ACIT, CHENNAI V. Smt. Janaki Mohan, CHENNAI

ITA 1837/CHNY/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96311 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Capital asset; Share purchase agreement; Additional evidence; Cost of acquisition
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! # , $ & BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.1837/MDS/2012 ( / ASSESSMENT YEAR: 2009-10) THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE-III CHENNAI-34 VS SMT. JANAKI MOHAN PLOT NO.490, 4 TH SOUTH CROSS STREET, KAPALEESWARAR NAGAR NEELANKARAI, CHENNAI-600 041. PAN: AAGPJ7764C ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. A.V.SREEKANTH, JCIT /RESPONDENT BY : DR.ANITA SUMANTH, ADVOCATE /DATE OF HEARING : 3 RD JULY, 2015 /DATE OF PRONOUNCEMENT : 4 TH NOVEMBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS-VIII), CHEN NAI DATED 11.07.2012 FOR THE ASSESSMENT YEAR 2009-10 A RISING OUT OF THE ASSESSMENT ORDER PASSED UNDER SECTION 14 3(3) OF THE ACT. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) ERRED IN DIRECTING THE A.O. TO 2 ITA NO.1837/MDS/2012 ALLOW THE EXEMPTION U/S 54F ON THE INVESTMENT MADE BY THE ASSESSEE TO THE TUNE OF ` 4,49,73,320/-. 3. THE ID. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE A.O. DISALLOWED THE EXEMPTION U/S 54 SINCE THE ASSESSEE HAS PURCHASED PLOTS OF LAND FROM 6 DIFFERENT PERSONS AS LAND APPURTENANT TO THE RESIDENTIAL BUILDING SITUATED ON THE FIRST PLOT OF LAND (PURCHASED FROM SHRI Y.J.ALEX) AND THE FIRST PLOT O F LAND ITSELF POSSESS A LARGE AREA OF LAND APPURTENANT TO THE RESIDENTIAL HOUSE. 4. IT IS SUBMITTED THAT A.O. HAS ALLOWED EXEMPTION U/S 54F TO THE EXTENT OF ONE PLOT OF LAND WITH RESIDENTIAL BUILDING. THE SUBSEQUENT PURCHASE OF PLOTS BY THE ASSESSEE FROM SIX DIFFERENT PERSONS HAS RIGHTLY NOT BEEN CONSIDERED FOR DEDUCTION U/S 54F. 5. THE ID. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT NARRATED BY THE A.O. IN THE ASSESSMENT ORDER THAT EACH TRANSACTION ON PURCHASE OF LAND IS INDEPENDENT AND PAYMENTS ARE ALSO MADE SEPARATELY. HENCE, THE REASON THAT THE FAMILY MEMBERS SELLERS FAMILY) INSISTENCE FOR BUYING LAND IS NOT A VALID GROUND. 6. THE ID. CIT(A) OUGHT NOT TO HAVE CONSIDERED ASSESSEE'S SUBMISSION THAT THE DIFFERENT PIECES OF LAND ARE CONTIGUOUS WHEREAS THE AO HAS CLEARLY FOUND THE ASSESSEE HAS NOT PURCHASED A SINGLE PLOT BUT A HUGE TRACT OF LAND AND THE REASON FOR NO N ALLOWABILITY OF CLAIM ON THIS GROUND HAS BEEN MENTIONED IN PARA. NO.16 OF THE ASST. ORDER. 7. IT IS SUBMITTED THAT THE PROVISIONS OF SEC.54F READ WITH CBOT'S CIRCULAR ENVISAGES PURCHASE/CONSTRUCTION OF RESIDENTIAL HOUSE AS THE MAIN INGREDIENT FOR CLAIMING THE DEDUCTION U/S 54F. IT CLEARLY DESCRIBED THAT THE BENEFIT OF SECTION 54 F IS NOT AVAILABLE FOR THE PURCHASE OF LANDS. 8. THE ID.CIT(A) FAILED TO FOLLOW THE DECISION OF THE ITAT, CHENNAI BENCH IN THE CASE OF ACIT VS. T.N.GOPAL (121 ITO 352) WHEREIN IT HAS BEEN HELD THAT FOR THE CONSTRUCTION OF ADDITIONAL BUILDING EXEMPTION U/S 54F IS NOT AVAILABLE. WHEN THERE IS NO DEDUCTION FOR ADDITIONAL CONSTRUCTION OF BUILDING, THERE IS NO QUESTION OF GIVING EXEMPTION 3 ITA NO.1837/MDS/2012 TO PURCHASE OF LAND U/S 54F. 9. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER RESTORED. 3. BRIEF FACTS ARE THAT ASSESSEE, AN INDIVIDUAL, FI LED HER RETURN OF INCOME ON 30 TH JULY, 2009 DECLARING INCOME FROM LONG TERM CAPITAL GAINS AT ` 4,52,06,356/- AND INCOME FROM OTHER SOURCES OF ` 4,83,284/-. THE ASSESSEE SOLD HER 31,14,900 SHARES FACE VALUE OF ` 10/- EACH OF GRAND NIRVANA HOLIDAY RESORTS PVT.LTD. TO M/S. PSK MANAGEMENT SER VICES P.LTD. AS PER THEIR SHARE PURCHASE AGREEMENT DATED 29.8.2008 ENTERED INTO BY THE ASSESSEE AND PSK MANAGEMENT SERVICES P. LTD. TOTAL CONSIDERATION RE CEIVED BY THE ASSESSEE IS ` 14,33,25,000/-. THE ASSESSEE AFTER INDEXATION ARRIVED AT THE COST OF ACQUISITION OF TH E SHARES AT ` 3,53,22,578/- AND COMPUTED LONG TERM CAPITAL GAINS ON SALE OF SHARES AT ` 10,79,97,872/-. OUT OF THE ABOVE CAPITAL GAINS, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT TO THE EXTENT OF ` 6,12,83,975/-. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54F SINCE SHE HAD INVESTED IN RESIDENTIAL HOUSE. THE ASSESSING OFFICER IN THE CO URSE OF 4 ITA NO.1837/MDS/2012 ASSESSMENT PROCEEDINGS EXAMINED IN DETAIL ALLOWABIL ITY OF THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 54F OF THE ACT. 4. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT SHE HAS PURCHASED 5.61 ACRES OF LAN D AT THE COST OF ` 6,92,58,320/- FROM A FAMILY OF SEVEN MEMBERS AND ENTERED INTO SEPARATE SALE DEEDS WITH ALL OF THEM AND ACQUIRED THE LAND AROUND 5.61 ACRES. THE ASSESSEE SUBMITTED THAT THE LAND IS CONTIGUOUS THOUGH THERE ARE SOME WATER BODIES AND THERE IS ONLY ONE RESIDENTIAL HO USE IN THE PROPERTY PURCHASED FROM MR. Y.J.ALEX AND OTHER PAR TS OF THE LAND HAS NO RESIDENTIAL BUILDING AND THERE WERE ONL Y TWO SHEDS IN SOME OTHER PROPERTIES WHICH CANNOT BE TREA TED AS RESIDENTIAL BUILDINGS AND THEREFORE, ASSESSEE IS EN TITLED FOR EXEMPTION UNDER SECTION 54F OF THE ACT AS SHE HAS PURCHASED ALL THE PROPERTIES BELONGING TO ONE FAMIL Y THOUGH UNDER SEPARATE DEEDS AND THERE IS ONLY ONE RESIDENT IAL HOUSE IN SUCH PROPERTY AND THE LAND IS CONTIGUOUS THOUG H THERE ARE PONDS IN THE LANDS PURCHASED. HOWEVER, THE ASSESSIN G OFFICER RESTRICTED THE DEDUCTION UNDER SECTION 54F OF THE ACT ONLY TO THE PLOT PURCHASED BY THE ASSESSEE FROM MR. Y.J.ALEX AND THE BUILDING THEREON AND DID NOT CONSIDER THE S ALE 5 ITA NO.1837/MDS/2012 CONSIDERATION PAID IN RESPECT OF THE PROPERTY PURCH ASED FROM OTHER SIX FAMILY MEMBERS HOLDING THAT RESIDENTIAL H OUSE IS SITUATED AT THE LAND BEARING SURVEY NUMBERS 98/9, 9 8/10, 98/11, 98/2-3 PURCHASED FROM MR. Y.J.ALEX. AS PER T HE ASSESSEE, THERE IS NO PROPERTY TO BE CALLED AS RES IDENTIAL HOUSE IN ANY OTHER PART OF THE LAND. SECTION IS INS ERTED IN THE ACT TO ENCOURAGE CONSTRUCTION OF RESIDENTIAL HOUSES AND MEANT FOR THOSE WHO OWNS ONLY ONE HOUSE AS ON THE D ATE OF TRANSFER OF CAPITAL ASSET FROM WHERE CAPITAL GAINS GET ACCRUED. THE ASSESSING OFFICER WAS OF THE OPINION THAT SPIRI T OF THE SECTION INDICATES THAT IT IS NOT MEANT FOR THOSE WH O ARE HAVING MORE THAN A HOUSE ON THE DATE OF TRANSFER OF ORIGIN AL ASSET AND BENEFIT UNDER THIS SECTION IS DEFINITELY NOT AV AILABLE FOR PURCHASE OF LAND. THE ASSESSING OFFICER HELD THAT A SSESSEE HAS PURCHASED LANDS FROM VARIOUS INDIVIDUALS BY ENT ERING INTO INDEPENDENT SALE DEEDS FROM SEVEN SELLERS THEREFORE EACH TRANSACTION IS INDEPENDENT AND THE PAYMENTS ARE MAD E TO SELLERS AS PER SPECIFIC SALE DEEDS. 5. THE ASSESSING OFFICER FURTHER HELD THAT THE LAND IS ADJACENT TO VAMBANADU LAKE WHICH IS A HUGE LAKE JO INS ARABIAN SEA, IN AND AROUND THE LAKE THERE ARE SEVER AL RESORT 6 ITA NO.1837/MDS/2012 AND TOURISM IS MAJOR ACTIVITY IN THE SURROUNDINGS. AS THE LAND PURCHASED BY THE ASSESSEE IS SURROUNDED BY CANALS I N WHICH PASSENGER BOATS PLY WHICH IS COMMON WAY OF TRANSPOR T IN THIS PARTICULAR AREA (MUGAMMA GHRAM PANCHAYAT, ALLAPUZ HA DIST) THE APPROACH SHOULD NOT BE A PROBLEM TO THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER HELD THAT ASSESSEE S LAND IS NOT TOTALLY CUT OFF FROM THE MAIN STREAM OF LIFE AN D APPROACH IS POSSIBLE, AS IT WAS THE CONTENTION OF THE ASSESSEE THAT ACCESS TO THE HOUSE PURCHASED FROM Y.J.ALEX IS THROUGH TH E LANDS OWNED BY OTHER FAMILY MEMBERS OF MR. Y.J.ALEX. IN S UCH CIRCUMSTANCES, THE ASSESSING OFFICER HELD THAT ENTI RE LAND IS NOT ELIGIBLE FOR BENEFITS UNDER SECTION 54F OF THE ACT AND HE RESTRICTED THE DEDUCTION TO THE LAND IN SURVEY NOS. 98/9, 98/10, 98/11, 98/2-3, WHERE THE RESIDENTIAL HOUSE IS SITUATED AS CLAIMED BY THE ASSESSEE. THE ASSESSING OFFICER F URTHER HELD THAT THIS LAND ONLY CAN BE CONSIDERED AS APPUR TENANT TO THE RESIDENTIAL HOUSE EVEN THOUGH THIS LAND HAS WAT ER BODIES PRESENT, SINCE IT WOULD BE PRACTICALLY IMPOSSIBLE FOR THE SELLER TO SEGREGATE THE WATER BODIES AND LAND WITHIN ITS SURVEY NUMBERS AS SUCH SEGREGATION IS DIFFICULT. AFTER RES TRICTING THE DEDUCTION ON THE SAID PIECE OF LAND PURCHASED FROM MR. 7 ITA NO.1837/MDS/2012 Y.J.ALEX, THE ASSESSING OFFICER ARRIVED AT THE INCO ME UNDER THE HEAD CAPITAL GAINS AT ` 8,58,50,428/- AFTER CONSIDERING THE SHORT TERM CAPITAL LOSS AT ` .17,55,644/- CLAIMED BY THE ASSESSEE. 6. AGGRIEVED BY THIS ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS). THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED TH E CLAIM OF THE ASSESSEE IN TOTO OBSERVING THAT A PER USAL OF THE MAP SHOWS THAT LANDS ARE PART OF TWO MAIN SURVEY NU MBERS 98 AND 99 THOUGH THERE ARE SOME SUB-DIVISIONS. THER EFORE, ACCORDING TO THE COMMISSIONER OF INCOME TAX (APPEAL S) IT CANNOT BE SAID THAT DIFFERENT PIECES OF LAND ARE NO T CONTIGUOUS. THE COMMISSIONER OF INCOME TAX (APPEALS ) OBSERVED THAT EXISTENCE OF WATER BODIES ON THE PLOT S OF LAND CANNOT BE A REASON TO CONCLUDE THAT ASSESSEE HAD AC QUIRED MORE THAN ONE RESIDENTIAL HOUSE BECAUSE SUCH WATER BODIES LIKE SWIMMING POOL OR WELL ARE REQUIRED TO BE MAIN TAINED FOR DAILY NECESSITIES OF OCCUPANTS IN KERALA. THE COMMI SSIONER OF INCOME TAX (APPEALS) HELD THAT COST OF VACANT LA ND APPURTENANT TO AND FORMING PART OF RESIDENTIAL UNI T HAS TO BE CONSIDERED FOR CLAIM UNDER SECTION 54F OF THE ACT, EVEN IF NO 8 ITA NO.1837/MDS/2012 CONSTRUCTION HAS BEEN DONE FOR RESIDENTIAL HOUSE O N THE APPURTENANT LAND. THE NEW RESIDENTIAL HOUSE IS NOT DEBARRED FROM HAVING A LAND APPURTENANT TO ANY SIZE FOR CL AIMING EXEMPTION UNDER SECTION 54F OF THE ACT WHEN ESPECIA LLY LAND WAS PURCHASED FROM ONE FAMILY THOUGH CONSISTING OF SEVEN MEMBERS. THUS HE ALLOWED THE CLAIM OF THE ASSESSEE WITHOUT ANY RESTRICTION. AGAINST THIS ORDER, THE REVENUE IS IN APPEAL BEFORE US. 7. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSE E HAS PURCHASED THE SAID PROPERTY FROM SEVEN PERSONS ALL ON THE SAME DATE I.E. 3.4.2009 BY INDEPENDENT SALE DEE DS AS UNDER:- DATE OF PURCHASE DOC.NO VENDOR EXTENT ACRES EXTENT CENTS SURVEY NO LAND VALUE BLDG. VALUE DOOR NO OF BLDG 03.04.09 523/09 Y.J.ALEX 2 18.500 98/9 1,47,00,000 3,00,000 II/391 & 392 98/11 98/10 ----- 11.5 98/2-3 03.04.09 527/09 Y.M.ALEXANDER 1 51 98/2/1 1,71,00,0 00 10,00,000 II/381, 382 & 383 99/11 03.04.09 525/09 MARIAMMA ALEX -- 88 98/2/2 95,00,000 5,00,000 II/380 03.04.09 528/09 ALEX MATHEW __ 25 98/2/1A 27,00,000 NO BLDG 03.04.09 531/09 T.G.PAUL --- 20 99/5-3 3,00,000 NO BLDG 9 ITA NO.1837/MDS/2012 03.04.09 529/09 T.G.SEBASTIAN --- 20 99/5-3 3,00,00 0 NO BLDG 03.04.09 530/09 BAIJU ___ 2.612 99/5-1 3,00,000 NO BLDG 4,99,00,000 18,00,000 REFERRING TO THE DETAILS FURNISHED, DEPARTMENTAL REPRESENTATIVE SUBMITS THAT VALUE OF LAND IN RESPE CT OF THE PROPERTIES HAVING BUILDINGS ARE HIGHER IN VALUE. DE PARTMENTAL REPRESENTATIVE SUBMITS THAT THOUGH THE ASSESSEE IS AT LIBERTY TO PURCHASE PROPERTY IRRESPECTIVE OF THE COST OF LA ND COMPONENT, THE FACT IN THIS CASE IS THAT THE INTENT ION OF THE ASSESSEE TO PURCHASE LAND AT PROPERTY FOR COMMERCIA L EXPLOITATION. DEPARTMENTAL REPRESENTATIVE SUBMITS T HAT ENTIRE LAND PURCHASED BY THE ASSESSEE CANNOT BE CONSIDERED AS BEING LAND APPURTENANT TO THE BUILDING FOR THE PURP OSE OF CLAIMING EXEMPTION UNDER SECTION 54F OF THE ACT. R EFERRING TO COPIES OF SALE DEEDS SUBMITTED BY THE ASSESSEE, DEPARTMENTAL REPRESENTATIVE SUBMITS THAT FOUR PROPE RTIES NAMELY THOSE PURCHASED BY THE ASSESSEE FROM MR. ALE X MATHEW, MR. T.G.PAUL, MR. T.G.SEBASTIAN AND MR. BAI JU DID NOT CONTAIN ANY BUILDING. THEREFORE, DEPARTMENTAL REPRESENTATIVE SUBMITS THAT FOUR PROPERTIES WHICH D ID NOT CONTAIN ANY BUILDINGS CANNOT BE CONSIDERED FOR THE PURPOSE OF CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT SIN CE THE 10 ITA NO.1837/MDS/2012 INVESTMENT HAS TO BE MADE IN A RESIDENTIAL PROPERTY AND NOT ON LAND. HE SUBMITS THAT THREE PROPERTIES PURCHASED BY THE ASSESSEE FROM MR. Y.J. ALEX, MR. Y.M. ALEXANDER AN D MARIAMMA ALEX ARE ONLY THE PROPERTIES WHICH CONTAIN BUILDINGS. REFERRING TO THE SALE DEED IN RESPECT OF MR.Y.J. ALEX AND THE DESCRIPTION OF PROPERTY MENTIONED THER EIN DEPARTMENTAL REPRESENTATIVE SUBMITS THAT IT IS CLEA R FROM THE NARRATION OF THE SALE DEED THAT THE EXTENT OF LAND WHICH IS CONTIGUOUS WITH THE BUILDING IS 2 ACRES 18.500 CENT S OF LAND EQUIVALENT TO 88.30 ACRES AND NOTHING MORE. THERE FORE, HE SUBMITS THAT ASSESSEES CLAIM THAT ENTIRE EXTENT OF LAND OF 5.61 ACRES IS CONTIGUOUS TO THE RESIDENTIAL PROPER TY PURCHASED IS FACTUALLY INCORRECT. HE SUBMITS THAT S INCE THE LAND APPURTENANT TO 2.18.500 CENTS THE ASSESSING O FFICER HAS RIGHTLY CONSIDERED ONLY THIS PROPERTY AS ELIGIB LE FOR CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT. 8. HE FURTHER SUBMITS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT DIFFERENT PIECES OF LAND ARE CONTIGUOUS THOUGH THERE ARE WATER BODIES IN SURVEY NUMBERS 98 AND 99 WITH SOME SUB-DIVISIONS. HE FURTHER SUBM ITS THAT OBSERVATION OF THE COMMISSIONER OF INCOME TAX (APPE ALS) 11 ITA NO.1837/MDS/2012 THAT SECTION 54F DOES NOT DEBAR NEW RESIDENTIAL HO USE FROM HAVING A LAND APPURTENANT TO OF ANY SIZE. REFERRI NG TO THE DECISION OF KERALA HIGH COURT IN THE CASE OF SMT.AS HA GEORGE REPORTED IN 351 ITR 123, DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE EXTENT OF LAND WHIC H CANNOT BE CONSIDERED AS CONTIGUOUS OR APPURTENANT TO A RES IDENTIAL PROPERTY CAME UP FOR CONSIDERATION BEFORE THE KERA LA HIGH COURT AND THE HIGH COURT AFFIRMED THE ORDER OF THE ASSESSING OFFICER IN ESTIMATING THE EXTENT OF LAND APPURTENAN T TO THE FARM HOUSE LOCATED IN THAT CASE. 9. THE DEPARTMENTAL REPRESENTATIVE IN HIS WRITTEN SUBMISSIONS RAISED THE FOLLOWING CONTENTIONS:- THE CIT(APPEALS) HAS IN PARA 12 ON PAGE 6 HELD THAT - 'SECTION 54 F DOES NOT DEBAR THE NEW RESIDENTIAL HOUSE FROM HAVING A LAND APPURTENANT TO OF ANY SIZE'. THE QUESTION OF THE EXTENT OF LAND WHICH CAN BE CONSIDERED AS CONTIGUOUS OR APPURTENANT TO A RESIDENTIAL PROPERTY CAME UP FOR CONSIDERATION BEFORE THE HON'BLE HIGH COURT, KERALA IN THE CASE OF SMT. ASHA GEORGE REPORTED IN 351 ITR 123, AND THE HON'BLE COURT HELD THAT HELD AS UNDER: SECTION 54F IS INTENDED TO ENCOURAGE CONSTRUCTION OF OR ACQUISITION OF RESIDENTIAL HOUSE WITH THE AID OF THE PROCEEDS FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, WHICH IS NOT A 12 ITA NO.1837/MDS/2012 RESIDENTIAL HOUSE. THE PROVISION CONTEMPLATES COMPUTING THE COST OF THE RESIDENTIAL BUILDING, BUT THE VALUE OF THE PLOT ON WHICH THE FARM HOUSE STANDS AND THE LAND APPURTENANT COULD ALSO BE CONSIDERED. THE TRIBUNAL HAS CATEGORICALLY FOUND THAT THE APPELLANT HAS NOT PRODUCED MATERIAL TO SHOW THAT THE ENTIRE AREA OF1.92 ACRES SHOULD BE CONSIDERED AS LAND APPURTENANT TO IT. IT IS IN SUCH CIRCUMSTANCES, THE TRIBUNAL MADE ESTIMATION AND DIRECTED THAT THE VALUE OF THE PLOT ON WHICH THE FARM HOUSE IS LOCATED AND THE LAND APPURTENANT BE FIXED AS RS.2 LAKHS. WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE APPELLANT THAT THE VALUE OF THE ENTIRE LAND MUST BE CONSIDERED IN ARRIVING AT THE VALUE OF THE RESIDENTIAL BUILDING. WE FIND NO ILLEGALITY COMMITTED BY THE TRIBUNAL. ( EMPHASIS SUPPLIED) IN THE CASE OF THE ASSESSEE AS THE DISCUSSION ABOVE SHOWS, THE EXTENT OF LAND CONTIGUOUS WITH THE BUILDING PURCHASED FOR Y.J.ALEX, IS 2 ACRE 18.500 CENTS OF LAND EQUIVALENT TO 88.30 ARES ONLY AND THE CLAIM OF THE ASSESSEE TO THIS EXTENT HAS BEEN ALLOWED BY THE ASSESSING OFFICER. ONCE THE EXTENT OF LAND APPURTENANT TO THE BUILDING HAS BEEN CONSIDERED AND EXEMPTION TO THAT EXTENT ALLOWED BY THE ASSESSING OFFICER, THE QUESTION OF ALLOWING EXEMPTION IN RESPECT OF LANDS APPURTENANT TO OTHER RESIDENTIAL PROPERTIES DOES NOT ARISE AND CONSEQUENTLY, THE ASSESSING OFFICER WAS JUSTIFIED IN DENYING EXEMPTION IN RESPECT OF THE OTHER SIX PROPERTIES WHICH THE ASSESSEE HAS PURCHASED. IN THIS CONTEXT, IT MAY BE RELEVANT TO NOTE THAT THOUGH COURTS/TRIBUNALS HAVE HELD THAT IN THE CONTEXT OF THE EXPRESSION 'A RESIDENTIAL PROPERTY' MENTIONED IN SECTION 54F, THE USE OF THE SINGULAR 'A' USED IN THE SECTION INCLUDES 'PLURAL', IT HAS A LSO BEEN HELD THAT EVEN IN SUCH CASES, WHERE THERE ARE MORE THAN ONE PROPERTY, THEY SHOULD BE ADJACENT, ATTACHED AND NOT DISPARATELY PLACED( HON'BLE ITAT, CHENNAI IN THE CASE OF SHRI A. KODANDA RAMI REDDY IN I.T.A. NO. 1865/MDS/2012 DATED 04.07.2013) WHEREIN IT WAS 13 ITA NO.1837/MDS/2012 OBSERVED AS UNDER: NO DOUBT, THE PLETHORA OF DECISIONS RELIED ON BY THE LEARNED A.R. CLEARLY MENTION THAT THE TERM 'A RESIDENTIAL HOUSE' USED IN SECTION 54 HAS TO BE CONSTRUED IN PLURALITY. BUT, AS HELD BY HON'BLE APEX COURT IN THE CASE OF CIT V. SUN ENGINEERING WORKS PVT. LTD. (198 ITR 297), JUDGMENT OF A COURT CANNOT BE SEEN DIVORCED FROM THE FACT SITUATION. ITS RELEVANCE IS ONLY WHEN FACTS ARE ON ALL FOUR SQUARES. IN EACH OF THE CASE, RELIED ON BY THE LEARNED A.R., THE RESIDENTIAL UNITS WERE SITUATED IN THE SAME BUILDING OR WERE PART OF THE SAME RESIDENTIAL COMPLEX AND WERE FLATS. EITHER THEY WERE ADJACENTLY SITUATED OR WERE SITUATED AT UPPER AND LOWER FLATS OR SITUATED IN SUCH A MANNER THAT THE UNITS COULD BE CONSTRUED TOGETHER AS 'A RESIDENTIAL HOUSE'. THE HON'BLE TRIBUNAL FURTHER HELD AS UNDER: AS REGARDS CLAIM FOR EXEMPTION AGAINST ACQUISITION OF TWO HOUSES UNDER SECTION 54 OF THE ACT; THE SAME IS NOT ADMISSIBLE IN PLAIN LANGUAGE OF STATUTE. IN THE JUDGMENT OF KARNATAKA HIGH COURT IN CIT V. B. ANANDA BASAPPA [2009J 223 CTR (KAR) 186: (2009) 309 ITR 329 (KAR), REFERRED TO IN THE IMPUGNED ORDER, EXEMPTION AGAINST PURCHASE OF TWO FLATS WAS ALLOWED HAVING REGARD TO THE FINDING THAT BOTH THE FLATS COULD BE TREATED TO BE ONE HOUSE AS BOTH HAD BEEN COMBINED TO MAKE ONE RESIDENTIAL UNIT. THE SAID JUDGMENT, THUS, PROCEEDS ON A DIFFERENT FACT SITUATION. ' WE ARE THUS OF THE OPINION THAT THE CIT(APPEALS) WAS JUSTIFIED IN CONFIRMING THE VIEW TAKEN BY THE A.D. THAT ASSESSEE COULD NOT CLAIM EXEMPTION UNDER SECTION 54 ON TWO DISPARATELY PLACED PROPERTIES. THEREFORE, IN VIEW OF THE ABOVE DECISION, THE ASSES SEE CANNOT CLAIM EXEMPTION U/S 54 IN RESPECT OF THE OTHER TWO PROPERTIES (PURCHASED FROM Y.M.ALEXANDER AND MARIAMMA ALEX), ON WHICH BUILDINGS STAND SINCE THEY ARE DISPARATELY PLACED 14 ITA NO.1837/MDS/2012 PROPERTIES. THE CIT(APPEALS) IN PARA 12 ON PAGE 6 STATES THAT - THE APPELLANT CLAIMED EXEMPTION U/S 54F OF NET CONSIDERATION WHICH THE APPELLANT HAS INVESTED IN THE PURCHASE OF FIRST PLOT ON WHICH RESIDENTIAL HOUSE WAS AVAILABLE AND IN RESPECT OF HIS CONTINUOUS PURCHASE OF PLOTS WHICH WERE NOTHING BUT LAND APPURTENANT TO THE BUILDING CONSTRUCTED ON THE FIRST PLOT OF LAND'. THE REFERENCE TO THE 'FIRST PLOT' OBVIOUSLY IS TO T HE PROPERTY PURCHASED BY THE ASSESSEE FROM Y.J.ALEX. I T HAS ALREADY BEEN SHOWN HOW THE EXTENT OF LAND IN RESPEC T OF THE PROPERTY PURCHASED BY THE ASSESSEE FROM Y.J.ALE X IS 2 ACRE 18.500 CENTS OF LAND EQUIVALENT TO 88.30 ARES ONLY. CONSEQUENTLY, THE ASSESSEE IS NOT ENTITLED TO CLAIM EXEMPTION IN RESPECT OF THE ENTIRE LAND OF 5.61 ACR ES. 10. COUNSEL FOR THE ASSESSEE FURNISHED TYPED SET OF DOCUMENTS CONTAINING 1 TO 3, MAP OF PROPERTY WITH TOPOGRAPHY, INVOICE OF M/S. APEX TOPOMAPPERS PVT . LTD. FOR BOUNDARY, TOPOGRAPHY AND CONTOUR SURVEY OF THE SITE AND WRITTEN SUBMISSIONS. IN THE WRITTEN SUBMISSIONS, CO UNSEL FOR THE ASSESSEE SUBMITS AS UNDER:- BRIEF FACTS ARE THAT (I) PROPERTY COMPRISING 5.61 ACRES OF LAND HOUSING 1 RESIDENTIAL UNIT, WAS PURCHASED BY THE ASSESSEE ON 3.4.2009 VID E 7 SALE DEEDS EXECUTED WITH 7 MEMBERS OF ONE FAMILY. (II) THE FAMILY MEMBERS ARE:- MRS. MARIYAMMA ALEX (MOTHER) AND HER 6 CHILDREN MR. Y.J. ALEX, MR. ALEXANDER, MR. AL EX MATHEW, MR. T.G. PAUL, MR. T.G. SEBASTIAN AND MR. BAIJU. (III) ALL THE VENDORS, BEING FAMILY MEMBERS, WERE INSISTENT UPON SELLING THE PROPERTY AS A WHOLE. (IV). PROPERTY IN SURVEY NOW. 98/9, 98/11 AND 98/ 10 SOLD BY SHRI Y.J. ALEX, COMPRISED LAND OF 88.30 ARES ALONG WITH A RESIDENTIAL UNIT THEREUPON. 15 ITA NO.1837/MDS/2012 (V). PROPERTY IN SURVEY NO. 98/2/1 AND 99/11 SOLD BY SHRI Y.M. ALEXANDER COMPRISED LAND OF 63.08 ARES ALONG WITH A TILED OUTHOUSE USED AS A STORE HOUSE BY THE FAMILY. (VI) PROPERTY IN SURVEY NO98/2/2 SOLD BY MRS. MAR IYAMMA ALEX COMPRISED LAND OF 35.61 ARES WITH A SHED WHEREIN A SHELL GRINDING UNIT WAS LOCATED. (VII) THE OTHER 4 PROPERTIES WERE VACANT AND FORM ED PART OF THE ENTIRE EXTENT OF LAND THAT WAS APPURTENANT TO T HE RESIDENTIAL UNIT. (VIII) OUT OF A TOTAL EXTENT OF 5.61 ACRES, NEARLY 2 ACRES COMPRISED OF WATER. (IX) EXEMPTION WAS CLAIMED BY THE ASSESSE UNDER S ECTION 54F OF THE INCOME TAX ACT, (HEREINAFTER REFERRED T O AS 'ACT'). (X) THE ASSESSING AUTHORITY, WHILE ACCEPTING THE PO SITION THAT ONLY ONE OUT OF THE SEVEN SURVEY MEMBERS CONTAIN A HOUSE , PARTLY REJECTED THE CLAIM FOR EXEMPTION ON THE GROUND THAT THE ENTIRE LAND COULD NOT BE TAKEN INTO CONSIDERATION FOR THE CLAIM . (XI) THE CLAIM WAS THUS REJECTED WITH RESPECT TO ALL SURVEY NOS. EXCEPT 98/9, 98/10, 98/11 AND 98/2-3. (XII). THE COMMISSIONER OF INCOME TAX APPEAL ALLOWE D THE APPEAL OF THE ASSESSEE. II. CONTENTION OF THE DEPARTMENT: : IN APPEAL BEFORE THE TRIBUNAL, THE REVENUE CONTENDS THAT THE EXISTENCE OF SHEDS IN TWO OF THE SURVEY NUMBERS LEADS TO THE CONCLUSION, THAT THE TWO WERE INDEPENDENT PROPERTIES THAT ARE NOT LIABLE TO BE TAKEN INTO CONSIDERATION FOR THE CLAIM UNDER SECTION 54F. ASSESSE'S REPLY: (I) WITH RESPECT TO THE PROPERTIES IN SURVEY NUMBER S OF MR. ALEXANDER AND MRS. MARIYAMMA ALEX, THE BUILDING COM PRISES OLD OUTHOUSES THAT WERE NOT HABITABLE. ONE TEMPORARY C ONSTRUCTION WAS UTILIZED BY THE FAMILY FOR STORING GRAIN, AND T HE OTHER COMPRISE A SHED THAT WAS UTILIZED FOR RUNNING THE B USINESS OF A SHELL CRUSHING UNIT. (II) REFERENCE HAS BEEN MADE BY THE DEPARTMENT TO T HE SALE DEEDS AND THE ANNEXURES THERETO, INDICATING DETAILS OF THE CONSTRUCTIONS THEREUPON SUCH REFERENCES DO NOT ADVA NCE THE CASE OF THE REVENUE IN THE LIGHT OF THE EXPLANATION ABOVE. 16 ITA NO.1837/MDS/2012 (III) WE, NOW PROCEED TO RESPOND IN SERIATIM TO TH E WRITTEN SUBMISSIONS FILED BY THE DEPARTMENTAL REPRESENTATIVE. THE AVERMENTS IN UN-NUMBERED PARA TWO THAT THERE AR E THREE RESIDENTIAL PROPERTIES IN THE ENTIRE IN THE P ROPERTY PURCHASED IS FACTUALLY ERRONEOUS. THERE IS ONLY ONE PROPERTY IN SURVEY NUMBER THAT WAS PURCHASED FROM MR. Y.J. ALEX . THE PRESUMPTION THAT THE INTENTION OF THE ASSESSEE WAS TO PURCHASE PROPERTY FOR COMMERCIAL EXPLOITATION IS OBJECTED TO AND IS WHOLLY UN-SUBSTANTIATED. REFERENCE TO THE AGREEMENT ENTERE D INTO WITH MIS. ARUN EXCELLO IS EXTRANEOUS TO THE ISSUE, SINCE SUCH AGREEMENT CONSTRUCTION IS BEYOND A PERIOD OF 3 YEAR S STIPULATED UNDER SECTION 54F. WE ARE UNAWARE OF ANY ORAL DIRECTION THAT HAS BEEN ISSUED BY THE VICE PRESIDENT OF THE INCOME TAX APPELLATE TRIBUNAL. THE DEPARTMENTAL CONTENTION IS TO THE EFFECT THAT S URVEY NOS. 98/2/1 A, 99/5-3, 99/5-2 AND 99/5-1 PURCHASED FROM ALEX MATHEW, T.G. PAUL, T.G. SEBASTIAN AND BAIJU RESPECTIVELY DO NOT QUALIFY FOR THE PURPOSE OF EXEMPTION IN SO FAR AS THE SAID PROPERTIES DO NOT C ONTAIN ANY BUILDING. THE NATURE OF THE PROPERTY BEING VACANT IS ADMITTED . PRIMA FACIE, HOWEVER, THIS CONTENTION IS INCORRECT IN SO FAR AS THE AFORESAID FOUR PIECES OF LAND ARE APPURTENANT TO SURVEY NO. 98 19, PURCHASED FROM Y.J. ALEX WHICH IS ADMITTEDLY A RESIDENTIAL PROPERT Y. THE DEPARTMENT RELIES ON THE DESCRIPTION OF THE PROPERTY PURCHASED FROM Y.J. ALEX TO CONTEND THAT ONLY 2 ACRES AND 18.5 CENTS IS CONTIGU OUS TO THE RESIDENTIAL HOUSE COMPRISED THEREIN. THIS DOES NOT HOWEVER TAKE INTO ACCOUNT THE OTHER LANDS THAT ARE ADMITTEDLY CONTIGUOUS TO THE A FORESAID PROPERTIES. THE POSITION WOULD NOT CHANGE MERELY BECAUSE THE OT HER PARCELS OF LAND HAVE BEEN TRANSFERRED UNDER DIFFERENT DEEDS OF SALE. AS EXPLAINED ORALLY AND CONFIRMED ELSEWHERE, ALL PARCELS OF CONT IGUOUS LAND BELONGED TO 7 MEMBERS OF THESAME FAMILY WHO WERE INSISTENT U PON SALE SIMULTANEOUSLY. THIS IS SUPPORTED BY THE FACT THAT ALL 7 DEEDS OF SALE ARE DATED 03.04.2009 REGISTERED ON THE SAME DAY. TH E INTERPRETATION OF THE DEPARTMENT IN THIS SITUATION IS HYPER TECHNICAL AND GROSSLY CONTRARY TO THE LETTER AND SPIRIT OF S. 54F OF THE INCOME TA X ACT. THE ASSESSEE RELIES UPON THE MEMORANDUM EXPLAINING THE PROVISIONS OF SECTION 54F AS REPORTED IN 184 ITR (STATUTES) TO THE EFFECT THAT THE ROVISION IS INTENDED TO BENEFIT AN ASSESSEE THAT IN VESTS IN THE ACQUISITIONS OF A RESIDENTIAL HOUSE. THIS PARAMETER IS SATISFIED IN THE PRESENT CASE. THE INTERPRETATION GIVEN BY THE DEPAR TMENT IS THUS LIABLE TO BE REJECTED AS BEING HYPER TECHNICAL AND CONTRAR Y TO THE INTENTION OF THE PROVISION. WE RELY UPON THE JUDGMENT OF THE SUP REME COURT IN THE CASE OF INCOME TAX OFFICER VS. BAJAJ TEMPO (196 ITR 188) THAT SUPPORTS THE AFORESAID PROPOSITION. 17 ITA NO.1837/MDS/2012 THE REVENUE RELIES UPON THE JUDGMENT OF THE KERALA HIGH COURT IN THE CASE OF SMT. ASHA GEORGE REPORTED IN 351 ITR 123. T HE OBSERVATIONS OF THE KERALA HIGH COURT EXTRACTED IN THE SUBMISSIO NS IN FACT SUPPORT THE ASSESSEE IN SO FAR AS THE DIVISION BENCH CONFIRMS A S FOLLOWS: 'SECTION 54F IS INTENDED TO ENCOURAGE CONSTRUCTION OF OR ACQUISITION OF RESIDENTIAL HOUSE WITH THE AID OF THE PROCEEDS FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, WHICH IS NOT A RESIDENTIAL HOUSE. THE PROVISION CONTEMPLATES COMPUTING THE COST OF THE RESIDENTIAL BUILDING. BUT THE VALUE OF THE PLOT ON WHICH THE FARM HOUSE STANDS AND THE LAN D APPURTENANT COULD ALSO BE CONSIDERED. THE TRIBUNAL HAS CATEGORICALLY FOUND THAT THE APPELLANT HAS NOT PRODUCED MATERIAL TO SHOW THAT THE ENTIRE AREA OF 1.92 ACRES SHOULD BE CONSIDERED AS L AND APPURTENANT TO IT. IT IS IN SUCH CIRCUMSTANCES, THE TRIBUNAL MADE ESTIMATION AND DIRECTED THAT THE VALUE OF THE PLOT ON WHICH THE FA RM HOUSE IS LOCATED AND THE LAND APPURTENANT BE FIXED AS RS.2 LAKHS. WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE APPELLANT THAT THE VAL UE OF THE ENTIRE LAND MUST BE CONSIDERED IN ARRIVING AT THE VALUE OF THE RESIDENTIAL BUILDING. WE FIND NO ILLEGALITY COMMITTED BY THE TRIBUNAL.' ( EMPHASIS BY UNDERLING AND HIGHLIGHTING IN BOLD, OURS) THEREAFTER, THE HIGH COURT ON A FACTUAL DIFFERENTI ATION OF THE MATTER FINDS THAT THE AREA OF 1.92 ACRES IS NOT LAN D APPURTENANT TO THE RESIDENTIAL HOUSE. IN THE PRESENT CASE, THE LEGAL P RINCIPLE AS DECIDED BY THE KERALA HIGH COURT, IN THE PORTION EMPHASISED, W OULD SUPPORT THE CASE OF THE ASSESSEE HEREIN. ALTERNATIVELY AND WITHOUT PREJUDICE TO THE MAIN SUB MISSION, IT IS SUBMITTED THAT EVEN ASSUMING THAT SURVEY NOS. 98/2/ 1 A, 99/5-3, 99/5- 2 AND 99/5-1 ARE TAKEN TO BE INDEPENDENT PROPERTIES , THE LAND IN SURVEY NO. 98/2-2 AND 98 / 2-1 ARE INDEED CONTIGUOU S TO SURVEY NO. 98/9, HOUSING THE RESIDENTIAL PROPERTY AND RELIEF U /S 54F IS LIABLE TO BE GRANTED IN CONNECTION THEREWITH. AT THIS JUNCTURE, IT IS NECESSARY THAT THIS HON'BLE TRIBUNAL APPRECIATES THAT THE CERTIFIED COPY OF THE PLAN FURNISHED INDIC ATES CLEARLY THAT ACCESS TO THE RESIDENTIAL HOUSE IS POSSIBLE ONLY TH ROUGH THE LAND IN SURVEY NO. 99/5-1, 99/5-2,99/5-3 AND 98/2-2. THUS, THE ACQUISITION OF THE LAND IN SURVEY NO. /5-1, 99/5-2,99/5-3 AND 98/2 -2 IS A NECESSITY IN ORDER THAT THE ASSESSEE APPROACH THE HOUSE. THIS SI TUATION APPLIES EQUALLY WITH RESPECT TO THE PROPERTIES IN SURVEY NO S. 98/9, 98/10 AND 98/11. THIS POSITION SATISFIES THE PROVISIONS OF S. 54F FOR THE REASON THAT THE LAND ACQUIRED IS NOT MERELY 'APPURTENANT T O' BUT 'A NECESSITY' IN THE PRESENT CIRCUMSTANCES. THE ASSESSEE ALSO PRODUCES A DIAGRAM OF THE TOPOGRA PHY THE PROPERTY IN 2009 AT THE TIME OF ACQUISITION ALONG WITH INVOI CE FROM THE ARCHITECT DATED 14.11.2008 CONTEMPORANEOUS WITH THE ACQUISITI ON THAT 18 ITA NO.1837/MDS/2012 ESTABLISHES CLEARLY THAT THE PROPERTIES IN SURVEY N OS. 98/2/1 AND 98/2/2 COMPRISE LAND WITH A SHED THEREUPON. THE SHED IS N OT HABITABLE AND DOES NOT CONSTITUTE A RESIDENTIAL UNIT FOR THE PURP OSE OF S. 54F. IT IS PRAYED THAT THE ABOVE DIAGRAM AND INVOICE MAY BE AD MITTED AS ADDITIONAL EVIDENCE FOR THE REASON THAT THE CONTENT ION OF THE REVENUE BEFORE THE TRIBUNAL THAT THERE ARE THREE (3) RESIDE NTIAL PROPERTIES IS A NEW SUBMISSION THAT HAS NOT BEEN RAISED EVEN BY THE ASSESSING OFFICER. IT IS THUS INCUMBENT UPON THE ASSESSEE TO PRODUCE EVIDENCE TO DEFEND THE SAID SUBMISSION AT THIS JUNCTURE. IN VIEW OF THE DETAILED ORAL SUBMISSIONS ADVANCED, WRITTEN SUBMISSIONS AND EVIDENCES FILED, IT IS PRAYED THAT THE APPEAL OF THE REVENUE BE DISMISSED. 11. FURTHER IN THE ADDITIONAL WRITTEN SUBMISSIONS, THE DEPARTMENTAL REPRESENTATIVE RAISED THE FOLLOWING CONTENTIONS:- THE LEARNED COUNSEL DURING THE COURSE OF ARGUMENTS ON 03 RD JULY 2015, STATED THAT A FRESH LINE OF ARGUMENT HA S BEEN TAKEN BY THE DEPARTMENTAL REPRESENTATIVE FOR T HE FIRST TIME THAT THE SAID PROPERTY IN RESPECT OF WHI CH CLAIM OF 54F HAS BEEN MADE CONSISTED OF THREE HOUSES. IN THIS CONNECTION, I WISH TO SUBMIT THAT IT IS NOT A FRESH LINE OF ARGUMENT I HAD TAKEN. I HAVE JUST HIGHLIGHTED CERTA IN FACTS SO THAT THE CASE CAN BE APPRECIATED IN THE PR OPER PERSPECTIVE. THE FACTS ARE NOT MY CREATION. THE FAC TS ALREADY EXISTED IN THE VERY DOCUMENTS RELIED UPON B Y THE LEARNED COUNSEL. AS POINTED OUT IN MY WRITTEN SUBMISSIONS EARLIER, T HE DEPARTMENT'S STAND IS THAT SINCE THE LAND CONTIGUOU S TO THE PROPERTY PURCHASED FROM Y. J.ALEX AS PER DOCUME NT NO 523/09 CONSISTED OF AN EXTENT OF 2 ACRES AND 18. 500 CENTS, THE ASSESSING OFFICER IS RIGHT IN RESTRICTIN G THE CLAIM OF 54F TO THAT EXTENT AS AGAINST THE CLAIM MADE BY THE ASSESSEE THAT THE ENTIRE LAND OF 5.61 ACRES IS CONTIGUOUS. THE UNDENIABLE FACT OF THE MATTER IS THAT, AS I HAD DEMONSTRATED DURING THE COURSE OF ARGUMENTS FORM TH E DOCUMENTS AVAILABLE IN THE PAPER BOOK FURNISHED BY THE ASSESSEE THAT, THE PROPERTY UNDER CONSIDERATION CON SISTS OF NOT ONE RESIDENTIAL PROPERTY BUT THREE RESIDENTI AL PROPERTIES. 19 ITA NO.1837/MDS/2012 SECTION 54F, AS PER THE INCOME TAX ACT, IS AVAILABL E IN RESPECT OF ONLY ONE PROPERTY. HOWEVER, CERTAIN JUDI CIAL AUTHORITIES HAVE HELD THAT 54F IS AVAILABLE EVEN IN RESPECT OF MORE THAN ONE PROPERTY. I HAD COUNTERED THAT BY REFERRING TO THE DECISION OF THIS HON'BLE TRIBUN AL IN THE CASE OF KODANDA RAMI REDDY IN ITA NO 1865/ MDS/2012 DATED 04.07.2013, THAT EVEN IN SUCH CASES WHERE THE RE ARE MORE THAN ONE PROPERTIES, THE BENEFIT WILL NOT BE AVAILABLE IN CASE OF DISPARATELY PLACED PROPERTIES. INCIDENTALLY, IN THE CASE OF THE ASSESSEE THE THREE RESIDENTIAL PROPERTIES ARE DISPARATELY PLACED. THE MAP: AT THE OUTSET, IT IS SEEN THAT THE MAP FURNISHED BY THE LEARNED COUNSEL IS NOT PREPARED BY ANY GOVERNMENT AGENCY OR AUTHORITY. THEREFORE NO RELIANCE CAN BE PLACED OR CREDENCE CAN BE GIVEN FOR THE CONTENTS OF THE SAME SINCE IT CANNOT BE CONSIDERED AS AUTHENTIC. SECONDLY, THE REASON FOR ALLOWING THE ADMISSION IS STATED TO THE NEW SUBMISSION THAT HAS BEEN MADE NOT EVEN BY THE ASSESSING OFFICER. YOUR HONOURS, IT HAS ALREADY BEEN POINTED OUT THAT NO NEW SUBMISSION (TH AT THERE WERE THREE RESIDENTIAL BUILDINGS ON THE PROPE RTY AND NOT ONE) WAS MADE. I REITERATE THAT I HAD ONLY BROUGHT CERTAIN FACTS TO LIGHT WHICH ALREADY EXISTE D ON RECORD. THEREFORE, THE MAP AS WELL AS THE INVOICE S HOULD NOT BE ADMITTED AS ADDITIONAL EVIDENCE AND I HEREBY RECORD MY OBJECTION. MY REPLY TO THE WRITTEN SUBMISSIONS OF THE ASSESSEE ON THE CONTENTION OF THE DEPARTMENT IN THE TYPED SET O F DOCUMENTS DATED 2 ND JULY 2015, ARE AS UNDER: THE COUNSEL FOR THE ASSESSEE CLAIMS THAT THE TWO BUILDINGS THAT EXIST ON THE SURVEY NUMBERS OF PROPE RTIES OF ALEXANDER AND MARIYAMMA ALEX (APART FROM THE RESIDENTIAL BUILDINGS THAT EXIST ON SL.NO DATE OF DOC NO VENDOR HOUSE NO.OF BLDG PURCHASE 1 03.04.2009 527/09 Y.M.ALEXANDER 11/381,382, 383 2 03.04.2009 525/09 MARIAMMA ALEX 11/380 20 ITA NO.1837/MDS/2012 IF AS CLAIMED BY THE ASSESSEE, THE SAID RESIDENTIAL BUILDINGS ARE SHEDS THERE WOULD BE NO 'HOUSE NUMBERS. THIRDLY, THE NUMBER OF ELECTRICAL INSTALLATIONS AS PER COLUMNS 8 ON PAGE 18 AND PAGE 25 ARE 10 EACH. THEREFORE THE CONTENTION OF THE COUNSEL THAT THERE IS ONLY ONE RESIDENTIAL BUILDING ON THE SAID PROPERTY IS FA CTUALLY ERRONEOUS. THE COUNSEL CLAIMS THAT SHE IS UNAWARE OF ANY ORAL DIRECTION GIVEN BY THE VICE PRESIDENT OF THE INCOME TAX APPEL LATE TRIBUNAL. IN THIS CONNECTION, I AM ENCLOSING A COPY OF THE LETTER DATED 03-06-2014, ADDRESSED BY THE CIT(DR-I) ADMN TO THE .CHIEF COMMISSIONER OF INCOME TAX, KOCHI THE SUBJECT, WHICH IS SELF-EXPLANATORY, FOR YOUR HONOUR S KIND PERUSAL. THE COUNSEL IN PAGE 3, PARA 3 OF THE TYPED SET DATED 2 ND JULY 2015, ACCEPTS THAT THE PROPERTIES PURCHASED FROM ALEX MATHEW, T.G.PAUL. T.G. SEBASTIAL AND BAIJU DO NOT Q UALIFY IN SO FAR AS THE SAID PROPERTIES DO NOT CONTAIN ANY BU ILDING. HOWEVER, IT IS CLAIMED THAT THESE LANDS ARE CONTIGU OUS WITH THE PROPERTY PURCHASED FROM Y.J.ALEX. IN THIS CONNE CTION, IT IS REITERATED THAT THE EXTENT OF LAND LYING CONTIGUOUS WITH THE PROPERTY PURCHASED FROM Y.J.ALEX IS ONLY AN EXTENT OF 2 ACRES AND 18.500 CENTS, WHICH IS AS PER THE SCHEDULE OF PROPERTY AS PER THE REGISTERED SALE DEED AVAILABLE ON PAGE 7 OF THE TYPED SET OF DOCUMENTS DATED 10 TH APRIL 2013. THEREFORE, THE EXEMPTION ULS 54F WOULD BE AVAILABLE ONLY TO THAT EXTENT. IN THIS CONNECTION IT HAS ALREADY BEEN SUBMITTED IN MY EARLIER WRITTEN SUBMISSION THAT THE QUESTION OF THE EXTENT OF LAND WHICH CAN BE CONSIDERED AS CO NTIGUOUS OR APPURTENANT TO A RESIDENTIAL PROPERTY CAME UP FO R CONSIDERATION BEFORE THE HON'BLE HIGH COURT, KERALA IN THE CASE OF SMT. ASHA GEORGE REPORTED IN 351 ITR 123, AND THE HON'BLE COURT HELD THAT HELD AS UNDER: SECTION 54F IS INTENDED TO ENCOURAGE CONSTRUCTION O F OR ACQUISITION OF RESIDENTIAL HOUSE WITH THE AID OF TH E PROCEEDS FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, W HICH IS NOT A RESIDENTIAL HOUSE. THE PROVISION CONTEMPLATES COMPU TING THE COST OF THE RESIDENTIAL BUILDING, BUT THE VALUE OF THE PLOT ON WHICH THE FARM HOUSE STANDS AND THE LAND APPURTE NANT COULD ALSO BE CONSIDERED. THE TRIBUNAL HAS CATEGORI CALLY FOUND THAT THE APPELLANT HAS NOT PRODUCED MATERIAL TO SHOW THAT THE ENTIRE AREA OF 1.92 ACRES SHOULD BE CONSIDERED AS LAND APPURTENANT TO IT. IT IS IN SUCH CIRCUMSTANCES , THE TRIBUNAL MADE ESTIMATION AND DIRECTED THAT THE VALU E OF THE PLOT ON WHICH THE FARM HOUSE IS LOCATED AND THE LAN D APPURTENANT BE FIXED AS RS.2 LAKHS. WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE APPELLANT THAT THE VALUE OF T HE ENTIRE 21 ITA NO.1837/MDS/2012 LAND MUST BE CONSIDERED IN ARRIVING AT THE VALUE OF THE RESIDENTIAL BUILDING. WE FIND NO ILLEGALITY COMMITTED BY THE TRIBUNAL. (EMPHASIS SUPPLIED) THEREFORE, IN MY HUMBLE VIEW, THE ONLY PROPERTY THA T COULD BE CONSIDERED FOR EXEMPTION UNDER SECTION 54 F IS T HE PROPERTY THE ASSESSEE PURCHASED FROM Y.J.ALEX AND T HE LAND APPURTENANT THERETO. THE ALTERNATE PLEA OF THE ASSESSEE, IS ALSO NOT TEN ABLE FOR THE SAME REASON THAT THE LANDS IN SURVEY NUMBERS 99/5- 1,99-5/2,99-5/3 AND 98/2-2 ARE NOT CONTIGUOUS TO THE LAND APPURTENANT TO PROPERTY PURCHASED BY THE ASSESSEE F ROM Y.J.ALEX. THAT IT WAS OUT OF NECESSITY TO ACCESS THE HOUSE, T HE ASSESSEE HAD TO PURCHASE THE LAND IN S.NOS. 99/5-1, 99-5/2, 99-5/3 AND 98/2-2, AND THEREFORE, THE EXEMPTION SHOULD BE EXTENDED TO THOSE PROPERTIES ALSO, IS IN MY HUMBLE VIEW, NOT TENABLE FOR THE REASON THAT THE ASSESSEE HAD PURCHA SED THE SAID PROPERTY AT A HUGE INVESTMENT AND THEREFOR E, THE ASSESSEE WOULD HAVE CERTAINLY FACTORED IN THE ISSUE OF ACCESS TO THE PROPERTY WHILE WORKING OUT THE COST F OR WHICH SHE COULD PURCHASE THE PROPERTY. FURTHER, THE QUEST ION OF ACCESS TO THE PROPERTY WOULD ARISE ONLY IN THE EVEN T THAT THE ASSESSEE RESIDED THERE FOR A CONSIDERABLE PERIOD OF TIME. THE ASSESSEE DID NOT PURCHASE THE PROPERTY WITH AN INTENTION TO RESIDE THERE PERMANENTLY. YOUR HONOURS , IT IS ON RECORD THAT THE ASSESSEE HAD SOLD THE PROPERTY TO M /S ARUN EXCELLO CONSTRUCTIONS ON 29.08.2012. AS POINTED OUT IN MY EARLIER SUBMISSIONS, THE ASSESSEE HAD ALSO ENTERED INTO AN AGREEMENT WITH M/S ARUN EXCELLO TO CONSTRUCT A RESO RT ON THE SAME PROPERTY. THE ABOVE SAID WOULD PROVE THAT THE ISSUE OF ACCESS TO THE PROPERTY NEVER EXISTED AND THIS HAS B EEN RAISED NOW ONLY FOR THE SAKE OF ARGUMENT AND THEREF ORE DOES NOT MERIT CONSIDERATION. IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE APPEAL OF THE REVENUE BE ALLOWED. 12. HEARD BOTH THE SIDES. PERUSED THE ORDERS OF LOW ER AUTHORITIES, MATERIALS PLACED BEFORE US AND THE WRI TTEN SUBMISSIONS. THE ASSESSEE AN INDIVIDUAL PURCHASED SEVERAL PLOTS FROM SEVEN MEMBERS OF A FAMILY TO THE EXTENT OF 5.61 22 ITA NO.1837/MDS/2012 ACRES OF LAND AND CLAIMED THAT PROPERTY IS A CONTI GUOUS PROPERTY AND PROPERTY IS PURCHASED FROM ONE FAMILY , THERE IS ONLY ONE APPROACH FOR ALL THESE PIECES OF LAND AND THERE IS ONLY ONE RESIDENTIAL HOUSE IN THAT PROPERTY AND THE REFORE SUCH RESIDENTIAL HOUSE HAVING LAND APPURTENANT TO IT IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT. THE ASSESSI NG OFFICER HOWEVER RESTRICTED DEDUCTION ONLY TO THAT P ORTION OF LAND WHERE THE BUILDING IS SITUATED WHICH IS PURCHA SED FROM MR. Y.J.ALEX AND IGNORED THE OTHER PLOTS OF LAND P URCHASED FROM OTHER FAMILY MEMBERS UNDER SEPARATE SALE DEEDS FOR THE PURPOSE OF ALLOWING DEDUCTION UNDER SECTION 54F OF THE ACT. THE QUESTION BEFORE US IS WHETHER THE ASSESSEE IS E NTITLED FOR DEDUCTION UNDER SECTION 54F ON THE SEVEN PLOTS OF L AND OR IS ENTITLED TO DEDUCTION ONLY IN RESPECT OF LAND PURCH ASED FROM MR. Y.J.ALEX IN SURVEY NUMBERS 98/9, 98/10, 98/1 1 AND 98/2-3. THE ASSESSEE PURCHASED 5.61ACRES OF LAND F ROM SEVEN PERSONS OF A FAMILY AND THE DETAILS ARE AS UN DER:- DATE OF PURCHASE DOC.NO VENDOR EXTENT ACRES EXTENT CENTS SURVEY NO LAND VALUE BLDG. VALUE DOOR NO OF BLDG 03.04.09 523/09 Y.J.ALEX 2 18.500 98/9 14700000 300 000 II/391 & 392 98/11 98/10 23 ITA NO.1837/MDS/2012 ----- 11.5 98/2-3 03.04.09 527/09 Y.M.ALEXANDER 1 51 98/2/1 171,00,00 0 10,00,000 II/381, 382 & 383 99/11 03.04.09 525/09 MARIAMMA ALEX -- 88 98/2/2 95,00,000 5,00,000 II/380 03.04.09 528/09 ALEX MATHEW __ 25 98/2/1A 27,00,000 NO BLDG 03.04.09 531/09 T.G.PAUL --- 20 99/5-3 3,00,000 NO BLDG 03.04.09 529/09 T.G.SEBASTIAN --- 20 99/5-3 3,00,00 0 NO BLDG 03.04.09 530/09 BAIJU ___ 2.612 99/5-1 3,00,000 NO BLDG 4,99,00,000 18,00,000 13. AS COULD BE SEEN FROM THE ABOVE DETAILS THE AS SESSEE PURCHASED SEVERAL PIECES OF LAND FROM SEVEN PERSONS AND ALL THESE PIECES OF LANDS WERE PURCHASED BY WAY OF IND IVIDUAL SALE DEEDS. THE PIECES OF LAND PURCHASED FROM MR. Y .J.ALEX, MR. Y.M.ALEXANDER AND MARIAMMA ALEX AS PER THEIR SA LE DEEDS SHOW THAT BUILDINGS ARE ALSO IN EXISTENCE AND VALUE OF BUILDINGS ARE ALSO MENTIONED IN THE SALE DEEDS ALO NG WITH MUNICIPAL DOOR NUMBERS. THE SALE DEEDS ALSO SHOW THAT THERE ARE ELECTRICAL INSTALLATIONS IN ALL THESE THR EE PROPERTIES AND NUMBER OF POINTS ARE TEN. IT IS CLEAR FROM THE SALE DEEDS THAT THREE BUILDINGS ARE IN EXISTENCE WITH MUNICIP AL DOOR NUMBERS AND ELECTRICAL INSTALLATIONS, THEREFORE IT CANNOT BE SAID THAT THERE IS ONLY ONE RESIDENTIAL BUILDING SI TUATED IN ALL THE THREE PROPERTIES PURCHASED BY THE ASSESSEE TO THE EXTENT 24 ITA NO.1837/MDS/2012 OF 5.61 ACRES AND THERE IS NO EVIDENCE ON RECORD T O SUGGEST THAT OUT OF THESE THREE BUILDINGS ONLY ONE BUILDING IS USED FOR RESIDENTIAL PURPOSES AND THE OTHER TWO ARE NOT USE D FOR RESIDENTIAL PURPOSES. THOUGH THE ASSESSEE CONTENDS THAT PROPERTIES OF MR. Y.J.ALEX, Y.M.ALEXANDER AND MARI AMMA ALEX COMPRISE OF OLD OUTHOUSE WERE NOT HABITABLE AN D ONE TEMPORARY CONSTRUCTION WAS UTILIZED BY THE FAMILY FOR STORING GRAINS AND THE OTHER COMPRISE SHED WHICH WAS UTILI ZED FOR RUNNING THE BUSINESS OF SHELL CRUSHING UNIT. NOTHI NG WAS BROUGHT ON RECORD BY THE ASSESSEE TO SUGGEST THAT S UCH BUILDINGS COMPRISE OF OLD OUTHOUSE AND TEMPORARY CONSTRUCTION FOR STORING GRAINS AND THE SHED WAS U TILIZING FOR RUNNING BUSINESS OF A SHELL CRUSHING UNIT. REFERRI NG TO THE CERTIFIED COPY OF THE PLAN FURNISHED, IT IS THE SUB MISSION OF THE ASSESSEE THAT ACCESS TO THE RESIDENTIAL HOUSE IS PO SSIBLE ONLY THROUGH THE LAND IN SURVEY NUMBERS 99/5-1, 99/5-2, 99/5-3, 98/2-2, THEREFORE ACQUISITION OF LAND IN SURVEY N UMBERS 99/5-1, 99/5-2, 99/5-3, 98/2-2 ARE NECESSITY FOR TH E ASSESSEE IN ORDER TO APPROACH THE HOUSE. IT IS THE SUBMISSIO N OF THE ASSESSEE THAT THIS SITUATION APPLIES EQUALLY WITH R ESPECT TO PROPERTIES IN SURVEY NUMBERS 98/10 AND 98/11. THERE FORE, IT 25 ITA NO.1837/MDS/2012 IS SUBMITTED THAT LAND ACQUIRED IS NOT MERELY APPUR TENANT TO IT BUT NECESSITY IN THE PRESENT CIRCUMSTANCES. ON A PE RUSAL OF THE MAP FURNISHED BY THE ASSESSEE, WE FIND THAT THI S MAP IS NOT PREPARED BY ANY GOVERNMENT AGENCY OR ANY GOVER NMENT RECOGNIZED AGENCY, SO NO MUCH CREDENCE CAN BE GIVEN TO THE MAP FURNISHED. THE ASSESSING OFFICER MADE CLEAR IN THE ASSESSMENT ORDER THAT HUGE LAND IS ADJACENT TO THE VAMBANADU LAKE WHICH JOINS ARABIAN SEA, IN AND AROU ND THIS LAKE THERE ARE SEVERAL RESORTS AND TOURISM IS A MA JOR ACTIVITY IN THE SURROUNDINGS. THE LAND PURCHASED BY THE ASSE SSEE IS SURROUNDED BY CANALS IN WHICH PASSENGER BOATS PLY W HICH IS COMMON WAY OF TRANSPORT IN THIS PARTICULAR AREA, TH EREFORE APPROACH SHOULD NOT BE A PROBLEM TO THE ASSESSEE. THE CONTENTION OF THE ASSESSING OFFICER IS THAT CIRCUMS TANTIALLY THE ASSESSEES LAND IS NOT TOTALLY CUT OFF FROM THE MAI N STREAM POSSIBILITY OF APPROACH CANNOT BE DENIED. 14. THE ASSESSEE RELYING ON THE MEMORANDUM EXPLAINI NG THE PROVISIONS OF SECTION 54F AS REPORTED IN 184 IT R (STATUE) SUBMITS THAT PROVISION IS INTENDED TO BENEFIT AN AS SESSEE THAT INVESTS IN ACQUISITION OF RESIDENTIAL HOUSE. ACCORD ING TO THE ASSESSEE, THIS PARAMETER IS SATISFIED IN THIS CASE . THEREFORE, 26 ITA NO.1837/MDS/2012 INTERPRETATION GIVEN BY THE REVENUE THAT ASSESSEE P URCHASED SEVERAL PIECES OF LAND BY WAY OF SEPARATE SALE DEED S AND THEREFORE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT ON THE ENTIRE LAND IS HYPER TECHNICAL AND CONTR ARY TO THE INTENTION OF THE PROVISION. NO DOUBT PROVISION IS I NTENDED TO BENEFIT THE ASSESSEE THAT INVESTS IN ACQUISITION OF RESIDENTIAL HOUSE. HOWEVER, IN THIS CASE THE INTENTION OF THE ASSESSEE APPEARS TO BE NOT TO PURCHASE RESIDENTIAL HOUSE BUT TO DEVELOP A RESORT. THIS IS CLEARLY EVIDENT FROM THE ENQUIRY REPORT SUBMITTED BY THE INSPECTOR OF INCOME TAX ON 27.05.2013 WHICH READS AS UNDER:- AS DIRECTED, I HAVE CONDUCTED A SITE INSPECTION O N 21.05.2013 AT THE LANDED PROPERTY PURCHASED BY SMT. JANAKI MOHAN, PLOT NO.490, 4 TH SOUTH CROSS STREET, KAPALEESWARAR NAGAR, NEELANKARAI, CHENNAI (PAN : AAGPJ7764C) FROM YOGYAVEETTIL FAMILY AT MUHAMMA ON 04.04.2009 AND TH E REPORT THEREUPON IS SUBMITTED AS UNDER:- THE PROPERTY IN SY.NOS. 98/2-1, 2-1A, 2-2, 2-3, 98/ 9, 10, 11, 99/5-1, 5-2, 5-3 AND 99-11 ADMEASURING 555.612 CEN TS AS PER RECORDS OF SUB-REGISTRAR OFFICE, PUTHANAMBALAM LIES ABOUT 750 MTRS FROM MUHAMMA BOAT JETTY TOWARDS NORT H. THE EAST SIDE OF THE LAND IS VEMBANAD LAKE AND WEST SIDE IS PALLVATHUCKAL-CMS ROAD WHICH IS PARALLEL TO THE MUH AMMA THANNERMUKKON ROAD. THIS PROPERTY IS LYING AS A SI NGLE PROPERTY FENCED WITH COMPOUND WALL EVEN THOUGH IT I S IN SEVERAL SURVEY NUMBERS. AT THE TIME OF MY VISIT, MR. AMESH, M.K.PROJECT ENGINEER RECENTLY APPOINTED TO SUPERVISE THE LAND DEVELOPMENT WORK WAS PRESENT AND ALSO SOME LABOURER S. MR. AMESH INFORMED THAT GROUND LEVELING WORK WAS ST ARTED ABOUT 10 DAYS BACK ONLY AND ABOUT 800 LOADS OF RED EARTH 27 ITA NO.1837/MDS/2012 WERE UNLOADED WHICH WAS BEING LEVELED WITH JCB. HE TOLD ME THAT THE OWNER OF THE PROPERTY SMT. JANAKI MOHAN INTENDS TO CONSTRUCT A RESORT THERE AND FOR WHICH C HENNAI BASED COMPANY NAMELY M/S. ARUN EXPELLO HAD BEEN ENGAGED FOR THE CONSTRUCTION WORK. I COULD OBSERVE TWO OLD HOUSE PROPERTIES IN THE SA ID LAND. ONE IS USED BY MR. AMESH AS OFFICE THE AREA O F THE HOUSE IS ABOUT 1000 SQ.FT. THE OTHER ONE HAVING AB OUT 300 SQ.FT AREA IS ALMOST IN A DILAPIDATED CONDITION. MR . AMESH INFORMED THAT THERE WERE THREE HOUSES ABOUT 15 TO 2 0 YEARS OLD IN THE LAND ALL OF WHICH WERE IN DILAPIDATED CO NDITION. ONE OF UNUSED BUILDING WAS DEMOLISHED RECENTLY FOR CAR RYING OUT GROUND DEVELOPMENT LEVELING WORK. ABOUT 3 ACRE LA ND IS BEING UNDER LEVELING WORK. MOST OF THE AREA OF THE LAND IS MARSHY WITH BUSHES, PLANTS, PONDS UNYIELDING COCONU T TREES. THE NEARBY INHABITANTS INFORMED THAT THE PROPERTY HAD BEEN KEPT IDLE BY THE PURCHASER AFTER IT WAS PURCHASED T ILL ONE MONTH BACK. THE PROPERTY HAVE LARGE COMMERCIAL OR BUSINESS IMPORTANCE IN THE AREA BECAUSE OF EMERGENCE OF ECO - BACKWATER TOURISM IN ALAPPUZHA. MUHAMMA IS LYING I N WESTERN SIDE OF THE VEMBANAD LAKE IN ALAPPUZHA DIST . MANY RESORTS ARE FUNCTIONING SUCCESSFULLY FOR YEARS IN T HIS AREA. IT IS EVIDENT THAT THE PURCHASER SPENT HUGE AMOUNT FOR BUYING THIS LAND WITH AN INTENTION TO MAKE A HUGE RETURN F ROM EITHER RUNNING A RESORT OR FROM RESALE OF THE LAND. EARLIE R BEFORE THE ADVENT OF TOURISM THE COST WAS ONLY ` 20,000/- FOR A CENT OF LAND. BUT AS THIS AREA BECOME A MAJOR TOURIST ATTRA CTION IN THE WORLD, THE LAND PRICE IN THIS AREA HAS GONE UP SUBSTANTIALLY. MY FINDINGS IN BRIEF IN THE LIGHT OF QUESTIONNAIRE ENVISAGED IN THE LETTER OF HON.ITAT CHENNAI ARE AS UNDER:- 1. THE VERY INTENTION BEHIND DEDUCTION U/S.54F IS FULLY DEFEATED AS THE ASSESSEE NEITHER CONSTRUCTED ANY BUILDING IN THE LAND NOR EXISTING BUILDINGS WERE US EFUL FOR RESIDENTIAL PURPOSE. MOREOVER, THE INTENSION O F THE ASSESSEE IN PURCHASING THE PROPERTY IS TO START A RESORT THEREON WHICH IS A COMMERCIAL / BUSINESS ACTIVITY. THE ASSESSEE HAS BEEN KEEPING THE LAND I DLE FROM THE DATE OF PURCHASE TILL LAST MONTH. 2. WITH REGARD TO THE INVESTMENT IN PROPERTY AFTER PURCHASE. A) THREE SIDE OF THE PROPERTY IS FENCED WITH TEMPOR ARY COMPOUND WALL (METAL SHEET) B) TWO MEDIUM TYPE GATE FIXED. 28 ITA NO.1837/MDS/2012 C) THREE MTR. WIDE APPROACH ROAD FROM THE OPENING OF THE PROPERTY ABOUT 150 MTRS IS PAVED WITH GRAVED RED EARTH. D) GROUND LEVELING WORK IN ABOUT 3.5 ACRE LAND WHIC H IS BEING CARRIED OUT. 3. THE PURCHASER NEVER USED THIS PROPERTY FOR RESID ENTIAL OR FOR BUSINESS /COMMERCIAL PURPOSE. 4. AFTER THE APPROVAL BY THE ALAPPUZHA CHIEF TOWN PLANNER, THE GRAMA PANCHAYAT, MUHAMMA HAS GIVEN PERMISSION FOR CONSTRUCTION OF VILLAS IN THE RESORT ON 7.1.2011. THIS HAS BEEN AMENDED ON 23.01.2013 BASED ON APPLICANTS RENEWAL APPLICATION. LETTER DAT ED 25.05.2013 OF THE SECRETARY, MUHAMMA GRAMA PANCHAYAT ENCLOSING THE ABOVE PERMISSION IS ATTACHED HEREWITH. 5. THE PROPERTY IS STILL IN THE POSSESSION OF SMT. JANAKI MOHAN AS PER THE RECORDS MAINTAINED IN THE SRO, PUTHANAMBALAN AS ON DATE. LETTER RECEIVED FROM THE SRO, PUCHANAMBALAN STATING THE SAME IS ENCLOSED. SD/- (VENUGOPAL R.PILLAI) INSPECTOR OF INCOME TAX O/O. ACIT, CIRCLE-I, ALAPPUZHA. DATE :27.05.2013 15. WE HAVE ALSO PERUSED THE BUILDING PERMIT ISSUED IN THE NAME OF THE ASSESSEE BY MUHAMMA GRAMA PANCHAYAT ON 7.1.2011 WHICH CLEARLY STATES THAT ASSESSEE HAD MA DE AN APPLICATION ON 28.9.2010 TO CONSTRUCT A RESORT. THE ASSESSEE PURCHASED LANDS TO THE EXTENT OF 5.61 ACRES, THOUGH FROM A SINGLE FAMILY BY WAY OF SEVERAL SALE DEEDS ON 03.04 .2009 AND APPLIED FOR CONSTRUCTION OF A RESORT ON 28.09.2010. MUHAMMA GRAMA PANCHAYAT VIDE ORDER DATED 07.01.2011 GRANTED BUILDING PERMISSION TO CONSTRUCT A RESORT SUBJECT T O THE 29 ITA NO.1837/MDS/2012 CONDITIONS STATED IN KMBR ACT AND SECTION 220(B) O F KPR ACT. IT IS FURTHER STATED THAT AS PER APPROVAL FROM TOWN PLANNING ORDER NO.C3-11600/2010 DATED 22.12.2010, THE CONSTRUCTION SHOULD BE ACCORDING TO THE INSTRUCTION S MENTIONED IN ITEM NUMBER 1 TO 4. IT IS THE ASSESSEE S VERSION THAT SHE HAD ENTERED INTO AN AGREEMENT ON 29.08.201 2 WITH M/S. ARUN EXCELLO CONSTRUCTIONS FOR DEVELOPING THE PROPERTY AND AT THE SAME TIME, IT IS THE ASSERTION OF THE AS SESSEE THAT POSSESSION HAS BEEN HANDED OVER AND GENERAL POWER O F ATTORNEY WAS ISSUED TO M/S. ARUN EXCELLO CONSTRUCTI ONS. THE DEVELOPMENTAL ACTIVITIES, IF ANY ON THE PROPERTY AR E AT THE INSTANCE OF M/S. ARUN EXCELLO CONSTRUCTION AND THE ASSESSEE HAS NO CONNECTION THEREWITH. ALL THESE THINGS GO TO CLEARLY SHOW THAT ASSESSEES INTENTION WAS TO PURCHASE LAN D AND DEVELOP A RESORT RATHER THAN A RESIDENTIAL HOUSE FO R RESIDING PURPOSE. IF THE VERSION OF THE ASSESSEE THAT ALL TH E LAND PURCHASED IS CONTIGUOUS LAND FORMS PART OF ONE PRO PERTY WITH ONE RESIDENTIAL HOUSE THOUGH PURCHASED FROM SEVERAL INDIVIDUALS OF A FAMILY SHOULD BE CONSIDERED AS ELI GIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT, IT DEFEATS THE VERY PURPOSE OF INTRODUCING THE PROVISIONS OF SECTION 54 F OF THE 30 ITA NO.1837/MDS/2012 ACT WHICH IS ENACTED TO INTEND THE BENEFIT TO THE A SSESSEE WHO INVESTS IN ACQUISITION OF RESIDENTIAL HOUSE ESP ECIALLY IN THE PRESENT CIRCUMSTANCES WHERE THE ASSESSEE PURCH ASED HUGE EXTENT OF 5.61 ACRES OF LAND STATING TO BE CON TIGUOUS WHICH WAS LATER DEVELOPED INTO A RESORT FOR COMMERC IAL PURPOSES. THE ASSESSEE PLACES RELIANCE ON THE DECI SION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ADDL. CI T VS. NARENDRA MOHAN UNIYAL (34 SOT 152) IN SUPPORT OF H ER CONTENTION THAT VACANT LAND APPURTENANT TO AND FORM ING PART OF A RESIDENTIAL UNIT SHOULD BE CONSIDERED FOR DEDU CTION UNDER SECTION 54F OF THE ACT. WE FIND THE SAID DECISION R ELIED ON BY THE ASSESSEE IS DISTINGUISHABLE ON FACTS AND HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. OTHER DECISIONS RELIED ON BY THE ASSESSEE ALSO HAVE NO APPLICATION TO THE FACTS OF THE CASE. 16. THE ALTERNATIVE SUBMISSION OF THE ASSESSEE IS T HAT EVEN ASSUMING THAT SURVEY NUMBERS 98/2/1A, 99/5-3, 99/5- 2, 99/5- 1 ARE TAKEN TO BE INDEPENDENT PROPERTIES THE LAND I N SURVEY NUMBERS 98/2-2, 98/2-1 ARE CONTIGUOUS TO SURVEY NUM BER 98/9 HOUSING RESIDENTIAL PROPERTY AND RELIEF UNDER SECTION 54F IS LIABLE TO BE GRANTED ALSO CANNOT BE ACCEPTED FOR THE 31 ITA NO.1837/MDS/2012 REASON THAT ALL THE PROPERTIES ARE INDEPENDENT PROP ERTIES PURCHASED FROM SEVERAL INDIVIDUALS EVEN THOUGH FROM THE SAME FAMILY HAVING VARIOUS WATER BODIES WITH CLEAR DEMARCATION OF LAND OF EACH PROPERTY WITH BUILDINGS THEREON IN THE THREE OF THE PROPERTIES WITH MUNICIPAL DOOR NUM BERS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS TO B E NOTED THAT EACH TRANSACTION AS A SEPARATE TRANSACTION AND IT CANNOT BE CONSIDERED AS CONTIGUOUS PROPERTIES . THUS, IN OUR OPINION, THE ASSESSING OFFICER IS PERFECTLY JUSTIFIED IN RES TRICTING THE DEDUCTION ONLY TO THE PORTION OF THE LAND PURCHASED FROM MR. Y.J.ALEX IN SURVEY NUMBERS 98/9, 98/10, 98/11 AND 98/2-3. THUS, WE UPHOLD THE ORDER OF THE ASSESSING OFFICER AND REVERSE THAT OF THE COMMISSIONER OF INCOME TAX (APP EALS). 17. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH NOVEMBER, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 4 TH NOVEMBER, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .