9911796707
TMI Blog2019 (7) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the Act), is directed against the order dated 26.6.2018 in ITA.No.1619/Chny/2017 on the file of the Income Tax Appellate Tribunal, Chennai 'B' Bench for the assessment year 2014-15. 3. The Revenue has filed this appeal by raising the following substantial questions of law : "i. Whether the Appellate Tribunal is correct in law in holding that the assessee is eligible to claim deduction under Section 54F of the Income Tax Act, when the property sold at Bangalore was only a depot/godown/storage place and not an industrial undertaking ? ii. Whether the Appellate Tribunal was justified in directing the Assessing Officer to grant deduction under Section 54G of the Act with respect to the long term capital gain earned by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee sold an explosive godown/property at Bangalore and invested in a property located in a non urban area i.e in the outskirts of Sivakasi town. 6. The Assessing Officer, while completing the assessment, vide order dated 31.12.2016, under Section 143(3) read with Section 153A of the Act, opined that the property sold by the assessee was only a godown and used for storing fireworks and that it could not be interpreted to mean an 'industrial undertaking'. Accordingly, the claim for deduction under Section 54G was disallowed and an amount of Rs. 50,36,72,654/- was assessed under the head 'capital gains'. 7. As against the order of assessment dated 31.12.2016, the assessee carried the matter on appeal before the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual position was not in dispute. The Revenue is on appeal before us challenging such finding. 9. In our considered view, the Assessing Officer failed to take note of the vital factor namely that the property, which was sold by the assessee in Bangalore, was a 'magazine'. Rule 2(31) of the Explosives Rules, 2008 defines the word 'magazine' to mean a building or structure (other than an explosives manufacturing building) intended for storage of explosives, specially constructed in accordance with the specification provided under these Rules or of a design and approved by the Chief Controller. The expression 'Chief Controller' is defined under Rule 2(9) of the Explosives Rules, 2008 to mean the Chief Controller of Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an area. The second limb of Section 54G(1) of the Act is what had weighed in the mind of the Assessing Officer while denying the deduction under Section 54G of the Act. However, what was important to note is that where the capital gains arising from transfer of capital asset, being machinery or plant or land or building used for the purposes of business of an industrial undertaking situated in an urban area effected in the course of or in consequence of the shifting of such industrial undertaking to any area other than an urban area, the assessee is entitled to the benefit of deduction under Section 54G of the Act. 12. The scheme of the Explosives Act and the relevant Rules framed thereunder would clearly bring a 'magazine', which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
