Assistant Commissioner of Income Tax, Circle - 6(3)(1), Bangalore V. Sri. Sandeep Bhujanga Shetty, Bangalore

ITA 1068/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3337 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 15-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Keywords: Capital asset; Salary income; Cost of acquisition; Revised return; Set aside; Capital Gains
• Section: 54; 139; 54F; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI. B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA 1068/BANG/2019 ASSESSMENT YEAR : 2015 16 ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6(3) (1), ROOM NO. 438, 4 TH FLOOR, BMTC BUILDING, KORAMANGALA, BENGALURU 560 095. VS. SHRI. SANDEEP BHUJANGA SHETTY, NO B, SNS CHAMBERS, 274, SANKEY ROAD, SADASHIVANAGAR, BENGALURU 560 080. PAN NO : AACPS 9801 M APPELLANT RESPONDENT & ITA 1070/BANG/2019 ASSESSMENT YEAR : 2015 16 SHRI. SANDEEP B SHETTY, NO 13, SNS CHAMBERS, 274, SANKEY ROAD, SADASHIVANAGAR, BENGALURU 560 080. PAN NO : AACPS 9801 M VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 6(3) (1), 4 TH FLOOR, BMTC BUILDING, 6 TH BLOCK, KORAMANGALA, BENGALURU 560 095. APPELLANT RESPONDENT APPELLANT BY : SHRI. MANJEET SINGH, ADDL. CIT DR RESPONDENT BY : SHRI. S. RAMASUBRAMANIAN, C A DATE OF HEARING : 16-01-2020 DATE OF PRONOUNCEMENT : 06-03-2020 PAGE 2 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEALS HAVE BEEN FILED BY REVENUE AND ASSE SSEE AGAINST ORDER DATED 15/03/2019 PASSED BY LD. CIT(A) , BANGALORE FOR ASSESSMENT YEAR 2015 16 ON FOLLOWING GROUNDS OF APPEAL: ITA NO.1068/B/2019 (REVENUES APPEAL) 1 THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AN D THE FACTS AND CIRCUMSTANCES OF THE CASES. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(A) IS JUSTIFIED IN ALLOW THE COST OF CONSTR UCTION TO BE EXEMPT U/S. 54 OF THE IT ACT AS THE ASSESSEE HAD CO MMENCED THE CONSTRUCTION OF THE HOUSE PRIOR TO THE DATE OF TRAN SFER OF THE ORIGINAL ASSET. ATTENTION IS DRAWN TO CBDT CIRCULA R NO. 667 DATED 18.10.1993 WHICH STATES THAT THE AGGREGATE COST TO QUALIFY AS A DEDUCTION U/S. 54F ONLY IF THE NET PROCEEDS OF SALE ARE INVESTED INN THE CONSTRUCTION OF THE NEW ASSET. 3 FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF T HE CIT(A), IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVER SED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4 THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AME ND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. ITA NO.1070/B/2019 (AS APPEAL) 1 THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME-TA X (APPEALS) IS BAD IN SO FAR IT IS PREJUDICIAL TO THE INTERESTS OF THE APPELLANT AND ERRONEOUS IN LAW AND AGAINST THE FACTS AND CIRCUMST ANCES OF THE CASE. 2 THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE COST OF LAND O F RS. 6,77,14,490 AS EXEMPTION U/S. 54F OF THE ACT ON THE GROUND THAT THE LAND WAS PURCHASED PRIOR TO THE DATE OF SALE OF ORIGINAL ASSET. ADDITIONAL GROUND 3 THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE TOTAL COST OF CONSTRUCTION OF RS. 6,63,64,068 INCURRED FOR ALLOWING EXEMPTION U/S. 54F OF THE ACT. 4 THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN NOT PROVIDING THE ADDITIONAL DEDUCTION OF RS. 2,79, 64,068/- BEING THE CONSTRUCTION COST INCURRED AFTER FILING THE RET URN OF INCOME AND BEFORE EXPIRY OF THREE YEARS FROM THE DATE OF SALE OF ORIGINAL ASSET. PAGE 3 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETURN OF I NCOME ON 22/08/2015 DECLARING TOTAL INCOME OF RS.4,41,70,750 /-. IT WAS OBSERVED THAT, ASSESSEE DECLARED INCOME UNDER THE H EAD INCOME FROM SALARY, BUSINESS AND PROFESSION, CAPITAL GAINS AND OTHER SOURCES. THE CASE WAS SELECTED FOR SCRUTINY AND S TATUTORY NOTICES WERE ISSUED TO ASSESSEE IN RESPONSE TO WHIC H REPRESENTATIVE OF ASSESSEE APPEARED BEFORE LD. AO A ND FILED REPLIES DATED 07/06/2017, 17/11/2017, 17/12/2017 AN D 11/12/2017. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, FROM DETAILS FURNISHED BY ASSESSEE, LD. AO OBSERVED THAT , ASSESSEE UNDERTOOK SALE AND DETAILS OF EXEMPTIONS CLAIMED U/ S. 54F FILED. IT WAS OBSERVED THAT, ASSESSEE HAD CLAIMED EXEMPTIO N TO THE TUNE OF RS. 3,84,00,000/- FOR CONSTRUCTION OF NEW RESIDE NTIAL HOUSE. LD. AO OBSERVED THAT, ASSESSEE EXECUTED TWO SALE DE ED DATED 07/08/2014 AND 07/01/2015 FOR SALE OF LAND. A PORT ION OF CONSIDERATION THAT ACCRUED FROM SALE WAS CLAIMED TO BE EXEMPT U/S.54F. ASSESSEE FURNISHED DETAILS OF COST INCURRE D FOR CONSTRUCTION OF NEW RESIDENTIAL HOUSE AND CLAIMED E XEMPT U/S. 54F. 4. LD. AO OBSERVED THAT, ASSESSEE STARTED CONSTRUCTION OF HOUSE FROM 30/01/2014, WHICH IS WELL AHEAD OF REALI SATION OF CAPITAL GAIN FROM SALE UNDERTAKEN BY ASSESSEE, AND THEREFORE THERE HE WAS OF THE VIEW THAT THERE WAS VIOLATION O F CONDITION TO CLAIM EXEMPTION U/S. 54F OF THE ACT. PAGE 4 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 AGGRIEVED BY ORDER OF LD. AO, ASSESSEE PREFERRED AP PEAL BEFORE LD. CIT(A). 5. BEFORE LD. CIT(A) ASSESSEE RAISED ADDITIONAL GROUND S, WHEREIN IT WAS PLEADED THAT A SUM OF RS. 6,77,14,49 0/- SPENT IN ACQUIRING THE PLOT OF LAND FOR CONSTRUCTION OF HIS NEW RESIDENTIAL HOUSE OUGHT TO HAVE BEEN INCLUDED IN THE TOTAL COST OF ACQUISITION OF NEW ASSET, AND THAT COST OF ACQUISITION OF NEW A SSET SHOULD HAVE BEEN DETERMINED AT RS.10,77,13,557/-. 6. LD. CIT(A) AFTER CONSIDERING ADDITIONAL GROUNDS AND SUBMISSIONS MADE BY ASSESSEE IN RESPECT OF THE SAME , CALLED FOR REMAND REPORT FROM LD. AO. IN REMAND REPORT LD. AO WAS OF THE OPINION THAT, IT IS NECESSARY THAT HOUSE SHOULD HAV E BEEN CONSTRUCTED WITHIN A PERIOD OF 3 YEARS FROM THE DAT E OF TRANSFER OF CAPITAL ASSET AND AS ASSESSEE HAS NOT SATISFIED THE REQUIREMENTS U/S. 54F WAS TO BE DENIED. 7. LD. CIT(A) HOWEVER HELD THAT, ASSESSEE WAS ENTITLED TO COST OF CONSTRUCTION TO BE EXEMPT U/S. 54 OF THE AC T, AS ASSESSEE COMMENCED THE CONSTRUCTION OF HOUSE PRIOR TO THE DA TE OF TRANSFER OF ORIGINAL ASSET, IN LIEU OF CIRCULAR NO. 667 DATED 18/10/1993 ISSUED BY CBDT. AGGRIEVED BY ORDER OF LD. CIT(A), BOTH REVENUE AS W ELL AS ASSESSEE ARE IN APPEAL BEFORE US NOW. ASSESSEE RAISED FOLLOWING ADDITIONAL GROUNDS: 1 THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE TOTAL COST OF CONSTRUC TION OF RS. 6,63,64,068 INCURRED FOR ALLOWING EXEMPTION U/S. 54F OF THE ACT . 2 THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN NOT PROVIDING THE ADDITIONAL DEDUCTION OF RS. 2,79,64,068/- BEING THE CONSTRUCTION COST PAGE 5 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 INCURRED AFTER FILLING THE RETURN OF INCOME AND BEF ORE EXPIRY OF THREE YEARS FROM THE DATE OF SALE OF ORIGINAL ASSET. 8. IT HAS BEEN SUBMITTED THAT, THESE ADDITIONAL GROUND S WERE NOT RAISED BEFORE AUTHORITIES BELOW DUE TO MER E OVERSIGHT AND THAT NO NEW FACTS NEEDS TO BE ANALYSED FOR ADJU DICATING THE SAME. LD. AR SUBMITTED THAT, ADDITIONAL GROUNDS MA Y BE ADMITTED IN VIEW OF DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS NATIONAL THERMAL POWER CORPORATION REPORTED IN 229 ITR 383 AND JUTE CORPORATION OF INDIA LTD., VS CIT REPORTED IN 187 ITR 688. ON THE CONTRARY, LD. SR. DR OBJECTED FOR ADMISSION OF THE SAME. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 9. ADMITTEDLY IN ORDER TO ADJUDICATE ADDITIONAL GROUND S, NO NEW FACTS NEED TO BE INVESTIGATED UPON. IT IS A LSO OBSERVED THAT, THIS ISSUE WAS DISCUSSED BY ASSESSEE IN WRITT EN SUBMISSION FILED BEFORE AUTHORITIES BELOW THOUGH A SPECIFIC GR OUND WAS NOT RAISED, WE THEREFORE DO NOT FIND ANY REASON, NOT TO ADMIT THESE GROUNDS. ACCORDINGLY, THE ADDITIONAL GROUNDS RAISED, REPRODU CED HEREINABOVE ARE ADMITTED. ALL GROUNDS RAISED BY ASSESSEE AS WELL AS REVENUE I NTERMINGLE WITH EACH OTHER AND ARE INTERCONNECTED, WE THEREFOR E DISPOSE THEM ALL TOGETHER. 10. LD. AR SUBMITTED THAT, ASSESSEE SOLD TWO PARCELS OF LAND FOR PRICE OF RS.8,16,55,200/- ONE ON 07/08/201 4 AND OTHER ON 07/01/2015, BOTH NEAR KEMPEGOWDA INTERNATIONAL A IRPORT, WHICH HE WAS ACQUIRED WAY BACK IN 1980 81. CAPIT AL GAINS THAT PAGE 6 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 RESULTED FROM THE SALE WAS COMPUTED AT RS.7,82,70,8 17/-. LD. AR SUBMITTED THAT, ASSESSEE ON 20/12/2012 PURCHASED A VACANT PLOT OF LAND IN BANGALORE FOR PURPOSE OF CONSTRUCTI NG NEW RESIDENTIAL HOUSE AND IN ACQUIRING THE SAME, HE INV ESTED A SUM OF RS.6,77,14,490/-. ASSESSEE STARTED CONSTRUCTION OF NEW RESIDENTIAL HOUSE IN THE PLOT OF LAND, WHICH HE ACQ UIRED IN 2012- 13, FOR WHICH HE ENGAGED ARCHITECT TO DESIGN THE HO USE AND SUPERVISE THE CONSTRUCTION. IT IS SUBMITTED THAT, ENTIRE SUM OF RS.6,77,14,490/- WAS UTILISED FOR ACQUIRING THE LAN D, AND FURTHER SUM OF RS.3,99,99,067/- WAS SPENT ON CONSTRUCTING T HE HOUSE. THUS, IN ALL, AN AMOUNT OF RS.10,77,13,557/- WAS IN VESTED IN ACQUIRING THE NEW RESIDENTIAL HOUSE. 11. LD. AR SUBMITTED THAT, ASSESSEE CLAIMED BENEFIT U/S . 54F OF THE ACT IN RESPECT OF AMOUNT SPENT FOR CONST RUCTION OF NEW RESIDENTIAL HOUSE. HE ACCORDINGLY, CLAIMED EXEMPTI ON TO THE EXTENT OF RS.3,84,00,000/-, WHICH WAS ARRIVED AT BY APPLYING TOTAL CAPITAL GAINS IN THE SAME PROPORTION AS THE A MOUNT SPENT ON CONSTRUCTION OF THE NEW RESIDENTIAL HOUSE WITHOUT C ONSIDERING THE AMOUNT SPENT ON LAND TO THE NET CONSIDERATION RECEI VED ON SALE OF TWO PARCELS OF LAND. LD. AR FURTHER SUBMITTED THAT , ON THE BALANCE AMOUNT OF CAPITAL GAINS, THAT IS RS.3,98,70 ,817/- BENEFIT U/S. 54F WAS NOT CLAIMED AND IT WAS OFFERED TO TAX. 12. LD. AR NOW SUBMITTED THAT, FOR PURPOSE OF SECTION 54F(1), COST INCURRED UP TO THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSE SHOULD BE TAKEN INTO ACCOUNT. IN SUPP ORT LD. AR PLACED RELIANCE ON DECISION OF THIS TRIBUNAL IN CASE OF DCIT VS. SHOBHA DEVELOPERS IN ITA NO. 1410/BANG/2013. LD. AR PLACED PAGE 7 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 RELIANCE ON DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS JAY SUBRAMANYA BHAT REPORTED IN 165 ITR 571 AND CIT VS RAMACHANDRA RAO REPORTED IN 277 CTR 522 IN SUPPORT OF HIS CONTENTIONS. IT IS SUBMITTED THAT, HONBLE COURT IN THESE DECISIONS ANSWERED QUESTION IN FAVOUR OF ASSESSEE T HAT; WHERE ASSESSEE INVESTS ENTIRE SALE CONSIDERATION AND CONS TRUCTION OF RESIDENTIAL HOUSE WITHIN 3 YEARS FROM THE DATE OF T RANSFER CAN HE BE DENIED EXEMPTION UNDER SECTION 54F OF ON THE GRO UND THAT HE DID NOT DEPOSIT THE SAID AMOUNT IN CAPITAL GAINS AC COUNT SCHEME BEFORE THE DUE DATE PRESCRIBED UNDER SECTION 139 (1 ) OF THE ACT? 13. FURTHER LD. AR SUBMITTED THAT, ASSESSEE PURCHASED SITE FOR A CONSIDERATION ON 20/12/2012 AND CONSTRUC TED THE HOUSE ON THE SITE AND CLAIMED SECTION 54F OF THE AC T. THE SALES OF CAPITAL ASSET GIVING RISE TO CAPITAL GAINS WERE MADE ON 07/08/2014 AND 07/01/2015. LD. CIT(A) ALSO HELD TH AT, LAND PURCHASED MORE THAN ONE YEAR PRIOR TO THE DATE OF T RANSFER OF CAPITAL ASSET IS NOT ELIGIBLE, WHEREAS ASSESSEE SUB MITTED THAT, LAND PURCHASED EVEN ONE YEAR PRIOR TO THE TRANSFER OF CAPITAL ASSET IS ELIGIBLE, BY RELYING UPON DECISION OF HONBLE MADRAS HIGH COURT IN CASE OF CIT VS ARYAMMA SUNDARAM REPORTED IN 407 ITR 1, WHEREIN HONBLE COURT ANSWERED FOLLOWING QUESTION IN FAVOUR OF ASSESSEE WHICH READS AS UNDER; WHETHER IN COMPUTATION OF COST OF NEW ASSET COMPLET ION IN SECTION 54 (1) OF THE INCOME TAX ACT, THE COST OF LAND CAN BE SEGREGATED FROM THE COST OF CONSTRUCTED HOUSE PROPERTY? 14. LD. AR PLACED RELIANCE UPON DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN R. M. M. ATHREYA VS ITO IN ITA NO. PAGE 8 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 467/B/2013 (PLACED AT PAGE 54 TO 62 OF PAPER BOOK) AND DECISIO N OF THIS TRIBUNAL IN CASE OF GOPILAL LADDHA VS ACIT REPORTED IN 62 SOT 59 . ON THE CONTRARY, LD. SR. DR PLACED RELIANCE UPON OR DERS PASSED BY AUTHORITIES BELOW. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 15. IN THE PRESENT FACTS OF THE CASE, IT IS SUBMITTED T HAT, ASSESSEE IS ELIGIBLE TO CLAIM BENEFIT OF SECTION 54 F IN RELATION TO CAPITAL GAINS AMOUNTING TO RS.7,82,70,817/-. IT IS THE CONTENTION OF ASSESSEE BEFORE US THAT, INSTEAD OF CONSIDERING TOTAL AMOUNT OF RS.10,77,13,557/- SPENT FOR THE NEW ASSET, ASSESSEE TOOK INTO ACCOUNT ONLY RS.3,99,99,067/- BEING THE AMOUNT SPEN T ON CONSTRUCTION. THUS, IN THE RETURN THE CLAIM OF SE CTION 54F WAS ONLY RS.3,84,00,000/- AS AGAINST RS.7,82,70,817/- ON THESE FACTS THE ISSUE THAT NEEDS TO BE ADDRESSED IS: WHETHER ASSESSEE COULD AVAIL BENEFIT UNDER SECTION 54F IF THE CONSTRUCTION OF NEW ASSET COMMENCED BEFORE THE SALE OF OLD ASSETS; WHETHER THE AMOUNT PAID FOR LAND USED FOR NEW ASSET SHOULD BE CONSIDERED FOR PURPOSE OF SECTION 54F; WHETHER ADDITIONAL DEDUCTION OF RS.2,79,64,068/- BE ING CONSTRUCTION COST INCURRED AFTER FILING THE RETURN OF INCOME BUT BEFORE EXPIRY OF 3 YEARS FROM THE DATE OF SALE OF ORIGINAL ASSETS LAND SHOULD BE CONSIDERED WHILE COMPUTING EXEMPTION UNDER SECTION 54F EVEN THOUGH ASSESSEE FA ILED TO CLAIM IT IN THE RETURN OF INCOME; PAGE 9 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 16. INSOFAR AS ISSUES NO.1 AND 2 NOTED HEREINABOVE IS CONCERNED, EXEMPTION UNDER SECTION 54F ON UTILISATI ON OF CAPITAL GAIN FOR PURCHASE OF RESIDENTIAL HOUSE OR CONSTRUCT ION OF A RESIDENTIAL HOUSE IS AS PER SUBSECTION 1. SUBSECTIO N 2 PROVIDE THE MECHANISM OF THE CAPITAL GAIN WAS NOT APPROPRIATED BY THE ASSESSEE TOWARDS PURCHASE OF NEW ASSET WITHIN ONE Y EAR BEFORE OR 2 YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK P LACE OR HAS WITHIN PERIOD OF 3 YEARS AFTER THE DATE CONSTRUCTED A RESIDENTIAL HOUSE BEING THE NEW ASSET SECTION 54F OF THE ACT IS A BENEFICIAL PROVISION OF PROMOTING THE CONSTRUCTION OF RESIDENTIAL HOUSE. THEREFORE THE PR OVISION HAS TO BE CONSTRUED LIBERALLY FOR ACHIEVING THE PURPOSE FO R WHICH IT WAS INCORPORATED IN THE STATUTE. THE WORDS USED IN THIS SECTION ARE PURCHASED OR CONSTRUCTED. FOR SUCH PURPOSE, CAP ITAL GAIN REALISED SHOULD HAVE BEEN INVESTED IN A RESIDENTIAL HOUSE. ON A LIBERAL INTERPRETATION, THE CONDITION PRECEDED AND FOR CLAIMING BENEFIT UNDER THE PROVISION IS THAT CAPITA L GAIN REALISED FROM SALE OF CAPITAL ASSET SHOULD HAVE BEEN INVESTE D EITHER IN PURCHASING A RESIDENTIAL HOUSE OR AND CONSTRUCTING A RESIDENTIAL HOUSE. 17. IN THE PRESENT FACTS OF CASE ASSESSEE UTILISED PART OF SALE CONSIDERATION EARNED FROM SALE OF 2 PARCELS OF LAND IN CONSTRUCTION OF RESIDENTIAL HOUSE, WHICH STARTED ON 13/01/2014 (WHICH IS WITHIN ONE YEAR PRIOR TO THE SALE OF CAPI TAL ASSET) AND, CONSTRUCTION WAS COMPLETED IN FINANCIAL YEAR 2016-1 7 (WHICH IS BEFORE EXPIRY OF 3 YEARS FROM THE SALE OF CAPITAL A SSET). ADMITTEDLY PAGE 10 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 ASSESSEE HAS USED SUM OF RS.3,99,99,067/- TOWARDS C ONSTRUCTION OF NEW ASSET AND BALANCE HAS BEEN OFFERED TO TAX. 18. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY VIOLATION OF REQUIREMENT TO CLAIM EXEMPTION U/S. 54 F, AS PER DECISIONS RELIED UPON BY LD.AR IN CASE OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS J.R SUBRAMANYA BHAT (SUPRA) AND CIT VS. RAMACHANDRA RAO (SUPRA), ASSESSEE IS ELIGIBLE TO CLAIM EXEMPTION UNDER SECTION 54F . WE THEREFORE DIRECT LD. AO IS DIRECTED TO COMPUTE THE CAPITAL GAINS CONSIDERING C LAIM IN CONSONANCE TO DECISIONS OF HONBLE KARNATAKA HIGH COURT MENTIONED HEREIN. ACCORDINGLY GROUND 1&2 OF ASSESSEES APPEAL STANDS ALLOWED WHEREAS REVENUES APPEAL STANDS DISMISSED. 19. SO FAR AS 3 RD ISSUE RAISED BY ASSESSEE IN GROUND NO. 3-4 BY WAY OF ADDITIONAL GROUND IS CONCERNED, IS CONCER NED, IT IS SUBMITTED THAT ASSESSEE DID NOT CONSIDER THE COST O F ACQUIRING THE LAND ON WHICH THE NEW ASSET IS CONSTRUCTED WHIL E COMPUTING CAPITAL GAINS AT THE TIME OF FILING ORIGINAL RETURN OF INCOME. ASSESSEE BEFORE US NOW SUBMITS THAT ASSESSEE IS ELI GIBLE FOR AN ADDITIONAL DEDUCTION OF RS.2,79,64,068/- BEING THE CONSTRUCTION COST INCURRED AFTER FILING THE RETURN OF INCOME AND BEFORE EXPIRY OF 3 YEARS FROM DATE OF SALE OF ORIGINAL ASSETS. 20. LD. AR SUBMITS THAT, IT IS NOT FAIR TO DENY ASSESSE E A RELIEF PURELY ON TECHNICALITIES WHEN OTHERWISE ASSE SSEE IS ENTITLED TO THE SAME. PLACING RELIANCE ON DECISION OF HONBLE SUPREME COURT IN CASE OF GOETZ (INDIA) LTD VS CIT REPORTED IN (2006) 157 TAXMANN 1 LD.AR SUBMITS THAT ASSESSEE MUST BE GRANTED THIS PAGE 11 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 ADDITIONAL DEDUCTION THOUGH NOT CLAIMED IN THE ORIG INAL RETURN OF INCOME. LD. SR. DR WHERE MENTALLY OPPOSED FOR THIS PROPOSITION AS ASSESSEE COULD HAVE REVISED ITS CLAIM BY FILING REVISED RETURN AT THE TIME OF ASSESSMENT PROCEEDINGS. HE SUBMITTED TH AT FACTS CONSIDERED BY HONBLE SUPREME COURT IN CASE OF GOET Z (INDIA) LTD (SUPRA) WAS DIFFERENT. HE SUBMITTED THAT IN CASE OF GOETZ (INDIA) LTD, ASSESSEE THEREIN HAD SOUGHT TO CLAIM DEDUCTION BY WAY OF LETTER BEFORE ASSESSING OFFICER AT THE TIME OF ASSE SSMENT PROCEEDINGS WHEREAS IN PRESENT FACTS OF THE CASE AS SESSEE IS SEEKING AS RELIEF BEFORE THIS TRIBUNAL . IT IS ALSO BEEN SUBMITTED BY LD. SR. DR THAT THE LAND WAS PURCHASED BY ASSESSEE DURING THE YEAR 2012-13 AND ASSESSEE IS NOT ESTABLISHING WHETH ER SUCH PURCHASE WAS OUT OF CAPITAL GAIN THAT AROSE FROM SA LE OF ANOTHER CAPITAL ASSET OR NOT. IT HAS BEEN SUBMITTED THAT ME RELY MAKING A CLAIM WHICH HAS NOT BEEN VERIFIED CANNOT BE ALLOWED . WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 21. IT IS OBSERVED THAT, AS RIGHTLY ARGUED BY LD. SR. D R THAT, ONE HAS TO VERIFY THE MANNER IN WHICH ASSESSE E INVESTED IN THE VACANT PLOT. ALSO, THAT THIS ISSUE HAS NOT BEEN CONSIDERED BY LD.AO, AND THEREFORE IN OUR VIEW IT IS APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO LD. AO. NEEDLESS TO SAY, THAT ASSESS EE SHALL BE GRANTED PROPER OPPORTUNITY OF BEING REPRESENTED IN SUPPORT OF THIS CLAIM. ACCORDINGLY, ADDITIONAL GROUND RAISED BY ASSESSEE S TANDS ALLOWED FOR STATISTICAL PURPOSES, PAGE 12 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 IN THE RESULT, APPEAL FILED BY ASSESSEE STANDS ALLO WED AS INDICATED ABOVE AND APPEAL FILED BY REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MARCH, 2020. SD/- SD/- (B. R. BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 6 TH MARCH, 2020. /MK/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL. BANGALORE. PAGE 13 OF 13 ITA 1068/BANG/2019 & ITA 1070/BANG/2019 A. Y : 2015 16 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR 04-03-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 05-03-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 05-03-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 05-03-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 06-03-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE 06-03-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK 06-03-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS