Y.Jaganmohan, CHENNAI v. ACIT, CHENNAI

ITA 1564/CHNY/2010 | 2004-2005
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 156421714 RSA 2010
Assessee PAN AADPJ3964D
Bench Chennai
Appeal Number ITA 1564/CHNY/2010
Duration Of Justice 10 month(s) 5 day(s)
Appellant Y.Jaganmohan, CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 22-07-2011
Date Of Final Hearing 18-07-2011
Next Hearing Date 18-07-2011
Assessment Year 2004-2005
Appeal Filed On 17-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER) .. I.T.A. NO. 1564/MDS/2010 ASSESSMENT YEAR : 2004-05 SHRI Y. JAGANMOHAN T-48 8 TH STREET ANNA NAGAR CHENNAI 600 040. PAN : AADPJ3964D (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE IV(3) CHENNAI 600 034. (RESPONDENT) I.T.A. NO. 2041/MDS/2010 ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE IV(3) CHENNAI 600 034. (APPELLANT) V. SHRI Y. JAGANMOHAN T-48 8 TH STREET ANNA NAGAR CHENNAI 600 040. (RESPONDENT) ASSESSEE BY : SHRI T. BANUSEKAR REVENUE BY : SHRI P.B. SEKARAN CIT - DR O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : THESE ARE CROSS APPEALS FILED BY ASSESSEE AND REVE NUE RESPECTIVELY. BOTH ARE AGAINST THE ORDER DATED 24. 08.2010 OF THE I.T.A. NO. 1564/MDS/10 I.T.A. NO. 2041/MDS/10 2 COMMISSIONER OF INCOME TAX (APPEALS)-V CHENNAI FO R ASSESSMENT YEAR 2004-05. ASSESSEE HAS TAKEN SEVEN GROUNDS OUT OF WHICH GROUND NOS.1 AND 7 ARE GENERAL. EFFECTIVE GROUNDS 2 TO 6 ARE REPRODUCED HEREUNDER:- 2. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) F AILED TO APPRECIATE THAT THE ORDER OF THE ASSESSING OFFIC ER IS WITHOUT JURISDICTION. 3. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN CANCELING THE RENTAL INCOME OF RS.75 000/- TREAT ED AS INCOME FROM HOUSE PROPERTY. 4. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN ALLOWING CONSULTANCY CHARGES PAID BY THE APPELLANT OF RS.45 LAKHS AS ALLOWABLE DEDUCTION IN CONNECTION WI TH THE TRANSFER OF PROPERTY. 5. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) E RRED IN DISALLOWING THE CLAIM OF EXEMPTION U/S.54EC AGAI NST THE LONG TERM CAPITAL GAINS. 6. FOR THAT THE COMMISSIONER OF INCOME TAX (APPEALS) F AILED TO APPRECIATE THAT THE EXEMPTION U/S.54EC IS ALLOWA BLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. REVENUE HAS RAISED FOUR GROUNDS OUT OF WHICH GROUN D NOS. 1 AND 4 ARE GENERAL. EFFECTIVE GROUNDS 2 AND 3 ARE REPRODU CED HEREUNDER:- 2.1 THE LEARNED CIT(A) HAS ERRED IN CANCELING THE TREAT MENT OF RS.75 000 AS INCOME FROM HOUSE PROPERTY RELYING ON THE ORDER OF THE ITAT IN I.T.A. NO. 199/MDS/09. 2.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE HO N'BLE TRIBUNAL IN THE SAID ORDER INFACT UPHELD THE CITS ACTION OF I.T.A. NO. 1564/MDS/10 I.T.A. NO. 2041/MDS/10 3 REMITTING THE ISSUE OF INCOME FROM HOUSE PROPERTY TO THE ASSESSING OFFICER. 3.1 THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE DEDUCT ION OF RS.45 LAKHS AS EXPENDITURE TOWARDS TRANSFER OF PROP ERTY RELYING ON THE ORDER OF THE ITAT IN I.T.A. NO. 199/MDS/09. 3.2 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE HO N'BLE TRIBUNAL HAD IN FACT UPHELD THE CITS ACTION U/S 26 3 OF DIRECTING THE A.O. TO WITHDRAW THE DEDUCTION. 2. THE GRIEVANCE OF THE ASSESSEE AND REVENUE ARE RE GARDING RENTAL INCOME FROM HOUSE PROPERTY ALLOWANCE OF CON SULTANCY CHARGES OF ` 45 LAKHS IN COMPUTING CAPITAL GAINS AND DISALLOWAN CE OF CLAIM OF EXEMPTION UNDER SECTION 54EC OF INCOME-TAX ACT 196 1 (IN SHORT THE ACT). 3. THE APPEALS HAVE BEEN FILED AGAINST ORDER OF LD. CIT(APPEALS) ARISING OUT OF AN ASSESSMENT DONE IN PURSUANCE OF D IRECTION OF CIT UNDER SECTION 263 OF THE ACT. AGAINST THE ORDER OF COMMISSIONER UNDER SECTION 263 OF THE ACT ASSESSEE HAD MOVED IN APPEAL BEFORE THIS TRIBUNAL EARLIER. IT IS NOTED THAT THE CIT IN HIS ORDER UNDER SECTION 263 OF THE ACT HAD REQUIRED RE-EXAMINATION OF THE RENTAL INCOME OF ` 75 000/- AND ALSO DIRECTED THE A.O. TO WITHDRAW DED UCTION OF ` 45 LAKHS ALLOWED AS CONSULTANCY CHARGES AND ALSO TO WI THDRAW DEDUCTION I.T.A. NO. 1564/MDS/10 I.T.A. NO. 2041/MDS/10 4 UNDER SECTION 54EC OF THE ACT OF ` 7 CRORES. IN COMPLIANCE OF THIS ORDER OF LD. CIT ASSESSING OFFICER HAD PASSED ORDE R OF ASSESSMENT. MEANWHILE IN THE APPEAL OF THE ASSESSEE AGAINST TH E ORDER UNDER SECTION 263 OF THE ACT THIS TRIBUNAL HAD UPHELD TH E ACTION OF CIT ON THE ISSUES RELATING TO RENTAL INCOME AND DEDUCTION OF CLAIM FOR CONSULTANCY CHARGES. BUT ON THE ASPECT OF CLAIM OF DEDUCTION UNDER SECTION 54EC OF THE ACT IT HELD IN FAVOUR OF ASSES SEE. IN OTHER WORDS EXCEPT FOR THE DEDUCTION CLAIMED UNDER SECTI ON 54EC OF THE ACT ON THE OTHER TWO ASPECTS THE VIEW OF LD. CIT WAS UPHELD BY THE TRIBUNAL. SINCE THE ASSESSING OFFICER HAD REDONE T HE ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS OF CIT UNDER SECTION 263 OF THE ACT BEFORE THE TRIBUNAL ORDER HAD COME ASSESSEE MOVED IN APPEAL BEFORE LD. CIT(APPEALS). LD. CIT(APPEALS) HAD ON S UCH APPEAL OF THE ASSESSEE HAD INITIALLY HELD THAT THE RENTAL INCOME OF ` 75 000/- COULD NOT BE INCLUDED IN THE INCOME OF THE PETITIONER AND DEDUCTION CLAIMED ON CONSULTANCY CHARGES WAS TO BE ALLOWED. THE CIT( APPEALS) HOWEVER DISALLOWED THE CLAIM OF THE ASSESSEE WITH REGARD TO DEDUCTION UNDER SECTION 54EC OF THE ACT. LATER LD . CIT(APPEALS) ON A PETITION FILED BY THE ASSESSEE UNDER SECTION 154 OF THE ACT PASSED I.T.A. NO. 1564/MDS/10 I.T.A. NO. 2041/MDS/10 5 AN ORDER OF RECTIFICATION ON 5.5.2011 WHEREBY HE RE CTIFIED THE MISTAKE IN APPRECIATING THE ORDER OF THIS TRIBUNAL ON THE APPEAL OF THE ASSESSEE AGAINST THE ORDER UNDER SECTION 263 OF THE COMMISSIONER. ACCORDINGLY HE HELD THAT RENTAL INCOME OF ` 75 000/- HAD TO BE INCLUDED IN THE INCOME OF THE PETITIONER DEDUCTION OF CONSULTANCY CHARGES COULD NOT BE ALLOWED TO THE ASSESSEE WHERE AS DEDUCTION OF ` 7 CRORES UNDER SECTION 54EC OF THE ACT HAD TO BE A LLOWED. 4. NOW BOTH THE PARTIES BEFORE US ARE IN AGREEMENT THAT IN VIEW OF THE RECTIFICATION ORDER DATED 5.5.2011 PLACED BEFOR E US THE APPEALS HAVE BECOME INFRUCTUOUS. IN SO FAR AS ASSESSEES A PPEAL IS CONCERNED THERE WAS A CLEAR FINDING BY THE TRIBUNA L THAT RENTAL INCOME HAD TO BE INCLUDED AS INCOME OF THE PETITION ER AND CLAIM OF CONSULTANCY CHARGES OF ` 45 LAKHS COULD NOT BE ALLOWED WHILE COMPUTING THE CAPITAL GAINS OF THE PROPERTY. SIMIL ARLY IN SO FAR AS CLAIM OF DEDUCTION UNDER SECTION 54EC OF THE ACT WA S CONCERNED THERE WAS A FINDING THAT THIS WAS CORRECTLY ALLOWED BY THE A.O. ORIGINALLY AFTER PROPER EXAMINATION OF THE RECORDS. HENCE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDE R OF LD. I.T.A. NO. 1564/MDS/10 I.T.A. NO. 2041/MDS/10 6 CIT(APPEALS) SINCE HE HAS ALREADY RECTIFIED THE ERR ORS THEREIN BY HIS ORDER DATED 5.5.2011 UNDER SECTION 154 OF THE ACT. 5. IN THE RESULT BOTH THE APPEALS FILED BY ASSESSE E AND REVENUE ARE DISMISSED AS INFRUCTUOUS. THE ORDER WAS PRONOUNCED IN THE COURT ON 22 ND JULY 2011. SD/- SD/- (U.B.S. BEDI) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 22 ND JULY 2011. KRI. COPY TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A)-V CHENNAI-34 (4) CIT CHENNAI-III CHENNAI (5) D.R. (6) GUARD FILE