Hridaya Mohan Lal, Hyd, Hyderabad V. DCIT, Circle-14(1), Hyderabad, Hyderabad

ITA 20/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5978 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 07-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reasonable cause; Benefit of exemption
• Section: 54F; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 20/HYD/2016 ASSESSMENT YEAR: 2005-06 HRIDAYA MOHANLAL, HYDERABAD PAN AAOPL 8178 N VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 14(1), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A. V. RAGHURAM REVENUE BY : SHRI K.J. RAO DATE OF HEARING 01-12-2016 DATE OF PRONOUNCEMENT 09-12-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-6, HYDERABAD, DATED 26/10/2015 FOR AY 200 5-06. 2. ON PERUSAL OF RECORD, WE FIND THAT THE ASSESSEE FILED THE APPEAL WITH A DELAY OF 13 DAYS. TO THIS EFFECT, THE ASSESS EE FILED AN AFFIDAVIT WHEREIN HE STATED THAT HE IS AN AGED PERSON AND S INCE HE MET WITH AN ACCIDENT, BEDRIDDEN FOR TWO MONTHS, THEREFORE, H E WAS UNABLE TO FILE THE APPEAL WITHIN THE STIPULATED TIME. HE, THE REFORE, SUBMITTED THAT THE DELAY MAY BE CONDONED AND ADMITTED THE APPEAL FOR HEARING AS THE REASONS WERE BEYOND THE HIS CONTROL AND WAS NO T INTENTIONAL. 3. AFTER PERUSING THE REASONS SUBMITTED FOR DELAY I N FILING THE APPEAL, WE ARE OF THE VIEW THAT ASSESSEE IS PREVENT ED BY SUFFICIENT REASONS TO FILE THE APPEAL BELATEDLY, THEREFORE, TH E DELAY IS CONDONED AND ADMITTED THE APPEAL FOR HEARING AND ADJUDICATIO N. 2 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. 4. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED HIS RETURN OF INCOME FOR THE AY 2005-06 ON 01/08/2005 D ECLARING A TOTAL INCOME OF RS. 10,97,210/- WHICH INCLUDED LONG TERM CAPITAL GAINS OF RS. 48,787/-. THE CASE WAS SCRUTINIZED FOR THE AY 2 006-07 WHERE IT WAS DETERMINED THAT THE ASSESSEE WAS LIABLE FOR CAP ITAL GAINS FOR THE AY 2005-06. ACCORDINGLY, NOTICE WAS ISSUED U/S 148 OF THE ACT FOR THE AY 2005-06 AND COMPLETED THE ASSESSMENT BY ASSESSIN G THE LONG TERM CAPITAL GAINS AT RS. 79,34,760/-. 4.1 THE ASSESSEE HAD SHOWN SALE CONSIDERATION OF RS. 1 .11 CRORES ON THE SALE OF PROPERTY AND HAD COMPUTED LONG TERM CAPITAL GAINS ATRS. 73.22 LAKHS FOR THE AY 2006-07. ACCORDING TO THE ASSESSEE, LONG TERM CAPITAL GAINS ON TRANSFER OF RESIDENTIAL HOUSE SITUATED AT TARNAKA, HYDERABAD AROSE IN PREVIOUS YEAR RELEVANT TO A.Y. 2006-07. THEREFORE, WHEN HE FILED HIS RETURN OF INCOME FOR A .Y. 2006-07, HE HAD SHOWN LTCG AND HAD CLAIMED EXEMPTION U/S. 54 FO R AN AMOUNT OF RS.73.50 LAKHS PAID FOR ACQUISITION OF A NEW FLAT O N 23.07.2006 IN GREATER NOIDA, UP. ON THE OTHER HAND, THE ASSESSING OFFICER CONSIDERED THAT THE CAPITAL GAIN HAD ARISEN IN PREV IOUS YEAR RELEVANT TO A.Y. 2005-06 WHEN THE GPA HAD BEEN REGISTERED ON 17.12.2004. THE MATTER OF TAXABILITY OF LTCG GOT FINALITY AS HO N'BLE ITAT ALSO HELD THAT CAPITAL GAIN WAS CHARGEABLE IN THE YEAR 2005-0 6 ONLY. BEFORE THE ITAT THE ASSESSEE CLAIMED THAT HE SHOULD BE GIVEN E XEMPTION U/S. 54F OF THE ACT AS CONSIDERATION FROM SALE AMOUNTING TO RS.73.50 LAKHS WAS REINVESTED IN PROCUREMENT OF THE NEW ASSE T (I.E. RESIDENTIAL HOUSE). THE MATTER WAS REMITTED BACK TO THE ASSESSI NG OFFICER TO BE DECIDED IN ACCORDANCE WITH LAW. THE ASSESSING OFFIC ER REJECTED THE CONTENTION OF THE ASSESSEE THAT THE CLAIM FOR DEDUC TION WAS MADE U/S 54 AND NOT SEC. 54F BECAUSE THE ASSESSEE HAD FILED THE ADDITIONAL GROUND BEFORE THE ITAT IN RESPECT OF CLAIM U/S 54F ONLY. SHE WENT TO HOLD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTI ON U/S. 54F OF THE ACT FOR THE REASON THAT THE TRANSFER HAD TAKEN PLAC E IN DECEMBER, 2004 AND THE UNUTILIZED AMOUNT OF SALE CONSIDERATIO N WHICH SHOULD 3 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. HAVE BEEN KEPT IN THE CAPITAL GAIN ACCOUNT'S SCHEM E BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME WAS NOT DONE SO BY THE ASSESSEE. 4.2 THE ASSESSEE HAD SHOWN LTCG IN THE A.Y. 2006-0 7 AND HAD ALSO CLAIMED FOR EXEMPTION U/S. 54 OF THE ACT. WHEN THE QUANTUM APPEAL FOR A.Y. 2005-06 HAD GONE BEFORE THE HON'BLE ITAT, HYDERABAD FOR ADJUDICATION, THE ASSESSEE HAS RAISED AS ADDITIONAL GROUND THAT HIS CLAIM U/S 54F SHOULD ALSO BE ALLOWE D. LATER, THE ASSESSEE MOVED A MISCELLANEOUS APPLICATION BEFORE T HE HON'BLE ITAT STATING THAT THE CLAIM OF EXEMPTION WAS U/S. 54 AND HE HAD ERRONEOUSLY MENTIONED SECTION 54F IN THE ADDITIONAL GROUNDS OF APPEAL AS A RESULT OF WHICH, THE ASSESSING OFFICER HAD DENIED BENEFIT TO HIM BY TREATING IT TO BE U/S. 54F, THE ASSESSEE CLAIMED THAT IN THE RETURN OF INCOME FILED FOR A.Y. 2006-07, HE HAD CLA IMED EXEMPTION U/S 54 AS THE PROPERTY TRANSFERRED WAS A RESIDENTIAL HO USE. THE ITAT AFTER CONSIDERING THE MISCELLANEOUS APPLICATION OF THE AS SESSEE HELD THAT THERE WAS NO ERROR IN ITS ORDER AND THE MA WAS NOT MAINTAINABLE. HOWEVER, IT MADE THE FOLLOWING OBSERVATION: 'IT IS A FACT THAT IN PARAGRAPH 4 OF THE ASSESSMENT ORDER, AO HIMSELF HAS STATED THE FACT THAT ASSESSEE IN THE RE TURN INCOME FILED FOR AY 2006-07 HAS CLAIMED DEDUCTION U/S 54 O F THE ACT AGAINST CAPITAL GAIN ARISING FROM SALE OF THE PROPE RTY IN QUESTION. MOREOVER, IN PARAGRAPH 14 OF THE IMPUGNED ORDER OF THE TRIBUNAL, IT HAS BEEN OBSERVED BY THE BENCH THAT WHILE COMPUT ING CAPITAL GAIN IN THE ASSESSMENT UNDER CONSIDERATION, AO IS R EQUIRED TO ALLOW ALL DEDUCTIONS AND BENEFITS PERMISSIBLE UNDER THE PROVISIONS OF THE ACT, WHICH ASSESSEE IS ELIGIBLE T O GET. SINCE, THE ISSUE IN THE ADDITIONAL GROUND WAS RAISED FOR T HE FIRST TIME BEFORE IT, THE TRIBUNAL INSTEAD OF GOING INTO THE M ERITS OF THE ISSUE RAISED THOUGHT IT APPROPRIATE TO DIRECT THE AO TO E XAMINE ASSESSEE'S CLAIM. THEREFORE, IF ASSESSEE IS OTHERWI SE ELIGIBLE FOR DEDUCTION U/S 54, AND IT FULFILS ALL THE CONDITIONS OF THE SAID PROVISION, THEN THERE IS NO BAR ON AO IN CONSIDERIN G ASSESSEE'S CLAIM OF DEDUCTION U/S 54 OF THE ACT.' 4.3 ACCORDINGLY, THE ASSESSEE SUBMITTED THAT HE SH OULD BE CONSIDERED FOR EXEMPTION U/S 54 OF THE ACT. 4 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) OBSERVED THAT IT IS A FACT THAT THE ASSESSEE HAD SH OWN LTCG IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2006-07 AND HAD ALSO CLAIMED EXEMPTION U/S. 54. IN VIEW OF THIS, IT IS SEEN THAT THE ASSESSEE COULD NOT HAVE FORESEEN THAT LTCG WOULD BE CONSIDERED TO BE TAXABLE IN THE A.Y. 2005-06. HE CONSIDERED IT TO BE TAXABLE IN A.Y . 2006-07 AND HAD MADE INVESTMENT ACCORDINGLY, WHICH WAS IN TIME I.E. BEFORE THE DUE DATE FOR FILING OF RETURN OF INCOME FOR THAT ASSESS MENT YEAR. HE HAD NO OCCASION TO DEPOSIT THE MONEY IN THE CAPITAL GAIN A CCOUNT SCHEME FOR THAT YEAR. WHAT NEEDED TO BE DONE IN A.Y. 2006- 07 COULD NOT AT ALL BE DONE IN A.Y. 2005-06; AS THE ASSESSEE CANNOT BE ASKED TO DO THE IMPOSSIBLE. HENCE, CONSIDERING THE PECULIAR FACTS O F THIS CASE, IT IS CONSIDERED THAT ASSESSEE HAD REASONABLE CAUSE FOR N OT INVESTING THE UNUTILIZED PART OF THE CAPITAL GAIN IN THE CAPITAL GAIN ACCOUNT SCHEME AND IT IS NOT CONSIDERED TO BE DEFAULT AS PER THE P ROVISIONS OF SUB- SECTION (2) OF SECTION 54 OF THE ACT. 5.1 THE CIT(A) OBSERVED THAT WHETHER THE CONDITION S WERE MET SUBSTANTIVELY. SECTION 54 REQUIRED THAT THE ASSESS EE SHOULD PURCHASE THE NEW HOUSE PROPERTY WITHIN 2 YEARS AFTER THE DAT E THE TRANSFER TOOK PLACE. THUS IN ORDER TO CLAIM EXEMPTION THE ASSESSE E HAS TO SHOW THAT HE HAD PURCHASED THE NEW HOUSE PROPERTY BY 27. 12.2006. 5.2 THE CIT(A) OBSERVED THAT THE ASSESSEE HAS SHOW N PAYMENT OF RS. 73.50 LAKHS FOR ALLOTMENT OF A DUPLEX FLAT IN G REATER NOIDA ON 23.07.2006. THIS PAYMENT WAS MADE TO A FIRM, DEVELO PING A HOUSING COMPLEX BY THE NAME OF 'AMRAPALI GRAND' ON LAND ALL OTTED BY GREATER NOIDA DEVELOPMENT AUTHORITY. HE WAS ASKED SPECIFICA LLY TO SHOW THAT THE PURCHASE WAS COMPLETE BY 27.12.2006. HE HAS FUR NISHED A COPY OF A LETTER FROM THE BUILDER CONFIRMING THAT THE CO NSIDERATION FOR THE FLAT HAD BEEN RECEIVED AND THAT IT HAD NO OBJECTION TO GIVING POSSESSION TO THE ASSESSEE. THE LETTER IS DATED 25 .02.2015. THIS 5 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. SHOWS CLEARLY THAT POSSESSION WAS NOT GIVEN TILL AS LATE AS 25.02.2015 SINCE THE LETTER TALKS OF ONLY 'NO OBJECTION' TO PO SSESSION BEING GIVEN BY THE BUILDER. 5.3 THE CIT(A) OBSERVED THAT THE ASSESSEE HAD TO S HOW THAT, EVEN IF REGISTRATION HAD NOT BEEN DONE, THE TRANSFER HAD TAKEN PLACE WITHIN THE EXTENDED MEANING OF THE TERM AS PER SECTION 2(4 7) OF THE ACT. HE HAS FAILED TO DO SO. A PROVISION GRANTING EXEMPTION FROM TAXATION IS A BENEFICIAL ONE. TAXATION IS A NORM AND EXEMPTION IS ONE EXCEPTION. IT IS SETTLED LAW, IF THE ASSESSEE WANTS EXCEPTIONAL T REATMENT HE HAS TO SATISFY THE CONDITIONS ATTACHED TO THE SAME FULLY. IF HE FAILS TO DO SO, HE HAS TO PAY TAX LIKE ANY OTHER TAXPAYER. NO ONE CAN HAVE VESTED RIGHT TO EXCEPTIONAL TREATMENT. THE ASSESSEE CANNOT BE ALLOWED TO SAY THAT HE IS AGGRIEVED BECAUSE HE DID NOT GET THE EXC EPTIONAL TREATMENT EVEN THOUGH HE FAILED TO SATISFY THE ATTACHED CONDI TION. 5.4 CIT(A) OBSERVED THAT ACCORDING TO THE ASSESSEE , HE HAD COMPLIED WITH HIS OBLIGATION OF PAYMENT OF ABOVE CO NSIDERATION ON 23.07.2006, BUT AS THERE WAS A DELAY IN HANDING OVE R OF THE FLAT BY AMRAPALI GRANT, THE SAME COULD BE DELIVERED ONLY IN FEBRUARY, 2015. IN SUPPORT OF HIS CONTENTION, THE ASSESSEE PRODUCE D A COPY OF A NO OBJECTION CERTIFICATE FROM THE BUILDER (DATED 2.201 5) CERTIFYING THAT THE ASSESSEE HAD MADE FULL AND FINAL PAYMENT FOR THE FL AT AND THE FIRM HAD NO OBJECTION TO HAND OVER THE POSSESSION OF THE ABO VE SAID FLAT. IN VIEW OF THE ABOVE, IT WAS SUBMITTED AS FAR AS THE A SSESSEE WAS CONCERNED, HE HAD COMPLIED WITH THE PROVISIONS OF T HE ACT AND FOR REASONS OF DELAY IN DELIVERING OF THE FLAT BY THE B UILDER, THE ASSESSEE COULD NOT BE PENALISED. IN SUPPORT OF HIS CONTENTIO N HE PLACED RELIANCE ON THE ORDER OF ITAT IN THE CASE OF SRI KO TAGIRI SRIDHAR IN ITA NO. 19/HYD/2013 DATED 23.09.2015 AND SUBMITTED THAT HE SHOULD BE ALLOWED THE BENEFIT OF EXEMPTION U/S. 54 OF THE ACT . 6 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. 5.5 THE CIT(A) OBSERVED THAT TILL DATE, THE ASSESS EE HAS NOT BEEN ABLE TO SHOW ANY EVIDENCE THAT HE HAS GOT THE POSSE SSION OF THE FLAT. THE CERTIFICATE FROM THE BUILDER STATES THAT THE PO SSESSION OF THE FLAT HAS NOT BEEN GIVEN TO THE ASSESSEE, AND THE REGISTR ATION WAS PENDING. THE CASE LAW RELIED BY THE ASSESSEE IS DISTINGUISHA BLE ON FACTS. IN THAT CASE, THE ASSESSEE HAD SHOWN LTCG ON SALE OF L AND ON 15.05.2008 AND THE HON'BLE ITAT FOUND THE ASSESSEE TO BE ELIGIBLE FOR EXEMPTION U/S. 54F AS THE CONSTRUCTION OF THE HOUSE HAD BEEN COMPLETED IN MARCH, 2011 AND THE CONTRACTOR HAD HAN DED OVER THE HOUSE TO THE ASSESSEE. THE GROUND ON WHICH THE ASSE SSING OFFICER HAD DISALLOWED EXEMPTION U/S.54F WAS THAT THE ASSES SEE HAD NOT BEEN ABLE TO OCCUPY THE HOUSE. HE REJECTED THE SUBM ISSION OF THE ASSESSEE THAT FINISHING WORK OF THE HOUSE COULD NOT BE COMPLETED BY HIM AS THE DEVELOPER HAD NOT COMPLETED ROADS, DRAIN AGE AND WATER CONNECTION. HE CONCLUDED THAT THE HOUSE WAS NOT COM PLETE AND THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S. 54F. T HE HON'BLE ITAT, RELYING ON THE JUDGEMENT OF THE HON'BLE KARNATAKA H IGH COURT (345 ITR 389), HELD THAT THE ASSESSEE HAD INVESTED THE S ALE CONSIDERATION IN ACQUIRING RESIDENTIAL PREMISE AND HAD TAKEN POSS ESSION OF IT,AND WAS IN OCCUPATION OF THE PROPERTY. AS THE OBJECT OF SEC 54 OF THE ACT TO ENCOURAGE INVESTMENT IN A RESIDENTIAL BUILDING W AS COMPLETELY FULFILLED, IT HELD THE ASSESSEE TO BE ELIGIBLE FOR BENEFIT OF SEC 54 OF THE ACT. 5.6 THE CIT(A) OBSERVED THAT IN THE CASE ON HAND, THE FACTS ARE TOTALLY DIFFERENT. THOUGH THE ASSESSEE HAS CLAIMED OF MAKING INVESTMENT IN THE RESIDENTIAL FLAT BY GIVING THE CH EQUE TO THE BUILDER, HE DID NOT ACQUIRE THE FLAT WITHIN THE STIPULATED T IME PERIOD (I.E. 2 YEARS FROM THE DATE OF SALE OF THE OLD ASSET). AS P ER THE PROVISIONS OF SECTION 54, HE SHOULD HAVE ACQUIRED IT BY DECEMBER, 2006. IT IS SEEN THAT NEARLY 9 YEARS HAVE LAPSED AND EVEN TODAY, THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE WHATSOEVER THAT HE HAD TAK EN POSSESSION OF THE FLAT. HE OBSERVED THAT ACCORDING TO THE ASSESSE E, THE FLAT WAS 7 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. DELIVERED TO HIM ON FEBRUARY, 2015, BUT THE DOCUMEN T SUBMITTED BY HIM SHOWS THAT THE BUILDER HAD SIMPLY CONVEYED HIS 'NO OBJECTION' TO GIVING POSSESSION. THERE IS NO SALE DEED; THERE IS NOT EVEN A DOCUMENT EVIDENCING ACTUAL POSSESSION OF THE FLAT. IN ANY CASE THE PURCHASE HAD TO BE COMPLETED BY 26.12.2006 AND HENC E THE TAKING OF POSSESSION IS FEBRUARY, 2015 IS MEANINGLESS. VIDE T HIS OFFICE LETTER DATED 06.10.2015, HE WAS AGAIN GIVEN AN OPPORTUNITY TO FURNISH EVIDENCE TO ESTABLISH THAT HE HAD PURCHASED THE FLA T. BUT NO ONE APPEARED NOR ANY REPLY WAS FILED. 5.7 IN VIEW OF THE ABOVE OBSERVATIONS, THE CIT()A) HELD THAT THE BENEFIT OF THE RATIO OF THE ITAT (SUPRA) COULD BE G IVEN TO HIM IF HE COULD DEMONSTRATE THAT THE CONSTRUCTION OF THE FLAT BY THE BUILDER WAS SUBSTANTIALLY COMPLETE, THAT POSSESSION HAD BEEN TA KEN BY HIM BY 26.12.2006 AND THAT ONLY SOME MINOR WORK REMAINED TO BE DONE. EVIDENTLY THAT IS NOT THE CASE HERE. HENCE, THERE I S NO REASON TO GIVE THE BENEFIT OF THAT DECISION. HE, THEREFORE, CONFI RMED THE ADDITION MADE BY THE AO ON THE GROUND THAT THE ASSESSEE DOES NOT QUALIFY TO GET EXEMPTION U/S 54 OF THE ACT. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- V I, HYDERABAD, DISMISSING THE APPEAL OF THE ASSESSEE IS PERVERSE, ILLEGAL AND UNSUSTAINABLE IN LAW. 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN REJE CTING THE CLAIM OF DEDUCTION MADE UNDER SECTION 54 OF THE INC OME TAX ACT ON THE ALLEGED GROUND THAT THE ASSESSEE HAS NOT SAT ISFIED THE CONDITION OF PURCHASING THE NEW ASSET WITHIN TWO YE ARS FROM THE DATE OF SALE OF THE ORIGINAL ASSET. 3. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSEE FROM HIS END HAS MADE INVESTMENT OF RS.73. 50 LAKHS BY MAKING A PAYMENT BY CHEQUE ON 23.07.2006 FOR A D UPLEX FLAT IN AMARAPALI GRAND, GREATER NOIDA AND HAD COMPLIED WITH THE 8 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. CONDITIONS PRESCRIBED UNDER SECTION 54 OF THE ACT. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT IF THE DEVELOPER DELAYS THE PROJECT FOR THE REASONS NOT ATTRIBUTABLE TO THE ASSESSEE, THE ASSESSEE CANNOT BE PENALIZED. 4. THE COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE ASSESSEE HAD NOT BEEN ABLE TO PROVE THAT THE POSSES SION OF THE PROPERTY HAS BEEN TAKEN OVER FAILING TO UNDERSTAND THE REQUIREMENT OF SECTION 54 OF THE ACT. THE COMMISSIO NER (APPEALS) OUGHT TO HAVE HELD THAT IT IS THE INVESTM ENT WHICH MAKES THE ASSESSEE/ ASSESSEE ENTITLED FOR DEDUCTION UNDER SECTION 54 OF THE ACT AND NOT THE DELIVERY OF THE P ROPERTY. 5. WITHOUT PREJUDICE TO THE ABOVE, THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THE ASSESSEE BY VIRTUE OF AGREEMENT OF SALE DATED 23.07.2006 COUPLED WITH ALLOTMENT LETTER IS ENTITLED TO CLAIM EQUITY UNDER THE PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT AND THEREFORE THE SAID RIGHT OF THE ASSESSEE CANNOT BE IGNORED. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE AS SESSEE FAILED TO APPEAR AND FURNISH POSITIVE EVIDENCE TO E STABLISH THAT HE HAD PURCHASED THE FLAT. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT AS REQUIRED BY HER NOTICE DATED 06. 10.2015, THE ASSESSEE FILED SUBMISSIONS ON 14/10/2015 BEFORE HER , RELYING ON THE ORDER OF JURISDICTIONAL TRIBUNAL WHICH WAS DIRE CTLY ON THE ISSUE ON HAND. THE CIT(A) ERRED IN IGNORING THE SUBMISSIO N MADE BY THE ASSESSEE ON 14/10/2015. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING, IT IS PRAYED THAT THE HONBLE TRIBUNAL MAY BE PLEASED TO ALLOW THE APPEAL. 7. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD MADE THE INVESTMENT WITHIN THE STIPULATED TIME AND IT IS NOT IMPORTANT THAT THE FLAT ALSO SHOULD BE ACQUIRED WITHIN THE STIPULATED TIME. HE SUBMITTED THAT THE IMPORTANT THING IS, THE INVESTMENT HAS TO BE MADE WITHIN THE STIPULATED TIME TO GET THE BENEFIT U/S 54. HE FURTH ER SUBMITTED THAT THE COURTS HAVE HELD THAT THE INVESTMENT IS IMPORTANT N OT THE POSSESSION. HE RELIED ON THE CASE OF NARASHIMHA RAJU RUDRA RAJU VS. ACIT, 26 ITR 681 (HYD.). 9 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. 8. LD. DR SUBMITTED THAT THERE ARE TWO CONDITIONS, NOT ONLY PAYMENT BUT ALSO POSSESSION MUST BE TAKEN IN TIME T O GET THE BENEFIT U/S 54. 9. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THIS IS A SPECIAL CASE WHEREIN THE SALE OF RESIDENTIAL HOUSE, LTCG ETC. ARE NOT UNDER DISPUTE. THE ISSUE B EFORE US IS THAT WHETHER THE ASSESSEE INVESTED ON ANOTHER PROPERTY A S PER THE PROVISIONS OF SECTION 54 OF THE ACT. AS PER THE PR OVISION, THE ASSESSEE MUST INVEST I.E., PURCHASE ANOTHER RESIDEN TIAL HOUSE ONE YEAR BEFORE OR AFTER TWO YEARS OF TRANSFER OR CONST RUCT WITHIN 3 YEARS OF TRANSFER OF THE ORIGINAL ASSETS. IN THE GIVEN CA SE, THE ASSESSEE HAS PAID FOR THE PURCHASE OF FLAT IN NOIDA WITHIN TWO Y EARS OF TRANSFER OF RESIDENTIAL PROPERTY BUT COULD NOT ESTABLISH THAT H E HAD TAKEN POSSESSION OF THE FLAT WITHIN OR WITHIN REASONABLE TIME. THE ASSESSEE HAS SUBMITTED A CONFIRMATION LETTER FROM THE DEVELO PER THAT HE HAD INVESTED THE SUM AND CAN TAKE THE POSSESSION, ONLY ON FEBRUARY, 2015. LD. CIT(A) HELD THAT THE BENEFIT COULD BE GIV EN TO THE ASSESSEE IF HE COULD DEMONSTRATE THAT THE POSSESSION HAD BEE N TAKEN BY HIM ON 26/12/2006 NOT OTHERWISE. AFTER CAREFUL READING, IN OUR VIEW, THE INTENTION OF THE ASSESSEE IS IMPORTANT AND WHAT HE DOES WITH THE SALE CONSIDERATION. HERE, THE ASSESSEE INTENDS TO MAKE I NVESTMENT IN THE RESIDENTIAL FLAT AND ACCORDINGLY MAKES PAYMENT. DUE TO UNFORESEEN REASONS BEYOND THE CONTROL OF THE ASSESSEE, DELAY H APPENS WHILE TAKING THE POSSESSION OF THE PROPERTY. WE AGREE THA T IN THE GIVEN CASE, THERE IS SUBSTANTIAL DELAY IN TAKING POSSESSI ON. MOREOVER, THE ASSESSEE HAS NOT SATISFACTORILY ESTABLISHED THAT HE HAD POSSESSION BUT FILED ONLY THE CONFIRMATION LETTER FROM THE BUI LDER. IN OUR CONSIDERED VIEW, THE INTENTION OF MAKING INVESTMENT IS IMPORTANT, AT THE SAME TIME, THE TRANSACTION OF PURCHASE HAS TO B E COMPLETE IN ALL RESPECTS. SINCE, ASSESSEE HAS ESTABLISHED THAT HE HAD MADE THE INVESTMENT IN THE PROPERTY AND ESTABLISHED THAT THE RE EXIST A PROPERTY, WHICH HE WILL TAKE THE POSSESSION IN A SHORT WHILE. IT DOES COMPLETE 10 ITA NO. 20/H/16 HRIDAYA MOHANLAL, HYD. THE CRITERIA TO CLAIM EXEMPTION U/S 54 OF THE ACT. IN NUMEROUS DECISIONS, THE COURTS HAVE TAKEN A LENIENT VIEW ON THE BENEFICIAL SECTIONS LIKE SECTION 54, WHICH WERE HELD IN FAVOUR OF THE ASSESSEES. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALL OWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. PRONOUNCED IN THE OPEN COURT ON 9 TH DECEMBER, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 9 TH DECEMBER, 2016 KV COPY TO:- 1) HRIDAYA MOHANLAL, C/O A.V. RAGHURAM, ADVOCATE, 6 10, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 00 1. 2) DCIT, CIRCLE 14(1), AYAKAR BHAVAN, HYD. 1. 3 CIT(A) 6, HYD. 4) PR. CIT 6, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE