ITO, W-4, Panchkula V. Smt. Seema Bishnoi, Panchkula

ITA 103/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3435 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 01-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S PHANI KISHORE
• Assessee Lawyers: A K JINDAL
• Keywords: Capital asset; Principle of natural justice; Fair market value; Wrong claim; Revised return; Bonafide mistake; Ignorance of law
• Section: 54B; 54F; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 103/CHD/2018 (ASSESSMENT YEAR : 2013-14) THE ITO VS. SMT. SEEMA BISHNOI WARD-4, PANCHKULA H.NO. 906, SEC-08, PANCHKULA PAN NO. ARUPB5117G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. A.K. JINDAL, CA DEPARTMENT BY : SHRI. G.S. PHANI KISHORE, CITDR DATE OF HEARING : 05/02/2019 DATE OF PRONOUNCEMENT : 20/02/2019 O R D E R PER N.K. SAINI, VICE PRESIDENT : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DT. 22/11/2017 OF LD. CIT(A)-, PANCHKULA 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE PRESEN T APPEAL: I) WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF TH E CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS RIGHT IN L AW IN CONSIDERING THE FARM HOUSE A RESIDENTIAL HOUSE FOR THE PURPOSE OF CLAIMI NG EXEMPTION UNDER SECTION 54F OF THE INCOME TAX ACT, 1961? II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS RIGHT IN LA W IN HOLDING THAT THE ASSESSEE FULFILLED ALL THE CONDITIONS REQUIRED FOR CLAIMING DEDUCTION UNDER SECTION 54F OF THE INCOME TAX ACT, 1961? III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS RIGHT IN LA W IN HOLDING THAT THERE BEING NO CLAIM IN THE RETURN AND DURING THE PROCEEDINGS B EFORE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) FOR DEDUCTION UNDER SECT ION 54F OF THE ACT, THE CLAIM UNDER SECTION 54F COULD BE CONSIDERED? IV) WHETHER THE LD. COMMISSIONER OF INCOME TAX (APP EALS) IS RIGHT IN LAW IN HOLDING THAT THE ASSESSING OFFICER OUGHT TO HAVE EX AMINED THE CLAIM UNDER SECTION 54F IGNORING THE FACT THAT THE ASSESSING OF FICER CONSIDERED BOTH THE CLAIMS AS PER LAW? V) IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THAT OF THE A.O. BE RESTORED. 2 VI) THE APPELLANT CRAVES LEAVE TO ADD OR AME ND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. FROM THE ABOVE GROUNDS IT IS GATHERED THAT ONLY GRIEVANCE OF THE DEPARTMENT IN THIS APPEAL RELATES TO THE DEDUCTION DIRECTED TO BE ALLOWED WHICH WAS CLAIMED BY THE ASSESSEE UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS ACT), BY CONSIDERING THE FARM HOUSE AS HIS RESIDENTIAL HO USE. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE E-FILED RETURN OF INCOME ON 10/10/2013 DECLARING INCOME OF RS. 76,22,830/-. LAT ER ON, THE CASE WAS SELECTED FOR SCRUTINY. 5. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A SSESSING OFFICER NOTICED THAT THE ASSESEE HAD SOLD AGRICULTURE LAND MEASURING 25 BIGHA & 13 BISWA SITUATED AT VILLAGE BIJWASAN, TEHSIL VASANT VIHAR, DELHI TO M/S SKA EST ATES PVT. LTD. FOR TOTAL CONSIDERATION OF RS. 62,50,00,000/- ON 18/09/2012. THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN AT NIL ON SALE OF ABOVE LAND AFTER CLAIMING EXEMPTION UNDE R SECTION 54F/54B ON ACCOUNT OF INVESTMENT OF RS. 62,47,51,100/- IN PURCHASE OF NEW AGRICULTURE LAND MEASURING 12 BIGHAS, AT VILLAGE JONAPUR, TEHSIL MEHRAULI, NEW DE LHI ON 19/10/2012. 6. THE ASSESSING OFFICER ASKED THE ASSESSEE TO GIVE JUSTIFICATION IN SUPPORT OF HER CLAIM OF EXEMPTION AGAINST CAPITAL GAIN. IN RESPONS E, THE ASSESSEE FILED COMPUTATION OF INCOME WHICH HAD BEEN REPRODUCED BY THE ASSESSING O FFICER IN PARA 2 OF THE ASSESSMENT ORDER DT. 31/03/2016, FOR THE COST OF RE PETITION THE SAME IS NOT REPRODUCED HEREIN. THE ASSESSING OFFICER OBSERVED THAT THE ASS ESSEE HAD STATED IN COMPUTATION OF INCOME THAT THE EXEMPTION WAS BEING CLAIMED UNDER S ECTION 54B/54F AND THAT SINCE THE EXEMPTION HAD BEEN CLAIMED ON ACCOUNT OF PURCHA SE OF AGRICULTURE LAND THE CLAIM OF THE ASSESSEE MUST HAVE BEEN DEEMED TO BE U NDER SECTION 54B OF THE ACT. THE ASSESSING OFFICER ALSO RECEIVED INFORMATION FRO M THE DDIT (INVESTIGATION) UNIT 1(1) NEW DELHI ON THE BASIS OF WHICH HE RECORDED THE REA SONS AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSING OFFICER OBSER VED THAT AS PER THE INFORMATION FROM DDIT (INVESTIGATION) THE ASSESSEE CLAIMED THAT THE LAND PURCHASED WAS AN AGRICULTURE LAND HOWEVER AS PER THE ENQUIRY CARRIED OUT BY THE SAID OFFICE NO AGRICULTURAL ACTIVITY WAS BEING CARRIED OUT ON THE SAID LAND AND THEREFOR E THE DEDUCTION UNDER SECTION 54B OF THE ACT WAS NO ADMISSIBLE. THE ASSESSING OFFICER ALSO VISITED THE SAID PREMISES TO ASCERTAIN ITS NATURE AND FOUND THAT THE LAND WAS NO T BEING USED FOR AGRICULTURE PURPOSES, THE WATER LEVEL WAS OBSERVED TO BE TOO LO W FOR CARRYING OUT AGRICULTURAL ACTIVITY, SURROUNDING AREA WAS RESIDENTIAL AREA A ND WAS FULLY DEVELOPED, PHOTOS OF THE LAND SHOWED A LARGE RESIDENTIAL CONSTRUCTION AND TH AT THE SAID PREMISES WAS BEING OCCUPIED BY THE RELATIVES OF THE ASSESSEE. THE ASSE SSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAD NOT DECLARED ANY AGRICULTURAL INCOME F OR ANY ASSESSMENT YEAR AND THEREFORE NO AGRICULTURAL OPERATIONS WERE BEING PER FORMED. THE ASSESSING OFFICER ALSO 3 ENQUIRED ABOUT THE STATUS OF THIS LAND FROM THE MUN ICIPAL CORPORATION OF DELHI WHO REPLIED THAT THE LAND COMES IN THE MUNICIPAL LIMIT AS PER NOTIFICATION NO. 1405 OF GOVERNMENT OF INDIA DT. 18/06/2013 AND THIS AREA CO MES IN LOWER DENSITY RESIDENTIAL AREA. THEREFORE THE ASSESSEE WAS NOT ELIGIBLE FOR C LAIMING EXEMPTION UNDER SECTION 54B OF THE ACT. 7. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A SSESSEE VIDE LETTER DT. 30/03/2016 INVITED ATTENTION OF THE ASSESSING OFFIC ER THAT THE EXEMPTION WAS ALTERNATIVELY CLAIMED UNDER SECTION 54F OF THE ACT BUT THE SAID CLAIM WAS NOT ACCEPTED BY THE ASSESSING OFFICER FOR THE REASONS GIVEN IN P ARA 2.4 OF THE ASSESSMENT ORDER WHICH READ AS UNDER: 'I. THE ASSESSEE IN HIS COMPUTATION CLEARLY STATED THAT THIS EXEMPTION IS BEING CLAIMED FOR PURCHASE OF AGRICULTURAL LAND. THEREFOR E THE ASSESSEE IS NOT ELIGIBLE FOR THIS DEDUCTION. II. EVEN THE DDIT (INV) ALSO STATED IN THE LETTER T HAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S.54B, HENCE NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S.54F OF THE INCOME TAX ACT, 1961. III. ON PERUSAL OF REGISTRY OF THE QUESTION LAND IT WAS NOTICED THAT THE WHOLE AMOUNT OF THE PURCHASED ASSETS WAS RELATED TO LAND ONLY NOT FOR ANY RESIDENTIAL HOUSE. AS THIS AMOUNT IS NOT RELATED TO ANY RESIDEN TIAL HOUSE, THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S .54F OF THE INCOME TAX ACT, 1961. IV. IN ITS REPLY THE ASSESSEE STATED THAT DUE TO CL ERICAL ERROR, IT HAS MENTIONED AS EXEMPTION U/S.54B INSTEAD OF 54F OF THE I T ACT, 19 61. THIS PLEA IS NOT ACCEPTABLE AS THE ASSASEE CLAIMED MANY TIMES EXEMPTION U/S.54B OF THE INCOME TAX ACT. 1961. THIS EXEMPTION NOT ONLY CLAIMED IN THIS OFFIC E BUT ALSO IN THE OFFICE OF DDIT(LNV), NEW DELHI AND DDIT(LNV),PANCHKULA. THIS SHOWS THAT THE ASSESSEE WAS ACTUALLY CLAIMING DEDUCTION U/S.54B OF THE INCOME T AX ACT, 1961 THEN SUDDENLY IT TURNED ITS VIEW AND CLAIMED DEDUCTION U/S.54F OF TH E I T ACT, 1961. V. THE ASSESSEE CLEARLY STATED IN HER AFFIDAVIT THA T SHE IS RESIDING AT PANCHKULA ONLY. IT AGAIN SHOWS THAT THE LAND HAS NO T BEEN PURCHASED FOR RESIDENTIAL PURPOSE. VI. DURING THE COURSE OF PHYSICAL INSPECTION OF THE SAID PREMISES STATEMENT OF SHRI SAURABH KUMAR WHO WAS FOUND IN TH E PREMISES AT DELHI HAS BEEN RECORDED U/S.131 OF THE I T ACT, 1961 IN WHICH HE HAS STATED THAT HE IS RESIDING IN THE SAID PREMISES SINCE DECEMBER, 2014. THIS AGAIN SHOWS THAT THIS LAND HAS NOT BEEN PURCHASED FOR RESIDENTIAL PURPOSE OF T HE ASSESSEE. HENCE NOT ELIGIBLE FOR DEDUCTION U/S.54F OF THE ACT. VII. THE ASSESSEE HAS CLAIMED EXEMPTION IN ITS COMP UTATION FOR THE PURCHASE AMOUNT OF LAND ONLY. IT SHOWS THAT THIS IN VESTMENT HAS BEEN MADE ONLY FOR PURCHASE OF LAND ONLY NOT FOR PURCHASE OF RESID ENTIAL HOUSE. IF THIS EXEMPTION WOULD HAVE BEEN CLAIMED FOR RESIDENTIAL HOUSE, THEN THE ASSESSEE WOULD CLAIM IT FOR THE BOTH AMOUNT I.E. LAND PURCHASE AMOUNT AND C ONSTRUCTION OF HOUSE AMOUNT BUT THE ASSESSEE CLAIMED EXEMPTION FOR PURCH ASE OF LAND ONLY NOT FOR CONSTRUCTION OF HOUSE AMOUNT. THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING EXEMPTION U/S.54F OF THE INCOME TAX ACT. 8. THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS NOT ENTITLED TO EXEMPTION UNDER SECTION 54B OF THE ACT AS WELL AS 54F OF THE ACT AN D DISALLOWED THE CLAIM OF EXEMPTION 4 AMOUNTING TO RS. 61,13,24,357/- WHICH WAS ADDED BAC K TO THE TAXABLE INCOME OF THE ASSESSEE. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS : RASIKLAL CHIMANLAL NAGRI VS. CIT, 56 ITR 608 RAJA MUSTAFA ALI KHAN VS. CIT, 16 ITR 330 CIT VS. RAJA BENOY KUMAR SUHAS ROY, 32 ITR 466 (SC) STATE OF UP VS. NAND KUMAR AGGARWAL, AIR 1998 SC 47 3, 476 VALLABDAS NARAINJI VS. DEVELOPMENT OFFICER, AIR 192 9 PC 163 TEA ESTATES INDIA PRIVATE LTD. VS. COMMISSIONER OF WEALTH TAX CIT VS. GEMINI PICTURES, 220 ITR 43 SARIFABIBIS CASE [ 1993] 204 ITR 631 (SC) CWT VS. OFFICER-IN CHARGE (COURT OF WARDS), PAIGAH [1976] 105 ITR 133 (SC) T. SAROJINI DEVI V. SRI KRISTNA, AIR 1944 MAD 401 CIT VS. V.A. TRIVEDI [1988] 172 ITR 95 CIT VS. SIDDHARTH J. DESAI [1981] 139 ITR 628 9. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED THE WRITTEN SUBMISSIONS ON 24/11/2016 THE RELEVANT PORTION OF WHICH HAD BEEN INCORPORATED BY THE LD. CIT(A) IN PARA 4.5 OF THE IMPUGNED ORDER WHICH IS REPRODUCED VERBATIM AS UNDER : IN THIS REGARD THE APPELLANT SUBMIT THAT THE APP ELLANT IS LEGALLY ENTITLED TO CLAIM DEDUCTION U/S 54F OF THE ACT. THE APPELLANT COMPLIE S WITH THE REQUIREMENT OF PROVISIONS OF SECTION 54F OF THE ACT, WHICH CAN BE SUMMARIZED AS UNDER:- I. APPELLANT HAS PURCHASED ANOTHER HOUSE WITHIN ONE YEAR FROM THE DATE OF SALE OF THE OLD LONG TERM ASSET; II. SHE DOES NOT OWN ANY OTHER HOUSE PROPERTY ON TH E DATE OF TRANSFER OF ORIGINAL ASSET; III. INCOME FROM THE NEWLY PURCHASED PREMISES IS CH ARGEABLE UNDER INCOME FROM HOUSE PROPERTY U/S 23(2) OF THE ACT AS SELF-OCCUPIE D ASSETS. THEREFORE SINCE THE APPELLANT HAS COMPLIED WITH THE PROVISIONS OF SECTION 54F OF THE ACT, THE LEARNED ASSESSING OFFICER SHOULD HAVE ALLOWED DEDUCTION U/S 54F OF THE ACT. HOWEVER LEARNED ASSESSING OFFICER CHOSE TO DENY THE SAME ON FLIMSY REASONS. THE ALLEGATION MADE BY THE LEARNED ASSESSI NG OFFICER FOR DISALLOWING THE EXEMPTION IS TOTALLY BASELESS. OUR SUBMISSION ON TH E ALLEGATION OF ASSESSING OFFICER IS AS UNDER: THE ASSESSEE IN HIS COMPUTATION CLEARLY STATED THAT THIS EXEMPTION IS BEING CLAIMED FOR PURCHASE OF AGRICULTURAL LAND. THEREFOR E THE ASSESSEE IS NOT ELIGIBLE FOR THIS DEDUCTION. THE ALLEGATION OF THE LEARNED ASSESSING OFFICER IS NOT CORRECT. IN COMPUTATION THE APPELLANT HAS CLEARLY MENTIONED THAT SHE IS CLAIMIN G EXEMPTION U/S.54F/54B OF THE INCOME TAX ACT, 1961. THIS CAN BE VERIFIED FROM THE ASSESSMENT ORDER, WHERE IN ON PG NO 2, THE LEARNED ASSESSING OFFICER REPRODUCE D THE COMPUTATION OF THE TOTAL INCOME, IN THIS IT IS CLEARLY REFLECT THAT TH E APPELLANT CLAIM THE EXEMPTION U/S.54F/54B OF THE ACT. THE REITERATION OF THE CLAI M U/S.54F OF THE ACT DURING THE COURSE OF THE ASSESSMENT IS MERELY AN EXTENSION OF THE ALTERNATE CLAIM MADE IN THE RETURN OF INCOME. FURTHER THE SAID CLAIM OF APP ELLANT BASED ON THE DOCUMENTARY EVIDENCE IN THE FORM OF PURCHASE AGREEM ENT, EVIDENCE COLLECTED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT ETC, WHICH PROVES THAT THE APPELLANT HAS PURCHASED THE RESIDENTIAL HOUSE W ITH THE LAND APPURTENANT THERETO. II. EVEN THE DDIT (INV) ALSO STATED IN THE LETTER T HAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S.54B, HENCE NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S.54F OF THE INCOME TAX ACT, 1961. 5 AT THE OUTSET THE APPELLANT SUBMIT THAT CORRESPONDE NCE RECEIVED FROM THE DDIT(LNV) HAS NOT BEEN SHARED WITH THE ASSESSEE. FU RTHER AS REGARDS TO THE REPLY SUBMITTED BY THE ASSESSEE WE SUBMIT THAT IN RESPONS E TO THE NOTICES/ENQUIRY BY THE DDIT(LNV), NEW DELHI, APPELLANT HAS SUBMITTED C OPY OF HER RETURN OF INCOME ALONG WITH COMPUTATION OF TOTAL INCOME . IN THE SAI D COMPUTATION REFERENCE OF BOTH SECTION WAS MENTIONED, HENCE CONCLUSION DRAWN BY THE DDIT(LNV), NEW DELHI IS BASED ON THE DOCUMENTS SUBMITTED WITH THEM AND NO NEGATIVE INFERENCE CAN BE DRAWN FROM THE PRELIMINARY FINDINGS OF THE D DIT(LNV), NEW DELHI. THEREFORE THE ALLEGATION OF THE LEARNED ASSESSING OFFICER THA T THE ASSESSEE IS CLAIMED DEDUCTION FROM TIME TO TIME U/S54B IS NOT SUSTAINAB LE. III. ON PERUSAL OF REGISTRY OF THE QUESTION LAND IT WAS NOTICED THAT THE WHOLE AMOUNT OF THE PURCHASES ASSETS WAS RELATED TO LAND ONLY NOT FOR ANY RESIDENTIAL HOUSE. AS THIS AMOUNT IS NOT RELATED TO ANY RESIDEN TIAL HOUSE, THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S .54F OF THE INCOME TAX ACT, 1961. IN THIS REGARD WE SUBMIT THAT APPELLANT HAS ENTERED INTO SALE DEED DATED 19.10.2012 WITH SHRI KARON GUPTA FOR PURCHASE OF LA ND WITH CONSTRUCTED HOUSE THEREIN FOR A TOTAL CONSIDERATION OF RS.59,50,00,00 0/-. THIS FACT IS CLEAR FROM THE AGREEMENT ITSELF ON PAGE NO 6.WHICH READS AS UNDER: AND WHEREAS THE VENDOR FOR THIS BONAFIDE NEEDS AND REQUIREMENTS HAS AGREED TO SELL AND THE VENDOR HAS AGREED TO PURCHASE THE S AID LAND I.E. AGRICULTURE LAND MEASURING 12 BIGHAS, BEARING MUSTATIL NO. 18 KILL N O. 5 (2-18), 6 MIN (3-3), 7 MIN (1- 2), 14 MIN (1-2) AND 15 MIN (3-15), WITH BOUNDARY W ALL, TUBE-WELL , ELECTRIC CONNECTION AND BUILD-UP FARM HOUSE THEREON, SITUATE D AT VILLAGE JONAPUR, TEHSIL MEHRAULI, NEW DELHI WITH ALL RIGHT OF OWNERSHIP, PO SSESSION PRIVILEGES, EASEMENTS AND APPURTENANCES ATTACHED THERETO, FOR A TOTAL SAL E CONSIDERATION OF RS. 59,50,00,000/-(RUPEES FIFTY NINE CRORES FIFTY LACS ONLY).' FURTHER IN RECITAL OF THE SAID AGREEMENT IT IS CLEA RLY MENTIONED THAT THE VENDOR HAS TAKEN APPROVAL FROM THE CONCERNED AUTHORITY FOR CON STRUCTION OF RESIDENTIAL HOUSE (FARM HOUSE) BY THE M.C.D. VIDE THEIR FILE NO 336/B /HQ/2006/94/AEI DATED 07.06.2006. THESE FACTS CLEARLY STATES THAT THE APP ELLANT PURCHASED THE RESIDENTIAL WITH LAND DULY APPROVED BY THE CONCERNED AUTHORITY. COPY OF SALE DEED IS ENCLOSED ON PAGE NO 5-14. FOR YOUR HONOURS READY RE FERENCE AND RECORDS. THEREFORE THE ALLEGATION OF LEARNED ASSESSING OFFIC ER THAT THE ASSESSEE MERELY PURCHASED LAND LACKS MERIT, HENCE NEEDS TO BE REJEC TED. IV. IN ITS REPLY THE ASSESSEE STATED THAT DUE TO CL ERICAL ERROR, IT HAS MENTIONED AS EXEMPTION U/S.54B INSTEAD OF 54F OF THE I T ACT, 19 61. THIS PLEA IS NOT ACCEPTABLE AS THE ASSESSEE CLAIMED MANY TIMES EXEMPTION U/S.54 B OF THE INCOME TAX ACT, 1961. THIS EXEMPTION NOT ONLY CLAIMED IN THIS OFFIC E BUT ALSO IN THE OFFICE OF DDIT(LNV), NEW DELHI AND DDIT(LNV), PANCHKULA. THIS SHOWS THAT THE ASSESSEE WAS ACTUALLY CLAIMING DEDUCTION U/S.54B OF THE INCOME T AX ACT, 1961 THEN SUDDENLY IT TURNED ITS VIEW AND CLAIMED DEDUCTION U/S.54F OF TH E IT ACT, 1961. THE APPELLANT SUBMIT IN THE COMPUTATION OF TOTAL IN COME THE CLAIM OF DEDUCTION WAS MENTIONED U/S.54B/54F OF THE ACT. AS STATED EAR LIER DURING THE ASSESSMENT PROCEEDINGS THE APPELLANT HAS SIMPLY DRAWN THE ATTE NTION OF THE AO TOWARDS THE ALTERNATE CLAIM OF THE ASSESSEE. THE APPELLANT FURTHER SUBMIT THAT EVEN IF THE APPEL LANT CLAIMED DEDUCTION UNDER WRONG SECTION THAN IT IS DUTY OF THE OFFICER TO GIV E THE ASSESSEE CLAIM OF EXEMPTION IN A RIGHT SECTION OF THE ACT. IN THIS REGARD ATTEN TION IS INVITED TO THE DT CIRCULAR NO 14.(XL-35), DATED 11-4-1955, WHICH READ AS UNDER: 'IT OFFICERS MUST NOT TAKE ADVANTAGE OF IGNORANCE O F AN ASSESSEE 'OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIE S TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIM ING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TAXPAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICA TE THAT SOME REFUND RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD, IN THE LONG RUN, B ENEFIT THE DEPARTMENT, FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DEPARTMENT. ALTHOUGH, THEREFORE, THE RESPO NSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH THE ASSESSEES ON WHOM IT IS IMPOSED BY LAW, OFFICERS SHOULD - 6 A. DRAW THEIR ATTENTION TO ANY REFUND OR RELIEFS TO WHICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE OMITTED TO CLA IM FOR SOME REASON OR OTHER; B. FREELY ADVISE THEM WHEN APPROACHED BY THEM AS TO THEIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPTED F OR CLAIMING REFUNDS AND RELIEFS.' FURTHER BOMBAY HIGH COURT IN THE CASE OF BALMUKUND ACHARYA VS. DEPUTY COMMISSIONER OF INCOME TAX & ORS. : 310ITR 310, HELD THAT 31. HAVING SAID SO, WE MUST OBSERVE THAT THE APEX C OURT AND THE VARIOUS HIGH COURTS HAVE RULED THAT THE AUTHORITIES UNDER THE AC T ARE UNDER AN OBLIGATION TO ACT IN ACCORDANCE WITH LAW. TAX CAN B E COLLECTED ONLY AS PROVIDED UNDER THE ACT. IF ANY ASSESSEE, UNDER A MISTAKE, MI SCONCEPTION OR ON NOT BEING PROPERLY INSTRUCTED IS OVER ASSESSED, THE AUTHORITI ES UNDER THEACT ARE REQUIRED TO ASSIST HIM AND ENSURE THAT ONLY LEGITIMATE TAXES DU E ARE COLLECTED [SEE S.R. KOSHTI VS. CIT (2005) 193 CTR (GUJ) 518 : (2005) 276 ITR 1 65 (GUJ), CPA. YOOSUF VS. ITO (1970) 77 ITR 237 (KER), CIT VS. BHARAT GENERAL REI NSURANCE CO. LTD. (1971) 81 ITR 303 (DEL), CIT VS. ARCHANA R. DHANWATEY (1981) 24 C TR (BOM) 142 : (1982) 136 ITR 355 (BOM)]. 1. IF PARTICULAR LEVY IS NOT PERMITTED UNDER THE ACT, TAX CANNOT BE LEVIED APPLYING THE DOCTRINE OF ESTOPPEL [SEE DY. CSTVS. S REENI PRINTERS (1987) 67 SCC 279]. 2. THIS COURT IN THE CASE OF NIRMALA L. MEHTA VS. A. B ALASUBRAMANIAM, CIT (2004) 191 CTR (BOM) 8 : (2004) 269 ITR 1 (BOM) HAS HELD THAT THERE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE. ARTICLE 265 OF THE CO NSTITUTION OF INDIA IN UNMISTAKABLE TERMS PROVIDES THAT NO TAX SHALL BE LE VIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. ACQUIESCENCE CANNOT TAKE AWAY FRO M A PARTY THE RELIEF THAT HE IS ENTITLED TO WHERE THE TAX IS LEVIED OR COLLECTED WITHOUT AUTHORITY OF LAW. IN THE CASE ON HAND, IT WAS OBLIGATORY ON THE PART OF THE AO TO APPLY HIS MIND TO THE FACTS DISCLOSED IN THE RETURN AND ASSESS THE ASSESS EE KEEPING IN MIND THE LAW HOLDING THE FIELD.' THE SAME VIEW WAS HELD BY THE INDORE TRIBUNAL IN TH E CASE OF PARAMJEET SINGH CHHABRA V. ITO (2013) 59 SOT 165 WHEREIN THE ASSESS EE CLAIMED THE EXEMPTION UNDER WRONG SECTION BUT THE HON'BLE IT AT DIRECTED THE AO TO ALLOW THE CLAIM UNDER CORRECT SECTION. THE FACT OF THE CASE WAS AS UNDER: 'THE ASSESSEE SOLD A SHOP AND WORKED OUT THE CAPITA L GAINS. HE INVESTED THE SALE CONSIDERATION IN CONSTRUCTION OF RESIDENTIAL HOUSE AND CLAIMED EXEMPTION UNDER SECTIONS MENTIONING SECTIONS 54B, 54D AND 54F IN TH E RETURN. THE ASSESSING OFFICER DENIED EXEMPTION CLAIMED ON GROUND THAT ASSESSEE HA D MENTIONED WRONG SECTIONS WHILE CLAIMING EXEMPTION. HELD WHERE DUE T O IGNORANCE WRONG SECTION HAD BEEN MENTIONED BY ASSESSEE IN RETURN. ON APPEAL THE TRIBUNAL HELD THAT THE ASSESSING OFFICER WAS REQUIRED TO ADVISE ASSESSEE A BOUT CORRECT CLAIM AND ALSO TO ASSESS TAX LEGITIMATELY. TRIBUNAL REFERRED THE CIRC ULAR NO 14.(XL-35), DATED 11-4- 1955 AND LETTER NO.F.81 /27/65-IT(B) DATED 18-5-196 5) AND DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM UNDER SECTION 54F AFTER PROVIDING DUE OPPORTUNITY OF HEARING.' FURTHER ATTENTION IS INVITED TO THE PROVISIONS OF S ECTION 292B OF THE ACT, WHICH STATES THAT RETURN OF INCOME SHALL NOT BE INVALID MERELY B Y REASON OF ANY MISTAKE, DEFECT OR OMISSION IF SUCH RETURN OF INCOME IS IN SUBSTANC E AND IN EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE ACT. CONSIDERING THE ABOVE JUDICIAL PRONOUNCEMENTS, PROV ISIONS OF LAW AND FACTS OF THE CASE IT IS CLEAR EVEN IF THE ASSESSEE HAS CLAIM ED DEDUCTION UNDER WRONG SECTION, IT IS DUTY OF THE ASSESSING OFFICER TO GUI DE THE ASSESSEE AND ALLOW DEDUCTION UNDER CORRECT PROVISIONS OF LAW IF THE SA ME IS IN SUBSTANCE IN CONFORMITY WITH THE ACT. THEREFORE ALLEGATION OF THE LEARNED A SSESSING OFFICER THAT THE CLAIM WAS MADE IN RETURN OF INCOME U/S 54B AND NOT 54F IS NOT SUSTAINABLE AND NEEDS TO BE REJECTED. V. THE ASSESSEE CLEARLY STATED IN HER AFFIDAVIT THA T SHE IS RESIDING AT PANCHKULA ONLY. IT AGAIN SHOWS THAT THE LAND HAS NOT BEEN PUR CHASED FOR RESIDENTIAL PURPOSE. 7 VI. DURING THE COURSE OF PHYSICAL INSPECTION OF THE SAID PREMISES STATEMENT OF SHRI SAURABH KUMAR WHO WAS FOUND IN THE PREMISES AT DELHI HAS BEEN RECORDED U/S.131 OF THE I T ACT, 1961 IN WHICH HE H AS STATED THAT HE IS RESIDING IN THE SAID PREMISES SINCE DECEMBER, 2014. THIS AGAIN SHOWS THAT THIS LAND HAS NOT BEEN PURCHASED FOR RESIDENTIAL PU RPOSE OF THE ASSESSEE. HENCE NOT ELIGIBLE FOR DEDUCTION U/S.54F OF THE ACT . IN THIS REGARD WE SUBMIT THAT IT IS GENERAL PRACTIC E IN INDIA THAT ON VARIOUS LEGAL DOCUMENT THERE IS A PARTICULAR ADDRESS WHICH COULD EITHER BELONGS TO HIM/HER OR ANY OF HIS/HER RELATIVE. SIMILARLY IN THIS CASE THE APPELLANT PRIOR TO ACQUISITION OF THIS PROPERTY WAS USING HER EARLIER ADDRESS ON ALL LEGAL DOCUMENTS INCLUDING RETURN OF INCOME BUT IT DOES NOT MEAN THAT THE APPELLANT DOES NOT OWN NEW ACQUIRED PROPERTY WHICH IS DULY SUPPORTED WITH LEGAL DOCUMEN TS. THE LD AO HAS WRONGLY DRAWN INFERENCE FROM THE ADDRESS USED ON AFFIDAVIT WHICH CLEARLY SHOWS THAT HE DOES NOT HAVE VALID GROUNDS TO REJECT THE LEGAL CLA IM OF APPELLANT. FURTHER RELIANCE ON THE STATEMENT OF SHRI SAURABH K UMAR, PART OF WHICH IS REPRODUCED ON PAGE 23 OF THE ORDER, WHEREIN HE HAS CONFIRMED THAT HE IS STAYING IN THE HOUSE FOR TWO YEARS AND SEEMA BISHNOI, WHO I S OWNER OF THE HOUSE IS HIS COUSIN SISTER, IS ALSO SUPPORT THE CLAIM OF APPELLA NT THAT THE PROPERTY PURCHASED BY THE APPELLANT IS A RESIDENTIAL PROPERTY. THE RELIAN CE ON THIS STATEMENT DOES NOT REFLECTED IN HIS ACTION, AS HE HAS NOT MADE ANY ADD ITION ON ACCOUNT OF RENTAL INCOME AND TREATED THE NEWLY ACQUIRED AS SELF-OCCUP IED PROPERTY OF THE ASSESSEE. EVEN OTHERWISE FOR CLAIMING THE EXEMPTION U/S.54F I T IS NOT THE CONDITION THAT THE ASSESSEE SHOULD RESIDE IN THE HOUSE WHICH SHE PURCH ASED. THE SAME VIEW WAS HELD BY THE HON'BLE IT ATDELHI BENCH IN THE CASE OF AMIT GUPTA V. DEPUTY COMMISSIONER OF INCOME-TAX, 6 SOT 403, ON WHICH THE APPELLANT PLACED ITS RELIANCE. IT WAS HELD THAT: 'THE REQUIREMENT OF SECTION 54F IS THAT THE PROPERT Y SHOULD BE A RESIDENTIAL HOUSE. THE EXPRESSION 'RESIDENTIAL HOUSE' HAS NOT BEEN DEF INED IN THE ACT. THE POPULAR MEANING OF THE WORD IS A PLACE OR BUILDING USED FOR HABITATION OF PEOPLE. IT IS USED IN CONTRADISTINCTION TO A PLACE WHICH IS USED FOR THE PURPOSE OF BUSINESS, OFFICE, SHOP, ETC. IT IS NOT NECESSARY THAT A PERSO N SHOULD RESIDE IN THE HOUSE TO CALL IT A RESIDENTIAL HOUSE. IF IT IS CAPABLE OF BE ING USED FOR THE PURPOSE OF RESIDENCE, THEN THE REQUIREMENT OF SECTION 54F IS S ATISFIED. THE FACT THAT THE ASRESSEE DID NOT ACTUALLY USE THE SAME FOR HIS RESI DENCE WOULD NOT DISENTITLE HIM TO THE CLAIM OF EXEMPTION UNDER SECTION 54F THUS FROM THE ABOVE IT IS CLEAR THAT FOR CLAIMING T HE EXEMPTION IS THAT THE PROPERTY SHOULD BE A RESIDENTIAL HOUSE, THERE IS NO RESTRICT ION FOR CLAIMING THE EXEMPTION THAT THE ASSESSEE IS NOT RESIDING IN THE SAME HOUSE . THE ASSESSEE HAS CLAIMED EXEMPTION IN ITS COMPUTATI ON FOR THE PURCHASE AMOUNT OF LAND ONLY. IT SHOWS THAT THIS INVESTMENT HAS BEE N MADE ONLY FOR PURCHASE OF LAND ONLY NOT FOR PURCHASE OF RESIDENTIAL HOUSE. IF THIS EXEMPTION WOULD HAVE BEEN CLAIMED FOR RESIDENTIAL HOUSE, THEN THE ASSESS EE WOULD CLAIM IT FOR THE BOTH AMOUNT LE. LAND PURCHASE AMOUNT AND CONSTRUCTION OF HOUSE AMOUNT BUT THE ASSESSEE CLAIMED EXEMPTION FOR PURCHASE OF LAND ONL Y NOT FOR CONSTRUCTION OF HOUSE AMOUNT THEREFORE, THE ASSESSEE IS NOT ELIGIBL E FOR CLAIMING EXEMPTION U/S.54F OF THE INCOME TAX ACT IN THIS REGARD WE SUBMIT THAT THE APPELLANT ON 19 TH OCTOBER 2012 PURCHASED FARM HOUSE ALONG WITH ITS SURROUNDING LAND FOR A CONSIDE RATION OF RS. 62,47,51,100/-. IN THE AGREEMENT IT IS CLEARLY MENTIONED THAT THE APPE LLANT PURCHASED THE LAND WITH RESIDENTIAL HOUSE BUILT OVER THERE. AS PER THE SECT ION 54F OF THE ACT, THE ASSESSEE IS ELIGIBLE FOR CLAIMING THE EXEMPTION UNDER SECTION 5 4F IF ASSESSEE INVEST THE SUM IN PURCHASING OR CONSTRUCTION OF THE HOUSE. IN THE PRE SENT CASE THE APPELLANT PURCHASED THE FARM HOUSE ALONG WITH ITS SURROUNDING LAND. NOW THE QUESTION ARISES WHETHER FARM HOUSE COMES UNDER THE PURVIEW O F THE RESIDENTIAL HOUSE OR NOT. THE HON'BLE JAIPUR IT AT IN THE CASE OF SHYAM SUNDER MUKHIJA VS INCOME-TAX OFFICER, 38 ITD125 HELD THAT 'THE FARM HOUSE CAN BE TREATED AS RESIDENTIAL HOUSE FOR THE PURPOSE OF THE CLAIMING EXEMPTION U/S.54F O F THE ACT.' THE RELEVANT FINDING (OF THE CASE IS AS UNDER: THE EXPRESSION RESIDENTIAL HOUSE' USED IN SECTIO N 54F HAS NOT BEEN DEFINED. THE POPULAR MEANING OF THE WORD 'HOUSE' IS A PLACE OR B UILDING USED FOR HABITATION OF 8 MAN. 'RESIDENTIAL HOUSE' IS A DWELLING HOUSE AS DIS TINCT FROM A HOUSE OF BUSINESS, WAREHOUSE, OFFICE, SHOP, ETC. IN OTHER WORDS, RESID ENTIAL HOUSE IS A BUILDING USED AS A PLACE OF ABODE IN WHICH PEOPLE RESIDE OR DWELL IN CONTRA-DISTINCTION TO ONE WHICH IS USED FOR COMMERCIAL OR BUSINESS PURPOSES. SINCE A HOUSE IS CALLED RESIDENTIAL HOUSE WITH REFERENCE TO THE PURPOSE OF ITS USER, IT MAY NOT BE NECESSARY THAT SOMEBODY SHOULD LIVE IN IT CONTINUOU SLY. IT IS ENOUGH IF IT WAS A HOUSE FOR RESIDENCE. A FARM HOUSE IS ALSO A RESIDEN TIAL HOUSE. A FARM HOUSE, ACCORDING TO THE DICTIONARY MEANING, IS A FARMER'S HOUSE ATTACHED TO A FARM. IN THE PRESENT CASE, THERE WAS NO EVIDENCE THAT THERE WAS ANY FARM IN EXISTENCE. THE ASSESSEE HAD PAID RS. 7,560 ON 7-4-1984 AS CONV ERSION CHARGES. HE AGAIN PAID RS. 4,200 AS DEVELOPMENT CHARGES TO THE ULTON 26-5-1984. THEREFORE, THE ITO COULD NOT TAKE THE VIEW THAT WHAT WAS IN EXISTENCE COULD NOT BE CALLED AS A RESIDENTIAL HOUSE. THE DESCRIPTION OF THE CONSTRUCT ION, WHICH WAS NOT IN DISPUTE, SHOWED THAT IT WAS A COMPLETE UNIT HAVING A BIG HAL L, KITCHEN, TOILET AND VERANDAH NOTWITHSTANDING THE SIZE OF THE SWIMMING P OOL, WHICH WAS ALSO THERE. AS RIGHTLY POINTED OUT BY THE ASSESSEE, THERE WAS N O PROHIBITION REGARDING THE CONSTRUCTION OF A RESIDENTIAL HOUSE ON AGRICULTURAL LAND. THEREFORE, THE ASSESSEE WAS ENTITLED TO THE DEDUCTION CLAIMED UNDER SECTION 54F.' THE APPELLANT PURCHASED THE FARM HOUSE ALONG WITH I TS SURROUNDING LAND. THE ASSESSING OFFICER DUE TO ITS SURROUNDING LAND COME TO THE CONCLUSION THAT THE ASSESSEE HAS PURCHASE THE LAND, HENCE NOT ELIGIBLE FOR THE EXEMPTION UFS.54F OF THE ACT. THE LAND WHICH IS VACANT LAND APPURTENANT TO AND FORMING PART OF THE RESIDENTIAL UNIT IS TO BE CONSIDERED FOR THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT. IT IS NOT NECESSARY THE RESIDENTIAL UNIT I S TO BE CONSTRUCTED ON THE WHOLE LAND. THE SAME VIEW WAS HELD BY THE HON'BLE DELHI B ENCH IN THE CASE OF ACIT VS NARENDRA MOHAN UNIYAL, 34 SOT 152 . THE FINDING OF THE SAID CASE LAW IS AS FOLLOWS: 'IT IS CRYSTAL CLEAR FROM PLAIN READING OF SECTIONS 54 AND 54F THAT EXEMPTION IS ALLOWABLE IN RESPECT OF AMOUNT INVESTED IN THE CONS TRUCTION OF A RESIDENTIAL HOUSE. THERE IS NOT ANY RIDER UNDER SECTION 54F THA T NO DEDUCTION WOULD BE ALLOWED IN RESPECT OF INVESTMENT OF CAPITAL GAINS M ADE ON ACQUISITION OF LAND APPURTENANT TO THE BUILDING OR ON THE INVESTMENT ON LAND ON WHICH BUILDING IS BEING CONSTRUCTED. WHEN THE LAND IS PURCHASED AND B UILDING IS CONSTRUCTED THEREON, IT IS NOT NECESSARY THAT SUCH CONSTRUCTION SHOULD BE ON THE ENTIRE PLOT OF LAND, MEANING THEREBY A PART OF THE LAND WHICH IS A PPURTENANT TO THE BUILDING AND ON WHICH NO CONSTRUCTION IS MADE, THERE IS NO D ENIAL OF EXEMPTION ON SUCH INVESTMENT. THEREFORE, THE CONTENTION OF THE REVENU E, THAT THERE IS A DISTINCTION WITH RESPECT TO INVESTMENT IN APPURTENANT LAND AS P ER SECTIONS 54 AND 54F, WAS NOT TENABLE AT ALL. IN THE INSTANT CASE, THERE WAS NO DISPUTE TO THE FACT THAT INVESTMENT OF CAPITAL GAINS WAS MADE WITHIN THE STA TUTORY PERIOD AND MOREOVER WITHIN THE SAME FINANCIAL YEAR. ANOTHER PLOT OF LAN D WHICH WAS PURCHASED BY THE ASSESSEE WAS ADJACENT TO THE PLOT ALREADY PURCHASED DURING THE RELEVANT YEAR ITSELF OUT OF CAPITAL GAINS. ONLY BECAUSE CONSTRUCT ION WAS MADE ON THE FIRST PLOT OF LAND, THE EXEMPTION CLAIMED IN RESPECT OF INVESTMEN T MADE IN ADJACENT PLOT OF LAND COULD NOT BE DECLINED WHEN ALL THE OTHER CONDI TIONS AS STIPULATED UNDER SECTION 54F WERE BEING SATISFIED. WHILE DEALING WIT H THE OBJECTION OF THE ASSESSING OFFICER, THE COMMISSIONER (APPEALS) HAD CATEGORICAL LY GIVEN A FINDING THAT THE LAND SO PURCHASED WAS ONE PIECE OF PLOT HAVING AREA OF 2,000 SQ. MTR. BOTH THESE PLOTS WERE HAVING 1,000 SQ. MTR., OF LAND. BOTH THE PLOTS FORMED PART OF ONE RESIDENTIAL UNIT AND WERE CONTIGUOUS AND ADJOINING TO EACH OTHER. THE COMMENT OF THE ASSESSING OFFICER TO THE EFFECT THAT EXEMPTI ON UNDER SECTION 54F WAS ELIGIBLE ONLY FOR CONSTRUCTION OF HOUSE WAS NOT TEN ABLE INSOFAR AS EVEN COST OF LAND FORMING PART OF THE RESIDENTIAL UNIT ON WHICH NO CONSTRUCTION WAS DONE WAS ALSO ELIGIBLE FOR EXEMPTION UNDER SECTION 54F. THUS , THE COST OF VACANT LAND APPURTENANT TO AND FORMING PART OF THE RESIDENTIAL UNIT WAS TO BE CONSIDERED FOR CLAIM OF EXEMPTION UNDER SECTION 54F EVEN IF NO CON STRUCTION HAD BEEN DONE ON THE APPURTENANT LAND. THE PROVISIONS OF SECTION 54 CLEARLY PROVIDE FOR EXEMPTION IF THE NET CONSIDERATION RECEIVED AS A RESULT OF TRANS FER OF ANY CAPITAL ASSET, OTHER THAN A RESIDENTIAL HOUSE, IS INVESTED IN THE PURCHA SE OR CONSTRUCTION OF A RESIDENTIAL HOUSE. THE NEW RESIDENTIAL HOUSE IS NOT DEBARRED FROM HAVING A LAND APPURTENANT TO ANY SIZE AND IT WAS ALSO NOT THE CAS E OF THE ASSESSING OFFICER THAT THE LAND APPURTENANT TO THE BUILDING WAS NOT ENTITL ED TO EXEMPTION UNDER SECTION 54F. HAD IT BEEN A CASE OF LAND NOT APPURTENANT TO THE BUILDING SO CONSTRUCTED, THEN THE CONTENTION OF THE ASSESSING OFFICER TO THE EFFECT THAT INVESTMENT OF CAPITAL GAINS MADE IN THE SECOND PLOT WHICH WAS NOT APPURTENANT TO THE BUILDING SO CONSTRUCTED WAS NOT ELIGIBLE FOR EXEMPTION, COUL D BE FAVOURABLY ACCEPTED. [PARA 10] 9 IN VIEW OF THE ABOVE DISCUSSION AND KEEPING IN VIEW THE DETAILED OBSERVATION MADE BY THE COMMISSIONER (APPEALS), IT COULD SAFELY BE CONCLUDED, ON A PROPER APPRECIATION OF MATERIAL AVAILABLE ON RECORD, THAT THE PROPERTY PURCHASED BY THE ASSESSEE WAS A SINGLE UNIT AND WAS BEING USED FOR R ESIDENTIAL PURPOSES. THEREFORE, INVESTMENT MADE IN RESPECT OF BOTH THE PLOTS WAS EL IGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 54F, THEREFORE, THE ORDER OF COMMISSI ONER (APPEALS) WAS TO BE UPHELD. [PARA 11] IN THE RESULT, THE APPEAL OF THE REVENUE WAS TO BE DISMISSED, WHEREAS CROSS- OBJECTION FILED BY THE ASSESSEE WAS TO BE ALLOWED. [PARA 12].' THUS FROM THE ABOVE IT IS CLEAR THAT THE APPELLANT IS ELIGIBLE FOR CLAIMING THE EXEMPTION U/S.54F OF THE ACT, HENCE THE SAME SHOULD BE ALLOWED TO THE APPELLANT. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IN TH E LIGHT OF THE ABOVE SUBMISSION, IT IS RESPECTFULLY PRAYED THAT THE ADDI TIONS MADE IS DESERVES TO BE DELETED. THIS BEING OUR BRIEF SUBMISSION WE SHALL PLEASE TO PROVIDE DETAILS/ EXPLANATION IN CASE YOUR HONOUR DO NOT CONVINCE WITH OUR ABOVE SUB MISSIONS. ' 10. THE LD. CIT(A) ASKED THE REMAND REPORT OF THE A SSESSING OFFICER ON THE AFORESAID SUBMISSION OF THE ASSESEE. IN RESPONSE TH E ASSESSING OFFICER FURNISHED THE REMAND REPORT DT. 25/07/2017 WHICH READS AS UND ER: SECOND GROUND OF APPEAL:- THAT, ALTERNATIVELY, ON T HE FACTS OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN DIS ALLOWING THE EXEMPTION U/S 54F OF THE ACT IN RESPECT OF THE AFORESAID LONG TERM CA PITAL GAIN. ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 54F ON T HE FOLLOWING REASONS:- 1. EXEMPTION U/S 54F IS AVAILABLE FOR PURCHASE OF THE RESIDENTIAL HOUSE, NOT FOR PURCHASE OF AGRICULTURAL LAND. THE ASSESSEE IN HIS COMPUTATION CLEARLY STATED THAT THIS EXEMPTION IS BEING CLAIMED FOR PURCHASE OF AGR ICULTURAL LAND. THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR THIS DEDUCTION. 2. AS DISCUSSED ABOVE, DDIT(INV.), NEW DELHI HIMSELF S TATED IN HIS LETTER THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54B IN HIS OFFIC E. THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 54F OF THE INCO ME TAX ACT, 1961. 3. ON PERUSAL OF REGISTRY OF THE QUESTION LAND IT WAS NOTICED THAT THE WHOLE AMOUNT OF THE PURCHASES ASSETS WAS RELATED TO LAND ONLY NOT FOR ANY RESIDENTIAL HOUSE. AS THIS AMOUNT IS NOT RELATED TO ANY RESIDEN TIAL HOUSE, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 54F OF THE INCOME TAX ACT, 1961.' 10.1 IN RESPONSE TO THE ABOVE REMAND REPORT OF THE ASSESSING OFFICER THE ASSESSEE FURNISHED THE REJOINDER VIDE LETTER DT. 23 /08/2017 THE CONTENTS OF THE SAME WERE AS UNDER: WE HAVE BEEN PROVIDED WITH THE COPY OF REMAND REP ORT DATED 25.07.2017, ON WHICH WE MAKE OUR OBSERVATIONS AS UNDER:- ON PERUSAL OF THE REMAND REPORT IT IS SEEN THAT THE ASSESSING OFFICER HAS NOT RAISED ANY NEW ISSUE NOR HAS REBUTTED THE ARGUMENTS SUBMITTED BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS. THE ASS ESSING OFFICER WAS SIMPLY REITERATED THE REASONING GIVEN IN THE ASSESSMENT OR DER ITSELF FOR DISALLOWING THE CLAIM OF THE ASSESSEE. ON VARIOUS ISSUES RAISED IN REMAND REPORT WE SUBMIT AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF, THE ASSESSEE VIDE LETTER DATED 30.03.2016 HAS SUBMITTED THAT THE EXEMPTION HAS BEE N CLAIMED U/S 54F FOR THE PURCHASE OF CONSTRUCTED RESIDENTIAL HOUSE AND LAND APPURTENANT THEREOF AND NOT FOR THE PURCHASE OF AGRICULTURAL LAND. THE FACT REG ARDING THE CLAIM MADE BY THE ASSESSEE U/S 54F DURING THE COURSE OF ASSESSMENT PR OCEEDINGS HAS BEEN CONFIRMED BY THE ASSESSING OFFICER HIMSELF IN PARA 6 OF THE REMAND REPORT. THUS IT IS 10 VERY CLEAR AND IS BEING ADMITTED THAT THERE IS NO C LAIM FOR DEDUCTION U/ S 54B AND THE CLAIM OF THE APPELLANT IS ONLY U/S 54F OF THE I NCOME TAX ACT. FOR DISALLOWING THE CLAIM OF THE APPELLANT U/S 54F, THE AO IN PARA 1 HAS ONLY STATED THAT THE EXEMPTION U/S 54F IS AVAILABLE FOR PURCHASE OF RESIDENTIAL HOUSE & NOT FOR PURCHASE OF AGRICULTURAL LAND. SINCE THE AS SESSEE HAS MADE THE CLAIM FOR PURCHASE OF AGRICULTURAL LAND SO THE ASSESSEE IS NO T ELIGIBLE FOR DEDUCTION U/S 54F. IN THIS REGARD WE SUBMIT THAT THE ASSESSEE VIDE LET TER DATED 30.03.2016 HAS CLARIFIED THE ISSUE REGARDING CLAIM FOR DEDUCTION U /S 54F STATING THAT THE CLAIM IS FOR THE PURCHASE OF RESIDENTIAL HOUSE. IT IS A MATT ER OF FACT THAT THE ASSESSEE HAS PURCHASED BUILD UP FARM HOUSE ALONG WITH THE LAND A PPURTENANT THERETO. THEREFORE THE CLAIM OF THE ASSESSEE U/S 54F IS AS P ER THE PROVISIONS OF LAW. IN PARA 2, THE AO HAS STATED THAT THE ASSESSEE BEFO RE THE DDIT (INV.) HAS SUBMITTED THAT THE EXEMPTION HAS BEEN CLAIMED U/S 5 4B. IN THIS REGARD IT IS SUBMITTED THAT THE ASSESSEE HAS NEVER BEEN CONFRONT ED WITH THE REPORT OF DDIT(INV) AND NO OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE TO SUBMIT HER OBSERVATIONS ON THE SAME. HOWEVER AS PER THE ASSESS EE, THE ASSESSEE HAS ONLY FURNISHED THE COMPUTATION OF INCOME BEFORE THE DDIT (INV) WHEREIN BOTH THE SECTIONS I.E. 54B/54F WERE MENTIONED AND THE DDIT ( INV) HAS FORMED HIS OWN OPINION ON THE SAME. IN THE ABSENCE OF ANY STATEMEN T BY THE ASSESSEE BEFORE THE DDIT(INV) WE SUBMIT THAT NO ADVERSE INFERENCE O N THE SAME BE WITHDRAWN. EVEN IF FOR THE SAKE OF ARGUMENT IT IS ASSUMED THAT THE ASSESSEE HAS MADE A STATEMENT REGARDING CLAIM U/ S 54B BEFORE THE DDIT( INV), IT WOULD NOT DISENTITLE THE ASSESSEE TO MAKE THE CLAIM UNDER THE CORRECT SECTIO N OF THE INCOME TAX ACT DURING THE ASSESSMENT PROCEEDINGS. SINCE THE ISSUE REGARDING CLAIM OF DEDUCTION HAS BEEN CLARIFIED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE SAID FACT HAS BEEN ADMITTED BY THE AO IN PARA 6 OF THE REMAND REPORT, WE SUBMIT THAT THE AO IS NOT JUSTIFIED IN DENYING THE CLAIM U/S - F OF THE INCOME TAX ACT. IN PARA 3 THE AO HAS STATED THAT ON PERUSAL OF THE REGISTRY IT WAS NOTICED THAT THE WHOLE AMOUNT OFPURCHASED ASSET RELATES TO LAND ONLY & NOT FOR RESIDENTIAL HOUSE, THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 54F. IN THIS REGARD WE WOULD LIKE TO DRAW YOUR KIND ATTE NTION TOWARDS PARA 3 ON PAGE 2 OF THE PURCHASE DEED WHEREIN IT HAS BEEN WRITTEN AS UNDER:- 'WHEREAS THE VENDOR IS THE SOLE, ABSOLUTE AND EXCLU SIVE OWNER/BHUMIDAR AND IS IN POSSESSION OF AGRICULTURAL LAND MEASURING 12 BIGHAS BEARING MUSTATIL NO. 18 KILL NO, 5 (2-18), 6 MIN (3-3) 7 MIN (1-2) 14 MIN (1-2) AND 15 MIN (3-15) WITH BOUNDARY WALL, TUBE WELL, ELECTRIC, CONNECTION AND BUILD UP FARM H OUSE THEREON, SITUATED AT VILLAGE J ONPUR, TEHSIL MEHRAULI, NEW DELHI, (HEREI NAFTER REFERRED TO AS 'THE SAID LAND') PARA 2 ON PAGE 6 OF THE PURCHASE DEED WHEREIN IT HA S BEEN WRITTEN AS UNDER :- 'AND WHEREAS THE VENDOR FOR THIS BONAFIDE NEEDS AND REQUIREMENTS HAS AGREED TO SELL AND THE VENDOR HAS AGREED TO PURCHASE THE S AID LAND I.E. AGRICULTURE LAND MEASURING 12 BIGHAS BEARING MUSTATIL NO. 18 KILL NO . 5 (2-18), 6 MIN (3-3) 7 MIN (1-2) 14 MIN (1-2) AND 15 MIN (3-15) WITH BOUNDARY WALL, TUBE WELL, ELECTRIC, CONNECTION AND BUILD UP FARM HOUSE THEREON, SITUATED AT VILLAGE JONPUR, TEHSIL MEHRAU LI, NEW DELHI WITH ALL RIGHT OF OWNERSHIP, POSSESSION PRIVI LEGES, EASEMENTS AND APPURTENANCES ATTACHED THERETO, FOR A TOTAL CONSIDE RATION OFRS. 59,50,00,000/- (RUPEES FIFTY NINE CRORES FIFTY LACS ONLY) ' FURTHER ON PAGE 4 OF THE CONVEYANCE DEED IT IS CLEA RLY MENTIONED THAT THE VENDOR HAS TAKEN APPROVAL FROM THE CONCERNED AUTHOR ITY FOR CONSTRUCTION OF RESIDENTIAL HOUSE (FARM HOUSE) BY THE M. C. D. VIDE THEIR FILE NO: 336/B/HQ/2006/94/AE1 DATED 07.06.2006. THESE FACTS CLEARLY PROVE THAT THE APPELLANT HAD PURCHASED A RESIDENCE HOUSE ALONG WIT H LAND APPURTENANT THERETO. THEREFORE, THE ALLEGATION OF LEARNED ASSESSING OFFI CER THAT THE ASSESSEE HAS PURCHASED LAND ONLY LACKS MERIT, HENCE NEEDS TO BE REJECTED. FURTHER THE FARM HOUSE IS TO BE CONSIDERED AS RESID ENTIAL HOUSE FOR THE -PURPOSE OF EXEMPTION U/S 54F FOR WHICH RELIANCE IS PLACED ON T HE FOLLOWING JUDICIAL PRONOUNCEMENT. 11 THE HONB'LE JAIPUR ITAT IN THE CASE OF SHY AM SUND ER MAKHIJA VS. INCOME-OFFICER, 38 ITD 125 HELD THAT 'THE FARM HOUSE CAN BE TREATED AS RESIDENTIAL HOUSE FOR THE PURPOSE OF THE CLAIMING EXEMPTION U/S. 54F OF THE A CT. IN VIEW OF THE ABOVE, THE AO HAS ERRED IN ALLEGING THAT THE PAYMENT HAS BEEN MADE FOR PURCHASE OF LAND ONLY AND THE CONTENTIONS DRAWN BY THE AO ARE NOT TENABLE. IT IS FURTHER SUBMITTED THAT WE RELY UPON THE SUBMI SSIONS MADE BEFORE YOUR GOODSELF AND ALTERNATIVELY EVEN IF IT IS ASSUMED TH AT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 54 B AND HAS MADE A WRONG CLAIM IN TH E RETURN OF INCOME, EVEN THEN, THE ASSESSEE CANNOT BE DENIED THE BENEFIT FOR CLAIM OF EXEMPTION IF HE FULFILLS & IS ELIGIBLE FOR CLAIM UNDER SOME OTHER S ECTION. ALSO IT IS AN ACCEPTED FACT THAT THE ASSESSEE HAS MADE A CORRECT CLAIM BEFORE T HE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE CANNOT BE DEBARRED OF ANY BENEFIT IF HE IS ELIGIBLE UNDER THE PROVISIONS OF T HE ACT AND THE ASSESSING OFFICER IS DUTY BOUND TO ALLOW THE BENEFIT TO THE ASSESSEE AND SHOULD NOT TAKE THE BENEFIT OF IGNORANCE OF LAW OF THE ASSESSEE. FOR THIS WE RELY ON THE CBDT CIRCULAR NO: 14.(XL-35 ) DATED 11.04.1955 WHICH READS AS UNDER:- 'OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. ' THE SAME VIEW WAS HELD BY THE INDORE TRIBUNAL IN TH E CASE OF PARAMJEET SINGH CHHABRA V. ITO (2013) 59 SOT 165 URO WHEREIN THE AS SESSEE CLAIMED THE EXEMPTION UNDER WRONG SECTION BUT THE HON'BLE IT AT DIRECTED THE AO TO ALLOW THE CLAIM UNDER CORRECT SECTION. IN VIEW OF THE ABOVE WE REQUEST THAT THE AO BE DIRE CTED TO ALLOW THE CLAIM OF THE ASSESSEE U/S 54F AND THE APPEAL BE ALLOWED.' 11. LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICER OBSERVED THA T THE ASSESSEE SOLD AGRICULTURE LAND MEASURING 25 BIGHAS AND 13 BISWA S ITUATED AT VILLAGE BIJWASAN, TEHSIL VASANT VIHAR, DELHI TO M/S SKA ESTATES PVT. LTD. FOR TOTAL CONSIDERATION OF RS. 62,50,00,000/- ON 18/09/2012 ON WHICH THE ASSESSEE EARNED NET LONG TERM CAPITAL GAIN OF RS. 61,13,24,357/- AND IN THE RETU RN OF INCOME THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN AT NIL ON THE SALE OF THE ABOVE LAND AFTER CLAIMING DEDUCTION UNDER SECTION 54F/54B ON ACCOUNT OF INVESTMENT OF RS. 62,47,51,100/- IN PURCHASE OF AGRICULTURE LAND MEAS URING 12 BIGHAS AT VILLAGE JONAPUR, TEHSIL MEHRAULI, NEW DELHI, THE ASSESSING OFFICER CONDUCTED FULL ENQUIRY INTO THE ISSUE AND HELD THAT THE LAND PURCHASED WAS NOT AN AGRICULTURE LAND. SHE ALSO OBSERVED THAT THIS FACT WAS BROUGHT OUT CLEARL Y IN THE REGISTERED SALE DEED DT. 19/10/2012 THEREFORE THE DEDUCTION UNDER SECTIO N 54B WOULD NOT BE GRANTED AND THE ASSESSING OFFICER RIGHTLY DENIED THE CLAIM OF THE ASSESSEE UNDER SECTION 54B OF THE ACT. THE LD. CIT(A) POINTED OUT THAT DUR ING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSEE HERSELF STATED VIDE LETTER DT. 30/03/2016 THAT THE EXEMPTION WAS CLAIMED UNDER SECTION 54F AND NOT UND ER SECTION 54B OF THE ACT AND THE SAME WAS REITERATED BEFORE HER VIDE LETTER DT. 07/10/2016 THEREFORE THE ASSESSEE WAS INELIGIBLE FOR THIS CLAIM UNDER SECTIO N 54B OF THE ACT. AS REGARD TO THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT , THE LD. CIT(A) OBSERVED 12 EVEN IF THE ASSESSEE HAD NOT MADE CLAIM OF DEDUCTIO N WHILE FILING HIS RETURN OF INCOME AND HAD SUBSEQUENTLY DURING THE COURSE OF AS SESSMENT PROCEEDING MADE THE CLAIM OF SUCH DEDUCTION THAN IT HAS THE RI GHT TO AVAIL ALL THE DEDUCTION IF IT SATISFIES ALL THE ELIGIBILITY CRITERIA FOR TH E SAID DEDUCTION AND THAT THE DEDUCTION CANNOT BE DENIED MERELY ON THE GROUND THA T IT WAS OMITTED TO BE CLAIMED AT THE TIME OF FILING THE RETURN OF INCOME. THE REFERENCE WAS MADE TO THE CBDT CIRCULAR NO. 14 (XL-35) DT. 11/04/1955, TH E LD. CIT(A) ALSO REFERRED TO THE DECISION OF THE ITAT IN THE CASE OF PARAMJEET S INGH CHHABRA VS. ITO (2013) 59 SOT 165 WHEREIN THE ASSSESSEE CLAIMED THE EXEMPTION UNDER WRONG SECTION BUT THE ITAT DIRECTED THE ASSESSING OFFICER TO ALLOW TH E CLAIM UNDER THE CORRECT SECTION AFTER PROVIDING DUE OPPORTUNITY OF HEARING. SHE ALSO REFERRED TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F BALMUKUND ACHAYRA VS. DCIT AND OTHERS REPORTED AT 310 ITR 310 WHEREIN THE ISSUE OF GIVING RELIEF WAS ADMISSIBLE TO THE ASSESSEE EVEN IF IT WAS NOT CLAIM ED IN THE RETURN OF INCOME. 11.1 LD. CIT(A) CATEGORICALLY STATED THAT IN THE PR ESENT CASE THE ASSESSEE IN THE COMPUTATION OF INCOME, FILED ALONGWITH RETURN OF IN COME, CLAIMED THE EXEMPTION AS UNDER SECTION 54F / 54B, THE SAID C OMPUTATION SHEET HAD BEEN REPRODUCED IN THE ASSESSMENT ORDER AT PAGE NO. 2. S HE THEREFORE HELD THAT THERE WAS CLAIM BY THE ASSESEE FOR EXEMPTION UNDER SECTIO N 54F OR 54B OF THE ACT IN ALTERNATE. 11.2 LD. CIT(A) OBSERVED THAT THE ASSESSING OFFICER DID NOT DENY THAT THE ASSESSEE HAD MADE THE CLAIM FOR EXEMPTION UNDER SEC TION 54B AND HAD METICULOUSLY MET ENQUIRY FOR EXAMINING THE ELIGIBIL ITY OF THE ASSESSEE FOR THIS EXEMPTION AND THAT THE ASSESSEE HAD SUBSEQUENTLY CL AIMED EXEMPTION UNDER SECTION 54 DURING THE ASSESSMENT PROCEEDING VIDE HE RE LETTER DT. 30/03/2016, ON THE BASIS OF REGISTERED PURCHASE DEED, CLAIMING PUR CHASE OF RESIDENTIAL HOUSE WITH LAND APPURTENANT THERETO. THEREFORE IN THE INT EREST OF NATURAL JUSTICE THE ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 54F COU LD NOT HAVE BEEN REJECTED EVEN IF BY BONAFIDE MISTAKE SHE HAS WRONGLY CLAIMED EXEMPTION UNDER SECTION 54B. LD. CIT(A) REFERRED TO THE CONDITION REQUIRED TO BE FULFILLED FOR CLAIM OF EXEMPTION UNDER SECTION 54F AS UNDER: I. ASSESSEE HAS INVESTED THE CAPITAL GAINS IN PURCH ASE OF A RESIDENTIAL HOUSE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS FRO M THE DATE OF SALE OF THE ORIGINAL ASSET; OR HAS WITHIN A PERIOD OF THREE YEA RS CONSTRUCTED ONE RESIDENTIAL HOUSE. II. THE ASSESSEE DOES NOT OWN MORE THAN ONE OTHER H OUSE PROPERTY ON THE DATE OF PURCHASE OF NEW ASSET; OR DOES NOT PURCHASE ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFT ER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR DOES NOT CONSTRUCT ANY RESIDENTI AL HOUSE, OTHER THAN THE 13 NEW ASSET WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET. III. INCOME FROM THE NEWLY PURCHASED RESIDENTIAL HO USE IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 11.3 LD. CIT(A) OBSERVED THAT THE PROPERTY PURCHASE D BY THE ASSESSEE WAS BEING USED FOR RESIDENTIAL PURPOSES ALONE WHICH HAD BEEN PROVED BY THE ASSESSING OFFICER DURING HIS ENQUIRY, THEREFORE THE STATUS OF THE PROPERTY BEING RESIDENTIAL HAD NOT BEEN DISPUTED BY THE ASSESSING OFFICER WHICH WAS ALSO CLEAR FROM THE REGISTERED SALE DEED DT. 19/10/2012 RELEVA NT PARA OF WHICH READS AS UNDER: 'AND WHEREAS THE VENDOR FOR THIS BONAFIDE NEEDS AND REQUIREMENTS HAS AGREED TO SELL AND THE VENDOR HAS AGREED TO PURCHASE THE S AID LAND I.E. AGRICULTURE LAND MEASURING 12 BIGHAS, BEARING MUSTATIL NO. 18 KILL N O. 5 (2-18), 6 MIN (3-3), 7MIN (1- 2), 14 MIN (1-2) AND 15 MIN (3-15), WITH BOUNDARY W ALL, TUBE- WELL, ELECTRIC CONNECTION AND BUILD-UP FARM HOUSE THEREON, SITUATE D AT VILLAGE JONAPUR, TEHSIL MEHRAULI, NEW DELHI WITH ALL RIGHT OF OWNERSHIP, PO SSESSION PRIVILEGES, EASEMENTS AND APPURTENANCES ATTACHED THERETO, FOR A TOTAL SAL E CONSIDERATION OF RS. 59,50,00,000/-(RUPEES FIFTY NINE CRORES FIFTY LACS ONLY).' 11.4 THE LD. CIT(A) WAS OF THE VIEW THAT THE ASSESS EE HAD PURCHASED A PRE- CONSTRUCTED FARM HOUSE IN MEHRAULI LOW DENSITY RESI DENTIAL AREA OF MUNICIPAL CORPORATION OF DELHI WITH APPURTENANT LAND AND TOTA L CONSIDERATION HAD BEEN MENTIONED IN THE PURCHASE DEED IN WHICH IT WAS CLEA RLY MENTIONED THAT THE ORIGINAL OWNER HAD TAKEN APPROVAL FROM THE CONCERNE D AUTHORITY I.E; MUNICIPAL CORPORATION OF DELHI FOR CONSTRUCTION OF FARM HOUSE ON THE SAID LAND ON 07/06/2006 AND IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE FARM HOUSE WAS NOT EXISTING AT THE TIME OF PURCHASE OF THE PRO PERTY. THE LD.CIT(A) ALSO MENTIONED THAT THE PHOTOGRAPHS OF THE IMPUGNED PROP ERTY WERE ALSO INCORPORATED IN THE ASSESSMENT ORDER WHICH SHOWED T HAT IT WAS A FARM HOUSE BUNGALOW WITH EXTENSIVE LANDSCAPED GARDEN AND DRIVE WAYS. THE FARMHOUSE WAS BEING USED BY THE ASSESSEE FOR RESIDENTIAL PURP OSE AS SELF OCCUPIED PROPERTY. SHE ALSO POINTED OUT THAT THE FARM HOUSE COULD BE CONSIDERED AS A RESIDENTIAL HOUSE FOR THE PURPOSE OF CLAIMING EXEMP TION UNDER SECTION 54F OF THE ACT. THE RELIANCE WAS PLACED ON THE DECISION OF ITA T JAIPUR BENCH IN THE CASE OF SHYAM SUNDER MAKHIJA VS. ITO REPORTED AT 38 ITD 125 . 11.5 LD. CIT(A) POINTED OUT THAT THE RELEVANT NOTIF ICATION OF MINISTRY OF URBAN DEVELOPMENT (DELHI DIVISION) PERMITTED DEVELOPMENT OF FARM HOUSE ON A LAND AREA MEASURING BETWEEN ONE TO TWO HECTARES IN LOW D ENSITY RESIDENTIAL AREA TILL 2013. THE LD. CIT(A) ALSO POINTED OUT THAT THE PURC HASE OF THE SAID RESIDENTIAL PROPERTY HAD BEEN MADE WITHIN THE STATUTORY PERIOD OF TWO YEARS FROM THE DATE OF RECEIPT OF THE CAPITAL GAINS AND THE ASSESSEE HA D ALSO SUBMITTED THAT SHE DID 14 NOT OWN ANY OTHER RESIDENTIAL HOUSE AS ON THE DATE OF PURCHASE OF THE SAID ASSET AND THIS WAS ONLY RESIDENTIAL HOUSE SHE POSSESSED T ILL DATE, THE PURCHASE WAS MADE ON 19/10/2012 I.E; BEFORE FURNISHING OF INCOM E TAX RETURN FOR THE RELEVANT A.Y. 2013-14, THEREFORE THERE WAS NO REQUIREMENT OF DEPOSITING THE GAINS IN THE CAPITAL GAIN ACCOUNT WITH THE BANK. THE LD. CIT(A) ACCORDINGLY HELD THAT THE ASSESSEE WAS ELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT, SINCE ALL THE CONDITIONS REQUIRED FOR THE CLAIM WERE BEIN G MADE BY HER. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED AND THE ASSESSING OFFICER WAS DIRECTED TO ALLOW THE EXEMPTION UNDER SECTION 5 4F TO THE ASSESSEE. 12. NOW THE DEPARTMENT IS IN APPEAL. 13. THE LD. CIT DR STRONGLY SUPPORTED THE ORDER PAS SED BY THE ASSESSING OFFICER AND REITERATED THE OBSERVATION MADE IN THE ASSESSMENT ORDER. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MUNICIPAL CORPORATION OF DELHI & ANOTHER VS. SH RI NARESH KUMAR AND OTHERS, ORDER DT. 10/03/1997 (COPY OF THE SAID ORDER WAS FU RNISHED WHICH IS PLACED ON RECORD). IT WAS FURTHER SUBMITTED THAT THE ASSESSEE CLAIMED THE EXEMPTION UNDER SECTION 54B OF THE ACT IN THE RETURN OF INCOME THEREFORE SH E WAS NOT PERMITTED TO CHANGE THE HEAD OF EXEMPTION UNDER SECTION 54F OF T HE ACT, LATER ON WHICH WAS CLEARLY AN AFTERTHOUGHT. 14. IN HIS RIVAL SUBMISSION THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE AUTHORITIES BELOW AND FU RTHER SUBMITTED THAT THE ASSESSEE HAD MADE A CLAIM FOR EXEMPTION UNDER SECTI ON 54F OF THE INCOME TAX ACT IN THE COMPUTATION SHEET AND AS PER THE CBDT CI RCULAR DT. 11/04/1955, THE ASSESSING OFFICER HAS TO ALLOW THE EXEMPTION UNDER THE CORRECT HEAD EVEN WHEN THE SAME HAD BEEN CLAIMED UNDER THE WRONG SECTION. THE RELIANCE WAS PLACED ON THE DECISION OF THE HON BLE KERALA HIGH COURT IN THE CASE OF RAGHAVAN NAIR VS. ASSISTANT COMMISSION ER OF INCOME TAX AND ANOTHER [2018] 402 ITR 400 (KER). RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASE LAWS: SHYAM SUNDER MAKHIJA VS. ITO 38 ITD 125 (JAIPUR TRI B.) MANOJ KUMAR SABHARWAL VS. ITO ITA NO. 3938/DEL/2017 ITO VS. SAROJ DEVI AGGARWAL ITA NO. 397/JP/2016 MANOJ BEHL VS. ITO ITA NO. 147/JP/2013 ACIT VS. OM PRAKASH ITA NO. 647/JP/2011 15 CIT VS. M. KALPAGAM 227 ITR 722(MAD) DCIT VS. KALYANA RAMAN NALRAJA 82 TAXMAN.COM 93 CHE NNAI ADDL. CIT VS. NARENDER MOHAN UNIYAL ITA NO. 1624/DE L/2009 DT. 31/08/2009 AMT GUPTA VS. DCIT 6 SOT 403 (DEL TRIB) 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD IN THE PRESENT CAS E IT IS NOT DISPUTED THAT THE ASSESEE SOLD AGRICULTURAL LAND SITUATED AT VILLAGE BIJWASAN, TEHSIL VASANT VIHAR, DELHI ON 18/09/2012 FOR A SUM OF RS. 62,50,00,000/- AND EARNED CAPITAL GAIN OF RS. RS. 61,13,24,357/-. THE ASSESSEE MADE INVESTMENT OF RS.62,47,51,100/-.I N THE PURCHASE OF LAND MEASURING 12 BIGHAS, AT VILLAGE JONAPUR, TE HSIL MEHRAULI, NEW DELHI, AND CLAIMED THE EXEMPTION UNDER SECTION 54F OF THE ACT. THE ASSESSING OFFICER DENIED THE EXEMPTION TO THE ASSESSEE FOR THE FOLLOW ING REASONS: I. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54B AN D NOT 54F OF THE ACT. II. WHOLE AMOUNT OF THE PURCHASED ASSETS WAS RELATED TO LAND ONLY AND NOT FOR ANY RESIDENTIAL HOUSE. 16. AS REGARDS TO DEDUCTION NOT CLAIMED UNDER SECT ION 54F OF THE ACT IS CONCERNED, IT IS NOTICED THAT ASSESSEE IN THE COMPU TATION OF INCOME WHICH IS REPRODUCED IN PARA 2 AT PAGE NO. 2 OF THE ASSESSMEN T ORDER DT. 31/03/2016, CLAIMED DEDUCTION UNDER SECTION 54F/54B OF THE ACT (AS PER ANNEUXRE C), SO IT CANNOT BE SAID THAT THE ASSESSEE DID NOT CLAIM DEDU CTION UNDER SECTION 54F OF THE ACT. 17. ON A ISSUE RELATING TO THE ALLOWABILITY OF THE DEDUCTION EVEN IF IT IS NOT CLAIMED AND OTHERWISE ALLOWABLE LEGALLY, THE HONBL E KERALA HIGH COURT IN THE CASE OF RAGHAVAN NAIR VS. ASSISTANT COMMISSIONER OF INCOME TAX AND ANOTHER [2018] 402 ITR 400 (KER) HELD AS UNDER: UNDER ARTICLE 265 OF THE CONSTITUTION NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. THE POWERS OF THE ASSESSING OFFICERS UNDER THE ACT ARE QUASI-JUDICIAL IN NATURE AND THEY ARE DUTY-BOUND, THEREFORE, TO ACT FAIRLY IN TH E DISCHARGE OF THEIR FUNCTIONS. THEY ARE ALSO INVESTED WITH THE AUTHORITY TO DO JUS TICE TO THE ASSESSEES. IN A CASE WHERE IT IS APPARENT ON THE FACE OF THE RECORD THAT THE ASSESSEE HAS INCLUDED IN HIS RETURN, AN INCOME WHICH IS EXEMPTED FROM PAYMENT OF INCOME-TAX, ON ACCOUNT OF IGNORANCE OR BY MISTAKE, THE ASSESSING OFFICER I S BOUND TO TAKE INTO ACCOUNT THAT FACT IN A PROCEEDING UNDER SECTION 143 OF THE INCOME-TAX ACT, 1961. IN OTHER WORDS, IF THE CAPITAL GAINS ON A TRANSACTION ARE EX EMPTED FROM PAYMENT OF TAX, THE ASSESSING OFFICER HAS A DUTY TO REFRAIN FROM LE VYING TAX ON THE CAPITAL GAINS AND THE ASSESSING OFFICER CANNOT, IN SUCH CASES, RE FUSE TO GRANT RELIEF UNDER SECTION 143 OF THE ACT TO THE ASSESSEE ON THE TECHN ICAL PLEA THAT THE ASSESSEE HAS NOT FILED A REVISED RETURN. IT IS SO SINCE THE PARA MOUNT DUTY OF THE ASSESSING OFFICER IS TO COMPLETE THE ASSESSMENTS IN ACCORDANCE WITH L AW. 16 THE ASSESSEE RECEIVED A SUM OF RS. 1,28,43,192 IN T HE YEAR 2014-15 BY WAY OF COMPENSATION FOR LAND ACQUIRED FROM HIM FOR THE KOC HI METRO RAIL PROJECT. THE ASSESSEE, AT THE RELEVANT TIME WAS UNDER THE IMPRES SION THAT THE CAPITAL GAINS RESULTING FROM THE ACQUISITION OF THE LAND WAS EXIG IBLE TO TAX UNDER THE ACT. CONSEQUENTLY, IN THE RETURN FILED BY THE ASSESSEE U NDER THE ACT FOR THE ASSESSMENT YEAR 2015-16, HE HAD DISCLOSED THE CAPITAL GAINS RE SULTING FROM THE ACQUISITION OF THE LAND AND PAID TAX ON THAT BASIS. TOR THAT PURPO SE, THE ASSESSEE HAD WORKED OUT THE INDEXED COST OF THE LAND RECKONING ITS FAIR MARKET VALUE AS ON APRIL 1,1981 AT RS. 50,000 PER CENT. THE RETURN WAS TAKEN UNDER SCRUTINY. THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER THE HEAD 'CAPITAL GAI NS' WAS THE ISSUE IDENTIFIED FOR EXAMINATION. AN INQUIRY WAS STARTED. IN THE MEA NWHILE, IN THE LIGHT OF SECTION 96 OF THE RIGHT TO FAIR COMPENSATION AND TRANSPAREN CY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013, THE COUR T HELD IN A NUMBER OF CASES THAT COMPENSATION PAYABLE TO PERSONS FOR THE LANDS ACQUIRED UNDER THE STATUTE WAS EXEMPTED FROM PAYMENT OF TAX UNDER THE ACT. IN THE CIRCUMSTANCES, IN SO FAR AS THE ACQUISITION OF THE LAND OF THE ASSESSEE WAS UNDER THAT STATUTE, THE ASSESSEE SUBMITTED A REPLY TO THE NOTICE REQUESTING THE ASSI STANT COMMISSIONER TO DROP THE PROCEEDINGS INITIATED AGAINST HIM UNDER SECTION 143 OF THE ACT. SINCE THE ASSISTANT COMMISSIONER DID NOT CONSIDER THE REQUEST MADE BY T HE ASSESSEE, THE ASSESSEE FILED A WRIT PETITION CHALLENGING THE CONTINUANCE O F THE PROCEEDINGS UNDER SECTION 143. THE WRIT PETITION WAS ADMITTED ON JULY 24, 2017 AND AN INTERIM ORDER WAS PASSED ON JULY 24, 2017 RESTRAINING THE ASSISTA NT COMMISSIONER FROM CONTINUING THE PROCEEDINGS. IN THE MEANWHILE, THE A SSESSEE WAS SERVED WITH AN ORDER DATED JULY 14, 2017, BY WHICH THE ASSISTANT C OMMISSIONER COMPLETED THE PROCEEDINGS RAISING A DEMAND FOR RS. 9,95,070. ON A WRIT PETITION: HELD, THAT THIS WAS A CLEAR CASE WHERE THE ASSISTAN T COMMISSIONER HAD PENALISED THE ASSESSEE FOR HAVING PAID TAX ON AN INCOME WHICH WAS NOT EXIGIBLE TO TAX. THE ORDER, IN THE CIRCUMSTANCES, WAS LIABLE TO BE QUASH ED. IN THE PRESENT CASE, EVEN IF THE ASSESSEE CLAIMED T HE DEDUCTION UNDER BOTH SECTION I.E; 54F AND 54B OF THE ACT, IT WAS TH E DUTY OF THE ASSESSING OFFICER TO ALLOW THE RIGHT DEDUCTION FOR WHICH THE ASSESSEE WAS ELIGIBLE. 18. AS REGARDS TO THE ADMISSIBILITY OF THE CLAIM MA DE DURING THE COURSE OF ASSESSMENT PROCEEDING, THE CBDT ISSUED A CIRCULAR N O. 14 DT. 11/04/1955 WHICH READS AS UNDER: 'IT OFFICERS MUST NOT TAKE ADVANTAGE OF IGNORANCE O F AN ASSESSEE OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIES TO ASSI ST A TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TA XPAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME RE FUND RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD, IN THE LONG RUN, BENEFIT THE DEPART MENT, FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DEPARTMENT. ALTHOUGH, THEREFORE, THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH THE ASSESSEES ON WHOM IT IS IMPOSED BY L AW, OFFICERS SHOULD - (A) DRAW THEIR ATTENTION TO ANY REFUND OR RELIEFS TO WH ICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE OMITTED TO CLAIM FOR S OME REASON OR OTHER; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS T O THEIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO BE ADOPTED FOR CLAIMING REFUNDS AND RELIEFS.' FROM THE AFORESAID CIRCULAR, IT IS CRYSTAL CLEAR TH AT THE ASSESSING OFFICER MUST NOT TAKE ADVANTAGE OF IGNORANCE OF THE ASSESSE E AS TO HIS RIGHTS & LIABILITIES, IT IS ONE OF THE DUTY OF THE OFFICER TO ADVICE WHEN APPROACHED BY THE ASSESSEE AS TO HIS RIGHTS AND LIABILITY AND AS TO THE PROCED URE TO BE ADOPTED FOR CLAIMING REFUND AND RELIEF. 17 18.1 IN THE PRESENT CASE THE ASSESSEE CLAIMED DEDUC TION UNDER SECTION 54F OF THE ACT, DURING THE COURSE OF ASSESSMENT PROCEEDING AND ALSO DULY MENTIONED IN THE COMPUTATION OF INCOME FOR THE SAID DEDUCTION . SO, IT WAS THE DUTY OF THE ASSESSING OFFICER TO ALLOW THE CLAIM UNDER SECTION 54F OF THE ACT IF IT WAS LEGALLY ALLOWABLE TO THE ASSESSEE. IN OUR OPINION THE LD. C IT(A) RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSE E UNDER SECTION 54F OF THE ACT. 19. NOW QUESTION ARISES AS TO WHETHER THE PROPERTY PURCHASED BY THE ASSESSEE AT VILLAGE JONAPUR WAS A RESIDENTIAL PROPE RTY FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 54F OF THE ACT OR NOT. FOR THAT PROPOSITION, IT IS RELEVANT TO CONSIDER THE PURCHASE DEED (COPY OF WHI CH IS PLACED AT PAGE 21 TO 32 OF THE ASSESSES PAPER BOOK), IN THE SAID PURCHAS E DEED IT IS MENTIONED AT PARA 3 OF PAGE 2 THAT THE SAID PROPERTY WAS HAVING TUBE WELL, ELECTRIC CONNECTION AND BUILDUP FARM HOUSE WITHIN THE BOUNDA RY WALL. SIMILAR FACTS HAVE BEEN MENTIONED AT PARA 2 OF PAGE 6 OF THE PURCHASE DEED WHICH CLARIFIES THAT THE ASSESSEE HAD PURCHASED LAND WITH BOUNDARY WALL, TUBE WELL, ELECTRIC CONNECTION AND BUILDUP FARMHOUSE. IN THE PRESENT CA SE, THE ASSESSING OFFICER ALSO MADE THE VERIFICATION BY VISITING THE SITE WHI CH IS EVIDENT FROM PAGE NO. 6 OF THE ASSESSMENT ORDER WHEREIN PHOTOGRAPHS OF THE LAN D IN QUESTION ARE SHOWN AND THE ASSESSING OFFICER ALSO MENTIONED IN PARA 2. 2 OF THE ASSESSMENT ORDER THAT NO AGRICULTURAL ACTIVITY WAS BEING CARRIED OUT ON THE SAID PREMISES. 20. NOW THE QUESTION ARISES AS TO WHETHER THE FARM HOUSE ON THE AGRICULTURAL LAND MAY BE CONSIDERED AS THE HOUSE FOR THE PURPOSE OF DEDUCTION UNDER SECTION 54F OF THE ACT. ON A SIMILAR ISSUE THE HON BLE KERALA HIGH COURT IN THE CASE OF SMT. ASHA GEORGE VS. ITO, WARD2(1), THRISSU R IN ITA NO. 114 OF 2012 ORDER DT. 16/01/2013 (COPY OF WHICH IS PLACED ON RECORD) HELD AS UNDER: 12. SECTION 54F IS INTENDED TO ENCOURAGE CONSTRUCT ION OF OR ACQUISITION OF RESIDENTIAL HOUSE WITH THE AID OF THE PROCEEDS FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, WHICH IS NOT A RESIDENTIAL HOUSE. TH E PROVISION CONTEMPLATES COMPUTING THE COST OF THE RESIDENTIAL BUILDING, BUT THE VALUE OF THE PLOT ON WHICH THE FARM HOUSE STANDS AND THE LAND APPURTENANT COUL D ALSO BE CONSIDERED. 20.1 SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT, JAIPU R BENCH IN THE CASE OF SHYAM SUNDER MUKHIJA VS. ITO [1991]38 ITD 125 WHERE IN IT HAS BEEN HELD AS UNDER: THE EXPRESSION RESIDENTIAL HOUSE USED IN SECTIO N 54F HAS NOT BEEN DEFINED. THE POPULAR MEANING OF THE WORK HOUSE IS A PLACE OR B UILDING USED FOR HABITATION OF MAN. RESIDENTIAL HOUSE IS A DWELLING HOUSE AS DIS TINCT FROM A HOUSE OF BUSINESS, WAREHOUSE, OFFICE, SHOP, ETC. IN OTHER WORDS, RESID ENTIAL HOUSE IS A BUILDING USED AS A PLACE OF ABODE IN WHICH PEOPLE RESIDE OR DWELL IN CONTRA-DISTINCTION TO ONE WHICH IS USED FOR COMMERCIAL OR BUSINESS PURPOSE. S INCE A HOUSE IS CALLED 18 RESIDENTIAL HOUSE WITH REFERENCE TO THE PURPOSE OF ITS USER, IT MAY NOT BE NECESSARY THAT SOMEBODY SHOULD LIVE IN IT CONTINUOU SLY. IT IS ENOUGH IF IT WAS A HOUSE FOR RESIDENCE. A FARM HOUSE IS ALSO A RESIDEN TIAL HOUSE. A FARM HOUSE, ACCORDING TO THE DICTIONARY MEANING, IS A FARMERS HOUSE ATTACHED TO A FARM. IN THE PRESENT CASE, THERE WAS NO EVIDENCE THAT THERE WAS ANY FARM IN EXISTENCE. THE ASSESSEE HAD PAID RS. 7,560 ON 7-4-1984 AS CONV ERSION CHARGES. HE AGAIN PAID RS. 4,200 AS DEVELOPMENT CHARGES TO THE UIT ON 26-5-1984. THEREFORE, THE ITO COULD NOT TAKE THE VIEW THAT WHAT WAS IN EXISTENCE COULD NOT BE CALLED AS A RESIDENTIAL HOUSE. THE DESCRIPTION OF THE CONSTRUCT ION, WHICH WAS NOT IN DISPUTE, SHOWED THAT IT WAS A COMPLETE UNIT HAVING A BIG HAL L, KITCHEN, TOILET AND VERANDAH NOTWITHSTANDING THE SIZE OF THE SWIMMING P OOL, WHICH WAS ALSO THERE. AS RIGHTLY POINTED OUT BY THE ASSESSEE, THERE WAS N O PROHIBITION REGARDING THE CONSTRUCTION OF A RESIDENTIAL HOUSE ON AGRICULTURAL LAND. THEREFORE, THE ASSESSEE WAS ENTITLED TO THE DEDUCTION CLAIMED UNDER SECTION 54F. 20.2 MOREOVER, THE ASSESSING OFFICER IN THE PRESENT CASE, HIMSELF ADMITTED AT PAGE NO. 16 OF THE ASSESSMENT ORDER THAT LAND PURCH ASED BY THE ASSESSEE CAME INTO MUNICIPAL LIMIT AND IN LOWER DENSITY RESIDENTI AL AREA, THE RELEVANT OBSERVATION OF THE ASSESSING OFFICER READS AS UNDER : IT IS PERTINENT TO MENTION HERE THAT THIS LAND AL SO COMES WITHIN THE PURVIEW OF MUNICIPAL LIMITS THEREFORE IT CANNOT BE TAKEN AS A GRICULTURAL LAND. A LETTER HAS BEEN ISSUED TO THE CHIEF EXECUTIVE OFFICER, MUNICIP AL CORPORATION OF DELHI(SOUTH), NEW DELHI FOR ASKING THE MUNICIPAL LIMITED OF THE S AID LAND. IN ITS RESPONSE EXECUTIVE ENGINEER(BLDG)-II SOUTH ZONE REPLIED THAT THIS LAND COMES UNDER MUNICIPAL LIMIT AREA. AGAIN AS PER NOTIFICATION NO. 1405 GOVERNMENT OF INDIA DATED 18/06/2013, THIS AREA COMES IN LOWER DENSITY RESIDENTIAL AREA. THEREFORE IT SHOWS THAT THE INVESTMENT IN LAND IS NOT FOR AGRICU LTURAL PURPOSES. IT IS ONLY A HUGE INVESTMENT IN URBAN AREA. IT IS PURELY CAPITAL ASSE TS FOR TAXATION PURPOSE. 20.3 IN THE INSTANT CASE THE ASSESSING OFFICER ON T HE ONE HAND REPRODUCED THE PHOTOGRAPHS OF THE FARMHOUSE AT PAGE NO. 6 OF THE A SSESSMENT ORDER WHICH CLEARLY SHOWS THE CONSTRUCTED FARMHOUSE, ON THE OTH ER HAND HE MENTIONED IN PARA (VII) AT PAGE NO. 23 OF THE ASSESSMENT ORDER T HAT THE ASSESSEE CLAIMED EXEMPTION IN ITS COMPUTATION FOR THE PURCHASED AMOU NT OF LAND ONLY AND NOT FOR THE PURCHASE OF RESIDENTIAL HOUSE, THE RELEVANT OBS ERVATION OF THE ASSESSING OFFICER READS AS UNDER: VII) THE ASSESSEE CLAIMED EXEMPTION IN ITS COMPUT ATION FOR THE PURCHASE AMOUNT OF LAND ONLY. IT SHOWS THAT THIS INVESTMENT HAS BEE N MADE ONLY FOR PURCHASE OF LAND ONLY NOT FOR PURCHASE OF RESIDENTIAL HOUSE. IF THIS EXEMPTION WOULD HAVE BEEN CLAIMED FOR RESIDENTIAL HOUSE, THEN THE ASSESE E WOULD CLAIM IT FOR THE BOTH AMOUNT I.E. LAND PURCHASE AMOUNT AND CONSTRUCTION O F HOUSE AMOUNT BUT HE ASSESSEE CLAIMED EXEMPTION FOR PURCHASE OF LAND ONL Y NOT FOR CONSTRUCTION OF HOUSE AMOUNT. THEREFORE, THE ASSESSEE IS NOT ELIGIB LE FOR CLAIMING EXEMPTION U/S 54F OF THE INCOME TAX ACT. 21. WE ARE UNABLE TO UNDERSTAND FROM THE AFORESAID OBSERVATION OF THE ASSESSING OFFICER THAT HOW A RESIDENTIAL FARMHOUSE CAN BE SEPARATED FROM THE LAND WHEN IT IS CONSTRUCTED ON THE SAME LAND. THERE FORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) RIGHTLY ALLOWED THE CLAIM OF THE ASS ESSEE FOR DEDUCTION UNDER SECTION 54 F OF THE ACT, PARTICULARLY WHEN THE ASSE SSING OFFICER HIMSELF MENTIONED IN THE ASSESSMENT ORDER THAT NO AGRICULTU RAL ACTIVITY WERE BEING 19 CARRIED OUT ON THE LAND IN QUESTION AND THE SAID PR OPERTY WAS BEING USED FOR RESIDENTIAL PURPOSE WHICH HAD BEEN APPROVED BY THE ASSESSING OFFICER DURING THE ENQUIRIES. LD. CIT(A) AFTER VERIFYING THE RECOR D, MENTIONED IN PARA 5.6 OF THE IMPUGNED ORDER THAT IN THE PURCHASE DEED IT WAS CLE ARLY MENTIONED THAT THE ORIGINAL OWNER HAD TAKEN APPROVAL FROM THE CONCERNE D AUTHORITY I.E; MUNICIPAL CORPORATION OF DELHI FOR CONSTRUCTION OF FARMHOUSE ON THE SAID LAND ON 07/06/2006 WHICH CLEARLY ESTABLISHED THAT THE ASSES SEE PURCHASED THE RESIDENTIAL PROPERTY WITH APPURTENANT LAND, DULY APPROVED BY TH E CONCERNED AUTHORITY. THE PURCHASE OF THE SAID RESIDENTIAL PROPERTY HAD BEEN MADE WITHIN THE STATUTORY PERIOD OF TWO YEARS FROM THE DATE OF RECEIPT OF CAP ITAL GAINS AND THE ASSESSEE ALSO SUBMITTED THAT SHE HAD NOT OWNED ANY OTHER RES IDENTIAL HOUSE AS ON THE DATE OF PURCHASE MADE ON 19/10/2012 I.E; BEFORE FUR NISHING OF INCOME TAX RETURN FOR THE YEAR UNDER CONSIDERATION, THEREFORE, THE ASSESSEE FULFILLED ALL THE CONDITIONS TO CLAIM THE EXEMPTION UNDER SECTION 54F OF THE ACT AND THE LD. CIT(A) RIGHTLY DIRECTED THE ASSESSING OFFICER TO AL LOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54F OF THE ACT. 22. BEFORE PARTING, IT IS RELEVANT TO POINT OUT THA T THE CASE LAW RELIED BY THE LD. CIT DR IN THE CASE OF MUNICIPAL CORPORATION OF DELH I & OTHERS VS. SHRI NARESH KUMAR AND OTHERS JUDGMENT DT. 10/03/1997, THE ISSUE WAS RELATING TO THE EXEMPTION FROM GENERAL TAX ON THE DWELLING HOUSE SI TUATED ON AN AGRICULTURE LAND AND IT HAS BEEN HELD THAT THE DWELLING HOUSE I NCLUDES WITHIN ITS AMBIT SUCH APPURTENANT LAND AS IS NECESSARY FOR A PROPER AND C ONVENIENT ENJOYMENT OF THE DWELLING HOUSE, THEREFORE, THE SAID JUDGMENT IS NOT OF ANY HELP TO THE DEPARTMENT. 23. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMI SSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 20/02/2019) SD/- SD/- (SANJAY GARG) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT DATED : 20/02/2019 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR