Narasimha Raju Rudra Raju, Hyderabad V. ACIT, Circle -8(1), Hyderabad

ITA 234/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2788 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: SHESHA GIRI RAO
• Keywords: Capital asset; Opportunity of being heard; Cost of acquisition; Corroborative evidences
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 234/HYD/12 ASST. YEAR 2008-09 NARASIMHA RAJU RUDRA RAJU, HYDERABAD. (PAN ADLPR1967P) V/S. ASST. COMMISSIONER OF INCOME- TAX CIRCLE 8(1), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI SHESHA GIRI RAO RESPONDENT BY : SMT. AMISHA S. GUPT DATE OF HEARING 07-03-2013 DATE OF PRONOUNCEMENT 26-04-2013. O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 24-11-2011 OF CIT(A)-III, HYDERABAD PAS SED IN APPEAL NO.0164/CIT(A)-III/10-11 PERTAINING TO THE A SSESSMENT YEAR 2008-09. 2. THE ASSESSEE HAS FILED THE APPEAL ON THE FOLLOW ING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED CIT( A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE ASSESSING OFFICER IN REJECTING THE CLAIM FOR DE DUCTION 2 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU U/S 54F OF THE IT ACT. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE APPELLANT UTILIZED THE ENTIRE CAPITAL GAIN FOR THE PURPOSE OF ACQUISITION OF THE PROPERTY AS CONTEMPLATED U/S 54F OF THE IT ACT. 3. BRIEFLY THE FACTS RELATING TO ISSUE IN DISPUTE ARE THE ASSESSEE AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE A SSESSMENT YEAR UNDER CONSIDERATION ON 31/03/2010 DECLARING TOTAL I NCOME OF RS. 10,45,299/-. THE RETURN WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTI NY ASSESSMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTICED THAT THE ASSESSEE HAD SOLD CERTAIN PROPERTY ON 29/10/2007 TO ONE SMT. VAKKALANKA PADMASREE. AFTER DEDUCTING THE COST OF ACQUISITION AT RS. 19,75,886/-, THE ASS ESSEE HAD COMPUTED THE CAPITAL GAINS AT RS. 58,90,114/- AND H AD CLAIMED EXEMPTION U/S 54F OF THE ACT. ON BEING ASKED BY THE ASSESSING OFFICER TO FURNISH THE DETAILS OF INVESTMENT MADE F OR CLAIMING EXEMPTION U/S 54F, THE ASSESSEE HAD SUBMITTED HAT H E HAD MADE PAYMENT OF RS. 64 LAKHS TO ONE M/S DHATRI CONSTRUCT IONS IN MARCH 2008. HE FURTHER SUBMITTED THAT M/S DHATRI CONSTRUC TIONS HAD TRANSFERRED THAT AMOUNT TO ONE M/S FIMA PROPERTIES LTD., HYDERBAD AND THE SAID M/S FIMA PROPERTIES HAD CONCL UDED AGREEMENT OF SALE ON 18/01/10, VIDE A REGISTERED DO CUMENT, IN RESPECT OF PROPERTY ADMEASURING 2528 SQ.FT. AT FLAT NO. 1203, ON 3 RD FLOOR OF FIMA HILLTOP IN SY.NO. 129/77, SITUATED A T SHAIKPET VILLAGE AND MANDAL, HYDERABAD FOR A SALE CONSIDERAT ION OF RS. 40 LAKHS PLUS REGISTRATION CHARGES OF RS. 3,20,100/-. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE ASSESSING OFFICER REFERRING TO THE PROVISIONS OF SE CTION 54F OF THE ACT, NOTED THAT IN THE INSTANT CASE THE ASSESSEE DI D NOT FULFILL THE CONDITION FOR ALLOWANCE OF EXEMPTION UNDER THAT SECTION. HE FURTHER NOTED THAT THE ASSESSEE HAD NOT PURCHASE D THE 3 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU HOUSE PROPERTY BY MAKING SUCH PAYMENT TO DHATRI CONSTRUCTIONS AND THE ASSESSEE HAD ALSO NOT STATED AS TO WHICH PROPERTY HE INTENDED TO PURCHASE FORM DHATRI CONSTRUCTIONS. FURTHER, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD ENTERED INTO AGREEMENT OF SALE VIDE DO CUMENT NO. 190/2010 DATED 18/01/10 WITH M/S FIMA CONSTRUCT IONS, HYDERABAD, AS PER WHICH, THE TOTAL SALE CONSIDERATI ON WAS RS. 40 LAKHS PLUS REGISTRATION CHARGES OF RS. 3,20,100/ -. HE FURTHER NOTED THAT AS PER CLAUSE 34 AT PAGE 13 OF T HE SAID AGREEMENT OF SALE, THE CONSTRUCTION HAS NOT COMMENC ED ON THE DATE OF SAID AGREEMENT AND THAT THE SAME WOULD BE COMPLETED WITHIN A PERIOD OF 36 MONTHS FROM THE DAT E OF AGREEMENT, WITH A GRACE PERIOD OF 6 MONTHS. WITH TH E SAID OBSERVATIONS AND STATING THAT THE PERIOD OF 3 YEARS FROM THE DATE OF SALE OF THAT PROPERTY MADE ON 29/10/2007, E XPIRED ON 29/10/10, BY WHICH DATE THE ASSESSEE HAD NEITHER PU RCHASED ANY RESIDENTIAL HOUSE NOR HAS COMPLETED CONSTRUCTIO N OF ANY RESIDENTIAL HOUSE AS STIPULATED IN SECTION 54F OF THE ACT, THE ASSESSING OFFICER HELD THAT THE ASSESSEE IS NOT ELI GIBLE FOR DEDUCTION U/S 54F ACT. ACCORDINGLY, THE ENTIRE AMOU NT OF RS. 58,90,114/- COMPUTED BY THE ASSESSEE WAS TAXED UNDE R THE HEAD LONG TERM CAPITAL GAINS. 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN A PPEAL BEFORE THE CIT(A) CHALLENGING THE DENIAL OF DEDUCTI ON U/S 54F OF THE ACT. 6. BEFORE THE CIT(A), THE AR OF THE ASSESSEE FILED WRITTEN SUBMISSIONS WHEREIN IT WAS STATED THAT THE ASSESSEE HAD ENTERED IN TO AN AGREEMENT WITH DHATRI CONSTRUCTIONS PVT. L TD. ON 19/03/2009 FOR SALE OF AN UNDIVIDED LAND AND ALSO E NTERED INTO A CONSTRUCTION AGREEMENT ON THE SAME DAY. IT WAS FURT HER STATED 4 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU THAT THE ENTIRE AMOUNT WAS PAID AND THE SALE DEED W AS EXECUTED ON 18/01/10. THEREFORE, IT WAS SUBMITTED THAT THE A SSESSEE IS ENTITLED FOR DEDUCTION U/S 54F OF THE ACT. IT WAS CONTENDED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTIN G THE CLAIM OF THE ASSESSEE FOR SUCH DEDUCTION. ALONG WITH WRITTEN SUBMISSIONS, THE AR OF THE ASSESSEE ALSO SUBMITTED XEROX COPY OF AN AGREEMENT OF SALE STATED TO BE EXECUTED ON 19/03/20 08 BETWEEN DHATRI CONSTRUCTIONS AND THE ASSESSEE, XEROX COPY O F CONSTRUCTION AGREEMENT STATED TO BE EXECUTED ON 19/03/2008 BETWE EN THE ASSESSEE AND THAT COMPANY AND XEROX COPY OF SALE D EED DATED 18/01/10 EXECUTED BETWEEN SEVERAL PERSONS REPRESENT ED BY M/S FIMA PROPERTIES PVT. LTD., AS THEIR DEVELOPMENT AGR EEMENT CUM GENERAL POWER OF ATTORNEY HOLDER, AND THE ASSESSEE, SHOWN AS PURCHASER, FOR PURCHASE OF UNDIVIDED SHARE OF LAND 92.7 SQ.YDS., FLAT NO. 1203 ON 3 RD FLOOR IN RESIDENTIAL BUILDING KNOWN AS 'FIMA HILLTOP, BLOCK 'B', TOWER NO. 12, FOR A LUMPSUM CON SIDERATION OF RS. 40 LAKHS. 7. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE CIT(A) O BSERVED THAT THE ASSESSEE HAD NOT CLARIFIED THE FAC TUAL POSITION WITH REFERENCE TO VARIOUS OBSERVATIONS MA DE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND ONLY MADE REFERENCE HAD BEEN MADE TO CERTAIN AGREEMENTS. HE FURTHER OBS ERVED THAT THE ASSESSEE HAD NOT EXPLAINED AS TO HOW THE ASSESS EE HAD ACQUIRED A NEW RESIDENTIAL HOUSE WITHIN THE STIPULA TED PERIOD, FROM THE DATE OF SALE OF THAT PROPERTY, FOR ALLOWAN CE OF DEDUCTION U/S 54F OF THE ACT AND, IN FACT, THE ASSESSEE HAD N OT REFUTED THE FINDINGS GIVEN BY THE AO IN THIS REGARD. THE CIT(A ) HELD THAT ASSESSEE HAD PURCHASED THE RESIDENTIAL FLAT NO. 120 3 IN FIMA HILLTOP BUILDING, FOR A CONSIDERATION OF RS. 40 LAK H, IN RESPECT OF WHICH HE HAD CLAIMED DEDUCTION U/S 54F O F THE ACT. HE FURTHER HELD THAT HOWEVER SINCE THE SAID FLAT, WHIC H WAS 5 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU PURCHASED BY THE ASSESSEE VIDE SALE DEED EXECUTED O N 18/01/10, WAS UNDER CONSTRUCTION ON THAT DATE AND IT WAS STIP ULATED IN THAT DEED THAT POSSESSION OF THAT PREMISES SHALL BE GIVE N WITHIN A PERIOD OF 36 MONTHS, WHICH SHOWS THAT THE ASSESSEE HAD NEITHER PURCHASED NOR CONSTRUCTED ANY NEW RESIDENTIAL HOUSE WITHIN THE STIPULATED PERIOD, AS MENTIONED IN SECTION 54F OF T HE ACT, HE, THEREFORE, CONFIRMED THE ACTION OF THE ASSESSING OF FICER IN DISALLOWING THE ASSESSEE'S CLAIM U/S 54F OF THE ACT . 8. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFOR E US. 9. THE LEARNED AR SUBMITTED BEFORE US THAT THE ASSE SSEE HAS INVESTED AN AMOUNT OF RS. 64.00 LAKHS TOWARDS PURCH ASE OF A PLOT AND CONSTRUCTION OF A RESIDENTIAL HOUSE OVER THAT P LOT. IN THIS CONNECTION, HE REFERRED TO TWO SEPARATE AGREEMENTS ENTERED WITH M/S DHATRI CONSTRUCTIONS PVT. LTD. ON 19/03/2008. T HE LEARNED AR SUBMITTED THAT THE ASSESSEE HAVING INVESTED THE AFO RESAID AMOUNT WITHIN THE STIPULATED PERIOD U/S 54F OF THE ACT, HE IS ENTITLED FOR EXEMPTION U/S 54F OF THE ACT. IT WAS FURTHER SUBMIT TED BY THE LEARNED AR THAT THE ASSESSEE FINALLY PURCHASED A FL AT VIDE REGISTERED SALE DEED DATED 18/01/2010. HE FURTHER S UBMITTED THAT THE PROVISION CONTAINED U/S 54F BEING A BENEFICIAL PROVISION FOR PROMOTING THE CONSTRUCTION OF RESIDENTIAL HOUSE IT HAS TO BE CONSTRUED LIBERALLY. IT WAS FURTHER SUBMITTED THAT ONCE THE ASSESSEE MAKES INVESTMENT TOWARDS PURCHASE OR CONST RUCTION OF A RESIDENTIAL HOUSE EXEMPTION U/S 54F CANNOT BE DENIE D ON THE GROUND THAT IT HAS NOT BEEN CONSTRUCTED WITHIN THE STIPULATED PERIOD. IN SUPPORT OF SUCH CONTENTION, THE LEARNED AR RELIED UPON A JUDGMENT DATED 12/02/2012 OF THE HONBLE KARNATAK A HIGH COURT IN THE CASE OF CIT V/S. SRI SAMBANDAM UDAYKU MAR IN IT APPEAL NO. 175 OF 2012. SPECIFICALLY REFERRING TO P ARA 11 OF THE SAID JUDGMENT, THE LEARNED AR SUBMITTED THAT THE CO NDITION 6 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU PRECEDENT FOR CLAIMING BENEFIT UNDER SECTION 54F IS THE CAPITAL GAIN REALIZED FROM SALE OF CAPITAL ASSET SHOULD HAV E BEEN PARTED BY THE ASSESSEE AND INVESTED EITHER IN PURCHASING A RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE. IF AF TER MAKING ENTIRE PAYMENT MERELY BECAUSE A REGISTERED SALE DEE D HAS NOT BEEN EXECUTED AND REGISTERED IN FAVOUR OF THE ASSES SEE BEFORE THE STIPULATED PERIOD THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF SECTION 54F OF THE ACT. TAKING A CUE FROM THE AFORE SAID JUDGMENT, IT WAS FURTHER SUBMITTED THAT ONCE THE ASSESSEE DEM ONSTRATES THAT THE CONSIDERATION RECEIVED ON TRANSFER HAS BE EN INVESTED EITHER IN PURCHASE OF A RESIDENTIAL HOUSE OR IN CON STRUCTION OF A RESIDENTIAL HOUSE, EVEN THOUGH THE TRANSACTIONS AR E NOT COMPLETE IN ALL RESPECTS AND AS REQUIRED UNDER THE LAW THAT WOULD NOT DISENTITLE THE ASSESSEE FROM THE SAID BENEFIT. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE ASSESSEE HAS ENTERED INTO A REGISTERED SALE DEED ON 18/01/2010, WHICH FURTHER REVEALS THE FACT THAT THE CONSTRUCTION OF THE FLAT WOULD BE COMPLETED WITHIN A PERIOD OF 36 MONTHS FROM THE DATE OF EXECUTION OF SALE DEED. IT WAS FURTHER SUBMITTED THAT THOUGH THE ASSESSEE CLAIMED TO HAVE INVESTED AN AMOUNT OF RS. 64 LAKHS TOWARDS PURCHASE OF THE PROP ERTY BUT THE REGISTERED SALE DEED REFLECTS A SALE CONSIDERATION OF RS. 40.00 LAKHS PLUS REGISTRATION CHARGES OF RS. 3,20,100/-. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT AS THE C ONSTRUCTION OF THE PROPERTY HAS NOT BEEN MADE WITHIN THE STIPUL ATED PERIOD THE ASSESSEE IS NOT ENTITLED FOR THE BENEFIT U/S 54 F OF THE ACT. 11. WE HAVE HEARD THE CONTENTIONS OF THE PARTIES AN D PERUSED THE MATERIALS ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE ON 29/10/2007 HAS SOLD A PROPERTY AND DECLARED A CAPI TAL GAIN OF RS. 58,90,114/-. HOWEVER, THE ASSESSEE CLAIMED EXEM PTION U/S 7 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU 54F BY STATING THAT HE HAS INVESTED AN AMOUNT OF RS . 64 LAKHS TOWARDS PURCHASE OF LAND AND CONSTRUCTION OF HOUSE PROPERTY BY VIRTUE OF AGREEMENT ENTERED INTO WITH M/S DHATRI CO NSTRUCTION PVT. LTD. ON 19/03/2008. PERUSAL OF THE AGREEMENT O F SALE DATED 19/03/2008 BETWEEN THE ASSESSEE AND M/S DHATRI CONS TRUCTIONS PVT. LTD. REVEALS THAT THE ASSESSEE HAS PAID AN AMO UNT OF RS. 52 LAKHS TO M/S DHATRI CONSTRUCTIONS PVT. LTD. TOWARDS SALE CONSIDERATION OF PLOT NO. 40, IN SURVEY NO. 18/P, ADMEASURING 279.55 SQ.YARDS WITH BUILT UP AREA OF 2500 TO 2700 SFT. SITUATED AT BANDLAGUDA VILLAGE, RAJENDRA NAGAR MANDAL AND MU NICIPALITY, RR DT. CLAUSE (1) OF THE AGREEMENT OF SALE STATES THAT THE AFORESAID SALE CONSIDERATION OF RS. 52 LAKHS COMPRI SES OF RS. 7 LAKHS TOWARDS PLOT AND THE BALANCE AMOUNT OF RS. 45 LAKHS TOWARDS THE CONSTRUCTION OF THE HOUSE. CLAUSE (2) O F THE AGREEMENT REVEALS THAT THE ENTIRE AMOUNT OF RS. 52 LAKHS WAS PAID BY THE ASSESSEE TO M/S DHATRI CONSTRUCTIONS P VT. LTD. THROUGH CHEQUE BEARING NOS. 118744, 118748, 118749, DATED 08/01/2008, 13/03/2008, 14/03/2008 DRAWN ON SBH, BA NJARA HILLS, HYDERABAD. ON THE VERY SAME DAY I.E. ON 19/0 3/2008, THE ASSESSEE ENTERED INTO ANOTHER AGREEMENT WITH M/S DH ATRI CONSTRUCTIONS PVT. LTD. FOR CONSTRUCTION OF A RESID ENTIAL HOUSE OVER THE SAID PLOT FOR A TOTAL CONSIDERATION OF RS. 45 LAKHS. HOWEVER, AS IT APPEARS, THIS AGREEMENT ULTIMATELY W ERE NOT ACTED UPON AND THE ASSESSEE ON 18/01/2010 ENTERED INTO AN OTHER AGREEMENT OF SALE WITH M/S FIMA PROPERTIES PVT. LTD . AND M/S DHATRI CONSTRUCTIONS PVT. LTD. FOR PURCHASE OF FLAT ADMEASURING 2528 SFT. IN BLOCK B TOWER 12 IN FIMA HILLTOP PROJE CT IN SURVEY NO. 129/77 TS NO. 26, WARD NO. 12, SYED NAGAR, FAST LAN CER, SHAIKPET VILLAGE, HYDERABAD AS DESCRIBED IN THE 2 ND SCHEDULE OF THE AGREEMENT OF SALE. PART B OF THE AFORESAID 2 ND SCHEDULE FURTHER REVEALS THAT THE TOTAL CONSIDERATION FOR SA LE OF THE AFORESAID FLAT IS RS. 1,15,35,000/- OUT OF WHICH TH E ASSESSEE 8 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU HAVING ALREADY PAID RS. 64 LAKHS TO M/S DHATRI CONS TRUCTIONS PVT. LTD. AGREED TO PAY THE BALANCE OF RS. 51,35,000/- I N THE NAME OF M/S DHATRI CONSTRUCTIONS PVT. LTD. ON THE VERY SAME DAY I.E. ON 18/01/2010 A REGISTERED SALE DEED WAS EXECUTED BETW EEN THE ASSESSEE AND WITH 7 OTHER PERSONS BEING REPRESENTED BY THEIR DEVELOPMENT AGREEMENT-CUM-GENERAL POWER OF ATTORNEY HOLDER M/S FIMA PROPERTIES PVT. LTD. FOR PURCHASE OF UNDIV IDED SHARE OF LAND 92.7 SQ.YDS., FLAT NO. 1203 ON 3 RD FLOOR IN THE RESIDENTIAL COMPLEX FIMA HILLTOP AT SURVEY NO. 129/77, TS NO. 2 6, WARD NO. 12, SYED NAGAR, FAST LANCER, SHAIKPET VILLAGE, HYDE RABAD FOR A LUMPSUM CONSIDERATION OF RS. 40 LAKHS. THE AFORESA ID DOCUMENTS REVEAL THE FACT THAT THE PROPERTY FOR WHICH INITIAL INVESTMENT OF RS. 64 LAKHS WAS MADE WITH M/S DHATRI CONSTRUCTIONS PVT. LTD. IS NOT THE SAME WHICH THE ASSESSEE FINALLY PURCHASED V IDE REGISTERED SALE DEED DATED 18/01/2010 I.E. THE PROPERTY BEING FLAT NO. 1203 IN THE RESIDENTIAL COMPLEX, FIMA HILLTOP. FURTHERMO RE, THOUGH THE ASSESSEE CLAIMED THAT HE HAS PAID AN AMOUNT OF RS. 64 LAKHS TO M/S DHATRI CONSTRUCTIONS PVT. LTD. WHILE CLAIMING E XEMPTION U/S 54F WHEREAS PART B OF THE 2 ND SCHEDULE OF THE AGREEMENT OF SALE DATED 18/01/2010 BETWEEN THE ASSESSEE AND M/S FIMA PROPERTIES PVT. LTD. SPEAKS OF THE TOTAL CONSIDERATION OF RS. 1,15,35,000/-. THE REGISTERED SALE DEED HOWEVER HAS BEEN EXECUTED FOR A TOTAL CONSIDERATION OF RS. 40 LAKHS. THESE DISCREPANCIES WITH REGARD TO THE EXACT AMOUNT OF INVESTMENT MADE BY THE ASSESSEE TOWARDS PURCHASE/CONSTRUCTION OF PROPERTY HAS NOT AT ALL BE EN RECONCILED BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES. FUR THER, THE ASSESSEE IS ALSO REQUIRED TO EXPLAIN WHY AND UNDER WHAT CIRCUMSTANCES THE AGREEMENT EXECUTED WITH M/S DHATR I CONSTRUCTIONS PVT. LTD. ON 19/03/2008 WAS NOT ACTED UPON AND M/S DHATRI CONSTRUCTIONS PVT. LTD., AS CLAIMED BY T HE ASSESSEE TRANSFERRED THE AMOUNT OF RS. 64 LAKHS TO FIMA PROP ERTIES LTD., HYDERABAD. IT IS SEEN FROM THE ORDER OF THE CIT(A ), THOUGH, HE 9 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU HAS ACCEPTED THE FACT THAT THE ASSESSEE HAS EXECUTE D A REGISTERED SALE DEED FOR PURCHASE OF RESIDENTIAL FLAT NO. 1203 IN FIMA HILLTOP BUILDING FOR A CONSIDERATION OF RS. 40 LAKHS BUT SI NCE THE FLAT WAS UNDER CONSTRUCTION ON THE DATE OF EXECUTION OF SALE DEED WHEREIN IT WAS FURTHER STIPULATED THAT THE POSSESSION OF TH AT PREMISES CAN BE GIVEN WITHIN A PERIOD OF 36 MONTHS, HE HELD THAT IT CANNOT BE CONSTRUED THAT THE ASSESSEE HAS PURCHASED OR CONSTR UCTED THE RESIDENTIAL HOUSE WITHIN THE STIPULATED PERIOD AS M ENTIONED IN SECTION 54F OF THE IT ACT. WE AGREE WITH THE CONTEN TION OF THE LEARNED AR THAT PROVISION CONTAINED U/S 54F BEING A BENEFICIAL PROVISION HAS TO BE CONSTRUED LIBERALLY. IN VARIOUS JUDICIAL PRECEDENTS AS ALSO IN THE DECISION CITED BEFORE US BY THE LEARNED AR, IT HAS BEEN HELD THAT THE CONDITION PRECEDENT F OR CLAIMING BENEFIT U/S 54F IS THE CAPITAL GAIN REALIZED FROM T HE SALE OF CAPITAL ASSET SHOULD HAVE BEEN PARTED BY THE ASSESSEE AND I NVESTED EITHER IN PURCHASING A RESIDENTIAL HOUSE OR IN CONS TRUCTING A RESIDENTIAL HOUSE. IF THE ASSESSEE HAS INVESTED THE MONEY IN CONSTRUCTION OF RESIDENTIAL HOUSE MERELY BECAUSE TH E CONSTRUCTION WAS NOT COMPLETE IN ALL RESPECTS AND IT WAS NOT IN A FIT CONDITION TO BE OCCUPIED WITHIN THE PERIOD STIPULATED THAT WO ULD NOT DISENTITLE THE ASSESSEE FROM CLAIMING THE BENEFIT U /S 54F OF THE ACT. ONCE THE ASSESSEE DEMONSTRATES THAT THE CONSID ERATION RECEIVED ON TRANSFER HAS BEEN INVESTED EITHER PURCH ASING A RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE EVEN THOUGH THE TRANSACTIONS ARE NOT COMPLETE IN ALL RES PECTS AND AS REQUIRED UNDER THE LAW THAT WOULD NOT DISENTITLE TH E ASSESSEE FROM AVAILING BENEFIT U/S 54F OF THE ACT. EVEN INVE STMENT MADE IN PURCHASING A PLOT OF LAND FOR THE PURPOSE OF CONSTR UCTION OF A RESIDENTIAL HOUSE HAS BEEN HELD TO BE AN INVESTMENT SATISFYING THE CONDITIONS OF SECTION 54F OF THE ACT. THOUGH TH ERE CANNOT BE ANY DISPUTE WITH REGARD TO THE ABOVE SAID PROPOSIT ION OF LAW, THE ASSESSEE IS REQUIRED TO PROVE THE ACTUAL DATE OF IN VESTMENT AND 10 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU THE AMOUNT INVESTED TOWARDS PURCHASE/CONSTRUCTION O F THE RESIDENTIAL HOUSE WITH SUPPORTING EVIDENCE. SINCE THE PRIMARY FACTS RELATING TO WHICH DATE SHOULD BE RECKONED AS THE ACTUAL DATE OF INVESTMENT AND WHICH IS THE ACTUAL AMOUNT OF INV ESTMENT HAVE NOT BEEN PROPERLY BROUGHT ON RECORD, WE ARE INCLINE D TO REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WH O SHALL DETERMINE THE ISSUE WITH REGARD TO ASSESSEES CLAIM U/S 54F OF THE ACT AFRESH AFTER CONSIDERING ALL THE FACTS AND MATERIALS AVAILABLE BEFORE HIM. THE ASSESSING OFFICER SHALL A FFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AND SHALL PASS THE ORDER AFTER CONSIDERING ALL MATERIAL FACTS AND EVIDENCES THAT MAY BE PRODUCED BY THE ASSESSEE AND ALSO TAKIN G NOTE OF THE DECISIONS THAT MAY BE RELIED UPON BY THE ASSESSEE. WITH AFORESAID DIRECTIONS, WE SET ASIDE THE ORDER OF THE CIT(A) AN D RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE GR OUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 26 TH APRIL, 2013. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT/- 26 TH APRIL, 2013. KV 11 ITA NO. 234/H/12 NARASIMHA RAJU RUDRA RAJU COPY FORWARDED TO: 1. NARASIMHA RAJU RUDRA RAJU, C/O SHRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, ST. NO. 9, HIMAYAT NAGAR, HYDERABAD 29. CASTLE HILLS, MASAB TANK, HYDERABAD. 2. 3. 4. ASST. CIT, CIRCLE 8(1), HYDERABAD CIT (A)-III, HYDERABAD. CIT-II, HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD.