ITO 19(1)(3), MUMBAI V. GIRDHARILAL ASUDANI (HUF), MUMBAI

ITA 1428/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1850 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 12-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2012
• Court: TRIBUNAL
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Capital asset; Additional evidence; Cost of acquisition
• Section: 54F; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE HONBLE S/SHRI SAKTIJIT DEY (JM) , AND ASHWANI TANEJA (AM) ./I.T.A. NO.1428/MUM/2012 ( / ASSESSMENT YEAR:2008-09) INCOME TAX -19(1)(3), ROOM NO.314, 3RD H FLOOR, PIRAMAL CHAMBERS, PAREL, LALBAUG, MUMBAI-400012 / VS. SHRI GIRDHARILAL ASUDANI (HUF), 201, KIRTI KUNJ APARTMENT, 14 TH ROAD, KHAR (W), MUMBAI-400052 ( / APPELLANT) .. ( / RESPONDENT) ./ ./PAN. :AAAHA2151Q / APPELLANT BY SHRI VACHASPATI TRIPATHI /RESPONDENT BY SHRI M SUBRAMANIAN ! / DATE OF HEARING : 12.10.2015 ! /DATE OF PRONOUNCEMENT: 16. 12.2015 / O R D E R PER ASHWANI TANEJA, AM: THIS IS AN APPEAL FILED BY THE REVENUE CHALLEN GING THE APPEAL ORDER PASSED BY THE FIRST APPELLATE AUTHORITY DATED 23.12 .2011 FOR THE ASSESSMENT YEAR 2008-09. 2. THE REVENUE HAS URGED FOLLOWING GROUNDS IN THIS APPEAL: A) THE LD.CIT(A) HAS ERRED IN DIRECTING TO TREAT TH E RECEIPT OF RS.1,61,06,180/- AS CAPITAL GAINS AS AGAINST THE IN COME FROM OTHER SOURCES; ITA NO1428/M/2012. 2 B) THE LD. CIT(A) HAS DIRECTED THE AO TO GRANT DEDU CTION U/S 54F OF THE ACT; AND C) THE LD. CIT(A) DIRECTED THE AO TO DELETE THE ADD ITION OF RS.12,29,185/- MADE U/S 68 OF THE ACT: 3. GROUND A): BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCO ME FILED BY THE ASSESSEE ON 14.11.2008 DECLARING TOTAL INCOME O F RS.8,22,100/-. IN THE ASSESSMENT ORDER AO ADDED THE FOLLOWING AMOUNTS: A) INCOME FROM OTHER SOURCES RS.1,61,06,180/- B) ADDITION U/S 68 RS.12,29,185/- 3.1. AGGRIEVED BY THIS, THE ASSESSEE FILED APPEAL B EFORE THE LD. CIT(A), WHO DELETED THE ADDITION BY HOLDING THAT THE RECEIPT OF SALE OF TDR OF RS.1,61,06,180/- IS A CAPITAL GAIN. THE LD. CIT(A) ALSO DIRECTED TO GRANT DEDUCTION U/S 54F OF THE ACT. HE ALSO DIRECTED THE AO TO DELETE THE AMOUNT OF RS.12,29,185/- BEING ADDITION U/S 68 OF THE ACT. 4. THE FACTS RELATING TO THE FIRST ISSUE ARE THAT D URING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RECEIVED LONG TERM CAPITAL GAINS (LTCG) ON SALE OF TDR AT THANE. THE AO OBSERVED THAT THE TDR WAS S OLD IN THE INDIVIDUAL CAPACITY OF FAMILY OF ASUDANI. THEREFORE, THE AO CALLED FOR AN EXPLANATION FROM THE ASSESSEE TO SHOW CAUSE AS TO WHY THE TDR SALE WAS CLAIMED IN THE NAME OF ASSESSEE HUF. THE AO ALSO ASKED ASSESSEE TO JUSTIFY THE DEDUCTION U/S 54F OF THE ACT. IN RESPONSE TO THE QUERIES RAISED BY THE AO, THE ASSES SEE FILED DETAILED REPLY, BUT THE AO WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE AND IT WAS HELD BY THE AO THAT SALE PROCEEDS COULD NOT HAVE ACCRUED TO THE ASSESSE E HUF, AND BELONGED TO THE ASSESSEE INDIVIDUAL, AND ACCORDINGLY, THE SAME WAS TREATED AS INCOME FROM OTHER SOURCES IN THE HANDS OF ASSESSEE (HUF). ITA NO1428/M/2012. 3 5. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BE FORE THE CIT(A), THE ASSESSEE FILED ALL THE DETAILS WITH DOCUMENTARY EVIDENCE TO SHOW THAT THE ASSESSEE (HUF) IS THE RIGHTFUL OWNER OF THE IMPUGNED PROPERTY. THE P ROCEEDS ACCRUED ON THE SALE OF THE SAME BELONGED TO THE ASSESSEE GIVING RISE TO TH E LTCG. AFTER CONSIDERING THE SUBMISSIONS AND DOCUMENTARY EVIDENCES, LD. CIT(A) H ELD THAT THE ASSESSEE (HUF) WAS THE OWNER OF THE PROPERTY, AND ACCORDINGLY, THE CAPITAL GAIN ARISING ON SALE OF THE SAME GAVE RISE TO INCOME ASSESSABLE UNDER THE HEAD CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REV ENUE IS IN APPEAL BEFORE US. 6. BEFORE US, THE DETAILED ARGUMENTS HAVE BEEN MADE BY BOTH THE SIDES. LD. DR HAS SUPPORTED THE ORDER OF AO AND SUBMITTED THAT IN THIS CASE THE ASSESSEE HAS TAKEN ADVANTAGE OF THE FLUCTUATION IN THE MARKET RA TE OF TDR AND USED IT AS A COLORABLE DEVICE TO CREATE TDR IN THE HANDS OF THE ASSESSEE TO REDUCE THE BURDEN OF TAX. THE LD. DR PRAYED FOR RESTORATION OF AOS ORDER AND SETTING ASIDE THAT OF LD. CIT(A)S ORDER. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). IT WAS SUBMITTED THAT THE ASSESSEE-HUF HAD PURCHASED THIS PROPERTY IN THE YEAR 1987 AND SINCE THEN THE S AME HAS BEEN SHOWN IN THE BALANCE SHEET OF ASSESSEE-HUF. THE LD. COUNSEL HAS DRAWN OUR ATTENTION TO THE VARIOUS PAGES FILED IN THE PAPER BOOK SHOWING INCOM E TAX RETURN, WEALTH TAX RETURN FILED BY THE ASSESSEE-HUF, WHEREIN THE AFORESAID PR OPERTY HAS BEEN SHOWN UNDER THE OWNERSHIP OF ASSESSEE-HUF. IT HAS BEEN FURTHE R SUBMITTED THAT THE IMPUGNED ASSET WAS A CAPITAL ASSET OWNED BY THE ASSESSEE-HUF AND THEREFORE THE SALE PROCEEDS OF THIS PROPERTY BELONGED TO THE ASSESSEE AND THE INCOME ARISING THERE- FROM HAS BEEN RIGHTLY SHOWN AS INCOME FROM LTCG IN THE HANDS OF THE ASSESSEE- HUF. ITA NO1428/M/2012. 4 8. IT WAS ALSO SUBMITTED THAT THE ACTION OF THE AO IS SELF CONTRADICTORY IN THE SENSE THAT ON THE ONE HAND THE AO HAS ALLEGED THAT THE IMPUGNED PROPERTY DID NOT BELONG TO ASSESSEE-HUF AND ON THE OTHER HAND, THE I NCOME FROM THE SALE OF SAME HAS BEEN ASSESSED IN THE HANDS OF THE ASSESSEE-HUF. BOTH THE THINGS ARE NOT POSSIBLE SIMULTANEOUSLY. IF AOS ALLEGATION IS ACC EPTED THAT THIS PROPERTY DOES NOT BELONG TO HUF, THEN NO INCOME SHOULD BE ASSESSED IN THE HANDS OF THE ASSESSEE- HUF, AND THUS, VIEWED FROM ANY ANGLE, THE ACTION OF THE AO IN TREATING THE IMPUGNED INCOME AS INCOME FROM OTHER SOURCES WAS IL LEGAL AND CONTRARY TO THE FACTS, AND THEREFORE IT HAS RIGHTLY BEEN REVERSED B Y THE LD. CIT(A). 9. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BOT H THE SIDES, THE ORDERS OF AUTHORITIES BELOW AND MATERIAL PLACED BEFORE US. TH E LD. CIT(A) HAS OBSERVED AND HELD AS UNDER: 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE DOCUMENTS BROUGHT ON RECORD. FROM THE PURCHASE AGREEMENTS OF LAND, IT IS SEEN THAT AGAINST THE NAME OF SHRI GIRDHARILAL S. ASUDANI, TH E WORDS MENTIONED ARE KARTA (KUTUMB PRAMUKH) IN ALL THE THREE AGREEMENTS. APART FROM TH IS, THE NAMES OF OTHER FAMILY MEMBERS ARE ALSO MENTIONED IN THE SAID PURCHASE AGREEMENTS. THIS CLEARLY SHOWS THAT LAND WAS PURCHA SED BY THE HUF OF SHRI GIRDHARILAL S. ASUDANI. HAD IT NOT BEEN SO, THE WOR DS KARTA/KUTUMB PRAMUKH WOULD NOT HAVE BEEN MENTIONED IN THE PURCHASE AGREE MENTS. FURTHER, THE APPELLANT HAS ALSO FILED COPIES OF RETURNS AND BALA NCE SHEET FOR THE ASSESSMENT YEARS 1988-THESE RETURNS OF INCOME HAVE BEEN FILED IN THE CAPACITY OF HUF. THE A.O., HAS ALSO ACKNOWLEDGED THAT BALANCE-S HEETS SHOWING PURCHASE OF PLOTS WERE FILED BEFORE HIM DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS SEEN FROM THE BALANCE -SHEETS FOR THE ASSESSMENT YEAR 1988-89 AND 1989-90 THAT BORIVIDA P ROPERTY AT THANA, HAD BEEN SHOWN AT RS.29,000/- IN BOTH THE ASSESSMENT YEA RS. THE PURCHASE COST AS PER THE THREE AGREEMENTS OF PLOTS AT THANA IS RS . 48,000/- PLUS REGISTRATION AND OTHER EXPENSES. THE APPELLANT HAS STATED THAT AMOUNT OF RS. 29,000/- REPRESENTS 50% OF THE COST OF THE PLOTS. TH US, FROM THE AFORESAID BALANCE-SHEETS IT CAN BE GATHERED THAT APPELLANT'S HUF WAS DULY SHOWING THESE PROPERTIES IN THEIR INCOME-TAX RETURNS. FURTH ER, THE APPELLANT HAS ALSO DRAWN MY ATTENTION TO THE MEMORANDUM OF UNDERSTANDI NG (MOU) BETWEEN ITA NO1428/M/2012. 5 GIRDHARILAL ASUDANI HUF AND, RAJENDRA JAIN, HUF,( J OINT HOLDER OF LAND) MAKING A DECLARATION OF 50:50 OWNERSHIP OF THE LAND AND HAS STATED THAT IN THIS MOU, THE APPELLANT HAS BEEN SHOWN AS AN HUF AN D IT IS NOT IN THE INDIVIDUAL'S NAME OF THE ASUDANI FAMILY. FURTHER, A S REGARDS TO THE OBSERVATION OF THE A.O. THAT BEFORE THIS MOU, THE N AME OF HUF WAS NOT APPEARING ANYWHERE AND THE ENTIRE TRANSACTIONS OF S URRENDERING LAND TO MUNICIPAL CORPORATION OF THANE AND OTHER DOCUMENTS EXECUTED TO THAT EFFECT WAS CARRIED OUT IN THE INDIVIDUAL NAME AND CAPACITY OF THE FAMILY MEMBERS. IT IS SUBMITTED BY THE APPELLANT THAT THIS OBSERVATION OF THE A.O., IS FACTUALLY INCORRECT AS THE LAND IS IN THE NAME OF THE APPELLA NT'S HUF, IN, THE MOU ALSO THE NAME OF THE HUF IS MENTIONED AND THE SAME IS RE FLECTED IN THE APPELLANT'S BALANCE-SHEET FOR THE ASSESSMENT YEARS 1988-89 AND 1989-90. FURTHER, THE PURCHASE AGREEMENT FOR NEW FLAT DATED 21.2.2011, IS ALSO IN THE NAME OF THE GIRDHARILAL ASUDANI, HUF. FROM THE ASSE SSMENT ORDER, IT APPEARS THAT THE MAIN OBJECTION OF THE A.O., IS REGARDING T HE NAME MENTIONED IN THE TOR CERTIFICATE ISSUED BY THANE MUNICIPAL CORPORATI ON. A COPY OF SUCH CERTIFICATE HAS BEEN SUBMITTED BY THE A.R. OF THE A PPELLANT, FROM WHICH IT IS SEEN THAT IT IS ADDRESSED TO THE FOLLOWING PARTIES: - SHRI RAJENDRA H. JAIN & 3 OTHERS, MS. KAVITA R. JAIN (MRS. JAYA N. AGICHA) MR. GIRIDHARILAL S. ASUDANI & 3 ORTS. THE ABOVE MENTIONING OF MR. GIRIDHARILAL S. ASUDANI & 3 OTHERS CLEARLY SHOW THAT THE TDR CERTIFICATE IS NOT ISSUED IN THE INDIV IDUAL CAPACITY OF MR. GIRIDHARILAL S. ASUDANI. IN FACT, THE VERY MENTION OF '3 ORS', WHICH ARE THE FAMILY MEMBERS AND CONSEQUENTLY COPARCENERS OF MR. GIRIDHARILAL S. ASUDANI: HUF CLEARLY INDICATE THAT THE CERTIFICATE IS ISSUED TO THE HUF OF SHRI GIRIDHARILAL S. ASUDANI, THOUGH NOT SPECIFICALLY MENTIONED BY TH E THANE MUNICIPAL CORPORATION. 7.1.. 7.2 AS REGARDS TO THE OBSERVATION OF THE AO. THAT FOR THE PURCHASE OF NEW FLAT FROM M/S GIRISH & ASSOCIATES, THE ASSESSEE HAD MADE PAYMENT OF RS.1,23,00,000/- UPTO 31.3.2008, WHEREAS THE COST O F THE FLAT IS RS. 1,53,00,000/-. ANOTHER OBSERVATION OF THE AO., IS T HAT IN THE LOAN CONFIRMATION FILED BY THE ASSESSEE, THE LOAN IS REF LECTED AT RS. 90,00,000/-. HOWEVER, AS PER THE LETTER OF MR. JITENDRA ASUDANI, TILL 31.3.2008, THE LOAN WAS ONLY RS.60,00,000/-, THUS THERE IS A DIFFERENCE OF RS 30,00,000/-. TO THIS, THE AR. OF THE ASSESSEE HAS SUBMITTED THAT THE BALA NCE PAYMENT OF RS. 30,00,000/-, WAS PAID ON 9.6.2008, WHICH FALLS IN T HE NEXT FINANCIAL YEAR. AS REGARDS TO THE SHORT PAYMENT BETWEEN THE FIGURES OF RS. 1,53,00,000/-- AND RS 1,23,00,000/- I.E RS. 30,00,000/-, IT IS SUBMITTE D BY THE AR. OF THE APPELLANT THAT RS. 30,00,000/- WAS PAID TO THE BUIL DER ON 9.6.2008 I.E BEFORE THE FILING OF THE RETURN OF INCOME.- ITA NO1428/M/2012. 6 7.3. IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE AO IS NOT JUSTIFIED IN HOLDING THT THE RECEIP T OF SALE OF TDR OF RS.1,61,06,180/- HAS NOT ACCRUED TO THE HUF OF SHRI GIRIDHARILAL S ASUDANI. THEREFORE, THE ACTION OF THE AO, IN TREATING THE SU M OF RS.1,61,06,180/- AS INCOME FROM OTHER SOURCES IS ALSO NOT JUSTIFIED. T HE AO, IS THEREFORE, DIRECTED TO TREAT THE RECEIPT RS.1,61,06,180/- AS CAPITAL GA INS OF THE APPELLANT. THIS GROUND OF APPEAL IS ALLOWED. IT IS NOTED BY US THAT THE LD. CIT(A) HAS RECORDED THE DETAILED FINDINGS AFTER ANALYZING THE COMPLETE FACTS, BEFORE HOLDING THAT TH E ASSESSEE-HUF WAS OWNER OF THE IMPUGNED PROPERTY, AS PER LAW AND FACTS, AND I NCOME ARISING THERE FROM SHOULD BE ASSESSED IN THE HANDS OF THE ASSESSEE-HUF ONLY. WE FIND THAT FINDINGS OF LD. CIT(A) ARE JUSTIFIED, NO INTERFERENCE IS CALLED FOR THEREIN, AND THEREFORE THESE ARE UPHELD. 10. GROUND B): THE BRIEF FACTS REGARDING THE GROUND NO. 2 ARE THA T THE AO DID NOT GRANT BENEFIT OF DEDUCTION U/S 54F OF THE ACT O N THE GROUND THAT SINCE THE INCOME OF THE ASSESSEE WAS TREATED AS INCOME FROM O THER SOURCES, DEDUCTION U/S 54F WAS NOT AVAILABLE AND THEREFORE, THE AO DENIED THE BENEFIT OF SECTION 54F OF THE ACT. THE AO ALSO DENIED THE BENEFIT OF SECTION 54F ON THE GROUND THAT THE ASSESSEE HAS NOT PURCHASED THE PROPERTY WITHIN A PE RIOD OF TWO YEARS FROM THE DATE OF SALE. AS PER SECTION 53 OF THE TRANSFER OF PROPERTY ACT, 1882 TO COMPLETE THE TRANSACTION POSSESSION OF THE PROPERTY SHOULD BE EXCHANGED BETWEEN THE PARTIES. BUT IN THIS CASE, THE ASSESSE E HAS NEITHER ENTERED INTO ANY SALE AGREEMENT NOR TAKEN POSSESSION OF THE PROPERTY WITHIN THE STIPULATED PERIOD. 11. BEING AGGRIEVED, THE ASSESSEE CONTESTED THE MAT TER BEFORE THE LD. CIT(A) AND THE LD. CIT(A) AFTER CONSIDERING THE DOC UMENTARY EVIDENCES AND CONTENTIONS OF THE PARTIES GRANTED RELIEF U/S 5 4F TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE I S IN APPEAL BEFORE US. ITA NO1428/M/2012. 7 12. THE LD. DR SUBMITTED THAT THE ASSESSEE IS NOT E LIGIBLE FOR DEDUCTION U/S 54F OF THE ACT AS THE ASSESSEE DID NOT ENTER IN TO AGREEMENT OF PURCHASE FOR ACQUIRING NEW PROPERTY WITHIN A STIPUL ATED PERIOD AS REQUIRED UNDER THE PROVISIONS OF SECTION 54F OF THE ACT AN D THE DEDUCTION WAS CLAIMED MERELY ON THE BASIS OF ALLOTMENT LETTER. I N SUPPORT OF THIS CONTENTION THE LD. DR PLACED RELIANCE ON THE DECIS ION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MILAN SHARAD RUPAREL V. ACIT 27 SOT 61 (MUM.) TO CONTEND THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDU CTION U/S 54F OF THE ACT, FOR THIS REASON ALSO THAT THE ASSESSEE HAD USED BORROWED FUN DS FOR MAKING INVESTMENTS IN NEW PROPERTY, WHICH WAS NOT PERMISSIBLE IN THE EYES OF LAW. IT WAS ALSO SUBMITTED THAT THE ADDITIONAL EVIDENCE WERE CONSIDERED BY THE LD. CIT(A) AND THEREFORE THIS ISSUE SHOULD BE SENT BACK TO THE FILE OF THE AO FO R FRESH APPLICATION OF MIND. 13 . ON THE OTHER HAND, THE LD. COUNSEL SUBMITTED THAT THERE IS NO ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) AND THEREFORE THIS A LLEGATION IS FACTUALLY INCORRECT. HE FURTHER PLACED RELIANCE ON THE DECISION OF HYDER ABAD BENCH OF THE TRIBUNAL IN THE CASE OF NARASIMHA RAJU RUDRA RAJU VS ACIT 143 ITD 586 (HYDERABAD) FOR THE PROPOSITION THAT SECTION 54F HAS NOWHERE ENVISAGED THAT THE ASSESSEE HAS TO UTILIZE THE SAME FUNDS WHICH WERE RECEIVED ON SALE O F OLD ASSETS, FOR THE PURPOSE OF MAKING INVESTMENT IN THE NEW ASSETS. IT WAS FURTHE R SUBMITTED THAT THERE WAS ACTUALLY NO LOAN AND THIS ALLEGATION IS ALSO FACTUA LLY CORRECT. IT WAS LASTLY SUBMITTED THAT FINDING RECORDED BY THE LD. CIT(A) ARE FACTUAL LY CORRECT AS PER LAW AND FACTS AND THESE SHOULD BE UPHELD. 14. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BOTH T HE SIDES, THE ORDERS OF LOWER AUTHORITIES AND MATERIAL PLACED BEFORE US. WE HAVE SPECIFICALLY ASKED THE LD. DR THAT WHAT ADDITIONAL EVIDENCES WERE SUBMITTE D. IN RESPONSE, LD. DR COULD NOT POINT OUT THAT EXACTLY WHAT EVIDENCES WERE ADDI TIONAL EVIDENCES. IT WAS NOTED ITA NO1428/M/2012. 8 FROM THE INDEX OF THE PAPER BOOK THAT THE ASSESSEE HAS CERTIFIED THAT ALL THE EVIDENCES WERE BEFORE THE BOTH THE LOWER AUTHORITIE S, EXCEPT WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A). THE LD. DR WAS NOT A BLE TO POINT OUT ANY DEFECT IN THE CERTIFIED COPY AND WAS NOT ABLE TO CONTROVERT T HE SAME. THIS PAPER BOOK WAS FILED MUCH EARLIER I.E. ON 31.12.2013. IN CASE, IT WAS FELT THAT THE CERTIFICATE WAS NOT CORRECT THEN IT WAS INCUMBENT UPON THE LD. DR T O FILE COUNTER AFFIDAVIT TO NEGATE THE CERTIFICATE OR AT LEAST HE SHOULD HAVE B ROUGHT ON RECORD THAT CERTIFICATE WAS NOT CORRECT. IT IS NOT FAIR TO MAKE ATTEMPT TO CREATE CONFUSION IN THE CASUAL AND IRRESPONSIBLE MANNER. THUS, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT BEFORE US, WE DISMISS THIS ARGUMENT OF LD. DR. 16. IT IS FURTHER NOTED BY US THAT AS PER SECTION 5 4F, IT IS NOT MANDATORY TO INVEST THE SAME AMOUNT IN THE NEW ASSETS WHICH HAS BEEN RECEIVED ON SALE OF OLD ASSET, AS THERE IS NO REQUIREMENT OF THERE BEING A NEXUS IN THE RECEIPTS OF OLD ASSET AND AMOUNT INVESTED IN THE ACQUISITION OF NEW ASSET S. FURTHER, THERE IS NO SUCH REQUIREMENT THAT TO CLAIM DEDUCTION U/S 54F, AMOUNT TO BE INVESTED IN THE NEW ASSETS SHOULD BE FROM THE OWN FUNDS, OR THAT ASSESS EE CANNOT UTILIZE BORROWED FUNDS FOR INVESTMENT IN NEW ASSETS. IT MAY BE NOTED HERE THAT THE TIME PERIOD AVAILABLE FOR MAKING INVESTMENT U/S 54F IS WITHIN T HE PERIOD OF ONE YEAR BEFORE OR TWO/THREE YEARS AFTER THE DATE OF WHICH THE TRANSFE R OF ORIGINAL ASSET TOOK PLACE. THUS, IF AS PER LAW, THE ASSESSEE IS ALLOWED, TO MA KE INVESTMENT EVEN ONE YEAR BEFORE THE DATE OF TRANSFER, THEN HOW CAN IT BE LOG ICAL TO SAY THAT THE SAME VERY FUNDS WHICH HAVE BEEN RECEIVED ON ACCOUNT OF SALE O F OLD ASSETS, SHOULD BE INVESTED FOR THE ACQUISITION OF NEW ASSETS. FURTHE R, THERE IS NO EMBARGO U/S 54F TO UTILIZE BORROWED FUNDS FOR THE PURPOSE OF MAKING INV ESTMENT INTO NEW ASSETS. THE OBJECT OF SECTION 54F IS GRANTING TAX CONCESSIONS T O THE ASSESSEES AS WELL AS PROMOTION OF HOUSING IN THE COUNTRY. UNDER THESE C IRCUMSTANCES, HOW AN ASSESSEE SHOULD PLAN HIS FINANCIAL AFFAIRS, SHOULD BE LEFT U PON ON THE WISDOM OF THE ASSESSEE ITA NO1428/M/2012. 9 ONLY. THUS, NO SUCH REQUIREMENT WHICH HAS BEEN PRE SCRIBED UNDER LAW, SHOULD BE READ BY THE REVENUE ON ITS OWN. 17. THE AOS ALLEGATION THAT DEDUCTION U/S 54F WAS NOT AVAILABLE SINCE THE IMPUGNED CAPITAL GAIN SHOWN BY THE ASSESSEE WAS TRE ATED AS INCOME FROM OTHER SOURCES, IS ALSO NOT SUSTAINABLE, AS IT HAS ALSO AL READY BEEN DECIDED IN THE EARLIER PART OF THIS ORDER THAT AFORESAID INCOME IS TO BE T REATED AS INCOME FROM CAPITAL GAIN ON SALE OF LONG TERM CAPITAL ASSETS. 18. OTHER OBJECTION RAISED BY THE AO FOR NOT GRANTI NG DEDUCTION U/S 54F IS THAT THE ASSESSEE HAD NOT TAKEN POSSESSION OF THE PROPER TY NOR ENTERED INTO SALE AGREEMENT FOR THE SAME. IN THIS REGARD, IT WAS SU BMITTED BY THE LD. COUNSEL THAT FOR CLAIMING DEDUCTION U/S 54F IT IS NOT NECESSARY THAT THE ASSESSEE SHOULD BECOME THE OWNER OF THE PROPERTY BY A REGISTERED DOCUMENT ONLY. IN THIS REGARD, RELIANCE HAS BEEN PLACED UPON THE FOLLOWING DECISIONS: A) CIT V/S T N ARVINDA REDDY (1997) 12 CTR 423 (SC ) B) CIT V/S AJIT SINGH KHAJANJI 297 ITR 95 (MP) 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE RECORD PLACED BEFORE US AND ALSO GONE THROUGH THE CASES RELIED UPON BY B OTH THE PARTIES. WE FIND THAT FULL PAYMENT OF PURCHASE VALUE OF ASSET HAS BEEN MA DE BY THE ASSESSEE BEFORE FILING OF THE RETURN OF INCOME FOR THE YEAR UNDER C ONSIDERATION. THUS, THE ASSESSEE HAS UTILIZED THE AMOUNT FOR ACQUIRING NEW ASSETS BEF ORE FILING THE RETURN OF INCOME. IN OUR CONSIDER VIEW, THE REQUIREMENT OF LAW HAS BE EN MET BY THE ASSESSEE. 20. AS REGARD THE LEGAL OWNERSHIP ISSUE IS CONCERNE D, WE FIND THAT UNDER THE INCOME TAX LAW, THE CONCEPT OF DEFACTO OWNERSHIP IS RECOGNIZED AND ACCEPTED. THE RELIANCE HAS BEEN PLACED UPON THE CBDT CIRCULAR NO. 471, DATED 15-10- 1986. IT IS FURTHER NOTED THAT AN AGREEMENT WAS EN TERED INTO BY AND ITA NO1428/M/2012. 10 BETWEEN THE PARTIES AND REGISTERED ALSO. ACCORDING TO THE AO, LETTER OF ALLOTMENT BY THE BUILDER TO THE ASSESSEE DOES NOT T ANTAMOUNT TO PURCHASE AND HENCE THE ASSESSEE HAD NOT PURCHASED THE PROPER TY WITHIN THE STIPULATED PERIOD. IN OUR VIEW, UNDERSTANDING OF TH E AO IS NOT IN ACCORDANCE WITH LAW AS HAS BEEN DISCUSSED IN THE JU DGMENTS QUOTED ABOVE, WHEREIN IT HAS BEEN HELD THAT REGISTRATION O F PROPERTY IS NOT SINE- QUA-NON FOR OWNERSHIP OF THE PROPERTY, ESPECIALLY I N THE CONTEXT OF INCOME TAX LAW. FURTHER, IN OUR CONSIDERED VIEW THE REGIS TRATION OF PROPERTY IS NOT MANDATORY CONDITION AS PER LAW FOR GRANT OF DEDUCTI ON U/S 54F OF THE ACT. THUS, WE FIND THAT THE OBJECTIONS OF THE AO ARE NOT LEGALLY SUSTAINABLE IN THE EYES OF THE LAW. THE LD. CIT(A) HAS DEALT WITH EACH OF THEM IN A PROPER MANNER. THEREFORE, NO INTERFERENCE IS CALL ED FOR IN THE ORDER OF LD. CIT(A). GROUND RAISED BY THE REVENUE IS THEREFORE R EJECTED. 21. WITH REGARD TO THE GROUND NO. C) , THE AO MADE ADDITION OF RS.12,29,185/- U/S 68 OF THE ACT ON THE GROUND TH AT THE ASSESSEE SOLD TDR TO M/S HARMONY RESIDENCY AT THE RATE OF RS.27 11.11 PER SQ.MT., AS AGAINST THE MARKET RATE OF RS.3752.97 PER SQ.MT.. IT WAS NOTED BY THE AO THAT THE AVERAGE RATE ON WH ICH THE ASSESSEE SOLD TDR TO THE SAID COMPANY IS LESS THAN THE MARKET RAT E BY RS,1041.863 PER SQ.FT., AND ACCORDINGLY HE WORKED OUT THE SAME AT RS.12,29,185/-, ACCORDINGLY HE MADE ADDITION OF THIS AMOUNT U/S 68 OF THE ACT. BEING AGGRIEVED BY THIS, THE ASSESSEE CONTESTED THE MATTE R BEFORE THE LD. CIT(A), WHO DELETED THE SAME. AGGRIEVED BY THIS DEC ISION OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 22. THE LD. DR REITERATED THE FACTS OF THE CASE AND RELIED UPON THE ORDER OF AO. ITA NO1428/M/2012. 11 23. ON THE OTHER HAND, THE LD. COUNSEL SUBMITTED TH AT THERE IS NO SUCH CRITERIA THAT ON THE BASIS OF AVERAGE VALUE, THE ADDITION SHOULD HAVE BEEN MADE U/S 68 OF THE ACT AND MUCH LESS ON THE BASIS OF PRESUMPTION AND ASSUMPTION. IT WAS SUBMITTED THAT THE AO HAS T AKEN DECISION WITHOUT ANY MATERIAL IN HIS POSSESSION AND WITHOUT ANY REFE RENCE TO THE FACT THAT THE ASSESSEE HAS NOT RECEIVED ANY AMOUNT OVER AND A BOVE THE AGREEMENT VALUE. IT WAS ALSO SUBMITTED THAT THE BURDEN WAS O N THE REVENUE TO PROVE THAT THE ACTUAL CONSIDERATION WAS MORE THAN THE VAL UE HAS PAID BY THE ASSESSEE, AND IN SUPPORT OF THIS CONTENTION HE HAS PLACED RELIANCE ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF K. P. VARGHESE V. ITO 131 ITR 597 (SC). 24. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BOTH T HE SIDES, THE ORDERS OF AUTHORITIES BELOW AND MATERIAL PLACED BEFORE US. WE FIND THAT THERE ARE NO ENTRIES IN THE BOOKS OF ACCOUNT OF ASSESSEE WITH RE SPECT OF THIS RECEIPT AND THEREFORE, THE SAME COULD NOT HAVE BEEN ADDED TO TH E TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE ACT. IT IS FURTHER NOTED THAT THIS A DDITION HAS BEEN MADE ON THE BASIS OF MERE ESTIMATION AND GUESS WORK. IT HAS BEEN REC ORDED BY THE LD. CIT(A) THAT THE TDR RATES ARE DETERMINED BY THE MARKET FORCE AND THERE IS NO THUMB RULE TO DETERMINE THE MARKET VALUE, THEREFORE, SOLELY RELYI NG UPON THE SAME MARKET RATE, AND WITHOUT BINGING ANY CONCRETE MATERIAL ON RECORD AND IN POSSESSION OF THE AO, HE COULD NOT HAVE MADE THIS ADDITION. WE FIND THAT THE LD. CIT(A) HAS DELETED THE SAME AFTER RECORDING CORRECT FINDINGS. THEREFORE, WE DO NOT FIND ANY FORCE IN THE CONTENTIONS OF LD. DR AND WE ARE NOT INCLINED TO IN TERFERE WITH THE ORDER OF LD. CIT(A). ACCORDINGLY, GROUND RAISED BY THE REVENUE STANDS DISMISSED. ITA NO1428/M/2012. 12 25. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. PRONOUNCED ACCORDINGLY ON 16 TH DEC, 2015. $ % & '( ) 16 TH DEC, 2015 SD/- SD/- (SAKTIJIT DEY) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER % MUMBAI: 16 TH DEC, 2015. . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. - ( ) / THE CIT(A)- CONCERNED 4. - / CIT CONCERNED 5. ./ 0 , ! 0 , % / DR, ITAT, MUMBAI CONCERNED 6. 1 / GUARD FILE. ( / BY ORDER, (ASSTT. REGISTRAR) ! 0 , % /ITAT, MUMBAI