K.G.Rukminiamma 331 ITR 211 relied upon actually supports the stand of the appellant for the claim of deduction U/s.54F of Income Tax Act, 1961 and thus the assessment made without giving deduction U/s.54F deserves to be vacated.

5. The learned CIT [A] ought to have appreciated that if the residential property built is assessed to property tax as single unit, the appellant's claim is still tenable inspite of amendment made to Section 54/54F by Finance ( No.2) Act, 2014 restricting the deduction to one residential house.

6. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s 234-A and 234-B of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled.

7. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.

5. Ground Nos. 2 to 5 – Exemption / Deduction under section 54F of the Act

5.1 We have heard the learned DR for Revenue in the matter, carefully perused the orders of the authorities below and the other material on record. The matter before us; i.e., the assessee’s claim for exemption / deduction under section 54F of the Act against the assessee’s share of LTCG on sale of the aforesaid property at Survey No.357/7, Begur Village and Hobli, Bengaluru South Taluk vide sale deed dated 23.01.2015. We find that the CIT(A) has dealt with elaborately with the issue for consideration before us at paras 4 to 4.7 of the impugned order; which is extracted hereunder:

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