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TMI Blog2020 (10) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... d appellant herein, completed the assessment under Section 143(1) of the Act by intimation dated 29.06.2015. Aggrieved by such order, the assessee filed a petition under Section 264 of the Act before the Principal Commissioner of Income Tax, Chennai claiming that additional cost of construction to the tune of Rs. 1,02,13,527/- as deduction under Section 54 of the Act, ought to have been allowed. The said petition was rejected by order dated 08.03.2018 holding that assessee had deposited only Rs. 1.50 Crores in the capital gain deposit account with State Bank of India, only this amount is eligible for deduction under Section 54 of the Act and any amount, even if it is spent for construction of property, cannot be considered for deduction under Section 54 of the Act because the amount was not the amount from the deposit in the capital gain account. The said order passed by the first appellant was put to challenge by the respondent by filing a Writ Petition. 3. The assessee primarily placed his case on the decision of High Court of Karnataka in the case of Commissioner of Income Tax Vs. Shri.K.Ramachandra Rao in I.T.A.No.47 of 2014 dated 14.07.2014. In the said decision, it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit. 7. The revenue sought to distinguish the decision in the case of K.Ramachandra Rao on facts and relied upon the decision of the Hon'ble Supreme Court in Commissioner of Customs V. Dilip Kumar reported in 2018 SCC online SC 747 and submitted that exemption provision under Section 54(2) requires to be strictly interpreted. 8. The asessee filed a reply affidavit to the counter affidavit filed by the revenue among other things, assessee contended that even in the assessee's individual case, the Tribunal by order dated 24.01.2019 on similar facts, granted relief, interfered with the order passed by the assessing officer and directed the assessing officer to re-examine all the documents and this order covers 75% of the transaction and therefore, it should apply to the balance 25% of the transaction, which is in the hands of HUF, the respondent / Writ Petitioner. Therefore, the assessee contended that the order passed by the 1st appellant should be set aside and the assessing officer should be directed to re-examine the cost overrun submissions. 9. The learned Single Judge considering the contentions placed before it, discussed about Section 54 of the Act and after noting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54F proportionately to amount invested. 13. Mr.Prabhu Mukunth Arunkumar, learned counsel for the appellant / department submitted that in the decision Humayun Suleman Merchant, the Court noted the decision in K.Ramachandra Rao and observed as to how the decision was rendered sub-silentio because no argument was made with regard to the requirement of deposit in the notified bank account in terms of Section 54F(4) of the Act before the due date as provided in Section 139(1) of the Act. In this regard, the learned counsel has referred to the following paragraphs of the said decision : 6. (o) Mr. Chatterji, learned Senior Counsel next submitted that in any case the issue now stands concluded in favour of the Appellant by the decision of the Karnataka High Court in K. Ramachandra Rao's case (supra) wherein an identical question came up for consideration and it was held that even where the assessee had not deposited the unutilized Capital Gain in an account which was duly notified by the Central Government in terms of Section 54F(4) of the Act, the benefit of Section 54F(1) of the Act would still be available. The Court held that if the intention was not to retain the capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-silentio are not material'; and Twisden J agreed : 'precedents sub-silentio and without argument are of no moment'. This rule has ever since been followed." 14. Mr.Abdul Ravoof, learned counsel appearing for the respondent / assessee argued to sustain the impugned order and would submit that the Writ Appeal filed by the revenue has become infructuous owing to the fact that the 1st appellant has passed an order under Section 264(7) of the Act dated 20.02.2020 and granted relief to the assessee. Therefore, it is submitted that the Writ Appeal may be dismissed as infructuous and the order passed by 1st appellant dated 20.02.2020 shall be directed to be given effect to. 15. Mr.Prabhu Mukunth Arunkumar, learned standing counsel for the appellant on the other hand, would contend that at the time when the appeal was entertained, the Division Bench of this Court has recorded that the revenue has made out a prima facie case, granted interim stay on 18.03.2020. Further more, because of the order of stay, the order passed by the 1st appellant dated 20.02.2020 has not been given effect to. Further, it is submitted that the decision of K.R.Ramachandra Rao, does not lay down t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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