PREM JAIN, JAIPUR V. PR.CIT-1, JAIPUR

ITA 279/JPR/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8655 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 23-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B. K. GUPTA PCIT
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Revision of order; Principle of natural justice; Period of limitation; Assessment record; Time period of passing order; Set aside; Capital Gains
• Section: 54; 263; 54F; 113; 13; 153; 22; 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 279/JP/2020 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2015-16 PREM JAIN, 90, BAPU BAZAR, JAIPUR CUKE VS. PRINCIPAL COMMISSIONER OF INCOME TAX-1, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABZPJ4150C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. SIDDHARTH RANKA (ADV) & SH. SAU RAV HARSH (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SH. B. K. GUPTA (PCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 15/06/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 15/07/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. PR. CIT-1, JAIPUR DATED 18.03.2020 WHEREIN THE ASSESSEE HAS TA KEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. PRINCIPAL COMMISSIONER OF INCOME-TAX-I, JAIPUR GROS SLY ERRED IN PASSING AN ORDER U/S 263 OF THE INCOME-TAX AND IN H OLDING THAT THE ASSESSMENT MADE BY THE LD. ASSESSING OFFICER IS FOU ND TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. PRINCIPAL COMMISSIONER OF INCOME-TAX-I, JAIPUR GROS SLY ERRED IN ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 2 HOLDING THAT 'THE LD. AO PASSED THE ASSESSMENT ORDE R IN A ROUTINE AND CASUAL MANNER WITHOUT VERIFICATION OF THE ISSUE OF THE DEDUCTION CLAIMED UNDER SECTION 54F OF THE ACT' IS WHOLLY UNJ USTIFIED, BAD IN LAW AND DESERVE TO BE QUASHED. 2.1 THAT THE LEARNED ASSESSING OFFICER PASSED THE ASSESSMENT ORDER AFTER APPRECIATING ALL SUPPORTING DOCUMENTS AND EVI DENCES WHICH WAS JUST AND PROPER THEREFORE THE ASSESSMENT ORDER PASS ED BY THE LEARNED ASSESSING OFFICER IS NEITHER ERRONEOUS NOR IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2.2 THAT THE LEARNED PR.CIT HAS GONE ON ASSUMPTIONS , PRESUMPTIONS, CONJECTURE AND SURMISES WHICH IS BAD IN LAW. 2.3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ID. PRINCIPAL COMMISSIONER OF INCOME-TAX-I, JAIPUR GROS SLY ERRED IN NOT TREATING PLOTS OF LAND OF THE ASSESSEE APPELLANT AS A SINGULAR UNIT WITH REGARD TO DEDUCTION OF RS. 51,35,093/- UNDER SECTIO N 54F OF THE ACT. 2. AT THE OUTSET, IT IS NOTED THAT THERE HAS BEEN A DELAY OF 34 DAYS IN FILING THE PRESENT APPEAL. AS PER THE AFFIDAVIT SUBMITTED BY THE ASSESSEE, THOUGH HE RECEIVED THE IMPUGNED ORDER DATED 18.03.2020 PASSED BY THE LD CIT(A) ON 21.03.2020, HOWEVER, DUE TO COVID -19 PANDEMIC AND NATIONWIDE LOCKDOWN IMPOSED BY THE GOVERNMENT, IT WAS IMPOSSIBLE FOR HI M TO FILE THE APPEAL WITHIN THE PRESCRIBED LIMITATION. IT WAS FURTHER SUBMITTE D THAT IN VIEW OF THE HONBLE SUPREME COURT DECISION IN SUO MOTO WRIT PETITION (C IVIL) NO. 3/2020 IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION DATED 23.03. 2020 WHEREIN THE LIMITATION PERIOD IN ALL SUCH PROCEEDINGS, IRRESPECTIVE OF LIM ITATION PRESCRIBED UNDER THE GENERAL LAW OR UNDER ANY SPECIAL LAWS, WHETHER COMP OUNDABLE OR NOT, SHALL STAND EXTEND W.E.F 15.03.2020 TILL FURTHER ORDERS, THE APPEAL SO FILED IS WITHIN ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 3 THE EXTENDED LIMITATION PERIOD AND HENCE, THE SAME MAY BE ADMITTED FOR ADJUDICATION. 3. PER CONTRA, THE LD. DR FAIRLY SUBMITTED THAT AS PER THE ORDERS PASSED BY THE HONBLE SUPREME COURT, THE PERIOD OF LOCKDOWN M AY BE EXCLUDED AND THE REVENUE HAS NO OBJECTION WHERE THE APPEAL IS ADMITT ED FOR ADJUDICATION. 4. HEARD BOTH THE PARTIES AND PURUSED THE MATERIAL AVAILABLE ON RECORD. WE RESPECTFULLY NOTE THAT THE HONBLE SUPREME IN AFORE SAID SUO-MOTO MATTER HAS LAID DOWN THAT PERIOD OF LIMITATION IN ALL SUCH PRO CEEDINGS, IRRESPECTIVE OF THE LIMITATION PRESCRIBED UNDER THE GENERAL LAW OR SPEC IAL LAWS WHETHER CONDONABLE OR NOT SHALL STAND EXTENDED W.E.F 15 TH MARCH 2020 TILL FURTHER ORDERS. THEREAFTER, THE HONBLE SUPREME COURT IN TE RMS OF SUBSEQUENT ORDER DATED 22.05.2020 HAS HELD THAT IN THE CASES WHERE T HE LIMITATION EXPIRED AFTER 15.03.2020, THAN THE PERIOD FROM 15.03.2020 TILL TH E DATE ON WHICH THE LOCK DOWN IS LIFTED IN THE JURISDICTIONAL AREA WHERE DIS PUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER LIFTING OF THE LOCKDOWN. WE ALSO TAKE NOTE OF THE FACT THAT THE M INISTRY OF LAW AND JUSTICE, GOVT. OF INDIA HAS ALSO ISSUED A NOTIFICATION DATED 31.03.2020 WHEREIN THE DUE DATES WHICH FALLS DURING THE PERIOD 20.03.2020 TO 2 9.06.2020 HAS BEEN EXTENDED TO 30 TH JUNE, 2020 IN RESPECT OF APPEALS AND APPLICATIONS UNDER THE SPECIFIED ACT WHICH INCLUDES THE INCOME TAX ACT AND WHICH HAS FURTHER BEEN EXTENDED UP TO 31 ST DECEMBER, 2020. IN THE PRESENT CASE, DUE DATE FOR FILING THE APPEAL BEING 31.05.2020 THAT IS, WITHIN TWO MON THS FROM THE END OF THE MONTH IN WHICH THE IMPUGNED ORDER WAS COMMUNICATED TO THE ASSESSEE ON 21.03.2020 AND THE FACT THAT THE APPEAL HAS BEEN FI LED WITH THE REGISTRY ON 23.06.2020, RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE SUPREME COURT AND THE TAXATION AND OTHER LAWS (RELAXATION OF CERT AIN PROVISIONS) ORDINANCE, ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 4 2020 AS NOTIFIED IN THE GAZETTE OF INDIA DATED 31 ST MARCH, 2020, THE SAME IS HEREBY ADMITTED AS FILED WITHIN THE EXTENDED LIMITA TION PERIOD. 5. NOW, COMING TO THE MERITS OF THE CASE. DURING T HE COURSE OF HEARING, THE LD AR SUBMITTED THAT THE ASSESSEE IS AN INDIVID UAL, HAVING INCOME FROM HOUSE PROPERTY, INTEREST, RENT, AGRICULTURAL INCOME , INCOME FROM PARTNERSHIP FIRMS, LONG TERM CAPITAL GAINS, ETC. AND IS REGULAR LY FILING HER INCOME TAX RETURNS FROM TIME TO TIME. THAT THE RETURN OF INCOME FOR A. Y. 2015-2016 WAS FILED ON 31.08.2015 DISCLOSING THEREIN TOTAL INCOME AT RS. 6 8,50,900/-. LONG TERM CAPITAL GAINS AT RS. 43,01,116/- WAS DISCLOSED BY T HE ASSESSEE ON ACCOUNT OF SALE OF LAND AT SIDDHARTH NAGAR, JAIPUR. DEDUCTION U/S. 54F OF THE ACT WAS CLAIMED AT RS. 51,35,093/- [723,755 + 44,11,338] ON THE BASIS OF INVESTMENT MADE OF RS. 54,41,816/- [770,816 + 46,71,000]. THAT THE INCOME TAX RETURN WAS SELECTED FOR LIMITED SCRUTINY VIDE NOTICE DATED 19.09.2016 WITH THE REASONS DEDUCTION CLAIMED UNDER THE HEAD CAPITAL G AINS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED COPI ES OF SALE DEED & PURCHASE DEED OF PROPERTY SOLD, COPY OF RECEIPT NO. S 2367 & 2368 DATED 23.10.2013 TOWARDS COST OF PLOT [2485781+2320146 = 4805927], COPY OF ALLOTMENT LETTER DATED 23.10.2013 TOWARDS PLOT NO. C-128 & C-149, C-BLOCK, VARDHMAN NAGAR, JAIPUR AD-MEASURING 612.22 SQ. YARD S, COPY OF BILL OF CONTRACTOR FOR CONSTRUCTION WORK DONE DATED 23.06.2 015 FOR RS. 5,71,820/- AND COPY OF SITE PLAN OF PLOT NO.S C-128 & C-149. IT WAS FURTHER SUBMITTED THAT THESE PLOTS ARE JOINED FROM THE REAR SIDE AND BOTH CONSTITUTE A SINGLE RESIDENTIAL UNIT. IT WAS SUBMITTED THAT THE ASSESSING OFFICER B EING FULLY SATISFIED AND AFTER COMPLETE VERIFICATION OF FACTS AND LAW ACCEPTED THE RETURNED INCOME VIDE ASSESSMENT ORDER DATED 27.12.2017. 6. IT WAS SUBMITTED THAT A SHOW CAUSE NOTICE DATED 05.02.2020 WAS THEREAFTER ISSUED BY THE LD. PCIT, JAIPUR-1, JAIPUR PROPOSING TO LIMIT THE ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 5 DEDUCTION CLAIMED BY THE ASSESSEE TO RS. 30,57,601/ - ONLY ON THE GROUND THAT DEDUCTION U/S. 54F IS AVAILABLE ONLY FOR ONE HOUSE WHEREAS THE ASSESSEE HAS PURCHASED TWO HOUSES. IN RESPONSE, THE ASSESSEE FUR NISHED REPLY DATED 14.02.2020 WHEREIN IT WAS SUBMITTED THAT (1) BOTH T HE PLOTS ARE ADJOINING, (2) A SINGLE PATTA HAS BEEN ISSUED, (3) CONSTRUCTION IS DONE IN SUCH A MANNER THAT IT IS SINGLE UNIT, (4) SCHEME IS UNDER APPROVAL OF JAIPUR DEVELOPMENT AUTHORITY, (5) THERE IS NO REQUIREMENT THAT DOCUMENTS SHOULD B E REGISTERED, (6) THE ORDER PASSED BY THE LD. ASSESSING OFFICER IS IN ACCORDANC E WITH LAW AND IT NEITHER ERRONEOUS NOT PREJUDICIAL TO THE INTEREST OF THE RE VENUE. BEING NOT SATISFIED WITH THE SUBMISSION OF THE ASSESSEE, THE LD. PCIT V IDE ORDER DATED 18.03.2020 HELD THAT THE BENEFIT U/S. 54F HAD TO BE RESTRICTED FOR ONE PLOT OF LAND AND THAT TOO, WHERE THE CLAIM OF THE CONSTRUCTED PORTION OF 625 SQ. FT IS FOUND TO BE RESIDENTIAL HOUSE IN ACCORDANCE WITH LAW. BEING AG GRIEVED WITH THE FINDINGS AND ORDER OF THE LD PCIT, THE ASSESSEE HAS FILED TH E PRESENT APPEAL. 7. IN THE AFORESAID BACKGROUND OF THE CASE, THE LD AR SUBMITTED THAT THE UNDENIABLE FACT IN THE INSTANT MATTER ARE THAT BOTH THE PLOT NO. C-128 & C-149 ARE ADJOINING/CONTIGUOUS, ONE SINGLE PATTA FOR 612. 22 SQ. YARDS HAS BEEN ISSUED BY THE DEVELOPER FOR BOTH THE PLOTS AND TWO PATTAS HAVE NOT BEEN ISSUED, THERE IS NO BOUNDARY WALL IN BETWEEN THE TWO PLOTS, CONSTRUCTION IS DONE IN SUCH A MANNER THAT IT IS SINGLE UNIT, THE BIFURCATI ON OF PLOTS IS DONE BY THE BUILDER/DEVELOPER FOR ITS OWN INTERNAL PURPOSE, LOC AL TOWN-PLANNING BYE-LAWS AND RULES AND THOSE REGULATIONS HAVE NO RELEVANCE A S FAR AS ASSESSEE/BUYER IS CONCERNED AS IT HAD PURCHASED THE AFORE-SAID PLOTS AS A SINGLE RESIDENTIAL UNIT BY A SINGLE PATTA AND NOT BY DIFFERENT PATTAS. IT WAS SUBMITTED THAT IT IS FOR THE ASSESSEE TO DECIDE AS TO HOW SHE WISHES TO CONSTRUC T A RESIDENTIAL HOUSE AND WHAT WOULD BE THE APPROPRIATE SIZE OF PLOT OF LAND WHICH WOULD BE REASONABLE FOR CONSTRUCTING THE RESIDENTIAL HOUSE AND HOW THE DEVELOPER OR THE LOCAL ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 6 AUTHORITIES HAVE DEMARCATED OR TREATED THE PLOTS OF LAND CANNOT BE HELD AGAINST THE ASSESSEE. 8. IN SUPPORT, RELIANCE WAS PLACED ON THE FOLLOWIN G DECISIONS: HERO CYCLES PVT. LTD. VS. CIT (2015) 379 ITR 347 (S C) MOHAMMADANIF SULTANALI PRADHAN V. DCIT (ITA 1797/AH D/2018 DATED 06.01.2020) NAVIN JOLLY V. ITO (2020) 6 TMI 514 (KAR) ATUL KOCHAR V. PCIT (2021) 3 TMI 997 (JP) LATA PHULWANI V. PCIT (2020) 10 TMI 407 (JP) 9. REGARDING THE QUERY RAISED BY THE BENCH DURING T HE COURSE OF HEARING AS TO WHETHER BENEFIT OF DEDUCTION U/S. 54F CAN BE EXTENDED TO LONG TERM CAPITAL GAINS EARNED ON SALE OF TWO DIFFERENT PROPE RTIES, IT WAS SUBMITTED THAT FIRSTLY LONG TERM CAPITAL GAINS FROM SALE OF VARIOU S LONG TERM CAPITAL ASSETS IS TO BE WORKED OUT AND THEREAFTER, IF THE TOTAL SALE CON SIDERATION RECEIVED OUT OF SALE OF CAPITAL ASSET IS INVESTED IN PURCHASE/CONST RUCTION OF RESIDENTIAL HOUSE, THEN BENEFIT WOULD BE AVAILABLE AGAINST EACH SUCH L ONG TERM CAPITAL ASSETS. 10. IT WAS FURTHER SUBMITTED THAT THE STATUTE HAS U SED THE WORD ANY PRIOR TO THE WORD LONG-TERM CAPITAL ASSET. THE STATUTE HAS C ONSCIOUSLY NOT USED THE WORD ONE PRIOR TO THE WORD LONG-TERM CAPITAL ASSE T, HENCE ENTIRE LONG TERM CAPITAL GAINS HAS TO BE WORKED OUT AND THEREAFTER, IF CONDITIONS OF SECTION 54F ARE BEING SATISFIED BY THE ASSESSEE, THEN DEDUCTION THEREOF, IS TO BE ALLOWED. RELIANCE IS PLACED UPON THE FOLLOWING AUTHORITIES W HO HAVE ALSO HELD THAT BENEFIT CANNOT BE RESTRICTED ON SALE OF MULTIPLE AS SETS: DCIT V. PANKAJ CHIMANLAL PATEL HUF (ITA 3179/AHD/20 16) ACIT V. MOHINDER KUMAR JAIN (ITA 5254/DEL/2014) SHASHIDHAR PATIL V. ITO (ITA 897/BANG/2019) ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 7 11. IN LIGHT OF ABOVE FACTS AND LEGAL PROVISIONS, I T WAS SUBMITTED THAT THE IMPUGNED ORDER PASSED BY THE LD. PCIT DESERVES TO B E SET-ASIDE AND QUASHED. 12. PER CONTRA, THE LD. PCIT/DR HAS RELIED ON THE O RDER OF THE LD PCIT AND OUR REFERENCE WAS DRAWN TO THE RELEVANT FINDINGS AS CONTAINED IN PARAS 7 TO 10 OF THE PCITS ORDER WHICH READ AS UNDER:- 7. I HAVE CONSIDERED THE ASSESSMENT RECORD AND THE SUBMISSION MADE DURING THE PROCEEDINGS U/S 263. THE ASSESSMENT RECORD INDICATES THAT THOUGH THE CASE WAS SELECTED FOR LIM ITED SCRUTINY ON THE ISSUE OF DEDUCTION CLAIMED UNDER CAPITAL GAINS, NO QUERY RELATING TO THE ISSUE WAS RAISED IN THE FIRST QUERY LETTER D ATED 19-09-2016. THE QUERY WAS RAISED VIDE LETTER DATED 24-08-2017. PART DETAILS WERE SUBMITTED ON 18-09-2017. ON 15-12-2017, THE AO ASKE D FOR THE SITE MAP OF PROPERTIES PURCHASED ON WHICH DEDUCTION U/S 54F WAS CLAIMED. ON 18-12-2017 THE ASSESSEE SUBMITTED THE S ITE PLAN ISSUED BY M/S GAURAV PRIVATE LTD STATING THAT AS THE PLOTS ARE ADJACENT TO EACH OTHER, THEY CONSTITUTE A SINGLE UNIT. AO DID N OT OBTAIN ANY DOCUMENTS THEREAFTER. THESE FACTS INDICATE THAT THE AO DID NOT CONDUCT ANY FURTHER ENQUIRY NOR ANY INDEPENDENT ENQ UIRY TO ASCERTAIN WHETHER THE PLOTS CONSTITUTE ONE SINGLE UNIT AS CLA IMED FOR THE PURPOSES OF SECTION 54F. THE AO FAILED TO CONSIDER THAT IN THE SITE PLAN THE NUMBERING OF THE PLOTS ITSELF INDICATED TH AT THE PLOTS ARE TWO SEPARATE PLOTS. THE SCHEME OF THE PLOTS SHOWN IN TH E SITE PLAN AND THE SEPARATE PAYMENT-RECEIPTS ISSUED FOR PLOTS 0-12 8 & 0-149 AVAILABLE ON RECORD CLEARLY NEGATE THE EXISTENCE OF SINGULARITY OF ANY SORT AS CLAIMED BY THE ASSESSEE. EACH PLOT IS A SEP ARATE PLOT AS THE SOCIETY HAS GIVEN SEPARATE NUMBERS TO THESE TWO PLO TS AS ALSO TO OTHER ADJACENT PLOTS OF SIMILAR SIZE. IN ABSENCE OF ANY EVIDENCE THE ASSESSEE'S CLAIM OF ADJACENCY OF THE TWO PLOTS OF L AND TO BE TREATED ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 8 AS A SINGULAR UNIT WITH REGARD TO DEDUCTION OF RS. 51,35,093/- U/S 54F OF THE ACT IS NOT JUSTIFIED AND IS NOT IN ACCORDANC E WITH LAW. THE AO ACCEPTED THE CLAIM THEREBY COMMITTING ERROR AND CAU SING PREJUDICE TO THE INTEREST OF REVENUE. 7.2 AS PER THE LETTER DATED 23-06-2015 OF THE CONTR ACTOR FILED DURING ASSESSMENT PROCEEDINGS, THE CONSTRUCTED AREA IS ONL Y 625 SQ. FEET. THERE IS DESCRIPTION OF THE EXACT CONSTRUCTION WORK OR ACTIVITY. THE AO WAS REQUIRED TO EXAMINE WHETHER THE CONSTRUCTION WORK IS ELIGIBLE TO BE CONSIDERED AS A HOUSE U/S 54F. IN ANY CASE, T HE STATED UNIT HAS BEEN CONSTRUCTED ONLY ON PART OF ONE PLOT. ON THE O THER PLOT, THERE IS NO CONSTRUCTION, SO THAT PLOT DOES NOT QUALIFY TO B E TREATED AS PART OF THE LAND ON WHICH THERE IS CONSTRUCTION OF ONE RESI DENTIAL HOUSE IN INDIA. THE AO FAILED TO EXAMINE THIS ASPECT OF THE 54F CLAIM. 7.3 IN THE COMPUTATION OF INCOME AVAILABLE ON TH E ASSESSMENT RECORD IT IS SEEN THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F ON TWO COUNTS: OF RS. 7,23,755/- AGAINST CAPITAL GAIN FROM SALE OF PLOT NUMBER C-60 AND RS. 44,11,338/- AGAINST CAPITAL GAIN FROM SALE OF PLOT NUMBER C-61, BOTH LOCATED AT SIDDARTH NAGAR, JAIPUR. TOTAL DEDUCTION U/S 54F HAS BEEN CLAIMED AT RS. 51,35,096/- . THUS THERE AR E TWO SETS OF `ORIGINAL ASSET' AND 'NEW ASSET' WITHIN THE MEANING OF SECTION 54F WHEREAS THE LAW ENVISAGES THAT DEDUCTION CAN BE ALL OWED FOR PURCHASE OF ONE NEW ASSET AGAINST THE CAPITAL GAIN DERIVED F ROM TRANSFER OF ONE ORIGINAL ASSET. THE AO WAS REQUIRED TO EXAMINE THE BASIS OF CLAIMING 54F DEDUCTION SEPARATELY IN PARTS ON BOTH THE PLOTS AS ALSO ITS ADMISSIBILITY. 8. AS DISCUSSED ABOVE, THE ASSESSING OFFICER FAIL ED TO APPLY HER MIND ON THE MATERIAL AVAILABLE ON RECORD AND FAILED TO I NVOKE THE APPLICABLE ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 9 PROVISIONS OF LAW. THIS IS TURN HAS RESULTED IN PAS SING OF AN ERRONEOUS ORDER BY THE ASSESSING OFFICER IN THE CASE DUE TO N ON-APPLICATION OF MIND TO RELEVANT MATERIAL, AN INCORRECT ASSUMPTION OF FACTS AND AN INCORRECT APPLICATION OF MIND TO THE LAW WHICH IS P REJUDICIAL TO THE INTEREST OF THE REVENUE AND HENCE LIABLE FOR REVISI ON UNDER SECTION 263 OF THE INCOME TAX ACT. THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL LIMITED V/S CIT 243 ITR IT HAS H ELD AS UNDER- AN INCORRECT ASSUMPTION OF FACTS OR AN INCORREC T APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERR ONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PR INCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND.' 9. THE ASSESSEE HAS RELIED UPON THE FOLLOWING JUDGE MENTS IN SUPPORT OF THE CLAIM U/S 54F: ACIT VS LEELA P NANDA 102 ITD 281(MUMBAI TRIB) CIT VS SUNITA AGGARWAL 284 ITR 20 (DELHI HIGH COURT ) CIT VS DEVDAS NAIK 366 ITR '12 ( BOMABY HIGH COURT) CIT VS GITA DUGGAL 357 ITR 153 (DELHI HIGH COURT) THE FACTS OF THE ABOVE CASES ARE CLEARLY DISTINGUIS HABLE FROM THAT OF THE ASSESSEE. IN CASE AT SERIAL NO. 1 ABOVE, TWO CONTIGUOUS FLATS WERE MADE INTO ONE UNIT. IN THE ASSESSEES CASE, THE PLOTS ARE VACANT WITH A VERY SMALL PORTION ON ONE PLOT HAVING A SMALL ROOM. IN CASE AT NUMBER 2, THERE IS A CLEAR FINDING THAT ALL THE PORTIONS WERE BEING CONTINUOUSLY USED FOR RESIDENCE. IN THE ASSES SEE'S CASE, ONE PLOT IS CLEARLY VACANT AND UNINHABITABLE/UNLIVABLE, AND THE OTHER PLOT IS ONLY PARTLY USABLE. ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 10 IN CASE AT NUMBER 3, THERE IS CLEAR FINDING OF TWO RESIDENTIAL FLATS CONJOINED TO MAKE ONE UNIT. A VACANT PLOT OF LAND C ANNOT BE EQUATED WITH TWO CONJOINED FLATS. IN CASE AT NUMBER 4, THE PROPERTY IS A BUILDING HAV ING SEVERAL UNITS. IN THE ASSESSEE'S CASE ONE PROPERTY IS A VACANT PLOT O F LAND & THE OTHER PROPERTY HAS PART OF A UNIT CONSTRUCTED. THE RATIO LAID DOWN IN ABOVE CASES DOES NOT APPLY T O THE ASSESSEE'S CASE AS THE FACTS ARE CLEARLY DISTINGUISHABLE AND HAVE T O BE INDEPENDENTLY CONSIDERED WITH REFERENCE TO THE REQUIREMENT OF, SE CTION 54F. 10. CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND FOR THE REASONS DISCUSSED ABOVE, THE ASSESSMENT ORDER DATED 27-12-2017 FOR A.Y. 2015-16 PASSED BY THE AO IS HELD ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE FOR THE PURPOSE OF SEC TION 263 OF THE I.T. ACT. THE SAID ORDER HAS BEEN PASSED BY THE ASSESSING OFF ICER IN A ROUTINE AND CASUAL MANNER WITHOUT VERIFICATION OF THE ISSUE OF THE DEDUCTION CLAIMED U/S 54F THE ACT. THE ASSESSING OFFICER HAS ACCEPTED THE RETURN OF INCOME, WHEREAS THE CLAIM U/S 54F WAS REQUIRED TO BE RESTRI CTED FOR ONE PLOT THAT TOO IF THE CLAIM OF THE CONSTRUCTED PORTION OF 625 SQ. FT. IS FOUND TO BE A RESIDENTIAL HOUSE IN ACCORDANCE WITH LAW. THE ASSES SMENT HAS THUS RESULTED IN SHORT LEVY OF TAXES. THE ORDER OF THE A SSESSING OFFICER IS, THEREFORE, LIABLE TO REVISION UNDER THE EXPLANATION (2) CLAUSE (B) AND CLAUSE (A) OF SECTION 263 OF THE INCOME TAX ACT. TH E ASSESSMENT ORDER IS SET ASIDE TO BE MADE AFRESH IN THE LIGHT OF THE OBS ERVATION MADE IN THIS ORDER WITH REGARD TO THE DEDUCTION CLAIMED U/S 54F OF THE ACT AND FOR A REDETERMINATION OF THE CAPITAL GAINS ON SALE OF LAN D. THE AO IS REQUIRED TO MAKE NECESSARY VERIFICATION IN RESPECT OF THE CAPIT AL GAINS ARISING ON SALE OF LAND, TO EXAMINE IN DEPTH THE CLAIM OF DEDUCTION U/S 54F AND TO DETERMINE AND FINALIZE THE ASSESSMENT IN ACCORDANCE WITH THE PREVAILING ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 11 LAW TO DETERMINE THE CORRECT INCOME OF THE ASSESSEE LIABLE TO TAX FOR THE A.Y 2015-16 AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE. 13. FURTHER, LD. PCIT/DR RELIED ON THE FOLLOWING DE CISIONS IN SUPPORT OF HIS CONTENTIONS AS UNDER:- VIRBHADRA SINGH (HUF) VS PCIT [2017] 86 TAXMANN.COM 113 (HP) CIT VS BALLARPUR INDUSTRIES LTD. [2017] 85 TAXMANN. COM 10 (BOM) JEEVAN INVESTMENT & FINANCE (P.) LTD VS. CIT [2017] 88 TAXMANN.COM 552 (BOM) RAMPYARI DEVI SARAOGI V. CIT [1968] 67 ITR 84 (SC) DANIEL MERCHANTS P LTD AND OTHERS (SLP NO. 23976/20 17 DATED 29.11.2017) IN THE HIGH COURT OF BOMBAY AT GOA IN CASE OF SESA STERLITE LIMITED (ERSTWHILE SESA GOA LTD) VS. CIT (TAX APPEALS NO. 2 7/2015 AND 28/2015 DATED 2.11.2020) 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURUSE D THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IN HER RETURN OF INCOME, W HILE COMPUTING INCOME FROM THE SALE OF THE TWO PLOTS OF LAND, HAS CLAIMED DEDU CTION U/S 54F OF THE ACT IN RESPECT OF INVESTMENT MADE IN HOUSE PROPERTY. THE INVESTMENT IN THE HOUSE PROPERTY HAS BEEN CLAIMED BY WAY OF PURCHASE OF TWO PLOTS OF LAND BEARING PLOT NO. C-128 & C-129 SITUATED AT C- BLOCK, VARDHMAN NA GAR, JAIPUR COSTING RS 48,05,927/- AND CARRYING OUT CONSTRUCTION THEREON C OSTING RS 5,71,820/-. THE RETURN OF INCOME WAS SELECTED FOR LIMITED SCRUTINY FOR THE PURPOSES OF VERIFYING THE ASSESSEES CLAIM OF DEDUCTION UNDER THE HEAD I NCOME FROM CAPITAL GAINS. 15. IN THE AFORESAID FACTS, THE ISSUE THAT ARISES F OR CONSIDERATION IS WHETHER THE MANDATE OF CLAIM OF DEDUCTION U/S 54F AS SO MAD E BY THE ASSESSEE HAS BEEN PROPERLY EXAMINED BY THE AO OR NOT. FOR THE P URPOSES OF CLAIM OF DEDUCTION U/S 54F, WHAT IS REQUIRED TO BE FULFILLED AND DULY EXAMINED BY THE ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 12 AO, BEING THE MANDATORY CONDITIONS, ARE FIRSTLY, WH ETHER THERE IS TRANSFER OF ANY LONG TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HO USE, SECONDLY, WHETHER THE ASSESSEE HAS WITHIN A PERIOD OF THREE YEARS, AFTER THE DATE ON WHICH TRANSFER OF ORIGINAL ASSET TOOK PLACE, APPROPRIATED THE NET SAL ES CONSIDERATION FROM SALE OF THE ORIGINAL ASSET AND CONSTRUCTED ONE RESIDENTIAL HOUSE IN INDIA. 16. IN THE INSTANT CASE, THE ASSESSEE HAS TRANSFERR ED TWO PLOTS OF LAND, BOTH BEING LONG TERM CAPITAL ASSETS AND NOT BEING RESIDE NTIAL HOUSE. THERE HAS BEEN NO DISPUTE WHICH HAS BEEN RAISED BY THE LD PCIT IN THE IMPUGNED ORDER IN TERMS OF THE SAID CONDITION NOT BEEN FULFILLED BY T HE ASSESSEE OR NOT BEEN DULY EXAMINED BY THE AO. THUS, THE FIRST MANDATORY CONDI TION FOR CLAIMING DEDUCTION U/S 54F OF THE ACT IS TAKEN AS DULY FULFILLED AND E XAMINED BY THE AO AND IS THUS, NOT THE SUBJECT MATTER OF DISPUTE BEFORE US. WHERE THE NET SALE CONSIDERATION ARISING OUT OF SALE OF THESE TWO ORIGINAL ASSETS AR E APPROPRIATED AS PER SECOND CONDITION, THE ASSESSEE SHALL BE ELIGIBLE FOR CLAIM OF DEDUCTION U/S 54F OF THE ACT. 17. REGARDING THE SECOND MANDATORY CONDITION OF APP ROPRIATION OF NET SALE CONSIDERATION TOWARDS CONSTRUCTION OF ONE RESIDENTI AL HOUSE IN INDIA, IT IS A SETTLED POSITION THAT COST OF PLOT OF LAND IS INTEG RAL TO COST OF CONSTRUCTION OF THE RESIDENTIAL HOUSE AND THEREFORE, WHERE THE NET CONS IDERATION IS APPROPRIATED TOWARDS PURCHASE OF PLOT OF LAND AND THEREAFTER, CO NSTRUCTION HAS BEEN CARRIED OUT THEREON, THE AGGREGATE COST SHOULD BE CONSIDERE D FOR DETERMINING THE AMOUNT OF DEDUCTION U/S. 54F PROVIDED THAT THE ACQU ISITION OF PLOT OF LAND AND THE CONSTRUCTION THEREON ARE COMPLETED WITHIN THE P ERIOD SO SPECIFIED. IN THIS REGARD, REFERENCE CAN BE DRAWN TO THE CBDT CIRCULAR NO. 667 DTD. 18.10.1993 [204 ITR (ST) 103] AND CONTENTS THEREOF READ AS UND ER: ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 13 1. SECTIONS 54 AND 54F PROVIDE FOR A DEDUCTION IN CASES WHERE AN ASSESSEE HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER OF A CAPITAL ASSET TAKES PLACE, PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE. THE QUANTUM OF DEDUCTION IS ITS ELF DEPENDENT UPON THE COST OF SUCH NEW ASSET. IT HAS BEEN REPRESENTE D TO THE BOARD THAT THE COST OF CONSTRUCTION OF THE RESIDENTIAL HOUSE S HOULD BE TAKEN TO INCLUDE THE COST OF THE PLOT AS, IN A SITUATION OF PURCHASE OF ANY HOUSE PROPERTY, THE CONSIDERATION PAID GENERALLY INCLUDES THE CONSIDERATION FOR THE PLOT ALSO. 2. THE BOARD HAS EXAMINED THE ISSUE WHETHER, IN CAS ES WHERE THE RESIDENTIAL HOUSE IS CONSTRUCTED WITHIN THE SPECIFI ED PERIOD, THE COST OF SUCH RESIDENTIAL HOUSE CAN BE TAKEN TO INCLUDE THE COST OF THE PLOT ALSO. THE BOARD ARE OF THE VIEW THAT THE COST OF THE LAND IS AN INTEGRAL PART OF THE COST OF THE RESIDENTIAL HOUSE, WHETHER PURCHASE D OR BUILT. ACCORDINGLY, IF THE AMOUNT OF CAPITAL GAIN FOR THE PURPOSES OF SECTION 54, AND THE NET CONSIDERATION FOR THE PURPOSES OF SECTI ON 54F, IS APPROPRIATED TOWARDS PURCHASE OF A PLOT AND ALSO TO WARDS CONSTRUCTION OF A RESIDENTIAL HOUSE THEREON, THE AGGREGATE COST SHO ULD BE CONSIDERED FOR DETERMINING THE QUANTUM OF DEDUCTION UNDER SECTION 54/54F, PROVIDED THAT THE ACQUISITION OF PLOT AND ALSO THE CONSTRUCT ION THEREON, ARE COMPLETED WITHIN THE PERIOD SPECIFIED IN THESE SECT IONS. 18. IN THE INSTANT CASE, THERE ARE, THUS, TWO ASPEC TS OF THE MATTER WHICH REQUIRE DUE AND PROPER EXAMINATION. FIRSTLY, THE A PPROPRIATION OF NET SALE CONSIDERATION FROM THE SALE OF THE ORIGINAL ASSETS TOWARDS THE PURCHASE OF PLOTS OF LAND ON WHICH RESIDENTIAL HOUSE CAN BE CONSTRUCT ED, AND SECONDLY, APPROPRIATION OF NET SALE CONSIDERATION FROM THE SA LE OF THE ORIGINAL ASSETS TOWARDS ACTUALLY CARRYING OUT CONSTRUCTION OF RESID ENTIAL HOUSE THEREON, BOTH ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 14 WITHIN THE PRESCRIBED TIME PERIOD. THE EMPHASIS IS EQUALLY ON BOTH APPROPRIATION/UTILIZATION OF NET SALES CONSIDERATIO N AND CONSTRICTION OF RESIDENTIAL HOUSE IN INDIA. THE DOMINANT OBJECTIVE BEING THE CONSTRUCTION OF RESIDENTIAL HOUSE IN INDIA, THE PURCHASE OF PLOT OF LAND HAS TO BE COUPLED WITH CONSTRUCTION OF RESIDENTIAL HOUSE THEREON AND WHERE THE FUNDS ARE UTILIZED TOWARDS MERELY PURCHASE OF PLOT OF LAND MEANT FOR R ESIDENTIAL PURPOSES AND THERE HAS BEEN NO ACTUAL CONSTRUCTION OF RESIDENTIA L HOUSE THEREON, THE MANDATE OF THE LAW CANNOT BE SAID TO BE FULFILLED A S THE INVESTMENT WOULD BE IN FORM OF A PLOT OF LAND AND NOT IN A RESIDENTIAL HOU SE. THEREFORE, WHAT IS RELEVANT IS THAT THERE IS AN APPROPRIATION OF NET S ALE CONSIDERATION TOWARDS ACTUAL PURCHASE OF PLOT OF LAND AS WELL AS ACTUAL C ONSTRUCTION OF A RESIDENTIAL HOUSE THEREON. 19. THE SATISFACTION OF THE AFORESAID SECOND MANDAT ORY CONDITION IS UNDER DISPUTE BEFORE US AND IN THIS REGARD, WE REFER TO T HE CONTENTIONS ADVANCED BY BOTH THE PARTIES. FIRSTLY, WE REFER TO THE FINDINGS OF THE LD PCIT IN THE IMPUGNED ORDER WHICH HAVE BEEN REITERATED BY THE LD PCIT/DR. THE LD PCIT HAS STATED IN HER ORDER THAT PURSUANT TO CALLING FOR A COPY OF TH E SITE PLAN FROM THE ASSESSEE ABOUT THE TWO PLOTS OF LAND WHICH WERE PURCHASED BY THE ASSESSEE, THE AO DIDNT OBTAIN ANY FURTHER DOCUMENTS OR CARRIED OUT ANY INDEPENDENT ENQUIRY TO ASCERTAIN WHETHER THE TWO PLOTS OF LAND CONSTITUTE ONE SINGULAR UNIT AS CLAIMED BY THE ASSESSEE FOR THE PURPOSES OF CLAIMING THE DE DUCTION U/S 54F OF THE ACT. THE LD PCIT THEREAFTER PROCEEDED TO EXAMINE THE SCH EME OF THE PLOTS OF LAND AS DEPICTED IN THE SITE PLAN AND THE PAYMENTS RECEI PTS ISSUED BY THE DEVELOPER AND HELD THAT IN THE SITE PLAN, THERE ARE SEPARATE NUMBERS INDICATED FOR THE TWO PLOTS OF LAND AND THERE ARE SEPARATE PAYMENT RECEIP TS ISSUED BY THE DEVELOPER FOR RESPECTIVE PLOTS OF LAND WHICH INDICATE THAT TH ESE ARE TWO SEPARATE PLOTS OF LAND AND IN ABSENCE OF ANY EVIDENCE FURNISHED BY TH E ASSESSEE IN SUPPORT OF HIS CLAIM OF ADJACENCY OF THE TWO PLOTS OF LAND, THEY C ANNOT BE TREATED AS A ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 15 SINGULAR UNIT FOR PURPOSES OF DEDUCTION U/S 54F OF THE ACT. IT WAS ACCORDINGLY SUBMITTED BY THE LD PCIT/DR THAT THE NET SALE CONSI DERATION CANNOT THEREFORE BE TREATED AS APPROPRIATED TOWARDS THE PURCHASE OF THE AFORESAID TWO PLOTS OF LAND CONSTITUTING A SINGLE RESIDENTIAL UNIT AND THE CLAIM OF DEDUCTION HAS BEEN RIGHTLY RESTRICTED TO NET SALE CONSIDERATION APPROP RIATED TOWARDS PURCHASE OF ONE PLOT OF LAND. 20. ON THE OTHER HAND, THE CASE OF THE ASSESSEE AS CONTENDED BY THE LD AR IS THAT BOTH THE PLOTS OF LAND ARE ADJOINING/CONTIGUOU S, ONLY ONE SINGLE PATTA FOR 612.22 SQ. YARDS HAS BEEN ISSUED BY THE DEVELOPER F OR BOTH THE PLOTS AND TWO PATTAS HAVE NOT BEEN ISSUED, THERE IS NO BOUNDARY WALL IN BETWEEN THE TWO PLOTS, THE BIFURCATION OF PLOTS IS DONE BY THE BUIL DER/DEVELOPER FOR ITS OWN INTERNAL PURPOSES AND FOR PURPOSES OF COMPLYING WIT H THE LOCAL TOWN-PLANNING BYE-LAWS AND REGULATIONS WHICH HAVE NO RELEVANCE AS FAR AS ASSESSEE IS CONCERNED AS SHE HAD PURCHASED THE AFORESAID PLOTS AS A SINGLE RESIDENTIAL UNIT BY A SINGLE PATTA AND NOT BY DIFFERENT PATTAS. IT WAS ACCORDINGLY SUBMITTED THAT THERE CANNOT BE ANY DISPUTE THAT NET SALE CONSIDERA TION HAS BEEN APPROPRIATED TOWARDS THE PURCHASE OF THE AFORESAID TWO PLOTS OF LAND CONSTITUTING A SINGLE RESIDENTIAL UNIT AND THE CLAIM OF DEDUCTION HAS BEE N WRONGLY RESTRICTED TO ONE PLOT OF LAND. 21. IN LIGHT OF AFORESAID CONTENTIONS, WE FIND THA T THE ISSUES, IN CONTEXT OF THE SATISFACTION OF THE SECOND CONDITION, WHICH HAS BEE N SPECIFICALLY RAISED FOR OUR CONSIDERATION IS WHAT WOULD BE AN APPROPRIATE SIZE OF PLOT OF LAND ON WHICH RESIDENTIAL HOUSE CAN BE BUILT AND CAN TWO PLOTS OF LAND BE COMBINED INTO ONE TO CONSTRUCT ONE RESIDENTIAL HOUSE THEREON OR NOT. IN OUR UNDERSTANDING, THE MANDATE OF LAW AND THE DOMINANT OBJECTIVE IS VERY C LEAR - THE ASSESSEE HAS TO CONSTRUCT ONE RESIDENTIAL HOUSE IN INDIA WITHIN THE SPECIFIED PERIOD. THEREFORE, THE PLOT OF LAND SHOULD BE SUCH WHICH ENABLES THE A SSESSEE TO CONSTRUCT AND ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 16 ENJOY THE FRUITS OF ONE RESIDENTIAL HOUSE. IT IS TH E PREROGATIVE AND INDIVIDUAL WISDOM OF THE ASSESSEE TO DECIDE THE LOCALITY AND S IZE/AREA OF THE PLOT OF LAND WHERE HE/SHE WISHES TO CONSTRUCT THE RESIDENTIAL HO USE. THE SAME WILL DIFFER FROM ASSESSEE TO ASSESSEE DEPENDING UPON INDIVIDUAL PREFERENCES, AND/OR NEED OF THEIR RESPECTIVE FAMILIES. DEPENDING UPON THE A VAILABILITY AND OTHER FACTORS, IT MAY SO HAPPEN THAT THE ASSESSEE IS UNABLE TO BUY THE REQUISITE SIZE/AREA OF INDIVIDUAL PLOT OF LAND OF HIS/HER INDIVIDUAL/FAMIL Y PREFERENCE AND NEED, AND IN SUCH CASES, HE/SHE MAY DECIDE TO BUY MORE THAN ONE PLOT OF LAND AS SO DEMARCATED BY THE DEVELOPER AND/OR LOCAL AUTHORITIE S AS SO AVAILABLE AT THE RELEVANT POINT IN TIME IN THE GIVEN AREA/LOCALITY/S OCIETY. IN SUCH CASES, MANDATE OF THE STATUE CAN BE SAID TO BE FULFILLED S O LONG AS THE INDIVIDUAL PLOTS OF LAND FORM ONE CONTIGUOUS PIECE OF LAND AND WHICH ENABLES THE ASSESSEE TO BUILD ONE RESIDENTIAL HOUSE THEREON WITHOUT ANY OBS TRUCTIONS AND/OR EXTERNAL INTERFERENCE. HOW THE DEVELOPER HAS DEMARCATED THE INDIVIDUAL PLOTS OF LAND, HOW THE ALLOTMENT LETTERS HAVE BEEN ISSUED BY THE D EVELOPER, HOW THE PAYMENTS RECEIPTS HAVE BEEN ISSUED AND REFLECTED IN THE DEVELOPERS FINANCIAL STATEMENTS ARE MATTERS WHICH WILL DIFFER IN EACH CA SE AND NO UNIFORM YARDSTICK CAN BE APPLIED ACROSS ALL CASES IN ABSENCE OF ANY S PECIFIC REQUIREMENT AS PROVIDED IN THE STATUE WHICH WE FIND IS CLEARLY ABS ENT. IN OTHER WORDS, THE STATUE BY NOT PROVIDING FOR ANY SUCH SPECIFIC CONDI TIONS HAS IN FACT PROVIDED FOR NECESSARY FLEXIBILITY TO THE ASSESSEES TO PURCHASE PLOT OF LAND AND CONSTRUCT ONE RESIDENTIAL HOUSE THEREON DEPENDING UPON THEIR INDI VIDUAL PREFERENCES AND AS LONG AS THEY FULFILL THE REQUIREMENT OF CONSTRICTIO N OF ONE RESIDENTIAL HOUSE THEREON WITHIN THE SPECIFIED PERIOD, REST ALL MATTE RS ARE EXTRANEOUS AND NON- FULFILLMENT THEREOF CANNOT BE HELD AGAINST THE ASSE SSEE DENYING HIM/HER THE RIGHTFUL CLAIM OF DEDUCTION U/S 54F OF THE ACT. 22. IN THE INSTANT CASE, WE HAVE GONE THROUGH THE S ITE PLAN ISSUED BY THE DEVELOPER IN RESPECT OF TWO PLOTS OF LAND BEARING N O. C-128 AND C-149 AND FIND ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 17 THAT BOTH THE PLOTS OF LAND BEARING NO. C-128 AND C -149 FORM ONE CONTIGUOUS PIECE OF LAND MEASURING IN TOTAL 612.22 SQ. YARDS W ITHOUT ANY OBSTRUCTIONS WHICH ALLOWS THE ASSESSEE TO BUILD A RESIDENTIAL HO USE. AND WE FIND THAT THERE COULD NOT BE ANY BETTER EVIDENCE THAN THE SITE PLAN ISSUED BY THE DEVELOPER AND FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CLAIM OF BOTH THE PLOTS OF LAND FORMING ONE CONTIGU OUS PIECE OF LAND WHICH HAS BEEN DULY TAKEN ON RECORD AND EXAMINED BY THE ASSES SING OFFICER. IT IS ASSESSEES PREROGATIVE TO BUY THESE TWO PLOTS OF LA ND FORMING ONE CONTIGUOUS PIECE OF LAND FOR THE PURPOSES OF CONSTRUCTING A RE SIDENTIAL HOUSE. THESE PURCHASES ARE DULY SUPPORTED BY A SINGLE ALLOTMENT LETTER ISSUED BY THE DEVELOPER AND PAYMENT RECEIPTS DEMONSTRATING DISCHA RGE OF CONSIDERATION BY THE ASSESSEE. 23. HAVING SAID THAT, WE FIND THAT THE LD PCIT HAS RETURNED A FINDING THAT BOTH THE PLOTS ARE VACANT WITH A VERY SMALL PORTION ON ONE PLOT HAVING A SMALL ROOM MEASURING 625 SQ. FT AND ON THE OTHER PLOT, TH ERE IS NO CONSTRUCTION SO THAT LATTER PLOT DOESNT QUALIFY AS PART OF LAND ON WHICH CONSTRUCTION HAS BEEN CARRIED ON. WE ARE ALSO INTRIGUED BY THE SAID FACT GIVEN THAT THE ASSESSEE HAS DECIDED TO PURCHASE THE CONTIGUOUS PIECE OF LAND ME ASURING 612.22 SQ YARDS EQUIVALENT TO 5509.98 SQ. FT APPROX AND HAS MERELY CARRIED OUT CONSTRUCTION OF ONE ROOM MEASURING 625 SQ. FT THEREON ON ONE PLOT O F LAND. THE SAID UNDISPUTED FACTS LEAD US TO ANOTHER FACET OF THE MA TTER WHICH HAS APPARENTLY ESCAPED THE ATTENTION OF THE AO IN TERMS OF THE EXT ENT OF VACANT LAND OR OPEN SPACE WHICH CAN BE APPURTENANT TO THE CONSTRUCTED/B UILT UP RESIDENTIAL AREA SO AS TO QUALIFY THE TOTAL AREA WITHIN THE OVERALL AMB IT OF A RESIDENTIAL HOUSE. AS WE HAVE NOTED ABOVE, THE DOMINANT OBJECTIVE BEING T HE CONSTRUCTION OF A RESIDENTIAL HOUSE AND NOT PURCHASE OF PLOT OF LAND AND WHERE FOR THE PURPOSES OF PROPER AND CONVENIENT ENJOYMENT OF A RESIDENTIAL HOUSE, WHERE THE ASSESSEE WISHES TO PROVIDE FOR OPEN SPACE FOR GARDEN OR OTHE R UTILITIES, ETC., THE LANDS ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 18 APPURTENANT TO THE BUILDING CAN BE CONSIDERED AS PA RT OF THE RESIDENTIAL HOUSE, HOWEVER, THE QUESTION IS THE EXTENT OF SUCH LAND WH ICH CAN BE HELD AS APPURTENANT TO THE BUILDING. THOUGH WE HAVE HELD EA RLIER THAT THE ASSESSEE HAS THE NECESSARY FLEXIBILITY TO BUY TWO PLOTS OF LAND MEASURING 622 SQ. YARDS FORMING ONE CONTIGUOUS PIECE OF LAND WHICH BY NECES SARY IMPLICATIONS MEANS THAT THE ASSESSEE GIVEN HER SOCIAL STATUS AND FAMIL Y REQUIREMENT WISHES TO BUILT A RESIDENTIAL HOUSE OF SIZE AND SCALE WHICH WOULD R EQUIRE SUCH A LARGE PLOT OF LAND AND HAS ACTUALLY GONE AHEAD AND BUILT SUCH A R ESIDENTIAL HOUSE. HOWEVER, WHERE ON FACTS, WE FIND THAT THE ASSESSEE HAS MEREL Y CARRIED OUT CONSTRUCTION OF A SMALL ROOM MEASURING 625 SQ. FT ON ONE PLOT OF LAND AND EVEN BY ASSUMING FOR SAKE OF ARGUMENT THAT SUCH A ROOM QUALIFIES AS RESIDENTIAL HOUSE, CAN IT BE HELD THAT REMAINING VACANT AREA MEASURING 90% APPRO X. OF TOTAL AREA WILL QUALIFY AS LAND APPURTENANT TO PROPER AND CONVENIEN T ENJOYMENT OF SUCH A RESIDENTIAL HOUSE. IN THIS REGARD, USEFUL REFERENC E CAN BE DRAWN TO THE DECISION OF THE COORDINATE BENCH IN CASE OF TONY J. PULIKAL VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -1, KOCHI [2013] 37 TAXM ANN.COM 221 (COCHIN - TRIB.) WHEREIN IT WAS HELD AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE A LSO CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 54F OF THE ACT. F OR CLAIMING EXEMPTION U/S 54F OF THE ACT, THE ASSESSEE HAS TO CONSTRUCT A RESIDENTIAL HOUSE ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TH E CAPITAL ASSET WAS TRANSFERRED. IN THIS CASE, AFTER TRANSFER OF THE CA PITAL ASSET, THE ASSESSEE HAS PURCHASED 196.144 CENTS OF LAND AND CONSTRUCTED A HOUSE ADMEASURING 254.94 SQ.MTRS. THE ASSESSEE HAS ALSO I NVESTED RS.81,41,120 TOWARDS THE COST OF CONSTRUCTION OF TH E PROPERTY. THERE IS NO DISPUTE WITH REGARD TO THE COST OF CONSTRUCTION OF THE BUILDING. THE DISPUTE IS WITH REGARD TO THE AREA OF THE LAND WHIC H IS REQUIRED FOR ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 19 CONVENIENT ENJOYMENT OF 254.94 SQ.MTS OF RESIDENTIA L HOUSE. THE AREA OF THE LAND WHICH IS REQUIRED FOR CONVENIENT ENJOYMENT OF THE HOUSE HAS TO BE DETERMINED WITH REGARD TO THE SOCIAL STATUS AND PROFESSION, ETC. OF THE INDIVIDUAL ASSESSEE, PROFESSION, ETC. AN AGRICULTUR IST MAY REQUIRE A REASONABLE EXTENT OF LAND FOR HOUSING THEIR CATTLE, AGRICULTURAL IMPLEMENTS, ETC. AN INDUSTRIALIST MAY REQUIRE CAR S HEDS TO PARK HIS CARS, SERVANT QUARTERS. ETC. MOREOVER, THE LOCALITY WHERE THE LAND ALSO NEEDS TO BE CONSIDERED. IN VILLAGES, ONE MAY HAVE VAST EXTEN T OF LAND FOR GARDEN, PLAY GROUND, ETC. HOWEVER, SUCH THINGS MAY NOT BE P OSSIBLE IN URBAN CITIES. THEREFORE, THE LAND APPURTENANT TO THE RESI DENTIAL HOUSE HAS TO BE DETERMINED WITH REGARD TO THE LOCALITY WHERE THE RE SIDENTIAL HOUSE IS SITUATED, THE SOCIAL STATUS OF THE INDIVIDUAL ASSES SEE, PROFESSION OF THE INDIVIDUAL AND OTHER FACTORS FOR PROPER AND CONVENI ENT ENJOYMENT OF THE RESIDENTIAL HOUSE. THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT 5 CENTS OF LAND DETERMINED BY THE CIT(A) IS VERY LESS IN TH E STATE OF KERALA. THE STATE OF KERALA MAINLY BEING AN AGRICULTURAL AREA, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) IS NOT CORRECT I N RESTRICTING THE LAND APPURTENANT TO THE BUILDING AT 5 CENTS WITHOUT CONS IDERING THE RELEVANT FACTORS WHICH PREVAIL IN THE STATE OF KERALA. HOWEV ER, THE LOCALITY WHERE THE LAND IS SITUATED AND OTHER FACTORS ARE NOT AVAI LABLE ON RECORD. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH AFTER CON SIDERING ALL THE FACTORS MENTIONED ABOVE AND THEREAFTER DETERMINE THE EXTENT OF LAND WHICH IS REQUIRED FOR PROPER AND CONVENIENT ENJOYMENT OF THE RESIDENTIAL HOUSE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ISSUE OF EXEMPTION U/S 54F IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE DISCUSSION MADE ABOVE AND THE CASE LAW S RELIED UPON BY THE ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 20 ASSESSEE AND THEREAFTER DECIDE THE ISSUE IN ACCORDA NCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASS ESSEE. 24. IN THE INSTANT CASE, WHERE THERE IS 90% APPROX. OF OPEN SPACE AND MERELY 10% OF BUILT UP AREA BY WAY OF CONSTRUCTION OF A ROOM, CAN IT BE SAID THAT ASSESSEE HAS CONSTRUCTED A RESIDENTIAL HOUSE W ITH LAND APPURTENANT THERETO. IN OUR CONSIDERED VIEW, THE SAID MATTER HA S CLEARLY ESCAPED THE ATTENTION OF THE AO AND TO THAT EXTENT, THE ORDER S O PASSED IS CLEARLY ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 25. NOW, COMING TO THE RELATED ISSUE OF CONSTRUCTIO N OF A ROOM AS TO WHETHER THE SAME QUALIFIES AS A RESIDENTIAL HOUSE ON SUCH C ONTIGUOUS PIECE OF LAND MEASURING 612.22 SQ.YARDS. THE LD PCIT HAS RECORDE D A FINDING THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED A LETTER DATED 23.06.2015 ISSUED BY THE CONTRACTOR WHEREIN THE CON STRUCTION AREA HAS BEEN STATED TO BE ONLY 625 SQ. FEET AND THERE IS NO DESC RIPTION OF THE EXACT CONSTRUCTION WORK OR ACTIVITY UNDERTAKEN BY THE CON TRACTOR. THE LD PCIT HAS FURTHER STATED THAT THE AO WAS REQUIRED TO EXAMINE WHETHER THE CONSTRUCTION WORK IS ELIGIBLE TO BE CONSIDERED AS A RESIDENTIAL HOUSE OR NOT FOR THE PURPOSES OF CLAIM OF DEDUCTION U/S 54F AND WHICH THE AO HAS FAILED TO EXAMINE RENDERING THE ORDER SO PASSED AS ERRONEOUS. THE LD PCIT ENQUIRED ABOUT THE MATTER DURING THE COURSE OF REVISIONARY PROCEEDINGS AND THE LD AR IN THE WRITTEN SUBMISSION HAS STATED THAT A SINGLE DWELLIN G UNIT COMPRISING ONE ROOM, TOILET AND KITCHEN WAS CONSTRUCTED WHEREIN A CHOWID AR IS PRESENTLY RESIDING AND TAKING THE SAME INTO CONSIDERATION, THE LD PCIT HAS RETURNED A FINDING THAT BOTH THE PLOTS ARE VACANT EXCEPT A SMALL PORTION OF ONE PLOT WHEREIN A SMALL ROOM HAS BEEN CONSTRUCTED AND HAS THEREFORE DIRECTED THE AO TO RESTRICT THE CLAIM TO ONE PLOT OF LAND SUBJECT TO VERIFYING CONSTRUCTION MEASURING 625 SQ FT AS TO WHETHER THE SAME QUALIFIES AS A RESIDENTIAL HOUSE I N ACCORDANCE WITH LAW. ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 21 26. DURING THE COURSE OF HEARING BEFORE US, THE LD AR HAS REITERATED THE EARLIER SUBMISSIONS AND STATED THAT THERE IS NO DIS PUTE THAT THE CONSTRUCTION HAS BEEN DONE IN SUCH A MANNER THAT IT CONSTITUTES A SINGLE RESIDENTIAL UNIT AND IT IS AGAIN THE WISDOM OF THE ASSESSEE WHETHER SHE WANTS TO BUILT A SINGLE ROOM RESIDENTIAL UNIT OR MULTIPLE ROOM RESIDENTIAL UNITS AND SO LONG AS EVEN A SINGLE ROOM QUALIFIES AS A RESIDENTIAL HOUSE, THE ASSESSEE QUALIFIES FOR DEDUCTION U/S 54F OF THE ACT. 27. AS HELD BY THE COURTS FROM TIME TO TIME, THE TE RM 'RESIDENTIAL HOUSE' HAS NOT BEEN GIVEN ANY STATUTORY DEFINITION AND, THUS, HAS TO BE ASSIGNED MEANING AS UNDERSTOOD IN COMMON PARLANCE. AS PER DICTIONARY MEANING, IT MEANS ABODE, A DWELLING PLACE OR A BUILDING FOR HUMAN HAB ITATION. A BUILDING, IN ORDER TO BE HABITABLE BY A HUMAN BEING, IS ORDINARILY REQ UIRED TO HAVE MINIMUM FACILITIES OF WASHROOM, KITCHEN, ELECTRICITY, SEWER AGE, ETC. IN THE INSTANT CASE, THOUGH IT HAS BEEN CLAIMED BY THE LD AR BEFORE THE LD PCIT THAT BESIDES THE ROOM, A KITCHEN AND TOILET HAS BEEN BUILT, HOWEVER NOTHING HAS BEEN BROUGHT ON RECORD BEFORE THE LD PCIT IN TERMS OF BUILDING P LAN, PHOTOGRAPHS ETC WHICH LENDS CREDENCE AND DEMONSTRATE SUCH FACILITIES BEIN G ACTUALLY BUILT AND THEREFORE, WHERE THE LD PCIT HAS HELD THAT ONLY A S MALL ROOM HAS BEEN BUILT, WE DONT SEE ANY INFIRMITY IN THE SAID FINDINGS AND THE AO HAVING FAILED TO VERIFY THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDING S, SETTING-ASIDE THE SAME FOR NECESSARY VERIFICATION AND EXAMINATION AS TO WH ETHER THE CONSTRUCTION SO CARRIED OUT QUALIFIES AS A RESIDENTIAL HOUSE OR NOT . 28. IN LIGHT OF THE AFORESAID DECISION AND IN THE E NTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE CLAIM O F DEDUCTION U/S 54F HAS NOT BEEN PROPERLY EXAMINED BY THE AO AS PER THE REQUIRE MENT OF LAW AND ACCORDINGLY, UPHOLD THE EXERCISE OF JURISDICTION BY THE LD PCIT U/S 263 OF THE ACT AND DIRECTS THE AO TO EXAMINE THE MATTER OF CLA IM OF DEDUCTION U/S 54F A ITA NO. 279/JP/2020 PREM JAIN, JAIPUR VS. PR. CIT-1, JAIPUR 22 FRESH IN LIGHT OF AFORESAID DISCUSSION AND DECIDE A S PER LAW AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISPOSED O FF IN LIGHT OF AFORESAID DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 15/07/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 15/07/2021 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- PREM JAIN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- PR. CIT-1, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 279/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR