JAG MOHAN SHARMA, Jaipur V. ITO, Jaipur

ITA 1089/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1989 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Assessee Lawyers: S K GOGRA
• Section: 54B; 54F; 54; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH HKKXPUN KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 1089/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2013-14. JAG MOHAN SHARMA (DECEASED) LEGAL HEIR NITESH SHARMA, 1/2, GANGA COLONY, KHATIPURA ROAD, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 1(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. EHPPS 0694 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.K. GOGRA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04.01.2018 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 13/03.2018 VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 27 TH SEPTEMBER, 2016 OF LD. CIT (A)-I PERTAINING TO A.Y. 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ORDER PASSED BY LD. AO BY CREATING DEMAND AGAI NST APPELLANT MAY PLEASE BE DECLARED AS ILLEGAL AND UNJUSTIFIED IN TH E FACTS & CIRCUMSTANCES OF THE CASE. 2. THAT ORDER OF LD. AO BY DISALLOWING BENEFIT OF INVE STMENT MADE U/S 54F FOR PURCHASE OF RESIDENTIAL HOUSE NO. 784A, DEVI NA GAR, JAIPUR FOR RS. 2 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA 75,11,000/- MERELY ON GROUND OF NON DEPOSITION OF S ALE CONSIDERATION IN CAPITAL GAIN ACCOUNT SCHEME IN ACCORDANCE WITH SCHE ME OF SECTION 54F(2) MAY PLEASE BE DECLARED ILLEGAL AND WHICH ARE ULTIMA TELY BEEN UTILIZED FOR PURCHASE OF RESIDENTIAL HOUSE NO.: 784-A, DEVI NAGA R, JAIPUR WITHIN STIPULATED PERIOD OF 36 MONTHS FROM THE DATE OF SAL E DEED. 3. THAT LD. AO HAS ERRED IN REBUTTING AGREEMENT DT. 19.1.2013 MADE WITH MANGAL CHAND KUMAWAT SELLER & DEVELOPER FOR PURCH ASE OF CONSTRUCTED RESIDENTIAL HOUSE NO.:784-A, DEVI NAGAR, JAIPUR BUT DUE TO NON FULFILMENT OF CONDITION OF SAID AGREEMENT TO DELIVER THE POSSE SSION OF DULY CONSTRUED HOUSE WITHIN A PERIOD OF 10 MONTHS FROM DATE OF AGR EEMENT, THE SAID TRANSACTION COULD NOT BE COMPLETED, MAY PLEASE BE D ECLARED AS ILLEGAL AND ARBITRARY IN NATURE. FURTHER LD. CIT(A) HAS ERRED I N CONFIRMING THE SAME WITHOUT ANY COGENT REASONS. 4. THAT LD. CIT(A) HAS ERRED IN GIVING FINDING AT HIS OWN THAT RESIDENTIAL HOUSE NO.: 784-A, DEVI NAGAR, JAIPUR PURCHASED VIDE AGREEMENT TO SALE DT. 13.10.2014 CANNOT BE TREATED AS PART OF HOUSE N O.: 784, DEVI NAGAR, JAIPUR WHEREAS THERE IS UNAMBIGUOUS FINDING IN ORDE R OF AO THAT BOTH HOUSES ARE ONE AND COMMON HOUSE AND PURCHASED THROU GH TWO DOCUMENTS I.E. HOUSE NO.: 784 VIDE SALE DEED DT. 17 .1.2013 FOR RS. 61,05,450/- AND HOUSE NO.: 784A WAS PURCHASED VIDE AGREEMENT TO SALE DT. 13.10.2014 FOR RS. 75,11,000/-. IT IS FURTHER S UBMITTED THAT APPELLANT (MR. JAG MOHAN SHARMA) EXPIRED ON 11.12.2014 THEREF ORE THE SAME COULD NOT BE GOT REGISTERED, THUS MERELY DUE TO NOT GETTI NG THE SAME REGISTERED WITH SUB-REGISTRAR AND EVEN AFTER GETTING POSSESSIO N OF SAID HOUSE, THE OWNERSHIP OF HOUSE CANNOT BE DENIED BY CIT(A). THUS ORDER OF CIT(A) IS BASED ON HIS WHIMS AND FANCIES AND WITHOUT ANY BASI S MAY PLEASE BE DECLARED ILLEGAL & UNJUSTIFIED. 5. THAT LD AO HAS ERRED IN TAKING UP SALE CONSIDER ATION AT DLC OF RS. 21058043/- WHEREAS ACTUAL SALE CONSIDERATION IS OF RS. 20100000/-, THUS WITHOUT ASCERTAINING ACTUAL SALE CONSIDERATION, PAS SING OF ASSTT. ORDER MAY 3 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA PLEASE BE DECLARED AS ILLEGAL AND ORDER OF CIT(A) I N CONFIRMING SAME MAY PLEASE BE DECLARED AS ILLEGAL. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND O R ALTER ANY OF THE GROUND TO THIS APPEAL. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS REGARDING DISALLOWANCE OF DEDUCTION UNDER SECTION 54F IN RESPECT OF THE IN VESTMENT MADE BY THE ASSESSEE IN THE HOUSE PURCHASED ON 13.10.2014. DURING THE ASSES SMENT PROCEEDINGS, THE AO NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS . 1,47,72,482/- UNDER SECTION 54F AND RS. 53,27,518/- UNDER SECTION 54B OF THE AC T AGAINST THE LONG TERM CAPITAL GAIN FROM SALE OF AGRICULTURAL LAND DURING THE YEAR UNDER CONSIDERATION. THE AO FURTHER NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTI ON U/S 54F IN RESPECT OF TWO RESIDENTIAL HOUSE NOS. 784 AND 784A, DEVI NAGAR, NE W SANGANER ROAD, JAIPUR. AS REGARDS THE DEDUCTION IN RESPECT OF THE RESIDENTIAL HOUSE NO. 784, DEVI NAGAR UNDER SECTION 54F AND DEDUCTION UNDER 54B FOR PURCHASE OF AGRICULTURAL LAND, THE SAME WERE ALLOWED. HOWEVER, THE AO DENIED THE DEDUCTION UNDER SECTION 54F IN RESPECT OF THE ANOTHER HOUSE NO. 784A, DEVI NAGAR. THE AO HAS RAISED OBJECTION AGAINST THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESS EE HAS PURCHASED THIS HOUSE VIDE AGREEMENT TO PURCHASE ON 13.10.2014 FOR A CONSIDERA TION OF RS. 75,11,000/-. HOWEVER, THE ASSESSEE HAS NOT DEPOSITED THE SAID AM OUNT IN THE CAPITAL GAIN ACCOUNT OF THE SCHEME BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139 OF THE ACT. THE AO FURTHER NOTED THAT THOUGH THE ASSESSEE DEPOSITED AN AMOUNT OF RS. 59,00,000/- ON 10.01.2014 AND RS. 28, 00,000/- ON 27.03.2014 IN CAPITAL GAIN ACCOUNT SCHEME WHICH IS AFTER DUE DATE OF FILING THE RETURN OF INCOME. 4 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A). THE LD. CIT (A) CONFIRMED THE DISALLOWANCE MADE BY THE AO MAINLY ON TWO REASONS THAT THE 2 ND HOUSE PURCHASED BY THE ASSESSEE CANNOT BE TREATED A S PART OF THE 1 ST HOUSE AND, THEREFORE, THE LD. CIT (A) HAS TREATED BOTH THE HOU SES AS SEPARATE UNIT AND SECONDLY, THE AMOUNT OF RS. 75,11,000/- WAS NOT DEPOSITED IN THE CAPITAL GAIN ACCOUNT SCHEME BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE ASSESSEE HAS INVESTED THE ENTIRE CONSIDERATION IN PURCHASE OF TH E HOUSE WITHIN THE STIPULATED PERIOD OF TIME ALTHOUGH THE DEPOSIT IN THE CAPITAL GAIN ACCOUNT SCHEME WAS MADE AFTER THE DUE DATE OF FILING THE RETURN OF INCOME. THE LD. A/R HAS EXPLAINED THAT INITIALLY THE ASSESSEE HAS ENTERED INTO AN AGREEMEN T FOR PURCHASE OF THE HOUSE AND, THEREFORE, THE ASSESSEE COULD NOT DEPOSIT THE AMOUN T IN THE CAPITAL GAIN ACCOUNT SCHEME. HOWEVER, WHEN THE SAID AGREEMENT WAS CANCE LLED DUE TO NON-FULFILLMENT OF THE CONDITION TO DELIVER THE POSSESSION OF THE CONS TRUCTED HOUSE WITHIN A PERIOD OF 10 (TEN) MONTHS, THEN THE ASSESSEE DECIDED TO PURCH ASE ANOTHER HOUSE WHICH IS ADJOINING TO THE 1 ST HOUSE PURCHASED BY THE ASSESSEE. THEREFORE, BOTH THESE HOUSES TOGETHER CONSTITUTE A RESIDENTIAL HOUSE AS PER THE FAMILY REQUIREMENT OF THE ASSESSEE. THE LD. A/R HAS FURTHER CONTENDED THAT W HEN THE ASSESSEE HAS MADE THE INVESTMENT FROM THE SALE CONSIDERATION OF THE AGRIC ULTURAL LAND WITHIN THE STIPULATED PERIOD AS PROVIDED UNDER SECTION 54F THEN EVEN IF T HE SAID AMOUNT WAS NOT DEPOSITED IN THE CAPITAL GAIN ACCOUNT SCHEME, THE B ENEFIT UNDER SECTION 54F CANNOT BE DENIED. IN SUPPORT OF HIS CONTENTION, THE LD. A /R RELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SH RI LAXMI NARAYAN & OTHERS VS. CIT & ANOTHER, 89 TAXMANN.COM 334 (RAJ.). HE HAS ALSO RELIED UPON THE DECISION OF THE 5 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SA RDARMAL KOTHARI, 302 ITR 286 (MAD.) AND SUBMITTED THAT THE REQUIREMENT OF PROVIS IONS OF SECTION 54F IS THAT THE ASSESSEE WITHIN A PERIOD OF THREE YEARS AFTER THE D ATE OF TRANSFER HAS TO CONSTRUCT A RESIDENTIAL HOUSE IN ORDER TO BECOME ELIGIBLE FOR E XEMPTION. IT IS ENOUGH IF THE ASSESSEE ESTABLISHES THAT THE ASSESSEE HAS INVESTED THE ENTIRE NET CONSIDERATION WITHIN THE STIPULATED PERIOD. HE HAS ALSO RELIED U PON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. K. RAMA CHANDRA RAO 277 CTR 522 (KAR.) AND IN CASE OF FATHIMA BAI VS. ITO 32 DTR 24 3 (KAR.). HENCE THE LD. A/R HAS PLEADED THAT WHEN THE ASSESSEE HAS COMPLIED WITH TH E CONDITIONS AS PRESCRIBED UNDER SECTION 54F FOR INVESTMENT OF THE NET CONSIDE RATION WITHIN THE STIPULATED PERIOD, THEN THE DEDUCTION UNDER SECTION 54F CANNOT BE DENIED. 3.1. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO HAS ALLOWED THE CLA IM OF THE ASSESSEE IN RESPECT OF THE INVESTMENT MADE IN THE RESIDENTIAL HOUSE WITHIN THE STIPULATED PERIOD AS WELL AS IN PURCHASE OF AGRICULTURAL LAND. HOWEVER, THE ASS ESSEE HAS CLAIMED THE DEDUCTION UNDER SECTION 54F IN RESPECT THE 2 ND PURCHASE OF A HOUSE WHICH IS NOT PERMISSIBLE AS PER THE PROVISIONS OF THE ACT. THE LD. D/R HAS SUB MITTED THAT WHEN TWO PURCHASES ARE MADE AT DIFFERENT POINT OF TIME AS A SEPARATE H OUSE THEN THIS CANNOT BE CONSIDERED AS A SINGLE RESIDENTIAL UNIT. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AS WELL AS MATERIAL ON RECORD. THE ASSESSEE SOLD THE AGRICULTURAL LAND ON 30.11.2012 A ND THEREAFTER PURCHASED A RESIDENTIAL HOUSE ON 17.01.2013 VIDE SALE DEED. TH E ASSESSEE HAS ALSO PURCHASED AGRICULTURAL LAND AND ACCORDINGLY CLAIMED DEDUCTION UNDER SECTION 54B WHICH WAS ALLOWED BY THE AO. THE CLAIM OF DEDUCTION UNDER SE CTION 54F WAS ALLOWED IN PART BY 6 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA THE AO TO THE EXTENT OF THE PURCHASE OF HOUSE NO. 7 84, DEVI NAGAR. HOWEVER, THE CLAIM OF THE ASSESSEE UNDER SECTION 54F WAS DENIED BY THE AO IN RESPECT OF THE PURCHASE OF HOUSE NO. 784A DEVI NAGAR VIDE AGREEMEN T TO SALE DATED 13.10.2014. IT IS APPARENT FROM THE NUMBER OF THESE TWO PROPERT IES BEING 784 AND 784A THAT THESE TWO HOUSES ARE ADJACENT TO EACH OTHER AND, TH EREFORE, IF THE FAMILY REQUIREMENT OF THE ASSESSEE CAN BE SATISFIED BY PUR CHASING OF THESE TWO ADJOINING PROPERTIES AND TO BE USED AS A DWELLING UNIT, THEN THE DEDUCTION UNDER SECTION 54F CANNOT BE DENIED ON THE GROUND THAT THE ASSESSEE HA S MADE THE PURCHASES ON TWO SEPARATE DATES. THE HONBLE DELHI HIGH COURT IN TH E CASE OF CIT VS. SUNITA AGARWAL, 284 ITR 20 (DELHI), RELIED UPON BY THE LD. A/R OF T HE ASSESSEE, HAS HELD THAT PURCHASE OF FOUR PORTIONS OF PROPERTY BY FOUR SALE DEEDS BY THE ASSESSEE FOR THE USE OF HER OWN RESIDENTIAL PURPOSES WOULD BE CONSIDERED AS A SINGLE RESIDENTIAL UNIT. IN THE CASE IN HAND, THE AO HAS NOT DENIED THIS FACT T HAT BOTH THESE PROPERTIES ARE ADJOINING AND WERE PURCHASED BY THE ASSESSEE FOR HI S OWN RESIDENTIAL PURPOSES. THEREFORE, PRIOR TO THE AMENDMENT OF THE PROVISIONS OF SECTION 54F VIDE FINANCE ACT 2014 WITH EFFECT FROM 01.04.2015, THE TWO ADJACENT PROPERTIES WOULD BE CONSIDERED AS SINGLE RESIDENTIAL HOUSE FOR THE PURPOSE OF DEDU CTION UNDER SECTION 54F. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE KARNATAKA HIGH C OURT IN THE CASE OF CIT VS. D. ANANDA BASAPPA, 309 ITR 329 (KAR.) AND HELD THAT TW O FLATS PURCHASED SIDE BY SIDE ARE ELIGIBLE FOR DEDUCTION U/S 54F OF THE ACT. THE HONBLE MADRAS HIGH COURT IN THE CASE OF ABHIJIT BHANDAR VS. CIT, 396 ITR 499 (MAD.) HAS HELD THAT BENEFIT UNDER SECTION 54 FOR PURCHASE OF TWO ADJACENT FLATS AS SI NGLE RESIDENTIAL UNIT CANNOT BE DENIED. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT IN THE ABSENCE OF DENIAL OF FACT THAT THESE TWO PROPERTIES ARE ADJACENT TO EACH OTHER AND TO BE USED BY THE 7 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA ASSESSEE FOR HIS RESIDENTIAL PURPOSES, THE BENEFIT UNDER SECTION 54F CANNOT BE DENIED MERELY BECAUSE THE ASSESSEE HAS PURCHASED TW O HOUSES. 5. AS REGARDS THE NON DEPOSIT OF THE AMOUNT IN THE CAPITAL GAIN ACCOUNT SCHEME, WE NOTE THAT THE ASSESSEE HAS SOLD THE AGRI CULTURAL LAND ON 30 TH NOVEMBER, 2012 AND THE HOUSE WAS PURCHASED ON 30.10.2014. THE REFORE, THE INVESTMENT MADE BY THE ASSESSEE IS WITHIN TWO YEARS FROM THE SALE O F THE EXISTING ASSET AND IS NOT BEYOND THE STIPULATED PERIOD AS PROVIDED UNDER SECT ION 54F OF THE ACT. THE ONLY OBJECTION RAISED BY THE AO AND LD. CIT (A) IS NON D EPOSIT OF AMOUNT IN THE CAPITAL GAIN ACCOUNT SCHEME. HOWEVER, WHEN THE ASSESSEE HA S INVESTED THE AMOUNT WITHIN THE STIPULATED PERIOD AS PROVIDED UNDER THE PROVISI ONS OF SECTION 54F, THEN THE SUBSTANTIAL REQUIREMENT AS PER SECTION 54F(1) IS SA TISFIED. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SARDARMAL KOTHARI (SUP RA) HAS HELD IN PARA 4 AS UNDER :- 4. THE REQUIREMENT OF THE PROVISION IS THAT THE A SSESSEE, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER, H AS TO CONSTRUCT A RESIDENTIAL HOUSE IN ORDER TO BECOME ELIGIBLE FOR E XEMPTION. IN THE CASES ON HAND, IT IS NOT IN DISPUTE THAT THE ASSESS ES HAVE PURCHASED THE LANDS BY INVESTING THE CAPITAL GAIN AND THEY HA VE ALSO CONSTRUCTED RESIDENTIAL HOUSES. IN ORDER TO ESTABLISH THE SAME, THE ASSESSES SUBMITTED BEFORE THE COMMISSIONER (APPEALS) SEVERAL MATERIAL EVIDENCES, VIZ., INVITATION CARD PRINTED FOR THE HO USE WARMING CEREMONY TO BE HELD ON 12.7.2003. THE ASSESSES HAV E ALSO PRODUCED THE COMPLETION CERTIFICATES FROM THE MUNICIPAL AUTH ORITY ON 30.1.2004. ON THE BASIS OF THE ABOVE DOCUMENTS, THE COMMISSION ER (APPEALS) CONCLUDED THAT THE REQUIREMENT OF THE STATUTORY PRO VISION HAS BEEN COMPLIED WITH BY THE ASSESSES AND THAT WAS RECONFIR MED BY THE TRIBUNAL IN THE ORDERS IMPUGNED. 8 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA SIMILAR VIEW WAS TAKEN BY HONBLE KARNATAKA HIGH CO URT IN THE CASE OF CIT VS. K. RAMACHANDRA RAO (SUPRA) AT PAGE 4 AS UNDER :- SUB-SECTION (4) IS ATTRACTED ONLY TO A CASE WHERE T HE SALE CONSIDERATION IS NOT UTILIZED EITHER FOR PURCHASE OR FOR CONSTRUCTION OF A RESIDENTIAL HOUSE. IT HAS NO APPLICATION TO A CASE WHERE THE ASSESSEE INVESTS TH E SALE CONSIDERATION DERIVED FROM THE TRANSFER EITHER IN PURCHASING THE PROPERTY OR C ONSTRUCTING THE RESIDENTIAL HOUSE WITHIN THE PERIOD STIPULATED IN SECTION 54F(1). THE PROVISO TO SECTION 54F PUTS AN EMBARGO ON THE APPLICATION OF SECTION 54F TO CASES WHICH ARE MENTIONED IN THE SAID PROVISO. THAT IS TO BE ELIGIBLE FOR THE BENEFIT UND ER SECTION 54F(1) THE ASSESSEE SHOULD NOT BE OWNING MORE THAN ONE RESIDENTIAL HOUS E OTHER THAN THE NEW ASSET ACQUIRED OR HE SHOULD NOT PURCHASE ANY RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANS FER OF RESIDENTIAL ASSET OR CONSTRUCTS ANY RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE RESIDENTIAL ASSET. IN THE ENTIRE SCHEME THERE IS NO PROHIBITION FOR THE ASSESSEE PUTTING UP CONSTRUC TION OUT OF SALE CONSTRUCTION RECEIVED BY SUCH TRANSFER OF A SITE WHICH IS OWNED BY HIM AS IS CLEAR FROM THE LANGUAGE USED. IT IS OPEN FOR THE ASSESSEE TO PUT U P A RESIDENTIAL CONSTRUCTION OR TO PURCHASE A RESIDENTIAL HOUSE. IT IS NOT THE REQUIRE MENT OF LAW THAT HE SHOULD PURCHASE A RESIDENTIAL SITE AND THEN PUTUP CONSTRUC TION. THEREFORE, IN THE INSTANT CASE ADMITTEDLY THE ASSESSEE HAS PURCHASED A VACANT SITE PRI-31.3.2001. HE SOLD THE ORIGINAL ASSET ON 27.8.2003 ON WHICH DATE HE WAS AL READY OWNING A SITE. IN FACT EVEN BEFORE SALE OF THE ORIGINAL ASSET HE HAD STARTED CO NSTRUCTION ON SUCH SITE BY AVAILING LOAN FROM THE BANK. IN TERMS OF SECTION 54F(1) ALL INVESTMENTS MADE IN THE CONSTRUCTION OF THE RESIDENTIAL HOUSE OF THE SAID S ITE WITHIN A PERIOD OF ONE YEAR PRIOR TO 27.8.2003 WOULD BE ELIGIBLE FOR EXEMPTION UNDER SECTION 54F(1). SIMILARLY ALL INVESTMENTS IN THE SAID CONSTRUCTION AFTER 27.8.200 3 WITHIN A PERIOD OF THREE YEARS THEREFROM IS ALSO ELIGIBLE FOR EXEMPTION. THEREFORE , THE ARGUMENT THAT SUCH INVESTMENT IN PUTTING UP A RESIDENTIAL CONSTRUCTION CANNOT BE MADE ON A SITE OWNED BY HIM TO BE ELIGIBLE FOR EXEMPTION IS WITHOUT ANY SUBSTANCE. BOTH THE APPELLATE AUTHORITIES HAVE RIGHTLY EXTENDED THE BENEFIT TO TH E ASSESSEE AND THERE IS NO ERROR COMMITTED BY THEM WHICH CALLS FOR INTERFERENCE. 9 ITA NO. 1089/JP/2016 SHRI JAG MOHAN SHARMA AGAIN IN THE CASE OF FATHIMA BAI VS. ITO (SUPRA), T HE HONBLE KARNATAKA HIGH COURT HAS REITERATED ITS VIEW THAT ONCE THE ENTIRE CAPITA L GAIN WAS UTILIZED BY THE ASSESSEE BY PURCHASING A HOUSE PROPERTY BEFORE THE EXTENDED DUE DATE UNDER SECTION 139(4), THE EXEMPTION UNDER SECTION 54 WOULD BE ALLOWABLE T O THE ASSESSEE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE ASSESS EE HAS INVESTED THE AMOUNT WITHIN THE STIPULATED PERIOD AS PRESCRIBED UNDER SE CTION 54F AND IN VIEW OF THE VARIOUS DECISIONS CITED SUPRA, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER S ECTION 54F IN RESPECT OF THE INVESTMENT MADE IN THE HOUSE PURCHASED ON 13 TH OCTOBER, 2014. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 13/03/2018 . SD/- SD/- HKKXPUN FOT; IKY JKWO (BHAGCHAND) ( VIJAY PAL RAO ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/03/2018. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI JAG MOHAN SHARMA, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO WARD 1(1), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO.1089 /JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR