Venkata Dilip Kumar, CHENNAI V. ACIT Non Corporate Circle 3, CHENNAI

ITA 2665/CHNY/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6140 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 17-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Additional evidence
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH : CHENNAI [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] ./I.T.A. NO.2665/CHNY/2018. / ASSESSMENT YEAR : 2014-2015. VENKATA DILIP KUMAR, NO.3, SESHADRI ROAD, ALWARPET, CHENNAI 600 018. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 3, CHENNAI. [PAN AFUPK 3711M ] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI. AR.V. SREENIVASAN, JCIT. /DATE OF HEARING : 21 - 01 - 2019 /DATE OF PRONOUNCEMENT : 24 - 01 - 201 9 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER IN THIS APPEAL FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST AN ORDER DATED 17.07.2018 OF LD. CIT(A)-4, CHENNAI, IT HAS TAKEN ALTOGETHER ELEVEN GROUNDS OF WHICH GROUNDS 1, 9, 10 AND 11 ARE GENERAL NEEDING NO SPECIFIC ADJUDICATION. THERE IS NO GROUND 8 APPEARING IN THE GROUNDS OF APPEAL. ITA NO.2665/CHNY/2018 :- 2 -: 2. VIDE ITS GROUNDS 2 & 3, ASSESSEE IS AGGRIEVED ON DENIAL OF EXEMPTION OF RS.1 CRORE CLAIMED U/S.54EC OF THE INC OME TAX ACT, 1961 (IN SHORT THE ACT). 3. FACTS APROPOS ARE THAT ASSESSEE HAD ENTERED INTO A JOINT DEVELOPMENT AGREEMENT (IN SHORT JDA) WITH ONE M/S.SUMANTH AND COMPANY ON 15.04.2013 FOR DEVELOPING A PROPERTY CO MPRISING OF LAND AND BUILDING AT DOOR NO.5 (OLD DOOR NO.3), SESHADR I ROAD, ALWARPET, CHENNAI OWNED BY HIM.. BY VIRTUE OF THE JDA, ASSESS EE WAS ENTITLED TO 3,850 SQ.FT OF CONSTRUCTED AREA AND M/S. SUMANTH AN D COMPANY ENTITLED FOR 11,500 SQ.FT OF CONSTRUCTED AREA. AS SESSEE WAS ALSO ENTITLED FOR A CONSIDERATION OF RS.16 CRORES AND IT SEEMS ASSESEE RECEIVED A SUM OF RS.5 CRORES OUT OF THIS AT THE D ATE OF SIGNING THE JDA. ASSESSEE ALSO EXECUTED A POWER OF ATTORNEY IN FAVOUR OF M/S.SUMANTH AND COMPANY ON VERY SAME DATE, WHICH E NABLED M/S.SUMANTH AND COMPANY TO DO ALL ACTS, DEED AND THINGS RELATING TO, OR CONNECTED WITH THE CONSTRUCTION ACTIVITY TO BE DONE IN THE PROPERTY, INCLUDING SIGNING OF PLANS, APPLICATIONS ETC. THE CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY (CMDA) ISSUED PL ANNING PERMIT FOR THE BUILDING ON 31.12.2013. AS PER THE ASSESSEE, V ACANT POSSESSION OF THE PROPERTY WAS HANDED OVER TO M/S. SUMANTH AND COMPANY ON 03.02.2014. IN THE RETURN OF INCOME FILED FOR THE I MPUGNED ASSESSMENT ITA NO.2665/CHNY/2018 :- 3 -: YEAR ASSESSEE ADMITTED CAPITAL GAINS ARISING OUT OF THE ABOVE TRANSACTION, BUT CLAIMED DEDUCTION OF RS.1 CRORE U/ S.54EC OF THE ACT ON SUCH CAPITAL GAINS. THIS CLAIM WAS ON THE INVE STMENT IN ELECTRIFICATION CORPORATION BONDS OF RS.50 LAKHS EA CH ON 28.02.2014 AND 30.06.2014. LD. ASSESSING OFFICER WAS OF THE OP INION THAT INVESTMENTS MADE BY THE ASSESSEE IN THE BONDS WERE BEYOND THE PERIOD OF SIX MONTHS FROM THE DATE OF TRANSFER, G IVING RISE TO THE CAPITAL GAINS. ACCORDING TO THE LD. AO, TRANSFER HA D APPEARED ON 15.04.2013, WHEN ASSESSEE ENTERED INTO JDA WITH M/S .SUMANTH AND COMPANY. THE INVESTMENTS AS PER THE LD. AO, OUGHT H AVE BEEN MADE BY THE ASSESSEE BEFORE 15.10.2013. THUS, ACCORDING TO HIM, INVESTMENTS IN ELECTRIFICATION CORPORATION BONDS MADE ON 28.02.2014 AND 30.06.2014 WERE BEYOND THE PERIOD ALLOWED U/S.5 4EC OF THE ACT AND NOT ELIGIBLE FOR SUCH DEDUCTION. THOUGH THE ASS ESSEE ARGUED THAT SIX MONTHS OUTER LIMIT HAD TO BE CONSTRUED WITH RE FERENCE TO DATE OF HANDING OVER THE POSSESSION OF THE PROPERTY, THIS WAS NOT ACCEPTED BY THE LD. AO. ACCORDING TO LD. AO, PARA 8 OF THE J DA CLEARLY MENTIONED THAT ASSESSEE HAD AGREED TO ENTRUST THE PROPERTY T O THE DEVELOPER AND THEREFORE REQUIREMENTS OF SECTION 53A OF TRANSFER O F PROPERTY ACT, 1882 STOOD SATISFIED. THUS, AS PER THE LD. ASSESSIN G OFFICER, THE TRANSFER HAD TAKEN PLACE ON 15.04.2013 AND ASSESSE E WAS NOT ELIGIBLE FOR THE DEDUCTION CLAIMED U/S.54EC OF THE ACT. THE CLAIM WAS DENIED. ITA NO.2665/CHNY/2018 :- 4 -: ASSESSEES APPEAL BEFORE THE LD. COMMISSIONER OF IN COME TAX (APPEALS) DID NOT MEET WITH ANY SUCCESS. 4. NOW BEFORE US, THE LD. AR STRONGLY ASSAILING TH E ORDERS OF THE LOWER AUTHORITIES SUBMITTED THAT THE TERMS OF THE JDA PLACED AT PAPER BOOK PAGES 1 TO 29 CLEARLY INDICATED THAT HAN DING OVER OF POSSESSION TOOK PLACE ONLY AFTER CMDA APPROVED THE PLAN. SPECIFIC REFERENCE PLACED ON CLAUSES 5, 8 AND 9 OF THE JDA. ACCORDING TO HIM, CMDA APPROVAL WAS RECEIVED ONLY ON 31.12.2013 AND P URSUANT TO THIS, ASSESSEE HAD HANDOVER THE POSSESSION ON 03.2.2014. THUS, ACCORDING TO HIM, INVESTMENTS IN ELECTRIFICATION CORPORATION BONDS WERE MADE WITHIN SIX MONTHS FROM THE DATE OF TRANSFER AND AS SESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SAID SECTION 54EC OF THE ACT. R ELYING ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. COROMANDEL INDUSTRIES LTD, 370 ITR 586, LD. AR SUBM ITTED THAT EVEN WHERE INVESTMENTS WERE MADE IN TWO FINANCIAL YEARS, IF BOTH THE INVESTMENTS FELL WITHIN SIX MONTHS PERIOD FROM TH E DATE OF TRANSFER, DEDUCTION U/S.54EC OF THE ACT COULD NOT BE DENIED. 5. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRO NGLY SUPPORTING THE ORDERS OF THE LOWER AUTHORITIES SUB MITTED THAT JDA WAS ITA NO.2665/CHNY/2018 :- 5 -: CORRECTLY TAKEN AS DATE OF TRANSFER BY THE LOWER AU THORITIES. ACCORDING TO HIM, ASSESSEE WAS NOT ELIGIBLE FOR CLAIMING DE DUCTION U/S. 54EC. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PER USED THE ORDERS OF THE AUTHORITIES BELOW. IF THE DATE OF TRANSFER IS CONSIDERED AS DATE OF JDA, ADMITTEDLY, INVESTMENTS MADE BY TH E ASSESSEE IN ELECTRIFICATION CORPORATION BONDS ON 28.02.2014 A ND 30.06.2014 WERE BEYOND THE SIX MONTHS PERIOD STIPULATED U/S.54EC OF THE ACT, FOR QUALIFYING FOR SUCH DEDUCTION. HOWEVER, CLAIM OF THE ASSESSEE IS THAT IT HAD HANDED OVER POSSESSION ONLY ON 03.02.2014 AN D THE SIX MONTHS PERIOD HAD TO BE CONSTRUED FROM THIS DATE. CLAUSE S 5, 8,9 AND 12 OF THE JDA DATED 15.04.2013 WHICH ARE APPOSITE IS REP RODUCED HEREUNDER:- 5. THE OWNER AGREES TO DELIVER VACANT POSSESSION OF THE SAID PROPERTY ON RECEIPT OF PLAN SANCTIONS FROM CMDA. 8. THE OWNER AGREES TO ENTRUST THE SAID PROPERTY TO THE DEVELOPER FOR THE PURPOSE OF DEMOLITION OF THE EXISTING BUILDING AND STRUCTURE AT THE DEVELOPERS COST AFTER RECEIPT OF APPROVAL FOR THE S AID PURPOSE AND SANCTION OF BUILDING PLANS FROM CMDA AND ALL OTHER CONCERNED AUTHORITIES AND ON PAYMENTS OF ALL AMOUNTS AS CONTE MPLATED UNDER CLAUSE 4(F). THE NET PROCEEDS OF THE DEMOLITION SHA LL ACCRUE TO THE DEVELOPER. 9. THE DEVELOPER SHALL COMMENCE DEMOLITION ONLY AFT ER OBTAINING THE NECESSARY DEMOLITION SANCTION AND THE APPROVAL OF P LAN FROM CMDA AND ON MAKING PAYMENTS CONTEMPLATED IN CLAUSE 4(F) ABOVE. THE DEVELOPER SHALL AT ALL TIMES, KEEP THE OWNER INDEMN IFIED OF ANY AND EVERY ACTION OR CLAIM BY ANY GOVERNMENT AUTHORITIES OR LOCAL BODY IN RESPECT OF THE DEVELOPMENT OF THE PROPERTY. THE DE VELOPER SHALL NOT DEVIATE IN ANY MANNER FROM THE SANCTIONED PLAN/S I N THE CONSTRUCTION OF THE BUILDING COMPLEX AND DEVELOPMENT OF THE SAID PROPERTY AND ITA NO.2665/CHNY/2018 :- 6 -: SHALL RENDER THEMSELVES LAIBLE FOR DAMAGES IF ANY S UCH DEVIATION/S IS /ARE FOUND. THE ARCHITECT SHALL IN WRITING KEEP TH E OWNER INFORMED ABOUT DEVIATIONS IF ANY. 12. THE DEVELOPER WILL COMMENCE CONSTRUCTION ACTIVI TY ONLY AFTER RECEIPT OF THE BUILDING PLANS APPROVED BY THE CMDA/ CORPORATION AND SANCTION OR APPROVALS FROM ALL LOCAL AND STATUTORY AUTHORITIES PERMITTING CONSTRUCTION AND DEVELOPMENT OF THE SAID PROPERTY. THE DEVELOPER SHALL NOT DEVIATE IN ANY MANNER FROM THE SANCTIONED AND APPROVED PLANS OF THE PROPOSED APARTMENT COMPLEX. IF THE OWNER REQUIRES OR DESIRES ANY INTERNAL CHANGES ALTERATION S OR ADDITIONS TO ANY PORTION OR PART OF HIS SHARE ALLOTTED UNDER THIS AG REEMENT HE SHALL INTIMATE IN WRITING TO THE DEVELOPER OF THE REQUIRE D CHANGES ALTERATIONS OR ADDITIONS SUFFICIENTLY IN ADVANCE. SUCH CHANGES, ALTERATIONS OR ADDITIONS WILL BE AT THE OWNERS COS T AND SUBJECT TO THE DEVELOPER AGREEING AND APPROVAL OF THE ARCHITECT. SUCH CHANGES ALTERATIONS OR ADDITIONS SHOULD NOT BE IN VIOLATIO N OF THE APPROVED PLANS OR ANY STATUTORY OR PRESCRIBED RULES, REGULAT IONS OR ORDERS. IT IS CLEAR FROM THE ABOVE THAT HANDING OVER OF TH E POSSESSION COULD HAPPEN ONLY AFTER THE CMDA APPROVAL FOR THE PLAN W AS RECEIVED. PLANNING PERMIT WAS GIVEN BY THE CMDA, ONLY ON 31. 12.2013. HENCE, POSSESSION COULD HAVE BEEN GIVEN BY THE ASSESSEE T O THE DEVELOPER ONLY AFTER 31.12.2013. EVEN IF, WE PRESUME THE L ETTER DATED 03.02.2014 PLACED BY THE ASSESSEE AT PAPER BOOK PA GE 42 AND CLAIMED AS EVIDENCE FOR HANDING OVER OF POSSESSION , AS A DOCUMENT CONSTRUCTED BY THE ASSESSEE AND THE DEVELOPER TO HE LP THE ASSESSEES CAUSE, STILL WE ARE INCLINED TO HOLD THAT THE INVES TMENTS MADE BY THE ASSESSEEE IN THE BONDS WERE WITHIN SIX MONTHS OUTE R LIMIT MENTIONED IN SECTION 54EC OF THE ACT. THIS IS DUE TO THE REAS ON THAT EVEN IF POSSESSION WAS GIVEN BY THE ASSESSEE ON THE VERY NE XT DAY AFTER GETTING THE CMDA APPROVAL, VIZ, ON 01.01.2014, THE INVESTMENTS MADE ITA NO.2665/CHNY/2018 :- 7 -: ON 28.02.2014 AND 30.06.2014 WERE WITHIN SIX MONTHS PERIOD. BY VIRTUE OF SECTION 2(47) (V) OF THE ACT TRANSFER IS COMPLETE WHEN THE POSSESSION OF IMMOVABLE PROPERTY IS GIVEN IN PART P ERFORMANCE FALLING WITHIN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. COMING TO THE QUESTION WHETHER ASSESSEE COULD CLAIM SUCH EXEM PTION OVER INVESTMENT DONE OVER TWO SUCCESSIVE FINANCIAL YEAR, THIS STANDS ANSWERED BY HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF COROMANDEL INDUSTRIES LTD (SUPRA). THEIR LORDSHIPS HAD UPHELD THE VIEW OF THIS TRIBUNAL THAT INVESTMENTS, EVEN THOUG H THEY ARE MADE IN TWO DIFFERENCE FINANCIAL YEARS, IF THEY FALL WITHI N SIX MONTHS PERIOD FROM THE DATE OF TRANSFER, WOULD BE ELIGIBLE FOR DE DUCTION UNDER SECTION 54EC OF THE ACT. HENCE, WE ARE OF THE OPIN ION THAT ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION U/S.54EC OF THE ACT . DISALLOWANCE OF SUCH CLAIM IS SET ASIDE. GROUNDS 2 AND 3 ARE ALLOWE D. 7. THROUGH ITS GROUNDS 4 TO 7, GRIEVANCE OF THE ASS ESSEE IS THAT LD. CIT(A) DID NOT ALLOW A CLAIM OF ADDITIONAL COST OF CONSTRUCTION OF RS.3,06,40,581/-, WHILE COMPUTING THE DEDUCTION CLA IMED UNDER SECTION 54 OF THE ACT. 8. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE IN THE RETURN OF INCOME FILED FOR THE IMPUGNED ASSESSMENT YEAR CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT AS UNDER:- ITA NO.2665/CHNY/2018 :- 8 -: U/S.54 (INVESTMENT IN ACQUISITION OF ANOTHER RESIDENTIAL PROPERTY) TO BE CONSTRUCTED BY THE DEVELOPER IN THE ASSESSEES SHARE OF UDSL RETAINED BY HIM :9,375,000 COST OF ADDITIONAL CONSTRUCTION FOR WHICH PAYMENTS TO BE MADE TO THE DEVELOPER HAS BEEN AGREED TO BE SET OFF AGAINST FURTHER PAYMENT DUE BY THE DEVELOPER TOWARDS THE TOTAL CASH PART OF CONSIDERATION OF RS.16 CRS :4,125,000 ADDITIONAL FACILITIES AGREED TO BE PROVIDED BY THE DEVELOPER FOR THE ASSESSEE IN HIS RESIDENCE THE COST OF WHICH HAS BEEN AGREED TO BE SET OFF AGAINST FURTHER PAYMENT DUE BY THE DEVELOPER TOWARDS THE TOTAL CASH PART OF CONSIDERATION OF RS.16 CRS :7,125,000 EXPENDITURE ON THE NEW RESIDENCE TO BE INCURRED BY THE ASSESSEE IN THE ACT OF WHICH DEPOSIT HAS BEEN MADE IN CAPITAL GAINS SCHEME ACCOUNT NO.7182924 WITH SBI ALWARPET OPENED ON 03.07.14. :11,250,000 41,875,000 TAXABLE CAPITAL GAIN 82,546,602 ACCORDING TO HIM, LD. AO HAD ALLOWED SUCH CLAIM IN THE ASSESSMENT AFTER DUE VERIFICATION. SUBMISSION OF THE LD. AUTH ORIZED REPRESENTATIVE THAT ASSESSEE HAD HOWEVER ON THE APPEAL BEFORE LD. CIT(A) PREFERRED A FRESH CLAIM OF ADDITIONAL COST OF CONSTRUCTION O F RS.3,06,40,581/- WITH NECESSARY EVIDENCE, WHICH IT HAD MISSED OUT WHEN IT FILED ITS ITA NO.2665/CHNY/2018 :- 9 -: RETURN. AS PER THE LD. AR, THE LD. CIT(A) HAD CHOS EN TO FORWARD THE ADDITIONAL CLAIM WITH EVIDENCE TO THE LD. AO FOR A REMAND REPORT. ACCORDING TO HIM, LD. AO IN THE REMAND REPORT, WI THOUT CONSIDERING THE EVIDENCE FILED BY THE ASSESSEE TOOK A VIEW THAT BUILDER WAS BOUND TO COMPLETE THE UNFINISHED WORK AND ASSESSEE COUL D NOT HAVE CLAIMED ANYTHING MORE THAN RS.12,21,086/-, FOR THE UNFINIS HED WORK. AS PER THE LD. AR, LD. AO CHOSE TO GO BY A SUBMISSION MADE BY THE M/S. SUMANTH& CO. THAT UNFINISHED WORK LEFT ON THE FLAT WAS ONLY RS.12,21,086/-. ACCORDING TO HIM, LD. AO SHOULD HA VE VERIFIED THE ADDITIONAL EVIDENCE IN THE NATURE OF CONTRACTS AND VOUCHERS FOR THE CONSTRUCTION WORK AND OUGHT NOT HAVE GONE SIMPLY A CCEPTED THE SUBMISSION OF M/S. SUMANTH& CO. 9. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT IN THE FIRST PLACE ASSESSEE HAD NOT MADE ANY CLAIM FO R SUCH ADDITIONAL CONSTRUCTION IN THE RETURN OF INCOME. FURTHER, AS P ER THE LD. DR ORIGINAL COST OF THE FLAT WAS RS.1.25 CRORES AND ADDITIONAL CONSTRUCTION CLAIMED BY THE ASSESSEE WORKED OUT AT RS.3,06,40,581/-. TH IS ACCORDING TO LD. DR WAS BEYOND PREPONDERANCE OF PROBABILITY. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS A ND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WHAT WE FIND IS TH AT ASSESSEE HAD ITA NO.2665/CHNY/2018 :- 10 - : MADE A CLAIM UNDER SECTION 54 OF THE ACT IN ITS RET URN OF INCOME, AND THIS INCLUDED COST OF THE FLAT TO BE CONSTRUCTED BY THE DEVELOPER, ADDITIONAL PAYMENTS WHICH WERE TO BE MADE TO THE DE VELOPER AND DEPOSIT MADE IN THE CAPITAL GAIN SCHEME, ALTOGETHER AGGREGATING TO RS.3,18,75,000/-, AND THIS CLAIM WAS ALLOWED BY TH E LD. AO IN THE ASSESSMENT. HOWEVER, ASSESSEE CHOSE TO STAKE A FUR THER CLAIM OF RS.3,06,40,581/- BEFORE LD. CIT(A) WITH SUPPORTING RECORDS. LD. CIT(A) DESPITE NOTING THAT IT WAS A FRESH CLAIM, ADMITTE D THE ADDITIONAL EVIDENCE AND REFERRED IT TO THE LD. AO FOR A REMAND REPORT. WHAT WAS STATED BY THE LD. AO IN THE REMAND REPORT IS REPROD UCED HEREUNDER:- PLEASE REFER TO THE ABOVE. THE FOLLOWING ISSUES ARE EXAMINED AND SUBMITTED HER EWITH. (I) WHETHER THE ASSESSEE HAS RAISED THE ABOVE ISSUE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF THE ASSESSME NT PROCEEDINGS, IF YES, WHY THE SAME WAS NOT CONSIDERE D BY THE AO. YES AND IT WAS CONSIDERED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS AND BASED ON THIS ONLY THE AO HAS ALLOW ED THE LONG TERM CAPITAL GAIN AS OFFERED BY THE ASSESSEE. (II) PLEASE VERIFY WHETHER THE CLAIM OF THE ASSESSE E IS GENUINE AND BONAFIDE FOR WHICH YOU MAY DEPUTE YOUR ITI TO V ISIT THE SITE. YES, BASED ON INSPECTORS REPORT, IT S ASCERTAINED THAT THE PROPERTY INDEED CONSTRUCTED AND IS BEING USED BY TH E ASSESSEE. (III) VERIFY THE RELEVANT ISSUES FROM THE CONCERNED CONTRACTOR OR BUILDER. ITA NO.2665/CHNY/2018 :- 11 - : FROM THE SUBMISSION OF DEVELOPER SUMANTH & CO, IT I S OBSERVED THAT THE DEVELOPER HAD NOT COMPLETED THE CONSTRUCTI ON OF FLAT AS SPECIFIED IN THE SCHEDULE B OF THE JOINT VENTURE DEVELOPMENT AGREEMENT DATED 16.03.2013. AS PER THE DEVELOPER, THE MONETARY VALUE OF UNFINIS HED WORK AS SPECIFIED IN SCHEDULE B IS WORKED OUT TO RS.12,21,0 86/-. HENCE, THE ADDITIONAL CLAIM MADE BY THE ASSESSEE UNDER SEC TION 54 SHALL BE RESTRICTED ONLY AN EXTENT OFRS.12,21 086/- . IN VIEW OF THE ABOVE, THE APPEALS MAY BE CONSIDERED AS PER THE FACTS SUBMITTED ABOVE AND BASED ON MERITS. WHAT WE FIND IS THAT LD. AO HAD SOUGHT RESTRICTION OF THE ADDITIONAL CLAIM OF RS.12,21,086/- BASED ON CERTAIN SUBMISSION S GIVEN BY M/S.SUMANTH& CO. IT APPEARS THAT HE DID NOT VERIF Y WHETHER THE CLAIM OF THE ASSESSEE WAS GENUINE. LD. AO ALSO DID NOT VERIFY WHETHER THERE WAS ANY DUPLICATION OF ORIGINAL CLAIM OF RS .3,18,75,000/- UNDER SECTION 54 OF THE ACT MADE IN THE RETURN AND THE AD DITIONAL CLAIM OF RS.3,06,40,581/- MADE BEFORE LD. CIT(A). ONCE LD. CIT(A) ADMITTED FRESH EVIDENCE IN OUR OPINION LD. AO WAS DUTY BOUND TO VERIFY SUCH EVIDENCE IN ACCORDANCE WITH LAW. CAREFUL EXAMINATIO N IS REQUIRED SINCE THE CLAIM OF ADDITIONAL CONSTRUCTION, WHEN AGGREGAT ED WITH WHAT WAS ORIGINALLY CLAIMED BY THE ASSESSEE IN THE RETURN AP PEARS PRIME FACIE TO BE DISPROPORTIONATE TO THE COST AND THE AREA. EVEN THE ORIGINAL CLAIM, IT SEEMS, WAS ALLOWED WITHOUT CONSIDER THIS ASPECT. WE ARE THEREFORE OF THE OPINION THAT QUESTION WHETHER ASSESSEE WAS E LIGIBLE FOR CLAIMING ANY RELIEF FOR ADDITIONAL COST OF CONSTRUCTION AND IF SO, TO WHAT EXTENT ITA NO.2665/CHNY/2018 :- 12 - : REQUIRES A FRESH LOOK BY THE LD. AO. WE THEREFORE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE AND REMIT IT BACK TO THE LD. AO FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW. GROUND S 4 TO 7 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALL OWED PRO-TANTO ORDER PRONOUNCED ON THURSDAY, THE 24TH DAY OF J ANUARY, 2019, AT CHENNAI. SD/- ( DUVVURU RL REDDY ) / JUDICIAL MEMBER SD/- (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER / CHENNAI / DATED:24 TH JANUARY, 2019. KV / COPY TO: 1 . / APPELLANT 3. ( ) / CIT(A) 5. / DR 2. / RESPONDENT 4. / CIT 6. / GF