TMI Blog2017 (7) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant : Shri T. Banusekar, CA For The Respondent : Shri A.V. Sreekanth, JCIT ORDER PER G. PAVAN KUMAR, JUDICIAL MEMBER: The assessee filed appeal against the order of Commissioner of Income Tax (Appeals)-2, in ITA No. 447/13-14 dated 25.02.2015 passed u/s. 143(3) and 250 of the Income Tax Act. 2. The assessee has raised the following grounds: 2.1 For that the Commissioner of Income Tax (Appeals) failed to appreciate that the order of the Assessing Officer is without jurisdiction. 2.2 For that the Commissioner of Income Tax (Appeals) erred in confirming the disallowance of exemption u/s.54 -to the extent of RS.24,10,000/- being construction cost of building in the first floor and exemption Ills 54E of ₹ 40,46,115/- being cost of purchase of residential property claimed by the appellant. 2.3 For that the Commissioner of Income Tax (Appeals) failed to appreciate that the appellant had sold residential building measuring 1400 sq.ft. with the land appurtenant thereto as well as the balance portion of land measuring 21 cents and hence eligible for claiming exemption both u/s.5.4 on sale of residential building and u/s.54F on sale of balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ₹ 3,24,55,000/- and assessee's share has been worked out to ₹ 1,62,27,500/-. Further, the assessee has incurred legal expenditure on the property and the net consideration received by the assessee is ₹ 1,36,02,500/-. The assessee after considering the indexed cost acquisition of land has worked out the long term capital gains of ₹ 1,10,96,255/- and further the assessee has claimed the exemption by purchasing two residential houses for ₹ 44,10,000/- and 49,60,000/- The assessee explained the facts through letter dated 18.12.2013 as referred by the Assessing Officer that the assessee has purchased a residential House property on 01.07.2011 for a sum of ₹ 44,10,000/- and also incurred expenditure of ₹ 24,10,000/- in respect of additional works on the first floor of the property before the date of sale and claimed exemption u/s. 54 of the Act of ₹ 68,20,000/- and the assessee has purchased a residential villa measuring 1500 sq.ft. on four cents of land from Sri K. Achuthan, and total payments including the stamp registration charges and additional works on a villa was worked out to ₹ 49,60,000/-. The Assessing Officer ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al with the CIT(A). In the appellate proceedings the Ld. AR argued the grounds and reiterated the submissions made by the Assessing Officer. The assessee also filed the additional ground before the CIT(A) referred at Para 3 of the order. The Ld. CIT(A) on perusal of the findings of the Assessing Officer and the submissions made by the assessee in the assessment proceedings dealt on the disputed issues and confirmed the action of the Assessing Officer and dismissed the assessee's appeal. 5. Aggrieved by the order of CIT(A), the assessee has filed an appeal before the Tribunal. Before us, the Ld. AR argued the grounds and substantiated his submissions by filing paper book and additional evidence under Rule 29 of the ITAT Rules along with judicial decisions. Further, Ld. AR explained that the Assessing Officer has denied exemption u/s. 54 of the Act on the additional cost of construction of ₹ 24,10,000/- incurred on the first floor of the building. The Ld. AO also has denied claim of exemption u/s. 54F of the Act ₹ 40,46,115/-. On cost of construction of residential villa and the CIT(A) has confirmed the action and not considered the basic facts that the assessee al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dated 22.12.2011 explaining the construction of the first floor area and the cost of construction worked out to ₹ 24 lakhs for 1500 sq.ft. and also filed copy of affidavit supporting the constructing on the first floor of the property. The Ld. AR emphasized that the assessee with due compliance of law has obtained permission from the earlier owners and made construction on the first floor and supported with these material papers. Similarly, the assessee purchased a residential villa by registered sale deed dated 21.03.2011 from the power of attorney holder referred at Page 36 to 49 of the paper book and claimed exemption u/s. 54F on apparent land sold along with the building. The Ld. AR argued that the assessee is eligible for exemption u/s. 54 and 54F of the Act or total exemption u/s. 54 of the Act to be allowed and supported his arguments with the case laws: 1. B. Sivasubramanian v ITO in ITA No. 1/Mds/2013 dated 12.03.2014 2. CIT v Anr V D Ananda Basappa [2009] 309 ITR 329 (Kar) 3. CIT Anr v Smt. K. G. Rukminiamma [2011] 331 ITR 211 (Kar) 4. CIT v Gita Duggal [2013] 257 CTR (Delhi) 208 5. CIT v Syed Alo Adi [2012] 83 CCH 240 (AP) 6. CIT v V.R. Karpag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment as additional evidence as and prayed that the assessee is also eligible for claim of exemption u/s. 54F in respect of investments in villa property. The Ld. DR objected to the additional evidence filed as per the ITAT Rules and argued that these additional evidences was not available before the Assessing Officer in the assessment proceedings and was deprived to verify and examine the genuineness of material and prayed for an opportunity to be provided to the Assessing Officer to verify the documents. 7. We found that there is strength in the submissions of the Ld. AR and the assessee filed petition under Rule 29 of the ITAT Rules for admitting the additional evidence having valuable impact on the assessment of the assessee. Further, there is no dispute on the sale and purchase of the property but only on the claim of exemption by the assessee and additional construction cost. We are of the opinion that the Assessing Officer shall be provided an opportunity to verify these additional evidences and comply the provisions of Rule 46A of IT Rules. In the interest of justice, we remit the disputed issue to the file of the Assessing Officer to verify and examine the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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