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2004 DIGILAW 322 (KER)

The Commissioner of Income Tax v. Ouseph Chacko

2004-07-13

A.K.BASHEER, S.SANKARASUBBAN

body2004
Judgment :- Sankarasubban, J. This I.T.R. has come up before us on a reference made by the Income Tax Appellate Tribunal, Cochin Bench in R.A.No.240/Coch/89. The following questions of law have been referred to us by the Tribunal: “1) Whether, on the facts and in the circumstances of the case and considering the disadvantages noted in the enclosure to the reference application, i) the Tribunal is right in law and fact in remitting the case to the officer in a restricted/closed manner? ii) should not the Tribunal have made an open remand? 2) Whether, on the facts and in the circumstances of the case, and also for the reasons noted in the enclosure the assessee is entitled to the benefit of section 54F of the Income-tax Act?” 2. The dispute herein lies in a very narrow compass. The assessee’s residential building in Panampilly Nagar was sold. He constructed another residential building at Kottayam. He has got another building at Thodupuzha, where, it is stated that a firm, of which he is a partner is conducting business. The house at Thodupuzha is admittedly a residential house. If the house at Thodupuzha is a residential house, then the assessee will not get the benefit of Section 54F. The assessing officer took the stand that the assessee is not entitled to the benefit of Section 54F. This was endorsed by the Commissioner of Income Tax (Appeals). The assessee has filed appeal before the Tribunal. The Tribunal ultimately remanded the matter to the Assessing Officer. In the remand order what the Tribunal had stated is that if on 4.4.1986, the assessee’s family were present in the impugned premises, it could be treated as a residential property. It also directed to find out whether any portion is being occupied for business and if so which is that portion. Thus the remand is made to the assessing officer. 3. The question now posed before us is that whether the Tribunal was correct in considering that the building at Thodupuzha is not a residential house. Learned counsel for the Department submitted that the fact that the building at Thodupuzha is a residential house is not disputed. What is now stated by the assessee is that the building is not used for residence. Learned counsel for the Department submitted that the fact that the building at Thodupuzha is a residential house is not disputed. What is now stated by the assessee is that the building is not used for residence. On the other hand, it is used for the purpose of a firm and hence the assessing officer was not justified in holding that the benefit of section 54F is not available to him. According to us, the restricted remand by the Appellate Tribunal is not correct. The assessing officer, according to us, should consider again on remand the question whether the building at Thodupuzha is a residential house, taking into account the proviso of Section 54F also. 4. Hence the remand made by the Income Tax Tribunal is set aside. The assessing officer should consider afresh the question whether the building at Thodupuzha is a residential building or not. The Revenue as well as the assessee can take all contentions to find out whether the disputed building was a residential house or not. Hence we answer question No.1 in favour of the Department and against the assessee. So far as the second question of law is concerned, it depends upon the ultimate decision, to be taken by the assessing officer. Hence it is not necessary for us to decide the question now. The assessee is entitled to produce all evidence before the assessing officer to bring home the points raised by him. I.T.R. is disposed of.