Shri Bhatkal Ramarao Prakash , Bangalore V. Income Tax officer Ward-5(2)(3), Bangalore

ITA 2692/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8210 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-12-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 26-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Cost of acquisition; Capital Gains
• Section: 54F; 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P. BOAZ , ACCOUNTANT MEMBER I TA NO. 2692/BANG/2018 ASSESSMENT YEAR : 2015 - 16 SHRI BHATKAL RAMARAO PRAKASH, NO.1, AABHRAN, I MAIN ROAD, N R COLONY, BANGALORE 560 019. PAN: AHNPP 4864F VS. THE INCOME TAX OFFICER, WARD 5(2)(3), BENGALURU. APP EL L ANT RESPONDENT APP ELL ANT BY : SHRI H.R. SURESH, CA RE SPONDENT BY : SHRI VIKAS SURYAWAMSHI, ADDL.CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 21 . 12. 201 8 DATE OF PRONOUNCEMENT : 04 . 01. 201 9 O R D E R PER N V VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 24.08.2018 OF THE CIT(APPEALS)-V, BENGALURU, RELATING TO ASSES SMENT YEAR 2015-16. 2. THERE ARE BASICALLY 3 ISSUES THAT ARISE FOR CON SIDERATION IN THIS APPEAL. THE FIRST ISSUE IS WITH REGARD TO THE COMP UTATION OF CAPITAL GAIN ON SALE OF A PROPERTY VIZ., SITE NO.513 (PII), R.R. NA GAR, BANGALORE BY THE ASSESSEE [HEREINAFTER REFERRED TO AS THE RR PROPERT Y]. IT IS NOT IN DISPUTE THAT THE ASSESSEE ACQUIRED THE RR PROPERTY FROM IDE AL HOMES CO-OP. BUILDING SOCIETY LTD., BANGALORE, UNDER A LEASE-CUM -SALE AGREEMENT DATED ITA NO. 2692/BANG/2018 PAGE 2 OF 17 22.3.2001. AS PER THE TERMS OF LEASE-CUM-SALE AGRE EMENT, THE ASSESSEE PAID A SUM OF RS.60,000 TOWARDS THE VALUE OF SITE O N THE DATE OF AGREEMENT FOR LEASE-CUM-SALE. AS PER THE FURTHER TERMS OF TH IS AGREEMENT, THE ASSESSEE HAS TO CONSTRUCT THE BUILDING ON THE SITE WITHIN TWO YEARS FROM THE DATE OF AGREEMENT. THE ASSESSEE SHOULD NOT ALIENAT E THE SITE FOR A PERIOD OF 10 YEARS. THE ASSESSEE TOOK POSSESSION OF THE P ROPERTY AND CONSTRUCTED A BUILDING. AS PER THE AGREEMENT, FOR 1 0 YEARS THE ASSESSEE HAS TO PAY ANNUAL LEASE CHARGES AND AT THE END OF 1 0 YEARS PERIOD, THE PROPERTY WILL BE CONVEYED TO THE ASSESSEE. IT IS N OT IN DISPUTE THAT THE ASSESSEE COMPLIED WITH THE AFORESAID TERMS OF LEASE -CUM-SALE AGREEMENT AND WAS IN POSSESSION OF THE PROPERTY AND PUT UP CO NSTRUCTION ON THE SITE ON THE DATE OF AGREEMENT AND SUBSEQUENTLY. 3. THE SOCIETY BY REGISTERED SALE DEED DATED 31.08. 2014 CONVEYED THE PROPERTY TO THE ASSESSEE. THE FACT THAT THE ASSESS EE WAS ALLOTTED THE SITE AS PER THE TERMS OF LEASE-CUM-SALE AGREEMENT DATED 22.3.2001 AND THE FACT THAT ASSESSEE COMPLIED WITH ALL THE CONDITIONS IN THE SAID LEASE-CUM- SALE AGREEMENT HAVE BEEN ACKNOWLEDGED IN THE SALE D EED. 4. THE ASSESSEE SOLD THE SITE AS WELL AS THE BUILDI NG CONSTRUCTED THEREON UNDER A SALE DEED DATED 03.12.2014. THE AS SESSEE COMPUTED LONG TERM CAPITAL GAIN ON THE SALE OF THIS PROPERTY BY TAKING THE DATE OF LEASE-CUM-SALE AGREEMENT VIZ., 22.03.2001 AS THE DA TE OF ACQUISITION OF THE PROPERTY. SINCE THE PROPERTY WAS HELD BY THE ASSES SEE FOR MORE THAN 3 YEARS, THE ASSESSEE CLAIMED THAT THE CAPITAL GAIN A RISING ON TRANSFER WAS A LONG TERM CAPITAL GAIN. 5. THE AO, HOWEVER, CONSTRUED THE DATE OF ACQUISITI ON OF PROPERTY BY THE ASSESSEE AS 31.08.2014, THE DATE ON WHICH THE S OCIETY MADE AN ABSOLUTE CONVEYANCE TO THE ASSESSEE. SINCE THE ASS ESSEE SOLD THE PROPERTY ON 03.12.2014, THE AO TREATED THE DATE OF ACQUISITION OF PROPERTY ITA NO. 2692/BANG/2018 PAGE 3 OF 17 AS 31.08.2014 AND THE DATE OF SALE BEING LESS THAN 36 MONTHS, THE AO CONSTRUED THE CAPITAL GAIN ON SALE OF PROPERTY AS A SHORT TERM CAPITAL GAIN. THE ASSESSEE HAD CLAIMED DEDUCTION U/S. 54F OF THE ACT BY INVESTING THE CAPITAL GAIN IN ACQUISITION OF ANOTHER PROPERTY. S INCE THE GAIN IN QUESTION WAS CONSTRUED AS A SHORT TERM CAPITAL GAIN, THE DED UCTION CLAIMED U/S. 54F OF THE ACT WAS NOT ALLOWED BY THE AO. 6. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) CONF IRMED THE ORDER OF AO. 7. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSE SSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL AND THE RELE VANT GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS REGARD ARE CONTAINED IN GROUND NOS.1 TO 4. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE DISPUT E BETWEEN THE ASSESSEE AND THE REVENUE IS AS TO WHETHER THE GAIN ON SALE OF THE RR PROPERTY WHICH WAS OBTAINED ORIGINALLY ON 22.03.200 1 ON LEASE FROM THE SOCIETY WHICH WAS SUBSEQUENTLY CONVEYED ABSOLUTELY BY THE SOCIETY TO THE ASSESSEE BY A REGISTERED SALE DEED DATED 31.08.2014 CAN BE SAID TO BE A LTCG. 9. SEC.2(29B) OF THE ACT DEFINES LONG TERM CAPITAL GAIN AS FOLLOWS:- 'LONG-TERM CAPITAL GAIN' MEANS CAPITAL GAIN ARISING FROM THE TRANSFER OF A LONG-TERM CAPITAL ASSET; SEC.2(29A) OF THE ACT DEFINES LONG TERM CAPITAL ASS ET AS FOLLOWS:- 'LONG-TERM CAPITAL ASSET' MEANS A CAPITAL ASSET WHI CH IS NOT A SHORT-TERM CAPITAL ASSET ; SEC.2(42A) OF THE ACT DEFINES SHORT TERM CAPITAL AS SET AS FOLLOWS:- (42A) 'SHORT-TERM CAPITAL ASSET' MEANS A CAPITAL AS SET HELD BY AN ASSESSEE FOR NOT MORE THAN THIRTY-SIX MO NTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER : ITA NO. 2692/BANG/2018 PAGE 4 OF 17 .. SEC.2(42B) OF THE ACT DEFINES SHORT TERM CAPITAL GA IN AS FOLLOWS:- (42B) 'SHORT-TERM CAPITAL GAIN' MEANS CAPITAL GAIN ARISING FROM THE TRANSFER OF A SHORT-TERM CAPITAL A SSET; 10. WE HAVE TO LOOK AT THE DEFINITION OF THE TERM SHORT TERM CAPITAL GAIN BECAUSE WHAT IS NOT SHORT TERM CAPITAL GAIN IS LONG TERM CAPITAL GAIN AND THAT IS THE WAY LONG TERM CAPITAL GAIN HAS BEEN DEF INED IN THE ACT. SHORT TERM CAPITAL GAIN MEANS CAPITAL GAIN ARISING FROM T HE TRANSFER OF A SHORT TERM CAPITAL ASSET. SHORT TERM CAPITAL ASSET HAS BE EN QUITE EXHAUSTIVELY DEFINED, COVERING SEVERAL SITUATIONS. FOR THE PRESE NT APPEAL THE PORTION OF THE DEFINITION WHICH SAYS SHORT TERM CAPITAL ASSET MEANS A CAPITAL ASSET HELD BY AN ASSESSEE FOR NOT MORE THAN THIRTY-SIX MO NTHS IMMEDIATELY PRECEDING THE DATE OF ITS TRANSFER ALONE IS RELEVA NT. 11. IT IS NOT IN DISPUTE THAT THE ASSESSEE PAID COS T OF THE SITE AS EARLY AS 22.3.2001 AND WAS IN POSSESSION OF THE PROPERTY AS LESSEE CUM AGREEMENT HOLDER WITH RIGHT TO OBTAIN CONVEYANCE OF ABSOLUTE INTEREST OVER THE LAND THAT WAS LEASED. THE EXPRESSION HELD BY THE ASSES SEE IN THE CONTEXT OF SEC.2(42A) OF THE ACT, IS RATHER AMBIGUOUS, IN THE SENSE THAT IT DOES NOT SPEAK OF THE DATE OF VESTING OF LEGAL TITLE TO THE PROPERTY. EVEN THE PROVISIONS OF SEC.2(47)(V) & (VI) OF THE ACT WHICH DEFINES WHAT IS TRANSFER FOR THE PURPOSE OF THE ACT, CONSIDERS POSSESSORY RI GHTS AS AKIN TO LEGAL TITLE. IT IS THEREFORE NECESSARY TO LOOK INTO THE POLICY A ND OBJECT OF THE PROVISIONS GIVING EXEMPTION FROM LEVY OF TAX ON CAPITAL GAIN. IN THE PRESENT CASE, AS WE HAVE ALREADY SEEN, THE ASSESSEE HAD PAID THE ENT IRE CONSIDERATION FOR THE SITE ORIGINALLY ALLOTTED AS EARLY AS IN THE YEA R 2001. THE ASSESSEE HAD PERFORMED ITS PART OF THE CONTRACT WITH THE SOCIETY . THEREFORE THE CLAIM OF THE ASSESSEE THAT IT HELD THE PROPERTY FROM 22.3.20 01 HAS TO BE ACCEPTED, ITA NO. 2692/BANG/2018 PAGE 5 OF 17 KEEPING IN MIND THE POLICY AND OBJECT OF THE PROVIS IONS GIVING EXEMPTION FROM LEVY OF TAX ON CAPITAL GAIN. 12. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. DR.SHAKUNTALA ITA NO.117 OF 2006 JUDGMENT DATED 19. 9.2007 HAD TO DEAL WITH A CASE WHERE THE ASSESSEE GOT A SITE ALLOTTED IN HER FAVOUR BY THE BANGALORE DEVELOPMENT AUTHORITY (BDA) UNDER A LEASE -CUM-SALE AGREEMENT DATED 28.2.1981 AND WAS PUT IN POSSESSION OF THE SITE ALLOTTED. SHE GOT ABSOLUTE SALE DEED FROM BDA ONLY ON 19.9.19 96. SHE SOLD THE PROPERTY ON 25.3.1997. THE QUESTION BEFORE THE HON BLE KARNATAKA HIGH COURT WAS AS TO WHETHER THE CAPITAL GAIN CAN BE REG ARDED AS LTCG OR STCG. THE CASE OF THE REVENUE WAS THAT THE PERIOD OF HOLDING HAD TO BE RECKONED FROM 19.9.1996 AND THE CAPITAL GAIN HAD TO BE REGARDED AS STCG. THE PLEA OF THE ASSESSEE WAS THAT THE HOLDIN G PERIOD HAD TO BE RECKONED FROM 18.2.1981 THE DATE ON WHICH THE ASSES SEE GOT POSSESSION OF THE PROPERTY UNDER LEASE-CUM-SALE AGREEMENT WAS ACCEPTED BY THE HONBLE KARNATAKA HIGH COURT. SIMILAR DECISIONS WER E RENDERED BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SMT.RAMA RANI KALIA 358 ITR 499 (ALL) & AMAR NATH AGARWAL 371 ITR 183 (ALL) . 13. WE ALSO FIND SUPPORT FOR THE AFORESAID CONCLUSI ONS FROM ANOTHER DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS A SURESH RAO 223 TAXMANN 228 (KAR) WHEREIN SIMILAR ISSUE WAS CONSIDERED AND WHEREIN THE SIGNIFICANCE OF THE EXPRESSION HEL D USED BY THE LEGISLATURE HAS BEEN ANALYSED AND EXPLAINED AT LENGTH. HONBLE HIGH COURT ANALYSED VARIOUS PROVISIONS OF THE ACT PERTAINING TO COMPUTA TION OF CAPITAL GAIN UNDER VARIOUS SITUATIONS AND ALSO CIRCULARS ISSUED BY THE CBDT ON THIS ISSUE. RELEVANT PORTION OF THE OBSERVATION WHEREIN THE ISS UE BEFORE US HAS BEEN PROPERLY ANALYSED IS REPRODUCED HEREUNDER:- ITA NO. 2692/BANG/2018 PAGE 6 OF 17 THE DEFINITION AS CONTAINED IN SECTION 2 (42A) OF THE ACT, THOUGH USES THE WORDS, A CAPITAL ASSET HELD AN ASS ESSEE FOR NOT MORE THAN THIRTY-SIX MONTHS IMMEDIATELY PRECEDING T HE DATE OF ITS TRANSFER, FOR THE PURPOSE OF HOLDING AN ASSET , IT IS NOT NECESSARY THAT, HE SHOULD BE THE OWNER OF THE ASSET, WITH A R EGISTERED DEED OF CONVEYANCE CONFERRING TITLE ON HIM . IN THE LIGHT OF THE EXPANDED DEFINITION AS CONTAINED IN SECTION 2(47), EVEN WHEN A SALE, EXCHANGE, OR RELINQUISHMENT OR EXTINGUISHMENT OF ANY RIGHT, UNDER A TRANSACTION THE ASSESSEE IS PUT IN POSSESSI ON OF AN IMMOVABLE PROPERTY OR HE RETAINED THE SAME IN PART PERFORMANCE OF THE CONTRACT UNDER SECTION 53-A OF THE TRANSFER OF PROPERTY ACT, IT AMOUNTS TO TRANSFER. NO REGISTERED DEED OF SALE IS REQUIRED TO CONSTITUTE A TRANSFER. SIMILARLY, ANY TRANSACTIO N WHETHER BY WAY OF BECOMING A MEMBER OF OR ACQUIRING SHARES IN A CO -OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MA NNER WHATSOEVER, WHICH HAS THE EFFECT OF TRANSFERRING, O R ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY, ALSO CONSTITUT ES TRANSFER AND THE ASSESSEE IS SAID TO HOLD THE SAID PROPERTY FOR THE PURPOSE OF THE DEFINITION OF SHORT-TERM CAPITAL GAIN. IN FACT, THE CIRCULAR NO.495 MAKES IT CLEAR THAT TRANSACTIONS OF THE NATU RE REFERRED TO ABOVE ARE NOT REQUIRED TO BE REGISTERED UNDER THE R EGISTRATION ACT, 1908. SUCH ARRANGEMENTS CONFER THE PRIVILEGES OF OWNERSHIP WITHOUT TRANSFER OF TITLE IN THE BUILDING AND ARE C OMMON MODE OF ACQUIRING FLATS PARTICULARLY IN MULTISTORIED CONSTR UCTIONS IN BIG CITIES. THE AFORESAID NEW SUB-CLAUSES (V) AND (VI) HAVE BEEN INSERTED IN SECTION 2(47) TO PREVENT AVOIDANCE OF C APITAL GAINS LIABILITY BY RECOURSE TO TRANSFER OF RIGHTS IN THE MANNER REFERRED TO ABOVE. A PERSON HOLDING THE POWER OF ATTORNEY IS AU THORIZED THE POWERS OF OWNER, INCLUDING THAT OF MAKING CONSTRUCT ION THOUGH THE LEGAL OWNERSHIP IN SUCH CASES CONTINUES TO BE W ITH THE TRANSFEROR. THE INTENTION OF LEGISLATURE IS TO TREA T EVEN SUCH TRANSACTIONS AS TRANSFERS AND THE CAPITAL GAIN ARIS ING OUT OF SUCH TRANSACTIONS ARE BROUGHT TO TAX. FURTHER, THE CIRCU LAR NO.4 71 GOES TO THE EXTENT OF CLARIFYING THAT FOR THE PURPOSE OF INCOME-TAX ACT, THE ALLOTTEE GETS TITLE TO THE PROPERTY ON THE ISSU ANCE OF THE ALLOTMENT LETTER AND THE PAYMENT OF INSTALLMENTS IS ONLY A FOLLOW UP ACTION AND TAKING THE DELIVERY OF POSSESSION IS ONLY A FORMALITY. IN CASE OF CONSTRUCTION AGREEMENTS, THE TENTATIVE COST OF CONSTRUCTION IS ALREADY DETERMINED AND THE AGREE MENT PROVIDES FOR PAYMENT OF COST OF CONSTRUCTION IN INSTALLMENTS SUBJECT TO THE ITA NO. 2692/BANG/2018 PAGE 7 OF 17 CONDITION THAT THE ALLOTTEE HAS TO BEAR THE INCREAS E, IF ANY, IN THE COST OF CONSTRUCTION. THEREFORE, FOR THE PURPOSE OF CAPITAL GAINS TAX THE COST OF THE NEW ASSET IS THE TENTATIVE COST OF CONSTRUCTION AND THE FACT THAT THE AMOUNT WAS ALLOWED TO BE PAID IN INSTALLMENTS DOES NOT AFFECT THE LEGAL POSITION. TH EREFORE, IN CONSTRUING SUCH TAXATION PROVISIONS, WHAT SHOULD BE THE APPROACH OF THE COURTS AND THE INTERPRETATION TO BE PLACED I S CLEARLY SET OUT BY THE APEX COURT IN THE CASE OF SMT. SAROJ AGGARWA L VS CIT 156 ITR 497 WHEREIN IT IS HELD AS UNDER:- FACTS SHOULD BE VIEWED IN NATURAL PERSPECTIVE, HAV ING REGARD TO THE COMPULSION OF THE CIRCUMSTANCES OF A CASE. WHERE IT IS POSSIBLE TO DRAW TWO INFERENCES FROM TH E FACTS AND WHERE THERE IS NO EVIDENCE OF ANY DISHONEST OR IMPROPER MOTIVE ON THE PART OF THE ASSESSEE, IT WOU LD BE JUST AND EQUITABLE TO DRAW SUCH INFERENCE IN SUCH A MANNER THAT WOULD LEAD TO EQUITY AND JUSTICE. TOO H YPER- TECHNICAL OR LEGALISTIC APPROACH SHOULD BE AVOIDED IN LOOKING AT A PROVISION WHICH MUST BE EQUITABLY INTE RPRETED AND JUSTLY ADMINISTERED COURTS SHOULD, WHENEVER POS SIBLE UNLESS PREVENTED BY THE EXPRESS LANGUAGE BY ANY SEC TION OR COMPELLING CIRCUMSTANCES OF ANY PARTICULAR CASE, MAKE A BENEVOLENT AND JUSTICE ORIENTED INFERENCE. FACTS MUST BE VIEWED IN THE SOCIAL MILIEU OF A COUNTRY. THEREFORE, KEEPING THE AFORESAID PRINCIPLES IN MIND , WHEN WE LOOK AT SECTION 48, THE LANGUAGE EMPLOYED IS UNAMBI GUOUS. THE INTENTION IS VERY CLEAR. WHEN A CAPITAL ASSET IS TR ANSFERRED, IN ORDER TO DETERMINE THE CAPITAL GAIN FROM SUCH TRANS FER, WHAT IS TO BE SEEN IS, OUT OF FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING, THE COST OF ACQUISITION OF THE ASSET, THE COST OF IMPROVEMENT AND ANY EXPENDITURE WHOLLY OR EXCLUSIVE LY INCURRED IN CONNECTION WITH SUCH TRANSFER IS TO BE DEDUCTED. WHAT REMAINS THEREAFTER IS THE CAPITAL GAIN. IT IS NOT NECESSARY THAT AFTER PAYMENT OF COST OF ACQUISITION, A TITLE DEED IS TO BE EXECU TED IN FAVOUR OF THE ASSESSEE. EVEN IN THE ABSENCE OF A TITLE DEED, THE ASSESSEE HOLDS THAT PROPERTY AND THEREFORE, IT IS THE POINT OF TIME AT WHICH HE HOLDS THE PROPERTY, WHICH IS TO BE TAKEN INTO CO NSIDERATION IN DETERMINING THE PERIOD BETWEEN THE DATE OF ACQUISIT ION AND DATE OF TRANSFER OF SUCH CAPITAL GAIN IN ORDER TO DECIDE WHETHER IT IS A SHORT-TERM CAPITAL GAIN OR A LONG-TERM CAPITAL GAIN . ITA NO. 2692/BANG/2018 PAGE 8 OF 17 14. IN THE LIGHT OF THE AFORESAID DECISIONS, WE AR E OF THE VIEW THAT THE CAPITAL GAIN IN QUESTION IN THE PRESENT CASE HAS TO BE TREATED AS LTCG AS CLAIMED BY THE ASSESSEE. GROUND NOS.3 TO 5 ARE ACCO RDINGLY ALLOWED. 15. THE NEXT DISPUTE IS WITH REGARD TO COMPUTATION OF CAPITAL GAIN AND DEDUCTION U/S. 54F OF THE ACT IN RESPECT OF ANOTHER PROPERTY SOLD BY THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR. THE AS SESSEE DURING THE PREVIOUS YEAR SOLD A SITE BEARING NO.689, HSR LAYOU T, BANGALORE BY A SALE DEED DATED 05.06.2014. IT IS NOT IN DISPUTE THAT T HE CAPITAL GAIN ON SALE OF THIS HOUSE SITE WAS A SUM OF RS.1,33,89,451. THE ASSESSEE CLAIMED EXEMPTION U/S. 54F OF THE ACT. THE ASSESSEE PURCHA SED PROPERTY AT N.R. COLONY FOR A CONSIDERATION OF RS.3,60,00,000. THE ITEMS OF PROPERTY THAT WAS PURCHASED BY ASSESSEE UNDER REGISTERED SALE DEE D DATED 20.06.2014 ARE AS FOLLOWS:- SCHEDULE ITEM # 1 ALL THAT PIECE AND PARCEL OF IMMOVABLE PROPERTY BEI NG RESIDENTIAL HOUSE (GROUND FLOOR) BEARING BRUHAT BANGALORE MAHANAGARA PALIKE KHATHA # 37, PID #'51-14- 37, (PREVIOUSLY # 2), SITUATED AT 1ST MAIN ROAD, N R COLONY, BANGALORE, THE RESIDENTIAL HOUSE HAVING TOTAL BUILT UP AREA OF 1260 SFT. , BUILT WITH RCC ROOF, RED-OXIDE FLOORING, TEAK WOOD DOORS AND WINDOWS. ITEM # 2 ALL THAT PIECE AND PARCEL OF IMMOVABLE PROPERTY BEI NG RESIDENTIAL HOUSE (FIRST FLOOR) BEARING BRUHAT BANGALORE MAHANAGARA PALIKE KHATHA # 37/1, PID # 51-14-37/1 , SITUATED AT 1ST MAIN ROAD, N R COLONY, BANGALORE, THE RESIDENTIAL HOUSE HAVING TOTAL BUILT UP AREA OF 1180 SFT., BUILT ABOVE PROPERTY # 37, PID # 51- 14-37, BUILT WITH RCC ROOF, RED-OXIDE FLOORING, TEAK WOOD DOORS AND WINDOWS, THE ITEM # 1 & 2 OF ITA NO. 2692/BANG/2018 PAGE 9 OF 17 SCHEDULE PROPERTY, BUILT ON SITE MEASURING EAST TO WEST 60 FT. , AND NORTH TO SOUTH 40 FT. , MEASURING IN ALL 2400 SFT., AND BOUNDED ON: EAST BY : 1ST MAIN ROAD WEST BY : PRIVATE PROPERTY NORTH BY : 3RD CROSS ROAD SOUTH BY : PRIVATE PROPERTY IN WITNESS WHEREOF THE VENDORS AND THE PURCHASERS HAVE AFFIXED THEIR SIGNATURES TO THIS DEED OF ABSOLUTE SALE ON THE DATE MENTIONED ABOVE AT BANGALORE. 16. ANOTHER ASPECT WHICH IS TO BE NOTED IS THAT THE ASSESSEE PURCHASED PROPERTY IN THE NAME OF HIMSELF, HIS WIFE SMT. GE ETA PRAKASH AND HIS SON - SHRI AMIT PRAKASH. 17. THE AO WAS OF THE VIEW THAT TO CLAIM DEDUCTION U/S. 54F OF THE ACT, THE ASSESSEE SHOULD NOT OWN MORE THAN ONE HOUSE, OT HER THAN THE NEW ASSET. SINCE AS PER THE DESCRIPTION OF THE PROPERT Y PURCHASED BY THE ASSESSEE GIVEN ABOVE CONSISTED OF TWO DOOR NOS., TH E AO WAS OF THE VIEW THAT THE ASSESSEE PURCHASED TWO HOUSE PROPERTIES AN D THEREFORE CANNOT CLAIM DEDUCTION U/S. 54F OF THE ACT AS HE OWNED MOR E THAN ONE HOUSE PROPERTY, OTHER THAN THE PROPERTY THAT WAS TRANSFER RED. ANOTHER OBJECTION OF THE AO WAS THAT TO CLAIM EXEMPTION U/S. 54F OF THE ACT, THE PROPERTY HAD TO BE PURCHASED ONLY BY THE ASSESSEE IN HIS NAME AND S INCE THE ASSESSEES WIFE AND CHILDREN WERE ALSO ADDED AS PURCHASERS, TH E ASSESSEE CAN CLAIM DEDUCTION U/S. 54F OF THE ACT ONLY TO THE EXTENT OF 1/3RD OF SALE CONSIDERATION INVESTED IN ACQUIRING THE NEW PROPERT Y. IN THAT VIEW OF THE MATTER, THE AO COMPUTED THE DISALLOWANCE U/S. 54F O F THE ACT AS FOLLOWS:- 7.0 FROM THE ABOVE, IT CAN BE SEEN THAT THE ASSES SEE HAS DECLARED PURCHASE INVESTMENT FOR THE PURPOSE OF CLA IMING ITA NO. 2692/BANG/2018 PAGE 10 OF 17 DEDUCTION U/S. 54F OF THE INCOME TAX ACT, 1961 AT R S. 1,40,00,000/- AND RS. 1,02,50,000/-RESPECTIVELY. ON PERUSAL OF THE PURCHASE DEED DATED 28/06/2014, IT IS FOUND THA T THE AGGREGATE CONSIDERATION FOR THE RESIDENTIAL PROPERTY MENTIONE D AT ITEM #1 HAS BEEN PAID AT RS. 2,16,00,000/- AND FOR THE RESI DENTIAL PROPERTY MENTIONED AT ITEM #2 HAS BEEN PAID AT RS. 1,44,00,0 00/-. FURTHER THE REGISTRATION CHARGES RS. 20,16,000/- AND STAMP DUTY RS. 3,60,000/- HAS ALSO BEEN PAID. ACCORDINGLY, THE COS T OF ACQUISITION AND SHARE OF ASSESSEE IN THE INVESTMENT ARE WORKED OUT AS UNDER; ITEM # 1 ITEM # 2 PURCHASE CONSIDERATION 2,16,00,000 1,44,00,000 STAMP DUTY PAID 2,16,000 1,44,000 PROPORTIONATE REGISTRATION CHARGES 12,09,600 8,06,400 TOTAL PURCHASE CONSIDERATION PAID 2,30,25,600 1,53,50,400 1/3 RD SHARE OF THE ASSESSEE WORKS OUT TO 76,75,200 51,16,800 7.1 THE ASSESSEE HAS DECLARED SALE CONSIDERATION AT RS. 1,40,00,000/-AND COMPUTED LONG TERM CAPITAL GAINS A T RS. 1,33,89,451/- RECEIVED FROM SALE OF THE PROPERTY 'S ITE # 689, H.S.R. LAYOUT, BANGALORE.' THE HIGHER SHARE OF THE ASSESSEE IN PURCHASE OF NEW ASSET (RESIDENTIAL HOUSE PROPERTY) HAS BEEN WORKED OUT AT RS. 76,75,200/-. HENCE, ALLOWABLE DED UCTION U/S. 54F OF THE INCOME TAX ACT, 1961 IS COMPUTED AS UNDE R; AMOUNT INVESTED TO PURCHASE OF CONSTRUCT ALLOWABLE DEDUCTION U/S. 54F = LONG TERM CAPITAL GA INS X RESIDENTIAL HOUSE NET CONSIDERATION 1,33,89,451 X 76,75,200 = RS. 73,40,480/- 1,40,00,000 7.2 IN VIEW OF THE ABOVE DISCUSSION, TAXABLE LONG T ERM CAPITAL GAINS IN ASSESSEE CASE ARE COMPUTED AT RS. 60,48,57 1/- (RS. 1,33,89,451 RS. 73,40,480) AND BROUGHT TO TAX DUR ING A.Y. 2015-16. DISALLOWANCE : RS.60,48,571/- ITA NO. 2692/BANG/2018 PAGE 11 OF 17 18. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) CON FIRMED THE ORDER OF AO. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS RAISED GROUND NOS.5 TO 7 BEFORE THIS TRIBUNAL. 19. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE HAVE A LREADY SEEN THAT THE ASSESSEE CLAIMED THAT IT HAD INVESTED LTCG IN P URCHASE OF ANOTHER RESIDENTIAL HOUSE PROPERTY AND CLAIMED DEDUCTION U/ S.54F OF THE ACT. ONE OF THE CONDITIONS FOR ALLOWING DEDUCTION U/S.54F AS LAID DOWN IN SEC.54F(1) PROVISO IS THAT THE ASSESSEE SHOULD NOT OWN MORE TH AN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET. THE FACTUAL DETAI LS WITH REGARD TO ACQUISITION OF THE PROPERTY BY THE ASSESSEE HAS ALR EADY BEEN SET OUT IN THE EARLIER PARAGRAPH OF THIS ORDER. THE DETAILS OF TH E PAYMENT MADE BY THE ASSESSEE ARE GIVEN IN PAGES 11 TO 12 OF ASSESSEES PAPER BOOK AND THE SAME IS AS FOLLOWS:- SL. # RTGS DA TE 1 BANK NAME & S.B. A/C # OF PURCHASERS FAVOURING BANK NAME & S.B. A/C # OF VENDORS AMOUNT (RS.) 1 27/06/2014 THE NATIONAL CO - OP BANK LTD., GANDHI BAZAR, BANGALORE - SB A/C.# 10323 OF SRI.B.R. PRAKASH & SMT. GEETHA PRAKASH SRI .PADMANABHA RANGANATH CHARI BANK OF MAHARASTRA, DHOLPUR HOUSE, SHAHJAHAN ROAD, UPSC, NEW DELHI- A/C. # 20072297678 71,28,000 / - LA INCOME TAX DEDUCTED AT SOURCE - - PAID BY CHALLAN SERIAL # 00024 DT.28/06/2014 72,000/ - 2 27/06/2014 THE NATIONAL CO - OP BANK LTD., GANDHI BAZAR, BANGALORE SB A/C.# 10323 10323 OF SRI.B.R. PRAKASH 86 SMT. GEETHA PRAKASH SRI.PADMANABHA SRINIVAS CHARI INDIAN OVERSEAS BANK, 1565, SWASTIK VIHAR, PANCHIKULA A/ C.# 156501000001392 71,28,000/ - 2A INCOME TAX DEDUCTED AT SO URCE - - PAID BY CHALLAN SERIAL # 00066 DT.28/06/2014 72,000/ - ITA NO. 2692/BANG/2018 PAGE 12 OF 17 3 27/06/2014 THE NATIONAL CO- OP BANK LTD.. GANDHI BAZAR, BANGALORE - SB A/C.# 1032310323 OF SRI.B.R. PRAKASH & SMT. GEETHA PRAKASH SRI.PADMANABH A RAMANUJA CHARI UNION BANK OF INDIA, VARTAK NAGAR, THANE (WEST), A/C. # 623302010001313 71,28,000/ - 3A INCOME TAX DEDUCTED AT SOURCE - - PAID BY CHALLANS SERIAL # 00017 DT.28/06/2014 72,000/ - 3B 27/06/2014 THE NATIONAL CO- ' OP BANK LTD., GANDHI BAZAR, BANGALORE - SB A/C.# 10323 10323 OF SRI.B.R. PRAKASH & SMT. GEETHA PRAKASH SRI.PADMANABH A RAMANUJA CHARI UNION BANK OF INDIA, VARTAK NAGAR, THANE (WEST), A/C. # 62330201001313 1,20,00,00/ - 3C 27/06/2014 THE NATIONAL CO- OP BANK LTD., GANDHI BAZAR, BANGALORE - SB A/C.# 43689 OF SRI. 'AMITH PRAKASH SRI.PADMANABH A RAMANUJA CHARI UNION BANK OF INDIA, VARTAK NAGAR, THANE (WEST), A/C. # 62330201001313 22,56,000/ - 3D INCOME TAX DEDUCTED AT SOURCE PAID BY CHALLAN SERIAL # 00021 DT.28/06/2014 1,44,000/ - TOTAL 3,60,00,000 / - 20. AS FAR AS THE CASE OF THE AO THAT ASSESSEE HAS PURCHASED TWO PROPERTIES UNDER SALE DEED DATED 28.06.2014 IS CONC ERNED, WE HAVE PERUSED THE SCHEDULE OF THE PROPERTY THAT WAS PURCH ASED. ACTUALLY THIS WAS A SINGLE PIECE OF PROPERTY VIZ., SITE NO.1 OWNE D BY SMT. JANAKI IYENGAR, SMT. JANAKI IYENGAR CONSTRUCTED A RESIDENT IAL HOUSE IN GROUND FLOOR IN THE YEAR 1937 AND THE FIRST FLOOR IN THE Y EAR 1962-63 WITH THE GROUND FLOOR OF THE PROPERTY RE-NUMBERED AS NO.37 AND THE FIRST FLOOR AS DOOR ITA NO. 2692/BANG/2018 PAGE 13 OF 17 NO.37/1 OF 1ST MAIN ROAD, N.R.COLONY. JANAKI IYENG AR EXECUTED A WILL ON 28.5.1975 WHEREIN SHE BEQUEATHED TO HER SISTER DR.M .VAIDHEI WITH DOOR NO.37 WHICH IS SCHEDULE-A OF THE SALE DEED UNDER WH ICH THE ASSESSEE PURCHASED THIS PROPERTY AND THE FIRST FLOOR BEARING DOOR NO.37/1, DESCRIBED IN SCHEDULE B IN THE SALE DEED UNDER WHICH ASSESSEE PURCHASED THE NEW ASSET TO HER NEPHEW P.RAMANUJA CHARI. JANAKI IYENG AR DIED ON 6.6.1975 AND THE LEGATEES UNDER THE WILL SOLD THEIR RESPECTI VE SHARES IN ONE PROPERTY TO THE ASSESSEE. THE ENTIRE PROPERTY CONSTITUTES S INGLE HOUSE BUT WAS BIFURCATED WITH TWO DOOR NUMBERS FOR THE GROUND AND FIRST FLOOR WITH COMMON ENTRANCE IN THE GROUND FLOOR ONLY TO EARMARK THE SHARE OF EACH BENEFICIARIES. THE PROPERTY OTHERWISE CONSTITUTES A SINGLE PROPERTY, THOUGH THEY HAVE TWO DIFFERENT DOOR NOS. IN SUCH CIRCUMST ANCES, THE ASSESSEE HAS PURCHASED ONLY ONE PROPERTY AND NOT TWO PROPERTIES. IN THIS REGARD, THE DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE BEFORE US SUPPORTS THE PLEA OF THE ASSESSEE VIZ., THE DECISION OF THE DELH I HIGH COURT IN THE CASE OF CIT VS. GITA DUGGAL (2013 30 TAXMANN.COM 230 (DELHI ) . IN THE AFORESAID DECISION, THE FACTS WERE THAT THE ASSESSE E ENTERED INTO A DEVELOPMENT AGREEMENT PURSUANT TO WHICH THE DEVELOP ER DEMOLISHED THE PROPERTY AND CONSTRUCTED A NEW BUILDING COMPRISING OF THREE FLOORS. IN CONSIDERATION OF GRANTING THE DEVELOPMENT RIGHTS, T HE ASSESSEE RECEIVED RS. 4 CRORES AND TWO FLOORS OF THE NEW BUILDING. TH E AO HELD THAT IN COMPUTING CAPITAL GAINS, THE COST OF CONSTRUCTION O F RS. 3.43 CRORES INCURRED BY THE DEVELOPER ON THE DEVELOPMENT OF THE PROPERTY HAD TO BE ADDED TO THE SUM OF RS. 4 CRORES RECEIVED BY THE ASSESSEE. T HE ASSESSEE CLAIMED THAT AS THE SAID CAPITAL GAINS WAS INVESTED IN THE SAID TWO FLOORS, SHE WAS ELIGIBLE FOR EXEMPTION U/S 54. THE AO REJECTED THE CLAIM ON THE BASIS THAT THE UNITS ON THE SAID FLOORS WERE INDEPENDENT & SEL F-CONTAINED AND NOT A RESIDENTIAL HOUSE AND GRANTED EXEMPTION FOR ONLY O NE UNIT. THE CIT(A) AND TRIBUNAL UPHELD THE ASSESSEES CLAIM BY RELYING ON B.ANANDA BASAPPA 309 ITR 329 (KAR) AND K.G. RUKMINIAMMA 331 ITR 211 (KAR ) . ON APPEAL BY THE ITA NO. 2692/BANG/2018 PAGE 14 OF 17 DEPARTMENT, THE HIGH COURT DISMISSED THE APPEAL OF THE REVENUE. THE HONBLE COURT OBSERVED THAT AS HELD IN B.ANANDA BASSAPPA (SLP DISMISSED) & K G RUKMINIAMMA , THE REVENUES CONTENTION THAT THE PHRASE A RESIDENTIAL HOUSE WOULD MEAN ONE RESIDENTIAL HOUSE IS NOT CORRECT. THE EXPRESSION A RESIDENTIAL HOUSE SHOULD BE UNDE RSTOOD IN A SENSE THAT BUILDING SHOULD BE OF RESIDENTIAL IN NATURE AND A SHOULD NOT BE UNDERSTOOD TO INDICATE A SINGULAR NUMBER. ALSO, SECTION 54/54F USES THE EXPRESSION A RESIDENTIAL HOUSE AND NOT A RESIDENTIAL UNIT. SE CTION 54/54F REQUIRES THE ASSESSEE TO ACQUIRE A RESIDENTIAL HOUSE AND SO LO NG AS THE ASSESSEE ACQUIRES A BUILDING, WHICH MAY BE CONSTRUCTED, FOR THE SAKE OF CONVENIENCE, IN SUCH A MANNER AS TO CONSIST OF SEVE RAL UNITS WHICH CAN, IF THE NEED ARISES, BE CONVENIENTLY AND INDEPENDENTLY USED AS AN INDEPENDENT RESIDENCE, THE REQUIREMENT OF THE SECTI ON SHOULD BE TAKEN TO HAVE BEEN SATISFIED. THERE IS NOTHING IN THESE SECT IONS WHICH REQUIRE THE RESIDENTIAL HOUSE TO BE CONSTRUCTED IN A PARTICULAR MANNER. THE ONLY REQUIREMENT IS THAT IT SHOULD BE FOR THE RESIDENTIA L USE AND NOT FOR COMMERCIAL USE. IF THERE IS NOTHING IN THE SECTION WHICH REQUIRES THAT THE RESIDENTIAL HOUSE SHOULD BE BUILT IN A PARTICULAR M ANNER, IT SEEMS TO US THAT THE INCOME TAX AUTHORITIES CANNOT INSIST UPON THAT REQUIREMENT. A PERSON MAY CONSTRUCT A HOUSE ACCORDING TO HIS PLANS, REQUI REMENTS AND COMPULSIONS. A PERSON MAY CONSTRUCT A RESIDENTIAL H OUSE IN SUCH A MANNER THAT HE MAY USE THE GROUND FLOOR FOR HIS OWN RESIDE NCE AND LET OUT THE FIRST FLOOR HAVING AN INDEPENDENT ENTRY SO THAT HIS INCOM E IS AUGMENTED. IT IS QUITE COMMON TO FIND SUCH ARRANGEMENTS, PARTICULARL Y POST-RETIREMENT. ONE MAY BUILD A HOUSE CONSISTING OF FOUR BEDROOMS (ALL IN THE SAME OR DIFFERENT FLOORS) IN SUCH A MANNER THAT AN INDEPENDENT RESIDE NTIAL UNIT CONSISTING OF TWO OR THREE BEDROOMS MAY BE CARVED OUT WITH AN IND EPENDENT ENTRANCE SO THAT IT CAN BE LET OUT. HE MAY EVEN ARRANGE FOR HIS CHILDREN AND FAMILY TO STAY THERE, SO THAT THEY ARE NEARBY, AN ARRANGEMENT WHICH CAN BE MUTUALLY SUPPORTIVE. HE MAY CONSTRUCT HIS RESIDENCE IN SUCH A MANNER THAT IN CASE ITA NO. 2692/BANG/2018 PAGE 15 OF 17 OF A FUTURE NEED HE MAY BE ABLE TO DISPOSE OF A PAR T THEREOF AS AN INDEPENDENT HOUSE. THERE MAY BE SEVERAL SUCH CONSID ERATIONS FOR A PERSON WHILE CONSTRUCTING A RESIDENTIAL HOUSE. THE PHYSICAL STRUCTURING OF THE NEW RESIDENTIAL HOUSE, WHETHER IT IS LATERAL OR VERTICAL, CANNOT COME IN THE WAY OF CONSIDERING THE BUILDING AS A RESIDENTIA L HOUSE. THE FACT THAT THE RESIDENTIAL HOUSE CONSISTS OF SEVERAL INDEPENDENT U NITS CANNOT BE PERMITTED TO ACT AS AN IMPEDIMENT TO THE ALLOWANCE OF THE DED UCTION U/S 54/54F. IT IS NEITHER EXPRESSLY NOR BY NECESSARY IMPLICATION PROH IBITED. 21. WE ARE THEREFORE OF THE VIEW THAT THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S.54F OF THE ACT IN RESPECT OF INVESTME NT IN THE PROPERTY BEARING DOOR NO.37 & 37/1, 1 ST MAIN ROAD, N.R.COLONY, BANGALORE. 22. THE NEXT ISSUE IS AS TO WHETHER THE DEDUCTION U /S.54F OF THE ACT HAS TO BE RESTRICTED TO ONLY 1/3 RD OF THE COST OF ACQUISITION OF THE NEW ASSET FOR THE REASON THAT THE ASSESSEE PURCHASED THE PROPERTY ALONG WITH THE NAME OF HIS WIFE AND SON SHOWN AS PURCHASER IN THE DOCUM ENT UNDER WHICH THE PROPERTY WAS PURCHASED. 23. THE STAND OF THE REVENUE IS THAT TO CLAIM DEDUC TION U/S.54F OF THE ACT, THE PURCHASE OF THE NEW ASSET SHOULD BE ONLY I N THE NAME OF THE TRANSFEROR I.E., THE ASSESSEE. TO THE EXTENT THE C APITAL GAIN IS INVESTED IN THE JOINT NAME OF THE ASSESSEES WIFE AND SON, THE DEDUCTION CANNOT BE ALLOWED. ON SUCH REASONING THE REVENUE AUTHORITIES TOOK THE VIEW THAT EVEN ASSUMING THE DEDUCTION U/S.54F OF THE ACT HAS TO BE ALLOWED TO THE ASSESSEE, SUCH DEDUCTION SHOULD BE RESTRICTED TO 1/ 3 RD OF THE COST OF THE NEW ASSET. THE STAND OF THE ASSESSEE ON THE OTHER HAND IS THAT SEC.54F MANDATES THAT THE NEW ASSET SHOULD BE PURCHASED BY THE ASSESSEE AND IT DOES NOT STIPULATE THAT THE HOUSE SHOULD BE PURCHAS ED IN THE NAME OF THE ASSESSEE ONLY. ITA NO. 2692/BANG/2018 PAGE 16 OF 17 24. THE VIEW OF THE REVENUE FINDS SUPPORT IN THE DE CISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PRAKASH VS. ITO 312 ITR 40 (BOM) WHEREIN IT WAS HELD THAT TO CLAIM DEDUCTION U/S.54F OF THE ACT, IT IS NECESSARY AND OBLIGATORY TO HAVE INVESTMENT MADE IN RESIDENTIAL HOUSE IN THE NAME OF THE ASSESSEE ONLY AND NOT IN THE NAME O F ANY OTHER PERSON. THE VIEW OF THE ASSESSEE FINDS SUPPORT IN THE DECIS ION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT (INTL.) VS. MRS. JENNIFER BHIDE (2011) 15 TAXMANN.COM 82 (KARN.) WHEREIN IT WAS HELD THAT THERE IS NO REQUIREMENT THAT INVESTMENT U/S.54EC SHOULD BE IN T HE NAME OF ASSESSEE ONLY. IN THAT CASE NEW ASSET WAS PURCHASED IN THE NAME OF THE ASSESSEE AND HER HUSBAND. THE AO ALLOWED DEDUCTION U/S.54EC ONLY TO THE EXTENT OF 50% ON THE REASONING THAT DEDUCTION WILL BE ALLO WED ONLY TO THE EXTENT OF INVESTMENT MADE IN THE NAME OF THE ASSESSEE. THE H ONBLE KARNATAKA HIGH COURT HELD THAT THE ENTIRE CONSIDERATION HAD F LOW FROM ASSESSEE AND NO CONSIDERATION HAD FLOWN FROM HER HUSBAND. MEREL Y BECAUSE THE HUSBANDS NAME IS ALSO MENTIONED IN THE PURCHASE DO CUMENT, THE ASSESSEE COULD NOT BE DENIED THE BENEFIT OF DEDUCTI ON. SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF CIT VS. KAMAL WAHAL (2013) 30 TAXMANN 34 (DELHI), LAXMI NARAYAN VS. CIT (2018) 89 TAXMANN 33 4 (RAJ.) & CIT VS. GURNAM SINGH (2008) 170 TAXMAN 160 (P & H) . 25. THE LAW IS WELL SETTLED THAT WHERE TWO VIEWS AR E POSSIBLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE SHOULD B E FOLLOWED. MOREOVER, THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MRS. JENNIFER BHIDE (SUPRA) IS IN FAVOUR OF THE ASSESSEE. FOLLOWING THE SAID DECISIONS, WE HOLD THAT THE ASSESSEE SHOULD BE ENTI TLED TO THE BENEFIT OF DEDUCTION U/S.54F OF THE ACT, TO THE WHOLE EXTENT O F INVESTMENT IN PURCHASE OF NEW ASSET, EVEN THOUGH THE PROPERTY HAS BEEN PUR CHASED IN THE JOINT NAMES OF ASSESSEE, HIS WIFE AND SON. WE HOLD ACCOR DINGLY. ITA NO. 2692/BANG/2018 PAGE 17 OF 17 26. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 04 TH DAY OF JANUARY, 2019. SD/- SD/- ( JASON P . BOAZ ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 04 TH JANUARY, 2019. / D ESAI S MURTHY / COPY TO: 1. THE APP ELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.