V Nageswara Rao(HUF), Vijayawada V. The Income-tax Officer, Vijayawada

CO 47/VIZ/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1809 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 03-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D KOMALI KRISHAN
• Keywords: Opportunity of being heard; Fair market value; Revised return
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , . . . . , $ $ $ $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.26/VIZ/2013 ( / ASSESSMENT YEAR :2008-09) ITO, WARD - 2(4), VIJAYAWADA. VS. SRI VENNA NAGESWARA RAO (HUF), D.NO. 26-20-7, SWAMY STREET, GANDHI NAGAR, VIJAYAWADA. [ PAN: AADHV 4355 E] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) C.O.NO. 47/VIZ/2013 (I.T.A.NO.26/VIZ/2013) (ASSESSMENT YEAR : 2008-09) SRI VENNA NAGESWARA RAO ( HUF), ITO, WARD - 2(4), D.NO. 26-20-7, SWAMY STREET, VS. VIJA YAWADA. GANDHI NAGAR, VIJAYAWADA. [ PAN: AADHV 4355 E] ( & & & & / APPELLANT) ( '(& '(& '(& '(& / RESPONDENT ) & ) / APPELLANT BY : SMT. D. KOMALI KRISHAN DR '(& ) / RESPONDENT BY : SHRI G.V.N. HARI ADV. ) - / DATE OF HEARING : 10/12/2015. ) - / DATE OF PRONOUNCEMENT : 29/12/2015 2 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJE CTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT( A), VIJAYAWADA DATED 07/11/2012 FOR THE A.Y. 2008-09. I.T.A.NO.26/VIZ/2013 2 . BRIEF FACTS OF THE CASE, ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME FOR THE A.Y. 2008-09 ON 28/07/2009 DECLARING TOTAL INCOME OF RS. 1,94,260/-. THE RETURN WAS PROCESSED UNDER SEC. 14 3(1) OF THE ACT ON 16/07/2009. SUBSEQUENTLY, THE CASE WAS SELECTED FO R SCRUTINY AND ACCORDINGLY, NOTICE UNDER SEC. 143(2) OF THE ACT WA S ISSUED. IN RESPONSE TO THE NOTICE, THE ASSESSEES AUTHORIZED R EPRESENTATIVE APPEARED FROM TIME TO TIME AND FURNISHED THE INFORM ATION CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTICED THAT THE ASSESSEE HAS DISCLOSED CAPITAL GAI NS AND CLAIMED EXEMPTION UNDER SEC. 54 OF THE ACT. THE ASSESSING OFFICER FURTHER NOTICED THAT THE SURVEY CONDUCTED IN THE CASE OF SM T. VENNAM SRIDEVI AND POST SURVEY ENQUIRIES, IT WAS FOUND THAT THE AS SESSEE HAD SOLD 40 ACRES OF LAND. THE ASSESSEE HAS COMPUTED CAPITAL G AIN AND CLAIMED EXEMPTION FROM CAPITAL GAINS UNDER SEC. 54F OF THE ACT, FOR REINVESTING THE SALE PROCEEDS FOR PURCHASE OF BUILDING AT D.NO. 26-20-6 AT SWAMY 3 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 STREET, GANDHINAGAR. ON VERIFICATION OF DOCUMENTS, THE ASSESSING OFFICER NOTICED THAT THOUGH, THE PROPERTY WAS SOLD FOR A CONSIDERATION OF RS. 80 LAC, THE FAIR MARKET VALUE OF THE PROPERTY W AS FIXED FOR THE STAMP VALUE PURPOSE IS AT RS.1,56,51,000/-. CONSEQUENT T O SURVEY, THE ASSESSEE HAS FILED REVISED RETURN ON 31/03/2010 AND ADMITTED CAPITAL GAIN OF RS. 54,21,442/- AFTER CLAIMING EXEMPTION OF RS. 60,13,453/- UNDER SEC. 54F OF THE ACT, FOR REINVESTMENT IN NEW HOUSE PROPERTY/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TO VER IFY THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE UNDER SEC. 54F OF THE ACT, THE ASSESSING OFFICER ISSUED A SHOW-CAUSE NOTICE AND AS KED TO FURNISH THE DETAILS OF NEW HOUSE PROPERTY PURCHASED ON WHICH EX EMPTION WAS CLAIMED UNDER SEC. 54F OF THE ACT. ON VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER NO TICED THAT THE ASSESSEE HAS PURCHASED FOUR APARTMENTS IN HIS INDIV IDUAL CAPACITY AND ANOTHER FOUR APARTMENTS IN THE NAME OF SMT. VENNA V IJAYA CHAMUNDESWARI. THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED AS TO WHY THE EXEMPTION CLAIMED UNDER SEC. 54F OF THE ACT SHOULD NOT BE DISALLOWED. IN REPLY, THE ASSESSEE SUBMITTED THAT THOUGH THE PROPERTIES ARE PURCHASED IN INDIVIDUAL NAMES OF HIMSELF AND HI S WIFE, BOTH ARE COPARCENERS OF THE HUF AND THE PROPERTY WAS PURCHAS ED OUT OF THE SALE PROCEEDS OF THE PROPERTIES SOLD IN HUF CAPACITY. T HE ASSESSEE FURTHER 4 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 SUBMITTED THAT THESE PROPERTIES WERE THROWN TO THE COMMON HOTCHPOT OF HUF. BY FILING AN AFFIDAVIT WHEREIN, BOTH OF THEM DECLARED THAT THEY ARE NO LONGER OWNER OF THE PROPERTIES AND ALL THE RIGHT S AND INTEREST IN THE PROPERTY IS VESTED WITH THE HUF. IN SUPPORT OF ITS CONTENTION PLACED RELIANCE UPON VARIOUS JUDICIAL DECISIONS. THE ASSES SING OFFICER, HOWEVER, REJECTED THE EXPLANATIONS OFFERED BY THE ASSESSEE A ND DISALLOWED THE CLAIM OF EXEMPTION UNDER SEC. 54F OF THE ACT. WHIL E DOING SO, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSES SEE HAS SOLD PROPERTY IN HIS HUF CAPACITY AND REINVESTED THE PROCEEDS IN PURCHASE OF ANOTHER RESIDENTIAL HOUSE PROPERTY IN THE NAME OF INDIVIDUA LS AND ALSO IT HAS PURCHASED MORE THAN ONE HOUSE, THEREFORE, IT IS NOT ELIGIBLE FOR EXEMPTION UNDER SEC. 54F OF THE ACT. 3 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE CONTENDED THAT IT HAS REINVESTED THE SALE CONSIDERATION FOR P URCHASE OF ANOTHER RESIDENTIAL HOUSE AND CLAIMED EXEMPTION UNDER SEC. 54F OF THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT THE PROPERTIES PURC HASED IN THE NAMES OF SHRI V. NAGESWARA RAO AND SMT. V. VIJAYA CHAMUND ESWARI ARE THROWN TO THE COMMON HOTCHPOT OF HUF AND DECLARED THAT THE SAID PROPERTIES ARE OF HUF PROPERTIES. THE ASSESSEE FURTHER SUBMIT TED THAT THE NEW HOUSE PROPERTIES WERE PURCHASED OUT OF THE SALE CON SIDERATION OF HUF 5 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 PROPERTY. THE PROPERTIES WERE PURCHASED IN THE NAME S OF CO-PARCENORS OF HUF AND THE SAME WERE THROWN TO THE COMMON HOTCH POT OF HUF, TO THIS EFFECT, FILED AN AFFIDAVIT WHEREIN, THEY HAVE DECLARED THAT ALL RIGHTS AND INTEREST IN THE PROPERTIES WERE VEST WITH HUF A ND THEY ARE NO LONGER OWNED THE PROPERTIES IN THEIR INDIVIDUAL STATUS. T HE ASSESSEE FURTHER SUBMITTED THAT THE PROPERTIES WERE TREATED AS HUF P ROPERTIES AND THE RENTAL INCOME FROM THE SAID PROPERTY WAS OFFERED IN THE CAPACITY OF HUF FOR THE A.Y. 2008-09 & 2009-10. 4 . THE CIT(A), AFTER CONSIDERING THE EXPLANATIONS OF FERED BY THE ASSESSEE, DELETED THE ADDITIONS MADE BY THE ASSESSI NG OFFICER. THE CIT(A) HELD THAT THE ASSESSEE HAS REINVESTED THE SA LE CONSIDERATION IN PURCHASE OF NEW RESIDENTIAL PROPERTY IN THE NAME OF COPARCENERS OUT OF THE SALE PROCEEDS OF HUF PROPERTY. THE CIT(A), FUR THER HELD THAT THE FACT THAT RENTAL INCOME RECEIVED FROM SUCH PROPERTI ES BEING ASSESSED IN THE HANDS OF THE HUF AND ALSO THE ASSESSEE HAS FILE D AN AFFIDAVIT STATING THAT THE THEY ARE NO LONGER THE OWNERS OF THE PROPE RTY AND THE OWNERSHIP OF THE PROPERTY IS VESTED WITH THE HUF, T HEREFORE, DIRECTED THE ASSESSING OFFICER TO ALLOW EXEMPTION UNDER SEC. 54F OF THE ACT. AGGRIEVED BY THE CIT(A)S ORDER, THE REVENUE IS IN APPEAL BEFORE US. 6 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 5 . THE DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT TH E CIT(A) WAS ERRED IN DELETING THE ADDITIONS MADE BY THE ASSESSI NG OFFICER, AS THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIONS O F SEC. 54F OF THE ACT. THE DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED T HAT THE ASSESSEE HAS RE-INVESTED THE SALE CONSIDERATION FOR PURCHASE OF NEW HOUSE PROPERTY IN HIS INDIVIDUAL CAPACITY AND ALSO HE HAS MADE INVESTMENT IN MORE THAN ONE RESIDENTIAL HOUSE PROPERTY WHICH IS N OT IN ACCORDANCE WITH THE PROVISIONS OF SEC. 54F OF THE ACT, HENCE, NOT ELIGIBLE FOR EXEMPTION. 6. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBM ITTED THAT THE ASSESSEE HAS PURCHASED NEW HOUSE PROPERTY OUT OF TH E SALE PROCEEDS OF HUF PROPERTY AND THE FLATS WERE REGISTERED IN THE N AMES OF THE MEMBERS OF THE HUF, THEREFORE ELIGIBLE FOR EXEMPTIO N UNDER SEC. 54F OF THE ACT. THE AUTHORIZED REPRESENTATIVE OF THE ASSE SSEE FURTHER SUBMITTED THAT THE ASSESSEE HAS DECLARED BY FILING AN AFFIDAVIT THAT THOUGH THE PROPERTIES WERE PURCHASED IN THE NAMES O F CO-PARCENERS, THE SAME WERE THROWN TO THE COMMON HOTCHPOT OF HUF. TH EY ARE NO LONGER OWNERS OF THE PROPERTY IN THE INDIVIDUAL CAPACITY A ND ALL THE RIGHTS AND INTEREST IN THE PROPERTY WAS VESTED WITH HUF. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER SUBMITTED TH AT THE PROPERTIES WERE TREATED AS HUF PROPERTIES AND THE RENTAL INCOM E FROM SUCH 7 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 PROPERTIES WERE DECLARED IN THE HUF CAPACITY AND FI LED THE RETURN OF INCOME ACCORDINGLY. IN SUPPORT OF ITS CONTENTION, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE RELIED UPON THE HON' BLE MADRAS HIGH COURTS JUDGMENT IN THE CASE OF CIT VS. NATARAJAN (2006) 287 ITR 271 (MAD. ). THE AUTHORIZED REPRESENTATIVE OF THE ASSESSE, F URTHER RELIED UPON THE DECISION OF THE HON'BLE ANDHRA PRADESH HIG H COURT IN THE CASE OF CIT VS. SYED ALI ADIL IN ITTA NO. 410/2012 AND ALSO HON'BLE KARNATAKA HIGH COURTS JUDGMENT IN THE CASE OF CIT VS. SMT. K.G. RUKMINIAMMA (2011) 331 ITR 211. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER DISALLO WED THE CLAIM OF EXEMPTION UNDER SEC. 54F OF THE ACT, ON THE GROUND THAT THE ASSESSEE HAS REINVESTED THE SALE CONSIDERATION FOR PURCHASE OF NEW HOUSE PROPERTY IN THE NAME OF INDIVIDUAL MEMBERS OF HUF. THE ASSESSING OFFICER FURTHER HELD THAT THE ASSESSEE HAS REINVEST ED IN MORE THAN ONE HOUSE PROPERTY, THEREFORE, IT IS NOT ELIGIBLE FOR E XEMPTION UNDER SEC. 54F OF THE ACT. THE CIT(A) DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER BY HOLDING THAT THE ASSESSEE HAS INVESTED T HE SALE CONSIDERATION FOR PURCHASE OF NEW HOUSE PROPERTY IN THE NAME OF C OPARCENERS OF HUF, THEREFORE, ELIGIBLE FOR EXEMPTION UNDER SEC. 54F OF THE ACT. THE ASSESSEES CONTENTION IS THAT IT IS PURCHASED THE N EW HOUSE PROPERTY OUT 8 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 OF THE SALE PROCEEDS OF HUF PROPERTY AND ALSO THE P ROPERTIES WERE REGISTERED IN THE NAME OF COPARCENERS OF HUF. THE ASSESSEE FURTHER CONTENDED THAT THOUGH THE PROPERTIES ARE REGISTERED IN THE NAMES OF MEMBERS OF HUF, THE PROPERTIES WERE DECLARED AS HUF PROPERTIES BY FILING AN AFFIDAVIT STATING THAT THE PROPERTIES WER E THROWN TO THE COMMON HOTCHPOT OF HUF. 8 . WE HAVE EXAMINED THE ORDERS OF THE LOWER AUTHORITI ES AND ALSO THE SUBMISSIONS OF THE ASSESSEE. IT IS AN ADMITTED FAC T THAT THE ASSESSEE HAS PURCHASED NEW HOUSE PROPERTY IN THE NAME OF IND IVIDUAL MEMBERS OF HUF. THE ASSESSEES CONTENTION IS THAT THE PROP ERTIES ARE HUF PROPERTIES AND THE SAME ARE THROWN TO THE COMMON HO TCHPOTCH OF HUF. WE FIND FORCE IN THE ARGUMENT OF THE ASSESSEE FOR TH E REASON THAT THOUGH THE PROPERTIES ARE REGISTERED IN THE INDIVID UAL NAMES OF MEMBERS OF HUF, THE PROPERTIES WERE DECLARED AS HUF PROPERT IES BY FILING AFFIDAVITS. ONCE, THEY THEMSELVES DECLARED THAT THE PROPERTIES ARE HUF PROPERTIES AND THE RENTAL INCOME FROM SUCH PROPERTI ES WERE DECLARED IN HUF CAPACITY, THE ASSESSING OFFICER WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS PURCHASED NEW PROP ERTY IN HIS INDIVIDUAL CAPACITY. IN THE PRESENT CASE IN OUR HAN D, THE ASSESSEE HAD MADE OUT HIS CASE THAT THE PROPERTIES WERE TREATED AS HUF PROPERTIES BY FILING AN AFFIDAVIT, WHEREIN THEY HAVE STATED THAT THE PROPERTIES ARE 9 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 OWNED BY HUF AND ALL RIGHT AND INTEREST IN THE PROP ERTIES WERE VESTED WITH HUF. THE REVENUE DID NOT CONTROVERT THE ABOVE SUBMISSION OF THE ASSESSEE BY BRINING ANY POSITIVE MATERIALS BEFORE U S. IT IS A WELL SETTLED PROPOSITION OF LAW THAT THE NEW HOUSE PROPERTY NEED NOT BE PURCHASED IN THE NAME OF ASSESSE ITSELF, EVEN IF THE PROPERTI ES ARE PURCHASED IN THE NAMES OF ASSESSEE AND HIS WIFE OR CHILDRENS, THE J UDICIAL FORUMS ARE HELD THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UN DER SEC. 54F OF THE ACT. 9 . COMING TO THE OTHER ALLEGATIONS OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS INVESTED IN PURCHASE OF MORE THAN ONE RESIDENTIAL HOUSE, THEREFORE, NOT ELIGIBLE FOR EXEMPTION UNDER SEC. 54 F OF THE ACT. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSES SEE HAS PURCHASED MORE THAN ONE APARTMENT, WHICH ARE SITUATED IN DIFF ERENT FLOORS, THEREFORE, IT CANNOT BE CONSTRUED A SINGLE RESIDENT IAL HOUSE TO CLAIM EXEMPTION UNDER SEC. 54F OF THE ACT. THE ASSESSEE S CONTENTION IS THAT THOUGH IT HAS PURCHASED MULTIPLE APARTMENTS, THEY A RE LOCATED IN ONE SINGLE RESIDENTIAL COMPLEX ADJACENT TO EACH OTHER, THEREFORE, IT IS ELIGIBLE FOR EXEMPTION. SO FAR AS THE VIEW OF THE ASSESSING OFFICER THAT EXEMPTION UNDER SEC. 54F OF THE ACT WILL BE AVAILAB LE IN RESPECT OF ONE HOUSE IS CONCERNED, WE DO NOT AGREE WITH THE STAND TAKEN BY THE ASSESSING OFFICER FOR THE REASON THAT THE LAW IS WE LL SETTLED THAT A 10 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 RESIDENTIAL HOUSE DOES NOT MEAN A SINGLE RESIDENTIA L HOUSE, EVEN WHERE THE ASSESSEE PURCHASED NUMBER OF FLATS ADJACENT TO EACH OTHER, THEN ALSO THE ASSESSEE WOULD BE ENTITLED FOR EXEMPTION U NDER SEC. 54F OF THE ACT AS HELD BY THE HON'BLE ANDHRA PRADESH HIGH COUR T IN THE CASE OF SYED ALI ADIL (SUPRA). 10 . NOW IT IS RELEVANT TO MENTION HERE THAT THE CASE- LAWS RELIED UPON BY THE ASSESSEE. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE RELIED UPON THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT, IN THE CASE OF CIT & ANR VS. SMT. K.G. RUKMINIAMMA (2011) 331 ITR 211 (KAR), WHEREIN THE HON'BLE HIGH COURT UNDER SIMILAR CIRCUMSTANCES HELD THAT EVEN THE ASSESSEE PURCHASED MORE THAN ONE RESIDENTIAL HOUSE WHICH ARE SITUATED IN A SINGLE RESIDENTIAL COMPLEX AND ADJACENT TO EAC H OTHER, THEN THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SEC. 54F O F THE ACT. THE RELEVANT PORTION IS REPRODUCED HEREIN UNDER:- 12. IN THE INSTANT CASE, THE FACTS ARE NOT IN DISPUTE. ON A SITE MEASURING 30'X110', THE ASSESSEE HAD A RESIDEN TIAL PREMISES. UNDER A JOINT DEVELOPMENT AGREEMENT, SHE GAVE THAT PROPERTY TO A BUILDER FOR PUTTING UP FLATS. UN DER THE AGREEMENT EIGHT FLATS ARE TO BE PUT UP IN THAT PROP ERTY AND FOUR FLATS REPRESENTING 48 PER CENT IS THE SHAR E OF THE ASSESSEE AND THE REMAINING 52 PER CENT REPRESENTING ANOTHER FOUR FLATS IS THE SHARE OF THE BUILDER. SO, THE CONSIDERATION FOR SELLING 52 PER CENT OF THE SITE I S FOUR FLATS REPRESENTING 48 PER CENT. ALL THE FOUR FLATS ARE SITUATED IN A RESIDENTIAL BUILDING. THESE FOUR RESI DENTIAL FLATS CONSTITUTE 'A RESIDENTIAL HOUSE' FOR THE PURP OSE OF S. 54. PROFIT ON SALE OF PROPERTY IS USED FOR RESIDENC E. THE 11 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 FOUR RESIDENTIAL FLATS CANNOT BE CONSTRUED AS FOUR RESIDENTIAL HOUSES FOR THE PURPOSE OF S. 54. IT HAS TO BE CONSTRUED ONLY AS 'A RESIDENTIAL HOUSE' AND THE ASS ESSEE IS ENTITLED TO THE BENEFIT ACCORDINGLY. 11 . THE COORDINATE BENCH OF THIS TRIBUNAL, IN THE CAS E OF ITO VS. SHRI KOMATI SUDHAKAR RAO IN I.T.A.NO. 226/VIZ/2013, UNDE R SIMILAR CIRCUMSTANCES AND AFTER RELIED UPON THE RATIO LAID DOWN BY THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SYED ALI A DIL (SUPRA) HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORT ION IS REPRODUCED HEREINUNDER:- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF T HE REVENUE AUTHORITIES AS WELL AS THE DECISIONS CITED. ON CONSIDERATION OF THE FACTS OF THE CASE WE HOLD AS F OLLOWS: 7.1 THE LEARNED CIT(A) AT PARA 6(III) OF HIS ORDER AT PAGE 8 OBSERVED AS FOLLOWS: 6(III) THIS RELATES TO VARYING OF EXEMPTION CLAIME D UNDER SECTION 54F OF THE IT ACT, 1961. IT IS SEEN T HAT THE APPELLANT HAS CLAIMED SUCH EXEMPTION ON THE TOT AL NUMBER OF UNITS LIKELY TO BE ALLOTTED TO HIM, WHERE AS THE AO HAS RESTRICTED SUCH UNITS TO ONE ONLY. IT MA Y BE NOTED HERE THAT THE PRESENT LEGAL OPINION IS THAT PROPERTY INCLUDES PLURAL UNITS OF PROPERTY BUT NOT A SINGLE UNIT, WHICH STAND IS SUPPORTED BY THE DECISI ON OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. K.G . RUKMINAMMA, REPORTED IN [2011] 196 TAXMAN 87 (KAR.) . IT IS NOT THE NUMBER OF UNITS OF PROPERTY PURCHASED IS THE CRITERIA, BUT INVESTMENT OF CAPITAL GAINS IN PU RCHASE OF OR CONSTRUCTION OF PROPERTY IN ONE UNIT OR IN MO RE THAN ONE UNIT IS THE CRITERION. THAT IS, IF THE ENT IRE LONG TERM CAPITAL GAINS WAS UTILIZED IN INVESTING IN A PROPERTY, MAY BE ONE UNIT OR NUMBER OF UNITS, IN CA SE OTHER CONDITIONS OF SECTION 54F ARE SATISFIED THEN THE 12 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 APPELLANT IS ELIGIBLE TO CLAIM EXEMPTION TO THE EXT ENT OF UTILIZATION OF LONG TERM CAPITAL GAINS. ONE DISTING UISHING FEATURE ONE HAS TO KEEP IN MIND IS THAT THE PROPERT Y SOLD (DEEMED) WAS IN THE HANDS OF THE APPELLANT, WHEREAS THE NEW PROPERTY (PROPERTIES) RECEIVABLE FR OM THE DEVELOPER OUT OF SUCH SALE PROCEEDS WERE ALSO I N THE HANDS OF THE SAME INDIVIDUAL. THUS, TAKING OVERALL PICTURE OF THE CASE, I AM OF THE CONSIDERED OPINION THAT SINCE FUNDS ARE FROM THE INDIVIDUAL AND THE NEW PROPERTIES PROPOSED TO BE TRANSFERRED OR CONSTRUCTE D WERE ALSO IN THE HANDS OF THE SAME INDIVIDUAL, WHER E THE LONG TERM CAPITAL GAINS HAS NEXUS OF NEW INVESTMENTS, THE ACTION OF THE AO IN DENYING EXEMPT ION UNDER SECTION 54F IS NOT JUSTIFIED AND ACCORDINGLY HE IS DIRECTED NOT TO DENY EXEMPTION AND RECOMPUTE THE TO TAL INCOME ACCORDINGLY. 7.2 THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF N. REVATHI (SUPRA) AT PARA 10 & 11 HELD AS FOLLOWS: 10. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AN D PERUSED MATERIALS ON RECORD AS WELL AS ORDERS OF TH E REVENUE AUTHORITIES. THE SOLE ISSUE BEFORE US IS WHETHER TH E BUILDING IN QUESTION CONSTRUCTED BY THE ASSESSEE ON WHICH EXEMP TION U/S 54F OF THE ACT HAS BEEN CLAIMED IS A RESIDENTIAL BU ILDING AS CLAIMED BY THE ASSESSEE OR A BUILDING CONSTRUCTED F OR COMMERCIAL USE. AS CAN BE SEEN FROM THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS COME TO A CONCLUSION THAT THE BUILDING IS NOT A RESIDENTIAL BUILDING BASICALLY FOR THE REASON THAT THE BUILDING IS USED FOR A SCHOOL. HOWEVER, ONLY BECAUS E THE BUILDING IS USED AS A SCHOOL CANNOT CHANGE THE NATU RE AND CHARACTER OF THE BUILDING FROM RESIDENTIAL TO COMME RCIAL. EVEN A RESIDENTIAL BUILDING CAN BE USED AS A SCHOOL OR F OR ANY OTHER COMMERCIAL PURPOSE BUT THE RELEVANT FACTOR TO JUDGE IS WHETHER THE CONSTRUCTION MADE IS FOR RESIDENTIAL HOUSE OR F OR COMMERCIAL PURPOSE. IF THE BUILDING HAS BEEN CONSTR UCTED FOR RESIDENTIAL USE WITH ALL AMENITIES LIKE KITCHEN, BA TH ROOM ETC., WHICH ARE NECESSARY FOR RESIDENTIAL ACCOMMODATION T HEN EVEN IF IT IS USED AS A SCHOOL OR FOR ANY OTHER COMMERCI AL PURPOSE, IT CANNOT LOSE ITS CHARACTER AS A RESIDENTIAL BUILDING . 11. HOWEVER, IF THE CONSTRUCTION IS MADE IN SUCH A WAY THAT IT IS NOT NORMALLY FOR RESIDENTIAL USE BUT PURELY COMMERC IAL USE, THEN IT CANNOT BE CONSIDERED TO BE A RESIDENTIAL HOUSE. THEREFORE, THE 13 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 PRIMARY FACT WHICH IS REQUIRED TO BE EXAMINED IS WH ETHER THE BUILDING HAS BEEN CONSTRUCTED FOR RESIDENTIAL USE O R NOT. THIS CAN BE VERIFIED FROM THE APPROVED PLAN AND ARCHITECTURA L DESIGN OF THE BUILDING. HOWEVER, THE PLAN OF THE CONSTRUCTED BUILDING HAS NOT BEEN BROUGHT ON RECORD EITHER BEFORE THE REVENU E AUTHORITIES OR BEFORE US. THEREFORE, IT IS DIFFICUL T TO ARRIVE AT A CONCLUSIVE FINDING WITH REGARD TO THE NATURE OF THE BUILDING. IN THE AFORESAID VIEW OF THE MATTER, WE ARE INCLINED T O REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WH O SHALL CONDUCT NECESSARY ENQUIRY TO FIND OUT THE EXACT NAT URE OF CONSTRUCTION I.E., WHETHER IT HAS BEEN CONSTRUCTED FOR RESIDENTIAL USE OR FOR COMMERCIAL USE. IF THE BUILDING HAS BEEN CONSTRUCTED FOR RESIDENTIAL USE WITH ALL AMENITIES, WHICH ARE N ECESSARY FOR A RESIDENTIAL ACCOMMODATION, THEN EXEMPTION U/S 54F C ANNOT BE REFUSED ONLY BECAUSE IT IS BEING USED AS A SCHOOL S UBSEQUENTLY. SO FAR AS THE VIEW OF THE ASSESSING OFFICER THAT EX EMPTION U/S 54F OF THE ACT WILL BE AVAILABLE ONLY IN RESPECT OF ONE FLAT IS CONCERNED, WE DO NOT AGREE WITH THE SAME. LAW IS WE LL SETTLED THAT A RESIDENTIAL HOUSE DOES NOT MEAN A SINGLE R ESIDENTIAL HOUSE. EVEN WHERE THE ASSESSEE CONSTRUCTS OR RECEIV ES A NUMBER OF FLATS ADJACENT TO EACH OTHER OR IN DIFFER ENT FLOORS OF THE SAME BUILDING THEN ALSO THE ASSESSEE WOULD BE E NTITLED FOR EXEMPTION U/S 54F OF THE ACT. IN THIS CONTEXT, WE R ELY ON A DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N CASE OF CIT VS. SYED ALI ADIL, JUDGMENT DATED 20-12-2012 IN ITT A NO.410 OF 2012. IN VIEW OF THE ABOVE, THE MATTER IS REMITTED TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE ISSUE AF RESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE IN THE MATTER. 7.3 THE VIEW OF THE FIRST APPELLATE AUTHORITY IS CO NSISTENT WITH THE VIEW TAKEN BY THE JURISDICTIONAL TRIBUNAL IN THE CASE OF N. REVATHI (SUPRA) AND RESPECTFULLY FOLLOWING TH E SAME, WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORIT Y AND DISMISS ALL THE APPEALS OF THE REVENUE. 12 . CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CA SE AND RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE C OORDINATE BENCH OF THIS TRIBUNAL, WE ARE OF THE OPINION THAT THE ASSESSEE I S ELIGIBLE FOR EXEMPTION UNDER SEC. 54F OF THE ACT, FOR REINVESTME NT IN PURCHASE OF 14 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 NEW HOUSE PROPERTY, EVEN THOUGH THE PROPERTIES WERE REGISTERED IN THE NAME OF COPARCENERS OF HUF AND INCOME WHEREOF WAS A SSESSED IN THE HANDS OF HUF. WE FURTHER OF THE OPINION, THAT EVEN THE ASSESSEE PURCHASED MORE THAN ONE APARTMENT, WHICH ARE SITUAT ED IN A SINGLE RESIDENTIAL COMPLEX AND ADJACENT TO EACH OTHER, THE N ALSO THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SEC. 54F OF THE ACT . THE CIT(A) RIGHTLY DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER AND HIS ORDER DOES NOT REQUIRE ANY INTERFERENCE. HENCE, WE INCLINED TO UPHELD THE ORDER OF THE CIT(A) AND REJECT THE GROUNDS RAISED BY THE REV ENUE. C.O.NO. 47/VIZ/2013 13 . THE ASSESSEE HAS FILED CROSS OBJECTION IN SUPPORT OF THE ORDER OF THE CIT(A). DURING THE COURSE OF HEARING, AUTHORIZ ED REPRESENTATIVE OF THE ASSESSEE HAS NOT PRESSED THE CROSS OBJECTION. THEREFORE, WE DISMISS THE C.O. FILED BY THE ASSESSEE AS NOT PRESS ED. 14 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALSO DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2015. SD/- SD/- ( . ) ( . . . . ) ( (( ( V. DURGA RAO ) )) ) ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER 15 ITA NO.26VIZ/2013 & C.O. NO. 47/VIZ/2013 /VISAKHAPATNAM: 3 / DATED : 29/12/2015 VR/SPS ) ' 4 / COPY OF THE ORDER FORWARDED TO :- 1. & / THE APPELLANT SRI VENNA NAGESWARA RAO (HUF), D.NO. 26-20-7, SWAMY STREET, GANDHI NAGAR, VIJAYAWADA. 2. '(& / THE RESPONDENT THE ITO, WARD-2(4), VIJAYAWADA. 3. 5 / THE CIT, VIJAYAWADA. 4. 5 () / THE CIT (A), VIJAYAWADA. 5. ' , , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // 9: ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM