DINESH CHAUDHARY (HUF), MUMBAI V. ITO 17(1)4, MUMBAI

CO 44/MUM/2011

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8547 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 13-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Cost of acquisition
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI R.K.GUPTA, JM & SHRI D.KARUNAKARA RAO , AM ITA NO. 2125 MUM/20 1 1 ( ASSESSMENT YEAR : 2006 - 07 ) ITO 17(1)(4), MUMBAI VS. DINESH CHOUDHARY (HUF), 201, KAPADIA APARTMENT, S.V.ROAD, JUHU SCHEME, VILE PARLE(W), MUMBAI - 400 056. PAN NO. : AAA H D 3444 B ( APP ELLANT ) .. ( RESPONDENT ) AND C.O. NO. 44 / MUM/ 20 11 ( ASSESSMENT YEAR : 2006 - 07 ) DINESH CHOUDHARY (HUF), 201, KAPADIA APARTMENT, S.V.ROAD, JUHU SCHEME, VILE PARLE(W), MUMBAI - 400 056. VS. ITO 17(1)(4), MUMBAI PAN NO. : AAAHD 3444 B ( CROSS - OBJECTOR ) .. ( RESPONDENT ) REVENUE BY : MR. MANOJ KUMAR ASSESSEE BY : MR. VIJAY MEHTA DATE OF HEARING : 2 ND APRIL, 2013 DATE OF PRONOUNCEMENT : 10 TH APRIL, 2013 O R D E R PER S HRI R.K.GUPTA, JM : TH E DEPARTMENT HAS FILED APPEAL I.E. ITA NO. 2125/MUM/2011 AGAINST THE ORDER DATED 24 - 12 - 2010 OF LEANED CIT (A) - 29 , MUMBAI RELA TING TO THE ASSESSMENT YEAR 2006 - 07 , WHEREAS THE ASSESSEE HAS FILED CROSS OBJECTION NO. 44/MUM/2011 FOR THE SAME ASSESSMENT YEAR. 2 . THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF THE LEARNED CIT(A), THEREFORE, THE SAME DOES NOT REQUIRE ANY SEPARATE ADJUDICATION UPON. ACCORDINGLY, THE SAME IS TREATED AS DISMISSED AS HAVING BEEN RENDERED IN FRUCTUOUS. ITA NO . 2125 / 201 1 & CO NO. 44/2011 2 3 . NOW, WE COME TO THE APPEAL PREFERRED BY THE DEPARTMENT, WHEREIN THE DEPARTMENT RAISES OBJECTION IN REGARD TO ALLOWING THE CLAIM OF EXEMPTION UNDER SECTION 54F. 4 . BRIEF FACTS OF THE CASE ARE THAT D URING THE YEAR ASSESSEE OFFERED RECEIPTS OF RS.41 ,51,196 / - ON ACCOUNT OF SALE OF KHOPOLI LAND. AGAINST THIS THE ASSESSEE REDUCED THE INDEXED COST OF ACQUISITION OF THE PROPERTY. THE DIFFERENCE AMOUNT OF RS .33, 19,314/ - WAS ALSO CLAIMED AS EXEMPT FROM CAPITAL GAIN U/S.54F OF THE I.T.ACT. THE ASSES SEE FILED A SALE AGREEMENT OF THE SAID PLOT WHICH WAS DATED 1.9.2005. THE AO FOUND THAT ACCORDING TO STAMP DUTY AUTHORITY THE REGISTRATION VALUE OF THE PROPERTY WAS RS.43 ,06,000 / - IN THE PLACE OF SALE CONSIDERATION OF RS.40 ,08,556/ - . THE AO ADOPTED THE VAL UE DETERMINED BY STAMP DUTY AUTHORITIES FOR THE PURPOSES OF CAPITAL GAIN. THE ASSESSEE TOOK THE VALUE DETERMINED BY THE STAMP DUTY AUTHORITY FOR DETERMINING THE CAPITAL GAIN OF RS .33,19,314/ - .THE AO FURTHER NOTED THAT THE ASSES S EE CLAIMED EXEMPTION U/S.54F TO THE EXTENT OF RS .33,19,314/ - . IT WAS FOUND THAT THE ASSESSEE CLAIMED EXEMPTION ON ACCOUNT OF NEW ASSET OF THE HOUSE PROPERTY , WHICH WAS CONSTRUCTED WITH A GROUND PLUS FOUR FLOORS ON THE PLOT BEARING NO.7 FRIENDS CO.OP SOCIETY, JVPD MUMBAI. IN THIS PROP ERTY 50% SHARE BELONGS TO THE ASSESSEE AND THE OTHER 50% BELONGS TO MUKESH CHOUDHARY HUF. THE AO FOUND THAT ASSESSEE SPENT YEAR - WISE RS .1,06,04,654/ - IN FY.2003 - 04, RS.41 ,39,942/ - IN FY.2004 - 05 AND RS .8 , 28 , 596/ - IN FY.2005 - 06. THE AO OBSERVED THAT THE ASSE SSEE STARTED CONSTRUCTION ACTIVITY IN FY.2003 - 04 AND ITA NO . 2125 / 201 1 & CO NO. 44/2011 3 COMPLETED THE ACTIVITIES IN FY.2005 - 06 PRECISELY ON 22.8.2005 WHEN THE LAST PAYMENT TO M/S.WATERPROOFING ASSOCIATES, A LABOUR CONTRACTOR HAS BEEN MADE. THE AO ALSO RECORDED A STATEMENT ON OATH OF SHRI DI NESH CHOUDHARY, KARTA OF HUF, WHO CONFIRMED THAT THEY OCCUPIED THE BUILDING IN AND AROUND DIWALI OF 2005. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAD TO INVEST CAPITAL GAIN IN PURCHASE OF A RESIDENTIAL HOUSE ONE YEAR BEFORE OR WITHIN 2 YEARS FROM THE DAT E OF TRANSFER OR THE ASSESSEE MUST CONSTRUCT A RESIDENTIAL HOUSE WITHIN A PERIOD OF 3 YEARS FROM THE DATE OF TRANSFER. THE AO NOTED THAT THE RESIDENTIAL HOUSE CONSTRUCTED BY THE ASSESSEE BEFORE THE DATE OF SALE I.E. 1 - 9 - 2005. IN VIEW OF THIS THE AO OBSERV ED THAT THE CAPITAL GAIN HAS NOT BEEN INVESTED IN CONSTRUCTING A NEW ASSET. THEREFORE, THE AO WAS OF THE OPINION THAT DEDUCTION UNDER SECTION 54F NOT AVAILABLE TO THE ASSESSEE. THE ASSESSEE CONTENDED THAT THERE WAS AN AGREEMENT TO SALE OF THE SAID PLOT OF LAND WITH M/S BHUSHAN STEEL AND ALLIED INDUSTRIES LIMITED ON 25 - 11 - 2000. HOWEVER, THERE WAS A DISPUTE AND A PURCHASER FILED A SUIT AGAINST THE ASSESSEE BEFORE THE CIVIL COURT OF PANVEL. IN TURN ASSESSEE FILED THE WRIT AGAINST THE PURCHASER BEFORE THE HON' BLE HIGH COURT OF BOMBAY. HON'BLE HIGH COURT OF BOMBAY PASSED AN ORDER DATED 17.7.2002 DIRECTING THE PURCHASER TO DEPOSIT RS. 1,97,00,000/ - WITH THE COURT AND PERMITTED THEM TO CARRY OUT CONSTRUCTION ACTIVITIES IN THE SAME PLOT WITH THE UNDERTAKING THAT IF THE DECISION IN THE CIVIL COURT OF PANVEL GOES IN FAVOUR OF SELLER THE PURCHASER WILL DEMOLISH THE CONSTRUCTION AT THEIR COST. HOWEVER, THE ITA NO . 2125 / 201 1 & CO NO. 44/2011 4 CIVIL COURT OF PANVEL DECIDED IN FAVOUR OF THE PURCHASER AND FINALLY ASSESSEE ENTERED INTO CONVEYANCE WITH THE PURCH ASER ON 1.9.2005. IT WAS ALSO ARGUED THAT SINCE HE INTENDED TO SELL THE PROPERTY WAY BACK IN 2000 AND RECEIVED ADVANCES FROM THE PURCHASER, HE STARTED RECONSTRUCTING THEIR RESIDENCE. AS STATED ABOVE, THIS CONTENTION OF THE ASSESSEE, WAS NOT ACCEPTED BY THE AO. ACCORDINGLY, THE CLAIM OF THE ASSESSEE WAS REJECTED. 5 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A), BEFORE WHOM, DETAILED SUBMISSIONS WERE FILED, WHICH HAS BEEN RECORDED BY THE LEARNED CIT(A) IN PARA 3.3 AT PAGE S 4 TO 13 OF HIS ORDER. LEARNED CIT(A) , AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, SATISFIED WITH THE EXPLANATION FILED ON BEHALF OF THE ASSESSEE. ACCORDINGLY, THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. 6 . HENCE, THE PR ESENT APPEAL BY THE DEPARTMENT HERE BEFORE THE TRIBUNAL. 7 . LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS MADE CONSTRUCTION BY BORROWING FUNDS AND, THEREFORE, DEDUCTION UNDER SECTION 54F IS NOT ALLOWABLE AS HELD BY THE TRIBUNAL IN THE CASE OF MILAN SHARAD RUPAREL VS. ACIT, REPORTED IN [2009] 27 SOT 61 (MUM) AND THE DECISION OF THE HON BLE KERALA HIGH COURT IN THE CASE OF CIT VS. V.R.DESAI , REPORTED IN [2011] 197 TAXMAN 52 (KER.) , COPIES OF WHICH HAVE ALSO BE EN FILED. ITA NO . 2125 / 201 1 & CO NO. 44/2011 5 8 . LEARNED COUNSEL OF THE ASSESSEE STATED THAT IN FACT, THE AO COULD NOT UNDERSTAND THE FACTS IN RIGHT PERSPECTIVE. HOWEVER, LEARNED CIT(A) HAS CONSIDERED THE FACTS IN DETAILS WHICH WERE FILED BEFORE HIM. IT WAS EXPLAINED THAT THE ASSESSEE ENTER ED INTO AN AGREEMENT OF SALE ON 25 - 11 - 2000 WITH ADVANCE OF RS. 6,50,000/ - WAS RECEIVED BY THE ASSESSEE AND POSSESSION OF THE PROPERTY WAS GIVEN TO THE PURCHASER. THEREAFTER CERTAIN DISPUTE AROSE BETWEEN THE ASSESSEE AND THE BUYER AND THE BUYER FILED A SUIT AGAINST THE ASSESSEE BEFORE THE CIVIL COURT OF PANVEL. IN TURN ASSESSEE FILED THE WRIT AGAINST THE PURCHASER BEFORE THE HON'BLE HIGH COURT OF BOMBAY. HON'BLE HIGH COURT OF BOMBAY PASSED AN INTERIM ORDER STATING THEREIN THAT IF THE CIVIL SUIT FILED BEFORE THE CIVIL COURT IS DECIDED IN FAVOUR OF THE ASSESSEE, THEN THE CONSTRUCTION MADE BY THE PURCHASER HAS TO BE DEMOLISHED, OTHERWISE THE TRANSACTION WILL BE FINAL. THEREAFTER THE CIVIL COURT DECIDED IN FAVOUR OF THE PURCHASER WHICH WAS DECIDED ON 16 - 4 - 2005 AN D THIS DATE IS CRUCIAL FOR TAKING INTO CONSIDERATION. ONCE THE ISSUE WAS DECIDED BY THE CIVIL COURT ON 16 - 4 - 2005, THEN THE ASSESSEE LOST HIS CASE AND THE TRANSACTION WAS COMPLETED. THE REGISTRATION TO THE APPROPRIATE AUTHORITY WAS JUST A FORMALITY. LEARNE D CIT(A) HAS CONSIDERED THIS ASPECT IN DETAIL AND THEN FOUND THAT THE TRANSACTION WAS COMPLETED ON 6 - 4 - 2005. THERE IS NO SECOND APPEAL AGAINST THE ORDER OF CIVIL COURT HAS BEEN FILED. IT MEANS THE ORDER OF THE CIVIL IS FINAL. 8. 1 REGARDING THE CASE LAWS, LEARNED COUNSEL STATED THAT THERE ARE NUMEROUS CASES DECIDED BY THE VARIOUS BENCHES AND THE HON BLE HIGH ITA NO . 2125 / 201 1 & CO NO. 44/2011 6 COURTS THAT BORROWED FUNDS USED FOR CONSTRUCTION OF THE HOUSE IS ALLOWABLE FOR DEDUCTION UNDER SECTION 54F . IT WAS ALSO STATED THAT THE PROVISIONS ARE VERY CLEAR, WHICH HAVE BEEN PROVIDED THAT IF THE CONSTRUCTION IS MADE, EVEN BEFORE ONE YEAR FROM THE DATE OF TRANSFER, THEN ALSO DEDUCTION UNDER SECTION 54F IS ALLOWABLE. ACCORDINGLY, IT WAS STATED THAT IT IS CLEAR THAT IF CONSTRUCTION IS COMPLETED BEFOR E SALE OF ANY PROPERTY, THEN ALSO THE ASSESSEE IS ELIGIBLE FOR EXEMPTION. NOWHERE IN THE PROVISION OF SECTION 54F IS MENTIONED THAT IF BORROWED FUNDS ARE USED THEN EXEMPTION WILL NOT BE ALLOWED. IT WAS STATED THAT IN THE CASE OF A CIT VS. DR. P.S.PASRICHA, REPORTED IN [2008] 20 SOT 468 (MUM.) , THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND THIS DECISION OF THE TRIBUNAL HAS BEE N CONFIRMED BY THE HONBLE BOMBAY HIGH COURT WHILE DECIDING ITA NO. 1825/2009, VIDE ORDER DATED 7 - 10 - 2009. COPIES OF WHI CH HAVE ALSO BEEN FILED. EVEN IT WAS SUBMITTED THAT THE FUNDS PROVIDED BY THE INDIVIDUAL TO THE HUF AND A JOURNAL ENTRY WAS PASSED AND THIS COPY OF BALANCE SHEET ETC. WERE ALSO FILED BEFORE THE AO , WHICH WERE NOT TAKEN INTO CONSIDERATION. ATTENTION OF THE BENCH WAS DRAWN ON THE RELEVANT PORTION OF THE ORDER OF THE AO. 9 . WE GAVE OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSIONS ADVANCED AT THE HANDS OF THE LEARNED COUNSEL OF THE ASSESSEE AS WELL AS LEARNED DR. AFTER CONSIDERING THE SUBMISSION AND PERUSING T HE MATERIAL ON RECORD, WE FOUND NO INFIRMITY IN THE ORDER OF THE LEARNED ITA NO . 2125 / 201 1 & CO NO. 44/2011 7 CIT(A). THE FINDINGS OF THE LEARNED CIT(A) HAVE BEEN RECORDED IN PARAS 3.4 & 3.5, WHICH ARE AS UNDER : - 3.4 I HAVE CONSIDERED THE FACTS OF THE CASE, ARGUMENTS OF THE ASSESSING OFFIC ER AND THE WRITTEN SUBMISSIONS OF THE AUTHORISED REPRESENTATIVE OF THE APPELLANT. ISSUE TO BE DECIDED IS THAT WHEN THE TRANSFER OF PROPERTY WAS COMPLETE. ACCORDING TO THE ASSESSING OFFICER IT IS COMPLETE ONLY WITH THE REGISTRATION OF CONVEYANCE DEED ON 1.9 .2005. ACCORDING TO THE APPELLANT THE TRANSFER WAS COMPLETE WITH THE ORDER OF CIVIL COURT ON 16.4.2005. THE HIGH COURT HAD ALREADY HELD THAT THE PURCHASERS ARE PERMITTED TO CARRY OUT ACTIVITIES ON THE PROPERTY TO BE SOLD BY THE APPELLANT WITH THE UNDERTAKI NG THAT IF THE FINAL DECISION OF CIVIL COURT IS ORDERED IN FAVOUR OF THE APPELLANT THE CONSTRUCTIONS WILL BE DEMOLISHED BY THEM AT THEIR OWN COST AND THAT THE AMOUNT WILL BE CLAIMED BY THE APPELLANT FROM THE COURT. ACCORDINGLY THE MATTER WAS REFERRED TO CI VIL COURT, PANVEL AND THE PURCHASER DEPOSITED A SUM OF F.197 LAKHS. THE APPELLANT HAD ALSO RELIED UPON THE DECISION IN THE CASE OF KHAN BAHADUR AHMED ALLADIN & SONS V. CIT [74 ITR 651 (AP)], CIT V. HINDUSTAN HOUSING AND LAND DEVELOPMENT TRUST LTD. [161 ITR 524 (SC)]. HOWEVER IT CAN BE SEEN THAT, THE ORDER OF THE HIGH COURT DID NOT BRING FINALITY TO THE DISPUTE. ALTHOUGH POSSESSION WAS GIVEN AND MONEY WAS DEPOSITED WITH THE COURT, ACCORDING TO THE ORIGINAL AGREEMENT FOR SALE, APPELLANT WAS NOT ENTITLED TO T HE CONSIDERATION UNTIL THE CIVIL COURT ORDER. WITH THE CIVIL COURT ORDER, THE PROPERTY PASSED ON TO THE PURCHASER AS STIPULATED BY HIGH COURTS ORDER. POSSESSION WAS ALREADY WITH THE PURCHASER LONG SINCE. APPELLANT BECAME ENTITLED TO RECEIVE CONSIDERATION F ROM THE COURT. LAW IS SETTLED THAT THERE WILL BE A TRANSFER OF PROPERTY WITHIN THE MEANING OF SECTION 2(47), WHEN POSSESSION IS HANDED OVER AND THERE IS A PART PERFORMANCE OF CONTRACT. HENCE WITH THE CIVIL COURT ORDER THE PROPERTY PASSED FROM THE SELLER TO THE PURCHASER AND SINCE CONSIDERATION WAS ALREADY PAID/DEPOSITED BY THE PURCHASER THERE WAS NOTHING ELSE TO BE DONE. REGISTRATION ON 1.9.2005 WAS ONLY A FORMALITY AND FOR THE PURPOSE CAPITAL GAIN AND TRANSFER OF IMMOVABLE PROPERTY, EVEN IF REGISTRATION IS DONE AT A LATER DATE, TRANSFER OF PROPERTY WILL BE COMPLETE AS AND WHEN POSSESSION IS GIVEN IN PART PERFORMANCE OF CONTRACT. THEREFORE IT CAN BE CONCLUDED THAT PROPERTY WAS TRANSFERRED WITH THE ORDER OF THE CIVIL COURT IN APRIL 2005. THE APPELLANT HAS FU LFILLED THE CONDITION U/S.54F THAT CONSTRUCTION HAS TO BE COMPLETE AFTER THE DATE OF SALE. 3.5 THE SECOND ISSUE IS WHETHER THE APPELLANT HAS INVESTED THE AMOUNT OF CAPITAL GAIN IN CONSTRUCTION OF THE HOUSE PROPERTY. AS PER THE FINDINGS OF THE AO THERE HA S BEEN AN INVESTMENT OF RS.1 ,06,04,654/ - IN THE FY.2003 - 04, AN AMOUNT OF RS.41 ,39,942/- IN FY.2004 - 05 AND AN AMOUNT OF RS. 8,28,596/ - IN THE FY.2005 - 06. THE AO HIMSELF HAS OBSERVED THAT CONSTRUCTION WORK WAS COMPLETE IN THE MONTH OF AUGUST 2005 WITH A LAST PAYMENT MADE TO M/S.WATER PROOFING ASSOCIATES ON 22.8.2005. HENCE, IT CAN BE ITA NO . 2125 / 201 1 & CO NO. 44/2011 8 SEEN THAT THE CONSTRUCTION IS COMPLETE AFTER THE DATE OF TRANSFER. THE APPELLANT HAS RELIED UPON VARIOUS CASE LAWS WHICH HOLD THAT THE COMMENCEMENT OF CONSTRUCTION CAN BEGIN BEFOR E THE DATE OF SALE. HOWEVER, A COMPLETION OF THE CONSTRUCTION ONLY HAS TO BE AFTER THE DATE OF TRANSFER AND WITHIN 3 YEARS. SUCH A VIEW HAS BEEN HELD IN THE CASE OF CIT VS. J R SUBRAMANYA BHATT 165 ITR 571 (KAR), H K KAPOOR 234 ITR 753 (ALH) . AS THE APPELL ANT HAS INVESTED THE ENTIRE CAPITAL GAIN IN CONSTRUCTION OF THE HOUSE PROPERTY HE IS ELIGIBLE FOR DEDUCTION U/S.54F. THE ADDITION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS .33, 19,314/ - IS DELETED. WE HAVE TAKEN INTO CONSIDERATION THE CASE LAWS RELIED UPON BY THE LEARNED DR AS WELL AS LEARNED AR AND WE FOUND THAT THE LEARNED CIT(A) HAS CONSIDERED ALL THE ASPECTS, WHO CATEGORICALLY NOTED THAT REGISTRATION ON 1 - 9 - 2005 WAS ONLY A FORMALITY AS THE DATE OF THE ORDER OF THE CIVIL COURT WAS THE DATE OF TRANSF ER OF THE PROPERTY. LEARNED CIT(A) HAS OBSERVED THAT THE POSSESSION OF THE PROPERTY HAS ALREADY BEEN GIVEN BY THE ASSESSEE. SINCE THERE WAS CERTAIN DISPUTE BETWEEN THE ASSESSEE AND THE PURCHASER, THEREFORE, MATER WENT TO THE CIVIL COURT AND THE CIVIL COURT DECIDED THE ISSUE ON 16 - 4 - 205, WHICH IS THE DATE OF TRANSFER ALSO BECAUSE ON THAT DATE THE COURT HAS FINALIZED THE ISSUE IN FAVOUR OF THE PURCHASER. ACCORDINGLY, THE REGISTRATION WHICH WAS MADE ON 1 - 9 - 2005 WAS A FORMALITY AND, THEREFORE, THE CRUCIAL DATE OF TRANSFER HAS TO BE TAKEN INTO CONSIDERATION AS 16 - 4 - 2005. EVEN AND OTHERWISE, THE ASSESSEE HAS INVESTED HUGE AMOUNTS BEFORE THIS DATE AND THE ASSESSEE CLAIMED DEDUCTION ONLY OF RS. 33 LAKHS OR ODD, THEREFORE, ALSO WE SEE NO UNREASONABLENESS IN THE ORDER OF THE LEARNED CIT(A) , WHO DIRECTED TO ALLOW THE DEDUCTION/EXEMPTION UNDER SECTION 54F. ITA NO . 2125 / 201 1 & CO NO. 44/2011 9 10 . IN CASE OF DR. P.S.PASRICHA (SUPRA) , THE MUMBAI BENCH HAS HELD THAT THE DEDUCTION UNDER SECTION 54F IS ALLOWABLE EVEN THE FUNDS WERE TAKEN ON LOAN. THIS DECISION OF THE MUMBAI BENCH HAS BEEN CONFIRMED BY THE HON BLE HIGH COURT IN ITA NO .1825/2009 . THE HON BLE HIGH COURT HAS OBSERVED IN PARA 2 OF ITS ORDER THAT HAVING SEEN THE FINDING OF FACT RECORDED BY THE TRIBUNAL IN PARAGRAPH NO. 9, THAT THE ASSESSEE HAD INITIAL LY UTILIZED THE SALE PROCEEDS OF SALE OF HIS RESIDENTIAL FLAT FOR PURCHASE OF COMMERCIAL PROPERTIES AND LATER ON HE PURCHASED TWO RESIDENTIAL FLATS WITHIN A PERIOD SPECIFIED IN SUB SECTION (2) OF SECTION 54 OF THE ACT. IN THIS VIEW OF THE MATTER, THE VIEW TAKEN BY THE TRIBUNAL CANNOT BE FAULTED. THE APPEAL IS WITHOUT ANY SUBSTANCE. HENCE, THE SAME STANDS DISMISSED IN LIMINE WITH NO ORDER AS TO COSTS. COPY OF THIS ORDER IS PLACED ON RECORD. AS STATED EARLIER, THE TRIBUNAL HAS GIVEN A FINDING OF FACT THAT TH E EXEMPTION UNDER SECTION 54F IS ALLOWABLE. IN FACT, IN THIS CASE, THE AO DENIED THE DEDUCTION UNDER SECTION 54 ON THE GROUND S THAT THE SALE PROCEEDS FROM THE ORIGINAL FLAT WERE NOT DEPLOYED FULLY IN THE NEW FLATS, AND THAT THE ASSESSEE HAD NOT PURCHASED O NE SINGLE PROPERTY, BUT TWO UNITS. THEREAFTER THE CIT(A) ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE AND THE TRIBUNAL CONFIRMED THE ORDER OF THE CIT(A) . 11 . SIMILAR VIEW HAS BEEN EXPRESSED IN THE CASE S OF MUNEER KHAN VS. ITO, REPORTED IN 41 SOT 504 (HYD. ) ; LALIT MARDA VS. ACIT, REPORTED IN 23 SOT 250 (KOL) ; MRS. PREMA P. SHAH VS. ITO, ITA NO . 2125 / 201 1 & CO NO. 44/2011 10 REPORTED IN 100 ITD 60 (MUM) AND ALSO IN THE CASE OF BOMBAY HOUSING CORPORATION VS. ACIT, REPORTED IN 81 ITD 545 (MUM) . 12 . THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT T HE LEARNED CIT(A) WAS CORRECT IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54F AND THE SAME IS HEREBY CONFIRMED. 13. IN THE RESULT, APPEAL OF THE DEPARTMENT AS WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 1 0/04/2013 . SD/ - SD/ - ( D.KARUNAKARA RAO ) ( R.K.GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED : 1 0/04 /2013 . PKM , PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELL ANT 2. THE RESPONDENT. 3. THE CIT(A) - X, MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI