Tony J.Pulikal, Cochin V. DCIT, Cochin

ITA 154/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4584 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 15-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MOHAN PULICKAL
• Keywords: Capital asset; Additional evidence
• Section: 54B; 54F

Judgement Text

1 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 154/COCH/2012 (ASSESSMENT YEAR 2007-08) TONY J PULIKAL VS THE DY.CIT PULICKAL HOUSE CENT.CIR.1, KOCHI OPP MEDICAL TRUST PALLIMUKKU, KOCHI 682 016 PAN : ACTPP3476A (APPELLANT) (RESPONDENT) I.T.A NO. 166/COCH/2012 (ASSESSMENT YEAR 2007-08) DY.CIT, CENT.CIR.1 VS TONY J PULIKAL KOCHI PALLIMUKKU, KOCHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MOHAN PULICKAL REVENUE BY : SMT. S VIJAYAPRABHA I.T.A NO. 249/COCH/2012 (ASSESSMENT YEAR 2007-08) DR XAVIER J PULIKKAL VS DY.CIT, CENT.CIR.1 PULICKAL HOUSE CENT.CIR.1, KOCHI OPP MEDICAL TRUST PALLIMUKKU, KOCHI 682 016 PAN : AAAPX2391M (APPELLANT) (RESPONDENT) 2 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 I.T.A NO. 270/COCH/2012 (ASSESSMENT YEAR 2007-08) DY.CIT, CENT.CIR.1 VS TONY J PULIKAL KOCHI PALLIMUKKU, KOCHI (APPELLANT) (RESPONDENT) ASSESSEE BY : JOSE KAPPAN RESPONDENT BY : SMT.S VIJAYAPRABHA DATE OF HEARING : 18-07-2013 DATE OF PRONOUNCEMENT : 16-08-2013 O R D E R PER N.R.S. GANESAN (JM) THESE CROSS APPEALS OF THE TWO INDEPENDENT ASSESSE ES ARE DIRECTED AGAINST THE SEPARATE ORDERS OF CIT(A)-I, KOCHI DATE D 30-03-2012 AND 12- 07-2012, RESPECTIVELY FOR THE ASSESSMENT YEAR 2007- 08. SINCE COMMON ISSUE ARISES FOR CONSIDERATION WE HEARD ALL THE APP EALS TOGETHER AND DISPOSE OF THE SAME BY THIS COMMON ORDER. 2. LET US FIRST TAKE THE APPEAL FILED BY THE ASSESS EE, SHRI TONY J PULICKAL IN ITA NO.154/COCH/2012. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISA LLOWANCE OF EXEMPTION U/S 54F OF THE ACT. 3 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 4. SHRI MOHAN PULICKAL, THE LD.COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSEE ALONG WITH HIS BROTHER PURCHASED 79.07 2 CENTS OF LAND ON 24- 12-1981. THE ABOVE SAID LAND WAS SOLD DURING THE Y EAR UNDER CONSIDERATION AND THE ASSESSEE CLAIMED EXEMPTION U/ S 54F OF THE ACT IN RESPECT OF INVESTMENT MADE FOR CONSTRUCTION OF A RE SIDENTIAL HOUSE. ACCORDING TO THE LD.COUNSEL, THE ASSESSEE HAS PURCH ASED 196.144 CENTS OF LAND ON 15-06-2007 FOR A CONSIDERATION OF RS.3,79,9 5,000 AND CONSTRUCTED A HOUSE ADMEASURING 254.94 SQUARE METRES. THOUGH T HE ASSESSING OFFICER DISALLOWED THE ENTIRE CLAIM OF THE ASSESSEE , THE CIT(A) FOUND THAT ONLY 5 CENTS OF LAND COULD BE TREATED AS STANDARD M EASURE OF A HOUSE. ACCORDINGLY HE DISALLOWED THE PROPORTIONATE COST OF LAND. ACCORDING TO THE LD.REPRESENTATIVE, THE AREA REQUIRED FOR CONSTRUCTI ON OF A HOUSE WOULD DEPEND UPON THE SOCIAL STATUS OF THE INDIVIDUAL. T HEREFORE, THE LAND APPURTENANT TO THE RESIDENTIAL HOUSE HAS TO BE DETE RMINED WITH RESPECT TO THE SOCIAL STATUS OF THE ASSESSEE. THE LD.COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF THE ANDHRA PRADESH HIGH COURT IN CI T VS ZAIBUNNISA BEGUM (1985) 151 ITR 320 (AP) AND SUBMITTED THAT TH E EXPRESSION LAND APPURTENANT MEANS THE EXTENT OF LAND WHICH IS REQU IRED FOR PROPER AND CONVENIENT ENJOYMENT OF THE RESIDENTIAL HOUSE. THE REFORE, ACCORDING TO THE LD.REPRESENTATIVE, THE CIT(A) IS NOT CORRECT IN RES TRICTING THE AREA OF LAND TO 4 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 ONLY 5 CENTS. THE LD.COUNSEL HAS ALSO PLACED RELIA NCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN CIT VS SARDARMAL KOTHARI & ANR (2008) 302 ITR 286 (MAD). THE LD.REPRESENTATIVE HAS FURTHER PLACE D HIS RELIANCE ON THE JUDGMENT OF ANOTHER MADRAS HIGH COURT JUDGMENT IN C IT VS SMT. M KALPAGAM ((1997) 227 ITR 733 (MAD) AND SUBMITTED TH AT IN THE CASE BEFORE THE MADRAS HIGH COURT 10 GROUNDS 29 SQ.FT. W AS USED BY THE ASSESSEE BY WAY OF RESIDENCE PATHWAY, SIT OUT, SERV ANT QUARTERS, COW SHED, ETC. THIS AREA AROUND THE HOUSE WAS HELD BY THE MADRAS HIGH COURT AS LAND APPURTENANT TO THE MAIN BUILDING. THE LD.C OUNSEL ALSO PLACED RELIANCE ON THE JUDGMENT OF THE APEX COURT IN THE C ASE OF SURYAKUMAR GOVINDJEE VS KRISHNAMMAL & ORS (1990) 4 SUPREME COU RT CASES 343. ON A QUERY FROM THE BENCH WHAT WOULD BE THE AREA OF LA ND THAT MAY BE REQUIRED FOR CONVENIENT ENJOYMENT OF THE HOUSE CONS TRUCTED IN THE LOCALITY WHERE THE ASSESSEES HOUSE WAS SITUATED, THE LD.COU NSEL SUBMITTED THAT 60 CENTS OF LAND IS REQUIRED FOR CONVENIENT ENJOYMENT OF THE HOUSE CONSTRUCTED IN THE LOCALITY WHERE THE HOUSE WAS SIT UATED. 5. ON THE CONTRARY, SMT. S VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS ACQUIRED 196.144 CENTS OF LAND AND CON STRUCTED BUILDING CONSISTING OF PLINTH AREA OF 254.94 SQ.MTRS. THIS COMES TO 1.63% OF THE TOTAL AREA OF THE LAND. ON A QUERY FROM THE BENCH WHAT WOULD BE THE EXTENT 5 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 OF LAND REQUIRED FOR CONVENIENT ENJOYMENT OF THE HO USE, THE LD.DR SUBMITTED THAT 10 CENTS OF LAND MAY BE REQUIRED FOR CONVENIENT ENJOYMENT OF THE HOUSE AND DEFINITELY NOT MORE THAN THAT. TH EREFORE, ACCORDING TO THE LD.DR, THE ENTIRE COST OF THE LAND CANNOT BE ALLOWE D AS INVESTMENT U/S 54F OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 54F OF THE ACT. FOR CLAIMING EXEMPTION U/S 54F OF THE ACT, THE ASSESSEE HAS TO CONSTRUCT A RESIDENTIAL HOUSE ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TH E CAPITAL ASSET WAS TRANSFERRED. IN THIS CASE, AFTER TRANSFER OF THE C APITAL ASSET, THE ASSESSEE HAS PURCHASED 196.144 CENTS OF LAND AND CONSTRUCTED A HOUSE ADMEASURING 254.94 SQ.MTRS. THE ASSESSEE HAS ALSO INVESTED RS.81,41,120 TOWARDS THE COST OF CONSTRUCTION OF TH E PROPERTY. THERE IS NO DISPUTE WITH REGARD TO THE COST OF CONSTRUCTION OF THE BUILDING. THE DISPUTE IS WITH REGARD TO THE AREA OF THE LAND WHICH IS REQ UIRED FOR CONVENIENT ENJOYMENT OF 254.94 SQ.MTS OF RESIDENTIAL HOUSE. T HE AREA OF THE LAND WHICH IS REQUIRED FOR CONVENIENT ENJOYMENT OF THE H OUSE HAS TO BE DETERMINED WITH REGARD TO THE SOCIAL STATUS AND PRO FESSION, ETC OF THE INDIVIDUAL ASSESSEE, PROFESSION, ETC. AN AGRICULTU RIST MAY REQUIRE A 6 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 REASONABLE EXTENT OF LAND FOR HOUSING THEIR CATTLE, AGRICULTURAL IMPLEMENTS, ETC. AN INDUSTRIALIST MAY REQUIRE CAR SHEDS TO PAR K HIS CARS, SERVANT QUARTERS. ETC. MOREOVER, THE LOCALITY WHERE THE LA ND ALSO NEEDS TO BE CONSIDERED. IN VILLAGES, ONE MAY HAVE VAST EXTENT OF LAND FOR GARDEN, PLAY GROUND, ETC. HOWEVER, SUCH THINGS MAY NOT BE POSSI BLE IN URBAN CITIES. THEREFORE, THE LAND APPURTENANT TO THE RESIDENTIAL HOUSE HAS TO BE DETERMINED WITH REGARD TO THE LOCALITY WHERE THE RE SIDENTIAL HOUSE IS SITUATED, THE SOCIAL STATUS OF THE INDIVIDUAL ASSES SEE, PROFESSION OF THE INDIVIDUAL AND OTHER FACTORS FOR PROPER AND CONVENI ENT ENJOYMENT OF THE RESIDENTIAL HOUSE. THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT 5 CENTS OF LAND DETERMINED BY THE CIT(A) IS VERY LESS IN THE S TATE OF KERALA. THE STATE OF KERALA MAINLY BEING AN AGRICULTURAL AREA, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) IS NOT CORRECT I N RESTRICTING THE LAND APPURTENANT TO THE BUILDING AT 5 CENTS WITHOUT CONS IDERING THE RELEVANT FACTORS WHICH PREVAIL IN THE STATE OF KERALA. HOWE VER, THE LOCALITY WHERE THE LAND IS SITUATED AND OTHER FACTORS ARE NOT AVAI LABLE ON RECORD. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH AFTER CON SIDERING ALL THE FACTORS MENTIONED ABOVE AND THEREAFTER DETERMINE THE EXTENT OF LAND WHICH IS REQUIRED FOR PROPER AND CONVENIENT ENJOYMENT OF THE RESIDENTIAL HOUSE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ISSUE 7 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 OF EXEMPTION U/S 54F IS REMITTED BACK TO THE FILE O F THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AF RESH IN THE LIGHT OF THE DISCUSSION MADE ABOVE AND THE CASE LAWS RELIED UPON BY THE ASSESSEE AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. THE ASSESSEE HAS TAKEN TWO MORE GROUNDS WITH REG ARD TO EXPENDITURE INCURRED TOWARDS DEVELOPMENT OF THE LAN D WHICH WAS SOLD AND BROKERAGE PAID TO THE EXTENT OF RS.11 LAKHS. WE HE ARD THE LD. COUNSEL FOR THE ASSESSEE AND THE LD.DR. 8. IT APPEARS FROM THE MATERIAL AVAILABLE ON RECORD THAT THESE GROUNDS WERE NOT RAISED BEFORE THE CIT(A) EVEN THOUGH THE A SSESSEE CLAIMED THEM BEFORE THE ASSESSING OFFICER. FROM THE ASSESSMENT ORDER IT APPEARS THAT THE CLAIM MADE TOWARDS DEVELOPMENT CHARGES AND BROK ERAGE WAS WITHDRAWN BY A LETTER DATED 16-12-2010. SINCE THE ASSESSEE HAS WITHDRAWN THE CLAIM BEFORE THE ASSESSING OFFICER, P ROBABLY, NO GROUND WAS RAISED BEFORE THE CIT(A) DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHE N THE ASSESSEE WITHDREW THE CLAIM BEFORE THE ASSESSING OFFICER BY A LETTER DATED 16-12- 2010, THE SAME CANNOT BE REAGITATED EITHER BEFORE T HE CIT(A) OR BEFORE THIS 8 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 TRIBUNAL. THEREFORE, THE GROUNDS IN RESPECT OF CHA RGES FOR DEVELOPMENT OF THE LAND AND BROKERAGE CANNOT BE AGITATED BEFORE TH IS TRIBUNAL ALSO. ACCORDINGLY, THE GROUNDS WITH REGARD TO DEVELOPMENT CHARGES AND BROKERAGE CHARGES ARE DISMISSED. 9. NOW COMING TO THE REVENUES APPEAL, THE FIRST GR OUND OF APPEAL IS WITH REGARD TO DEPOSIT OF RS.40 LAKHS IN THE CAPITA L GAIN ACCOUNT SCHEME ON 07-01-2008. REFERRING TO SECTION 54F(4) OF THE ACT , SMT. S VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSEE WAS EXPECTED TO DEPOSIT THE AMOUNT WITHIN THE DUE DATE PROVIDED FOR FILING OF THE RETU RN OF INCOME U/S 139(1) OF THE ACT. ACCORDING TO THE LD.DR, THE DUE DATE FOR FILING THE RETURN OF INCOME U/S 139(1) WAS 31-07-2007. THEREFORE, THE DEPOSIT OF FUNDS TO THE EXTENT OF RS.40 LAKHS IN CAPITAL GAIN DEPOSIT SCHEME IS BE YOND THE TIME SPECIFIED IN SECTION 54F(4) OF THE ACT. 10. ON THE CONTRARY, SHRI MOHAN PULICKAL, THE LD.CO UNSEL FOR THE ASSESSEE SUBMITTED THAT SECTION 139(4) GIVES EXTEND ED TIME FOR FILING THE RETURN OF INCOME. THEREFORE, THE DEPOSIT MADE BEFO RE THE DUE DATE FOR FILING THE RETURN OF INCOME U/S 139(4) HAS TO BE CO NSIDERED FOR THE PURPOSE OF DEDUCTION 54F OF THE ACT. THE LD.COUNSEL PLACED HIS RELIANCE ON THE JUDGMENT OF THE PUNJAB & HARYANA HIGH COURT IN CIT VS JAGRITI AGGARWAL 9 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 (2011) 339 ITR 610 (P&H). THE LD.COUNSEL HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE GAUHATI HIGH COURT IN THE CASE OF C IT VS RAJESH KUMAR JALAN (2006) 286 ITR 274 (GAU). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SECTION 54F(4) OF THE ACT. FOR CLAIM ING EXEMPTION U/S 54F THE ASSESSEE HAS TO DEPOSIT THE NET CONSIDERATION I N CAPITAL GAIN DEPOSIT SCHEME NOT LATER THAN THE DUE DATE APPLICABLE FOR F URNISHING THE RETURN OF INCOME U/S 139(1) OF THE ACT. THE GAUHATI HIGH COU RT IN THE CASE OF RAJESH KUMAR JALAN (SUPRA) AND THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF JAGRITI AGGARWAL (SUPRA) HAD AN OCCASION TO INTERPRET SECTION 54F(4) OF THE ACT. BOTH THE HIGH COURTS FOUND THAT SECTION 139(4) GIVES EXTENDED TIME FOR FILING THE RETURN OF INCOME. THE REFORE, THE AMOUNT DEPOSITED WITHIN THE DUE DATE FOR FILING THE RETURN OF INCOME U/S 139(4) ALSO HAS TO BE CONSIDERED FOR GRANTING EXEMPTION U/S 54F OF THE ACT. WE FIND THAT THE APEX COURT IN THE CASE OF PRAKASH NATH KHA NNA & ANR VS CIT (2004) 266 ITR 1 (SC) HAD AN OCCASION TO INTERPRET THE WORDS DUE DATE. THOUGH IT IS IN RESPECT OF PROSECUTION, THE APEX CO URT AFTER CONSIDERING VARIOUS CASE LAWS ON THE SUBJECT FOUND THAT THE DUE DATE MEANS THE DUE DATE MENTIONED IN SECTION 139(1) OF THE ACT. HOWEVE R, BOTH THE AUTHORITIES 10 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 BELOW HAVE NOT CONSIDERED THIS JUDGMENT OF THE APEX COURT. MOREOVER, THE ASSESSEE ALSO HAD NO OCCASION TO EXPLAIN THE CONSEQ UENCES OF THIS JUDGMENT OF THE APEX COURT BEFORE THE LOWER AUTHORI TIES OR BEFORE THIS TRIBUNAL. THEREFORE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE ASSESSING OFFICER SHALL RECONSIDER THIS ISSUE ALSO. IN OTHER WORDS, SINCE THE MAJOR ISSUE WITH REGARD TO THE INVESTMENT IN THE RE SIDENTIAL HOUSE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER, FOR THE SAKE OF CONSISTENCY, THE DEPOSIT IN CAPITAL GAIN ACCOUNT AL SO NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ORDERS OF AUTHORITI ES BELOW ON THIS ISSUE IS ALSO SET ASIDE AND REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEA RING TO THE ASSESSEE. 12. THE REVENUE HAS TAKEN ONE MORE GROUND WITH REGA RD TO THE COMPLETION OF THE CONSTRUCTION OF PROPERTY BEFORE T HREE YEARS. ACCORDING TO THE LD.DR, THE ASSESSEE HAS PRODUCED A COMPLETION C ERTIFICATE FROM THE PANCHAYAT ISSUED FOR THE PURPOSE OF ELECTRIFICATION . WE HEARD SHRI MOHAN PULICKAL, THE LD.COUNSEL EPRESENTATIVE FOR THE ASSE SSEE ALSO. COMPLETION CERTIFICATE WILL BE GIVEN BY THE LOCAL PANCHAYAT ON LY AFTER COMPLETION OF THE CONSTRUCTION. IT IS COMMON KNOWLEDGE THAT ELECTRIC ITY SUPPLY WOULD BE 11 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 PROVIDED ONLY AFTER COMPLETION OF THE CONSTRUCTION. BEFORE COMPLETION, NO REGULAR POWER SUPPLY WILL BE PROVIDED BY THE ELECTR ICITY BOARD. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE LOCAL PANCHAYAT HAS ISSUED THE COMPLETION CERTIFICATE UNDER THE LOCAL B ODIES ACT, THE SAME HAS TO BE ACCEPTED UNLESS AND UNTIL THE REVENUE HAS MAT ERIAL TO SHOW THAT THE BUILDING WAS NOT OTHERWISE COMPLETED. THIS TRIBUNA L IS OF THE CONSIDERED OPINION THAT THE AUTHORITY IS EMPOWERED TO PERMIT T HE ASSESSEE TO CONSTRUCT THE BUILDING UNDER LOCAL BODIES ACT IS C OMPETENT TO AND ISSUE COMPLETION CERTIFICATE. IN THE ABSENCE OF ANY MATE RIAL TO INDICATE THAT THE HOUSE WAS NOT COMPLETED, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE COMPLETION CERTIFICATE ISSUED BY THE LOCAL PANC HAYAT HAS TO BE ACCEPTED. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY WITH REGARD TO THE DATE OF COMPLETION OF THE BUILDING. 13. IN THE RESULT, ITA NO.154/COCH/2012 IS ALLOWED FOR STATISTICAL PURPOSE AND APPEAL OF THE ASSESSEE IN ITAT NO.166/COCH/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 14. NOW COMING TO THE APPEAL FILED BY THE ASSESSEE, DR XAVIER J IN ITA NO.249/COCH/2012, THE FIRST GROUND OF APPEAL IS WIT H REGARD TO DEDUCTION U/S 54B OF THE ACT. 12 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 15. SHRI JOSE KAPPAN, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE CLAIMED DEDUCTION U/S 54B OF THE ACT. HOWEVER, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E MAINLY ON THE GROUND THAT THE ASSESSEES BROTHER, SHRI TONY J PULICKAL H AS NOT MADE ANY CLAIM THAT THE CAPITAL ASSET WAS SUBJECTED TO AGRICULTURA L OPERATION. ACCORDING TO THE LD.REPRESENTATIVE, MERELY BECAUSE THE BROTHER O F THE ASSESSEE OMITTED TO CLAIM DEDUCTION U/S 54B IT WOULD NOT DISENTITLE THE ASSESSEE TO MAKE A CLAIM U/S 54B OF THE ACT. THE ASSESSEE HAS FILED S EVERAL DOCUMENTS SUCH AS BILLS, DIARY, ETC. IN THE FORM OF ADDITIONAL EVI DENCE TO SUPPORT CLAIM THAT THE CAPITAL ASSET WAS SUBJECTED TO AGRICULTURAL OPE RATIONS. ACCORDING TO THE LD.REPRESENTATIVE, THE CAPITAL ASSET WAS CLASSIFIED AS AGRICULTURAL LAND IN THE GOVERNMENT RECORDS AND IN FACT THE ASSESSEE CULTIVA TED THE LAND. THE ASSESSEE HAS PRODUCED A CERTIFICATE FROM THE VILLAG E OFFICER TO SHOW THAT THE SUBJECT LAND WAS UNDER CULTIVATION. THE ASSESS EE HAS ALSO PRODUCED COPIES OF THE BILLS FOR PURCHASE OF FERTILIZER AND ENTRIES IN THE DIARIES. 16. WE HAVE HEARD SMT. S VIJAYAPRABHA, THE LD.DR AL SO. ON A QUERY FROM THE BENCH, WHEN THE ASSESSEE HAS FILED ADDITIO NAL EVIDENCE TO SUBSTANTIATE THE CLAIM THAT THE LAND WAS SUBJECTED TO CULTIVATION WHY THE ASSESSING OFFICER IN THE LIGHT OF ADDITIONAL EVIDEN CE FILED BY THE ASSESSEE 13 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 SHOULD NOT RECONSIDER THE ISSUE? THE LD.DR VERY FAI RLY SUBMITTED THAT SINCE THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE TO PROVE THE CULTIVATION, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER FOR RECONSIDERATION. 17. WE HAVE CONSIDERED THE SUBMISSIONS ON EITHER SI DE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSING OFFICER MAINLY DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT HIS BROTHER HAS NOT CLAIMED ANY DEDUCTION U/S 54B OF THE ACT. THE ASSE SSING OFFICER HAS ALSO OBSERVED THAT THE LAND WAS NOT SUBJECTED TO ANY AGR ICULTURAL OPERATION AND IT IS WETLAND. THE ASSESSEE HAS NOW PRODUCED CERT IFICATE FROM THE VILLAGE OFFICER AND COPIES OF BILLS FOR PURCHASE OF FERTILI ZER AND ENTRIES MADE IN THE DIARY TO SHOW THAT THE LAND IN QUESTION WAS SUBJECT ED TO CULTIVATION. THESE ARE FRESH EVIDENCE FILED BEFORE THE TRIBUNAL. THER EFORE, THE LOWER AUTHORITIES HAD NO OCCASION TO EXAMINE THE SAME. MERELY BECAUSE THE ASSESSEES BROTHER HAS NOT MADE ANY CLAIM U/S 54B T HAT CANNOT BE A REASON FOR DISALLOWING THE CLAIM OF THE ASSESSEE. WHEN THE ASSESEE HAS PRODUCED CERTAIN MATERIAL BEFORE THIS TRIBUNAL AND CLAIMED THAT THE LAND WAS SUBJECTED TO CULTIVATION, THIS TRIBUNAL IS OF T HE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO EXAMINE THE DOCUMENTS INDEPENDENTLY AND RECORD FINDING WHETHER THE LAND IN QUESTION IS SUBJ ECTED TO CULTIVATION OR 14 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 NOT? THEREFORE, THE OMISSION OF THE ASSESSEES BRO THER TO CLAIM DEDUCTION U/S 54B CANNOT BE A REASON TO DISALLOW THE CLAIM OF THE ASSESSEE. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITIES ARE SET AIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE IN THE LIGHT OF ADDITION AL EVIDENCE FILED BY THE ASSESSEE BEFORE THIS TRIBUNAL AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEE. 18. THE NEXT GROUND OF APPEAL IS WITH REGARD TO INV ESTMENT IN CONSTRUCTION OF THE HOUSE. 19. SHRI JOSE KAPPAN, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PURCHASED 10.885 CENTS OF LAN D ON 04-09-2007 AND CONSTRUCTED RESIDENTIAL BUILDING BY INVESTING 84,40 ,007. THE ASSESSEE HAS ALSO SPENT RS.1,42,000 FOR COMPLETION OF THE RESIDE NTIAL HOUSE. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSING OFFICER DIS ALLOWED THE ENTIRE CLAIM ON THE GROUND THAT NO MATERIAL WAS PRODUCED BEFORE HIM. HOWEVER, THE CIT(A) FOUND THAT THE ASSESSEE HAS FILED ALL THE DO CUMENTS BEFORE THE ASSESSING OFFICER FOR CONSTRUCTION OF THE RESIDENTI AL HOUSE. THE ASSESSEE HAS ALSO FILED APPROVED VALUERS REPORT WITH REGARD TO THE INVESTMENT BEFORE THE ASSESSING OFFICER ALONG WITH THE BUILDING PLAN, ETC. ACCORDINGLY, THE 15 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE TOWARDS C ONSTRUCTION. HOWEVER, THE COST OF PROPORTIONATE LAND WAS RESTRIC TED TO 5 CENTS OF LAND. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE HA S PURCHASED ONLY 10.885 CENTS OF LAND WHICH IS ESSENTIAL FOR PROPER AND CONVENIENT ENJOYMENT OF THE HOUSE. 20. ON THE CONTRARY, SMT. VIJAYAPRABHA, THE LD.DR S UBMITTED THAT THE CIT(A) HAS RIGHTLY RESTRICTED THE AREA OF THE LAND TO 5 CENTS. ON A QUERY FROM THE BENCH WHAT WOULD BE THE REASONABLE AREA TH AT IS REQUIRED FOR PROPER AND CONVENIENT ENJOYMENT OF THE HOUSE, THE L D.DR SUBMITTED THAT 10 CENTS OF LAND MAY BE REASONABLE FOR PROPER AND C ONVENIENT ENJOYMENT OF THE HOUSE. 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THOUGH T HE ASSESSING OFFICER REJECTED THE ENTIRE CLAIM OF THE ASSESSEE WITH REGA RD TO THE COST OF CONSTRUCTION AND PURCHASE OF LAND, THE CIT(A) ALLOW ED THE ENTIRE COST OF CONSTRUCTION AND THE COST OF LAND TO THE EXTENT OF 5 CENTS OF LAND. THE COST OF CONSTRUCTION IS NOT IN DISPUTE BEFORE THIS TRIBU NAL. WHAT IS DISPUTED IS THE EXTENT OF THE LAND I.E. WHETHER 5 CENTS OF LAND IS SUFFICIENT FOR PROPER AND CONVENIENT ENJOYMENT OF THE HOUSE OR 10.885 CEN TS OF LAND IS REQUIRED 16 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 FOR THE SAME. THE LD.DR SUBMITTED THAT 10 CENTS OF LAND IS REQUIRED FOR PROPER AND CONVENIENT ENJOYMENT OF THE HOUSE. 22. THERE IS NO MUCH OF DIFFERENT 10 OR 10.885 CENT S OF LAND. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT 10.885 C ENTS OF LAND ANYWHERE IN THE STATE OF KERALA IS ESSENTIAL FOR CONVENIENT ENJ OYMENT OF THE HOUSE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE EXTENT OF LAND TO 5 CENTS. IN THE ABSENCE OF ANY DISPUTE WITH REGARD TO THE COST OF CONSTRUCTION, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THE ENTIRE INVESTMENT CLAIMED BY THE ASSESSEE HAS TO BE ALLOWED SINCE 10.885 CENTS OF LAND IS ESSENTIAL FOR PROPER AND CO NVENIENT ENJOYMENT OF THE LAND. THEREFORE, WE DO NOT FIND ANY REASON TO UPHOLD THE ORDER OF THE CIT(A). ACCORDINGLY, THE ORDER OF THE CIT(A) IS MO DIFIED AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE ENTIRE COST OF THE LAND AS CLAIMED BY THE ASSESSEE. 22. NOW COMING TO THE DEPARTMENTAL APPEAL, THE ONLY ISSUE ARISES FOR CONSIDERATION IS CLAIM OF DEDUCTION U/S 54F(4) OF T HE ACT. THIS ISSUE WAS CONSIDERED BY THIS TRIBUNAL IN THE CASE OF SHRI TON Y J PULICKAL IN THE EARLIER PART OF THIS ORDER. THE ISSUE WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION SINCE THE JUDGMENT OF T HE APEX COURT IN THE CASE 17 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 OF PRAKASH NATH KHANNA & ANR (SUPRA) WAS NOT CONSID ERED BY BOTH THE AUTHORITIES BELOW AND THE ASSESSEE ALSO HAD NO OCCA SION TO PLACE HIS SUBMISSION BEFORE THE LOWER AUTHORITIES. IN VIEW O F THE ABOVE, THE ORDER OF THE LOWER AUTHORITIES ON THIS ISSUE IS SET ASIDE AN D REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE IN THE LIGHT OF DIRECTIONS ISS UED IN THE CASE OF SHRI TONY J PULICKAL AND THEREAFTER DECIDE THE SAME IN A CCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO T HE ASSESSEE. 23. IN THE RESULT BOTH THE APPEAL OF THE ASSESSEE A ND THE REVENUE ARE ALLOW ED FOR STATISTICAL PURPOSE . 24. ITAT NO.154/COCH/2012, ITA NOS 249 & 270/COCH/2012 ARE ALLOWED FOR STATISTICAL PURPOSE AND APPEAL OF THE R EVENUE IN ITAT NO.166/COCH/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF AUGUST, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 16 TH AUGUST, 2013 PK/- 18 ITA NO. 154 & 166/COCH/2012 ITA NOS. 249 & 270/COCH/2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH