Monika Jain, New Delhi V. ITO, Ward-2(2), Faridabad

ITA 1501/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8668 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GUNJAN JAIN CA SHRI R K GUPTA
• Keywords: Capital asset; Opportunity of being heard; Fair market value; Valuation report; Tax effect; Benefit of exemption; Capital Gains
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: SMC-1 (HEARING THROUGH VIDEO CONFERENCING), NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.1501/DEL./2019 ASSESSMENT YEAR: 2011-12 SMT. MONIKA JAIN, LGF-7A, NRI COMPLEX, MANDAKINI, GREATER KAILASH-IV, NEW DELHI VS. ITO, WARD-2(2), FARIDABAD PAN :AACPJ3778Q (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THE ASSESSEE HAS PREFERRED THIS APPEAL AGAINST THE ORDER DATED 24/12/2018 PASSED BY THE LD. COMMISSIONER OF INCOME- TAX (APPEALS), FARIDABAD [IN SHORT THE LD. CIT(A) ] FOR ASSESSMENT YEAR 2011-12, RAISING FOLLOWING GROUNDS OF APPEAL: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESSING AUTHORITY AND LD. FIRST APPELLATE AUTHORITY HAVE GR OSSLY ERRED IN NOT ALLOWING THE CLAIM OF EXEMPTION IN TERMS OF SEC TION 54 AMOUNTING TO RS. 5,99,244/-OF THE ACT IN RESPECT OF LONG TERM CAPITAL GAIN ARISING ON SALE OF RESIDENTIAL FLAT AT VARSOVA (MUMBAI) APPELLANT BY MS. GUNJAN JAIN, CA RESPONDENT BY SHRI R.K. GUPTA, SR. DR DATE OF HEARING 15.07.2020 DATE OF PRONOUNCEMENT 21.07.2020 2 ITA NO.1501/DEL./2019 AGAINST THE PURCHASE OF NEW RESIDENTIAL PROPERTY MA DE DURING THE YEAR, WHICH IS GROSSLY INJUDICIOUS, UNWARRANTED AGA INST THE FACTS AND BAD AT LAW. TAX EFFECT RELATING TO ABOVE MENTIONED GROUND OF APPEAL IS RS . 93,057/-. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESSING AUTHORITY AND LD. FIRST APPELLATE AUTHORITY HAVE GR OSSLY ERRED IN HOLDING THAT NO GROUND HAS BEEN RAISED BY THE ASSES SEE REGARDING CLAIM OF EXEMPTION U/S 54 AT ANY STAGE DU RING APPELLATE PROCEEDINGS, WHICH IS GROSSLY ARBITRARY, INJUDICIOUS AND AGAINST THE FACTS OF THE CASE. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. ASSESSING AUTHORITY AND LD. FIRST APPELLATE AUTHORITY HAS NOT ACCEPTED THE CONTENTION OF THE ASSESSEE THAT SHE IS ENTITLED FOR EXEMPTION FOR LONG TERM CAPITAL GAIN WHICH IS GROSSLY ARBITRARY, UNWARRANTED AND AGAINST THE FACTS OF THE CASE. 4. THE LD. ASSESSING AUTHORITY AND LD. FIRST APPEL LATE AUTHORITY HAVE GROSSLY ERRED IN DISALLOWING THE COST OF CONST RUCTION OF FLAT AMOUNTING TO RS. 14,60,083/- AS CLAIMED BY THE ASSE SSEE BASED ON THE VALUATION REPORT OF REGISTERED VALUER WHICH IS GROSSLY INJUDICIOUS, ARBITRARY AND BAD AT LAW. TAX EFFECT RELATING TO ABOVE MENTIONED GROUND OF APPEAL IS RS . 3,59,056/-. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE ALONG WITH OTHER TWO CO-OWNERS OWNED AN ANCESTRAL PROPERT Y AT VERSOWA, MUMBAI AND ON 05/03/2009 ALL THE CO-OWNERS ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S J. V. CONSTRUC TION AND DEVELOPERS FOR CONSTRUCTION OF A MULTI-STOREY TOWER (BUILDING), WHICH WAS NAMED AS RATAN KUNJ. AS PER THE TERMS O F THE DEVELOPMENT AGREEMENT, THE ASSESSEE ALONG WITH OTHE R CO-OWNERS I.E. SAURABH JAIN AND MRS. USHARANI, OUT OF THE FLA TS CONSTRUCTED IN THE MULTI-STOREY BUILDING, GOT ONE RESIDENTIAL F LAT ON SECOND FLOOR AGAINST CONSIDERATION OF SHARE OF THEIR LAND. THE LD. CIT(A) HAS MENTIONED THAT THE DEVELOPER WAS TO UNDERTAKE T HE ENTIRE 3 ITA NO.1501/DEL./2019 CONSTRUCTION WORK OF THE TOWER AT HIS EXPENSE AND T HE DEVELOPER WAS ENTITLED TO GET ENTIRE FIRST AND FIFTH FLOOR AS HIS SHARE. THE ASSESSEE WITH OTHER CO-OWNERS HAD NOT INCURRED ANY EXPENSES TOWARDS CONSTRUCTION OF THE MULTI-STOREY TOWER (BUI LDING). 2.1 ON 02/07/2010, THE ASSESSEE ALONG WITH OTHER CO-OW NERS SOLD THE RESIDENTIAL FLAT AT SECOND FLOOR, TOWER A, RATAN KUNJ, VERSOVA FOR A CONSIDERATION OF 4.2 CRORES. 2.2 IN THE RETURN OF INCOME FILED, THE ASSESSEE HAS SH OWN INCOME UNDER THE HEAD LONG-TERM CAPITAL GAIN AND SH ORT-TERM CAPITAL GAIN ON ACCOUNT OF THE SALE OF ONE THIRD SH ARE IN THE RESIDENTIAL FLAT SOLD ALONG WITH OTHER CO-OWNERS. T HE ASSESSEE HAS BIFURCATED THE SALE CONSIDERATION INTO TWO COMPONEN TS. ONE COMPONENT IS OF 1,02,57,406/- TOWARDS SALE CONSIDERATION FOR THE LAND AND 16,42,594/- TOWARDS SALE CONSIDERATION FOR THE CONSTRUCTED PART. THE ASSESSEE ALSO CLAIMED DEDUCTI ON AGAINST LONG-TERM CAPITAL GAIN OF 21 LAKH I.E. THE AMOUNT WHICH WAS RETAINED BY THE BUYER DUE TO HOUSE TAX DISPUTE. THE LEARNED ASSESSING OFFICER DID NOT ALLOW THE DEDUCTION OF RS . 21 LAKH WHILE COMPUTING THE LONG-TERM CAPITAL GAIN. HE ALSO DID N OT ALLOW THE COST OF THE CONSTRUCTION OF THE FLAT AGAINST SHORT- TERM CAPITAL GAIN ON THE GROUND THAT NO SUCH COST WAS INCURRED BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTI ON 54 OF THE ACT WAS ALSO DENIED ON THE GROUND THAT NO SUCH CLAI M WAS MADE IN THE RETURN OF INCOME AND THE ASSESSEE ALREADY OW NED RESIDENTIAL HOUSE AT THE TIME OF THE INVESTMENT IN THE RESIDENTIAL HOUSE CLAIMED FOR DEDUCTION UNDER SECTION 54 OF THE ACT. ON FURTHER APPEAL, THE LD. CIT(A) DISMISSED THE CLAIM UNDER SECTION 54 OF THE ACT ON THE GROUND THAT ASSESSEE HAD NOT R AISED ANY 4 ITA NO.1501/DEL./2019 GROUND OF THE APPEAL OR ADDITIONAL GROUND BEFORE HI M AND ASSESSEE ALSO FAILED TO LEAD ANY EVIDENCE REGARDING EXPENSES MADE FOR CONSTRUCTION OF THE SECOND FLOOR, WHICH HAS BEE N SOLD BY THE ASSESSEE ALONG WITH OTHER CO-OWNERS. ON FURTHER APP EAL, INCOME TAX APPELLATE TRIBUNAL (IN SHORT THE TRIBUNAL), O N THE ISSUE OF EXEMPTION UNDER SECTION 54, DIRECTED THE LEARNED CI T(A) TO CONSIDER THE ADDITIONAL GROUND RAISED BY THE ASSESS EE AFTER GOING THROUGH THE EVIDENCES WHICH WOULD BE PRODUCED BY TH E ASSESSEE. ON THE ISSUE OF THE COST OF THE CONSTRUCTION OF THE FLAT AGAINST SHORT-TERM CAPITAL GAIN, THE TRIBUNAL DIRECTED TO D ECIDE THE ISSUE AFRESH KEEPING IN VIEW THE ASSESSMENT ORDER PASSED IN THE CASE OF OTHER CO-OWNER SH. SAURAB JAIN. 2.3 THE LD. CIT(A) IN THE IMPUGNED ORDER, REGARDING DE DUCTION UNDER SECTION 54 OF THE ACT HELD THAT NO CLAIM WAS FILED BY THE ASSESSEE BEFORE THE COMMISSIONER (APPEALS) IN FIRST ROUND OF THE PROCEEDINGS. THE CIT(A) HAS MERELY DISMISSED THE CL AIM ON THE GROUND THAT CONVEYANCE DEED IN RESPECT OF THE NEW F LAT WAS EXECUTED AFTER APPROXIMATELY SEVEN YEARS FROM THE D ATE OF THE SALE OF THE RESIDENTIAL FLAT ON SECOND FLOOR AND THUS AS SESSEE WAS NOT ENTITLED FOR DEDUCTION UNDER SECTION 54 OF THE ACT. THE CLAIM OF THE COST OF CONSTRUCTION CLAIMED UNDER SHORT TERM C APITAL GAIN HAS ALSO BEEN DENIED HOLDING THAT THE ASSESSING OFF ICER IN THE CASE OF SAURABH JAIN HAS FAILED TO APPRECIATE THE F ACTS CORRECTLY AND, THEREFORE, SAME CANNOT HELP THE CASE OF THE AS SESSEE. 3. BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE APP EARED THROUGH VIDEOCONFERENCING AND FILED A PAPER-BOOK CO NTAINING PAGES 1 TO 110. AS REGARD TO THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT IS CONCERNED, SHE SUBMITTED T HAT THE LEARNED 5 ITA NO.1501/DEL./2019 CIT(A) HAS NOT DECIDED THE ISSUE PROPERLY AND NOT C ONSIDERED THE EVIDENCES REGARDING INVESTMENT MADE FOR BOOKING OF THE FLAT WITH BPTP, FARIDABAD ON 16.03.2011. ACCORDING TO HER, IN VIEW OF THE VARIOUS CBDT CIRCULARS, THE BOOKING MADE FOR INVEST MENT IN FLAT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE A CT. SHE SUBMITTED THAT THIS ISSUE MIGHT BE RESTORED BACK TO THE LEARNED CIT(A)/AO FOR DECIDING AFRESH. ON THE ISSUE OF THE COST OF THE CONSTRUCTION, SHE AGAIN SUBMITTED THAT UNDER THE DE VELOPMENT AGREEMENT, THE DEVELOPER HAS INCURRED THE COST OF C ONSTRUCTION, WHICH HAS BEEN ALLOWED IN THE CASE OF THE OTHER CO- OWNER. SHE SUBMITTED THAT THIS ISSUE MAY ALSO BE RESTORED BACK TO THE LEARNED CIT(A) OR THE AO FOR DECIDING AFRESH. 4. ON THE OTHER HAND, THE LEARNED DR ALSO APPEARED TH ROUGH VIDEOCONFERENCING AND RELIED ON THE ORDER OF THE LO WER AUTHORITIES BUT DID NOT OBJECT FOR RESTORING THE MATTER BACK TO THE ASSESSING OFFICER FOR DECIDING AFRESH. 5. WE HAVE HEARD THE RIVAL SUBMISSION OF THE PARTIES AND PERUSED THE RELEVANT MATERIAL ON RECORD. ON PERUSAL OF THE DEVELOPMENT AGREEMENT AVAILABLE ON PAGES 39 TO 58 O F THE PAPER- BOOK, WE FIND THAT THE LAND IN QUESTION WAS OWNED B Y MANY OTHER CO-OWNERS OTHER THAN THE THREE CO-OWNERS I.E. THE A SSESSEE, SH SAURABH JAIN AND USHARANI. THE OWNERS OF THE LAND H AD STARTED WORK IN THE TOWERS A AND B, BUT WORK WAS STOPPED AF TER SECOND SLAB AND THEREAFTER, THEY ENTERED INTO AGREEMENT WI TH THE DEVELOPER FOR CONSTRUCTION OF THE TOWER A UPTO 9 FLOORS. THE DEVELOPER AGREED TO COMPLETE THE CONSTRUCTION WORK OF THE SAID TOWER AND WAS ENTITLED FOR FEW FLOORS OF THE TOWER. THE DEVELOPMENT AGREEMENT HAS PROVIDED DETAILS OF VARIO US FLOORS 6 ITA NO.1501/DEL./2019 WHICH WERE ASSIGNED TO THE DEVELOPER AND OWNERS OF THE LAND. THE ASSESSEE ALONG WITH OTHER TWO CO-OWNERS WERE ASSIGN ED SECOND FLOOR OF THE TOWER, WHICH THE ASSESSEE HAS SOLD ALO NG WITH THE CO- OWNERS. THE ASSESSEE HAS CLAIMED EVENT OF TAXABILIT Y OF THE LONG- TERM CAPITAL GAIN AND SHORT-TERM CAPITAL GAIN ONLY AT THE TIME OF THE SALE OF THE FLAT ON SECOND FLOOR. IN THE CASE, THE ASSESSEE HAS RECEIVED SECOND FLOOR OF THE TOWER IN EXCHANGE OF T HE SALE OF HIS SHARE OF THE LAND AND THUS FAIR MARKET VALUE OF THE FLAT AT THE TIME OF THE RECEIPT OR POSSESSION BY THE ASSESSEE SHOULD HAVE BEEN CONSIDERED AS SALE CONSIDERATION RECEIVED IN TRANSF ER OF LAND THROUGH EXCHANGE AND LONG-TERM CAPITAL GAIN LIABILI TIES WOULD HAVE BEEN DECIDED ACCORDINGLY. ANY GAIN THEREAFTER ON SALE OF THE SECOND FLOOR SHOULD HAVE BEEN TAXED AT THE TIME OF THE SALE OF THE SECOND FLOOR AND TAXED FOR THE LONG-TERM CAPITAL GA IN NOR SHORT- TERM CAPITAL GAIN IN VIEW OF THE PERIOD THE ASSET W AS HELD. 5.1 THE QUESTION BEFORE US IS OF ADMISSIBILITY OF THE CLAIM UNDER SECTION 54 OF THE ACT. IN OUR OPINION, IN THE DECIS ION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE INDIA L TD VS CIT (2006) 157 TAXMANN 1 (SC), THE ASSESSING OFFICER HA S BEEN BARRED FROM ACCEPTING ANY NEW CLAIMS, BUT NO SUCH B AR HAS BEEN IMPOSED ON THE APPELLATE AUTHORITIES, INCLUDING THE FIRST APPELLATE AUTHORITY. THE ASSESSEE IS IN SECOND ROUND OF THE L ITIGATION AND CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 5 4 OF THE ACT HAS NOT BEEN DECIDED PROPERLY AND ITS EVIDENCE OF I NVESTMENT OR BOOKING HAS NOT BEEN EXAMINED IN PERSPECTIVE OF THE RELEVANT CBDT CIRCULARS AND JUDICIAL DECISIONS. THE CBDT IN CIRCULAR NO. 672 DATED 16/12/1993 HAS CLARIFIED THAT IN TERMS OF A SCHEME OF THE ALLOTMENT AND CONSTRUCTION OF THE FLAT/HOUSE BY THE CO- 7 ITA NO.1501/DEL./2019 OPERATIVE SOCIETIES OR THE OTHER INSTITUTION ARE SI MILAR TO THOSE MENTIONED IN PARA 2 OF CBDT CIRCULAR NO. 471/DATED 15/10/1986 AND THUS SUCH CASE MAY BE TREATED AS THE CONSTRUCTION OF THE FLAT FOR THE PURPOSE OF SECTIO N 54 AND 54F OF THE ACT. THE TRIBUNAL IN THE CASE OF AYUSHI PATNI ( SUPRA) AFTER FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS SMT. BEENA JAIN, 217 ITR 363, TREATED THE DATE OF THE TAKING POSSESSION AS THE DATE OF THE PURCHASE O F THE FLAT AND ALLOWED BENEFIT OF SECTION 54F OF THE ACT, OBSERVI NG AS UNDER: 6. WE HAVE HEARD THE SUBMISSIONS MADE BY RIVAL SID ES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HAVE AL SO PERUSED THE DECISIONS ON WHICH THE LD. A.R. HAS PLACED RELIANCE . THE SOLITARY ISSUE RAISED IN THE PRESENT APPEALS BY THE ASSESSEE AND REVENUE IS: WHETHER THE ASSESSEE IS ELIGIBLE FOR CLAIMING EXEMP TION U/S 54F IN RESPECT OF RESIDENTIAL FLAT / HOUSE FOR WHICH TH E ASSESSEE HAS ENTERED INTO AN AGREEMENT FOR PURCHASE MORE THAN ON E YEAR BEFORE THE DATE OF TRANSFER OF CAPITAL ASSET ? THE DATES QUA, TRANSFER OF CAPITAL ASSET, EXECUTION OF AGREEMENT FOR PURCHASE OF RESIDENTIAL FLAT AND POSSESSION OF THE FLAT ARE NOT IN DISPUTE. 7. THE CONTENTION OF THE ASSESSEE IS THAT SINCE FIN AL CONSIDERATION WAS PAID AND THE POSSESSION OF FLAT WAS RECEIVED WI THIN A PERIOD OF ONE YEAR PRIOR TO THE DATE OF TRANSFER OF CAPITAL A SSET, THE SAME SHOULD BE CONSIDERED AS THE DATE OF PURCHASE. WHERE AS, THE STAND OF DEPARTMENT IS THAT THE DATE OF EXECUTION OF AGREEME NT FOR PURCHASE OF FLAT SHOULD BE CONSIDERED AS THE DATE OF PURCHAS E. 8. THE LD. A.R. HAS DRAWN OUR ATTENTION TO CLAUSE ( 12) OF THE DEED OF AGREEMENT BETWEEN THE ASSESSEE AND THE BUILDER FOR PURCHASE OF FLAT. THE SAID CLAUSE IS REPRODUCED HEREIN BELOW : '12. NOTHING CONTAINED IN THIS AGREEMENT SHALL BE C ONSTRUED TO AS TO CONFER UPON THE PURCHASER ANY RIGHT WHATSOEVE R INTO OR OVER THE SAID PROPERTY OR THE SAID NEW BUILDING OR ANY PART THEREOF INCLUDING THE SAID PREMISES ON EXECUTION OF THIS AGREEMENT. IT IS AGREED BY AND BETWEEN THE PARTIES THAT CONFERMENT OF TITLE IN RESPECT OF THE SAID PREMISES SHALL TAKE 8 ITA NO.1501/DEL./2019 PLACE IN FAVOUR OF THE PURCHASERS ONLY ON THE PURCH ASER'S MAKING FULL PAYMENT OF CONSIDERATION TO THE DEVELOP ERS AND COMPLYING WITH THE TERMS AND CONDITIONS OF THIS AGR EEMENT AND ON THE PURCHASER BEING ADMITTED AS A MEMBER OF THE SAID SOCIETY AS HEREIN PROVIDED.' THE AFORESAID CLAUSE MAKES IT UNAMBIGUOUSLY EVIDENT THAT THE ASSESSEE HAS NO RIGHT WHATSOEVER IN THE PROPERTY ON MERE EXECUTION OF AGREEMENT. THE ASSESSEE SHALL BE CONFERRED TITLE OF PROPERTY ONLY ON MAKING FULL PAYMENT OF CONSIDERATION TO THE BUIL DER. IN THE INSTANT CASE, FULL CONSIDERATION HAS BEEN PAID BY THE ASSES SEE FOR PURCHASE OF RESIDENTIAL FLAT WITHIN A PERIOD OF ONE YEAR BEF ORE THE DATE ITA NOS.1424 & 1707/PUN/2016 OF TRANSFER OF CAPITAL ASS ET. THEREAFTER, ACTUAL POSSESSION OF THE FLAT WAS DELIVERED TO ASSE SSEE ON 17.09.2010 I.E., WITHIN A PERIOD OF ONE YEAR PRIOR TO THE DATE OF TRANSFER OF CAPITAL ASSET. IT IS AN UN-REBUTTED FAC T THAT AT THE TIME OF EXECUTION OF AGREEMENT, THE RESIDENTIAL PROPERTY WA S NOT IN EXISTENCE. THEREFORE, TAKING INTO CONSIDERATION FAC TS OF THE CASE, THE DATE OF POSSESSION OF FLAT IS THE DATE OF ACTUAL PU RCHASE FOR THE PURPOSE OF CLAIMING EXEMPTION U/S 54F OF THE ACT. 9. WE FIND THAT SIMILAR ISSUE HAD COME UP BEFORE TH E HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. BEENA K. JAIN (SUPRA). THE HON'BLE HIGH COURT IN THE APPEAL BY DE PARTMENT, UPHOLDING THE ORDER OF TRIBUNAL AND ALLOWED THE BEN EFIT OF EXEMPTION U/S 54F TO THE ASSESSEE. THE SUBSTANTIAL QUESTION F OR CONSIDERATION BEFORE THE HON'BLE HIGH COURT WAS : 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN ALLOWING EXEMPTION OF RS.11,0 4,423/- UNDER SECTION 54F OF THE INCOME TAX ACT, 1961, CONSIDERING THE DATE OF POSSESSION OF THE NEW RESIDENTIAL PREMISES INSTEAD OF THE DATE OF SALE AGREEMENT AND THE DATE OF REGISTRA TION ?' THE HON'BLE HIGH COURT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY ANSWERING THE QUESTION AS UNDER : '2. UNDER SECTION 54F OF THE INCOME-TAX ACT, IN THE CASE OF AN ASSESSEE IF ANY CAPITAL GAIN ARISES FROM THE TRANSF ER OF ANY LONG- TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL H OUSE, AND THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE, PU RCHASED A RESIDENTIAL HOUSE, THE CAPITAL GAIN SHALL BE DEALT WITH AS PROVIDED IN THAT SECTION. AS PER THE SECTION CERTAI N EXEMPTION HAS TO BE ALLOWED IN RESPECT OF THE CAPITAL GAINS T O BE CALCULATED AS SET OUT THEREIN. THE DEPARTMENT CONTENDS THAT TH E ASSESSEE DID NOT PURCHASE THE RESIDENTIAL HOUSE EITHER ONE Y EAR PRIOR TO 9 ITA NO.1501/DEL./2019 OR TWO YEARS AFTER THE SALE OF THE CAPITAL ASSET WH ICH RESULTED IN THE LONG-TERM CAPITAL GAINS. ACCORDING TO THE DEPAR TMENT, THE AGREEMENT FOR PURCHASE OF THE NEW FLAT WAS ENTERED INTO MORE THAN ONE YEAR PRIOR TO THE SALE. HENCE, PETITIONER IS NOT ENTITLED TO THE BENEFIT UNDER SECTION 54F . IN OUR VIEW, THE TRIBUNAL HAS RIGHTLY NEGATIVED THIS CONTENTION AND HAS HELD THAT THE NEW RESIDENTIAL HOUSE HAD BEEN PURCHASED BY THE ASSESSE E WITHIN TWO YEARS AFTER THE SALE OF THE CAPITAL ASSET WHICH RESULTED IN LONG-TERM CAPITAL GAINS. THE TRIBUNAL HAS HELD THAT THE RELEVANT DATE IN THIS CONNECTION IS JULY 29, 1988, WHEN THE PETITIONER PAID THE FULL CONSIDERATION AMOUNT ON THE FLAT BECO MING READY FOR OCCUPATION AND OBTAINED POSSESSION OF THE FLAT. THIS HAS BEEN TAKEN BY THE TRIBUNAL AS THE DATE OF PURCHASE. THE TRIBUNAL HAS LOOKED AT THE SUBSTANCE OF THE TRANSAC TION AND COME TO THE CONCLUSION THAT THE PURCHASE WAS SUBSTA NTIALLY EFFECTED WHEN THE AGREEMENT OF PURCHASE WAS CARRIED OUT OR COMPLETED BY PAYMENT OF FULL CONSIDERATION ON JULY 29, 1988, AND HANDING OVER OF POSSESSION OF THE FLAT ON THE N EXT DAY.' 10. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF BASTIMAL K. JAIN VS. ITO (SUPRA) UNDER SIMILAR SET OF FACTS HAD ALLOWED THE BENEFIT OF EXEMPTION U/S 54 TO THE ASSESSEE BY FOLL OWING THE RATIO LAID DOWN IN THE CASE OF CIT VS. SMT. BEENA K. JAIN (SUPRA). 11. THUS, IN VIEW OF UNDISPUTED FACTS OF THE CASE A ND THE DECISION RENDERED IN THE CASE OF CIT VS. SMT. BEENA K. JAIN (SUPRA), WE HOLD THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING EXEMPTIO N U/S 54F ON THE ENTIRE AMOUNT OF CAPITAL GAIN UTILIZED FOR PURCHASE OF RESIDENTIAL PROPERTY. CONSEQUENTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THE APPEAL OF REVENUE IS DISMISSED. 5.2 BOTH THE PARTIES BEFORE US HAVE AGREED THAT ALL TH E ISSUES INVOLVED IN THE APPEAL NEED TO BE EXAMINED AFRESH B Y THE ASSESSING OFFICER IN ACCORDANCE WITH LAW, AFTER VER IFICATION OF DOCUMENTARY EVIDENCES AVAILABLE WITH THE ASSESSEE. IT SHALL BE DUTY OF THE ASSESSEE TO PRODUCE ALL THE DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER AT THE EARLIEST. ACCOR DINGLY, WE FEEL IT APPROPRIATE TO RESTORE THE ENTIRE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION FOR FRESH ASSE SSMENT DE-NOVO. IT IS NEEDLESS TO MENTION THAT THE ASSESSEE SHALL B E AFFORDED 10 ITA NO.1501/DEL./2019 ADEQUATE OPPORTUNITY OF BEING HEARD. ALL THE GROUND S RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR THE STATIS TICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JULY, 2020. SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 ST JULY, 2020. RK/- (D.T.D.S.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI