The Income Tax Officer, Ward-6(3), Hyderabad V. Shri Kotagiri Sridhar, Hyderabad

ITA 19/HYD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98508 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G SURYA PRAS
• Assessee Lawyers: P MURALIKRISHNA
• Keywords: Unexplained investment; Capital asset
• Section: 143(3); 54F; 68; 54

Judgement Text

ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BBENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.19/HYD/2013 (ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER WARD 6(3) HYDERABAD VS. SHRI KOTAGIRI SRIDHAR, HYDERABAD PAN: AHYPK 8220 B (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI G. SURYA PRAS AD , DR FOR ASSESSEE : SHRI P. MURALI KRISHNA DATE OF HEARING : 15 .09 .2015 DATE OF PRONOUNCEMENT : 23 . 09. 2015 O R D E R PER SMT.P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2009-10. IN T HIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF TH E CIT (A) GIVING RELIEF TO THE ASSESSEE BY ALLOWING DEDUCTION U/S 54 F OF THE I.T. ACT, EVEN THOUGH, CONSTRUCTION OF THE HOUSE WAS NOT COMPLETED WITHIN 3 YEARS FROM THE DATE OF TRANSFER OF THE ORI GINAL ASSET. FURTHER, THE REVENUE IS ALSO AGGRIEVED BY THE ORDER OF THE CIT (A) IN HOLDING THAT THE ADDITION MADE BY THE AO IN THE HANDS OF THE ASSESSEE U/S 68 OF THE I.T. ACT OF RS.22.00 LAKHS I S TO BE ASSESSED IN THE HANDS OF THE ASSESSEES WIFE I.E. S MT. K. SARITHA. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, HAS FILED RETURN OF INCOME FOR THE A.Y 2009-10 ON 2 9.09.2009 DECLARING INCOME OF RS.13,57,910. DURING THE ASSESS MENT ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 2 OF 9 PROCEEDINGS U/S 143(3) OF THE I.T. ACT, VARIOUS DET AILS RELATING TO THE ASSESSEES COMPUTATION OF INCOME WERE CALLED FO R. ASSESSEE FILED THE REQUIRED DETAILS. THE AO OBSERVED THAT IN THE COMPUTATION OF TOTAL INCOME, ASSESSEE HAS SHOWN LON G TERM CAPITAL GAIN ON SALE OF LAND AT TELLAPUR(V), RAMACH ANDRAPURA (M) ON 15.05.2008 AND COMPUTED THE CAPITAL GAINS AT RS. 1,48,93,906 AND HAS CLAIMED THE NET LONG TERM CAPITAL GAIN AS A DEDUCTION U/S 54F OF THE I.T. ACT. AO ASKED THE ASSESSEE TO C LARIFY AS TO WHETHER THE HOUSE PURCHASED BY THE ASSESSEE FOR CLA IMING DEDUCTION U/S 54F IS COMPLETE AND FIT FOR OCCUPATIO N WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF CAPITAL ASSET OR NOT. IN RESPONSE TO THE SAME, ASSESSEE FILED A LETT ER DATED 8.11.2011 STATING THAT THE ASSESSEE HAS PURCHASED L AND AND THE CONSTRUCTION OF THE HOUSE WAS COMPLETED IN MARCH, 2 011 AND THAT THE CONTRACTOR HAS HANDED OVER THE HOUSE. IT W AS SUBMITTED THAT THE TOTAL NET SALE CONSIDERATION WAS INVESTED IN ACQUIRING THE HOUSE AND DUE TO VARIOUS ISSUES, THE DEVELOPER HAS NOT COMPLETED ROADS, DRAINAGE AND WATER CONNECTION AND HENCE ASSESSEE COULD NOT COMPLETE THE FINISHING WORKS. FR OM THESE DETAILS FURNISHED BY THE ASSESSEE, AO CAME TO THE C ONCLUSION THAT THE HOUSE IS NOT YET COMPLETELY CONSTRUCTED AN D NOT FIT FOR HABITATION DUE TO LACK OF ROAD, ELECTRICITY AND DRA INAGE SYSTEM TO THE HOUSE. HE OBSERVED THAT FOR CLAIMING DEDUCTION U/S 54F OF THE ACT, ASSESSEE SHOULD HAVE COMPLETED THE CONSTRU CTION OF THE RESIDENTIAL HOUSE WITHIN A PERIOD OF 3 YEARS AFTER THE TRANSFER OF THE ORIGINAL ASSET. SINCE THE RESIDENTIAL HOUSE IS NOT COMPLETE, HE DISALLOWED THE DEDUCTION U/S 54F AND BROUGHT IT TO TAX. ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 3 OF 9 3. HE FURTHER OBSERVED THAT VIDE LETTER DATED 23.11 .2011, ASSESSEE HAS STATED THAT HE HAS INVESTED CASH OF RS .22.00 LAKHS FOR PURCHASE OF PLOTS DURING THE YEAR AND FURNISHED THE SOURCES FOR THE SAME. ON VERIFICATION OF THE DETAILS, HE OB SERVED THAT THE SOURCES CLAIMED BY THE ASSESSEE INCLUDED A SUM OF R S.22.00 LAKHS RECEIVED FROM SHRI I.V. SATISH AND THE AMOUNT OFFERED TO TAX BY THE ASSESSEE AS UNEXPLAINED INVESTMENT EXCLU DING THE ABOVE SUM IS RS.38,50,000. ASSESSEE ALSO FURNISHED CONFIRMATION LETTER OF SHRI I.V. SATISH WHO STATED THAT HE HAS PAID AN AMOUNT OF RS.22.00 LAKHS ON BEHALF OF THE ASSESS EE ON 10.10.2008 AS AN ADVANCE FOR A NEW SITE AND THE SAM E IS REFLECTED IN HIS BALANCE SHEET FOR THE FINANCIAL YE AR 2008-09. ON VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESS EE, AO OBSERVED THAT ASSESSEE HAS ENTERED INTO AN AGREEMENT FOR CON STRUCTION ON 29.09.2008 WITH SHRI I.V. SATISH FOR CONSTRUCTION O F PROPERTY AT PLOT NO.A2, NANAKRAMGUDA (V), SERI LINGAMPALLY (M), R.R. DISTRICT FOR AN AMOUNT OF RS.1,16,70,680 AND THE AS SESSEE HAD PAID AN ADVANCE OF RS.1.00 CRORE ON 29.09.2008. ON VERIFICATION OF THE BANK A/C OF SHRI I.V. SATISH, AO OBSERVED TH AT SHRI I.V. SATISH HAS WITHDRAWN CASH OF RS.22.00 LAKHS ON 10.1 0.2008 OUT OF THE SAME AMOUNT RECEIVED FROM THE ASSESSEE. HE O BSERVED THAT ON THE ONE HAND, ASSESSEE IS CLAIMING THAT THE AMOU NT WAS GIVEN TO SHRI SATISH AS AN INVESTMENT FOR CONSTRUCTION OF NEW HOUSE AND ON THE OTHER HAND, THE SAME AMOUNT HE HAS CLAIM ED AS AMOUNT RECEIVED BY THE ASSESSEE FOR INVESTMENT. HE FURTHER OBSERVED THAT THOUGH THE ASSESSEE HAS CLAIMED AN AM OUNT OF RS.22.00 LAKHS AS AN ADVANCE FROM SHRI SATISH TO TH E ASSESSEE TOWARDS PURCHASE OF ASSET, ASSESSEE HAS FAILED TO F URNISH DETAILS OF THE PROPERTY FOR WHICH ADVANCE WAS RECEIVED, A C OPY OF THE ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 4 OF 9 AGREEMENT OF SALE ETC. HE FURTHER OBSERVED THAT THE ASSESSEE HAS NOT SHOWN THE ADVANCE RECEIVED FROM SRI SATISH IN H IS BALANCE SHEET AND THEREFORE, HE TREATED THE SUM OF RS.22.00 LAKHS AS UNEXPLAINED INVESTMENT AND BROUGHT IT TO TAX. AGGRI EVED BY BOTH THE DISALLOWANCES ABOVE, ASSESSEE PREFERRED AN APPE AL BEFORE THE CIT (A). THE CIT (A), AFTER CONSIDERING THE ASSESSE ES CONTENTIONS AT LENGTH, HAS DELETED BOTH THE DISALLOWANCES MADE BY THE AO. AGGRIEVED BY THE RELIEF GIVEN BY THE CIT (A), REVEN UE IS IN APPEAL BEFORE US. 4. LEARNED DR RELIED UPON THE ORDER OF THE AO, WHIL E THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDE R OF THE CIT (A). ASSESSEE HAS ALSO FILED A PAPERBOOK CONSISTING OF THE WRITTEN SUBMISSIONS, BANK STATEMENT OF MR. I.V. SATISH, CON FIRMATION LETTER OF MR.SATISH, BALANCE SHEET OF THE ASSESSEE AND THE RELEVANT CASE LAW ON WHICH THE ASSESSEE IS PLACING RELIANCE UPON. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE UNDISPUTED FACT IS THAT AS SESSEE HAS SOLD A CAPITAL ASSET AND HAS DERIVED LONG TERM CAPITAL G AIN THEREON. IT IS ALSO NOT DISPUTED THAT THE ENTIRE NET SALE CONSI DERATION HAS BEEN INVESTED IN THE CONSTRUCTION OF A RESIDENTIAL HOUSE. THE ONLY DISPUTE IS WHETHER THE ASSESSEE IS ELIGIBLE FOR DED UCTION U/S 54F OF THE I.T. ACT, SINCE THE HOUSE CONSTRUCTED BY THE ASSESSEE IS NOT IN A LIVEABLE CONDITION BY THE END OF THREE YEARS F ROM THE DATE OF SALE OF ORIGINAL ASSET DUE TO LACK OF ROAD FACILITY , ELECTRICITY CONNECTION AND DRAINAGE SYSTEM TO THE HOUSE. WE FIN D THAT THIS TRIBUNAL IN CATENA OF DECISIONS HAS HELD THAT THE T HRUST OF THE SECTION 54F IS ON THE INVESTMENT OF THE NET CONSIDE RATION ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 5 OF 9 RECEIVED ON THE SALE OF THE ORIGINAL ASSET AND STAR T OF THE CONSTRUCTION OF A NEW RESIDENTIAL HOUSE AND DOES NO T PRESCRIBE COMPLETION OF CONSTRUCTION OF THE RESIDENTIAL HOUSE WITHIN THE PERIOD OF THREE YEARS. THIS VIEW HAS BEEN HELD BY B BENCH OF THE TRIBUNAL AT CHANDIGARH IN THE CASE OF SMT. RAJNEETH SANDHU VS. DCIT (2010) 133 TTJ 64. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SAMBANDHAM UDAY KUMAR (2012) 34 5 ITR 389 (KAR.) HAS EXTENSIVELY CONSIDERED THE ISSUE AT PARAS 9 TO 15 OF THE ORDER WHICH IS REPRODUCED HEREUNDER FOR READ Y REFERENCE: 9. SECTION 54F OF THE ACT PROVIDES FOR EXEMPTION FROM PAYMENT OF CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS IN CASE THE CONSIDERATION FOR TRANSFER IS INVESTED IN ACQUIRING THE RESIDENTIAL H OUSE. IT READS AS UNDER: 54F. CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. (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 LONG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HO USE (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DA TE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THR EE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SA Y,- ( 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 NET 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 A S THE 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 THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSE T; OR ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 6 OF 9 ( II ) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE N EW 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 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 THA N THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PRO PERTY.' EXPLANATION : FOR THE PURPOSES OF THIS SECTION, 'NET CONSIDERATI ON', IN RELATION TO THE TRANSFER OF A CAPITAL ASSET, MEANS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER OF THE CAPITAL ASSET AS REDUCED BY ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER. 10. A READING OF THE AFORESAID PROVISION MAKES IT VERY CLEAR THAT IF A CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG TERM CAPI TAL ASSET, NOT BEING A RESIDENTIAL HOUSE AND THE ASSESSEE HAS WITHIN THE P ERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TRANSFER TOOK PLACE PURCHASED OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONS TRUCTED A RESIDENTIAL HOUSE, IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE N ET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET THE WHOLE SUCH CAPITAL GAIN S HALL NOT BE CHARGED UNDER SECTION 45 OF THE ACT. HOWEVER, IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO BE WHOLE OF THE CAPITAL GAIN THE S AME PROPORTION AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION SHA LL NOT BE CHARGED UNDER SECTION 45 OF THE ACT. 11. SECTION 45 OF THE ACT MAKES IT VERY CLEAR THAT ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECT ED IN THE PREVIOUS YEAR SHALL, SAVE OR OTHERWISE PROVIDED IN SECTIONS 54, 5 4B, 54D, 54E, 54EA, 54EB, 54F, 54G AND 54H IS CHARGEABLE TO INCOME TAX UNDER THE HEAD 'CAPITAL GAINS' AND SHALL BE DEEMED TO BE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. THE AFORESAID SECTIO NS WHICH FORM PART OF SECTION 54 OF THE ACT ARE CASES WHERE CAPITAL GAIN ON TRANSFER OF CAPITAL ASSET NOT TO BE CHARGED IN THOSE CASES. SECTION 54F OF THE ACT IS A BENEFICIAL PROVISION OF PROMOTING THE CONSTRUCTION OF RESIDENT IAL HOUSE. THEREFORE, THE SAID PROVISION HAS TO BE CONSTRUED LIBERALLY FOR AC HIEVING THE PURPOSE FOR WHICH IT WAS INCORPORATED IN THE STATUTE. THE INTEN TION OF THE LEGISLATURE WAS TO ENCOURAGE INVESTMENTS IN THE ACQUISITION OF A RESIDENTIAL HOUSE AND COMPLETION OF CONSTRUCTION OR OCCUPATION IS NOT THE REQUIREMENT OF LAW. THE WORDS USED IN THE SECTION ARE 'PURCHASED' OR 'CONST RUCTED'. FOR SUCH PURPOSE, THE CAPITAL GAIN REALIZED SHOULD HAVE BEEN INVESTED IN A RESIDENTIAL HOUSE. THE CONDITION PRECEDENT FOR CLAIMING BENEFIT UNDER THE SAID PREVISION IS THE CAPITAL GAIN REALIZED FROM SALE OF CAPITAL ASSET SH OULD HAVE BEEN PARTED BY ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 7 OF 9 THE ASSESSEE AND INVESTED EITHER IN PURCHASING A RE SIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE. IF AFTER MAKING T HE ENTIRE PAYMENT, MERELY BECAUSE A REGISTERED SALE DEED HAD NOT BEEN EXECUTE D AND REGISTERED IN FAVOUR OF THE ASSESSEE BEFORE THE PERIOD STIPULATED , HE CANNOT BE DENIED THE BENEFIT OF SECTION 54F OF THE ACT. SIMILARLY, IF HE HAS INVESTED THE MONEY IN CONSTRUCTION OF A RESIDENTIAL HOUSE, MERELY BECAUSE THE CONSTRUCTION WAS NOT COMPLETE IN ALL RESPECTS AND IT WAS NOT IN A FI T CONDITION TO BE OCCUPIED WITHIN THE PERIOD STIPULATED, THAT WOULD NOT DISENT ITLE THE ASSESSEE FROM CLAIMING THE BENEFIT UNDER SECTION 54F OF THE ACT. THE ESSENCE OF THE SAID PROVISION IS WHETHER THE ASSESSEE WHO RECEIVED CAPI TAL GAINS HAS INVESTED IN A RESIDENTIAL HOUSE. ONCE IT IS DEMONSTRATED THAT T HE CONSIDERATION RECEIVED ON TRANSFER HAS BEEN INVESTED EITHER IN PURCHASING A RESIDENTIAL HOUSE OR IN CONSTRUCTION OF A RESIDENTIAL HOUSE EVEN THOUGH THE TRANSACTIONS ARE NOT COMPLETE IN ALL RESPECTS AND AS REQUIRED UNDER THE LAW, THAT WOULD NOT DISENTITLE THE ASSESSEE FROM THE SAID BENEFIT. 12. IN FACT, MADRAS HIGH COURT HAD AN OCCASION TO CONS IDER THIS ASPECT IN THE CASE OF CIT V. SARDARMAL KOTHARI [2008] 302 ITR 286 WHERE IT HAS BEEN HELD AS UNDER: '4. THE REQUIREMENT OF THE PROVISION IS THAT THE AS SESSEE, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER, HAS TO CONS TRUCT A RESIDENTIAL HOUSE IN ORDER TO BECOME ELIGIBLE FOR EXEMPTION. IN THE CASE S ON HAND, IT IS NOT IN DISPUTE THAT THE ASSESSEES HAVE PURCHASED THE LANDS BY INVESTING THE CAPITAL GAIN AND THEY HAVE ALSO CONSTRUCTED RESIDENTIAL HOU SES. IN ORDER TO ESTABLISH THE SAME, THE ASSESSEES SUBMITTED BEFORE THE CIT(A) SEVERAL MATERIAL EVIDENCES, VIZ., INVITATION CARD PRINTED FOR THE HOUSE WARMING CERE MONY TO BE HELD ON 12TH JULY, 2003. THE ASSESSEES HAVE ALSO PRODUCED THE COMPLETION CERTIFICATES FROM THE MUNICIPAL AUTHORIT Y ON 30TH JAN., 2004. ON THE BASIS OF THE ABOVE DOCUMENTS, THE CIT(A) CONCLU DED THAT THE REQUIREMENT OF THE STATUTORY PROVISION HAS BEEN COM PLIED WITH BY THE ASSESSEES AND THAT WAS RECONFIRMED BY THE TRIBUNAL IN THE ORDERS IMPUGNED.' 13. THE SAID JUDGMENT OF THE MADRAS HIGH COURT HAS BEE N AFFIRMED BY THE APEX COURT AND THE APPEAL WAS DISMISSED AT THE STAG E OF PRELIMINARY HEARING IN CC NOS.3953-3954/2009 DECIDED ON 6.4.200 9. 14. IN THE INSTANT CASE, THE MATERIAL ON RECORD DISCLO SES THAT THE ASSESSEE HAD INVESTED RS. 2,16,61,670/- AS ON 31.10.2006 WIT HIN TWELVE MONTHS FROM THE DATE OF REALIZATION OF SALE PROCEEDS OF SH ARES. THE DEVELOPER ACKNOWLEDGING THE SAID AMOUNT HAS GIVEN PARTICULARS OF THE STAGE OF CONSTRUCTION. ACCORDING TO HIM, ONLY MINOR FITTINGS LIKE WINDOW SHUTTERS AND SOME ELECTRICAL WORK WERE REQUIRED TO BE MADE. IN FACT, THE REPORT OF THE INQUIRY CONDUCTED BY THE DEPARTMENT ALSO DISCLO SES THE FLOORING WORK, ELECTRICAL WORK, FITTING OF DOOR AND WINDOW SHUTTER S WERE STILL PENDING. THE ASSESSEE HAS PRODUCED BEFORE THE AUTHORITIES THE RE GISTERED SALE DEED DATED ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 8 OF 9 7.11.2009 SHOWING THE TRANSFER OF THE PROPERTY IN H IS FAVOUR. THE SAID DOCUMENT DISCLOSES MARBLE TILES FLOORING HAS BEEN D ONE, ELECTRICITY, WATER AND SANITARY CONNECTIONS HAVE BEEN GIVEN, WOOD USED IS TEAK IN RESPECT OF DOORS AND WINDOWS. THE ASSESSEE HAS BEEN PUT IN POS SESSION OF THE PROPERTY AND HE IS IN OCCUPATION. THEREFORE , THE ASSESSEE HAS INVESTED THE SALE CONSIDERATION IN ACQUIRING A RESIDENTIAL PREMI SES AND HAS TAKEN POSSESSION OF THE RESIDENTIAL BUILDING AND IS LIVIN G IN THE SAID PREMISES. THE OBJECT OF ENACTING SECTION 54 OF THE ACT I.E., TO E NCOURAGE INVESTMENT IN A RESIDENTIAL BUILDING IS COMPLETELY FULFILLED. 15. IN THAT VIEW OF THE MATTER, THE TRIBUNAL WAS JUSTI FIED IN EXTENDING THE BENEFIT OF SECTION 54F OF THE ACT TO THE ASSESSEE A ND THE SAID ORDER DOES NOT SUFFER FROM ANY INFIRMITY WHICH CALLS FOR INTERFERE NCE . 6. AS FACTS AND CIRCUMSTANCES BEFORE US ARE SIMILAR , WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE C IT (A) ON THIS ISSUE. 7. THIS GROUND OF APPEAL OF REVENUE ON THIS ISSUE I S ACCORDINGLY REJECTED. 8. AS REGARDS THE SECOND ISSUE OF THE ADDITION OF THE UNEXPLAINED INVESTMENT OF RS.22.00 LAKHS DELETED BY THE CIT (A) IS CONCERNED, WE FIND THAT ADMITTEDLY THE SUM OF RS.22.00 LAKHS H AS BEEN ADVANCED BY MR. I.V. SATISH TO THE ASSESSEES WIFE WHO HAS INVESTED THE SAME FOR PURCHASE OF A SITE. NO DOUBT MR. SATISH IS THE CONTRACTOR WHO HAS RECEIVED AN ADVANCE OF RS.1. 00 CRORE FROM THE ASSESSEE FOR CONSTRUCTION OF THE BUILDING, BUT AS RIGHTLY OBSERVED BY THE CIT (A), THE SUM OF RS.22.00 LAKHS ADVANCED BY MR. I.V. SATISH IS NOT TO THE ASSESSEE, BUT TO THE ASSESSEES WIFE, WHO IS AN INDEPENDENT ASSESSEE. SINCE THE INVESTMEN T MADE IN THE SITE IS BY THE WIFE OF THE ASSESSEE, AS RIGHTLY HELD BY THE CIT (A), THE SAID AMOUNT, IF AT ALL IS TO BE BROUGHT TO TAX, IT CAN BE ONLY IN THE HANDS OF THE ASSESSEES WIFE AND NOT IN THE ASSESSEES ITA NO.19 OF 2013 KOTAGIRI SRIDHAR HYDERABAD PAGE 9 OF 9 HANDS. THEREFORE, WE SEE NO REASON TO INTERFERE WIT H THE ORDER OF THE CIT (A) ON THIS ISSUE AS WELL. THE GROUND OF AP PEAL OF THE REVENUE ON THIS ISSUE IS THUS REJECTED. 9. IN THE RESULT, REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2015. S D/ - S D/ - ( B. RAMAKOTAIAH ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 23 RD SEPTEMBER, 2015. VNODAN/SPS COPY TO: 1. INCOME TAX OFFICER WARD 6(3) 6 TH FLOOR, C BLOCK, IT TOWERS, AC GUARDS, HYDERABAD 2. SHRI KOTAGIRI SRIDHAR, PLOT NO.63, ASHWINI LAYOUT, JOURNALIST COLONY, JUBILEE HILLS, HYDERABAD 3. CIT (A)-IV HYDERABAD 4. CIT-III HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER