Dy.CIT, Circle-3(2), Hyderabad V. Sri Machineni Srinivasa Rao, Hyderabad

ITA 1053/HYD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6036 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 04-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2014
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Keywords: Additional evidence; Cost of acquisition
• Section: 54F; 54; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ES B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1 0 49 /H YD /201 4 ASSESSMENT YEAR: 20 1 0 - 1 1 M. SRINIVASA RAO, HY DERABAD [PAN: A EUPM6 178D ] VS ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 3(2) , HYDERABAD (APPELLANT) (RESPONDENT) I.T.A. NO. 1053/HYD/2014 ASSESSMENT YEAR: 2010 - 11 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 3(2), HYDERABAD VS SRI M. SRINIVASA RAO, HYDERABAD [PA N: AEUPM6178D] (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.C. DEV DAS , AR FOR REVENUE : SHRI B. KURMI NAIDU , DR DATE OF HEARING : 04 - 0 2 - 201 6 DATE OF PRONOUNCEMENT : 29 - 0 2 - 201 6 O R D E R PER B. RAMAKOTAIAH, A.M : TH E S E CROSS - A PPEAL S ARE BY A SSESSEE AND REVENUE ON THE ISSUE OF CLAIM U/S. 54/54F OF THE INCOME TAX ACT [ACT] A GAINST THE ORDER OF THE COM MISSIONER OF INCOME TAX ( APPEALS ) - I V , HYDERABAD , I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 2 - : DATED 1 4 - 0 3 - 201 4 . WE HAVE HEARD THE LD. DR AND LD. COUNSEL IN DETAIL. 2. THE BR IEF FACTS LEADING TO THE PRESENT DISPUTE ARE THAT ASSESSEE HAD SOLD TWO PLOTS ON 01 - 09 - 2009 AND 05 - 09 - 2009 FOR A SALE CONSIDERATION OF RS. 1.90 CRORES. AS THE COST OF ACQUISITION OF THESE PLOTS ARE RS. 3 LAKHS EACH (RS. 6,00,00 0/ - ), HE HAS CLAIMED INDEXED COST OF ACQUISITION AND ARRIVED AT CAPITAL GAINS OF RS. 1,80,45,600/ - . ASSESSEE DEPOSITED AN AMOUNT OF RS. 8 0 ,00,000/ - IN CAPITAL GAINS ACCOUNTS ON 30 - 07 - 2010 (WRONGLY SUBMITTED AND NOTED AS 06 - 09 - 2010) AND LATER PURCHASED A SEMI - FINISHED HOUSE ON 16 - 06 - 2011 FOR A COST OF RS. 3 CRORES AND COMPLETED CONSTRUCTION OF HOUSE BY 12 - 07 - 2012 (TOTAL INVESTMENT WAS ABOUT RS. 4 CRORES). AN APPLICATION FOR OBTAINING OCCUPANCY CERTIFICATE WAS MADE TO GHMC ON 10 - 08 - 2012 ACCOMP ANIED BY RELEVANT CERTIFICATE DT. 20 - 07 - 2012 ISSUED BY PRINCIPAL ARCHITECT THAT THE CONSTRUCTION HAS BEEN COMPLETED. NO CERTIFICATE HOWEVER, WAS ISSUED BY GHMC. ASSESSEE DID NOT FILE RETURN OF INCOME U/S. 1 39(1) ON OR BEFORE 31 - 07 - 2010, BUT FILED THE SAM E U/S. 139(4) ON 24 - 02 - 2011 , CLAIMING DEDUCTION OF THE ENTIRE LONG TERM CAPITAL GAINS U/S. 54F IN INVESTING IN A NEW HOUSE. 3. IN THE SCRUTINY ASSESSMENT COMPLETED, ASSESSEE DID NOT RESPOND TO VARIOUS NOTICES. AO COMPLETED ASSESSMENT U/S. 144 EX - PARTE AND BROUGHT THE ENTIRE SALE CONSIDERATION TO TAX, DISALLOW ING THE CLAIM OF SECTION 54F AND ALSO COST OF ACQUISITION. AO WAS OF THE OPINION THAT ASSESSEE HAS NOT FURNISHED EVIDENCE FOR COMPLETION OF HOUSE WITHIN THREE YEARS AS PER THE PROVISIONS, NOR DEPOS ITED THE AMOUNT IN CAPITAL GAINS ACCOUNT WITHIN THE TIME I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 3 - : ALLOWED U/S. 139(1 ) AND HAS NOT FURNISHED EVIDENCE REGARDING COST OF ACQUISITION. 4. BEFORE THE LD. CIT(A), ASSESSEE FILED ADDITIONAL EVIDENCE IN SUPPORT OF CONTENTIONS AND RELIED ON VARIOUS CASE LAW. AFTER REMANDING THE MATTERS AND EXAMINING THE CONTENTIONS, LD. CIT(A) HELD THAT ASSESSEE IS ENTITLED TO DEDUCTION OF RS. 80,00,000/ - DEPOSITED IN BANK A/C AS IT WAS WITHIN THE TIME LIMIT PROVIDED U/S. 139(4). EVEN THOUGH, ASSESSEE HAS CONSTRUCTED THE HOUSE WITHIN THREE YEARS AND ENTIRE DISCUSSION ON RULES AND PROVISIONS OF GHMC AND CASE LAW WERE ACCEPTED , CONFIRMING THE CLAIM OF CONSTRUCTION OF HOUSE WITHIN THE PERIOD, SURPRISINGLY, LD. CIT(A) DID NOT ALLOW COMPLETE DEDUCTION BUT DIRECTE D TO THE E XTEN T DEPOSITED IN BANK A/C. EVEN, THE CLAIM OF COST OF ACQUISITION AND INDEXATI ON WERE NOT CONSIDERED OR D ECIDED . HENCE, CROSS - APPEALS. 5. REVENUE , IN ITS APPEAL IN ITA NO. 1053/HYD/2014 HAS RAISED THE FOLLOWING GROUNDS: 2. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE EXEMPTION U/S. 54F IS NOT ALLOWABLE UNLESS THE GAIN ON SALE OF PROPERTY IS NOT DEPOSITED IN NOTIFIED SCHEMES WITHIN THE DUE DATE U/S. 139(1). 3. WHETHER ON FACTS & CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS CORRECT IN HOLDING THAT THE AMOUNT DEPOSITED BEFORE THE DUE DATE U/S. 139(4) IS ELIGIBLE FOR DEDUCTION U/S. 54F? 5.1. WITH REFERENCE TO THE ABOVE GROUNDS, THE Y NEED NOT BE CONSIDERED ON THE SIMPLE REASON THAT ASSESSEE HAS DEPOSITED RS. 80,00,000/ - ON 30 - 07 - 2010 AS EVIDENCE D BY THE BANK A/C (COPY PLACED IN PAPER BOOK AT PAGE 33). IT WAS WRONGLY NOTED AS 06 - 09 - 2010, SO THE CONTENTION THAT THE AMOUNT WAS DEPOSITED U/S. I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 4 - : 139(4). SINCE THE AMOUNT WAS DEPOSITED WITHIN THE DUE DATE OF SECTION 139(1), THE GROUNDS RAISED BY REVENUE , ON WRONG ASSUMPTIONS, HAVE NO MERITS. 5.2. EVEN OTHERWISE, LD. CIT(A) HAS CONSIDERED THE DECISIONS OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS. JAGTAR SINGH CHAWLA [87 DTR 217] [215 TAXMAN 154] AND VARIOUS OTHER DECISIONS LISTED IN P ARA 5.5 AS UNDER: I. CIT VS. JAGRIT AGGARWAL [TAXMANN.COM (P&H)]; II. CIT VS. RAJESH KUMAR JALAN [286 ITR 274 ] (GAU); III. FATIMA BAI [32 DTR 243] (KAR)]; IV. RKP ELAYARAJAN VS. DCIT [52 SOT 159] (CHENNAI); THIS VIEW WAS ALSO SUPPORTED BY THE HON'BLE KARNATAKA HIGH COUR T IN THE CASE OF CIT VS. K. RAMACHANDRA RAO [56 TAXMANN.COM 163]. IN VIEW OF THE JUDICIAL PR ECEDENTS ON THE SUBJECT, WE DO NOT SEE ANY MERIT IN REVENUES CONTENTIONS BOTH ON FACTS AND ON LAW. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 6. IN ITA NO. 1049/HYD /2014 , ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2. THE LEARNED CIT(A) SHOULD HAVE APPRECIATED THAT THE E NTIRE SALE CONSIDERATION OF THE ASSET AMOUNTING TO RS. 1,90,00,000 HAVING BEEN UTILIZED IN PURCHASE/CONSTRUCTION OF A NEW ASSET AMOUNTING TO RS. 3,22,50,000 THE DEDUCTION SHOULD HAVE BEEN ALLOWED UNDER SECTION 54F OF THE ACT AS THE SAME WAS IN SUBSTANTIAL COMPLIANCE TO THE PROVISIONS OF THE SAID SECTION INSTEAD OF STICKING TO TECHNICALITIES IN AN INCENTIVE PROVISION AND LIMITING THE DEDUCTION TO ONLY RS. 80,00,000/ - . 3. THE LEARNED CIT(A) SHOULD HAVE ALLOWED INDEXATION OF THE COST OF ACQUISITION OF THE ORIGINAL ASSET AMOUNTING TO RS. 6,00,000 WHICH WAS ACQUIRED IN THE YEAR 2000 - 01. I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 5 - : 6.1. AS FAR AS G ROUND NO. 2 IS CONCERNED, AS ALREADY STATED EARLIER, THE LD. CIT(A) GIVES A FINDING THAT ASSESSEE HAS CONSTRUCTED THE HOUSE BEFORE THE DUE DATE OF THREE YEARS. THE CIT(A) HAS CONSIDERED THE ISSUE AS UNDER: 5.10 IT IS UNDISPUTED THAT THE PROPERTY PURCHASED VIDE SALE DEED DATED 16.06.2011 WAS AN UNFINISHED STRUCTURE. THEREFORE, WHAT IS RELEVANT IN THE APPELLANT'S CASE IS WHETHER THE APPELLANT HAD COMPLETED CONSTRUCTION OF THIS HOUSE WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF SALE OF THE ORIGINAL ASSETS, I.E. BY SEPTEMBER, 2012. THE APPELLANT HAD SUBMITTED ELECTRICITY AND WATER BILLS BEFORE THE ASSESSING OFFICER WHICH WERE NOT ACCEPTED AS ADEQUATE EVIDENCE BY THE ASSESSING OFFICER. 5.11 THE APPELLANT HAD ALSO SUBMITTED THAT HE HAD APPLIED BEFORE THE DUE DATE TO GHMC FOR A COMPLETION CERTIFICA TE THOUGH THE CERTIFICATE HAD NOT BEEN ISSUED BY GHMC. THE APPELLANT WAS, THEREFORE, DIRECTED TO FURNISH A COPY OF THE APPLICATION MADE TO GHMC. THE APPLICATION U/S 455 OF THE HYDERABAD MUNICIPAL CORPORATION ACT, 1955 WAS MADE ON 10.08.2012 AND WAS ACCOMPA NIED, AS REQUIRED UNDER THAT ACT AND THE ATTENDANT RULES, BY A CERTIFICATE DATED 20.07.2012 ISSUED BY THE PRINCIPAL ARCHITECT THAT THE CONSTRUCTION HAD BEEN COMPLETED. 5.12 THE DATE OF COMPLETION WAS AN ISSUE IN CONSIDERATION IN THE CONTEXT OF SEC.80IB( 10) IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. (ITA NOS. 945 TO 950/PN/2010), DATED 30.08.2011, WHERE THE ITAT OBSERVED AS FOLLOWS: 'IT IS ALSO AN UNDISPUTED FACT THAT ISSUANCE OF OCCUPANCY CERTIFICATE IS THE PREROGATIVE OF THE LOCAL AUTHORITY I.E., AMC AND IN THIS REGARD, THE ASSESSEE HAS NO CONTROL AND IT IS BEYOND THE POWER OF THE ASSESSEE TO MAKE THE AMC ISSUE THE SAID COMPLETION/OCCUPANCY CERTIFICATE BEFORE 31.3.2008. WHAT WAS UNDER THE POWER AND CONTROL OF THE ASSESSEE WAS ONLY TO MOVE THE AMC FOR C OMPLETION CERTIFICATE FULFILLING ALL THE REQUIREMENTS WITH THE AMC FOR ISSUANCE OF OCCUPANCY CERTIFICATE WHICH THE ASSESSEE HAS DONE IN THE PRESENT CASE. THUS, THE DELAY IN ISSUING THE OCCUPANCY CERTIFICATE CANNOT BE ATTRIBUTED ON THE PART OF THE ASSESSEE TO DENY THE CLAIMED DEDUCTION U/S 80 - 18(10) OF THE ACT ON THE BASIS THAT THE PROJECT WAS NOT COMPLETED BY 31.03.2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY THE AMC REGARDING DEVIATION IN THE CONSTRUCTION OF THE PROJECT APPROVED BY THE AMC . 5.1 3 SIMILAR VIEW WAS ALSO TAKEN IN THE CASE OF IN THE CASE OF SATISH BORA AND ASSOCIATES (ITA NO.713 & 714/PN/2010, DATED 07.01.2011). THE DECISION IN THE CASE OF SATISH BORA & ASSOCIATES WAS RELIED UPON IN THE CASE OF R.V. NIRMAN LTD (ITA NOS.L03/HYD/2012 A ND 262/HYD/2011, DATED 30.10.2012) BY THE JURISDICTIONAL ITAT. I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 6 - : 5 . 14 FOR THE PURPOSE OF DECIDING THE PRESENT APPEAL, REFERENCE MAY BE MADE TO THE RELEVANT PROVISIONS OF THE GREATER HYDERABAD MUNICIPAL CORPORATION ACT, 1955 WHICH ARE REPRODUCED BELOW: 'SE CTION 455: COMPLETION OF CERTIFICATES, PERMISSION TO OCCUPY OR U SE: (1) EVERY PERSON SHALL WITHIN ONE MONTH AFTER THE COMPLETION OF THE ERECTION OR RE - ERECTION OF BUILDING OR THE EXECUTION OF ANY SUCH WORK AS IS DESCRIBED IN SECTION 343 DELIVER OR SEND O R CAUSE TO BE DELIVERED OR SENT TO THE COMMISSIONER AT HIS OFFICE, A NOTICE IN WRITING OF SUCH COMPLETION ACCOMPANIED BY A CERTIFICATE IN THE FORM SPECIFIED IN THE BYE - LAW SIGNED AND SUBSCRIBED IN THE MANNER SO SPECIFIED, AND SHALL GIVE TO THE COMMISSIONER ALL NECESSARY FACILITIES FOR THE INSPECTION OF SUCH BUILDING OR OF SUCH WORK AND SHALL APPLY FOR PERMISSION TO OCCUPY THE BUILDING. (2) NO PERSON SHALL OCCUPY OR PERMIT TO BE OCCUPIED ANY SUCH BUILDING, OR USE OR PERMIT TO BE USED THE BUILDING OR PART T HEREOF AFF ECTED BY ANY WORK, UNTIL: - A) PERMISSION HAS BEEN RECEIVED FROM THE COMMISSIONER IN THIS BEHALF; OR B) THE COMMISSIONER HAS FAILED FOR TWENTY - ONE DAYS AFTER RECEIPT OF THE NOTICE OF COMPLETION TO INTIMATE HIS REFUSAL OF THE SAID PERMISSION. 5.15 SIMILARLY, THE RELEVANT PROVISIONS OF THE HYDERABAD REVISED BUILDING RULES, 2006 PROVIDE AS FOLLOWS: 'RULE 12: COMPLETION CERTIFICATE: 12.1. ON COMPLETION OF THE BUILDING WORK THE LICENSED TECHNICAL PERSONNEL SHALL GIVE NOTICE TO THE AUTHORITY IN PRESCRIBED FORM AS GIVEN IN APPENDIX G IN PURSUANCE OF SUB - SECTION( 1) OF SECTION 455 OF THE ACT. 13. OCCUPANCY CERTIFICATE: 13.1. NO BUILDING HEREAFTER ERECTED, RE - ERECTED OR ALTERED MATERIALLY SHALL BE OCCUPIED IN WHOLE OR IN PART UNTIL THE ISSUE OF AN OCCUPANCY CERTIFICATE BY THE AUTHORITY AFFIRMING THAT SUCH BUILDING IS FOR OCCUPATION, AS PER PROFORMA GIVEN IN APPENDIX UNDER CLAUSE(A) OF SUB - SECTION(2) OF SEC. 455 OF THE ACT. 13.1.1 . ON RECEIPT OF THE COMPLETION CERTIFICATE THE AUTHORITY SHALL I NSPECT THE COMPLETED BUILDING AND PREMISES TO ENSURE THAT THE WORK HAS BEEN COMPLETED AS PER THE SANCTIONED PLAN AND OTHER PERMISSIONS. BASED ON THE SAME, THE OCCUPANCY CERTIFICATE SHALL BE ISSUED OR NOT ISSUED. .. I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 7 - : 13.1.2. PROVIDED THAT IF THE AUTHORITY FAILS TO ISSUE THE OCCUPANCY CERTIFICATE WITHIN TWENTY ONE DAYS (AS PER ACT) OF THE DATE OF RECEIPT OF COMPLETION CERTIFICATE BY THE AUTHORITY FOR ISSUE OF SUCH CERTIFICATE, THE BUILDING MAY BE OCCUPIED WITHOUT WAITING FOR THE CERTIFICATE, BUT INFORMATION TO THIS EFFECT SHALL HAVE TO BE SENT TO THE AUTHORITY BY THE OWNER BEFORE OCCUPYING THE SAME . 5.16 IT IS CLEAR FROM A PERUSAL OF SEC.455 OF THE GHMC ACT, 1955 AND RULE 12 & 13 OF THE HYDERABAD REVISED BUILDING RULES, 2006 THAT THE RELEVANT PROVISIONS A PPLICABLE TO HYDERABAD AND THE APPELLANT ARE SIMILAR TO THOSE OF PUNE WHICH WERE TAKEN NOTE OF IN THE CASE OF SATISH BORA AND ASSOCIATES: A. THERE IS NO CONCEPT OF ISSUE OF COMPLETION CERTIFICATE BY THE MUNICIPAL AUTHORITIES. ONLY AN OCCUPANCY CERTIFICAT E IS REQUIRED TO BE ISSUED .. B. THE MUNICIPAL LAWS/RULES SPECIFY A PERIOD OF 21 DAYS FOR THE MUNICIPAL AUTHORITIES TO PROCESS THE APPLICATION FOR ISSUE OF OCCUPANCY CERTIFICATE. C. AFTER THE LAPSE OF 21 DAYS, THE OCCUPANCY CERTIFICATE CAN BE PRESUMED TO HAVE BEEN ISSUED. 5.17 IT FOLLOWS FROM THE FACTS OF THE PRESENT CASE THAT THE APPELLANT HAVING APPLIED FOR ISSUE OF OCCUPANCY CERTIFICATE ON 10.8.2012, CAN BE DEEMED UNDER THE RELEVANT LAWS/RULES TO HAVE RECEIVED THE CERTIFICATE ON 31.8.2012 (I.E. AFT ER 21 DAYS) WHICH IS BEFORE THE SPECIFIED DATE U/S. 54. 5.18 THE DECISION IN THE CASE OF SATISH BORA AND ASSOCIATES ALSO REFERS TO THE FACT THAT SUCH DEEMED ISSUE OF OCCUPANCY CERTIFICATE WOULD BE APPLICABLE PROVIDED THERE ARE NO MAJOR DEVIATIONS IN THE P LAN. THERE IS NO EVIDENCE ON RECORD TO SHOW THAT ANY SUCH MAJOR DEVIATION TOOK PLACE. 6.2. AFTER THE ABOVE DISCUSSION, LD. CIT(A) HOWEVER, GRANTED DEDUCTION U/S. 54F TO THE EXTENT OF RS. 80,00,000/ - ONLY INSTEAD OF ENTIRE CAPITAL GAIN. THE INVESTMENT IN NEW HOUSE IS MORE THAN THE CAPITAL GAIN/SALE CONSIDERATION. THE ONLY ISSUE WHICH MIGHT HAVE RESTRAINED THE LD. CIT(A) COULD BE THE REASON THAT ASSESSEE HAD DEPOSITED ONLY RS. 80 LAKHS AND NOT ENTIRE SALE CONSIDERATION. 6.3. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V S. K.RAMACHANDRA RAO (SUPRA) ANSWERED THE QUE STION IN FAVOUR OF ASSESSEE HOLDING THAT WHEN ASSESSEE HAD INVESTED THE ENTIRE SALE I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 8 - : CONSIDERATION IN CONSTRUCTION OF A RESIDENTIAL HOUSE WITHIN THE THREE YE ARS FROM THE DATE OF TRANSFE R, C OULD HE BE DE NIED EXEMPTION UNDER SECTION 54 F ON THE GROUND THAT HE DID NOT DEPOSIT THE SAID AMOUNT IN CAPITAL GAIN ACCOUNT SCHEME BEFORE THE DUE DATE PRESCRIBED U/S.139(L) OF THE ACT. THE HON'BLE HIGH COURT OF KARNATAKA HIGH COURT HELD AS UNDER: - 'A S IT CLEAR FROM SUB - SECTION (4) IN THE EVENT OF THE ASSESSEE NOT INVESTING THE CAPITAL GAINS EITHER IN PURCHASING THE RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE WITHIN THE PERIOD STIPULATED IN SECTION 54F( 1), IF THE ASSESSEE WANTS THE BENEFI T OF SECTION 54F, THEN HE SHOULD DEPOSIT THE SAID CAPITAL GAINS IN AN ACCOUNT WHICH IS DULY NOTIFIED BY THE CENTRAL GOVERNMENT. IN OTHER WORDS IF HE WANT OF CLAIM EXEMPTION FROM PAYMENT OF INCOME TAX BY RETAINING THE CASH, THEN THE SAID AMOUNT IS TO BE INV ESTED IN THE SAID ACCOUNT. IF THE INTENTION IS NOT TO RETAIN CASH BUT TO INVEST IN CONSTRUCTION OR ANY PURCHASE OF THE PROPERTY AND IF SUCH INVESTMENT IS MADE WITHIN THE PERIOD STIPULATED THEREIN, THEN SECTION 54F(4) IS NOT AT ALL ATTRACTED AND THEREFORE T HE CONTENTION THAT THE ASSESSEE HAS NOT DEPOSITED THE AMOUNT IN THE BANK ACCOUNT AS STIPULATED AND THEREFORE, HE IS NOT ENTITLED TO THE BENEFIT EVEN THOUGH HE HAS INVESTED THE MONEY IN CONSTRUCTION IS ALSO NOT CORRECT. CO - ORDINATE BENCH OF ITAT, AHMEDAB AD BENCH IN THE CASE OF ASHOK KAPASI WALA IN ITA NO. 2692/AHD/2014 DT. 10 - 09 - 2015, ALSO HELD THE SAME RELYING ON THE ABOVE JUDGEMENT. 6.4. IN THE PRESENT CASE, ASSESSEE HAS PURCHASED A SEMI - FINISHED HOUSE AND COMPLETED CONSTRUCTION BEFORE THE THREE YEARS PERIOD AS PRESCRIBED. REVENUE HAS NOT CITED OR PLACED ON RECORD ANY CONTRARY JUDGMENT. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. K. RAMACHANDRA RAO [56 TAXMANN.COM 163] , WE DIRECT THE AO TO ALLOW THE CAPITAL GAINS EXEMPTION AS CLAIMED. I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 9 - : 6.5. GROUND NO. 2 IS ON THE CLAIM OF C OST OF ACQUISITION. AO AS STATED EARLIER HAS NOT CONSIDERED THE COST OF ACQUISITION OR INDEXATION AND BROUGHT THE ENTIRE SALE CONSIDERATION TO TAX. BEFORE THE LD . CIT(A), ADDITIONAL EVIDENCE IN THE FORM OF PURCHASE DEEDS WERE FILED. LD. CIT(A) FAI LED TO ADJUDICATE THE GROUND. WE NOTICE THAT ASSESSEE IS ENTITLED TO COST OF INDEXATION AS CLAIMED AS A DEDUCTION WHILE COMPUTING THE CAPITAL GAINS. EVEN OTH ERWISE, SI NCE ASSESSEES INVEST MENT IN NEW HOUSE IS MORE THAN THE SALE CONSIDERATION, THE GROUND MAY BECOME ACADEMIC. HOWEVER, WE DIRECT THE AO TO ALLOW COST OF INDEXATION AS CLAIMED AND ARRIVE AT THE CORRECT CAPITAL GAINS AND ALLOW DEDUCTION U/S. 54F/54 THEREON. 7. IN THE RESULT, ASSESSEES APPEAL IN ITA NO. 1049/HYD/2014 IS ALLOWED WHEREAS REVENUES APPEAL IN ITA NO. 1053/HYD/2014 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH FEBRU ARY , 201 6 SD/ - SD/ - (P. MADHAVI DEVI) (B. RAMAKOTAIA H) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 29 TH FEBRUARY, 2016 TNMM I.T.A. NO S . 10 49 & 1053 / HYD / 201 4 SRI M. SRINIVASA RAO : - 10 - : COPY TO : 1. SRI M. SRINIVASA RAO, H.NO. 8 - 2 - 686/B - 12/5, ROAD NO. 12, BANJARA HILLS, HYDERABAD. 2. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 3(2), 7 TH FLOOR, B - BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD. 3 . ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 3 ( 2 ), I.T. TOWERS, A.C. GUARDS , HYDERABAD. 4 . CIT (APPEALS) - I V , HYDERABAD. 5 . CIT - I II , HYDERABAD. 6 . D.R. ITAT, HYDERABAD. 7 . GUA RD FILE.