Income-tax Officer, V. Shri Narshiva Amrutrao Dhere, Pune

ITA 1944/PUN/2013

• Counselvise Citation: 194424514 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Cost of acquisition
• Section: 143(3); 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.1944/PN/2013 ASSESSMENT YEAR: 2008-09 THE INCOME TAX OFFICER, WARD 5 (4), PUNE . APPELLANT VS. SHRI NARSHIVHA AMRUTRAO DHERE, PROP:M/S. N.A. WINES, 350, SHUKRAWAR PETH, PUNE 411002 . RESPONDENT PAN: ABAPD9677R ITA NO.1945/PN/2013 ASSESSMENT YEAR: 2008-09 THE INCOME TAX OFFICER, WARD 5 (4), PUNE . APPELLANT VS. SHRI CHANDRASEN AMRUTRAO DHERE, PROP:M/S. GILD PACKAGING, 350, SHUKRAWAR PETH, PUNE 411002 . RESPONDENT PAN: ABAPD9628A APPELLANT BY : SHRI RAJESH DAMOR RESPONDENT BY : SHRI SUNIL GANOO DATE OF HEARING : 03-03-2015 DATE OF PRONOUNCEMENT : 18-03-2015 ORDER PER SUSHMA CHOWLA, JM: BOTH THE APPEALS FILED BY THE REVENUE ARE AGAINST S EPARATE ORDERS OF CIT(A)-III, PUNE, DATED 30.08.2013 RELATING TO ASSE SSMENT YEAR 2008-09 AGAINST RESPECTIVE ORDERS PASSED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961. ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 2 2. BOTH THE APPEALS RELATING TO THE CONNECTED ASSES SEES ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING M ADE TO THE FACTS AND ISSUES IN ITA NO.1944/PN/2013 TO ADJUDICATE THE ISSUES. 3. IN ITA NO.1944/PN/2013, THE REVENUE HAS RAISED T HE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN LAW AND ON FACTS BY ALLOWING EXEMPTION U/S 54F TO THE A SSESSEE WHEREAS THE ASSESSEE HAD NOT FOLLOWED THE RESTRICTE D FRAMED U/S 54F. 3. FOR THESE AND SUCH ABOVE OTHER GROUNDS AS MAY BE URGED AT THE TIME OF THE HEARING, THE ORDER OF THE LEARNED CIT(A PPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 4. THE APPELLANT CRAVES, LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUND OF APPEAL ''DURING THE COURSE OF THE A PPELLANT PROCEEDINGS BEFORE THE ITAT. 4. THE BRIEF FACTS OF THE CASE ARE THAT, DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD DECLARED INCOME FROM LONG TERM CAP ITAL GAINS OF RS.7,52,311/- ON SALE OF LAND AT FURSUNGI, IN THE RETURN OF INCOM E. THE ASSESSING OFFICER REQUISITIONED THE ASSESSEE TO FURNISH THE COMPLETE DETAILS OF THE SALE TRANSACTION INCLUDING THE COPY OF PURCHASE DEED AND ALSO THE DE TAILS OF DEDUCTION CLAIMED UNDER SECTION 54 OF THE ACT IN RESPECT OF RE-INVEST MENT IN RESIDENTIAL PROPERTY. ON THE PERUSAL OF DETAILS FURNISHED BY THE ASSESSEE, T HE ASSESSING OFFICER NOTED THAT THE ASSESSEE ALONG WITH HIS BROTHER SHRI C.A. DHERE SOLD THE PLOT AT FURSUNGI VIDE AGREEMENT TO SELL DATED 12.04.2007 FOR A TOTAL CONSIDERATION OF RS.1,39,20,000/-. THE ASSESSEES SHARE IN THE SAID CONSIDERATION WAS 50% AT RS.69,60,000/-. THE COST OF ACQUISITION OF THE SAI D PLOT AS ON 01.04.1981 WAS SHOWN AT RS.9,00,000/- AND COST OF IMPROVEMENT TO T HE SAID PLOT DURING THE FINANCIAL YEAR 1988-89 WAS SHOWN AT RS.25,800/- AND IN FINANCIAL YEAR 1990-91 AT RS.1,75,880/-. THE ASSESSEE HAD WORKED OUT THE LON G TERM CAPITAL GAINS AT ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 3 RS.58,43,331/-, AGAINST WHICH, HE HAD CLAIMED DEDUC TION UNDER SECTION 54F OF THE ACT AND DECLARED TAXABLE LONG TERM CAPITAL GAIN S OF RS.7,52,311/-. ON THE PERUSAL OF DETAILS FURNISHED BY THE ASSESSEE IN RES PECT OF THE INVESTMENT IN THE NEW RESIDENTIAL PROPERTY, THE ASSESSING OFFICER NOT ED THAT THE ASSESSEE HAD MADE INVESTMENT IN TWO FLATS VIZ. 304A AND 304B IN THE PROJECT CITY WOODS BY M/S. OM ESTATE & HOUSING DEVELOPERS PVT. LTD. THE ASSESSEE WAS FOUND TO HAVE ENTERED TO INTO AN AGREEMENT FOR PURCHASE OF T HE SAID TWO FLATS WITH THE BUILDER VIDE TWO SEPARATE AGREEMENTS DATED 19.11.20 04, AGAINST WHICH, THE ASSESSEE CLAIMED THAT HE HAD RECEIVED THE POSSESSIO N OF THE SAID FLATS ONLY ON 20.04.2007, IN VIEW THEREOF, THE ASSESSEE CLAIMED T HAT HE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT. THE ASSESS ING OFFICER FROM THE PERUSAL OF PAYMENTS MADE TO THE BUILDER, NOTED THAT SUBSTAN TIAL PAYMENTS WERE MADE BY THE ASSESSEE MUCH BEFORE THE SO CALLED DATE OF POSS ESSION. ANOTHER SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO THE C LAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. THE ASSESSING OFFICER OBSE RVED THAT TWO FLATS PURCHASED BY THE ASSESSEE WERE TWO INDEPENDENT FLATS, WHICH H AD SEPARATE KITCHENS AND HAD ALSO SEPARATE LIVING ROOMS, LOBBIES, ETC. IN A DDITION, SEPARATE CAR PARKING SLOTS WERE MADE AVAILABLE TO EACH OF THE FLATS. SI NCE THE ASSESSEE HAD INVESTED INTO TWO DIFFERENT FLATS, THE ASSESSING OFFICER QUE STIONED AS TO HOW DEDUCTION UNDER SECTION 54F OF THE ACT COULD BE ALLOWED AGAIN ST SUCH INVESTMENT IN TWO FLATS. ANOTHER CONTENTION RAISED BY THE ASSESSING OFFICER WAS THAT SINCE YOU HAVE PURCHASED TWO FLATS WITHIN PERIOD SPECIFIED IN SECTION 54F OF THE ACT AS AGAINST PURCHASE OF ONLY ONE FLAT ALLOWABLE UNDER T HE PROVISIONS OF SECTION 54F OF THE ACT, AS TO WHY THE DEDUCTION UNDER SECTION 54F OF THE ACT SHOULD NOT BE WITHDRAWN. THE NEXT OBJECTION OF THE ASSESSING OFF ICER WAS THAT THE LAND WAS SOLD ON 12.04.2007, WHEREAS THE ASSESSEE HAD ENTERE D INTO AGREEMENT FOR PURCHASE OF FLATS ON 19.11.2004 AND SINCE MAJORITY OF PAYMENTS WERE MADE PRIOR TO ONE YEAR BEFORE THE DATE OF SALE OF LAND I.E. 12 .04.2006, THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 54 F OF THE ACT. IN REPLY, THE ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 4 ASSESSEE EXPLAINED THAT DUE TO HIS FAMILY NEEDS, HE HAD PURCHASED ADJACENT FLATS, WHICH HAD A SINGLE ENTRY AND AS SUCH, HE WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. THE ASSESS EE ALSO EXPLAINED THAT THOUGH THE AGREEMENT FOR PURCHASE OF THE FLATS WAS EXECUTED ON 19.11.2004, THE POSSESSION FOR THE FLATS WAS OBTAINED ONLY IN APRIL , 2007 AND DATE OF POSSESSION WAS DECISIVE UNDER THE PROVISIONS OF I.T. ACT. THE ASSESSING OFFICER REJECTED BOTH THE PLEAS OF THE ASSESSEE SINCE MAJORITY PAYME NTS WERE MADE BETWEEN THE PERIOD 27.09.2004 TO 03.11.2004 AND ALSO THE ASSESS EE HAD PROCURED HOUSING LOAN FROM COSMOS BANK FOR PURCHASE OF THE SAID PROP ERTIES AND SUM OF RS.43,65,000/- WAS DISBURSED ON 31.01.2005 ITSELF A ND ALSO REJECTED THE PLEA OF THE ASSESSEE THAT IT HAD JOINED TWO FLATS, HELD THE ASSESSEE NOT TO BE ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT AT RS.50,91,020/-. 5. BEFORE THE CIT(A), THE ASSESSEE FURNISHED WRITTE N SUBMISSIONS VIS--VIS CONTENTION OF THE ASSESSING OFFICER THAT THE ASSESS EE HAD RECEIVED POSSESSION OF THE FLATS IN CITY WOODS PROJECT PRIOR TO 20.04.2007 AND ALSO PURCHASE OF TWO INDEPENDENT FLATS, WHICH ARE INCORPORATED UNDER PAR A 4.4 AT PAGES 7 TO 9 OF THE APPELLATE ORDER. THE CIT(A) NOTED THAT THE CONTENT ION OF THE ASSESSING OFFICER THAT THE ASSESSEE HAD RECEIVED POSSESSION OF FLAT N OS.304A & 304B IN CITY WOODS PRIOR TO 20.04.2007 WAS INCORRECT SINCE THE A SSESSEE HAD ALREADY FILED COPIES OF THE OCCUPANCY CERTIFICATE DATED 18.03.200 8 ISSUED BY PMC IN RESPECT OF IMPUGNED FLAT, THE FIRST MSEB BILL DATED 14.08.2 007 IN RESPECT OF THE COMBINED FLAT (NOS.304A & B), THE TEMPORARY POSSESSION LETTE R DATED 20.04.2007 ISSUED BY THE BUILDER DURING THE ASSESSMENT PROCEEDINGS AND T HAT THESE EVIDENCES HAD BEEN IGNORED BY THE ASSESSING OFFICER. THE CIT(A) FURTHER NOTES THAT COPIES OF ALL THE DOCUMENTS WERE FILED BEFORE THE ASSESSING O FFICER, BUT NONE OF THESE DOCUMENTS FOUND MENTION IN THE ASSESSMENT ORDER AND SAME WERE FORWARDED TO THE ASSESSING OFFICER FOR EXAMINATION BOTH ON MERIT S AS WELL AS ON THE ADMISSIBILITY OF ADDITIONAL EVIDENCES, IF ANY. THE REMAND REPORT WAS FURNISHED BY THE ASSESSING OFFICER VIDE LETTER DATED 21.08.2013. IN THE SAID REMAND REPORT, ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 5 THE ASSESSING OFFICER HAD MENTIONED THAT ALTHOUGH THE OCCUPANCY CERTIFICATE OF PMC WAS NOT FILED DURING SCRUTINY PROCEEDINGS, THE OC ISSUED BY PMC CONFIRMED THE FACT THAT CONSTRUCTION WAS COMPLETED AND THE BU ILDING WAS READY FOR OCCUPATION DURING THE PREVIOUS YEAR RELEVANT TO A.Y . 2008-09. SIMILARLY, THE ASSESSING OFFICER STATES THAT ALTHOUGH THE FIRST EL ECTRIC BILL DATED 14.08.2007 WAS NOT PRODUCED DURING SCRUTINY PROCEEDINGS, VERIFICAT ION SHOWS THAT THE BILL WAS ISSUED DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 20 08-09. SO FAR AS THE TEMPORARY POSSESSION LETTER DATED 20.04.2007 ISSUED BY THE BUILDER WAS CONCERNED, THE SAME HAD BEEN FILED DURING THE ASSES SMENT PROCEEDINGS. THE CIT(A) VIDE PARA 4.6 OBSERVED THAT THE EVIDENCES ST ATED TO BE AS ADDITIONAL EVIDENCES BY THE ASSESSING OFFICER WERE GERMANE TO THE ISSUE AND WERE ADMITTED IN THE INTEREST OF JUSTICE. THE CIT(A) FU RTHER OBSERVED THAT IN VIEW OF THE REMAND REPORT OF THE ASSESSING OFFICER, IT WAS CLEA R THAT THE ASSESSEE HAD RECEIVED POSSESSION OF THE TWO FLATS IN CITY WOODS COMPLEX DURING THE IMPUGNED ASSESSMENT YEAR, ALTHOUGH THE SALE AGREEMENT WAS RE GISTERED WITH THE BUILDER ON 19.11.2004. THE OCCUPANCY CERTIFICATE OF PMC WHICH WAS GOVERNMENT AUTHORITY, WAS REFERRED TO BY THE CIT(A). FURTHER, RELIANCE W AS PLACED ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. BE ENA K. JAIN REPORTED IN 271 ITR 263 (BOM), WHEREIN IT HAS BEEN HELD THAT TH E DATE OF POSSESSION OF NEW RESIDENTIAL PREMISES RATHER THAN THE DATE OF SALE A GREEMENT AND DATE OF REGISTRATION SHOULD BE CONSIDERED FOR DETERMINING T HE ALLOWABILITY OF EXEMPTION UNDER SECTION 54F OF THE ACT. IN VIEW THEREOF, THE CIT(A) HELD THAT THE EXEMPTION UNDER SECTION 54F OF THE ACT COULD NOT BE DENIED TO THE ASSESSEE. 6. THE NEXT OBSERVATION OF THE ASSESSING OFFICER TH AT THE ASSESSEE HAD PURCHASED TWO INDEPENDENT FLATS VIDE TWO SEPARATE S ALE DEEDS AND HENCE, NOT ENTITLED TO THE EXEMPTION UNDER SECTION 54F OF THE ACT WAS REJECTED BECAUSE OF VARIOUS CASE LAWS ON THE ISSUE. THE CIT(A) PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN CIT VS. D.ANANDA BASAPPA REPORTED IN 309 ITR 329 (KAR), AGAINST WHICH SLP FI LED BY THE DEPARTMENT HAD ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 6 BEEN DISMISSED BY THE HONBLE SUPREME COURT ON 10.0 8.2009. THE CIT(A) HELD THAT PURCHASE OF TWO SEPARATE RESIDENTIAL UNITS PER SE, DOES NOT DIS-ENTITLE THE ASSESSEE FROM CLAIMING THE DEDUCTION UNDER SECTION 54F OF THE ACT. IN VIEW THEREOF, THE APPEAL OF THE ASSESSEE WAS ALLOWED, AG AINST WHICH, THE REVENUE IS IN APPEAL BEFORE US. 7. THE ISSUE RAISED BY THE REVENUE IS AGAINST THE S AID ALLOWANCE OF EXEMPTION UNDER SECTION 54F OF THE ACT. THE LEARNE D DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT FOR CLAIMING DEDUCTION UNDER SECTION 54F OF THE ACT AT RS.50,91,020/-, THE ASSES SEE HAD MADE INVESTMENT INTO TWO FLATS, FOR WHICH THE AGREEMENT TO SELL WAS EXEC UTED ON 19.11.2004 AND THE POSSESSION WAS RECEIVED ON 20.04.2007. IT WAS FURT HER POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT PRIOR TO 12.04.2006, THE ASSESSEE HAD PAID MORE THAN 50% OF THE TOTAL CO NSIDERATION AND EVEN THE LOAN WAS DISBURSED BY THE BANK ON 31.01.2005 OF RS. 43,65,000/-. THE PLEA RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE F OR THE REVENUE WAS THAT THE MONEY WAS PAID EARLIER I.E. PRIOR TO THE WINDOW YEA R ALLOWED UNDER SECTION 54F OF THE ACT. IN THIS REGARD, RELIANCE WAS PLACED ON TH E ORDER OF ASSESSING OFFICER. IT WAS FURTHER POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT THESE ARE TWO SEPARATE ADJACENT FLATS PURCHASED BY THE ASSESSEE, AGAINST WHICH THE SAID DEDUCTION UNDER SECTION 54F OF THE ACT COULD NOT BE ALLOWED. 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE PLACING RELIANCE ON THE ORDER OF CIT(A) AND FURTHER PLACING RELIANCE ON THE FOLLOWING DECISIONS, CONTENDED THAT THE FACTUAL CONTENTIONS MADE BY THE ASSESSEE WERE NOT DISPUTED BY THE ASSESSING OFFICER AND HENCE, NO MERIT IN THE ORDER PASSED BY THE ASSESSING OFFICER:- 1. CIT VS. SMT. BEENA K. JAIN (1996) 217 ITR 363 (B OM) 2. ITO VS. RITESH PREM BELLARA IN ITA NO.994/PN/201 1 AND ANOTHER, ORDER DATED 28.08.2012. ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 7 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. UNDER THE PROVISIONS OF SECTION 54F OF THE ACT, DEDUCTION IS ALLOWABLE TO THE ASSESSEE WHERE THE ASSESSEE BEING AN INDIVID UAL OR HINDU UNDIVIDED FAMILY, INVESTS THE CAPITAL GAINS ARISING FROM THE TRANSFER OF ANY LONG TERM ASSETS, NOT BEING A RESIDENTIAL HOUSE, WHICH IS TO BE REFER RED AS ORIGINAL ASSET, INTO AND HAS WITHIN PERIOD OF ONE YEAR BEFORE OR TWO YEARS A FTER THE DATE ON WHICH TRANSFER TOOK PLACE, PURCHASED OR HAS WITHIN PERIOD OF THREE YEARS AFTER THE DATE, CONSTRUCTED ONE RESIDENTIAL HOUSE I.E. A NEW ASSET, THEN THE CAPITAL GAINS ARISING ON THE SALE OF ORIGINAL ASSET, SHALL BE SET OFF AGA INST THE COST OF PURCHASE / CONSTRUCTION OF THE NEW ASSET AS PROVIDED IN THE SE CTION ITSELF. THE PROVISO PROVIDES THAT THE PROVISIONS OF THE SAID SUB-SECTIO N SHALL NOT APPLY WHERE THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHE R THAN THE NEW ASSET, ON THE DATE OF ORIGINAL ASSET OR PURCHASE ANY RESIDENT IAL HOUSE OTHER THAN THE NEW ASSET WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET OR CONSTRUCTS ANY RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET; AND THE INCOME FROM SUCH RESIDENTIAL HOUSE OTHER THAN THE ONE OWNED BY THE A SSESSEE ON THE DATE OF TRANSFER OF ORIGINAL ASSET, IS CHARGEABLE TO TAX UN DER THE HEAD INCOME FROM PROPERTY. FURTHER, PROVISIONS ARE PROVIDED UNDER SECTION 54F OF THE ACT IN RELATION TO THE TRANSFER OF NEW ASSETS WHICH ARE NO T RELEVANT FOR THE ISSUE RAISED BEFORE US HENCE, WE RESTRICT OURSELVES TO THE SUB-S ECTION (1) OF SECTION 54F OF THE ACT AND THE PROVISO THEREUNDER. 10. NOW, COMING TO THE FACTS OF THE CASE, THE ASSES SEE DURING THE YEAR UNDER CONSIDERATION HAD SOLD LAND AT FURSUNGI ALONG WITH HIS BROTHER AND BOTH OF THEM HAD 50% SHARE IN THE SAID PROPERTY. THE SAID PROPE RTY WAS SOLD FOR TOTAL CONSIDERATION OF RS.1,39,20,000/- AND 50% SHARE OF THE ASSESSEE WAS WORKED OUT TO RS.69,60,000/-. THE ASSESSEE DECLARED INCOM E FROM CAPITAL GAINS AT RS.58,43,331/- AFTER CLAIMING THE INDEXED COST OF L AND AND INDEXED COST OF ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 8 CONSTRUCTION CARRIED OUT IN VARIOUS YEARS. AGAINST THE SAID INCOME DECLARED ON ACCOUNT OF LONG TERM CAPITAL GAINS, THE ASSESSEE CL AIMED DEDUCTION UNDER SECTION 54F OF THE ACT VIS--VIS THE INVESTMENT IN RESIDENT IAL HOUSE AMOUNTING TO RS.50,91,020/- AND DECLARED INCOME FROM LONG TERM C APITAL GAINS AT RS.7,52,311/-. THE ASSESSEE HAD INVESTED IN THE PU RCHASE OF TWO ADJACENT FLATS I.E. FLAT NOS.304A & 304B IN THE PROJECT CITY WOODS , FOR WHICH HE HAD ENTERED INTO AN AGREEMENT FOR PURCHASE WITH THE BUILDER VID E TWO SEPARATE AGREEMENTS DATED 19.11.2004. THE ASSESSEE CLAIMS THAT, THOUGH THE SAID AGREEMENTS TO SELL WERE ENTERED IN NOVEMBER, 2004, THE POSSESSION OF T HE SAID FLATS WERE RECEIVED ONLY ON 20.04.2007 I.E. AFTER THE DATE OF SALE OF P LOT OF LAND AT FURSUNGI VIDE AGREEMENT DATED 12.04.2007. IN VIEW THEREOF, THE P LEA OF THE ASSESSEE WAS THAT HE WAS ELIGIBLE FOR THE CLAIM OF DEDUCTION UNDER SE CTION 54F OF THE ACT. ON THE OTHER HAND, THE ASSESSING OFFICER DENIED THE DEDUCT ION UNDER SECTION 54F OF THE ACT TO THE ASSESSEE ON THE GROUND THAT IT HAD ENTER ED INTO AN AGREEMENT FOR PURCHASE OF FLATS ON 19.11.2004, WHICH WAS PRIOR TO THE PERIOD PRESCRIBED UNDER SECTION 54F OF THE ACT AND FURTHER, MAJORITY OF PAY MENTS WERE PAID BY THE ASSESSEE BEFORE ONE YEAR FROM THE DATE OF TRANSFER OF THE PROPERTY I.E. BEFORE 12.04.2006 AND HENCE, FOR THE VIOLATION OF THE ABOV E TWO CONDITIONS, THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. ANOTHER OBJECTION RAISED BY THE ASSESSING OFFICER W AS THAT THE ASSESSEE HAD INVESTED IN TWO ADJACENT FLATS WHICH HAD TWO SEPARA TE ENTRANCES, TWO SEPARATE KITCHENS AND TWO SEPARATE ELECTRIC METERS, ETC. FU RTHER, THE ASSESSEE HAD ALSO INVESTED INTO TWO SEPARATE CAR PARKING FOR EACH OF THE FLATS RESPECTIVELY. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, THE ASSE SSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT AND THE SAME WAS DENIED TO THE ASSESSEE. H OWEVER, THE CIT(A) CONSIDERED THE PLEA OF THE ASSESSEE BEFORE THE ASSE SSING OFFICER WHICH IS IN THE FORM OF WRITTEN SUBMISSIONS WHICH IS INCORPORATED A T PAGES 8 AND 9 OF THE ASSESSMENT ORDER. IN ADDITION TO THE REASONS FOR A CQUISITION OF TWO INDEPENDENT ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 9 FLATS BEING ONE FLAT, THE NEXT CONTENTION OF THE AS SESSEE WAS VIS--VIS THE DATE OF PURCHASE OF THE PROPERTY AND IT WAS ADMITTED BY THE ASSESSEE THAT THE AGREEMENTS FOR PURCHASE OF FLATS THOUGH WERE EXECUT ED ON 19.11.2004, BUT THE POSSESSION WAS OBTAINED IN APRIL, 2007 IN RESPECT O F WHICH, THE ASSESSEE FURNISHED THE COPIES OF OCCUPANCY CERTIFICATE ISSUE D BY PMC IN RESPECT OF THE IMPUGNED FLATS DATED 18.03.2008 AND THE FIRST BILL OF MSEB DATED 14.08.2007 IN RESPECT OF COMBINED FLATS I.E. FLAT NOS.304A AND 30 4B. ALL THESE DOCUMENTS, THE ASSESSEE CLAIMS TO HAVE FILED BEFORE THE ASSESSING OFFICER, BUT THE CIT(A) CONFRONTED THE SAME TO THE ASSESSING OFFICER IN APP ELLATE PROCEEDINGS AND REMAND REPORT WAS RECEIVED FROM THE ASSESSING OFFIC ER. IN THE REMAND REPORT, THE ASSESSING OFFICER MENTIONED THAT THE OCCUPANCY CERTIFICATE ISSUED BY PMC CONFIRMS THE FACT THAT THE CONSTRUCTION WAS COMPLET ED AND BUILDING WAS READY FOR OCCUPATION DURING THE PREVIOUS YEAR RELEVANT TO ASS ESSMENT YEAR 2008-09. SIMILARLY, IN RESPECT OF ELECTRICITY BILL, THE VERI FICATION CARRIED OUT BY THE ASSESSING OFFICER REFLECTED THAT THE BILL WAS ISSUED DURING T HE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2008-09. ANOTHER EVIDENCE FILED BY THE ASSESSEE WAS THE TEMPORARY POSSESSION LETTER DATED 20.04.2007 ISSUED BY THE BUILDER WHICH THE ASSESSING OFFICER ADMITTED THAT THE ASSESSEE HAD FU RNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IN VIEW OF THE ABOVE SAID EVIDENCES AND THE REMAND REPORT OF THE ASSESSING OFFICER, IT IS APPARENT THA T THE ASSESSEE HAD RECEIVED THE POSSESSION OF THE TWO FLATS IN CITY WOODS COMPLEX D URING THE CAPTIONED ASSESSMENT YEARS THOUGH THE AGREEMENT OF PURCHASE O F THE SAID FLATS WAS EXECUTED ON 19.11.2004. IN VIEW OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND EVIDENCES FILED BY THE ASSESSEE BEFORE THE CIT(A), WE CONFIRM THE OBSERVATION OF CIT(A) IN THIS REGARD THAT THE ASSESSEE HAD PURCHAS ED THE SAID FLATS IN INSTANT ASSESSMENT YEARS UNDER APPEAL. 11. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. BEENA K. JAIN (SUPRA), WHEREIN IT HAS BEEN HELD THAT THE RELEVANT DATE FOR PURCHASE OF THE PROPERTY WAS WHEN THE PETI TIONER HAD PAID FULL ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 10 CONSIDERATION AMOUNT ON THE FLAT BECOMING READY FOR OCCUPATION AND HAD OBTAINED POSSESSION OF THE FLAT AND THE DATE OF ENT ERING INTO THE AGREEMENT TO PURCHASE THE SAID FLAT HAD NOT TO BE CONSIDERED. F OLLOWING THE SAID PROPOSITION OF LAW PROPOUNDED BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. BEENA K. JAIN (SUPRA), THE DATE TO BE CONSIDERED IS THE DATE ON W HICH THE ASSESSEE HAD OCCUPIED THE SAID PROPERTY AND NOT THE DATE ON WHIC H IT HAD ENTERED INTO AN AGREEMENT TO PURCHASE THE PROPERTY. IN THE FACTS O F THE PRESENT CASE, THE ASSESSEE HAD ENTERED INTO AN AGREEMENT ON 19.11.200 4. HOWEVER, THE OCCUPANCY CERTIFICATE WAS ISSUED BY PMC ONLY ON 18. 03.2008 AND EVEN THE FIRST MSEB BILL WAS DATED 14.08.2007. CONSEQUENTLY, THE ASSESSEE HAD RECEIVED, THE POSSESSION OF THE PROPERTY IN ASSESSMENT YEAR 2008- 09 I.E. WITHIN THE YEAR OF SALE OF THE ASSET AND THE ASSESSEE FULFILLED THE CO NDITIONS LAID DOWN UNDER SECTION 54F OF THE ACT VIS--VIS INVESTMENT IN THE NEW ASSETS AND WAS ENTITLED TO THE CLAIM OF DEDUCTION IN THIS REGARD. 12. THE NEXT ASPECT OF THE ISSUE WAS THE PURCHASE O F TWO SEPARATE FLATS VIDE TWO SEPARATE SALE DEEDS. IN THE FACTS OF THE CASE, THE ASSESSEE HAD PURCHASED TWO FLATS WHICH WERE JOINED BY THE ASSESSEE AND HAD A COMMON ENTRANCE AND A COMMON ELECTRICITY METER. IN VIEW THEREOF, WE FIND NO MERIT IN THE ORDER OF ASSESSING OFFICER AND CONFIRMING THE ORDER OF CIT(A ), WE HOLD THAT THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES, IS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT, IN VIEW OF THE FOLLOWING RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN CIT VS. D.ANANDA BASAPPA (SUPRA):- 4.8 THE KARNATAKA HIGH COURT HELD IN D. ANANDA BAS APPAS CASE THAT THE CONTENTION OF THE REVENUE IS THAT THE PHRASE A RESIDENTIAL HOUSE WOULD MEAN ONE RESIDENTIAL HOUSE AND IT DOES NOT AP PEAR TO BE THE CORRECT UNDERSTANDING. THE EXPRESSION A RESIDENTIAL HOUS E SHOULD BE UNDERSTOOD IN A SENSE THAT BUILDING SHOULD BE OF RE SIDENTIAL IN NATURE AND A SHOULD NOT BE UNDERSTOOD TO INDICATE A SINGULAR NUMBER. THE COMBINED READING OF SECTION 54(1) AND 54F OF THE IN COME-TAX ACT DISCLOSES THAT, A NON-RESIDENTIAL BUILDING CAN BE S OLD, THE CAPITAL GAIN OF WHICH CAN BE INVESTED IN A RESIDENTIAL BUILDING TO SEEK EXEMPTION OF CAPITAL GAIN TAX. IT IS ALSO LEARNT THAT THE SLP FILED BY THE DEPARTMENT AGAINST THIS DECISION OF KARNATAKA HIGH COURT HAS BEEN DISMISSED BY THE SUPREME COURT ON 10.08.2009. ITA NOS.1944 AND 1945/PN/2013 SHRI NARSHIVHA AMRUTRAO DHERE & ANOTHER 11 13. CONSEQUENTLY, WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 14. THE FACTS AND ISSUE IN ITA NO.1944/PN/2013 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.1945/PN/2013 AND OUR DECISION IN IT A NO.1944/PN/2013 SHALL APPLY MUTATIS MUTANDIS TO ITA NO.1945/PN/2013. 15. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 18 TH DAY OF MARCH, 2015. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 18 TH MARCH, 2015 GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE