2014 (2) TMI 84 - AT - Income Tax

Re-opening of assessment Held that - The assessee had accepted the reasons for reopening and agreed for completion of the assessment before the assessing officer as evidenced from the observations made by the assessing officer now, he cannot re- agitate the matter once again either before the CIT(A) or before the ITAT order of the CIT(A) upheld. Claim of exemption u/s 54 of the Act Building fit for human habitation or not - Held that - From the above report it appears that work relating to construction of lawn in front of the house was in progress - The entire work appears to be completed within 10 to 20 days - The Architect has also given certificate with regard to the completion of the building - However, there is no finding by both the authorities below as to whether the building was fit for human habitation or not - it is necessary to examine whether the construction completed within the specified period is fit for human habitation or not - Since lower authorities have not examined and recorded finding to this effect, thus,the matter needs to be reconsidered order set aside and the matter remitted back to the AO for fresh adjudication Decided in favour of Assessee.

Summary

Issues:
1. Reopening of assessment
2. Claim of exemption u/s 54 of the Act

Reopening of Assessment:
The appellant contested the reopening of assessment, but the Tribunal held that since the appellant had agreed to the reasons for reopening and completion of assessment before the assessing officer, they cannot challenge the matter again before the CIT(A) or ITAT. The Tribunal upheld the order of the lower authorities on this issue.

Claim of Exemption u/s 54 of the Act:
The dispute revolved around the claim of exemption u/s 54 of the Act. The appellant argued that major construction work was completed, with only the lawn remaining. They cited a judgment stating that completion of the house and occupation were not necessary, only investment of net consideration within the stipulated period. On the other hand, the respondent contended that construction completion was required for exemption. The Inspector's report indicated that most of the construction was done, with the lawn in progress. However, the authorities did not assess if the building was fit for habitation. The Tribunal noted that the assessing officer must determine if the construction within the specified period was habitable. As such, the matter was remitted back to the assessing officer for reconsideration. The appeal was allowed for statistical purposes.

This detailed analysis of the judgment from the Appellate Tribunal ITAT Cochin highlights the issues of reopening assessment and claiming exemption u/s 54 of the Act, providing a comprehensive understanding of the legal reasoning and decisions made by the Tribunal.