Https://Hcservices.ecourts.gov.in/Hcservices v. "Whether In The Facts And Circumstances Of The Case, Thetribunal Was Right In Holding That Improvement Of Residentialproperty Also Would Be Eligible For The Ben

In the High Court of Judicature at Madras Dated : 18.09.2007 Coram : The Honourable Mr.Justice K.RAVIRAJA PANDIANandThe Honourable Mrs.Justice CHITRA VENKATARAMAN Tax Case (Appeal) No.1254 of 2007 Commissioner of Income TaxChennai .. AppellantVs Mr.B.Tiburtius18, R.K.Nagar, II Cross St.,ThiruvanmiyurChennai – 41. .. Respondent TAX CASE (APPEAL) under Section 260A of the Income Tax Act againstthe order of the Income Tax Appellate Tribunal Madras 'A' Bench dated20.4.2007 made in I.T.A.No.795/Mds/2003 for the assessment year 1998-99From the Commissioner of Income Tax (Appeal) Chennai in ITA.No.57/2002-2003 of 21.01.2003 and against the Assessment order of Company Circle IV(3) Chennai dated 15.03.2002 in PAN.No./G.I.No.AAAPT3336-N/MT+1A. For Appellant : Mr.J.Nareshkumar JUDGMENT JUDGMENT OF THE COURT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J The appeal is filed against the order of the Income Tax AppellateTribunal Madras 'A' Bench dated 20.4.2007 made in I.T.A.No.795/Mds/2003for the assessment year 1998-99. 2. The assessee is an individual. For the relevant assessment year,the assessee filed income tax return and claimed deduction under Section54F on purchase of house property during the financial year relevant tothe assessment year 1997-98 and the same was allowed by the Department. https://hcservices.ecourts.gov.in/hcservices/ Subsequently, for the instant assessment year, the assessee claimeddeduction under Section 54F for an amount of Rs.8,01,055/- being theamount spent towards repairs i.e., improvement of the house purchasedduring the earlier previous year. The assessing officer disallowed theclaim of the assessee. Aggrieved by the order of the assessing officer,the assessee filed an appeal before the Commissioner of Income-tax(Appeals). The Commissioner of Income-tax (Appeals) allowed the claim ofthe assessee following the decision of the Madras High Court in the caseof COMMISSIONER OF INCOME-TAX VS. P.V.NARASIMHAN (1989) 47 TAXMAN 89 = 181ITR 101. Aggrieved by the order of the Commissioner of Income-tax(Appeals), the revenue filed appeal before the Income-tax AppellateTribunal The Income-tax Appellate Tribunal relying upon the decision ofthis Court in the case of COMMISSIONER OF INCOME-TAX VS. P.V.NARASIMHAN(1989) 47 TAXMAN 89 = 181 ITR 101 upheld the order of the Commissioner ofIncome-tax (Appeals) and dismissed the appeal of the Department. Thecorrectness of the said order is canvassed by the revenue in this appealby formulating the following questions of law: "Whether in the facts and circumstances of the case, theTribunal was right in holding that improvement of residentialproperty also would be eligible for the benefit of Section 54Fof the Income-tax Act?" 3. Learned counsel appearing for the revenue submitted that in thefacts and circumstances of the case the invocation of Section 54-F of theIncome-tax Act is not applicable to the facts of the present case. Theassessee has only improved the assets purchased arising out of the capitalgain, which is not contemplated under Section 54F of the Income-tax Act. 4. We heard the argument of the learned counsel for the revenue andperused the materials on record. "Whether in the facts and circumstances of the case, theTribunal was right in holding that improvement of residentialproperty also would be eligible for the benefit of Section 54Fof the Income-tax Act?" 3. Learned counsel appearing for the revenue submitted that in thefacts and circumstances of the case the invocation of Section 54-F of theIncome-tax Act is not applicable to the facts of the present case. Theassessee has only improved the assets purchased arising out of the capitalgain, which is not contemplated under Section 54F of the Income-tax Act. 4. We heard the argument of the learned counsel for the revenue andperused the materials on record. 5. The Tribunal in its order has categorically stated that theassessee has explained that he did not make any investment in newproperty. The assessee did purchase only one property in 1997-98 and theamount of Rs.8,01,005/- spent in the assessment year 1998-99 was onlytowards the improvement of the property. Before the Commissioner ofIncome-tax (Appeals), the assessee did furnish an affidavit stating thathe did not own any property other than No.18, Radhakrishnan Nagar,Thiruvanmiyur, Chennai – 600 041. The Commissioner of Income-tax (Appeals)sought the comments of the assessing officer on the factual details. Theassessing officer by his letter dated 23.12.2002 confirmed that there wasno purchase of second property by the assessee and the assessing officeralso mentioned in that letter the assessee was eligible for deductionunder Section 54F(1) to the extent of Rs.41,46,865/-. 6. From the above said factual circumstances of the case, andfollowing the decision of this Court in the case of COMMISSIONER OFINCOME-TAX VS. P.V.NARASIMHAN (1989) 47 TAXMAN 89 = 181 ITR 101 wherein itwas held that the expenses involved in construction of first floor couldbe allowed under Section 54 of the Income-tax Act. Further, in view of theexplanation offered by the assessing officer himself pursuant to theclarification sought for by the Commissioner of Income-tax (Appeals) thatthe assessee is entitled to deduction under Section 54F, we do not findany material for entertaining this appeal and the appeal is thereforedismissed. Sd/Asst.Registrar/true copy/Sub Asst.RegistraruskTo1. The Assistant Registrar, Income Tax Appellate Tribunal, Chennai-600 034 2. The Commissioner of Income-tax (Appeals)- V Chennai3.The Asst.Commissioner of Income Tax, Company Circle IV(3) Chennai-34.4. The Assistant Registrar, Income-Tax Appellate Tribunal Rajaji Bhavan, III Floor, Besant Nagar, Chennai - 90.1 cc To Mr.Pushya Sitaraman, Standing Counsel for I.T.Cases, SR.58520.Tax Case (Appeal) No.1254 of 2007 SSV(CO)RVL 25.09.2007