The Tax Publishers2020 TaxPub(DT) 4552 (Mad-HC) : (2021) 437 ITR 0137 : (2021) 277 TAXMAN 0463

INCOME TAX ACT, 1961

Section 54F

Where following order passed by Single Judge, PCIT passed order under section 264(7) and allowed additional cost of construction incurred by the assessee for claiming deduction under section 54 and granted relief to assessee, thereafter revenue was precluded from pursuing writ appeal after implementing order was passed in the writ petition.

Capital gains - Deduction under section 54F - Additional cost of construction incurred by assessee for claiming deduction under section 54 was allowed in writ proceedings by court - Revenue barred from pursuing writ appeal

Against order of AO passed under section 143(1), assessee filed petition under section 264 before PCIT claiming that additional cost of construction as deduction under section 54 ought to be allowed. PCIT rejected petition of assessee by holding that amount in question, even if it was spent for construction of property, could not be considered for deduction under section 54 because amount was not deposited in capital gains account scheme. Assessee filed writ petition against order of PCIT and Single Judge allowed writ petition and remanded back the matter to AO to pass fresh order by considering issue as to whether disputed amount claimed by the assessee as deduction, was utilised towards additional construction within a time limit prescribed under section 54(1). Revenue filed writ appeal against order of Single Judge. Held: Writ Appeal filed by the revenue became infructuous owing to fact that PCIT passed an order under section 264(7) and granted relief to the assessee. PCIT recorded in the order that taking cognizance of the direction issued by the High Court, assessee was heard and in pursuant to the Court's decision, the additional cost of construction incurred by the assessee for claiming deduction under section 54 was allowed and then, relief was granted. Revenue could not pursue appeal after implementing order passed in the writ petition.

REFERRED : Commissioner of Customs (Import) v. M/s. Dilip Kumar & Company & Ors. 2018 SCC online SC 747 : 2018 TaxPub(EX) 737 (SC), Venkata Dilip Kumar v. CIT 2019 TaxPub(DT) 7658 (Mad-HC) , Humayun Suleman Merchant v. Chief CIT & Anr. (2016) 73 Taxmann.com 2 (Bom) : 2016 TaxPub(DT) 3850 (Bom-HC), CIT v. K. Ramachandra Rao [ITA No. 47 of 2014 dt. 14-7-2014] and Venkata Dilip Kumar v. Asstt. CIT 2019 TaxPub(DT) 2644 (Chen-Trib)

FAVOUR : In assessee's favour.

A.Y. : 2014-15

IN THE MADRAS HIGH COURT

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