2019 (10) TMI 657 - AT - Income Tax

Reopening of assessment u/s 147 - HELD THAT - AO found that the assessee has not filed return of income for assessment year 2008-09. However, on the basis of the sale deed registered, the Assessing Officer issued notice u/s 148 for reopening of assessment. Therefore, this Tribunal is of the considered opinion that the AO has rightly reopened the assessment. Accordingly, the reopening is confirmed. Determination of sale consideration - HELD THAT - It is not in dispute that the assessee is one of the co-owners among four others. In other words, the assessee s interest in the property is 1/5th. This Tribunal in the case of Shri S. Sathyamurthy, one of the co-owners, found that the sale consideration is only ₹ 25 lakhs. In view of the above decision of this Tribunal in one of the co-owner s case, the Assessing Officer is directed to compute the capital gains by adopting 1/5th share in ₹ 25,00,000/- on sale of property at Velachery, Chennai. Claim of deduction under Section 54F - Section 54F of the Act does not require filing the return of income before the due date under Section 139(1) of the Act. The requirement of Section 54F of the Act is that the assessee within a period of one year before or two years after the date of transfer took place, shall purchase or within a period of three years after the date, shall construct one residential house in India. If for any reason, the assessee could not appropriate the capital gain for purchase of new asset within one year before the date on which the transfer is originally took place or which is not utilised in purchase of new asset before the due date for filing the return of income under Section 139 of the Act, shall deposit in the appropriate account before the due date for filing return of income under Section 139(1) of the Act. Therefore, the Parliament in their wisdom does not provide any condition for filing of return of income before the due date provided under Section 139(1) of the Act. Wherever the Parliament feels that return has to be filed under Section 139(1) of the Act, they are so specific for the purpose of claiming benefit under that scheme. For the purpose of deduction under Section 54F of the Act, the Parliament specifically omitted to say that return of income has to be filed under Section 139(1) of the Act. Therefore, the observation of the Assessing Officer to reject the claim of the assessee is not justified. Now the assessee along with other co-owners, has invested in the very same property. This Tribunal in the case of Shri S. Sathyamurthy, one of the co-owners, also found that the assessee is eligible for deduction under Section 54F of the Act and the Assessing Officer was directed accordingly. In view of the decision of the co-ordinate Bench of this Tribunal, the present assessee is also eligible for deduction under Section 54F of the Act. Accordingly, the orders of both the authorities below are set aside.

Summary

Issues:
1. Reopening of assessment.
2. Determination of sale consideration.
3. Claim of deduction under Section 54F of the Income-tax Act.

Reopening of Assessment:
The appeal addressed the issue of the reopening of assessment for the assessment year 2008-09. The Assessing Officer had issued a notice under Section 148 of the Income-tax Act based on the sale deed registered, as the assessee had not filed a return of income. The Tribunal confirmed the reopening, stating that the Assessing Officer had validly reopened the assessment.

Determination of Sale Consideration:
The next issue concerned the determination of the sale consideration. The Assessing Officer had taken ?30 lakhs as the sale consideration, but the assessee argued that the correct amount was ?25 lakhs, as found in a related case involving another co-owner. The Tribunal agreed with the assessee, directing the Assessing Officer to compute the capital gains based on the 1/5th share of ?25 lakhs as the sale consideration.

Claim of Deduction under Section 54F:
The final issue revolved around the claim of deduction under Section 54F of the Act. The assessee, along with another co-owner, had invested in a property. The Tribunal referred to the provisions of Section 54F, highlighting that the section does not mandate filing the return of income before the due date under Section 139(1) of the Act. The Tribunal emphasized that the Parliament did not specify such a condition for claiming deduction under Section 54F. Based on a previous decision involving a co-owner, the Tribunal ruled that the present assessee was eligible for deduction under Section 54F. Consequently, the orders of the lower authorities were set aside, and the appeal by the assessee was allowed.

In conclusion, the Tribunal's judgment addressed the issues of reopening assessment, determination of sale consideration, and the claim of deduction under Section 54F, providing detailed analysis and legal reasoning for each issue, ultimately ruling in favor of the assessee on all counts.