Shri Devendra Vyas, JODHPUR V. ITO, JODHPUR

ITA 249/JODH/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9658 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-01-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 15-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Fair market value; Corroborative evidences; Competent authority
• Section: 54F; 54; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, JODHPUR BEFORE SHRI B.P JAIN ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY JUDICIAL MEMBER ITA NO. 249/JODH/2015 ASSESSMENT YEAR: 2011 - 12 SHRI DEVENDRA VYAS VS. THE ITO C/O SHRI U.C. JAIN, ADVOCATE WARD - 3(2) SHATRUNJAY HARI SINGH NAGAR JODHPUR PALI ROAD JODHPUR PAN NO. ACLPV0880C (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJENDRA JAIN RESPONDENT BY : SMT. RUNI PAL DATE OF HEARING : 10/01/2017 DATE OF PRONOUNCEMENT : 12/01/2017 ORDER PER PARTHA SARATHI CHAUDHURY , JM THIS APPEAL PREFERRED BY THE ASSESSEE WHICH EMANATES FROM THE ORDER OF THE LD. CIT(A) - 2 DT. 09/03/2015 ON THE FOLLOWING GROUNDS OF APPEAL: 1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - II ERRED IN SUSTAINING ADDITION IN RESPECT OF COST OF BOUNDARY WALL ON THE PROPERTY IN QUESTION FOR WHICH ASSESSEE CLAIMED COST AT RS. 3,96,065/ - AND THEREBY ENHANCING T HE VALUE OF TAXABLE CAPITAL GAIN . 2 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - II ERRED IN SUSTAINING ADDITION IN RESPECT OF EXEMPTION U/S 54F ON THE AMOUNT INVESTED BY THE ASSESSEE ON PURCHASE OF LAND AND CONSTRUCTION OF HOU SE THEREON. 3] THAT THE PETITIONER MAY KINDLY BE PERMITTED TO RAISE ANY ADDITIONAL AND/OR ALTERNATIVE GROUND AT OR BEFORE THE HEARING OF APPEAL. 4] THE PETITIONER PRAYS FOR JUSTICE & RELIEF. 2. FACTS IN BRIEF FOR THE FIRST GROUND OF APPEAL RELATING TO SUSTAINING OF ADDITION BY THE LD. CIT(A) IN RESPECT OF COST OF BOUNDARY WALL ON THE PROPERTY IN QUESTION FOR WHICH ASSESSEE CLAIMED COST AT RS. 3,96,065/ - THEREBY ENHANCING THE VALUE OF TAXABLE CAPITAL GAIN . THAT THE ASSESSEE ALONGWITH HIS BROTHER INHERITE D A PROPERTY SITUATED AT JAGDA L PUR DISTRICT BASTAR AND JOINTLY SOLD IT AFTER DISMANTLING IT AND CONSTRUCTING THREE TIN SHED SHOPS ON IT. THIS PROPERTY WAS SOLD FOR TOTAL SALE CONSIDERATION OF RS. 1,46,29,000/ - , THE ASSESSEE SHARE BDING 50%, THE SALE CONSIDERATION FOR ASSESSEE WAS RS. 73,14,500/ - . THE COST OF ACQUISITION OF THE PROPERTY WAS ADOPTED AT RS. 2,40,518/ - AS O N 01/04/1981, THE ASSESSEE ENHANCED THE VALUE OF INHERITED PROPERTY BY ADDING COST OF IMPROVEMENT BY WAY OF CONSTRUCTION OF THREE SHO PS FOR RS. 4,85,680/ - IN THE FY 2008 - 09, EXPENDITURE ON PLOT LEVELING, BHARATI WORK & DEMOLITION CHARGES AT RS. 11,05,335/ - AND CONSTRUCTION OF BOUNDARY WALL FOR RS. 3,96,065/ - IN THE FY 2009 - 10. THE AO OBSERVED AND HELD AS BELOW IN PARA 4.4 ON PAGE 5 OF T HE ASSESSMENT ORDER: ' DURING THE FY 2009 - 10, THE ASSESSEE HAS ALSO CLAIMED CONSTRUCTION OF BOUNDARY WALL ON THE PROPERTY IN QUESTION AT RS.3,96,065/ - WHICH IS ALSO NOT SUPPORTED BY ANY KIND OF EVIDENCE LIKE BILLS/VOUCHER OF MATERIAL UTILIZED IN CONSTRUCTI ON, LABOUR PAYMENT ETC.THE ASSESSEE HAS ALSO NOT SUBMITTED ANY KIND OF EVIDENCE LIKE MAP, PERMISSION FOR CONSTRUCTION OF BOUNDARY WALL FROM THE COMPETENT AUTHORITY, MAP 3 OF THE INHERITED HOUSE. HENCE, THE EXPENDITURE CLAIMED ON THE CONSTRUCTION OF THE BOUND ARY WALL, IN ABSENCE OF ANY COGENT EVIDENCE, IS DISALLOWED.' THUS, THE AO DID NOT ALLOW THIS VALUE TO BE ADDED AS COST OF IMPROVEMENT. 3. THAT AT THE FIRST APPELLATE STAGE THE WRITTEN SUBMISSION OF THE ASSESSEE REGARDING THIS ISSUE IS AS FOLLOWS: 1. THA T THE LD. AO DID NOT ALLOW THE COST INCURRED BY THE ASSESSEE ON THE BOUNDARY WALL CONSTRUCTED IN THE FINANCIAL, YEAR 2009 - 10 AFTER DEMOLISHING THE HOUSE. THE ASSESSEE INCURRED RS. 3,96,065/ - ON CONSTRUCTION OF BOUNDARY WALL. 2. THAT NON ALLOWING COST INCUR RED BY THE ASSESSEE ON THE BOUNDARY WALL IS ERRONEOUS AND EVEN IN ABSENCE OF THE VOUCHERS AND BILLS ETC FOR THE CONSTRUCTION OF BOUNDARY WALL IT CANNOT BE SAID THAT THE NO COST WAS INCURRED BY THE ASSESSEE ON THE CONSTRUCTION OF BOUNDARY WALL. IN LIGHT OF ABOVE YOUR HONOR REQUESTED TO KINDLY ALLOW THE COST OF CONSTRUCTION INCURRED ON BOUNDARY WALL BY THE ASSESSEE. 4. THAT THE LD. CIT(A) - II IN HER ORDER OBSERVED AND HELD WHICH IS ON RECORD THAT THE AO HAS NOT ALLOWED THE COST OF CONSTRUCTION OF BOUNDARY WALL BE INCLUDED IN THE COST OF IMPROVEMENT IN THE ABSENCE OF ANY KIND OF SUPPORTING EVIDENCE SUCH AS BILLS/ VOUCHERS, MAP OR PERMISSION FROM AUTHORITIES ETC. THE ASSESSEE WAS UNABLE TO ADDUCE ANY EVIDENCE EVEN NOW REGARDING CONSTRUCTION OF BOUNDARY WALL O N THE SOLD PROPERTY. THE LD. CIT(A) - II HELD THAT THE AO WAS PERFECTLY JUSTIFIED IN DISALLOWING THE COST OF BOUNDARY WALL TO BE INCLUDED IN THE COST OF IMPROVEMENT FOR COMPUTATION OF CAPITAL GAIN. THE LD. CIT(A) UPHELD THE ACTION OF THE AO AND THIS GROUND O F APPEAL WAS DISMISSED. 4 5. THAT AT THE TIME OF HEARING BEFORE US THE ASSESSEE HAS FURNISHED A WRITTEN SUBMISSION WHEREIN A CHART RELATING TO INDEX COST OF CONSTRUCTION OF BOUNDARY WALL AND OTHER WORK WHICH IS PRODUCED AS BELOW: PARTICULARS AS PER ASSESSEE AS PER AO SALE CONSIDERATION (BEING 50% SHARE IN THE TOTAL SALE CONSIDERATION OF RS. 1,46,29,000/ - ) 73,14,500/ - 73,14,500/ - LESS: COST OF ACQUISITION I.E. 1/2 OF TOTAL INDEXED COST 2301577/2 19,96,244/ - 11,50,788/ - FY 1981 - 82 FAIR MARKET VALUE AS ON 01.04.1981 10747 SQ. FT. @ RS. 22.38 PER SQ. FT= RS. 240518/ - INDEXED COST OF ACQUISITION 240518 *711/100 17,10,083 17,10,083 FY 2008 - 09 INDEXED COST OF CONSTRUCTION OF 3 SHOPS @ RS. 161893/ - EACH SHOP 485680*711/582 5,93,330 3,66,494 (ESTIMATED BY THE AUTHORITY BELOW) FY 2009 - 10 INDEXED COST OF DEMOLITION CHARGES ETC. RS. 1 105335/ - 1105335*711/632 12,43,502 2,25,000 (ESTIMATED BY THE AUTHORITY BELOW) FY 2009 - 10 INDEXED COST OF BOUNDRY WALL AND OTHER WORK RS. 396065/ - 396065*711/632 4,45,573 0.00(NOT ALLOWED) TOTAL INDEXED COST 39,92,488 23,01,577 LONG TERM CAPITAL GAIN 53,18,256 61,63,711 6. WE HAVE PERUSED THE CASE RECORD AND WE FIND THAT IN THE ASSESSMENT ORDER ITSELF FROM THE REPORT OF PATWARI, BAWDIKALA KARYALAY TEHSILDAR, JODHPUR DT. 04/02/2014 WHEREIN IT IS CLEARLY STATED THAT THE CONSTRUCTION OF HOUSE HAS TAKEN PLACE AND THE WORK FOR BA RANDA IS GOING ON THAT THE REPORT FURTHER STATES THE FENCING OF THE PROPERTY IS OLD WHEREAS 5 THE CONSTRUCTION OF THE HOUSE IS NEW. THE RELEVANT EXTRACT OF THE REPORT IS APPEAR IN THE ASSESSMENT ORDER IS AS FOLLOWS: BOTH THE SUBORDINATE AUTHORITIES IN THEIR RESPECTIVE ORDERS HAVE DENIED THE RELIEF TO THE ASSESSEE ON THE GROUND THAT NO PROPERTY DETAILS ETC. WERE PRODUCED BUT HOWEVER THE RECORDS ITSELF SHOWS IN THE ASSESSMENT ORDER WHERE THE PATWARI HIMSELF HAS CERTIFIE D THE CONSTRUCTION OF THE PROPERTY, THE GENUINENESS OF WHICH THEREFORE CANNOT BE DENIED. THAT EVEN THE ASSESSEE HAS SUBMITTED DETAILED CHART REGARDING INDEX COST FOR THE CONSTRUCTION OF BOUNDARY WALL AND OTHER WORKS WHICH SHOWS THAT WORK WAS UNDERTAKEN. TH AT THEREFORE IN CONSIDERATION OF THE TOTALITY OF THE FACT WE ARRIVE AT OUR CONSIDERED VIEW THAT THERE HAS BEEN A COST INCURRED FOR BOUNDARY WALL ON PROPERTY AND THE COST OF RS. 3,96,065/ - IS ALLOWED AS THE COST OF CONSTRUCTION OF BOUNDARY WALL TO BE INCLUD ED IN THE COST OF IMPROVEMENT. 7. THAT THIS GROUND OF APPEAL BY THE ASSESSEE IS ALLOWED . 6 8. THE NEXT GROUND IS RELATING TO DENIAL OF DEDUCTION UNDER SECTION 54F OF THE ACT. 9. THE FACTS IN BRIEF LEADING TO THIS DISALLOWANCE ARE THAT WHILE FILING THE RETURN OF INCOME ASSESSEE CLAIMED LONG TERM CAPITAL GAIN AS NOT TAXABLE BY VIRTUE OF PROVISIONS OF SECTION 54, DURING THE COURSE OF ASSESSMENT PROCEEDING THE AO OBSERVED THAT AS THE ASSESSEE SOLD THE LAND AFTER DEMOLISHING THE HOUSE PROPERTY THEREFORE PROV ISIONS OF SECTION 54 CANNOT BE INVOKED IN THE CASE OF ASSESSEE. THE A SSESSEE VIDE REPLY DATED 13/02/2014 PRAYED BEFORE THE AO THAT THE CLAIM UNDER SECTION 54 WAS WRONGLY CLAIMED BY THE ASSESSEE INSTEAD OF SECTION 54F AND THEREFORE RELIEF U/S.54F MAY BE ALL OWED ON THE CONSTRUCTION OF HOUSE ON THE NEW LAND PURCHASED. THE AO DID NOT ALLOW THE RELIEF U/S. 54F ON THE BASIS OF FINDINGS RECORDED IN PARA 6 AT PAGE 8 TO 15 OF THE ASSESSMENT ORDER. THE CRUX OF THE FINDINGS OF THE AO IS AS UNDER: A. THAT THE CONSTRUC TION ON THE LAND WAS CLAIMED BY THE ASSESSEE FROM 08/05/2011 TO 31/07/2011 WHEREAS THE LAND ITSELF WAS PURCHASED ON 06/07/2011 THEREFORE IT IS NOT POSSIBLE TO INCUR EXPENDITURE PRIOR TO THE DATE OF PURCHASE OF LAND. B. THAT IN CASE INVESTMENT IN THE NEW A SSET IS NOT MADE BY THE DUE DATE OF FILING RETURN OF INCOME FOR CLAIMING BENEFIT OF SECTION 54F, ASSESSEE IS REQUIRED TO DEPOSIT THE AMOUNT TO BE INVESTED IN THE CAPITAL GAIN DEPOSIT SCHEME, 1988 AND SINCE THE ASSESSEE DID NOT DEPOSIT ANY AMOUNT IN SUCH SC HEME BENEFIT U/S. 54F IS NOT ALLOWABLE TO ASSESSEE. C. THAT AS PER REPORT OF THE INSPECTOR AND OF THE PATWARI AFTER SPOT INSPECTION ON 04/02/2014 CONSTRUCTION OF HOUSE WAS NEW. THE AO DISCUSSED THE REPORT OF PATWARI AND PHOTOGRAPHS TAKEN BY THE INSPECTOR OF INCOME TAX IN PARA 6.8 OF THE ASSESSMENT ORDER AS BELOW: 'FROM THE REPORT OF THE CONCERNED PATWARI AND PHOTOGRAPHS TAKEN BY THE INSPECTOR OF THIS OFFICE, IT IS EVIDENT THAT THERE WAS A ROOM HAVING SIZE OF APPROXIMATELY 10 X 20 FT. WHICH WAS RECENTLY BE EN CONSTRUCTED ON THE SAID AGRICULTURE LAND. THERE WAS FENCING OUTSIDE THE AGRICULTURE LAND, WHICH ACCORDING TO REPORT ON THE BASIS OF LOCAL INQUIRY WAS FOUND TO BE VERY OLD. FROM THE PHOTOGRAPHS IT IS ALSO CLEAR THAT THERE HAS SIMPLY BEEN 7 STONE WORK IN TH E CONSTRUCTION OF THE ROOM AND IT IS STILL IN UNDER CONSTRUCTION STAGE. FURTHER TO MENTION THAT THE EXPENDITURE OF RS.27,57,500/ - CLAIMED ON THE CONSTRUCTION OF HOUSE WAS MAINLY UTILIZED FOR JCB HIRING AND TRACTOR HIRING CHARGES FOR LEVELING OF THE AGRICUL TURAL LAND AND NO BIFURCATION OF EXPENSES ON LEVELING AND ON CONSTRUCTION OF ALLEGED HOUSE WAS GIVEN BY THE ASSESSEE. HENCE, THE CLAIM OF THE ASSESSEE THAT EXPENDITURE OF RS.27,57,500/ - INCURRED DURING THE FY 2010 - 11 ON THE CONSTRUCTION OF HOUSE ON THE SAI D LAND IS NOT GENUINE.' THE AO FURTHER NOTED THAT APART FROM THIS U/S.54F, THE NEW HOUSE CAN BE PURCHASED/CONSTRUCTED WITHIN THE TIME LIMIT OF 2 YEARS/ 3 YEARS FROM THE DATE OF TRANSFER OF ORIGINAL ASSET, IF THE AMOUNT IS NOT UTILIZED FOR PURCHASE/CONSTRUC TION OF THE NEW HOUSE TILL THE DUE DATE OF SUBMISSION OF RETURN OF INCOME, THEN IT SHOULD BE DEPOSITED IN CAPITAL GAINS DEPOSIT ACCOUNT SCHEME, ON THE BASIS OF AMOUNT UTILIZED IN ACQUIRING THE NEW PROPERTY AND AMOUNT DEPOSITED IN THE DEPOSIT ACCOUNT, EXE MPTION U/S 54 OF THE IT ACT CAN BE ALLOWED. THE AO HELD THAT AS THE CONDITIONS LAID DOWN U/S 54F FOR CLAIMING EXEMPTION ON THE CAPITAL GAIN HAVE NOT BEEN FULFILLED BY THE ASSESSEE, SO NO EXEMPTION U/S 54F IS ALLOWED TO THE ASSESSEE. THE AO FURTHER RELIED O N THE FOLLOWING CASE - LAWS: I. SMT. ASHA GEORGE VS. ITO (2013) 351 ITR 123 (KER.)(HC) II. ASHOK SYAL VS. CIT, 209 TAXMAN 376 PUNJAB & HARYANA HC III. ANU AGARWAL VS. ITO 28 TAXMAN.COM 286 ITAT, CHANDIGARH IV. V KUMUDA VS. DCIT 135 ITD 116, ITAT HYDERABAD V. CIT VS. V R DESAI 197 TAXMAN 52 (KER.)(HC) VI. RANJIT NARANG VS. CIT 317 ITR 332 ALLAHABAD HC DISCUSSING THUS, THE AO DISALLOWED THE DEDUCTION U/S. 54F OF THE ACT CLAIMED BY THE A SSESSEE . 10. THAT AT APPELLATE STAGE THE ASSESSEE FILED THE WRITTEN SUBMISSION WHICH IS REPRODUCED BELOW: ................................ ................................ ......... THAT A PIECE OF LAND WAS SOLD 8 BY ASSESSEE ON 30/03/2011 AND AS PER PROVISIONS OF SECTION 54F IN CASE THE ASSESSEE CONSTRUCTED A NEW HOUSE WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER OF ASSET ASSESSEE IS ELIGIBLE TO CLAIM BENEFIT OF SECTION 54F. IN THE CASE OF ASSESSEE THREE YEARS FROM THE DATE OF TRANSFER COMPLETED ON 29/03/2014 AND PRIOR TO THAT THE ASSESSEE CONSTRUCTED NEW HOUSE AND THEREFORE ASSESSEE IS ELIGIBLE TO CLAIM BENEFIT OF SECTION 54F. FOR THE ELIGIBILITY TO CLAIM BENEFIT OF SECTION 54F THE ONLY CONDITION IS TO CONSTRUCT HOUSE WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER. THE CONDITION LAID UNDER SUB SECTION (4) WITH RESPECT TO DEPOSIT OF PROPOSED INVESTMENT IN THE CAPITAL GAIN DEPOSIT SCHEME IS ONLY FOR THE PU RPOSE OF COMPUTATION OF RELIEF U/S 54F AND NOT FOR THE ELIGIBILITY FOR RELIEF U/S 54F. THEREFORE WHEN THE ASSESSEE COMPLETED CONSTRUCTION OF HOUSE WITHIN THREE YEARS FROM THE TRANSFER OF PROPERTY, ASSESSEE OUGHT TO BE HELD ELIGIBLE FOR CLAIM RELIEF U/S 54 F. 2. THAT WHEN THE ASSESSEE HELD TO BE ELIGIBLE TO CLAIM BENEFIT OF SECTION 54F, THE NEXT STEP IS TO COMPUTE AMOUNT OF BENEFIT. FOR COMPUTATION OF RELIEF U/S 54F THE AMOUNT ELIGIBLE FOR RELIEF REQUIRED TO BE COMPUTED. THE REQUIREMENT OF AMOUNT OF PROPOSED I NVESTMENT IN CAPITAL GAIN DEPOSIT SCHEME IS NOT IN ALL CASE MANDATORY. IF CLAIM OF RELIEF U/S 54F SOUGHT ON THE BASIS OF AMOUNT DEPOSITED IN THE CAPITAL GAIN DEPOSIT SCHEME THEN THE SAME MUST BE DEPOSITED BEFORE THE DUE DATE OF FURNISHING RETURN U/S 139(1) . BUT WHERE THE ASSESSEE CLAIMED RELIEF U/S 54F ON THE BASIS OF ACTUAL AMOUNT INCURRED PRIOR TO FURNISHING RETURN OF INCOME THERE IS NO REQUIREMENT TO DEPOSIT THE UNUTILIZED AMOUNT IN THE CAPITAL GAIN DEPOSIT SCHEME IF THE SAME NOT INVESTED UP TO DUE DATE OF FURNISHING RETURN U/S 139(1). THE TIME LIMIT TO CLAIM RELIEF U/S 54F ON THE ACTUAL INVESTMENT PRIOR TO FILING RETURN OF INCOME IS TIME LIMIT AVAILABLE U/S 139 AND THE SAME IS NOT RESTRICTED TO TIME LIMIT U/S 139(1). IN THE CASE UNDER CONSIDERATION THE A SSESSEE FILED ITS RETURN OF INCOME ON 31/03/2013 AND AS SUCH THE BENEFIT U/S 54F IS AVAILABLE TO ASSESSEE FOR THE INVESTMENT MADE UP TO 31/03/2013 EVEN IF ON THE DATE OF FILING OF RETURN OF INCOME CONSTRUCTION NOT COMPLETED BUT COMPLETED PRIOR TO COMPLETIO N OF THREE YEARS FROM THE DATE OF TRANSFER. IN THIS MATTER RELIANCE IS PLACED ON THE JUDGEMENT OF HON'BLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALAN REPORTED IN 286 ITR 274 (GAU) (COPY ENCLOSED). RELEVANT EXTRACT OF THE JUDGEMENT IS REPRO DUCED HEREIN BELOW: '6. FROM A PLAIN READING OF SUB - S. (2) OF S. 54 OF THE IT ACT, 1961, IT IS CLEAR THAT ONLY S. 139 OF THE IT ACT, 1961, IS MENTIONED IN S. 54(2) IN THE CONTEXT THAT THE UNUTILISED PORTION OF THE CAPITAL GAIN ON THE SALE OF PROPERTY USED FOR RESIDENCE SHOULD BE DEPOSITED BEFORE THE DATE OF FURNISHING THE RETURN OF THE INCOME - TAX UNDER S. 139 OF THE IT ACT. SEC. 139 OF THE IT ACT, 1961, CANNOT BE MEANT ONLY AS S. 139(1) BUT IT MEANS ALL SUB - SECTIONS OF S. 139 OF THE IT ACT, 1961. UNDER SUB - S. (4) OF S. 139 OF THE IT ACT ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB - S. (1) OF S. 142 MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. SUCH BEING THE 9 SITUATION, IT IS THE CASE OF THE RESPONDENT/ASSESSEE THAT THE RESPONDENT/ASSESSEE COULD FULFIL THE REQUIREMENT UNDER S. 54 OF THE IT ACT FOR EXEMPTION OF THE CAPITAL GAIN FROM BEING CHARGED TO INCOME - TAX ON THE SALE OF PROPERTY USED FOR RESIDENCE UPTO 30TH MARCH, 1998, INASMUCH AS THE RETURN OF INCOME - TAX FOR THE ASST. YR. 1997 - 98 COULD BE FURNISHED BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMP LETION OF THE ASSESSMENT WHICHEVER IS EARLIER UNDER SUB - S. (4) OF S. 139 OF THE IT ACT, 1961. 7. THE APEX COURT IN STATE OF MAHARASHTRA VS. SANTOSH SHANKAR ACHARYA (2000) 7 SCC 463 HELD THAT IT IS TOO WELL KNOWN A PRINCIPLE OF CONSTRUCTION OF STATUTES THAT T HE LEGISLATURE ENGRAFTED EVERY PART OF THE STATUTE FOR A PURPOSE. THE LEGISLATIVE INTENTION IS THAT EVERY PART OF THE STATUTE SHOULD BE GIVEN EFFECT. THE LEGISLATURE IS DEEMED NOT TO WASTE ITS WORDS OR TO SAY ANYTHING IN VAIN AND A CONSTRUCTION WHICH ATTRI BUTES REDUNDANCY TO THE LEGISLATURE WILL NOT BE ACCEPTED EXCEPT FOR COMPELLING REASONS. 8. THE APEX COURT IN BHAVNAGAR UNIVERSITY VS. PALITANA SUGAR MILL (P) LTD. (2003) 2 SCO 111, HELD THAT IT IS THE BASIC PRINCIPLE OF CONSTRUCTION OF STATUTE THAT STATUTORY ENACTMENT MUST ORDINARILY BE CONSTRUED ACCORDING TO THEIR PLAIN MEANING AND NO WORDS SHOULD BE ADDED, ALTERED OR MODIFIED UNLESS IT IS PLAINLY NECESSARY TO DO SO TO PREVENT A PROVISION FROM BEING UNINTELLIGIBLE, ABSURD, UNREASONABLE, UNWORKABLE OR TOTALLY IRRECONCILABLE WITH THE REST OF THE STATUTE. PARAS 24 AND 25 OF THE BHAVNAGAR UNIVERSITY VS. PALITANA SUGAR MILL (P) LTD. READ AS FOLLOWS: '24. TRUE MEANING OF A PROVISION OF LAW HAS TO BE DETERMINED ON THE BASIS OF WHAT IT PROVIDES BY ITS CLEAR LANGUAGE, WITH DUE REGARD TO THE SCHEME OF LAW. 25. SCOPE OF THE LEGISLATION ON THE INTENTION OF THE LEGISLATURE CANNOT BE ENLARGED WHEN THE LANGUAGE OF THE PROVISION IS PLAIN AND UNAMBIGUOUS. IN OTHER WORDS STATUTORY ENACTMENTS MUST ORDINARILY BE CONSTRUED ACCORDI NG TO ITS PLAIN MEANING AND NO WORDS SHALL BE ADDED, ALTERED OR MODIFIED UNLESS IT IS PLAINLY NECESSARY TO DO SO TO PREVENT A PROVISION FROM BEING UNINTELLIGIBLE, ABSURD, UNREASONABLE, UNWORKABLE OR TOTALLY IRRECONCILABLE WITH THE REST OF THE STATUTE.' 9. FO R THE REASONS DISCUSSED ABOVE, WE ANSWER THE QUESTION FORMULATED IN THE PRESENT CASE IN POSITIVE. ACCORDINGLY THE ORDER OF THE LEARNED TRIBUNAL, GAUHATI BENCH, GAUHATI, DT. 18TH APRIL, 2001, PASSED IN ITA NO. 328/GAU/1999 AND ITA NO. 49/GAU/2000 IS NOT INT ERFERED WITH AND THE APPEAL IS DISMISSED.' 3. THAT AS PER ASSESSEE ALL THE INVESTMENT WAS MADE PRIOR TO 31/07/2011 BUT THE LD. AO DID NOT ACCEPT THE SAME. EVEN IF THE 10 INVESTMENT BY THE ASSESSEE BY THE DATE OF 31/07/2011 NOT ACCEPTED THE CONSTRUCTION OF HOUSE WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER CANNOT BE DENIED AND THEREFORE THE AMOUNT INVESTED TILL THE DATE OF FILING OF RETURN IS ELIGIBLE FOR COMPUTATION OF RELIEF U/S 54F. IN LIGHT OF ABOVE SUBMISSION AND JUDICIAL DECISIONS RELIED U PON THE RELIEF U/S. 54F MAY KINDLY BE ALLOWED.' THAT THE LD. CIT(A) - II ON BASIS OF THE REASONS APPEARING IN HIS ORDER AS ON RECORD HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT. 11. THAT AT THE TIME OF HEARING BEFORE U S IN THE WRITTEN SUBMISSION FILED BY THE ASSESSEE IT IS STATES THAT THE ASSESSEE HAS MADE A CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT AS UNDER: LAND PURCHASED 15,90,000/ - ADD COST OF CONSTRUCTION 27,57,500/ - 43,47,500/ - THAT FURTHER THE ASSE SSEE CONTENDED THAT THE AUTHORITIES BELOW HAVE NOT CONSIDERED THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE HAS MADE AN INVESTMENT IN PURCHASE OF LAND AND ALSO CONSTRUCTION OF THE HOUSE AND THIS FACT WAS ALSO VERIFIED BY THE TEHSILDAR AND ALSO VERIFIED BY THE INSPECTOR OF THE DEPARTMENT. THAT THE ASSESSEE FURTHER RELIED ON THE JUDICIAL PRONOUNCEMENT IN THE CASE OF SMT. SHASHI VARMA VS. CIT REPORTED IN 224 ITR 0106(MP), THEREIN IT WAS HELD THAT IT WAS NOT PROPER FOR THE TRIBUNAL TO HAVE IGNORED THE CIRCUL AR NO. 471, DT. 15/10/1986 BECAUSE IT HAS A PERSUASIVE VALUE AND IT WAS IN THE NATURE OF GRANTING RELIEF. THEREFORE, THE TRIBUNAL SHOULD HAVE CONSIDERED THE CIRCULAR SYMPATHETICALLY AND GRANTED 11 THE RELIEF. MORE SO, SECTION 54 ONLY SAYS THAT WITHIN TWO YEAR S, THE A SSESSEE SHOULD HAVE CONSTRUCTED THE HOUSE BUT THAT DOES NOT MEAN THAT THE CONSTRUCTION OF HOUSE SHOULD NECESSARILY BE COMPLETE WITHIN TWO YEARS. WHAT IT MEANS IS THAT THE CONSTRUCTION OF HOUSE SHOULD BE COMPLETED AS FAR AS POSSIBLE WITHIN TWO YEARS . IN THE MODERN DAYS, IT IS NOT EASY TO CONSTRUCT A HOUSE WITHIN THE TIME LIMIT OF TWO YEARS AND UNDER THE GOVERNMENT SCHEMES, CONSTRUCTION TAKES YEARS TO YEARS. THEREFORE, CONFINING TO TWO YEARS PERIOD FOR CONSTRUCTION AND HANDING OVER POSSESSION THEREOF IS IMPOSSIBLE AND UNWORKABLE UNDER SECTION 54. IF THE SUBSTANTIAL INVESTMENT IS MADE IN THE CONSTRUCTION OF HOUSE, THEN IT SHOULD BE DEEMED THAT SUFFICIENT STEPS HAVE BEEN TAKEN AND THIS SATISFIES THE REQUIREMENTS OF SECTION 54. THEREFORE, THE VIEW TAKEN BY THE TRIBUNAL IS NOT CORRECT. 12. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 13. WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE RECORDS IN THIS CASE AND HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES IN DETAIL. 14. WE ARRI VE AT OUR CONSIDERED VIEW THAT WITH REGARD TO THIS GROUND OF APPEAL WE CONCUR WITH THE FINDINGS OF HONBLE MP HIGH COURT IN THE CASE OF SMT. SHASHI VARMA VS. CIT(SUPRA). THAT , THE HONBLE HIGH COURT IN THEIR JUDGMENT HAS CLEARLY BROUGHT OUT THE LEGAL ASPECT O N ONE HAND AND THAT THE PRACTICAL DIFFICULTIES FACED BY A PERSON IN CONSTRUCTION OF A HOUSE IN 12 PRESENT DAY SCENARIO AND THEREFORE SIMPLY GO I N G BY THE LEGAL STATUTE THE GENUINE RIGHTS OF A TAX PAYER AND AS SESSEE CANNOT BE CURBED OR DENIED. THAT THEREFORE RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF SMT. SHASHI VARMA VS. CIT(SUPRA) WE ALLOW THIS GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE . 15. THAT THE GROUND S NO. 3 & 4 ARE GENERAL IN NATURE , HENCE , NO ADJUDICATION IS REQUIRED. 16. IN THE RESULT, APPEAL PREFERRED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/ - SD/ - (B.P. JAIN) ( PARTHA SARATHI CHAUDHURY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12/01/2017 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR