Shri Dashrath Ambalal Patel, Ahmedabad V. The Income Tax Officer, Ward -7(2), Ahmedabad

ITA 296/AHD/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8182 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N J VYAS
• Assessee Lawyers: S N DIVATIA
• Keywords: Principle of natural justice; Cost of acquisition
• Section: 54F; 148; 54

Judgement Text

, ,L ,L,L ,L- -- -,E ,E,E ,E- -- -LH LHLH LH * ** * IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD LOZJH LOZJH LOZJH LOZJH EGKOHJ EGKOHJ EGKOHJ EGKOHJ IZLKN] U; IZLKN] U; IZLKN] U; IZLKN] U;KF KFKF KF;D LNL; , ;D LNL; , ;D LNL; , ;D LNL; ,OA OAOA OA OLHE OLHE OLHE OLHE VGEN] YS[KK LNL; DS LE{KA VGEN] YS[KK LNL; DS LE{KA VGEN] YS[KK LNL; DS LE{KA VGEN] YS[KK LNL; DS LE{KA BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ I.T.A. NO. 296/AHD/2014 ( / ASSESSMENT YEAR : 2007-08) DASHRATH AMBALAL PATEL, 9, JASHWANT SOCIETY, JODHPUR CHAR RASTA, SATELLITE, AHMEDABAD 380 015. / VS. ITO, WARD 7(2), AHMEDABAD. ./ ./ PAN/GIR NO. : AKYPP 5852 G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. DIVATIA & MEHUL TALERA, A.R. / RESPONDENT BY : SHRI N. J. VYAS, SR. D.R. / DATE OF HEARING 16/10/2018 !'# / DATE OF PRONOUNCEMENT 01/01/2019 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)XIV, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO. CIT(A)- XIV/WD.7(2)/327/2012-13 DATED 03.12.2013 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S.143(3) R.W.S. 147 O F THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') D ATED 15.01.2013 RELEVANT TO ASSESSMENT YEAR (AY) 2007-08. ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS UNDER:- 1.1 THE ORDER, PASSED U/S.250 ON 3.12.2013 FOR A. Y.2007-2008 BY CIT(A)-XIV, ABAD PARTLY CONFIRMING THE EXEMPTION U/ S,54F BY RS.4,73,936/- IS WHOLLY ILLEGAL, UNLAWFUL AND AGAIN ST THE PRINCIPLES OF NATURAL JUSTICE. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AN D OR ON FACTS IN UPHOLDING THE DEDUCTION U/S.54F TO THE EXTENT OF RS .4,73,936/-. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE DEDUCTI ON U/S.54F TO THE EXTENT OF RS.4,73,936/-. 3.1 THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ENTIRE INVESTMENT MADE IN THE PURCHASE OF BUNGLOW AT SAHAJAND PALACE WAS ELIGIBLE FOR EXEMPTION U/S.54F AND SAME SHOULD NOT HAVE BEEN RESTIRCD TO RS. 11,11,000. 4.1 THE LD. CIT(A) HAS ERRED IN UPHOLDING THE VALIDITY OF REOPENING OF THE ASSTT. U/S.147. IT IS THEREFORE PRAYED THAT FULLY EXEMPTION SHOULD BE ALLOWED U/S.54F. 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT TH E LD. CIT(A) ERRED IN GRANTING EXEMPTION U/S 54 OF THE ACT FOR RS.4,73 ,936/- OUT OF THE TOTAL EXEMPTION CLAIMED FOR RS.11,11,000/-. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF LABOUR WORK FOR ELECTRIC FITTING. THE ASSESSEE IS ALSO DERIVING INCOME FROM OTHER SOURCES UNDER TH E HEAD INTEREST INCOME. THE ASSESSEE WAS THE CO-OWNER IN THE PROPER TY BEARING BLOCK NO. 755-756 ADMEASURING ABOUT 23169 SQ. METERS AT GHUMA ALONG WITH SHRI SURESH A. PATEL AND SHRI CHANDRAKANT PATEL. THE ASS ESSEE ALONG WITH TWO OTHER INDIVIDUALS WAS A 1/3 RD OWNER IN THE SAID PROPERTY. THE ASSESSEE ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 3 - ACQUIRED THE PROPERTY ALONG WITH HIS CO-OWNERS BEFO RE 1981. THE ASSESSEE ALONG WITH CO-OWNER HAS SOLD OUT THE PROPE RTY FOR AN AMOUNT OF RS. 66,00,000/- VIDE SALE DEED DATED 13-8-2006. ACC ORDINGLY, THE ASSESSEE WAS ENTITLED TO HIS SHARE IN THE PROPERTY AMOUNTING TO RS. 22,00,000/- BEING 1/3 RD SHARE OF SALE CONSIDERATION. THE ASSESSEE WORKED OUT LONG TERM CAPITAL GAIN IN RESPECT OF SUCH PROPE RTY FOR RS. 9,57,447/- WHICH WAS CLAIMED AS EXEMPT U/S 54F OF T HE ACT ON ACCOUNT OF INVESTMENT IN ANOTHER PROPERTY FOR AN AMOUNT OF RS. 11,11,000/- THE NECESSARY WORKING OF THE CAPITAL GAIN STANDS AS UND ER: SALE CONSIDERATION RS.22,00,000/- (-) INDEX COST OF ACQUISITION RS.12,42,553/- LONG TERM CAPITAL GAIN RS. 9,57,447/- (-) EXEMPTION U/S 54F RS.11,11,000/- LONG TERM CAPITAL GAIN NIL HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDINGS O BSERVED THAT THE PROPERTY PURCHASED WAS REGISTERED IN THE NAME OF TH E ASSESSEE VIDE DATED 10.10.2011 WHICH IS BEYOND THE PERIOD PRESCRIBED UN DER THE PROVISION OF SECTION 54F OF THE ACT. ACCORDINGLY, THE AO DENIED THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 54F OF THE ACT. THUS, T HE AO MADE THE ADDITION AS LONG TERM CAPITAL GAIN OF RS. 9,57,447/ - TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 4 - 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD CI T(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT HE HA D INVESTED IN THE NEW RESIDENTIAL HOUSE FOR AN AMOUNT OF RS.19,34,000/- A S DETAILED UNDER: SR. NO. NAME OF PARTY CHEQUE NO. DATE AMOUNT 1. M/S. HARE KRISHNA DEVELOPERS 148792 22.02.2006 11,000/- 2. 148796 20.03.2006 1,00,000/- 3 166614 08.12.2006 3,00,000/ - 4. 168451 11.02.2006 3,50,000/- 5. 168452 15.12.2006 3,50,000/- 6. 270376 29.04.2011 8,34,000/- 7. 270377 10.05.2011 3,50 ,000/ - 8. CASH 10.05.2011 5,000/- 5.1 AS PER THE ASSESSEE, THE PAYMENT ABOVE WAS MADE BEFORE THE DATE OF EXECUTION OF THE PURCHASE DEED, I.E. 10.10.2011. 5.2 THE ASSESSEE FURTHER CLAIMED THAT THE DELAY IN GETTING THE PROPERTY REGISTERED WAS DUE TO SOME LITIGATION FOR GETTING T HE SAME SETTLED. THUS, THE DELAY OCCURRED DUE TO THE SITUATION WHICH WAS B EYOND THE CONTROL OF THE ASSESSEE. THEREFORE, THE ASSESSEE CLAIMED THAT HE SHOULD NOT BE PENALIZED BY NOT ALLOWING EXEMPTION U/S 54F OF THE ACT ON ACCOUNT OF THE DELAY OCCURRED DUE TO THE UNAVOIDABLE SITUATION. HOWEVER, THE LD. CIT(A) DELETED THE ADDITION IN PAR T MADE BY THE LD. AO BY OBSERVING AS UNDER: ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 5 - 5. I HAVE PERUSED THE FACTS OF THE CASE AS ENUMERA TED BY A.O. AND AS SUBMITTED BY APPELLANT. I HAVE PERUSED THE CASE LAWS RELIED ON BY A.O. AS WELL AS APPELLANT. AFTER CAREFUL CONSIDERAT ION OF FACTS, SUBMISSION AND CONTENTION OF BOTH A.O. AS WELL AS OF APPELLANT, GROUND WISE ADJUDICATION IS AS FOLLO WS: THE APPELLANT'S ONE AND ONLY GROUND IS AGAINST THE ADDITION OF LONG TERM CAPITAL GAIN OF RS.957447 DENYING THE BENEFIT TO AP PELLANT U/S 54F OF THE ACT. IT IS OBSERVED FROM IMPUGNED ASSESSMENT ORDER THAT APPELLANT FAILED TO REFLECT THE TRANSACTION OF SALE OF LAND C O OWNED WITH TWO OTHER PERSON AND DESPITE THE FACT THAT APPELLANT'S ORIGIN AL RETURN OF INCOME IS PRESENTLY BEFORE THE HON'BLE ITAT BUT THIS ISSUE WA S NOT THERE. THE A.O. AFTER RECEIPT OF CREDIBLE INFORMATION, RECORDED SAT ISFACTION AND AFTER TAKING STATUTORY APPROVAL, ISSUED NOTICE U/S 148 OF THE ACT. THE APPELLANT ALSO FILED RETURN IN RESPONSE TO THIS NOT ICE U/S 148 OF THE ACT THOUGH BEYOND THE TIME LIMIT AS GRANTED BY A.O. IN THE NOTICE. THE APPELLANT REFLECTED THE TRANSACTION OF SALE OF LAND RESULTING INTO LONG TERM CAPITAL GAIN BUT CLAIMED DEDUCTION U/S 54F OF THE ACT FOR AN AMOUNT OF RS.11,11,000/- INVESTED IN A HOUSE PROPER TY. THOUGH A.O. TREATED THIS RETURN OF INCOME AS NON-EST BUT TAKEN COMPUTATION OF INCOME FROM THE SAME RETURN OF INCOME. THE APPELLAN T FILED ALL THE DETAILS BEFORE A.O. AS ASKED (ADMITTED BY A.O. IN I MPUGNED ORDER AND ACCEPTED THE TRANSACTION OF SALE OF LAND AT RS.66 LACS WITH 1/3 RD SHARE OF APPELLANT AT RS.22 LACS. THE A.O. ALSO ACCEPTED TH E APPELLANT'S SHARE FOR COST OF ACQUISITION (INDEXED) AT RS.1242553 TO WORKOUT LONG TERM CAPITAL GAIN AT RS.957447/-. THE A.O. ALSO NOT DOU BTED ABOUT TRANSACTION OF INVESTMENT OF RS.11,11,000/- IN A H OUSE PROPERTY BUT ONLY ON THE FACT THAT FOR THE SAME PROPERTY THE REG ISTRATION DEED WAS MADE ON 10.10.11, THE TIME LIMIT AS STIPULATED UNDE R SECTION 54F OF THE ACT WAS NOT ADHERED HENCE THE DEDUCTION WAS REJECTE D. THE APPELLANT EMPHATICALLY CONTENDED THAT IT MADE I NVESTMENT OF RS.11,11,000/- TILL 15/12/2006 WHICH WAS NOT DISPUT ED BY A.O. ALSO AND EVIDENCED THROUGH BANK ACCOUNT BUT ON ACCOUNT OF CI VIL LITIGATION AND VARIOUS STATUTORY AUTHORITIES ORDER, THE COMPLETION OF CONSTRUCTION AND RESULTANT BUILDING USE PERMISSION WAS GRANTED LATER HENCE REGISTRATION WAS MADE ON 10.10.11 AFTER PAYMENT OF REMAINING AMO UNT. IT IS ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 6 - THEREFORE, THE APPELLANT COMPLIED THE CONDITION OF INVESTMENT FOR CONSTRUCTION OF FLAT WITHIN TIME STIPULATED AND IT IS BECAUSE OF SPECIAL CIRCUMSTANCES BEYOND THE CONTROL OF APPELLANT THAT DESPITE HIS CLEAR INTENTION FOLLOWED BY ACTION OF PAYMENT OF FUND WAS NOT MATERIALIZED IN PRESCRIBED TIME LIMIT. I AM INCLINED BY THE CONTENTION OF THE APPELLANT TH AT IN THE UNDISPUTED AND SPECIAL FACTS & CIRCUMSTANCES, THE B ENEFIT OF SECTION 54F OF THE ACT SHOULD NOT BE DENIED TO APPELLANT. THE R ATIO OF HON'BLE ITAT, CHENNAI ORDER AS RELIED ON BY APPELLANT IS SQUARELY APPLICABLE IN THE CASE OF APPELLANT. THE APPELLANT PRODUCED ALL NECES SARY DETAILS TO SUBSTANTIATE THE CIRCUMSTANCES BEYOND HIS CONTROL. HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT. BEENA K. JAI N (1974) 75 TAXMAN 145 AND HON'BLE MADHYA PRADESH HIGH COURT IN THE CA SE OF CIT VS. AJITSINGH KHAJANCHI (2007) 163 TAXMAN 426 HELD THAT IT IS THE DATE OF PAYMENT AND NOT THE REGISTRATION OR REGISTERED DEED WHICH MATTERS FOR THE CLAIM OF DEDUCTION U/S 54F OF THE ACT. HON'BLE GUJARAT HIGH COURT IN THE CASE OF HARSUTRAI J. RAVAL VS. CIT (2002) 255 I TR 315 HELD THAT IF THE CONDITIONS U/S 54F OF THE ACT ARE SUBSTANTIALLY SATISFIED THEN ASSESSEE IS ENTITLED FOR DEDUCTION. HON'BLE GUJARAT HIGH COURT FULL SUCH IN THE CASE OF CIT VS. MORMASJI MANCHARIJI VAID (2001) 250 ITR 542 CATEGOR ICALLY HELD THAT IT IS THE DATE OF EXECUTION OF IMMOVABLE PROPERTY R ATHER THAN DATE OF REGISTRATION WHICH IS ALL IMPORTANT THE APPELLANT'S CASE IS SQUARELY COVERED WITH HON'B LE DELHI HIGH COURT DECISION IN THE CASE OF BALRAJ VS. CIT (2002) 254 ITR 22. IT WAS HELD BY HON'BLE HIGH COURT THAT- 'FOR THE PURPOSE OF ATTRACTING THE PROVISIONS OF SE C. 54 OF THE IT. ACT, IT IS NOT NECESSARY THAT THE ASSESSEE SHOULD BECOME TH E OWNER OF THE PROPERTY. SEC. 54 OF THE ACT SPEAKS OF PURCHASE.' HON'BLE HIGH COURT RELIED ON SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. T. N. ARAVINDA REDDY (1979) 120 ITR 46 WHERE IT HAS BEEN HELD THAT 'THE WORD 'PURCHASE' OCCURRING IN SECTION 54(1) OF THE ACT HAD TO BE GIVEN ITS COMMON MEANING VIZ. BUY FOR A PRICE OR EQ UIVALENT OF PRICE BY ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 7 - PAYMENT IN KIND OR ADJUSTMENT TOWARDS A DEBT OR FOR OTHER MONETARY CONSIDERATION.' IT IS THEREFORE, FOLLOWING THE FIND ING AS DISCUSSED ABOVE AND RATIO OF VARIOUS CASE TAWS, THE APPELLANT IS EN TITLED FOR DEDUCTION U/S 54F OF THE ACT FOR THE INVESTMENT OF RS.11,11,000/- FOR A RESIDENTIAL PROPERTY. BUT, AS PER THE PROVISIONS OF SECTION 54F , THE DEDUCTION AVAILABLE U/S 54F OF THE ACT WILL BE IN THE PROPORT ION OUT OF LONG TERM CAPITAL GAIN, WHICH THE INVESTMENT IN NEW EVIDENTIA L PROPERTY BEARS WITH TOTAL SALE CONSIDERATION. THE APPELLANT'S TOTAL CONSIDERATION WAS UNDISPUTEDLY OF RS.22,00,000/- AND LONG TERM CAPITA L GAIN IS OF RS.9,57,447/-. IT IS THEREFORE FOR THE INVESTMENT OF RS.11,11,000/- THE AVAILABLE DEDUCTION OUT OF LONG TERM CAPITAL GAIN W ILL BE RS.4,83,511/- 9,57,447 X 11,11,000 22,00,000 IT IS IMPORTANT THAT EXCEPT INVESTMENT OF RS.11,11,000/- FOR A RESIDENTIAL PROPERTY, THE APPE LLANT HAS NOT DEPOSITED THE BALANCE SALE CONSIDERATION IN ANY SPE CIFIED ACCOUNT AS PROVIDED IN SECTION 54F OF THE ACT. THEREFORE, THE DISALLOWANCES & ADDITION MADE BY A.O. OF RS.9,57,447/- IS RESTRICTE D TO RS.4,73,936/- (9,57,447 -4,83,511). THE A.O. IS DIRECTED TO DELET E THE BALANCE ADDITION OF RS.4,83,511/-. THIS GROUND IS PARTLY ALLOWED. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) ASSE SSEE IS IN APPEAL BEFORE US. 6. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1-186 AND REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). 7. ON THE OTHER HAND, THE LD. DR VEHEMENTLY SUPPORT ED THE ORDER OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 8 - ASSESSEE BEFORE THE AO CLAIMED TO HAVE INVESTED IN THE RESIDENTIAL PROPERTY FOR RS.11,11,000/- ONLY IMMEDIATELY AFTER THE SALE OF THE PROPERTY. ACCORDINGLY, THE ASSESSEE CLAIMED THE EXE MPTION U/S 54F OF THE ACT FOR RS.11.11 LACS. HOWEVER, THE AO REJECTED THE PLEA OF THE ASSESSEE ON THE GROUND THAT THE PROPERTY WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE WITHIN THE TIME AS PRESCRIBED UNDER THE PR OVISION OF SECTION 54F OF THE ACT. HOWEVER, THE ASSESSEE BEFORE THE LD. CIT(A) CLAIMED TO HAVE INVESTED FOR RS.19,34,000/- AS DISCUSSED ABOVE. ACCORDINGLY, THE ASSESSEE PLEADED BEFORE THE LD. CIT(A) FOR THE EXEMPTION OF THE ENTI RE AMOUNT INVESTED IN THE NEW RESIDENTIAL UNIT AS DISCUSSED ABOVE. AS PER THE ASSESSEE, THERE WAS A DELAY IN MAKING THE PAYMENT AND GETTING THE P ROPERTY REGISTERED IN HIS NAME DUE TO THE SITUATION WHICH WAS BEYOND HIS CONTROL. THE LD. CIT(A) ADMITTED THE CLAIM OF THE ASSESSEE AND RELAX ED THE PROVISION FOR DEPOSITING MONEY IN THE CAPITAL GAIN ACCOUNT SCHEME BEFORE FILING THE INCOME TAX RETURN AS PRESCRIBED UNDER THE PROVISION OF SECTION 54F OF THE ACT. ACCORDINGLY, THE LD. CIT(A) ALLOWED THE RELIEF TO THE ASSESSEE PROPORTIONATELY FOR THE AMOUNT INVESTED IN THE PROP ERTY FOR RS. 11.11 LACS. THE ONLY GRIEVANCE OF THE ASSESSEE BEFORE US IS THA T HE HAS INVESTED MONEY OF RS. 19.34 LACS WHICH SHOULD HAVE BEEN CONS IDERED FOR EXEMPTION U/S 54F OF THE ACT. IT IS A FACT ON RECOR D THAT THE ASSESSEE ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 9 - BEFORE THE AO CLAIMED TO HAVE INVESTED RS. 11.11 LA CS. HOWEVER, THE ASSESSEE BEFORE THE LD. CIT(A) CLAIMED THE FIRST TI ME TO HAVE MADE THE PAYMENT OF RS.19.34 LACS OUT OF WHICH A SUM OF RS. 8,34,000/- WAS PAID IN APRIL & MAY 2011, I.E. THE DATE BEYOND THE PERIO D OF THREE YEARS BUT BEFORE GETTING THE REGISTRATION OF THE PROPERTY. FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS N EVER FILED ANYTHING ABOUT THE PAYMENT OF RS. 8.34 LACS BEFORE THE AO. T HEREFORE, THE SAME NEEDS TO BE VERIFIED BY THE AO. 9. THE NEXT ISSUE ARISES WHETHER THE ASSESSEE IS EL IGIBLE FOR DEDUCTION U/S 54F OF THE ACT FOR THE PAYMENT MADE BEYOND THRE E YEARS. 10. IN THIS REGARD, WE NOTE THAT THERE WAS A DELAY ON ACCOUNT OF SOME DISPUTE IN THE PROPERTY WHICH PREVENTED THE ASSESSE E FROM INVESTING THE MONEY WITHIN THE TIME AS SPECIFIED UNDER SECTION 54 F OF THE ACT. THUS, IT IS CLEAR THAT THE ASSESSEE COULD NOT COMPLY WITH TH E PROVISION OF SECTION 54F OF THE ACT WHICH WAS BEYOND HIS CONTROL. THEREF ORE WE ARE OF THE VIEW THAT THE ASSESSEE IS VERY MUCH ELIGIBLE FOR DE DUCTION U/S 54F OF THE ACT FOR THE AMOUNT WHICH HAS BEEN INVESTED BY HIM B EYOND THE PRESCRIBED PERIOD BUT BEFORE GETTING THE REGISTRATI ON OF THE PROPERTY PROVIDED THERE WAS SUFFICIENT REASON WHICH PREVENTE D THE ASSESSEE FOR MAKING IN THE INVESTMENT WITHIN THE PRESCRIBED TIME . ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 10 - CONSIDERING THE FACTS & SITUATION AS DISCUSSED ABOV E, WE ARE OF THE VIEW THAT THE DELAY OCCURRED DUE TO THE SITUATION BEYOND THE CONTROL OF THE ASSESSEE. THUS, HE IS ELIGIBLE FOR DEDUCTION U/S 54 F OF THE ACT. IN THIS REGARD, WE FIND SUPPORT AND GUIDANCE FROM THE ORDER OF ITAT, CHENNAI IN THE CASE OF SMT. V. A. THARABAI VS. DCIT REPORTED I N (2012) 149 TTJ (CHENNAI) (UO) 41, WHEREIN IT WAS HELD AS UNDER: A DOMINANT FACTOR TO BE SEEN IN THE INSTANT CASE I S THAT THE ENTIRE CONSIDERATION RECEIVED BY THE ASSESSEE ON SALE OF H ER OLD PROPERTY HAS BEEN UTILIZED FOR THE PURCHASE OF THE NEW PROPERTY. THE PURCHASE VALUE OF THE PROPERTY IS MORE THAN THE LONG-TERM CAPITAL GAINS TAXABLE IN THE HANDS OF THE ASSESSEE. THIS FACT IS VERY CRUCIAL. T HE CONDUCT OF THE ASSESSEE UNEQUIVOCALLY DEMONSTRATES THAT THE ASSESS EE WAS IN FACT PROCEEDING TO CONSTRUCT A RESIDENTIAL HOUSE, BASED ON WHICH THE ASSESSEE HAD CLAIMED EXEMPTION UNDER SECTION 54F. T HEREFORE, WHAT IS THE REALITY? THE REALITY IS THAT THE ASSESSEE HAS S PENT THE ENTIRE CONSIDERATION RECEIVED ON THE SALE OF PROPERTY TOWA RDS THE CONSTRUCTION OF THE RESIDENTIAL HOUSE. IT IS TRUE THAT THE ASSES SEE COULD NOT CONSTRUCT THE HOUSE. BUT SHE HAS PURCHASED THE LAND UTILIZING THE ENTIRE CONSIDERATION RECEIVED ON THE SALE OF THE OLD PROPE RTY. IT MEANS THAT THE ASSESSEE HAS INVESTED THE ENTIRE CONSIDERATION RECE IVED ON SALE OF THE OLD ASSET IN ACQUIRING/CONSTRUCTING A RESIDENTIAL H OUSE PROPERTY. IN THE SPECIAL FACTS AND CIRCUMSTANCES OF THE INSTANT CASE , IT IS NECESSARY TO HOLD THAT THE AMOUNT UTILIZED BY THE ASSESSEE TO PU RCHASE THE LAND WAS IN FACT UTILIZED FOR ACQUIRING/CONSTRUCTING A RESID ENTIAL HOUSE. DE FACTO SPEAKING, THAT PART OF THE CONSTRUCTION OF TH E HOUSE PROPERTY WHICH WAS NOT COMPLETED WITHIN THE PERIOD OF THREE YEARS, IS ALTOGETHER A DIFFERENT MATTER. WITHOUT PURCHASING LAND, HOUSE CA NNOT BE CONSTRUCTED. THE FIRST STEP SHOULD BE THE PURCHASE OF LAND. THAT WAS DONE. NO STEP COULD BE PUT FORWARD THEREAFTER, FOR REASONS ALREAD Y STATED. THEREFORE, THE ENTIRE AMOUNT SPENT BY THE ASSESSEE IN PURCHASI NG THE LAND SHOULD BE CONSTRUED AS AMOUNT INVESTED IN PURCHASE/CONSTRU CTION OF RESIDENTIAL HOUSE . ITA NO.296/AHD/2014 DASHRATH AMBALAL PATEL VS. ITO A.Y. 2007-08 - 11 - HOWEVER, WE NOTE THAT THE AMOUNT INVESTED BY THE AS SESSEE IS NOT COMING OUT FROM THE SUBMISSION OF THE ASSESSEE AS MADE BEF ORE THE AO. THEREFORE, WE DIRECT THE AO TO VERIFY THE AMOUNT IN VESTED BY THE ASSESSEE AND ALLOW THE EXEMPTION U/S 54F OF THE ACT FOR THE AMOUNT INVESTED IN THE PROPERTY BEYOND THE PRESCRIBED PERI OD BUT BEFORE THE REGISTRATION OF THE PROPERTY. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 01/01/2019 SD/- SD/- EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 01/01/2019 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-XIV, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD. 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD