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2016 (3) TMI 43 - ITAT CHENNAI

2016 (3) TMI 43 - ITAT CHENNAI - TMI - Reopening of assessment - eligibility of deduction u/s 54F - Held that:- As held by the Supreme Court in the case of Sun Engineering Works P. Ltd (1992 (9) TMI 1 - SUPREME Court ), the re-assessment proceedings is for bringing to tax item which are escaped assessment, it would be open to an assessee to put forward claims for deduction of any expenditure in respect of that income or the non-taxability of the items at all. Keeping in view of the object and pu .....

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atable to the item sought to be taxed has escaped assessment. Even in cases, where the claims of the assessee during the course of re-assessment proceedings relating to the escaped assessment are accepted, still the allowance has to be limited to the extent to which they reduce the income to that originally assessed. The income for the purpose of re-assessment cannot be reduced from the income originally assessed. Being so, in our opinion, the claim of the assessee with regard to the cost of imp .....

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ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For The Appellant : Shri T Banusekar, CA For The Respondent : Shri P Radhakrishnan, JCIT ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-5, Chennai, dated 19.3.2015 for assessment year 2007-08. 2. The assessee has raised the following grounds: 1. For that the order of the Commissioner of Income Tax (Appeals) is contrary to law, fact .....

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oner of Income Tax (Appeals) erred in denying appellant's claim of the indexed cost of acquisition of ₹ 20,40,794/- and deduction u/s.54F of RS.35,00,000/-. 5. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the appellant had rightfully claimed the additional indexed cost of improvement and additional investments in property while calculating capital gains. 6. For that the Commissioner of Income Tax (Appeals) erred in stating that the additional claim as an .....

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s 143(1) of the Act. The scrutiny assessment was completed u/s 143(3) read with sec.147 of the Act on 19.12.2011 determining the total income at 26,81,437/- which includes Long Term Capital Gain of .26,82,399/-. Consequent to the completion of assessment proceedings/ penalty proceedings u/s 271(1)(c) of the Act were initiated and a sum of 6,01,714/- was levied u/s 271(1)(c) of the Act on 22.06.2012. 4.1 Subsequently notice u/s 148 of the Act was issued on 31.10.2012. In response, the assessee fi .....

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4.2 During the course of assessment proceedings, the Assessing Officer found that the total consideration received by the assessee was ₹ 97,51,112/- as compensation for compulsory acquisition of his property by the National Highways Authority of India. In the revised return filed/ the assessee worked out the Long Term Capital Gain at ₹ 42,10,318/- after deducting indexed cost of acquisition of ₹ 20,40,794/- and claiming deduction of 35,00,000/- u/s 54F of the Act as against th .....

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tor to the effect that construction work was carried out from March 2006 to October 2007 for construction of 6000 sq.ft. of building. 4.3 Not convinced with the reply of the assessee, the Assessing Officer was of the opinion that the fresh claim of deduction is not allowable as the proceedings u/s 148 of the Act cannot be used to make fresh claim of expenditure/deduction. The Assessing Officer is also of the view that the new claims are only an afterthought with an intent to reduce Long Term Cap .....

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a Economica De Goa210 ITR 719(Bom). 3.Chettinad Cement Corporation Pvt. Limited 147 ITR 57 (Mad) & 200 ITR 320(SC). The Assessing Officer rejected the arguments of the assessee and disallowed the claim of cost of improvements and additional investment in the new property. Thus the Assessing Officer worked out the Long Term Capital Gain at 67,59,827/- against the admitted LTCG of 42,10,318/-. On appeal, the CIT(A) confirmed the action of the Assessing Officer against which the assessee is in .....

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ents of Supreme Court in the case of CIT vs Sun Engineering Works Pvt. Ltd, 198 ITR 297, Chettinad Cement Corporation Pvt. Ltd 200 ITR 320 also support the claim of the assessee. 6. On the other hand, the ld. Departmental Representative strongly opposed the claim of the assessee by stating that the provisions of sec. 148 is for the benefit of the Department. Whenever the assessment is reopened, the intention is to bring the escaped income for taxation and not to give any relief to the assessee. .....

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