B Prabhakar Reddy (HUF), Hyderabad V. ITO, Wd-4, Karimnagar

ITA 1800/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4832 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Gift
• Section: 143(3); 54F; 56(2); 234B; 54; 56; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 25/HYD/2013 ASSESSMENT YEAR: 2008-09 B. PRABHAKAR REDDY, APPELLANT KARIMNAGAR. (PAN AFIB0872J) VS. INCOME-TAX OFFICER, RESPONDENT WARD 4, KARIMNAGAR. ITA NO. 1800/HYD/2012 ASSESSMENT YEAR: 2008-09 B. PRABHAKAR REDDY(HUF), APPELLANT KARIMNAGAR. (PAN AAGHB6632K) VS. INCOME-TAX OFFICER, RESPONDENT WARD 4, KARIMNAGAR. APPELLANT BY : SHRI S. RAMA RAO REVENUE BY : SHRI K.J. RAO DATE OF HEARING : 25/06/2013 DATE OF PRONOUNCEMENT : 21/08/ 2013 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: BOTH THESE APPEALS PREFERRED BY THE ASSESSEE (IN I NDIVIDUAL AND HUF CAPACITY) ARE DIRECTED AGAINST SEPARATE ORDER S OF CIT(A)-III, HYDERABAD, FOR THE ASSESSMENT YEAR 2008-09. 2 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY ITA NO. 25/H/12 IN CASE OF B. PRABHAKAR REDDY (INDI VIDUAL) 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL DERIVES INCOME FROM MANUFACTURE OF CEME NT PIPES. FOR THE YEAR UNDER CONSIDERATION, HE FILED RETURN OF IN COME ON 26/06/2009 DECLARING TOTAL INCOME OF RS. 2,11,360/- AND AGRICULTURAL INCOME OF RS. 30,000/-. THE RETURN WAS PROCESSED U/S 143(1) ON 05/03/2010 AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE U/S 143(2) WAS ISSUE D. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FILED ALL THE DETA ILS WHICH WERE REQUIRED. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO MENTION THE SOURCE FOR INVESTMENT OF RS. 9,20,000/- WITH M/S KAKATIYA CEMENT PRODUCTS ON 26/10/2007 TOWARDS ADDITIONAL CAPITAL. THE ASSESSEE EXPLAINED THAT THE HUF CONSISTING OF HIMSELF AND HIS TWO SONS HELD LAND AD MEASURING 733.33 SQ.YARDS ALONG WITH A HOUSE SITUATED AT SURVEY NO. 836;838 AND 838/A AT RAMPUR, KARIMNAGAR ON 24/10/2007 AND RECEI VED CONSIDERATION OF RS. 31,90,000/-. IT WAS SUBMITTED THAT OUT OF THE SAID AMOUNT OF RS. 31,90,000/-, RS. 25,00,000/- WAS UTILIZED BY THE ASSESSEE FOR HIS OWN PURPOSES. IT WAS SUBMITTED TH AT A SUM OF RS. 25 LAKHS RECEIVED FROM HUF DOES NOT REPRESENT THE G IFT BY THE HUF BUT IT PRESENTS AN AMOUNT RECEIVED FROM HUF. 4. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENT ION OF THE ASSESSEE AND ADDED THE INVESTMENT MADE OF RS. 9,20, 000/- ON THE 3 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY GROUND THAT THERE IS NO EVIDENCE TO SHOW THAT THE A MOUNT OF RS. 25 LAKHS WAS RECEIVED PRIOR TO THE DATE OF INVESTMENT. THE ASSESSING OFFICER ALSO TREATED THE AMOUNT OF RS. 25 LAKHS AS THE INCOME OF THE ASSESSEE U/S 56(2)(VI) OF THE IT ACT. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT(A). 6. BEFORE THE CIT(A), THE LEARNED AR OF THE ASSESSE E SUBMITTED THAT THE FAMILY PROPERTY WAS SOLD BY THE HUF ON 24/ 10/2007 AND A COPY OF THE SALE DEED WAS FURNISHED TO THE CIT(A), WHICH WAS REGISTERED WITH THE SUB-REGISTRAR ON 26/10/2007, ON WHICH DATED THE FULL CONSIDERATION WAS RECEIVED BY THE HUF. OUT OF THE TOTAL CONSIDERATION OF RS. 31,90,000/-, THE ASSESSEE GOT HIMSELF FOR RS. 25 LAKHS. THE AR FURTHER SUBMITTED THAT THIS INFORM ATION WAS FILED IN THE RETURN OF INCOME ON 31/03/2010 MUCH PRIOR TO TH E DATE OF INVESTMENT. IT WAS CONTENDED BY THE AR THAT THE STA TEMENT OF ASSESSING OFFICER THAT THERE IS NO EVIDENCE TO SHOW THAT THE AMOUNT WAS AVAILABLE FROM OUT OF THE FUND OF HUF AS ON THE DATE OF INVESTMENT IS TOTALLY INCORRECT. THE AR ARGUED THAT THERE HAS BEEN MISTAKE IN THE AMOUNT OF FIGURES IN THE BOOKS OF AC COUNT AS THE ASSESSEE HAD MENTIONED THE AMOUNT OF RS. 25 LAKHS A S GIFT RECEIVED BY THE INDIVIDUAL FROM HUF. THE AR OF THE ASSESSEE SUBMITTED THAT THERE WAS A FAMILY DISPUTE REGARDING ENTRIES MADE A ND THE ASSESSEE THEREAFTER WHILE RESOLVING THE DISPUTE INDICATED TO THE FAMILY THAT THE AMOUNT OF RS. 25 LAKHS WAS RECEIVED MENTIONED A S GIFT WHEREAS IT REPRESENTS ONLY THE REPAYABLE ADVANCE. THE AR, T HEREFORE, SUBMITTED THAT THE PROVISIONS OF SECTION 56(2)(VI) HAS NO APPLICATION 4 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY TO THE FACTS OF THE PRESENT CASE. THE LEARNED AR F URTHER SUBMITTED THAT THE AMOUNT RECEIVED FROM THE RELATIVES ARE EXE MPT FROM OPERATION OF SECTION 56(2) AS THE AMOUNT RECEIVED F ROM THE HUF BY AN INDIVIDUAL IS ONLY BY WAY OF ENHANCEMENTS AND NO T IN ANY OTHER MANNER AND PROVISO TO CLAUSE (VI) OF SECTION 56(2) MENTIONED CLEARLY ANY AMOUNT RECEIVED BY WAY OF ANY ENHANCEMENTS AND PROVISION IS EXCLUDED FROM THE OPERATION OF THE ACT. IT WAS ARGU ED BY THE AR THAT IF THE AMOUNT IS NOT TO BE CONSIDERED AS GIFT AND NOT TO BE CONSIDERED AS LOAN WHICH SHALL HAVE TO BE CONSIDERE D AS A RECEIPT BY WAY OF ENHANCEMENTS, WHICH IS ALSO EXCLUDED FROM TH E OPERATION OF SECTION 56(II) OF THE IT ACT. 7. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) HELD AS FOLLOWS: 6.2 I HAVE CONSIDERED CAREFULLY THE FACTS AND EVIDE NCE AND I FIND THAT THE APPELLANT HAS ONLY CHANGED HIS STAND ON ACCOUNT OF THE APPLICABILITY OF SECTION 56 BY STATING THAT THERE WAS CONFLICT BETWEEN MEMBERS OF THE HUF, WHICH HAS NOW BEEN RESOLVED, THE APPELLANT IS TRYING TO CREATE AN IMAG INARY STORY WHICH HAS NO LEGS OF EVIDENCE. IT IS INTERESTING TO SEE THAT GIFT HAS NOW TURNED INTO AN ADVANCE. HOWEVER, NEITHER DOES THE ADVANCE CARRY ANY INTEREST NOR HAS IT BEEN RETURNED . IT IS CLEAR FROM THE ABOVE THAT THE ASSESSING OFFICER IS CORREC T IN APPLYING THE PROVISIONS OF SECTION 56 AND NO INTERFERENCE IS CALLED FOR. ACCORDINGLY, THE ADDITION OF RS. 25,00,000/-, IS OR DERED TO BE CONFIRMED. 8. AS REGARDS THE ADDITION OF RS. 9,20,000/-, THE C IT(A) HELD THAT EVEN THOUGH THERE IS EVIDENCE TO PROVE THAT SOME AM OUNT WAS RECEIVED BY THE ASSESSEE THROUGH HIS OWN HUF, YET T HERE IS NO EVIDENCE TO SHOW THAT THIS AMOUNT WAS UTILIZED FOR THE INVESTMENT IN QUESTION. HE FURTHER HELD THAT THERE ARE NO DIRECT LY RELATABLE BANK ACCOUNT ENTRIES AND THE ASSESSING OFFICER HAS RIGHT LY POINTED OUT 5 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY THAT THERE IS NO ENTRY EVEN IN THE ASSESSEES OWN C APITAL ACCOUNT. THE CIT(A), THEREFORE, CONFIRMED THE ADDITION ON TH E GROUND THAT THERE WAS NO ENTRY IN THE BOOKS OR ANY EVIDENCE FRO M BANK ACCOUNT HAS BEEN FILED BY THE ASSESSEE. 9. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US A ND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOT H ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION MADE BY THE ASSESSING OFFICER OF RS. 9,20,000/- WITHOUT BEL IEVING THE SOURCE FOR INVESTMENT MADE BY THE APPELLANT IN THE PARTNERSHIP FIRM. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS. 25 LAKH S WHICH IS PROPERLY EXPLAINED BY THE APPELLANT. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN LEVYING INTEREST U/S 234A AND 234B AND 234C OF THE ACT. 10. GROUND NO. 1 IS GENERAL IN NATURE AND NEED NO A DJUDICATION. 11. AS REGARDS GROUND NO. 2 RELATING TO THE ADDITIO N OF RS. 9,20,000/-, THE REVENUE AUTHORITIES MADE THE ADDITI ON ON THE GROUND THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO ESTABLISH THAT THIS AMOUNT WAS UTILIZED FOR THE INVESTMENT IN QUESTION. EVEN BEFORE US, THE ASSESSEE HAS NOT FILED ANY EVIDENCE TO DEMONSTRATE THAT THE AMOUNT WAS AVAILABLE FROM OUT OF THE FUNDS OF HUF AS ON THE DATE OF INVESTMENT I.E. ON 26/10/2007. THEREFOR E, WE CONFIRM THE ADDITION OF RS. 9,20,000/-. 6 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY 12. AS REGARDS GROUND NO. 3 RELATING TO THE ADDITIO N OF RS. 25 LAKHS, THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S. RAMA RAO TOOK US THROUGH TO SECTION 10(2) OF THE IT ACT, WHICH RE ADS AS FOLLOWS: 10(2): [SUBJECT TO THE PROVISIONS OF SUB-SECTION (2 ) OF SECTION 64,] ANY SUM RECEIVED BY AN INDIVIDUAL AS A MEMBER OF A HINDU UNDIVIDED FAMILY, WHERE SUCH SUM HAS BEEN PAID OUT OF THE INCOME OF THE FAMILY, OR, IN THE CASE OF ANY IMPART IBLE ESTATE, WHERE SUCH SUM HAS BEEN PAID OUT OF THE INCOME OF T HE ESTATE BELONGING TO THE FAMILY 13. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE BEFORE THE CIT(A) THAT 56(II(VI ) IS NOT APPLICABLE AND RELIED ON THE FOLLOWING CASE LAWS: 1. V.D. DHANWATEY VS. CIT, 68 ITR 365 (SC) 2. CIT VS. KALU BABU LAL CHAND, 37 ITR 123 (SC) 3. S.RM.CT.PL PALANIAPPA CHETTIAR VS. CIT, 68 ITR 2 21 (SC) 4. MATHURA PRASAD VS. CIT, 60 ITR 428 (SC) 14. HE ALSO RELIED ON THE DECISION IN THE CASE OF I TO VS. P.K. MADAV IN ITA NO. 212/HYD/11 FOR AY 2006-07 ORDER DA TED 01/01/2013. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . IN THE CASE OF VINEETKUMAR RAGHAVJIBHAI BHALODIA VS. ITO, 12 ITR (TRIB)616 (RAJKOT), THE TRIBUNAL HELD AS FOLLOWS: THE ASSESSEE SATISFIED BOTH CONDITIONS OF SECTION 1 0(2) THAT THE ASSESSEE WAS A MEMBER OF THE HINDU UNDIVIDED FA MILY AND HAD RECEIVED THE AMOUNT OUT OF THE INCOME OF FAMILY . THERE WAS NO MATERIAL ON RECORD TO HOLD THAT THE GIFT WAS OUT OF ANY ASSETS OF THE HINDU UNDIVIDED FAMILY. IT WAS OUT OF INCOME OF FAMILY TO A MEMBER OF HINDU UNDIVIDED FAMILY, AND T HEREFORE, IT WAS EXEMPT U/S 10(2). 7 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY 16. RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH OF THE TRIBUNAL, WE HOLD THAT GIFT OF RS. 25 LAKHS REC EIVED FROM THE HUF IS EXEMPT FROM SECTION 10(2) OF THE ACT. A PLAIN RE ADING OF SECTION 56(II)(VI) ALONG WITH EXPLANATION TO THAT SECTION A ND UNDERSTANDING, THE INTENTION OF THE LEGISLATURE FROM THE SECTION, WE FIND THAT THE GIFT RECEIVED FROM A RELATIVE IRRESPECTIVE OF WHE THER THE GIFT IS RECEIVED FROM A RELATIVE OR FROM GROUP OF RELATIVES IS EXEMPT FROM TAX UNDER THE PROVISIONS OF SECTION 56(II)(VI) OF T HE ACT. THE ASSESSEE IN THE PRESENT CASE HAS RECEIVED THE GIFT FROM HUF, WHICH IS FROM A GROUP OF RELATIVES AND THE GIFT RECEIVED BY THE ASSESSEE FROM THE HUF SHOULD BE INTERPRETED TO MEAN THAT THE GIFT WAS RECEIVED FROM THE RELATIVES AND, THEREFORE, IS NO T TAXABLE UNDER SECTION 56(II)(VI) OF THE ACT. ACCORDINGLY, THIS GR OUND IS ALLOWED. 17. IN THE RESULT, APPEAL OF THE ASSESSEE BEING ITA NO. 25/HYD/13 IS PARTLY ALLOWED. ITA NO. 1800/HYD/12 IN CASE OF B. PRABHAKAR REDDY ( HUF) 18. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN HUF DERIVING INCOME FROM BROKERAGE AND COMMISSION. FOR THE AY UNDER CONSIDERATION, THE ASSESSEE FILED THE RETURN OF INC OME ON 31/03/2010 ADMITTING A TOTAL INCOME OF RS. 4,000/- FORM BUSINESS AND OTHER SOURCES AND ALSO ADMITTED RS. 20,000/- BE ING THE AGRICULTURAL INCOME. SUBSEQUENTLY, THE CASE WAS SEL ECTED FOR SCRUTINY AND THE AO ISSUED NOTICE U/S 143(2). THE A SSESSEE FILED ALL THE DETAILS AND THE AO COMPLETED THE ASSESSMENT U/S 143(3) ON 8 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY 27/12/2010 DETERMINING THE TOTAL INCOME AT RS. 30,1 1,410/-. WHILE DOING SO, THE AO DETERMINED THE CAPITAL GAIN OF RS. 30,07,410/- AND THE AO DID NOT ALLOW DEDUCTION U/S 54F. 19. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT(A). THE CIT(A) CONFIRMED THE ORDER OF THE AO IN ADOPTIN G THE JT. SUB- REGISTRARS VALUE AT RS. 21.73 PER SQ.YD AS ON 01/0 1/1981. 20. THE FACTS ARE THAT ON 18.05.2010, THE ASSESSING OFFICER SENT A LETTER TO THE JT. SUB-REGISTRAR, KARIRNNAQAR THROUGH HIS INSPECTOR, ASKING FOR VALUATION OF THE SAID PROPERTY. THE MARKET VALU E WAS REDUCED BY INDEXING AND THE VALUE AS ON 01.01.1981 WAS EXTRAPO LATED AS RS.21.73 PER SQ.YD. WHEN THE APPELLANT WAS CONFRONTED WITH THIS VALUE, HE SUBMITTED A LETTER ON 13.08.2010 ALONG 'WITH A COPY OF CERTIF ICATE WHICH WAS SAID TO HAVE BEEN ISSUED BY TF1E JT. SUB-REGISTRAR ON 1 3.08.2009 WHEREBY A MUCH HIGHER VALUE OF THE LAND WAS SHOWN. AS PER THIS HIGHER VALUE REDUCED BY THE INDEXING, THE LAND VALUE AS ON 01.01.1981 WAS RS,525/- PER SQ.YD. HOWEVER, ON VERIFICATION IT WAS FOUND THAT THE APPELLANT HAD WRONGLY OBTAINED THE CERTIFICATE FROM JT. SUB-REGISTRAR, WHO WAS NOT IN SERVICE. THIS CERTIFICATE DID NOT CO RRELATE AT ALL WITH THE VALUE OF THE REGISTRATION DEEDS OF THE AREA FROM WH ICH THE MARKET VALUE HAD BEEN FOUND. FINALLY THE ASSESSING OFFICER SENT BOTH THE CERTIFI CATES I.E. THE ONE OBTAINED BY HIM AND THE ONE OBTAINED BY THE APPELLANT FROM THE RETI RED PERSON FOR AUTHENTICATION BY THE JT. SUB-REGIST RAR. THE JT. REGISTRAR WAS ALSO PROVIDED WITH THE PLOT N O., FOR WHICH THE VALUATION WAS REQUIRED. AFTER CONSIDERATION OF THE ENTIRE ISSUE AND BOTH THE CERT IFICATES AS WELL AS THE SPECIFIC PLOT NO., THE JT. REGISTRAR CERTIFIED THE VALUE OF THE LAND TO BE RS. 21.73 AS ON 01/01/1981. 9 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY 21. THE CIT(A), THEREFORE, HELD THAT THE VALUE PROV IDED BY THE JT. SUB-REGISTRAR AND GIVEN TWICE UNDER OFFICIAL STATUTORY SANCTION IS TO BE CONSIDERED AND DECLINED TO INTERFERE WITH THE ORDER OF THE ASSESS ING OFFICER. 22. WITH RESPECT TO THE NEXT ISSUE REGARDING CLAIM OF EXEMPTION U/S 54F OF THE ACT, THE ASSESSEE CLAIMED EXEMPTION BY STATING THAT HE HAD PURCHASED A SEMI-FINISHED RESIDENTIAL FLAT BY PAYING RS. 10 L AKHS AS ON 28/01/2009 AND 15/09/2009. THE ASSESSING OFFI CER DISALLOWED THE CLAIM BY GIVING FOLLOWING REASON S: THE OTHER ASPECT IS THAT THE ASSESSEE CLAIMED EXEM PTION U/S 54F FROM THE LONG TERM CAPITAL GAINS STATING THAT HE PURCHASED SEMI FINISHED RESIDENTIAL FLAT BY PAYING RS. 10,00,000/- ON 28.01.2009 AND 15.09.2009. BUT AS PER THE PROVISIONS OF SECTION 54 F, WHERE THE AMOUNT OF CAPITAL GAIN IS NOT UTILIZED BY THE ASSESSEE FOR AC QUISITION NEW ASSET BEFORE THE DUE DATE OF FURNISHING THE RET URN OF INCOME U/S 139(1), IT SHALL BE DEPOSITED BY HIM ON OR BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME U/S 139(1), IN AN ACCOUNT WITH ANY SPECIFIED BANK OR INSTITUTION AND UTILIZED IN ACCOR DANCE WITH THE CAPITAL GAINS ACCOUNT SCHEME, 1988 FRAMED BY THE CENTRAL GO VERNMENT IN THIS REGARD. PROOF OF SUCH DEPOSIT IS TO BE PRODUCED BEF ORE THE ASSESSING OFFICER ON DEMAND. DURING THE COURSE OF HEARING ON 05/10/2010, THE ASSESSEE WAS ASKED TO PRODUCE EVIDENCE OF SUCH DEPO SIT MADE, IF ANY. BUT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE WIT H REGARD TO SUCH STATUTORY REQUIREMENT OF DEPOSIT IN ANY SPECIFIED B ANK FOR CLAIMING EXEMPTION U/S 54F. THE ASSESSEE SOUGHT ADJOURNMENTS ON 19/10/2010, 06/ 12/2010 AND ON 22/12/2010 WITHOUT FURNISHING THE REQUIRED INFOR MATION. FINALLY, IN RESPONSE TO THIS OFFICE LETTER DT. 14/12/2010 THE A SSESSEE FURNISHED A LETTER ON 27/12/2010 STATING THAT HE PURCHASED A HO USE PROPERTY ON 14/07/2010 I.E. WITHIN 3 YEARS FROM THE DATE OF SAL E OF LAND AND THAT HE PAID ADVANCE OF RS. 10,00,000/- FOR PURCHASE OF THE SAID HOUSE PROPERTY WITHIN THE DUE DATE FOR FURNISHING THE RET URN IF INCOME. BUT HE HAS NOT FURNISHED ANY PROOF OF SUCH PAYMENT. HE WAS ASKED TO FURNISH PROOF OF PAYMENT OR PROOF FOR DEPOSIT MADE, IF ANY, AS PER THE STATUTORY REQUIREMENT FOR CLAIMING EXEMPTION V/S S4F. THERE WAS NO CLEAR RESPONSE FROM THE ASSESSEE IN THIS REGARD. IN THE SECOND PAGE OF STATEMENT OF TOTAL INCOME WHICH WAS ENCLOSED TO THE RETURN OF INCOME , THE ASSESSEE WHILE CLAIMING EXEMPTION U/S 54F CLEARLY STATED THAT A SUM OF RS.L0,00,000/- WAS PAID ON 28.01.2009 AND ON 10 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY 15.09.2009 FOR PURCHASE OF SEMI FINISHED RESIDENTIA L FLAT. THEREFORE, IT IS CLEAR THAT THE ASSESSEE HAS NEITHER UTILTZED THE AMOUNT OF LTCG FOR ACQUIRING THE NEW ASSET NOR MADE ANY DEPOSIT OUT OF LONG TERM CAPITAL GAINS IN ANY BANK SPECIFIED BENT: AS PER STATUTORY REQUIREMENT FOR CLAIMING EXEMPTION U/S 54F IT ACT BEFORE THE DUE DATE OF FILING RETURN OF INCOME 139(1) I.E. BEFORE 30.09,2008. FURTHER, THE ASSESSEE HAS NOR PURCHASED THE SAID FLAT (NEW ASSET) WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE OF TRANSFER OR SALE OF THE LAND (ORIGINAL ASSET) AS PER THE PROVISIONS OF SECTION 54F, UTILISATION OF AMOUNT OF LTCG TOR ACQUIRING NEW ASSET OR M AKING DEPOSIT OF THE LTCG IN ANY SPECIFIED BANK BEFORE THE DUE DATE FOR FURNISHING OF RETURN OF INCOME U/S 139(1) IS THE MAIN CRITERIA FOR CLAIMING DEDUCTION U/S 54F THE ASSESSEE HAS NOT FULFILLED THE SAID STATUTORY REQUIREMENT IN THIS REGARD. IN VIEW OF THE ABOVE, THE ASSESSEE'S CLAIM FOR EXEMPTION U/S 54F IS DISALLOWED. 23. ON APPEAL, THE CIT(A) HELD AS FOLLOWS: I FIND THAT BY THE DUE DATE I.E. 30/03/2008, THE A PPELLANT HAD NOT PURCHASED THE NEW ASSET AND BEFORE THAT DATE NO AMO UNT HAD BEEN DEPOSITED IN THE SPECIFIED BANK ACCOUNT. THERE IS NOTHING ON THE RECORD TO SHOW OTHERWISE. SINCE, THE CONDITIONS AS SPECIFIED HAD NOT BEEN MET, IT IS HELD THAT THE ASSESSING OFF ICER WAS CORRECT IN DENYING THE EXEMPTION U/S 54F. THIS ISSUE IS ACC ORDINGLY DECIDED IN FAVOUR OF THE REVENUE. 24. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT JT. SUB-REGISTRAR HAS WRONGLY DETERMINED THE MARKET VALUE AS ON 01/04/1981 AS HE HAS TAKEN THE RATE PER ACRE AS AGA INST THE RATE PER SQ.YD. THE LEARNED COUNSEL REFERRED PAGE 22 OF THE PAPER BOOK TO SHOW THAT THE PLOT IS SITUATED ON THE MAIN ROAD (HIGH WAY) FROM KARMINAGAR TO HYDERABAD. AT PAGE 13 HE HAD ANNEXED CERTIFICATE OF THE MARKET VALUE OF THE PROPERTY INVOLVED IN A PROP OSED SUIT ISSUED IN TERMS OF AP HIGH COURT AS ANNEXURE II, WHEREI N THE MARKET VALUE HAS BEEN MENTIONED AS RS. 525/- PER SQ.YD. 11 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY 25. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 26. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES , PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW. WE ARE OF THE OPINION THAT THE LOWER AUTHORITIES HA VE NOT EXAMINED THE ISSUE OF VALUE OF THE PROPERTY AS ON 01/04/1981 TAKING INTO ACCOUNT (SITUATION OF THE PLOT OF LAND) VARIOUS ASP ECTS SUCH AS PLOT BEING ON THE HIGHWAY AND THE PARTICULAR SITUATION O F THE PLOT. IN THESE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE ISSUE BACK TO THE FILE OF THE AO WITH A DIRECTI ON TO DECIDE THE SAME AFRESH BY TAKING NOTE OF THE AFORESAID POINTS AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, GROUND NOS. 2 & 3 ARE ALLOWED FOR STATISTICAL PURPOSES. 27. AS REGARDS THE ASSESSEES CLAIM OF EXEMPTION U/ S 54F OF THE ACT, WE FIND FORCE IN THE ARGUMENT OF THE LEARNED C OUNSEL THAT THE TIME LIMIT FOR THE DEPOSIT UNDER THE SCHEME OR UTIL IZATION CAN BE MADE BEFORE THE DUE DATE FOR FILING OF THE RETURN U /S 139(4) OF THE ACT. WE FIND THAT THE DUE DATE FOR FURNISHING THE R ETURN OF INCOME AS PER SECTION 139(4) IS SUBJECT TO EXTENDED PERIOD PR OVIDED UNDER SUB-SECTION (4) OF SECTION 139 OF THE ACT. THIS VIE W HAS BEEN TAKEN BY THE GAUHATHI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALAN, 286 ITR 275 AND PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MS. JAGGRITI AGGARWAL, 339 ITR 610 (P&H) WH EREIN IT HAS BEEN HELD THAT SUB-SECTION (4) OF SECTION 139 IN FA CT, A PROVISO TO SUB-SECTION (1) AND PROVIDES FOR EXTENSION OF PERIO D OF DUE DATE FOR 12 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY FILING THE RETURN IN CERTAIN CIRCUMSTANCES AND, THE REFORE, EXEMPTION U/S 54 WAS ALLOWABLE WHERE THE ASSESSEE HAD PURCHAS ED NEW PROPERTY BEFORE THE EXTENDED DUE DATE OF FILING RET URN U/S 139(4) AND FILED RETURN WITHIN SUCH EXTENDED TIME. RESPECT FULLY FOLLOWING THE RATION LAID DOWN IN THE AFORESAID CASES, WE RES TORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO VERIFY WHETH ER ENTIRE PROFITS ARE ENTITLED TO EXEMPTION WHERE PROFITS HAVE BEEN UTILI ZED FOR SPECIFIED PURPOSE BEFORE DUE DATE OF FILING OF RETURN U/S 139 (4) OF THE ACT AND THEREAFTER DECIDE THE ISSUE IN THE LIGHT OF THE SAI D DECISIONS. THUS, THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 28. IN THE RESULT, APPEAL OF THE ASSESSEE BEING ITA NO. 1800/HYD/12 IS ALLOWED FOR STATISTICAL PURPOSES. 29. TO SUM UP, APPEAL NO. 25/H/13 IS PARTLY ALLOWED AND THE APPEAL NO. 1800/H/12 IS ALLOWED FOR STATISTICAL PUR POSES. PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 21 ST AUGUST, 2013. KV 13 ITA NO. 25/HYD/13 & 1800/HYD/12 B. PRABHAKAR REDDY COPY TO:- 1) B. PRABHAKAR REDDY (INDIVIDUAL AND HUF), C/ S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, H.N O. 3- 6-643, ST. NO. 9, HIMAYAT NAGAR, HYDERABAD 500 02 9. 2) ITO, WARD 4, KARIMNAGAR. 3) THE CIT (A)-III, HYDERABAD 4) THE CIT-II, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., YDE RABAD.