ITO, Ward 3(2), Pune V. Shri Ghole Vikram Shantaram (HUF), Pune

ITA 1708/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1147 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Capital asset; Benefit of exemption
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1708/PN/2013 %' ( ')( / ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER, WARD 3(2), PUNE, P.M.T. BUILDING, SWARGATE, PUNE-4110037 ....... / APPELLANT ' / V/S. SHRI GHOLE VIKRAM SHANTARAM (HUF), 1097/2, SHIV APARTMENT, MODEL COLONY, PUNE 411016 PAN : AAAHG5471K / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI B.C. MALAKAR / DATE OF HEARING : 10-06-2015 / DATE OF PRONOUNCEMENT : 08-09-2015 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE REVENUE IMPUGNING THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 13-02 -2013 FOR THE ASSESSMENT YEAR 2008-09. 2. IN APPEAL, THE REVENUE HAS ASSAILED THE FINDINGS OF CO MMISSIONER OF INCOME TAX (APPEALS) ON FOLLOWING GROUNDS: 2 ITA NO. 1708/PN/2013, A.Y. 2008-09 (I) IN ACCEPTING THE SALE CONSIDERATION OF BUILDING AT RS.1.50 CRORES. THE SALE CONSIDERATION OF THE BUILDING WAS FIXED AT RS.2.75 CRORES VIDE REGISTERED SALE DEED. SUBSEQUENTLY, THE SALE CONSIDERATIO N WAS REDUCED TO RS.1.50 CRORES BY REGISTERED DEED OF RECTIFICATION. (II) IN ALLOWING THE EXPENDITURE RS.1.25 CORES TOWARDS THE SE TTLEMENT OF CLAIMS OF TENANTS/OCCUPANTS, U/S. 48 OF THE ACT IN THE ABS ENCE OF ANY COGENT EVIDENCE. (III) IN ALLOWING EXEMPTION U/S. 54 OF THE ACT IN RESPECT OF TWO RESIDENTIAL HOUSES. 3. THE FACTS OF THE CASE AS EMERGING FROM THE DOCUMENTS ON RECORD ARE : THE ASSESSEE IS AN HUF. THE ASSESSEE FILED ITS RETU RN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 31-03-2009 DECLARIN G TOTAL INCOME OF RS.85,810/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. ACCORDINGLY, NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 10-05-2010. AN AIR INFORMATION IN THE CASE OF ASSESSEE W AS RECEIVED IN RESPECT OF SALE OF IMMOVABLE PROPERTY. DURING THE COUR SE OF SCRUTINY ASSESSMENT, IT WAS FOUND THAT THE ASSESSEE HAD SOLD A PROPERTY SIT UATED AT BALGANDHARVA CHOWK, SHIVAJINAGAR, PUNE FOR A CONSIDERA TION OF RS.2.75 CRORES. AS PER THE CONTENTIONS OF THE ASSESSEE THE PROPERTY WAS OCCUPIED BY SEVERAL TENANTS/OCCUPANTS AND THE LITIGA TION WITH TENANTS/OCCUPANTS WAS PENDING IN VARIOUS COURTS. THE A SSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S. CHANDAN VENTURES ON 03-04-2007 WITH RESPECT TO THE SAID PROPERTY. THE DEV ELOPER IN LIEU OF TRANSFER OF DEVELOPMENT RIGHTS TOGETHER WITH A COVENANT TO ASSIGN, TRANSFER AND CONVEY ALL RIGHTS, TITLE, INTEREST AND CLAIMS BY THE OWNERS, AGREED TO PAY AN AMOUNT OF RS.2,75,00,000/- AS CONSIDERAT ION IN A PHASED MANNER STARTING FROM 12-12-2006 TO 05-07-2007. AS PER THE TERMS OF AGREEMENT, THE DEVELOPER TOOK THE RESPONSIBILITY AND OBLIGATION 3 ITA NO. 1708/PN/2013, A.Y. 2008-09 TO DEAL WITH THE TENANTS/OCCUPANTS AND SETTLE THEIR CLAIM S. THE SAID DEVELOPMENT AGREEMENT WAS DULY REGISTERED WITH THE REGISTRA R. THEREAFTER, THE ASSESSEE EXECUTED A REGISTERED SALE DEE D IN RESPECT OF THE SAID BUILDING IN FAVOUR OF M/S. CHANDAN VENTU RES ON 10-08-2007. AS PER THE SALE DEED THE SALE CONSIDERATION OF THE BUILDING WAS FIXED AT RS.2.75 CRORES. SUBSEQUENTLY, AFTER M ORE THAN 3 YEARS A DEED OF RECTIFICATION TO SALE DEED WAS EXECUTED O N 08-12-2010, WHEREIN, THE SALE CONSIDERATION TO BE RECEIVED BY THE ASS ESSEE IN RESPECT OF THE AFORESAID BUILDING WAS REDUCED FROM RS.2.75 C RORES TO RS.1.50 CRORES. THE REASON FOR REDUCING SALE CONSIDERATIO N AS MENTIONED IN DEED OF RECTIFICATION WAS, SHIFTING OF LIABILITY FROM VE NDORS TO VENDEE FOR GETTING THE PROPERTY VACATED FROM VARIOUS TENANTS/OCCUPANTS AND OTHER CLAIMANTS. IN THIS REGARD AFFIDAVITS WERE ALSO EXECUTED IMMEDIATELY AFTER THE REGISTRATION OF SALE DE ED. THE AFFIDAVIT DATED 10-08-2007 WAS EXECUTED BY THE CO-OWNER S OF THE PROPERTY AND AFFIDAVIT DATED 13-09-2007 WAS EXECUTED ON BEHALF O F M/S. CHANDAN VENTURES. ALL THE DOCUMENTS VIZ DEVELOPMENT AGR EEMENT, SALE DEED, RECTIFICATION DEED AND AFFIDAVITS ARE PLACED ON REC ORD IN THE FORM OF PAPER BOOK. THE ASSESSING OFFICER REJECTED THE CONTENTIONS OF THE ASSESSEE WITH RESPECT TO REDUCTION OF SALE CONSIDERA TION FROM RS.2.75 CRORES TO RS.1.50 CRORES. THE ASSESSING OFFICER HE LD THAT NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE AMOUNT OF RS.1.25 CRORES WAS PAID TO THE TENANTS/OCCUPANTS. THE ASSESSING OFFICER OBSERVED THAT WHILE FIXING THE SALE CONSIDERATION AT RS.2.75 CRORES, THE SO CALLED ENCUMBRANCES HAVE ALREADY BEEN FAC TORED. THE EXECUTION OF RECTIFICATION DEED IS AN AFTERTHOUGHT. FURTHER, THE ASSESSEE INVESTED THE AMOUNT OF CAPITAL GAIN ARISING FROM THE SALE OF BUILDING, FOR THE PURCHASE OF TWO FLATS AND CLAIMED 4 ITA NO. 1708/PN/2013, A.Y. 2008-09 EXEMPTION U/S. 54 OF THE ACT. THE ASSESSING OFFICER PARTLY ACCEPTED THE CLAIM AND RESTRICTED THE EXEMPTION U/S. 54 TO ONE HOUSE HAVING HIGHER VALUE. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER AC CEPTED THE CONTENTIONS OF THE ASSESSEE. THE COMMISSIONER OF INC OME TAX (APPEALS) CONCLUDED THAT THE AMOUNT OF RS.1.25 CRORES WA S PAID TO THE TENANTS/OCCUPANTS ON BEHALF OF THE ASSESSEE TO VACATE THE PREMISES. THUS, THE SAME SHOULD BE ALLOWED AS EXPENDITURE FROM THE TOTAL SALE CONSIDERATION. THE COMMISSIONER OF INCOME TAX (APPEALS) FURT HER ACCEPTED THE CLAIM OF THE ASSESSEE IN RESPECT OF DEDUCTIO N U/S. 54 ON BOTH THE FLATS. AGAINST THESE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT SUBMITTED THAT A PERUSAL OF DEVELOPMENT AGREEMENT AND SALE DEED WOULD CLEA RLY SHOW THAT THE SALE CONSIDERATION IN RESPECT OF PROPERTY SOLD B Y ASSESSEE WAS FIXED AT RS.2.75 CRORES. IN CLAUSE (3)(A) OF THE SALE DEED IT HAS BEEN CLEARLY STATED THAT THE ASSESSEE HAS GIVEN THE POSSES SION OF PREMISES OCCUPIED BY THE TENANTS/OCCUPANTS TO THE PURCHASER. THE ASSESSEE HAS ALSO HANDEDOVER THE PHYSICAL POSSESSION OF 6 UNITS/ROOMS ON VARIOUS FLOORS WHICH ARE IN THEIR POSSESSION TO THE PURCHASER. WHILE REFERRING TO CLAUSE (5)(G) OF THE DEVELOPMENT AGREEMENT THE LD. DR SUBMITT ED THAT THE FACT THAT PREMISES IS OCCUPIED BY THE TENANTS/OCCU PANTS AND LIABILITY TO GET THE PREMISES VACATED FROM THE TENANTS/OCC UPANTS WOULD LIE ON THE DEVELOPER HAS BEEN CLEARLY SPELLED OUT. IN VIEW OF THE 5 ITA NO. 1708/PN/2013, A.Y. 2008-09 CATEGORIC RECITAL IN BOTH THE DOCUMENTS THERE IS NO STRE NGTH IN THE ARGUMENT OF THE ASSESSEE THAT AN AMOUNT OF RS.1.25 CROR ES HAS BEEN PAID FROM THE AGREED SALE CONSIDERATION BY THE VENDEE FO R MAKING PAYMENT TO THE TENANTS/OCCUPANTS FOR VACATING THE PRE MISES. THE LD. DR FURTHER SUBMITTED THAT THE AFFIDAVITS FILED BY THE ASSESS EE STATING THAT THE SALE CONSIDERATION HAS BEEN WRONGLY MENTIONED IN THE SALE DEED ARE SELF SERVING DOCUMENTS AND AN AFTERTHOUGHT. TH E AFFIDAVITS AND THE DEED OF RECTIFICATION HAVE BEEN EXECUTED IN AN AT TEMPT TO REDUCE THE TAX LIABILITY ARISING FROM SALE OF CAPITAL ASSET. T HE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAD CLAIMED THE BEN EFIT OF EXEMPTION U/S. 54 OF THE ACT. THE EXEMPTION HAS BEEN C LAIMED IN RESPECT TO TWO RESIDENTIAL HOUSES, WHEREAS, UNDER THE P ROVISIONS OF SECTION 54(1), THE ASSESSEE CAN CLAIM EXEMPTION IN RESPECT OF ONE RESIDENTIAL HOUSE ONLY. THUS, THE BENEFIT OF EXEMPTION U/S. 54(1) ON SECOND FLAT HAS BEEN WRONGLY GRANTED BY COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR VEHEMENTLY SUPPORTED THE ASSESSMEN T ORDER AND PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER. 6. SHRI SUNIL GANOO APPEARING ON BEHALF OF THE ASSESSEE SU BMITTED THAT INITIALLY THE CONSIDERATION FOR SALE OF PROPERTY WAS FIX ED AT RS.2.75 CRORES. IT IS AN UNDISPUTED FACT THAT THE PROPERTY IN Q UESTION WAS OCCUPIED BY TENANTS/OCCUPANTS AND THERE WAS LITIGATION G OING ON BETWEEN THE ASSESSEE AND VARIOUS TENANTS/OCCUPANTS IN CIVIL COURTS AT DIFFERENT LEVELS. INITIALLY, IT WAS AGREED BETWEEN THE PARTIE S THAT THE ASSESSEE SHALL GET THE PREMISES VACATED. LATER ON, THE ASSESSEE REALIZED THAT IN VIEW OF PENDING LITIGATION IT WOULD BE VERY DIFFICULT TO G ET THE PREMISES VACATED FROM SEVERAL TENANTS/OCCUPANTS OCCUPY ING THE PROPERTY. ALTHOUGH, THE ASSESSEE HAD RECEIVED THE POS T DATED CHEQUES IN RESPECT OF SALE CONSIDERATION OF PROPERTY. HOWEVER, THE ASSESSEE HAD ONLY REALIZED RS.1.50 CRORES. THE REMAINING CHEQUES WERE NOT 6 ITA NO. 1708/PN/2013, A.Y. 2008-09 PRESENTED IN THE BANK AND WERE RETURNED TO THE PURCH ASERS. THE ASSESSEE EXECUTED AN AFFIDAVIT ON 10-02-2007 FOR REDUCING THE SALE CONSIDERATION BY RS.1.25 CRORES AND TRANSFERRING THE LIABILIT Y TO GET THE PREMISES VACATED TO THE DEVELOPER/PURCHASER I.E. M/S. CH ANDAN VENTURES. DEED OF RECTIFICATION WAS ALSO EXECUTED BETWEE N THE ASSESSEE AND PURCHASER WHICH WAS REGISTERED ON 08-12-2010. THE LD. AR OF THE ASSESSEE SUBMITTED THAT IT IS A WELL SETTLED LAW THAT THE RECTIFICATION DEED RELATES BACK TO THE DATE OF EXECUTION THE ORIGINAL REGISTERED DOCUMENT. THE LD. AR FURTHER SUBMITTED THAT AFTER THE EXECUTION OF REGISTERED SALE DEED, SUBSEQUENT EVENTS SHOULD ALSO BE C ONSIDERED THAT HAVE BEARING ON THE ORIGINALLY REGISTERED DOCUMENT. IN S UPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. SUNIL KUMAR ROY VS. M/S. BHOWRA KANKANEE COLLIERIES LTD. & OTHERS, 1970 SCC (3) 565; II. CIT VS. SHAKUNTALA KANTILAL, 190 ITR 56 (BOM); III. SUSHILA SHANTILAL THAVERI VS. UNION OF INDIA AND ANOTHER, 286 ITR 428 (BOM); AND IV. HIRA LAL RAM DAYAL VS. CIT, 122 ITR 461 (P&H). 6.1 IN RESPECT OF EXEMPTION U/S. 54 CLAIMED BY THE ASSESSEE , THE LD. AR SUBMITTED THAT FROM THE CAPITAL GAIN ARISING FROM THE S ALE OF BUILDING, TWO RESIDENTIAL FLATS WERE PURCHASED BY THE ASSESS EE IN THE SAME BUILDING. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN CATEGORIC FINDINGS THAT THE TWO FLATS PURCHASED BY THE AS SESSEE I.E. FLAT NO. 103 IN WING B1 AND 107 IN WING B2 ARE IN THE SAME BUI LDING. THE LD. AR SUBMITTED THAT THERE ARE SEVERAL CASE LAWS WHERE IN IT HAS BEEN HELD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM EXEMPTION U/S. 54 IN RESPECT OF TWO FLATS IF THEY ARE WITHIN THE SAME BUILDING. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE ORDER OF CO-O RDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI NARSING GOPAL PAT IL VS. ACIT 7 ITA NO. 1708/PN/2013, A.Y. 2008-09 IN ITA NO. 1544/PN/2012 FOR THE ASSESSMENT YEAR 2008-0 9 DECIDED ON 31-05-2013. THE LD. AR OF THE ASSESSEE PRAYED FOR DISMIS SING THE APPEAL OF THE REVENUE AND SUSTAINING THE FINDINGS OF COMMISS IONER OF INCOME TAX (APPEALS). 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO CONSIDERED THE DOCUMENTS THAT HAVE BEEN PLACED ON RECORD BY THE ASSESSEE IN THE FORM OF PAPER BOOK, AS WE LL AS, THE DECISIONS ON WHICH THE LD. AR HAS PLACED RELIANCE. TO UNDER STAND THAT FACTUAL MATRIX OF THE CASE, IT IS ESSENTIAL TO FIRST SEE THE SEQUENCE OF EVENTS. THE SAME ARE AS UNDER: 03-04-2007 REGISTERED DEVELOPMENT AGREEMENT IN RESPEC T OF PROPERTY, PLOT NO. 548, VILLAGE BHAMBURDA (SHIVAJINAGAR), PUNE BETWEEN THE ASSESSEE (AND OTHER CO-OWNERS) AND M/S. CHANDAN VENTURES. 10-08-2007 REGISTERED SALE DEED EXECUTED FOR THE ABOVE STATED PROPERTY BETWEEN THE PARTIES AFOREMENTIONED. 10-08-2007 AFFIDAVIT EXECUTED BY ASSESSEE AND OTHER CO- OWNERS FOR RECTIFICATION OF SALE DEED. 13-09-2007 AFFIDAVIT EXECUTED ON BEHALF OF M/S. CHANDAN VENTURES FOR RECTIFICATION OF SALE DEED. 08-12-2010 REGISTERED DEED OF RECTIFICATION OF SALE DEED. 8. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAD INITIALL Y ENTERED INTO DEVELOPMENT AGREEMENT WITH M/S. CHANDAN VENTURES IN RESPECT OF PROPERTY SITUATED AT SHIVAJINAGAR, PUNE. THE DEVELOPER IN CONSIDERATION OF TRANSFER OF EXCLUSIVE DEVELOPMENT RIGHTS RELATING TO THE SAID PROPERTY AND TRANSFER OF ALL OTHER RIGHTS, TITLES, INTEREST AND CLAIMS B Y THE 8 ITA NO. 1708/PN/2013, A.Y. 2008-09 ASSESSEE HAD AGREED TO PAY A CONSIDERATION OF RS.2.75 CR ORES. A DEVELOPMENT AGREEMENT WAS FOLLOWED BY A REGISTERED SALE D EED ON 10- 08-2007 IN FAVOUR OF M/S. CHANDAN VENTURES. THE SALE CON SIDERATION FOR TRANSFERRING THE TITLE IN THE PROPERTY WAS FIXED AT RS .2.75 CRORES TO BE PAID IN A PHASED MANNER. THE RELEVANT EXTRACT OF TH E SALE DEED DEALING WITH TRANSFER OF CONSIDERATION READS AS UNDER: 2. (A). THE PURCHASER PARTLY PAID AND AGREED TO PAY THE BALANCE AMOUNT OF THE SAID CONSIDERATION OF RS.2,75,00,000/ - (TWO CRORE SEVENTY FIVE LAKH) TO THE VENDOR AS FOLLOWS: AMOUNT (RS.) PARTICULARS 0,05,00,000/- PAID BY DULY DRAWN CROSSED CHEQUE NO. 240460, DATED 12.12.2006, ON THE PUNE PEOPLES CO-OPERATIVE BANK LTD., MARKET YARD BRANCH, PUNE: 411037, TO AND IN FAVUOR OF THE OWNER NO.1, RECEIPT OF THE AMOUNT WHEREOF IS HEREBY ACKNOWLEDGED BY THE OWNER NO.1. 0,05,00,000/- PAID BY DULY DRAWN CROSSED CHEQUE NO. 240505, DATED 02.04.2007, ON THE PUNE PEOPLES CO-OPERATIVE BANK LTD., MARKET YARD BRANCH, PUNE: 411037, TO AND IN FAVUOR OF THE OWNER NO.1, RECEIPT OF THE AMOUNT WHEREOF IS HEREBY ACKNOWLEDGED BY THE OWNER NO.1. 0,45,,00,000/- PAID BY DULY DRAWN CROSSED CHEQUE NO. 240515, DATED 05.06.2007, ON THE PUNE PEOPLES CO-OPERATIVE BANK LTD., MARKET YARD BRANCH, PUNE: 411037, TO AND IN FAVUOR OF THE OWNER NO.1, RECEIPT OF THE AMOUNT WHEREOF IS HEREBY ACKNOWLEDGED BY THE OWNER NO.1. 0,25,00,000/- PAID BY DEMAND DRAFT NO. 295304, DATE D 9/10/07, ON THE STATE BANK OF MYSORE, GOKHALENAGAR BRANCH, PUNE:411016, TO AND IN FAVOUR OF THE OWNER NO.1, RECEIPT OF THE AMOUNT WHEREOF IS HEREBY ACKNOWLEDGE D BY THE OWNER NO.1. 1,25,00,000/- PAYABLE BY THE PURCHASER TO AND IN FA VOUR OF THE VENDORS, ON OR BEFORE 19.08.2007. 25,00,000/- PAYABLE BY THE PURCHASER TO AND IN FAVO UR OF THE VENDORS, WITHIN 3 MONTHS. 2,75,00,000/- TOTAL (TWO CRORE SEVENTY FIVE LAKH ONLY) 9 ITA NO. 1708/PN/2013, A.Y. 2008-09 9. SUBSEQUENTLY, A REGISTERED DEED OF RECTIFICATION OF SA LE DEED WAS EXECUTED ON 08-12-2010 WHEREBY THE SALE CONSIDERATION WAS REDUCED TO RS.1.50 CRORES, AS THE ASSESSEE TRANSFERRED THE LIABILITY TO GET THE PREMISES VACATED FROM THE TENANTS/OCCUPANTS WHO WERE IN OCCUPATION OF THE PROPERTY TO THE PURCHASER. AS IS EVIDENT FROM TH E RECORDS, THAT AT THE TIME OF EXECUTION OF DEVELOPMENT AGREEMENT, AS WELL AS SALE DEED, THE FACT THAT THE PART OF PROPERTY IN QUESTION IS OCCUPIE D BY TENANTS/OCCUPANTS WERE IN THE KNOWLEDGE OF THE DEVELOPE R/PURCHASER I.E. M/S. CHANDAN VENTURES. THE DEVELOPER HAD TAKEN THE RESPONSIBILITY TO DEAL WITH THE TENANTS/OCCUPANTS AND THE OWNERS WER E RELIEVED FROM THE RESPONSIBILITY TO SETTLE WITH THE TENANTS AND OCCUPAN TS OF THE BUILDING. A SPECIFIC CLAUSE TO THIS EFFECT WAS INCORPORATED IN THE DEVELOPMENT AGREEMENT. THE RELEVANT EXTRACT OF CLAUSE 5 (G) OF THE DEVELOPMENT AGREEMENT IS REPRODUCED AS UNDER: 5 (G) HOWEVER, THE ENTIRE COST AND EXPENSES, RESPO NSIBILITIES AND OBLIGATIONS, LIABILITIES AND DUTIES OF DEVELOPMENT OF THE SAID PROPERTY, THE CONSTRUCTION OF THE BUILDING/S THEREO N, AND DEALING OR TRANSACTING WITH THE TENANTS LISTED IN ANNEXURE- II HEREIN, SO ALSO ALL THE MATTERS RELATING AND TOUCHING TO ANY O F THESE MATTERS, SHALL ENTIRELY BE BORNE BY THE DEVELOPER AND THE OW NERS SHALL NOT BE LIABLE OR RESPONSIBLE FOR THE SAME. IN CLAUSE 3(A) OF THE SALE DEED ALSO, IT WAS SPECIFICALLY STATE D THAT DE-JURE POSSESSION OF THE PREMISES OCCUPIED BY THE TENANTS/OCC UPANTS HAVE BEEN DELIVERED BY THE VENDORS TO THE PURCHASER. THE RELEVANT EXTRACT OF CLAUSE 3(A) OF THE SALE DEED READS AS UNDER: 3 (A) THE VENDORS HEREBY, GRANTED AND DELIVERED DE JURE POSSESSION OF THE PREMISES OCCUPIED BY THE OCCUPANTS, CLAIMING TO BE TENANTS OR OTHERWISE, UNTO AND IN FAVOUR OF THE PURCHASER, THE PARTICULARLY OR WHICH HAVE BEEN SEPARATELY FURNISHED BY THE VENDORS TO THE PURCHASER. 10 ITA NO. 1708/PN/2013, A.Y. 2008-09 10. A BARE LOOK AT THE SEQUENCE OF EVENTS SHOW THAT T HE TIME LAG BETWEEN THE EXECUTION OF REGISTERED DEVELOPMENT AGREEME NT AND EXECUTION OF SALE DEED WAS 4 MONTHS. IN BOTH THESE DOC UMENTS THE CONSIDERATION HAS BEEN FIXED AT RS.2.75 CRORES. THUS, IT IS EVIDENT THAT IT WAS A CONSCIOUS DECISION ON THE PART OF BOTH THE PAR TIES TO THE AGREEMENT AND SALE DEED TO FIX THE SALE CONSIDERATION AT RS.2.75 CRORES AFTER MAKING ALLOWANCES FOR THE EXPENDITURE TO BE INCURRED FOR GETTING THE PREMISES VACATED FROM THE TENANTS/OCCUPANTS OF THE BUILDING. A CONJOINT READING OF THE DEVELOPMENT AGREEMENT AND SALE D EED WOULD MAKE IT CLEAR THAT THE RESPONSIBILITY AND OBLIGATION TO GET THE PREMISES VACATED FROM THE TENANTS/OCCUPANTS OR THE OCCUPANTS WERE ON THE DEVELOPER/PURCHASER. THE ASSESSEE HAD HANDED OVER LE GAL POSSESSION OF THE PROPERTY TO THE PURCHASER AT THE TIME OF EXECUTION OF SALE DEED . 11. THE LD. AR OF THE ASSESSEE DURING THE COURSE OF SUBM ISSIONS REFERRED TO THE AFFIDAVIT EXECUTED BY THE ASSESSEE AND O THER CO-OWNERS ON 10-08-2007. AS PER THE CONTENTIONS OF THE LD. AR, AFTER THE EXECUTION OF SALE DEED THE OWNERS REALIZED THAT THEY WOU LD NOT BE ABLE TO GET THE PREMISES VACATED AND THUS, THEY AGREED TO REDUCE THE SALE CONSIDERATION FROM RS.2.75 CRORES TO RS.1.50 CRORES AND MA DE ALLOWANCES OF RS.1.25 CRORES FOR PAYMENT TO THE TENANTS/ OCCUPANTS AND OCCUPANTS OF THE BUILDING. THE PURCHASER ALSO EXECUT ED AFFIDAVIT ON SIMILAR LINES ON 13-09-2007. THE AFFIDAVIT EXECUTED BY THE ASSESSEE AND OTHER CO-OWNERS IS AT PAGES 95 TO 98 OF THE PAPER BOOK AND THE AFFIDAVIT EXECUTED ON BEHALF OF THE PURCHASER I.E. M/S. CHANDA N VENTURES IS AT PAGES 91 TO 94 OF THE PAPER BOOK. WHILE EXAMINING THE SAID DOCUMENTS IT IS OBSERVED THAT THE STAMP PAPER US ED FOR MAKING AFFIDAVIT BY THE ASSESSEE AND OTHER CO-OWNERS WAS PURCH ASED ON AUGUST 9, 2007 I.E. A DAY PRIOR TO THE EXECUTION OF SALE DEED. WE ARE UNABLE TO UNDERSTAND AS TO HOW THE ASSESSEE WOULD KNOW THAT S OME ERROR WOULD 11 ITA NO. 1708/PN/2013, A.Y. 2008-09 BE COMMITTED IN THE EXECUTION OF SALE DEED WHICH HAS TO B E RECTIFIED IMMEDIATELY THEREAFTER. AS HAS BEEN OBSERVED EARLIER, THE ASSESSEE AND OTHER CO-OWNERS HAD TIME OF 4 MONTHS BETWEEN THE DATE OF EXECUTION OF DEVELOPMENT AGREEMENT AND THE SALE DEED TO THINK OVER THE MANNER IN WHICH PREMISES HAS TO BE VACATED FROM THE TENANTS/OCCU PANTS WHO ARE ALREADY LITIGATING WITH THE OWNERS. WE FAIL TO UNDERSTAND, WH AT MOTIVATED THE ASSESSEE TO EXECUTE AFFIDAVIT ABRUPTLY AFTE R THE EXECUTION OF THE SALE DEED, WHEN THEY HAD 4 MONTHS TIME TO TAKE A CONCISIONS DECISION AND FORMULATE A PLAN TO GET THE PREMISES VACATED . WHEN CONFRONTED WITH THIS QUESTION THE LD. AR HAD NO REPLY. 12. THE VENDORS REALIZED THE PURPORTED MISTAKE IMMEDIATEL Y AFTER THE EXECUTION OF SALE DEED ON 10-08-2007 AND EXECUTED AN A FFIDAVIT ON SAME DAY TO RECTIFY IT. WHEREAS, THE PURCHASER REALIZED THE MISTAKE AFTER MORE THAN A MONTH AND THEREAFTER EXECUTE AFFIDAVIT O N 13-09-2007 ON SIMILAR LINES FOR REDUCING THE SALE CONSIDERATION IN LIEU OF TAKING THE RESPONSIBILITY TO GET THE PREMISES VACATED. AFTER MORE TH AN 3 YEARS OF THE EXECUTION OF THE SALE DEED THE PARTIES TO THE SALE A GREEMENT EXECUTE REGISTERED RECTIFICATION DEED ON 08-12-2010 TO REDUCE TH E SALE CONSIDERATION FROM RS.2.75 CRORES TO RS.1.50 CRORES AND AL LOW RS.1.25 CRORES TO BE PAID BY THE PURCHASER TO SETTLE THE CLAIM OF THE TENANTS/OCCUPANTS OF THE PROPERTY. THE MANNER IN WHICH THE TRANSACTIONS HAVE BEEN CARRIED OUT FOR REDUCING THE SALE CONSIDERATION CLEARLY SHOWS THAT IT WAS A DUBIOUS METHOD TO REDUCE T HE TAX LIABILITY AND THE EXECUTION OF REGISTERED DEED OF RECTIFICATION IS AN ATTEMPT TO PLUG THE LEGAL LACUNA. THE WAY IN WHICH THE ENTIRE EPISODE FOR REDUCTION OF SALE CONSIDERATION HAS BEEN WEAVED SMACKS MALAFIDE. 13. THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY EVIDEN CE TO SHOW THAT THE AMOUNT OF RS.1.25 CRORES THAT HAS BEEN REDUC ED FROM THE 12 ITA NO. 1708/PN/2013, A.Y. 2008-09 SALE CONSIDERATION WAS AT ALL PAID TO ANY OF THE TENANTS/O CCUPANTS OF THE BUILDING. EXCEPT FOR SELF SERVING DOCUMENTS, THERE IS NO OTHER DOCUMENT ON RECORD THAT CAN SUBSTANTIATE THE CONTENT IONS OF THE ASSESSEE. MERE FACT THAT THE RECTIFICATION DEED IS REGIST ERED IT WOULD NOT MEAN THAT ITS CONTENTS ARE SACROSANCT AND HAVE T O BE TAKEN ON FACE VALUE. 13.1 THE LD. AR OF THE ASSESSEE IN SUPPORT OF HIS SUBMISSIO NS HAS PLACED RELIANCE ON THE DECISION OF HON'BLE PUNJAB AND HARY ANA HIGH COURT RENDERED IN THE CASE OF HIRA LAL RAM DAYAL VS. CIT (SUPRA). IN THE SAID CASE A REGISTERED SALE DEED WAS EXECUTED BY A SSESSEE IN FAVOUR OF A CO-OPERATIVE SOCIETY PURPORTING TO SELL THE ASSESSEE S FACTORY. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE CONTEN DED THAT THE SALE DEED WAS A SHAM TRANSACTION AND NO CAPITAL GAIN ACC RUED TO THE ASSESSEE. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE. IN THE FIRST APPEAL, THE FINDINGS OF ASSESSING OFFICER WERE C ONFIRMED. ON FURTHER APPEAL, THE TRIBUNAL HELD THAT THE REGISTERED SALE DEED WAS A SACROSANCT DOCUMENT AND REFUSED TO LOOK INTO OTHER MAT ERIAL PRODUCED BY THE ASSESSEE TO SUBSTANTIATE ITS CLAIM THAT THE SALE TRANSACT ION WAS A SHAM ONE. THE MATTER TRAVELLED TO THE HON'BLE HIGH COU RT, THE HON'BLE HIGH COURT REVERSED THE FINDINGS OF THE TRIBUNAL BY OBSERVING AS UNDE R: IT IS NO DOUBT TRUE THAT THE EVIDENTIARY VALUE HAS TO BE ATTACHED TO A REGISTERED DOCUMENT BUT THE SAID DOCUMENT CANNOT BE A FINAL WORD IN THE MATTER. IT HAS TO BE REMEMBERED THAT CAPITAL GAINS ACCRUE ONLY IF THERE IS A SALE OR ANY OTHER TRANSFER OF THE CAPITAL ASSET A ND IF THE ASSESSEE IS ABLE TO PROVE THAT IN FACT NO SALE TOOK PLACE IN TH AT CASE NO CAPITAL GAIN ACCRUED WHICH COULD BE ASSESSED TO INCOME TAX. IF T HE ASSESSEE, EVEN IN THE FACE OF THE REGISTERED SALE DEED, IS ABLE TO PR OVE BY COGENT EVIDENCE AND SATISFY THE TRIBUNAL THAT NO SALE IN FACT TOOK PLACE, IN THAT CASE, THE TRIBUNAL HAS TO COME TO THE CONCLUSION THAT THERE W AS NO CAPITAL GAIN. AS IS APPARENT FROM THE OBSERVATIONS MADE IN THE ORDER OF THE TRIBUNAL, THE TRIBUNAL WAS UNDER THE MISAPPREHENSION THAT THE REG ISTERED SALE DEED WAS FINAL AND, THEREFORE, REFUSED TO LOOK INTO THE OTHER MATERIAL PRODUCED 13 ITA NO. 1708/PN/2013, A.Y. 2008-09 BY THE ASSESSEE WITH A VIEW TO PROVE ITS CASE THAT THE SALE TRANSACTION WAS A SHAM TRANSACTION. IT IS, HOWEVER, A DIFFERENT MATTER THAT THE TRIBUNAL MAY NOT FEEL CONVINCED THAT THE SALE TRANS ACTION WAS A SHAM TRANSACTION AND REFUSE TO RELY ON THE MATERIAL PROD UCED BY THE ASSESSEE FOR GOOD REASONS, BUT THE SAID MATERIAL HAD TO BE T AKEN INTO CONSIDERATION AND COULD NOT BE IGNORED. IN THE PRESENT CASE, WE HAVE CONSIDERED ALL THE DOCUME NTS WHICH HAVE BEEN PLACED ON RECORD BY THE ASSESSEE. AFTER EXA MINING THE SAME WE ARE OF THE CONSIDERED VIEW THAT THE DOCUMENTS EXECU TED SUBSEQUENT TO THE EXECUTION OF THE SALE DEED ARE SELF SERVING DOCUM ENTS TO REDUCE THE TAX LIABILITY. NO EFFORT HAS BEEN MADE BY THE ASSESSE E TO SHOW THAT THE AMOUNT OF RS.1.25 CRORES THAT HAS BEEN REDUCED FROM THE SALE CONSIDERATION HAS ACTUALLY BEEN PAID TO THE TENANTS/OCC UPANTS OF THE BUILDING. 13.2 THE LD. AR OF THE ASSESSEE IN SUPPORT OF HIS SUBMISSION S HAS FURTHER PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA RENDERED IN THE CASE OF SUNIL KUMAR ROY VS. M/S. BH OWRA KANKANEE COLLIERIES LTD. & ORS. (SUPRA). IN THE SAID CASE, TH E HON'BLE APEX COURT HELD THAT ANY DOCUMENT WHICH VARIES THE ESS ENTIAL TERMS AND CONDITIONS AS SPELT OUT IN THE REGISTERED DOCUMENT M UST BE REGISTERED. THE HON'BLE APEX COURT FURTHER HELD THAT TH E REGISTRATION OF AN AGREEMENT IS NECESSARY WHICH REDUCES THE RENT OF AN EXISTING REGISTERED LEASE. THE LAW LAID DOWN BY THE HON'BLE SUPREM E COURT OF INDIA IS WELL ACCEPTED AND WE RESPECTFULLY FOLLOW THE SAME. THERE IS NO SECOND OPINION THAT THE SUBSEQUENT DOCUMENT WHICH SUBS TANTIALLY AMENDS THE TERMS AND CONDITIONS OF THE REGISTERED DOCUM ENT HAS TO BE REGISTERED. IN THE PRESENT CASE, NO DOUBT THE AMENDME NT TO SALE DEED HAS BEEN MADE BY EXECUTION OF REGISTERED RECTIFICATION DEE D, HOWEVER, IT IS THE SURROUNDING CIRCUMSTANCES THAT RAISES AN EYE O F SUSPICION ON THE MOTIVE OF CREATING SUCH DOCUMENT. 14 ITA NO. 1708/PN/2013, A.Y. 2008-09 13.3 THE LD. AR HAS ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF SUSHILA SHANTI LAL JHAVERI VS. UNION OF INDIA AND ANOTHER (SUPRA). IN THE SAID CASE THE HON'BLE HIGH COURT HELD THAT THE SUBSEQUENT EVENTS OR DEVELOPM ENTS OCCURRING PENDENT LITE CAN BE CONSIDERED IF THEY HAVE THE EFFECT OF O VERSHADOWING THE CASE FOUND BY THE COURT BELOW. THE HON'BLE HIGH COURT FURTHER HELD THAT IN VIEW OF THE IMPACT OF THE SUBSEQUENT EVENTS ON THE OPERATIVE PART OF THE ORDER UNDER CHALLENGE, WHICH HAD COMPLETELY CHANGED THE COLOUR OF THE ORIGINAL FINDINGS, IN THE PECULIAR FACTS AND CIRCUM STANCES OF THIS CASE, THE ORDER OF THE COMMISSIONER WAS TO BE SET ASIDE, AND IT WOULD BE NECESSARY FOR THE COMMISSIONER TO RECONSIDER TH E APPLICATION FILED AND THE SUBMISSIONS MADE BY THE ASSESSEE ON THE ME RITS IN THE LIGHT OF THE SUBSEQUENT EVENTS FOLLOWING THE PRINCIPLES OF NAT URAL JUSTICE AND KEEPING ALL RIVAL CONTENTIONS OPEN. WE FIND THAT THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIG H COURT IN THE ABOVE SAID CASE HAS BEEN FOLLOWED IN THE PRESENT CASE. TH E SUBSEQUENT EVENTS WHICH HAVE TAKEN PLACE AFTER THE EXE CUTION OF SALE DEED HAVE BEEN DULY CONSIDERED. SINCE, THE SUBSEQUENT DOCUMENTS EXECUTED DO NOT INSPIRE CONFIDENCE IN THE ABSENCE OF COR ROBORATIVE EVIDENCE, THEREFORE, THEY WOULD NOT MAKE ANY IMPACT OF THE COVENANTS OF ORIGINAL DOCUMENT. 13.4 THE LD. AR HAS ALSO PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. SHAKUNTALA KANTILAL (SUPRA). IN THE SAID CASE THE HON'BLE HIGH COURT HAS EX PLAINED THE TERMS FULL VALUE OF CONSIDERATION IN THE CASE OF COMPUTING CAPITAL GAINS. THE HON'BLE HIGH HELD: .THE LEGISLATURE, WHILE USING THE EXPRESSION 'FULL VALUE OF CONSIDERATION', IN OUR VIEW, HAS CONTEMPLATED BOTH ADDITIONS TO AS WELL AS DEDUCTIONS FROM THE APPARENT VALUE. WHAT IT MEAN S IS THE REAL AND 15 ITA NO. 1708/PN/2013, A.Y. 2008-09 EFFECTIVE CONSIDERATION. THAT APART, SO FAR AS CLAU SE (I) OF SECTION 48 IS CONCERNED, WE FIND THAT THE EXPRESSION USED BY THE LEGISLATURE IN ITS WISDOM IS WIDER THAN THE EXPRESSION 'FOR THE TRANSF ER'. THE EXPRESSION USED IS 'THE EXPENDITURE INCURRED WHOLLY AND EXCLUS IVELY IN CONNECTION WITH SUCH TRANSFER'. THE EXPRESSION 'IN CONNECTION WITH SUCH TRANSFER' IS, IN OUR VIEW, CERTAINLY WIDER THAN THE EXPRESSION 'F OR THE TRANSFER'. HERE AGAIN, WE ARE OF THE VIEW THAT ANY AMOUNT THE PAYME NT OF WHICH IS ABSOLUTELY NECESSARY TO EFFECT THE TRANSFER WILL BE AN EXPENDITURE COVERED BY THIS CLAUSE. IN OTHER WORDS, IF, WITHOUT REMOVIN G ANY ENCUMBRANCE INCLUDING THE ENCUMBRANCE OF THE TYPE INVOLVED IN T HIS CASE, SALE OR TRANSFER COULD NOT BE EFFECTED, THE AMOUNT PAID FOR REMOVING THAT ENCUMBRANCE WILL FALL UNDER CLAUSE (I). ACCORDINGLY , WE AGREE WITH THE TRIBUNAL THAT THE SALE CONSIDERATION REQUIRES TO BE REDUCED BY THE AMOUNT OF COMPENSATION. THE FIRST QUESTION IS, THER EFORE, ANSWERED IN THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. THIS IS A WELL SETTLED LAW THAT WHILE DETERMINING CAPITAL GAINS BOTH ADDITIONS AS WELL AS DEDUCTION FROM THE APPARENT VALU E HAVE TO BE GIVEN EFFECT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT PLACED ANY DOCUMENT ON RECORD TO SUBSTANTIATE THE EXPENDITURE INC URRED TOWARDS THE TRANSFER OF PROPERTY IN QUESTION. SO FAR AS RS.1.25 CR ORES ALLEGEDLY UTILIZED FOR PAYMENT TO TENANTS/OCCUPANTS OF BUILDING IS CON CERNED, NO EVIDENCE, WHATSOEVER HAS BEEN FURNISHED BY ASSESSEE EXC EPT SELF SERVING AFFIDAVITS AND DEED OF RECTIFICATION. MOREOVER, A PERU SAL OF DEVELOPMENT AGREEMENT AND SALE DEED WOULD SHOW THAT TH E LIABILITY TO SETTLE THE CLAIM OF THE TENANTS/OCCUPANTS OF BUILDING IS OF T HE DEVELOPER/PURCHASER AND NOT THAT OF THE ASSESSEE OR THE OTHER CO-OWNERS. 14. THUS, IN VIEW OF OUR ABOVE DETAILED FINDINGS THE GROUN D NOS. 1 TO 3 RAISED BY THE REVENUE IN APPEAL ARE ALLOWED. 15. THE SECOND ISSUE RAISED BY THE REVENUE IN APPEAL IS W ITH REGARD TO CLAIM OF EXEMPTION U/S. 54 OF THE ACT. THE REVENUE HAS ASSAILED THE 16 ITA NO. 1708/PN/2013, A.Y. 2008-09 FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING EXEMPTION U/S. 54 IN RESPECT OF TWO RESIDENTIAL HOUSES. THE LD. DR HAS SUBMITTED THAT THE EXPRESSION USED IN SECTION 54 IS A R ESIDENTIAL HOUSE THAT MEANS ONE HOUSE. THE ASSESSEE CANNOT CLAIM EXEMP TION U/S. 54 ON MORE THAN ONE HOUSE. ON THE OTHER HAND THE LD. AR OF THE ASSESSEE HAS STATED THAT EXPRESSION A RESIDENTIAL HOUSE DOES N OT MEAN ONE RESIDENTIAL HOUSE. THE TRIBUNAL HAS BEEN CONSISTENTLY TA KING A VIEW THAT A RESIDENTIAL HOUSE DOES NOT MEAN ONE RESIDENTIAL HOUSE. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF TRIBUN AL IN THE CASE OF SHRI NARSING GOPAL PATIL VS. ASST. COMMISSIONER OF IN COME IN ITA NO. 1544/PN/2012 FOR THE ASSESSMENT YEAR 2008-09 DECIDED ON 31-05-2013. WE FIND THAT THIS ISSUE HAS BEEN DEALT BY THE HON'BLE HIGH COURTS AND VARIOUS BENCHES OF THE TRIBUNAL. THE EXPRES SION A RESIDENTIAL HOUSE USED IN THE SECTION 54 DOES NOT RESTR ICT THE EXEMPTION FOR INVESTMENT IN ONE RESIDENTIAL HOUSE. THIS ISSU E HAS BEEN DECIDED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF SHRI NARSING GOPAL PATIL VS. ASST. COMMISSIONER OF INCOME (SUPRA). THE RELEVANT EXTRACT OF THE ORDER IN SAID CASE IS AS UNDER: 20. FROM THE AFORESAID DISCUSSION, IT IS TO BE UND ERSTOOD THAT THE PRESENCE OF THE EXPRESSION A RESIDENTIAL HOUSE UN DER SECTION 54F OF THE ACT IS NOT TO BE UNDERSTOOD TO MEAN THAT THE ASSESS EE IS TO ACQUIRE A SINGLE RESIDENTIAL UNIT. SECTION 54F REQUIRES THE A SSESSEE IS TO ACQUIRE A RESIDENTIAL HOUSE AND SO LONG AS THE ASSESSEE ACQU IRES A BUILDING, WHICH MAY BE CONSTRUCTED IN A MANNER SO AS TO CONSI ST OF SEVERAL UNITS WHICH CAN, IF THE NEED ARISES BE USED AS INDEPENDEN T UNITS AS RESIDENCES THE REQUIREMENT OF SECTION 54F SHOULD BE TAKEN TO H AVE BEEN SATISFIED. IN OUR CONSIDERED OPINION, THE AFORESAID DECISION OF T HE HONBLE DELHI HIGH COURT SUPPORTS THE PROPOSITION CANVASSED BY THE ASS ESSEE AND NEGATES THE OBJECTION RAISED BY THE REVENUE. ON THIS POINT, IT WOULD ALSO BE WORTHWHILE TO NOTICE THAT THE HONBLE DELHI HIGH CO URT HAS REFERRED WITH APPROVAL TO AN EARLIER JUDGEMENT OF THE HONBLE KAR NATAKA HIGH COURT IN THE CASE OF CIT VS. D. ANANDA BASAPPA (SUPRA) WHERE IN THE SIMILAR PROPOSITION WAS DEALT WITH. THE JUDGEMENT OF THE HO NBLE KARNATAKA 17 ITA NO. 1708/PN/2013, A.Y. 2008-09 HIGH COURT HAS THE IMPLIED APPROVAL OF THE HONBLE SUPREME COURT, WHEN THE SLP FILED BY THE REVENUE WAS DISMISSED ON 10.08 .2009 (SUPRA). 21. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE REVENUE TO DENY EXEMPTION UNDER SECTION 54F OF THE ACT MERELY ON THE GROUND THAT THE RESIDENTIAL BUILDING CONSTRUCTED BY THE ASSESSEE CONSISTED OF SEVERAL INDEPENDENT RESIDENTI AL UNITS. WE RESPECTFULLY FOLLOW THE SAME AND HOLD THAT THE ASSESS EE IS ELIGIBLE TO CLAIM BENEFIT OF SECTION 54 ON BOTH THE FLATS IN TH E SAME BUILDING. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMMISSIO NER OF INCOME TAX (APPEALS) ON THIS ISSUE. ACCORDINGLY, THIS GROUN D OF APPEAL OF THE REVENUE IS REJECTED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED ON TUESDAY, THE 08 TH DAY OF SEPTEMBER, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 08 TH SEPTEMBER, 2015 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-II, PUNE 4. ' / THE CIT-II, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE