Chennakeshava Murthy, Bangalore V. ITO, Bangalore

ITA 1234/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8637 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 16-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Capital asset; Tangible material; Fair market value; Reason to believe
• Section: 143(3); 133A; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NOS.1231, 1233 AND 1234/BANG/2016 ASSESSMENT YEAR : 2006-07 SHRI. C. JAGANNATH HUF, NO. T-01A/01B, FORTUNE ICON APARTMENTS, BYATARAYANAPURA, SAHAKARANAGAR, YELAHANKAR HOBLI, BANGALORE 560 092. PAN : AAGHJ1469Q SHRI. C. BHASKAR HUF, G-27, FORTUNE ICON APARTMENTS, BYATARAYANAPURA, SAHAKARANAGAR, YELAHANKAR HOBLI, BANGALORE 560 092. PAN : AAIHB2921D SHRI. CHENNAKESHAVA MURTHY HUF, NO. T-01A/01B, FORTUNE ICON APARTMENTS, BYATARAYANAPURA, SAHAKARANAGAR, YELAHANKAR HOBLI, BANGALORE 560 092. PAN : AADHC5306A VS. INCOME TAX OFFICER, WARD 6(3)(2), BANGALORE. APPELLANT S RESPONDENT ASSESSEES BY : SHRI. SHYAM CHAKRAVARTHY, CA AND SHRI. RAGHAVENDRA CHAKRAVARTHY, CA REVENUE BY : SMT. SWAPNA DAS, JCIT DATE OF HEARING : 06.12.2016 DATE OF PRONOUNCEMENT : 20.01.2017 ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 2 OF 11 O R D E R PER BENCH THESE THREE APPEALS OF THREE ASSESSEES WHO ARE FATH ER AND SONS, ARE DIRECTED AGAINST THE ORDERS OF CIT(A), ALL DATED 22 .02.2016. 2. THE BRIEF FACTS LEADING TO THE CONTROVERSY ARE T HAT A SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE CASE O F THE ASSESSEES ON 26.11.2012. DURING THE COURSE OF VERIFICATION OF R ECORDS, THE AO FOUND THE JOINT DEVELOPMENT AGREEMENT (JDA) DATED 01.06.2005 WHEREBY THE ASSESSEES HAVE TRANSFERRED THEIR SHARE IN THE LAND IN FAVOUR OF THE DEVELOPER M/S. FORTUNA CONSTRUCTIONS, AS PER THE TERMS AND CO NDITIONS OF THE SAID AGREEMENT. THE AO ALSO NOTED THAT THE ASSESSEES DI D NOT FILE ANY RETURN OF INCOME FOR THE AY 2006-07. ACCORDINGLY, THE AO RE OPENED THE ASSESSMENT IN VIEW OF THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS. T. K. DAYALU ITR 202 TAXMANN 531, BY ISS UING A NOTICE UNDER SECTION 148 ON 28.12.2012. IN RESPONSE TO THE NOTI CE U/S. 148, THE ASSESSEES FILED THEIR RETURN OF INCOME ON 19.06.2013 DECLARIN G NIL INCOME. THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 ON 2 8.03.2014 WHEREBY LONG TERM CAPITAL GAIN ARISING FROM JDA WAS ASSESSED TO TAX AFTER ALLOWING EXEMPTION U/S 54F. THE AO ADOPTED THE DEEMED FULL VALUE CONSIDERATION @ 800/- PER SQ.FT. OF THE CONSTRUCTED SHARE OF THE AS SESSEE. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE CIT BUT COULD NOT SUCCEED. THE ASSESSEES HAVE FILED THE COMMON GROUNDS OF APPEAL. THE GROUNDS RAISED IN THE CASE OF SHRI. C. JAGANNATH, HUF ITA NO. 1231/B/ 2016 ARE REPRODUCED AS UNDER: ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 3 OF 11 ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 4 OF 11 3. GROUND NOS. 1 TO 3 ARE GENERAL IN NATURE AND DOE S NOT REQUIRE ANY SPECIFIC ADJUDICATION. 4. GROUND NOS. 4 AND 5 ARE REGARDING VALIDITY OF TH E REOPENING OF THE ASSESSMENT. THE LEARNED AR OF THE ASSESSEE HAS SUB MITTED THAT THE REOPENING OF ASSESSMENT IS NOT VALID AS THE AO DID NOT HAVE REASON TO BELIEVE THAT ANY INCOME PERTAINING TO THE ASSESSEE HAD ESCAPED ASSESSMENT. THE AO REOPENED THE ASSESSMENT FOR THE AY UNDER CON SIDERATION PURELY BASED ON ASSUMPTION, PRESUMPTION, SURMISE AND GUESS WORK THAT THERE WAS A TRANSFER OF CAPITAL ASSET VIDE JDA. HE HAS FURTHER CONTENDED THAT THE AO HAS MERELY RELIED UPON THE DECISION OF HONBLE JURISDIC TIONAL HIGH COURT IN CASE OF CIT VS. DR. T. K. DAYALU (SUPRA) AND REOPENED TH E ASSESSMENT IN THE ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 5 OF 11 ASSESSEES CASE WITHOUT GOING INTO THE DETAILS AND FACTS WHETHER THERE IS A TRANSFER OF CAPITAL ASSET OR NOT. IN SUPPORT OF HI S CONTENTION HE HAS RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH CO URT IN THE CASE OF DEVI CHAND KOTARI V. ITO REPORTED IN 230 TAXMANN 301 AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT WHERE THE STATEMEN T RECORDED WAS NOT FURNISHED TO THE ASSESSEE, THE ASSESSMENT RENDERS I NVALID. THUS THE LEARNED AR HAS PLEADED THAT THE REOPENING OF THE ASSESSMENT IS NOT SUSTAINABLE AND THE SAME IS REQUIRED TO BE QUASHED. 5. ON THE OTHER HAND THE LEARNED DR HAS SUBMITTED T HAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME FOR THE AY 2006-07. IT WAS ONLY WHEN A SURVEY U/S. 133A WAS CONDUCTED IN THE CASE OF THE A SSESSEE, THE AO CAME TO KNOW THAT THE ASSESSEES HAVE ENTERED INTO A JDA DAT ED 01.06.2005 AND THEREFORE THIS CONSTITUTES A TANGIBLE MATERIAL TO B ELIEVE THAT THE INCOME CHARGEABLE TO TAX BEING CAPITAL GAIN ARISING FROM T RANSFER OF LAND UNDER JDA HAS ESCAPED ASSESSMENT IN THE LIGHT OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DR. T. K. DAYALU (SUPRA). HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEES DID NOT FILE ANY RETURN OF INCOME FOR THE AY 2006-07. DURING THE COURSE OF S URVEY U/S 133(A), THE JDA DATED 01.06.2005 CAME TO THE KNOWLEDGE OF THE A O. THEREFORE THE FACT OF TRANSFER OF LAND BY THE ASSESSEES UNDER THE JDA CAME TO THE NOTICE OF THE AO ONLY IN THE COURSE OF SURVEY PROCEEDINGS. THE A O ACCORDINGLY REOPENED THE ASSESSMENT BY ISSUING THE NOTICE U/S 148 ON 28. 12.2012 BY RECORDING THE REASONS FOR REOPENING OF THE ASSESSMENT. THE ASSES SEE REQUESTED THE AO TO FURNISH THE REASONS RECORDED FOR REOPENING WHICH WE RE FURNISHED BY THE AO ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 6 OF 11 AS STATED IN THE ASSESSMENT ORDER. THE ASSESSEE FI LED THE OBJECTIONS AGAINST THE REASONS AS WELL AS NOTICE U/S 148 WHICH WERE RE JECTED BY THE AO. THE HONBLE HIGH COURT IN THE CASE OF CIT VS. DR. T. K. DAYALU (SUPRA), AS HELD IN PARAS 7 AND 8 IS AS UNDER: 7. SO FAR AS OTHER SUBSTANTIAL QUESTIONS OF LAW ARE C ONCERNED, IT IS CLEAR THAT THE FINDING OF FACT ARRIVED AT BY THE TRIBUNAL IS BASED UPON THE MATERIAL ON RECORD. THE CONTENTS OF THE AGREEME NT DATED 26-1-1996, THE SECOND SUPPLEMENTARY AGREEMENT DATED 14-10-1998 , THE THIRD SUPPLEMENTARY AGREEMENT DATED 26-11-1999 AND ALSO T HE AFFIDAVIT FILED BY THE ASSESSEE STATING THAT THE ACTUAL POSSESSION OF THE SCHEDULE PROPERTY WAS HANDED OVER ON 30-5-1996, THE SAID FIN DING ON THE QUESTION OF FACT THAT THE POSSESSION WAS HANDED OVER ON 30-5 -1996 IS BASED UPON THE MATERIAL ON RECORD AND CANNOT BE SAID TO BE PER VERSE OR ILLEGAL. THE QUESTION TO BE DECIDED IS THE YEAR IN WHICH RS. 45 LAKHS RECEIVED BY THE ASSESSEE UNDER THE AGREEMENT DATED 26-1-2006 (SIC) AS MODIFIED BY THE SUBSEQUENT AGREEMENTS TO BE TAXED. IT IS NOT DISPUT ED THAT THE ASSESSEE HAD RECEIVED CAPITAL GAIN IN THE YEAR 1997-98 AND H AVING REGARD TO THE FINDING OF FACT THAT THE POSSESSION OF THE PROPERTY HAS BEEN HANDED OVER ON 30-5-1996, WE HOLD THAT APPROPRIATE ASSESSMENT Y EAR IN WHICH THE CAPITAL GAIN IS TO BE TAXED IS 1997-98. THERE IS NO MERIT IN THE CONTENTION OF LEARNED COUNSEL APPEARING FOR THE ASSESSEE THAT SINCE THE ENTIRE PROJECT HAS BEEN COMPLETED IN THE YEAR 2003-04, THE TAX ON CAPITAL GAIN HAS TO BE MADE IN THAT YEAR. IT IS NOW WELL-SETTLED THAT THE DATE ON WHICH POSSESSION WAS HANDED OVER TO THE DEVELOPER IS RELE VANT AND IN THE PRESENT CASE, IT IS NOT DISPUTED THAT ASSESSEE HAS ALREADY RECEIVED A SUM OF RS. 45 LAKHS IN ADDITION TO THE STRUCTURES WHICH WOULD ENABLE TO PUT UP CONSTRUCTION. 8. THE HON'BLE BOMBAY HIGH COURT IN CHATURBHUJ DWARKA DAS KAPADIA V. CIT [2003] 260 ITR 491 / 129 TAXMAN 497 HELD THAT THE DATE RELEVANT FOR ATTRACTING CAPITAL GAIN HAVING REGARD TO THE DEFINITION UNDER SECTION 2(47) OF THE ACT IS THE DATE ON WHICH POSSE SSION IS HANDED OVER BY THE DEVELOPER AND HAS OBSERVED AS FOLLOWS: 'UNDER SECTION 2(47)(V), ANY TRANSACTION INVOLVING ALLOWING OF POSSESSION TO BE TAKEN OVER OR RETAINED IN PART PER FORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRA NSFER OF PROPERTY ACT WOULD COME WITHIN THE AMBIT OF SECTION 2(47)(V). TH AT, IN ORDER TO ATTRACT SECTION 53A, THE FOLLOWING CONDITIONS NEED TO BE FU LFILLED. THERE SHOULD BE A CONTRACT FOR CONSIDERATION; IT SHOULD BE IN WR ITING; IT SHOULD BE SIGNED BY THE TRANSFEROR; IT SHOULD PERTAIN TO TRAN SFER OF IMMOVABLE PROPERTY; THE TRANSFEREE SHOULD HAVE TAKEN POSSESSI ON OF THE PROPERTY; LASTLY, THE TRANSFEREE SHOULD BE READY AND WILLING TO PERFORM HIS PART OF THE CONTRACT. THAT EVEN ARRANGEMENTS CONFIRMING PRI VILEGES OF OWNERSHIP WITHOUT TRANSFER OF TITLE COULD FALL UNDER SECTION 2(47)(V). SECTION 2(47)( V) WAS INTRODUCED IN THE ACT FROM THE ASSESSMENT YE AR 1988-89 BECAUSE ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 7 OF 11 PRIOR THERETO, IN MOST CASES, IT WAS ARGUED ON BEHA LF OF THE ASSESSEE THAT NO TRANSFER TOOK PLACE TILL EXECUTION OF THE CONVEY ANCE. CONSEQUENTLY, THE ASSESSEES USED TO ENTER INTO AGREEMENTS FOR DEVELOP ING PROPERTIES WITH THE BUILDERS AND UNDER THE AGREEMENT WITH THE BUILD ERS, THEY USED TO CONFER PRIVILEGES OF OWNERSHIP WITHOUT EXECUTING CO NVEYANCE AND TO PLUG THAT LOOPHOLE, SECTION 2(47)(V) CAME TO BE INTRODUC ED IN THE ACT.' THE HON'BLE SUPREME COURT HAS REFERRED TO THE CONTE NTION OF THE ASSESSEE AND THE EARLIER JUDGMENTS OF THE SUPREME C OURT CITED BY HIM AND HELD THAT THOSE JUDGMENTS WERE PRIOR TO INTRODU CTION OF THE CONCEPT OF DEEMED TRANSFER UNDER SECTION 2(47)(V) OF THE AC T AND IF THE CONTRACT, READ AS A WHOLE, INDICATES PASSING OF OR TRANSFERRI NG OF COMPLETE CONTROL OVER THE PROPERTY IN FAVOUR OF THE DEVELOPER, THEN THE DATE OF THE CONTRACT WOULD BE RELEVANT TO DECIDE THE YEAR OF CHARGEABILI TY. THEREFORE, IN THESE APPEALS, WE HOLD THAT CAPITAL GAIN IS TO BE TAXED I N THE YEAR 1997-98 AND NOT IN THE YEAR 2003-04 AS CONTENDED BY THE ASSESSE E. ACCORDINGLY, WE ANSWER THE SUBSTANTIAL QUESTIONS OF LAW FRAMED IN I TA NO.3209/2005 IN FAVOUR OF THE REVENUE AND SUBSTANTIAL QUESTIONS OF LAW FRAMED IN ITA NO.3105/2005 AGAINST THE ASSESSEE AND PASS THE FOLL OWING: ORDER ITA NO.3209/2005 IS ALLOWED. ITA NO.3165/2005 IS DI SMISSED. 7. THUS IT IS CLEAR THAT THE RELEVANT DATE FOR ATTR ACTING THE CAPITAL GAIN HAVING REGARD TO THE DEFINITION U/S 2(47) OF THE A CT IS THE DATE ON WHICH THE POSSESSION OF LAND IS HANDED OVER IN PART PERFORMAN CE OF THE CONTRACT OF THE NATURE REFERRED IN SECTION 53A OF TRANSFER OF PROPE RTY ACT. THUS THE CAPITAL GAIN ARISING FROM DEEMED TRANSFER U/S 2(47)(V) OF T HE ACT IS CHARGEABLE TO TAX IN THE YEAR IN WHICH THE JDA IS EXECUTED AND POSSES SION OF THE LAND WAS HANDED OVER. THE AO FOUND THAT THE CAPITAL GAIN AR ISING FROM THE TRANSFER OF THE LAND UNDER JDA IS CHARGEABLE TO TAX FOR THE AY UNDER CONSIDERATION AS THE JDA COUPLED WITH GPA HAS BEEN EXECUTED IN THE F INANCIAL YEAR RELEVANT TO THE AY UNDER CONSIDERATION. THUS THE JDA FOUND DURING THE COURSE OF SURVEY ALONG WITH GPA CONSTITUTE A TANGIBLE MATERIA L ON THE BASIS OF WHICH THE AO HAS FORMED A BELIEF THAT THE INCOME BEING CA PITAL GAIN CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE AUTHORITIES BELOW QU A THIS ISSUE. ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 8 OF 11 8. GROUND NOS. 6 TO 14 REGARDING THE MERITS OF ASSE SSMENT OF CAPITAL GAIN ARISING FROM TRANSFER OF LAND UNDER JDA: WE HAVE HEARD THE LEARNED AR AS WELL AS LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE GRIEVANCES OF THE ASSESSEE IS LI MITED ONLY WITH RESPECT TO THE FULL VALUE CONSIDERATION ADOPTED BY THE AO BY A LLOCATING THE COST OF CONSTRUCTION AT THE RATE OF RS.800/- PER SQ.FT. HE HAS CONTENDED THAT THE FAIR MARKET VALUE OR THE CIRCLE RATE OF THE LAND AS ON T HE DATE OF JDA SHALL BE THE FULL VALUE CONSIDERATION FOR THE PURPOSE OF COMPUTI NG THE CAPITAL GAIN. THE VALUE OF RS.800/- IS TAKEN AS PER THE BUILDERS LET TER WHICH WAS NOT INTACT AND ASCERTAINABLE AS ON THE DATE OF JDA. ON THE DATE O F JDA THERE EXISTED ONLY LAND AND NOT BUILDING AND THEREFORE THE COST OF CON STRUCTION OF BUILDING CANNOT BE TAKEN AT RS.800/- PER SQ.FT. WHICH IS WIT HOUT ANY BASIS OR EVIDENCE. EVEN OTHERWISE THE COST OF CONSTRUCTION INCLUDES EX PENSES FOR MATERIAL LIKE CEMENT, JELLY, SAND, BRICKS, LABOUR COST AND OTHER OVERHEADS WHICH VARIES FROM TIME TO TIME AND THEREFORE THE VALUE ADOPTED B Y THE AO IS INCORRECT. THUS THE LEARNED AR HAS PLEADED THAT THE FAIR MARKE T VALUE OF THE LAND OR THE CIRCULAR RATE OF THE LAND AS ON THE DATE OF JDA SHO ULD BE TAKEN AS FULL VALUE CONSIDERATION FOR THE PURPOSE OF CAPITAL GAIN. ON THE OTHER HAND, THE LEARNED DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BE LOW AND SUBMITTED THAT SINCE THE JDA DID NOT SPECIFY THE COST OF CONSTRUCT ION, MARKET VALUE, THEREFORE THE COST INCURRED BY THE BUILDER/DEVELOPE R WAS LOWER THAN THE MARKET VALUE AND THE SAME WAS ADOPTED BY THE AO FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. AS PER THE DECISION OF HONBLE JURISDIC TIONAL HIGH COURT IN CASE ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 9 OF 11 OF T. K. DAYALU (SUPRA), THE CAPITAL GAIN IS REQUIR ED TO BE TAXED IN THE AY IN WHICH THE LAND IN QUESTION IS DEEMED TO HAVE BEEN T RANSFERRED AS PER PROVISIONS OF SECTION 247(V) OF THE ACT R.W.S. 53A OF THE TRANSFER OF PROPERTY ACT. THERE IS NO DISPUTE THAT JDA IN QUES TION ALONG WITH GPA HAS BEEN EXECUTED DURING THE FINANCIAL YEAR RELEVANT TO THE AY UNDER CONSIDERATION. THEREFORE THE CAPITAL GAIN PERTAINI NG TO THE TRANSFER OF THE LAND HAS TO BE COMPUTED BY CONSIDERING THE FULL VAL UE CONSIDERATION BEING THE SHARE OF THE ASSESSEE IN THE CONSTRUCTED AREA O F THE PROJECT. THE QUESTION ARISES IS THE VALUATION OF THE SHARE OF ASSESSEE IN THE CONSTRUCTED AREA OF PROJECT AS ON THE DATE OF JDA. THE AO HAS ADOPTED THE RATE BY CONSIDERING THE COST OF CONSTRUCTION AS PER THE LETTER OF THE D EVELOPER. HOWEVER, THE SAID COST OF CONSTRUCTION OF THE PROJECT IS NOT ON THE D ATE OF THE JDA BUT IT IS A SUBSEQUENT EVENT. THEREFORE, THE FAIR MARKET VALUE OF THE SHARE OF THE ASSESSEE IN THE CONSTRUCTED AREA HAS TO BE CONSIDER ED AS ON THE DATE OF THE JDA. HENCE THE FULL VALUE CONSIDERATION OF THE LAN D IS THE FAIR MARKET VALUE OF THE SHARE OF THE ASSESSEE IN THE CONSTRUCTED ARE A UNDER THE JDA. ACCORDINGLY IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE AO WITH THE DIRECTION TO RECOMPUTE THE FULL VALUE CONSIDERATION BY CONSIDERING THE FAIR MARKET VALUE OF THE SHARE OF THE ASSESSEES IN THE CONSTRUCTED AREA OF THE PROJECT AS ON THE DATE OF JDA. 10. GROUND NO. 15 IS REGARDING DEDUCTION U/S 54. W E HAVE HEARD THE LEARNED AR AS WELL AS LEARNED DR. THE AO HAS ALLOW ED THE CLAIM OF DEDUCTION U/S 54 OF RS.26,24,400/- EACH WITHOUT ANY DISCUSSION IN THE ASSESSMENT ORDER. THE AO HAS COMPLETED THE ASSESSM ENT PROCEEDINGS BY ADOPTING THE COST INCURRED BY THE BUILDER AND HAS C OMPUTED THE CAPITAL GAIN ON THE TRANSACTION OF JDA. SINCE THE ASSESSEE IS R ECEIVING SHARE AFTER COMPLETION OF JDA AND THEREFORE THE ENTIRE SALE CON SIDERATION IS IN THE SHAPE ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 10 OF 11 OF RESIDENTIAL FLATS AND HENCE THE ASSESSEE IS ENTI TLED FOR DEDUCTION U/S 54/54F OF THE ACT IN RESPECT OF CAPITAL GAIN BY CONSIDERIN G THE ENTIRE SHARE IN THE RESIDENTIAL PROJECT. LD. AR OF THE ASSESSEE HAS RE LIED UPON THE FOLLOWING DECISIONS: 1. CIT VS. SMT. K. G. RUKMINIAMMA 331 ITR 211 (KARNATA KA) 2. CIT VS. D. ANANDA BASAPPA 309 ITR 329 (KARNATAKA) 3. DECISION DATED 20.7.2016 IN CASE OF SHRI. N. G. CHA NDRA REDDY (HUF) VS. DCIT ITA NO. 390/BANG/2015 ON THE OTHER HAND, THE LEARNED DR HAS RELIED UPON T HE ORDERS OF AUTHORITIES BELOW. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE W AS TO RECEIVE THE SALE CONSIDERATION IN THE SHAPE OF SHARE IN THE JDA PROJ ECT. THE ASSESSEES WERE TO RECEIVE THE CONSTRUCTED RESIDENTIAL HOUSES. THU S FOR THE PURPOSE OF SECTION 54F/54 OF THE INCOME TAX ACT, THE ASSESSEE IS ENTITLED FOR THE BENEFIT OF THE INVESTMENT IN THE RESIDENTIAL HOUSE. THE QU ESTION ARISES WHETHER MORE THAN ONE HOUSE OR RESIDENTIAL UNIT CAN BE TAKEN INT O CONSIDERATION FOR THE BENEFIT OF 54/54F OF THE ACT. AT THE OUTSET WE NOT E THAT THE HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. SMT. K . G. RUKMINIAMMA (SUPRA) HAS CONSIDERED AN IDENTICAL ISSUE AND HELD IN PARAS 10 TO 13 AS UNDER: 12. ACCORDINGLY, IN PRINCIPLE THIS ISSUE IS COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT. HOWEVER, AS REG ARDS THE COMPUTATION OF EXEMPTION U/S. 54, SINCE WE ALREADY REMITTED THE IS SUE OF VALUATION OF THE ITA NOS. 1231, 1233 AND 1234/BANG/2016 PAGE 11 OF 11 CAPITAL GAIN AND FULL VALUE CONSIDERATION TO THE RE CORD OF THE AO THEREFORE THIS ISSUE IS ALSO SET ASIDE TO THE RECORD OF THE A O FOR ADJUDICATION IN THE LIGHT OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT AS WELL AS THE OTHER DECISIONS RELIED UPON BY THE ASSESSEES. 13. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF JANUARY, 2017. SD/- SD/- (INTURI RAMA RAO) (VIJA Y PAL RAO) ACCOUNTANT MEMBER J UDICIAL MEMBER BANGALORE. DATED: 20 TH JANUARY, 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.