Shri Rajni R.Verma, Ahmedabad V. The ACIT.,Cent.Circle-2(4), Ahmedabad

ITA 1892/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0113 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 01-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY RANJAN
• Assessee Lawyers: BHUBNESH KULSHRESTHA
• Keywords: Capital asset; Opportunity of being heard; Additional evidence; Cost of acquisition
• Section: 54F; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND D. C. AGRAWAL , AM) ITA NO.1892/AHD/2010 A. Y.: 2007-08 SHRI RAJNI R. VARMA, HARIOM AVENUE, 31-B, GOVT. SERVANT SOCIETY, NR. MUNICIPAL MARKET, NAVRANGPURA, AHMEDABAD VS THE A. C. I. T. CEN. CIRCLE-2(4), AAYAKAR BHAVAN ANNEXE, ASHRAM ROAD, AHMEDABAD PA NO. AAPPV 6502P (APPELLANT) (RESPONDENT) APPELLANT BY SHRI VIJAY RANJAN, AR ASSESSEE BY BHUBNESH KULSHRESTHA, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE LEARNED CIT(A)-III, AHMEDABAD DATED 15-10-2009 FOR ASSESSMENT YEAR 20007-08 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE DEPARTMENTAL AUTHORITIES HAVE ERRED IN REJECTING AS SESSEES CLAIM FOR DEDUCTION FROM LONG TERM CAPITAL GAINS. 2. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE, THE DEPARTMENTAL AUTHORITIES SHOULD HA VE ACCEPTED ASSESSEES CLAIM U/S 54F AND SHOULD HAVE A LLOWED DEDUCTION OF RS.9,13,807/-, BEING NET CONSIDERATION AND LONG TERM CAPITAL GAINS WHICH AROSE ON SALE OF A LONG TE RM CAPITAL ASSET BECAUSE SOON THEREAFTER THE ASSESSEE HAD BOUG HT A PLOT OF LAND FOR CONSTRUCTING A RESIDENTIAL HOUSE AND HA D PAID RS.10 LACS. 2. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERE D THE MATERIAL ON RECORD. 3. THE AO OBSERVED THAT DURING THE YEAR UNDER CONSI DERATION THE ASSESSEE HAS FILED RETURN OF INCOME AT RS.3,04,600/ - ON 12-11-2008 AND ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 2 CLAIMED EXEMPTION U/S 54 ONWARDS INCLUDING SECTION 54 F OF THE IT ACT IN RESPECT OF PART SALE OF LAND OF SURVEY NO.147 AT THALTEJ. THE DECLARED SALE CONSIDERATION WAS RS.60,00,000/- IN W HICH THE SHARE OF THE ASSESSEE WAS ONE SIXTH I.E. RS.10,00,000/- ALONG WI TH OTHER BROTHERS SHRI MAHESH VARMA, SHRI RAVI VARMA AND ASSESSEE AND THEI R SPOUSES. THE COST OF ACQUISITION AFTER INDEXING WAS SHOWN AT RS. 86,193/- AND CAPITAL GAIN OF RS.9,13,807/- WAS CLAIMED EXEMPT UNDER VARI OUS SECTIONS INCLUDING SECTION 54F OF THE IT ACT. THE SALE PROCE EDS WERE UTILIZED IN PURCHASE OF PLOT OF 1200 SQ. YDS. AT SAKET- III, AH MEDABAD JOINTLY WITH HIS WIFE ON 22-10-2007 BEFORE THE DATE OF FILING OF THE RETURN AND EXEMPTION WAS CLAIMED AS NOTED ABOVE. THE AO POINTE D OUT THAT THE PLEA OF THE ASSESSEE WAS NOT COVERED UNDER ANY OF THE PR OVISIONS OF SECTION 54 INCLUDING SECTION 54 F OF THE IT ACT AND ACCORDINGL Y ADDITION ON ACCOUNT OF CAPITAL GAIN WAS MADE IN A SUM OF RS.9,13,807/-. THE ADDITION WAS CHALLENGED BEFORE THE LEARNED CIT(A) AND IT WAS SUB MITTED THAT EXEMPTION HAD BEEN CLAIMED U/S 54F OF THE IT ACT IN RESPECT OF INVESTMENT IN THE LAND AT SAKET FOR CONSTRUCTION OF RESIDENTIAL HOUSE, OUT OF THE SALE PROCEEDS RECEIVED FROM THE SALE OF AGRI CULTURAL LAND. THE PLOT AT SAKET WAS ACQUIRED FOR CONSTRUCTION OF RESIDENTI AL PROPERTY AND THE ASSESSEE HAD INVESTED THE SALE PROCEEDS VIDE CHEQUE S OF RS.5,00,000/- EACH ON 18-06-2007 AND 23-07-2007 AS PER HIS SHARE. COPY OF PURCHASE DEED DATED 22-10-2007 WAS FILED. IT WAS SPECIFIED T HAT THE ASSESSEE OWNED ONLY ONE RESIDENTIAL PROPERTY AND WAS ELIGIBL E FOR EXEMPTION U/S 54F OF THE IT ACT. THE LEARNED CIT(A) HOWEVER, NOTE D THAT TO CLAIM EXEMPTION U/S 54F OF THE IT ACT, THE ASSESSEE WAS R EQUIRED TO PURCHASE RESIDENTIAL HOUSE PROPERTY OR CONSTRUCT THE SAME WI THIN THE PRESCRIBED TIME LIMIT. THE LEARNED CIT(A) FURTHER NOTED THAT T HE RESIDENTIAL HOUSE IS A PLACE USED FOR HABITATION OF PEOPLE SO MUCH BE CA PABLE OF BEING USED FOR THE PURPOSE OF RESIDENCE. IN THE CASE OF THE AS SESSEE ENTIRE SALE CONSIDERATION HAD BEEN INVESTED IN THE PURCHASE OF THE PLOT OF LAND WHICH IS NOT CAPABLE OF BEING USED FOR THE PURPOSE OF RES IDENCE. THEREFORE, ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 3 REQUIREMENTS OF SECTION 54F OF THE IT ACT ARE NOT S ATISFIED IN THIS CASE. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY DISMISSE D. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T THE ASSESSEE IS AN INDIVIDUAL AND SOLD AGRICULTURAL LAND ON 01-02-2007 (COPY FILED IN PAPER BOOK) WHICH GAVE RISE TO LONG TERM CAPITAL GAIN IN A SUM OF RS.9,13,807/- . THEN, WITHIN 9 MONTHS THEREOF I.E. ON 22-10-2007, THE ASSESSEE PURCHASED RESIDENTIAL PLOT FOR RS.10,00,000/- WITH INTENTION TO CONSTRUCT RESIDENTIAL HOUSE. THEREFORE, SUCH CLAIM WAS MADE I N THE RETURN OF INCOME. HE HAS SUBMITTED THAT THE AUTHORITIES BELOW HAVE NOT GIVEN SPECIFIC REASON FOR REJECTING THE CLAIM OF THE ASSE SSEE. HE HAS SUBMITTED THAT THE AUTHORITIES BELOW HAVE REJECTED THE CLAIM OF THE ASSESSEE MERELY ON THE REASON THAT BUYING OF A RESIDENTIAL PLOT CAN NOT BE REGARDED AS CONSTRUCTING RESIDENTIAL HOUSE. IT WAS SUBMITTED TH AT FOR CONSTRUCTING A RESIDENTIAL HOUSE PURCHASE OF A RESIDENTIAL PLOT IS NECESSARY WHICH IS DONE IN THIS CASE. THE LEARNED COUNSEL FOR THE ASSE SSEE FURTHER SUBMITTED THAT SECTION 54F OF THE IT ACT LAYS DOWN TIME LIMIT OF 3 YEARS FOR CONSTRUCTION OF A NEW HOUSE AFTER THE DATE OF T RANSFER OF THE ORIGINAL ASSET AND IN THIS CASE THE SAME TIME WAS AVAILABLE TO THE ASSESSEE UP TO 31-01-2010. IT CANNOT BE INFERRED THAT THE ASSESSEE HAS FAILED TO CONSTRUCTION THE HOUSE WITHIN THE ABOVE MENTIONED S PECIFIED PERIOD OF 3 YEARS. IT WAS SUBMITTED THAT RETURN WAS FILED MUCH EARLIER. IT WAS FURTHER SUBMITTED THAT COST OF THE PLOT PURCHASED HAS TO BE CONSIDERED AS PART OF THE COST OF RESIDENTIAL HOUSE TO BE BUILT UP. THE S AME POSITION IS CLARIFIED BY THE BOARD IN THE CIRCULAR NO.667 DATED 18-10-199 3 WHICH IS REPRODUCED IN THE BOOK OF CHATURVEDI & PITHISARIAS , 5 TH EDITION, VOLUME 2 AND IN PARA 2 IT WAS EXPLAINED THAT BOARD IS OF T HE VIEW THAT THE COST OF THE LAND IS AN INTEGRAL PART OF THE COST OF THE RES IDENTIAL HOUSE, WHETHER PURCHASED OR BUILT. THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT IF THE AMOUNT OF CAPITAL GAIN FOR THE PURPOSE OF SE CTION 54 OF THE IT ACT ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 4 AND THE NET CONSIDERATION FOR THE PURPOSE OF SECTIO N 54F OF THE IT ACT, IS APPROPRIATED TOWARDS PURCHASE OF A PLOT AND ALSO T OWARDS CONSTRUCTION OF RESIDENTIAL HOUSE THEREON, THE AGGREGATE COST SH OULD BE CONSIDERED FOR DETERMINING THE QUANTUM OF DEDUCTION U/S 54 F OF TH E IT ACT, PROVIDED THAT THE ACQUISITION OF THE PLOT AND ALSO THE CONST RUCTION THEREOF ARE COMPLETED WITHIN THE SPECIFIED PERIOD UNDER THESE S ECTIONS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT CONSTRUCTIO N ON THE AFORESAID PURCHASED PLOT WAS GOING ON WHEN THE MATTER WAS PEN DING BEFORE THE LEARNED CI)T(A) AND ALL THESE FACTS WERE APPRISED T O HIM THAT CONSTRUCTION WAS GOING ON IN THE ABOVE PURCHASED PLOT. THE DETAI LS WERE FILED BUT THE LEARNED CIT(A) PROCEEDED IN THE MATTER WITHOUT CONS IDERING THE SUBMISSION OF THE ASSESSEE THAT CONSTRUCTION WAS GO ING ON WITHIN THE SPECIFIED PERIOD IN THE PURCHASED PLOT. HE HAS, THE REFORE, SUBMITTED THAT THE LEARNED CIT(A) DID NOT GIVE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND NO DETAIL FACTS HAVE BEEN NOTED IN THE IMPUGNED ORDER. THE LEARNED COUNSEL FOR THE ASSESSEE FILED APPLICATION FOR ADDITIONAL EVIDENCES AND SUBMITTED THAT THE DOCUMENTS SOUGHT TO BE ADMIT TED ARE VITAL IN NATURE AND PRAYED THAT SAME MAY BE ADMITTED FOR THE PURPOSE OF JUST DECISION IN THE MATTER. THE ADDITIONAL EVIDENCES SO UGHT TO BE ADMITTED ARE AS UNDER: 1. PERMISSION FROM AHMEDABAD URBAN DEVELOPMENT AUT HORITY DATED 24/11/2005 TO THE BUILDERS/DEVELOPERS EVIDENC ING PERMISSION FOR CONSTRUCTION OF ONLY 45 SQ. METERS O N THE APPELLANTS PLOT. 2. COPY OF ELECTRICITY BILL OF THE MONTH OF MAY-JUN E, 2009 EVIDENCING OBTAINING OF ELECTRICITY CONNECTION TO S TART CONSTRUCTION. 3. LEDGER ACCOUNT OF CONSTRUCTION OF THE RESIDENCE . 4. ARCHITECTS CERTIFICATE EVIDENCING COMPLETION OF CONSTRUCTION ON 11/01/2010 ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 5 5. PHOTOGRAPH OF THE RESIDENTIAL UNIT CONSTRUCTED B Y THE APPELLANT. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. THE LEARNED DR AS REGARDS ADMISS ION OF THE ADDITIONAL EVIDENCES DID NOT OBJECT TO THE REQUEST OF THE ASSE SSEE. THE LEARNED DR HOWEVER, SUBMITTED THAT IN CASE ADDITIONAL EVIDENCE AS AFORESAID ARE ADMITTED, THE MATTER MAY BE REMANDED TO THE FILE OF THE AO FOR RECONSIDERATION OF THE ISSUE AFRESH IN ACCORDANCE W ITH LAW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. SECTION 54 F OF THE IT ACT REA DS AS UNDER: 54F. (1) [SUBJECT TO THE PROVISIONS OF SUB-SECTION (4) , WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LO NG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SE CTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PER IOD OF ONE YEAR BEFORE OR [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DA TE CONSTRUCTED, A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERR ED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CA PITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE N ET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPIT AL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS TH E COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER SECTION 45 : [ PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL A PPLY WHERE (A) THE ASSESSEE, (I) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THA N THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 6 (II) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN TH E NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANS FER OF THE ORIGINAL ASSET; OR (III) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; AND (B) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER T HAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPER TY.] EXPLANATION.FOR THE PURPOSES OF THIS SECTION, NET CONSIDERATION, IN RELATION TO THE TRANSFER OF A CAPITAL ASSET, MEANS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACC RUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET AS REDUCED BY ANY EXP ENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRAN SFER. (2) WHERE THE ASSESSEE PURCHASES, WITHIN THE PERIOD OF [TWO YEARS] AFTER THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET, OR CONSTRUCTS, WITHIN THE PERIOD OF THREE YEARS AFTER SUCH DATE, ANY RESIDENT IAL HOUSE, THE INCOME FROM WHICH IS CHARGEABLE UNDER THE HEAD INCOME FRO M HOUSE PROPERTY, OTHER THAN THE NEW ASSET, THE AMOUNT OF CAPITAL GAI N ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE (A), OR, AS THE CASE MAY BE, CLAUSE (B), OF SUB-SECTION (1), SHALL BE DE EMED TO BE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH RESIDENTI AL HOUSE IS PURCHASED OR CONSTRUCTED. (3) WHERE THE NEW ASSET IS TRANSFERRED WITHIN A PER IOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE OR, AS THE CASE MAY B E, ITS CONSTRUCTION, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFE R OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE CO ST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, C LAUSE (B), OF SUB- SECTION (1) SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS RELATING TO LONG-TERM CAPITAL ASSET S OF THE PREVIOUS YEAR IN WHICH SUCH NEW ASSET IS TRANSFERRED.] ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 7 [(4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS N OT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE O RIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURC HASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RET URN OF INCOME UNDER SECTION 139 , SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 ] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTI LISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION I N THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT ; AND, FOR THE PURPOSES OF SUB- SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILISED B Y THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1), THE N, (I) THE AMOUNT BY WHICH (A) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TR ANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB-SECTION (1), EXCEEDS (B) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HAD THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SE CTION (1) BEEN THE COST OF THE NEW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF TH E TRANSFER OF THE ORIGINAL ASSET EXPIRES ; AND ( II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UN UTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. EXPLANATION. [ OMITTED BY THE FINANCE ACT, 1992, W.E.F. 1-4-1993. ]]. 7. THE DATES OF SALE OF THE CAPITAL ASSET AND PURCH ASE OF THE PROPERTY ARE NOT IN DISPUTE. THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 8 THE ASSESSEE PURCHASED THE RESIDENTIAL PLOT WITH IN TENTION TO CONSTRUCT RESIDENTIAL HOUSE AND CLAIMED DEDUCTION U/S 54 F OF THE IT ACT WHICH LAYS DOWN TIME LIMIT OF 3 YEARS FOR CONSTRUCTION OF A RESIDENTIAL HOUSE FROM THE DATE OF TRANSFER OF THE CAPITAL ASSET. THE REFORE, THE SUBMISSION OF THE ASSESSEE IS ACCEPTABLE THAT THE CASE OF THE ASSESSEE MAY FALL WITHIN THE PROVISIONS OF SECTION 54F OF THE IT ACT. HOWEVE R, THE ASSESSEE DID NOT FILE ANY EVIDENCE BEFORE THE AUTHORITIES BELOW. THE LEARNED COUNSEL FOR THE ASSESSEE NOW FILED THE ABOVE ADDITIONAL EVIDENC ES IN SUPPORT OF THE CLAIM AND REQUESTED THAT THE SAME MAY BE ADMITTED F OR THE JUST DECISION IN THE MATER. THE FIRST ADDITIONAL EVIDENCE IS THE PERMISSION FROM AHMEDABAD URBAN DEVELOPMENT AUTHORITY DATED 24-11-2 005 GIVING PERMISSION FOR CONSTRUCTION OF 45 SQM ON THE ASSESS EES PLOT WHICH WAS GRANTED TO THE BUILDER/DEVELOPER. THE SECOND ADDITI ONAL EVIDENCE IS ELECTRICITY BILL SHOWING THAT CONSTRUCTION HAD STAR TED IN THE PLOT IN QUESTION. THE COPY OF THE CONSTRUCTION ACCOUNT SHOW S THAT THE ASSESSEE STARTED MAKING INVESTMENT IN THE PLOT IN QUESTION F OR RAISING CONSTRUCTION FROM 27-04-2009 UP TO 25-01-2010. IT W OULD SHOW THAT CONSTRUCTION ACTIVITIES STARTED IN THE PLOT IN QUES TION PRIOR TO DISPOSAL OF THE APPEAL BY THE LEARNED CIT(A). THE CERTIFICATE O F THE ARCHITECT AND THE PHOTOGRAPH SHOWS THAT CONSTRUCTION OF RESIDENTIAL H OUSE IS COMPLETED IN JANUARY, 2010. ALL THE ABOVE ADDITIONAL EVIDENCES A RE VITAL FOR DOING SUBSTANTIAL JUSTICE IN THE MATTER. THE ABOVE ADDITI ONAL EVIDENCES GO TO THE ROOT OF THE MATTER ENABLING THE AUTHORITIES BEL OW TO DECIDE THE ABOVE ISSUE IN ACCORDANCE WITH THE LAW. THE LEARNED DR DI D NOT OPPOSE ADMISSION OF THE ADDITIONAL EVIDENCES. CONSIDERING THE ABOVE FACTS AND CONSIDERING THE ADDITIONAL EVIDENCES IN THE LIGHT O F THE PROVISIONS OF SECTION 54F OF THE IT ACT, WE ARE OF THE VIEW THAT ALL THE ABOVE ADDITIONAL EVIDENCES SHALL HAVE TO BE ADMITTED FOR JUST DECISI ON IN THE MATTER. IN THE INTEREST OF JUSTICE AND FOR SUBSTANTIAL CAUSE IN TH E MATTER, WE ADMIT THE ADDITIONAL EVIDENCES WHICH ARE RELEVANT TO THE MATT ER IN ISSUE FOR JUST DECISION IN THE MATTER. THE REQUEST OF THE ASSESSEE IS ACCORDINGLY ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 9 ACCEPTED AND ALL THE ABOVE ADDITIONAL EVIDENCES ARE ADMITTED FOR THE PURPOSE OF HEARING. SINCE, ALL THE ABOVE ADDITIONAL EVIDENCES HAVE NOT BEEN FILED BEFORE THE AUTHORITIES; THEREFORE, IT WO ULD BE REASONABLE AND PROPER TO RESTORE THE MATTER TO THE FILE OF THE AO TO RECONSIDER THE ISSUE IN ACCORDANCE WITH LAW BECAUSE THE AO WOULD BE ABLE TO EXAMINE ALL THE EVIDENCES BEFORE HIM FOR DECIDING THE ISSUE ONCE FO R ALL. THE DOCUMENTS SO ADMITTED SHOWS THAT THE LEARNED CIT(A) HAS NOT G IVEN REASONABLE OPPORTUNITY TO THE ASSESSEE TO ADDUCE THE ABOVE EVI DENCES AT THE APPELLATE STAGE. WE ACCORDINGLY, SET ASIDE T4HE ORD ERS OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE IN APPEAL TO THE FILE O F THE AO WITH DIRECTION TO THE AO TO RE-DECIDE THE ABOVE ISSUE IN ACCORDANC E WITH LAW IN THE LIGHT OF THE EVIDENCE PRODUCED BY THE ASSESSEE BEFORE US AND SO ADMITTED ABOVE. THE ASSESSEE MAY ALSO PRODUCE ANY OTHER EVID ENCE BEFORE THE AO IN SUPPORT OF THE CLAIM U/S 54 F OF THE IT ACT. THE AO SHALL GIVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 -09-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 01-09-2010 LAKSHMIKANT/- ITA NO.1892/AHD/20010 SHRI RAJNI R. VARMA VS ACIT, CC -2(4), AHD 10 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD