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TMI Blog2019 (6) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... ch bar imposed statutorily in the Act. Both the sections only speak about investment in new property, a fact on which there is no dispute. There is no double claim on the same investment as the assessee has claimed the balance/spill over investment in the new flat as deduction u/s 54F. CIT(A) has rightly directed the AO to allow deduction u/s 54EC and also to compute eligible deduction u/s 54F on the balance investment in the flat/apartment and allow the same while computing long-term capital gains arising on the sale of impugned land capital asset. So far as the fresh claim u/s 54F is concerned, the objection of the AO that the assessee has not made such claim of deduction in the original return of income. Since various Courts have held that the appellate authorities have conferred upon the power to adjudicate and allow the legitimate claim, which was not claimed in the original return of income, the claim u/s 54F admitted by the ld. CIT(A) cannot be held as illegal. - Decided against revenue. - I.T.A. No. 628/Chny/2017 - - - Dated:- 25-4-2019 - Shri A. Mohan Alankamony, Accountant Member And Shri Duvvuru RL Reddy, Judicial Member For the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on sale of property at Muttukadu, ECR of ₹.9,79,72,382/- to M/s. VGN Developers Pvt. Ltd. The assessee has claimed deduction under section 54 and 54EC of the Income Tax Act, 1961 [ Act in short] to the tune of ₹.5,76,25,701/- and ₹. 50,00,000/- and the remaining amount of ₹. 3,53,46,681/- has been declared as capital gain. The case was selected for scrutiny and notice under section 143(2) of the Act was issued. After verification of details furnished against statutory notices, the assessment under section 143(3) of the Act was completed on 11.02.2016 determining the total income at ₹. 8,58,36,728/- after making disallowance under section 54 of the Act to the tune of ₹.4,93,94,256/-. 3. The assessee carried the matter in appeal before the ld. CIT(A). After considering the written submissions of the assessee and facts of the case, the ld. CIT(A) directed the Assessing Officer to allow deduction of ₹.50,00,000/- under section 54EC of the Act and also to compute eligible deduction under section 54F of the Act on the balance investment in the flat/apartment and allow the same while computing long term capital gains arising on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and claimed deduction under section 54EC of the Act. 6.1 By the registered documents No.P154/89, dated 6.10.1989 1840 dated 25.7.1990, SRO, Tirupporur, the assessee became the owner of the property located at Muttukadu, ECR. The total extent of land comprised in the property was 1.23 acres (53,579 sq.ft) and thereafter the assessee constructed a building to the extent of 1.512 sq. ft. along with the first floor to the extent of 1,015 sq. ft. The assessee has submitted that the residential house consists of swimming pool to the extent of 740 sq. ft. drive way from the main thoroughfare of 3,610 sq. ft. After examining the sale document, the Assessing Officer observed that as per Annexure A, only 850 sq. ft. of ground floor and 687 sq. ft. of first floor belongs to Smt. Ramanl Joseph.The other building to the extent of 468 sq. ft. belongs to Shri Binoy Jospeh, brother in law of the assessee. The assessee has considered the whole property as residential unit along with land appurtenant thereto and claimed exemption under section 54 and 54EC of the Act. 6.2 The Assessing Officer was of the opinion that as per the provision contained in section 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain on sale of land of ₹. 8,47,40,937/- in the hands of the assessee. 6.5 On appeal, against the claim of deduction under section 54 and 54EC of the Act of the gains arising from the sale of the house property along with land appurtenant thereto as well as alternate claim of deduction under section 54 as also 54F of the Act, the ld. CIT(A) has observed that the assessee sold the impugned land along with a residential house property for a consideration of ₹.10,67,72,265/-. Out of the sale consideration the assessee invested ₹.5,76,25,701/- on purchase of a residential apartment at Chennai thereby availing the deduction under section 54 and the balance of ₹.50,00,000/- in REC capital bonds thereby availing deduction offered under section 54EC of the Act. The reasons for taking such a view have been discussed in the orders of authorities below. In this case, the assessee sold a single property being a house property along with land appurtenant thereto on a single sale deed and received a single payment for the impugned sale. So irrespective of whether it is to be considered as sale proceeds of the house property and land appurt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer rejected the claim of deduction under section 54F on the ground that no such claim was made in the return of income. The ld. CIT(A) was of the opinion that this premise is not wholly correct as the assessee of its own accord had made a claim u/s 54E in the return of income. It did not foresee that the Assessing Officer would not be convinced with the claim. The claim u/s 54F therefore originated only during the course of assessment proceedings during which the Assessing Officer treated only part of the land as appurtenant to the building. The Assessing Officer made the disallowance following the Kerala High Court decision in the case of Asha George [2013] 30 taxmann.com 334. Even if such decision is accepted, the assessee cannot be denied of the deduction claimed under section 54F to which it is entitled, as long as there is no dispute on the investment in new asset. 6.8 Further, the ld. CIT(A) observed that the proposition of the Assessing Officer that both the deductions, u/s 54 and 54F cannot be given on the same property is bereft of merit as there is no such bar imposed statutorily in the Act. Both the sections only speak about investment in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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