Case Law Details
Deputy Commissioner of Income Tax Vs Shri Sudhakar (ITAT Chennai)
Facts in the impugned order are that the assessee sold an immovable property on 06.06.2014 to M/s. Chellamal Educational Society for a total sale consideration of ₹.5,16,54,000/-. The assessee has computed the long term capital gains towards sale of property and claimed exemption under section 54F of the Act by reinvesting the capital gains by entering into an agreement with M/s. Mantri Technology Constellations Private Limited on 06.09.2013 for purchase of residential house. The Assessing Officer, during the course of assessment proceedings, denied the claim of exemption under section 54F of the Act on the ground that at the time of reinvestment of capital gains, the assessee was owner of more than one house property. According to the Assessing Officer, the property at RMO quarters is a residential property and apart from that the assessee was having one more property and thus, not entitled for deduction under section 54F of the Act. The Assessing Officer has disregarded the claim of the assessee that the property at RMO quarters is a commercial property and used for business of M/s. S.P. Hospital on the basis of report of Inspector that the said property is a residential property. Before the ld. CIT(A), the assessee has filed certain additional evidences including financial statements of M/s. S.P. Hospital and argued that the property at RMO quarters is owned by the hospital and not by the assessee and used for hospital, which is commercial property and cannot be considered as residential property to deny the claim of deduction under section 54F of the Act. The ld. CIT(A), by accepting the additional evidences filed by the assessee, allowed relief to the assessee on the ground that the property at RMO quarters is a commercial property and hence the same cannot be considered as a residential house to deny the benefit to the assessee.
In this background, if it is examined the case of the assessee, we find that the reasons given by the Assessing Officer was based on the report of the Inspector to deny the benefit under section 54F of the Act, whereas, the assessee was claiming it as commercial property. But, when enquiry was conducted, it was ascertained that the property is a residential house and further, it is in the name of the assessee and his wife, but not in the name of the partner’s firm. On the other hand, the ld. AR of the assessee has submitted that the property is owned by M/s. S.P. Hospital on the basis of certain additional evidences including financial statement of the firm. There are contradictory facts, one side the assessee claims that the property is owned by the firm, whereas, documentary evidence shows that the property is owned by the assessee and his wife as submitted by the Inspector. Therefore, we are of the considered opinion that the issue needs to go back to the Assessing Officer for further verification to ascertain the nature of the property and ownership of the property. In fact, the assessee, through his Cross Objection has raised a ground that the Assessing Officer has not given sufficient time to justify his case with necessary evidences. Hence, we set aside the issue to the file of the Assessing Officer and direct the Assessing Officer to cause necessary enquiries on the additional evidences filed by the assessee to ascertain the nature of the property. In case, the Assessing Officer finds that if the property is accounted in the books of firm M/s. S.P. Hospital as a commercial property and the property is used for the purpose of hospital, then the Assessing Officer is directed to allow deduction under section 54F of the Act.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) 14, Chennai, dated 23.01.2020 relevant to the assessment year 2015-16. The Revenue has raised the following grounds:
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