Shri Jagdish P.Patel, Baroda V. The CIT-I, Baroda

ITA 1675/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9111 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Assessee Lawyers: M K PATEL
• Keywords: Capital asset; Business income; Question of law; Difference of opinion; Change of opinion
• Section: 143(3); 54F; 2(14); 54; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) ITA. NO: 1675/AHD/2014 (ASSESSMENT YEAR: 2009-10) SHRI JAGDISH P. PATEL PATEL FALIA, JAMBUVA, BARODA V/S THE COMMISSIONER OF INCOME-TAX-I, BARODA (APPELLANT) (RESPONDENT) PAN: ALBPP5617L APPELLANT BY : SHRI M. K. PATEL, AR RESPONDENT BY : MS. VIBHA BHALLA, CIT/ D.R. ( )/ ORDER DATE OF HEARING : 10 -02-201 7 DATE OF PRONOUNCEMENT : 13 -02-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE O RDER OF THE LD. CIT-I, BARODA DATED 10.03.2014 MADE U/S. 263 OF THE ACT. I T IS THE CLAIM OF THE ASSESSEE THAT THE LD. CIT HAS GROSSLY ERRED IN ASSU MING JURISDICTION U/S. 263 OF THE ACT. ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 2 2. IN THIS CASE, THE ASSESSMENT WAS MADE U/S. 143(3) O F THE ACT VIDE ORDER DATED 28.02.2011 IN WHICH THE RETURNED INCOME OF TH E ASSESSEE WAS ACCEPTED. ASSUMING THE JURISDICTION CAST UPON HIM B Y VIRTUE OF THE PROVISIONS OF SECTION 263 OF THE ACT, THE LD. CIT C ALLED FOR THE RECORDS AND EXAMINED THEM. THE LD. CIT NOTED THAT THE ASSESSEE HAD SHOWN SALE OF LAND TO A CONCERN WHEREIN HE HIMSELF IS A PARTNER AND HA S OFFERED CAPITAL GAINS TAX WHICH OUGHT TO HAVE BEEN TAXED AS BUSINESS INCO ME IN THE HANDS OF THE ASSESSEE. THE LD. CIT WAS OF THE FIRM BELIEF THAT T HAT THE A.O. HAS NOT EXAMINED THIS ASPECT AND, THEREFORE, THE ASSESSMENT ORDER IS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THE LD. CIT ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER WITH A D IRECTION TO REFRAME THE SAME AFTER BRINGING ALL MATERIAL FACTS ON RECORD AS PER THE PROVISIONS OF THE ACT. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY CHALLENGED THIS ACTION OF THE LD. CIT(A). IT IS SAY OF THE LD. COUN SEL THAT THE A.O. HAS MADE FULL INQUIRY BEFORE MAKING THE ASSESSMENT ORDER U/S . 143 OF THE ACT. THE LD. COUNSEL CONTINUED BY STATING THAT AFTER MAKING FULL INQUIRIES, THE A.O. WAS SATISFIED WITH THE COMPUTATION OF CAPITAL GAINS TAX AND, THEREFORE, THE ACT OF THE LD. CIT IS NOTHING BUT MERE CHANGE OF OPINION. THE A.O. HAS TAKEN A POSSIBLE VIEW AND, THEREFORE, THE LD. CIT WRONGLY A SSUMED THE JURISDICTION U/S. 263 OF THE ACT. 4. PER CONTRA, THE D.R. STRONGLY SUPPORTED THE ORDER O F THE LD. CIT. ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 3 5. IT IS SAY OF THE LD. D.R. THAT THE A.O. HAS GROSSLY ERRED IN ACCEPTING THE RETURNED INCOME WITHOUT MAKING ANY DETAILED INQUIRY . THE LD. D.R. FURTHER STATED THAT THE ENTIRE ASSESSMENT ORDER IS DEVOID O F APPLICATION OF MIND. 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW AND HAVE CAREFULLY PERUSED THE DOCUMENTARY EV IDENCES BROUGHT ON RECORD. WE FIND THAT DURING THE COURSE OF THE ASSES SMENT PROCEEDINGS VIDE NOTICE DATED 18.07.2011. THE A.O. ASKED THE ASSESS EE, INTERALIA, VIDE POINT NO. 16, TO FURNISH COMPLETE DETAILS OF LONG TERM CA PITAL GAIN ARISING OUT OF SALE OF IMMOVABLE PROPERTIES. THIS QUERY WAS DULY R EPLIED BY THE ASSESSEE VIDE REPLY DATED 26.07.2011 AT POINT NO. 16 OF HIS REPLY. 7. IT APPEARS THAT SOME MORE CLARIFICATION WAS NEEDED BY THE A.O. AND THE SAME WAS CLARIFIED BY THE ASSESSEE VIDE REPLY DATED 25.11.2011 AND THE SAME READS AS UNDER:- LONG TERM CAPITAL GAIN SHOWN RS.12,831,574/- FOR TH E SALES OF LAND S. NO. 31 MARETHA VILLAGE : - DURING THE TIME OF LAST HEARING YOU HAVE POINTED OU T THAT WHY LONG TERM CAPITAL GAIN SHOWN FOR THE SALE OF MARETHA VILLAGE LAND SHO ULD NOT BE TREATED AS BUSINESS INCOME. IN THIS RESPECT MY SUBMISSION IS AS UNDER ` (1) I AM AGRICULTURIST. I BORN AND BUILT UP IN AGRICULT URIST FAMILY. I RECEIVED AGRICULTURE LAND FROM MY FATHER. FROM VERY BEGINNIN G MY MAIN ACTIVITY IS FARMING THE AGRICULTURE LAND, SO I AM AN AGRICULTUR IST SINCE BIRTH. DURING ASSTT. YEAR 2004-05 I PURCHASED AGRICULTURAL LAND ON 30,01 .2004 AS CO-OWNER WITH OTHER THREE PARTIES. THE COST OF LAND TO ME WAS RS. 67,8007-.! HAVE PURCHASED THIS LAND ALONG WITH OTHERS AND SAID LAND WAS AGRIC ULTURAL LAND SITUATED AT MARETHA VILLAGE, DIST. BARODA WHICH IS OUTSIDE THE BARODA MUNICIPAL CORPORATION AND FALLS UNDER VUDA LIMITS. ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 4 I HAVE FILED MY INCOME TAX RETURN FOR ASSTT. YEAR 2 003-04 SHOWING TOTAL INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES (INTEREST INCOME) AND AGRICULTURAL INCOME. COPY OF RETURN FILED PROOF ENCLOSED HEREWIT H AT ANNEXURE A'. I HAVE ALSO FILED INCOME TAX RETURN FOR ASSTT. YEAR 2004-05 IN THE SAID RETURN INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES (IN TEREST INCOME ) AND INTEREST AND SALARY FROM FIRM UNDER THE HEAD BUSINESS INCOME AND AGRICULTURAL INCOME. THERE AFTER I HAVE ALWAYS SHOWN AGRICULTURAL INCOME . BALANCE SHEET OF ASSTT. YEAR 2004-05 IS ENCLOSED HEREWITH AND IN SAID BALANCE SH EET ABOVE SAID LAND IS SHOWN AS CAPITAL ASSET. I HAVE PURCHASED SAID LAND FOR CU LTIVATION PURPOSE ONLY. MY INTENTION AT THE TIME OF PURCHASE WAS TO PURCHASE T HIS LAND AS CAPITAL ASSET FOR THE PURPOSE OF CULTIVATION THE SAME. ABOVE SAID STA TEMENT SUPPORT MY INTENTION. SO IT IS CLEAR THAT HAVE PURCHASED AGRICULTURAL LAN D AS CAPITAL ASSET AND NOT FOR BUSINESS PURPOSE. SO IT IS CLEAR THAT I HAVE MADE I NVESTMENT IN ASSTT. YEAR 2004- 05 AGRICULTURAL LAND AS CAPITAL INVESTMENT. 'THEREFORE IN ASSTT. YEAR 2009-10 I GOT THIS LAND CO NVERTED INTO NON-AGRICULTURAL AND DEVELOPMENT AGREEMENT IS EXECUTED ON 24.12.2008 WITH THE FIRM M/S RADHEY DEVELOPERS AND I HAVE SHOWN IN RETURN OF INC OME THE LONG TERM CAPITAL GAIN AND PAID TAXES ACCORDINGLY, IN ASSTT. YEAR 200 9-10 IN SURROUNDING AREA OF THIS LAND HOUSING DEVELOPMENT TOOK PLACE AND IT WAS BECOME DIFFICULT TO FARMING AT THE SAID TEND. SO I CONVERTED THIS LAND INTO NON -AGRICULTURAL AND DECIDED TO SALE THE SAME. UNDER THESE CIRCUMSTANCES BY ALL MEA NS THE INCOME ON SALE OF THIS LAND IS TAXABLE UNDER THE HEAD LONG TERM CAPITAL GA IN AND I HAVE SHOWN ACCORDINGLY. IN ORDER TO FIND WHETHER A TRANSACTION OF PURCHASE AND SUBSEQUENT SALE AMOUNT TO AND ADVENTURE IN NATURE OF TRADE, THE INITIAL IN TENTION IS AN IMPORTANT FACTOR. MY INITIAL INTENTION WAS TO PURCHASE THE LAND FOR C ULTIVATING THE AGRICULTURE. AND ALSO I HAVE CULTIVATED THE AGRICULTURE AFTER PURCHA SING UP TO FOUR YEAR. AND IN FIFTH YEAR I THOUGHT THAT DEVELOPMENT OF HOUSE BUILDING I N SURROUNDING AREA IS GOING ON AND HENCE IT IS ADVISABLE TO CONVERT THE SAID LA ND IN NON-AGRICULTURAL AND I CONVERTED IN NON-AGRICULTURAL AND THEN SOLD OUT. LORDSHIP OF SUPREME COURT OF INDIA IN CASE OF CIT V /S GEMINI PICTURES CIRCUIT PVT. LTD. REPORTED IN 220ITR 43 HELD THAT- 'PROPERTY COMPRISING 17 ACRES, 16 GROUNDS AND 825 SQ . FT. WAS SITUATED ON MOUNT ROAD, MADRAS. !N THE SALE DEED, THE LAND WAS DESCRI BED AS AGRICULTURAL LAND. AFTER PURCHASING THE LAND, THE ASSESSEE ITSELF CONSTRUCTE D TWO LARGE BUILDINGS THEREON. THE BUILDINGS WERE BEING USED FOR NON-RESIDENTIAL P URPOSES. THE LAND WAS SURROUNDED ON ALL SIDES BY INDUSTRIAL AND COMMERCIA L BUILDINGS. NO AGRICULTURAL OPERATIONS WERE BEING CARRIED OUT ON ANY LAND NEARB Y. IN THE FACE OF THE ABOVE ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 5 CIRCUMSTANCES, THE MERE FACT THAT VEGETABLES WERE B EING RAISED THEREON AT THE TIME OF THE SALE OR FOR SOME YEARS PRIOR THERETO DI D NOT CHANGE THE NATURE AND CHARACTER OF THE LAND. OBVIOUSLY, IT WAS ONLY A STO P-GAP ACTIVITY. IT WAS NOT A TRUE REFLECTION OF THE NATURE AND NOT AGRICULTURAL LAND IN INDIA DURING THE YEAR OF THE WORDS 'CAPITAL ASSET'. THE SURPLUS RAISED ON THE SA LE OF LAND WAS ASSESSABLE AS CAPITA! GAIN.' IN THE CASE OF CIT V/S MOHAMMED MOHIDEEN REPORTED I N 176 ITR 393, THE DIVISION BENCH OF MADRAS HIGH COURT HAS HELD THAT 'PLOTTING AND DEVELOPING OF LAND BEFORE SALE BY ITSE LF WOULD NOT ESTABLISH THAT THE PERSON CONCERNED WAS INDULGING IN A TRADING ACTIVIT Y, IT MAY BE THAT FOR REALIZING THE MAXIMUM PRICE, HE UNDERTAKES CERTAIN ACTS WHICH ANY OTHER OWNER WOULD UNDERTAKE. REVENUE HAS TO ESTABLISH BY POSITIVE EVI DENCE THAT THE PURCHASE AND SALE OF PROPERTY WAS WITH THE VIEW TO EARN PROFITS THROUGH TRADING TRANSACTION. IN THE PRESENT CASE, CIRCUMSTANCES RELIED ON BY THE RE VENUE ONLY THROW SUSPICION ON THE ASSESSEE'S ACT OF PURCHASING A PROPERTY WHICH D ID NOT IMMEDIATELY YIELD INCOME, BUT THERE ARE NO MATERIALS TO FURTHER PROVE THAT THE ASSESSEE INTENDED TO INDULGE IN A TRADING ACTIVITY. TRANSACTION OF ASSES SEE IN PURCHASING AND SELLING THE PROPERTY DID NOT, THEREFORE, AMOUNT TO AN ADVENTURE IN THE NATURE OF TRADE. IN THE CASE OF INDIAN HUME PIPE CO. LTD. V/S CIT 19 5ITR 386, 107CTR 95(BOM), SHRI B. N. SHRIKRISHNA, J. AS HE THEN WAS HELD 'THE ASSESSEE, NOT ENGAGED IN REAL ESTATE BUSINESS, HAVING PURCHASED SEVERAL PIECES OF LAND SPORADICALLY AND SOLD THEM MAINLY IN DRIBLETS IN DIFFERENT YEARS WITHOUT DEVELOPING OR MAKING ANY IMPROVEMENT ON THE M, SURPLUS COULD NOT BE ASSESSABLE AS BUSINESS INCOME.' AGAIN, IN THE CASE OF B. NARASIMHA REDDY V/S ITO RE PORTED IN 48TTJ 329(HYDERABAD), THE DIVISION BENCH OF INCOME-TAX AP PELLATE TRIBUNAL, HYDERABAD 'A' BENCH, HAS HELD THAT THE ASSESSEE PLOTTING OUT HIS ANCESTRAL AGRICULTURA L LAND AND SELLING THEM AT THE RATE OF PER SQUARE YARD AFTER GETTING APPROVAL FOR THE LAYOUT FROM GRAM PANCHAYAT. FT WAS HELD THAT THE ASSESSEE NEVER DEAL T IN PURCHASE AND SALE OF REAL ESTATE. LAND WAS CAPITAL ASSET WITHIN THE MEANING O F SECTION 2(14) READ WITH SECTION 2(1 A) BEING SITUATED WITHIN 8 KMS. OF MUNI CIPAL LIMIT. TRANSACTION WAS, THEREFORE, TO REALIZE THE MAXIMUM FROM OUT OF CAPIT AL ASSET. PROFITS, THEREFORE, NOT INCOME FROM ADVENTURE IN THE NATURE OF TRADE BU T CAPITAL GAINS. ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 6 8. A PERUSAL OF THE ABOVE FACTUAL FIGURES SHOW THAT SP ECIFIC INQUIRIES WERE MADE DURING THE COURSE OF THE ASSESSMENT PROCEEDING S TO WHICH SPECIFIC REPLIES WERE FILED BY THE ASSESSEE AND ON THE BASIS OF THE INQUIRIES MADE BY THE A.O. AND ON THE BASIS OF THE SUBMISSIONS MADE B Y THE ASSESSEE, THE A.O. ACCEPTED THE CONTENTION OF THE ASSESSEE. 9. IN OUR CONSIDERED OPINION WHETHER A SALE TRANSACTIO N GIVE RISE TO CAPITAL GAINS OR BUSINESS INCOME IS ALWAYS A DEBATABLE ISSU E, THERE ARE JUDICIAL DECISION WHEREIN EVEN A SOLITARY TRANSACTION HAS BE EN ACCEPTED AS AN ADVENTURE IN THE NATURE OF TRADE AND THERE ARE OTHE R JUDICIAL DECISIONS WHEREIN EVEN MULTIPLE SALES HAVE BEEN ACCEPTED AS G IVING RISE TO CAPITAL GAINS TAX LIABILITY. THEREFORE, THE VIEW TAKEN BY T HE A.O. IS A POSSIBLE VIEW AND CANNOT MAKE THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 10. THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF SH RI PRAKASH BHAGCHAND. KHATRI IN TAX APPEAL NO. 177OF 2016 HAD THE OCCASIO N TO CONSIDER AN IDENTICAL ISSUE QUA THE FOLLOWING QUESTION OF LAW. (A) WHETHER THE TRIBUNAL IS RIGHT IN LAW AND ON FA CTS IN UPHOLDING THE ORDER PASSED BY THE CIT UNDER SECTION 263 OF-THE* ACT ON MERITS AND STILL S TORING THE ISSUE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 54 OF THE ACT: TO THE FILE OF ASSESSI NG OFFICER THROUGH THE WORKING OF ALLOWABILITY OF DEDUCTION UNDER SECTION 54F IS AVAILABLE IN THE ORD ER UNDER SECTION 263 WHICH IS NOT DISPUTED BY THE ASSESSEE BEFORE ITAT? 11. AND THE HONBLE HIGH COURT HELD AS UNDER:- 5. HAVING HEARD LEARNED COUNSEL FOR THE PARTIES AND HAVING PERUSED DOCUMENTS ON RECORD, WE NOTICE THAT THOUGH IN THE ORDER OF AS SESSMENT, THE ASSESSING ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 7 OFFICER HAS NOT DISCUSSED THE CLAIM OF THE ASSESSEE OF LONG TERM CAPITAL GAIN AND DEDUCTION UNDER SECTION 54F OF THE ACT OUT OF SUCH CAPITAL GAIN, HE HAD RAISED MULTIPLE QUERIES ABOUT SAID ASPECTS. IN THE ORDER S HEET, THE ASSESSMENT, OFFICER HAD CALLED UPON THE ASSESSEE TO FURNISH VARIOUS DET AILS INCLUDING 'THE DETAILS OF FIXED ASSETS AND DETAILS OF SALE OF LAND'. THUS, DE TAILS THE ASSESSEE HAD PROVIDED UNDER A COMMUNICATION MADE IN OCTOBER, 2012 IN WHIC H HE HAD PROVIDED DETAILS OF FIXED ASSETS AND DETAILS OF SALE OF LAND. ON 28. 2.2012, THE ASSESSEE HAD WRITTEN TO THE ASSESSING OFFICER AS UNDER; 'THIS IS WITH REFERENCE TO THE DATE OF CONSTRUCTION OF NEW ASSET FOR THE PURPOSE SECTION 54/54F WITHIN A PERIOD OF THREE YEARS WE WO ULD LIKE TO MENTION AS FOLLOWS: 1. SECTION 54F OF THE INCOME-TAX ACT PROVIDES FOR EXEM PTION FROM TAX ON LONG TERM CAPITAL GAINS ARISING FROM TRANSFER OF A CAPIT AL ASSET OTHER THAN A RESIDENTIAL HOUSE PROPERTY, PROVIDED THE NET CONSID ERATION IS INVESTED IN A NEW ASSET BEING A RESIDENTIAL HOUSE PROPERTY. FOR A VAILING OF THE EXEMPTION, THE ASSESSEE IS REQUIRED TO DO FOLLOWING ACTS IN AD DITION TO SATISFYING OTHER CONDITIONS: *PURCHASE THE RESIDENTIAL HOUSE PROPERTY WITHIN A P ERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER * CONSTRUCT THE RESIDENTIAL HOUSE PROPERTY WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE ASSET. 2. SECTION 54 OF THE INCOME TAX ACT DEALING WITH EX EMPTION FROM TAX FOR LONG TERM GAINS ON TRANSFER OF A LONG TERM CAPITAL ASSET OTHER THAN A RESIDENTIAL HOUSE PROVIDES AS UNDER (RELEVANT EXTRACTS ONLY): 'CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. 54F. (1) [SUBJECT TO THE .PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED F AMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL ASSET NO T FEEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGI NAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR [TWO YEARS] A FTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERI OD OF THREE YEARS AFTER THAT DATE [CONSTRUCTED, A RESIDENTIAL HOUSE] (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY,- ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 8 (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE N ET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; (B) (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE N ET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER SECTI ON 45: THE MAJOR POINTS TO BE NOTED ON THE ISSUE ARE AS U NDER: *SECTION 54F OF THE INCOME TAX ACT IS A BENEFICIAL PROVISION WHICH IS TO BE INTERPRETED LIBERALLY FOR ACHIEVING THE PURPOSE FOR WHICH IT WAS INSERTED. THE PURPOSE OF THE SECTION IS TO ENCOURAGE CONSTRUCTION OF THE HOUSES. *FOR THE PURPOSE OF INTERPRETATION OF THE WORD 'PUR CHASED' OR 'CONSTRUCTED' WHAT IS ESSENTIAL IS THE INVESTMENT OF THE CAPITAL GAIN IN THE RESIDENTIAL HOUSE. THE CAPITAL GAIN SHOULD BE PARTED WITH BY THE ASSES SEE AND INVESTED IN EITHER PURCHASING OR CONSTRUCTING THE HOUSE. 4. ONE OF THE CONDITIONS FOR GETTING BENEFIT OF SEC TION 54/54FIS THAT ON SALE OR TRANSFER OF THE OLD HOUSE, THE ASSESSEE SHOULD EITH ER PURCHASE A NEW HOUSE WITHIN ONE YEAR BEFORE SALE OR WITHIN 2 YEARS AFTER SALE O R SHOULD CONSTRUCT A NEW HOUSE WITHIN 3 YEARS OF THE SALE OF OLD HOUSE BY INVESTIN G THEREIN THE NEST AMOUNT OF CAPITAL GAIN ARISING FROM THE SALE OR TRANSFER OF T HE OLD HOUSE.' 6. IT CAN THUS BE SEEN THAT THOUGH FINAL ORDER OF A SSESSMENT WAS SILENT ON THIS ASPECT, THE ASSESSING OFFICER HAD CARRIED OUT INQUI RIES ABOUT THE NATURE OF SALE OF LAND AND ABOUT THE VALIDITY OF THE ASSESSEE'S CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. LEARNED COUNSEL FOR THE REVENUE HOWEVER SUBMITTED THAT THESE INQUIRIES WERE CONFINED TO THE CLAIM OF DEDUCTION U NDER SECTION 54F OF THE ACT IN THE CONTEXT OF FULFILLING CONDITIONS CONTAINED THER EIN AND MAY POSSIBLY HAVE NO RELEVANCE TO THE QUESTION WHETHER THE SALE OF LAND GAVE RISE TO A LONG TERM CAPITAL GAIN. LOOKING TO THE TENOR OF QUERIES BY TH E ASSESSING OFFICER AND DETAILS SUPPLIED BY THE ASSESSEE, WE ARE UNABLE TO ACCEPT S UCH A CONDITION. IN THAT VIEW OF THE MATTER, THE OBSERVATION OF THE TRIBUNAL THAT THE ASSESSING OFFICER HAVING MADE INQUIRIES AND WHEN TWO VIEWS ARE POSSIBLE, REV ISIONAL POWERS COULD NOT BE EXERCISED, CALLED FOR NO INTERFERENCE. SINCE WITH R ESPECT TO COMPUTATION AND ASSERTIONS OF OTHER ASPECTS OF DEDUCTIONS UNDER SEC TION 54F OF THE ACT THE TRIBUNAL HAS REMANDED THE PROCEEDINGS, NOTHING STAT ED IN THIS ORDER WOULD AFFECT EITHER SIDE IN CONSIDERATIONS OF SUCH CLAIM. ITA NO. 1675 /AHD/2014 . A.Y. 2009-10 9 12. RESPECTFULLY FOLLOWING THE AFOREMENTIONED DECISION OF THE HONBLE HIGH COURT, WE SET ASIDE THE ORDER OF THE LD. CIT MADE U /S. 263 OF THE ACT AND RESTORE THAT OF THE A.O. MADE U/S. 143(3) OF THE AC T. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 13- 02- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 13 /02/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD