The DCIT, Circle-2(2), Ahmedabad V. Shri Pankaj Chimanlal Patel (HUF), Ahmedabad

ITA 3179/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9742 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Deduction for capital gain; Capital asset
• Section: 143(3); 54F; 54; 2

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMEBR ./ I.T.A. NO. 3179/AHD/2016 ( ASSESSMENT YEAR : 2012-13) THE DY.COMMISSIONER OF INCOME-TAX CIRCLE- 2(2), AHMEDABAD 1 ST FLOOR, C. U. SHAH BLDG., ASHRAM ROAD, AHMEDABAD - 380009 / VS. SHRI PANKAJ CHIMANLAL PATEL (HUF) 249, KADVA PATIDAR VAS, NR. RAMJI MANDIR, CHANDKHEDA, SABARMATI, AHMEDABAD - 380005 ./ ./ PAN/GIR NO. : AAIHP1179H ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MUDIT NAGPAL, SR. D.R. / RESPONDENT BY : SHRI S. N. DIVATIA, A.R. DATE OF HEARING 18/09/2018 !'# / DATE OF PRONOUNCEMENT 12/12/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-4, AHMEDABAD (CIT(A) IN SHORT), DATED 2 1 ST SEPTEMBER, 2016 ARISING IN THE ASSESSMENT ORDER DATED 13.02.20 15 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2012-13. ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 2 - 2. THE REVENUE IN ITS APPEAL HAS IMPUGNED THE ACTI ON OF THE CIT(A) IN DELETING THE DISALLOWANCE OF DEDUCTION UN DER S.54F OF THE ACT AMOUNTING TO RS.1,50,94,718/-. 3. BRIEFLY STATED, THE ASSESSEE IS AN HUF AND DERIV ES INCOME BY WAY OF CAPITAL GAINS AND OTHER SOURCES. IT FILED I TS RETURN OF INCOME FOR AY 2012-13 IN QUESTION DECLARING TOTAL INCOME OF RS.1,17,44,790/-. THE RETURN FILED WAS SUBJECTED T O SCRUTINY ASSESSMENT. IN THE COURSE OF ASSESSMENT PROCEEDING S, THE AO NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER S.54F OF THE ACT OF RS.1,50,94,718/- ON SALE OF PLOT OF LAND AGAINST A NEW RESIDENTIAL HOUSE PROPERTY. IT WAS FURTHER NOTICED THAT THE AS SESSEE HAD ALREADY MADE SUCH CLAIM OF DEDUCTION ON SALE OF ANOTHER LAN D IN THE PRECEDING AY 2011-12 ALSO. THE AO ACCORDINGLY CONCLUDED THAT THE ASSESSEE COULD NOT MAKE CLAIM OF DOUBLE DEDUCTION TOWARDS IN VESTMENT OF SALE PROCEEDS ARISING OUT IN TWO DIFFERENT ASSETS IN TWO DIFFERENT ASSESSMENT YEARS AGAINST THE PURCHASE OF SAME RESID ENTIAL PROPERTY. TO ARRIVE AT SUCH CONCLUSION, IT WAS OBSERVED BY TH E AO THAT DEDUCTION UNDER S.54F OF THE ACT ARISES FROM A SINGLE ASSET A S THE WORDS USED ARE ORIGINAL ASSET AND NOT ASSET(S). IT WAS FURTHE R OBSERVED BY THE AO THAT SINCE THE PURCHASE AS CONTEMPLATED IN SECTION 54F OF THE ACT COULD HAPPEN ONLY ONCE AND THAT HAS ALREADY HAPPENE D IN THE PRECEDING ASSESSMENT YEAR 2011-12 ON 21.01.2011, TH E BENEFIT TOWARDS PURCHASE OF NEW ASSET CANNOT BE EXTENDED TO CAPITAL GAINS ON SALE OF ANOTHER ORIGINAL ASSET IN ANOTHER ASSESSMENT YEAR. THE AO ACCORDINGLY REFUSED TO ENTERTAIN THE CLAIM OF DEDUC TION OF THE ASSESSEE UNDER S.54F OF THE ACT. 4. AGGRIEVED, THE ASSESSEE PREFERRED THE APPEAL BEF ORE THE CIT(A). ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 3 - 5. THE CIT(A) REFERRED TO THE DECISION OF CO-ORDINA TE BENCH ON THE IDENTICAL ISSUE IN THE CASE OF ANAGHA AJIT PANEKAR (2006) 9 SOT 685 (MUMBAI) & MRS. KRISHNADEVI KEJRIWAL ITA NO. 93/MUM /2009 & ORS. ORDER DATED 25 TH JUNE, 2010 AND ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) READS AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER. THE ONLY GROUND OF APPEAL IS AGAINST THE ADDITIONS OF RS.1,50,94,718/- MADE BY T HE AO BY DISALLOWING THE CLAIM OF THE APPELLANT MADE U/S 54F OF THE ACT. BRIEF FACTS OF THE CASE ARE AS UNDER: 6.1 THE APPELLANT IS AN HUF AND DERIVES INCOME BY W AY OF CAPITAL GAIN & OTHER SOURCES. IT HAD FILED ITS RETURN OF IN COME FOR A.Y.2012- 13 ON 19-7-2012 DECLARING TOTAL INCOME OF RS.1,17,4 4,790/- DURING THE COURSE OF ASSTT. PROCEEDINGS, THE AO NOTICED TH AT THE APPELLANT HAD CLAIMED EXEMPTION U/S 54F OF SALE OF PLOT OF LAND BEARING S.NO.726/4/1, FP NO. 32/1 ADMEASURING AB OUT 2158.05 SQ. MTRS. AGAINST THE NEW RESIDENTIAL HOUSE PROPERTY, T HOUGH IT HAD ALREADY MADE SUCH CLAIM OF EXEMPTION IN A.Y. 2011-1 2 ON SALE OF LAND BEARING S. NO. 664 FP NO. 218/1 ADMEASURING AB OUT 1052 SQ. MTRS. IN OTHER WORDS IT WAS THE CONTENTION OF AO TH AT THE ASSESSEE COULD NOT MAKE CLAIM OF DOUBLE, EXEMPTION AGAINST T HE SAME RESIDENTIAL PROPERTY. THE APPELLANT VIDE REPLY DT.2 3-1-2015 SUBMITTED BEFORE THE A.O. THAT THERE WAS NO BAR OF CLAIMING S UCH EXEMPTIONS PROVIDED THE TIME LIMIT IS SATISFIED AND FUNDS FROM SALE OF TWO ASSETS WERE UTILIZED IN THE NEW PROPERTY. HOWEVER THE AO H AS REJECTED THE SAME FOR THE REASONS STATED IN PARA-5.2 TO 5.5 OF T HE ASSTT. ORDER. 6.2 THE DEDUCTION CLAIMED UNDER SECTION 54F IS AS U NDER. FY ENDED AY 31.03.2011 AY:2011-12 31.03.2012 AY:2012-13 TOTAL SALE OF PROPERTY LAND AT S.NO.664 LAND AT S.NO.726 SALE CONSIDERATION 2,28,41,726 2,67,03,250 LTCG 2,14,19,904 2,39,92,739 4,54,12,643 DED. U/S 54F 1,96,92,819 1,50,94,718 3,47,87,537 (A) DURING THE AY: 2011-12 , THE APPELLANT SOLD A PIECE OF LAND ON 31.03.2011 AT SURVEY NO.664 FOR A CONSIDERATION OF RS.2,28,41 ,726 AND EARNED CAPITAL GAIN OF RS.2,14,19 904. OUT OF T HIS SALE ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 4 - CONSIDERATION, THE APPELLANT DECIDED TO INVEST IN A RESIDENTIAL HOUSE PROPERTY AT BUNGALOW NO. 10, PANCHSHIL SOCIETY, USM ANPURA, AHMEDABAD FOR A COST OF RS.3,78,00,000 AND ACCORDIN GLY THE APPELLANT PAID RS.2,10,00,000 VIDE A BANAKHAT ON 21.01.2011 . THUS, THE APPELLANT CLAIMED THE NEW INVESTMENT IN RESIDEN TIAL HOUSE PROPERTY OF RS.1,96,92,819 (PROPORTIONATELY) UNDER SECTION 54F IN A.Y. 2011-12. (B) SUBSEQUENTLY IN A SUCCEEDING ASSESSMENT YEAR I.E. IN AY:2012-13 , THE APPELLANT SOLD ANOTHER PIECE OF LAND ON 31.03.2012 AT SURVEY NO.726/4/1 FOR A CONSIDERATION OF RS.2,67,03,250 AN D EARNED CAPITAL GAIN OF RS.2,39,92,739. THE APPELLANT IAS CLAIMED D EDUCTION OF RS. 1,50,94,718 BY INVESTING RS. 1,68,00,000 (3,78,00,0 00 - 2,10,00,000) IN THE SAME RESIDENTIAL PROPERTY BEING BUNGLOW NO. 10, PANCHSHIL SOCIETY, USMANPURA, AHMEDABAD VIDE A REGISTERED SAL E DEED 16.04.2012 . (C) THE ASSESSING OFFICER HAS DISALLOWED CLAIM MADE U/ S.54F ACCOUNTING OF RS.1,50,94,718/- IT IS DISCUSSED IN P ARA 5 OF THE ORDER. IT IS OBSERVED BY AO THAT DEDUCTION UNDER SECTION 5 4F CANNOT BE MADE FOR THE SAME RESIDENTIAL PROPERTY IN TWO DIFFE RENT ASSESSMENT YEARS. THE AO FURTHER OBSERVED THAT THE INTERPRETAT ION OF SECTION 54F MEANS THE GAIN SHOULD ARISE FROM A SINGLE ASSET AS WORDS USED ARE THE ORIGINAL ASSET AND NOT ASSETS. IT IS FURTHER ME NTIONED BY AO THAT SINCE THE PURCHASE COULD HAPPENS ONLY ONCE AND THAT HAD HAPPENED ON 21.01.2011, THE SAME BENEFIT CANNOT BE EXTENDED TO THE SECOND PROPERTY IN ANOTHER ASSESSMENT YEAR. 6.3 THE APPELLANT CONTENDED THAT THE DISALLOWANCE M ADE BY THE AO ARE NOT AS PER THE PROVISIONS OF THE ACT AND HENCE NOT JUSTIFIED. THE APPELLANT'S SUBMISSION HAS BEEN REPRODUCED ABOVE. T HE APPELLANT ALSO RELIED UPON THE CASE LAWS AS MENTIONED IN THE SUBMISSION. 6.4 THE REASONS FOR MAKING THE ADDITIONS AND THE SU BMISSION MADE BY THE APPELLANT ALONGWITH CASE LAWS RELIED UPON HA VE BEEN CAREFULLY CONSIDERED AND FOUND THAT THE ADDITIONS MADE BY THE AO ARE NOT JUSTIFIED FOR THE FOLLOWING REASONS: I) SECTION 54F OF THE ACT CONTAINS THE PROVISIONS A S UNDER: 54F. (1) [SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREA FTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSE E HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERI OD OF THREE YEARS AFTER THAT DATE [CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA] (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW A SSET), THE CAPITAL ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 5 - GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOL LOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN T HE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 ; (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE N ET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPIT AL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTIO N AS THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER SECTION 45: ON GOING THROUGH THE FACTS OF THE CASE AND THE PROV ISIONS CONTAINED UNDER SECTION 54F OF THE ACT AS REPRODUCED ABOVE, I T IS FOUND THAT THE APPELLANT HAS COMPLIED ALL THE CONDITIONS PRESCRIBE D UNDER THAT SECTION. THERE IS NOT A SINGLE CONDITION WHICH HAS NOT BEEN FULLY COMPLIED WITH BY THE APPELLANT. WHEN THE APPELLANT COMPLIED ALL THE CONDITIONS PRESCRIBED UNDER THE PROVISIONS OF THE S AID SECTION, THE DISALLOWANCE OF THE CLAIM OF THE APPELLANT IS NOT I N ACCORDANCE WITH THE PROVISIONS OF THE ACT, THEREFORE, IT IS NOT FOU ND JUSTIFIED. THE APPELLANT'S CLAIM IS FOUND AS PER LAW, SO IT IS ALL OWABLE. HENCE ADDITIONS MADE ARE DELETED. II) THE APPELLANT'S CASE IS COVERED BY THE ORDER OF THE HON'BLE ITAT, MUMBAI, BENCH 'C' IN THE CASE OF SMT. ANAGHA AJIT PANEKAR V/S ITO (2006) 9 SOT 685 (MUM.) IN ITA NO.3810 (MUM .) OF 2003 DATED JUNE 14, 2006. THE SAID ORDER IS REPRODUCED B ELOW: 'SECTION 54F OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - EXEMPTION OF, IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE - ASSESSMENT YEAR 1997-98 - WHETHER THERE IS NO BAR I N &* SECTION 54F FOR CLAIMING DEDUCTION SECOND TIME OR THIRD TIM E FOR SAME PROPERTY IF COST OF RESIDENTIAL PROPERTY IS WITHIN CAPITAL GAIN ARISEN TO ASSESSEE, PROVIDED DEDUCTION IS CLAIMED WITHIN T IME STIPULATED IN SECTION 54F - HELD, YES - ASSESSEE EARNED CAPITAL G AIN ON ACCOUNT OF SALE OF SHARES AND CLAIMED DEDUCTION UNDER SECTION 54F IN RESPECT OF CAPITAL GAIN FOR PURCHASE OF RESIDENTIAL FLAT ON 18-8-1995 - ASSESSEE HAD ALSO EARNED CAPITAL GAIN IN EARLIER AS SESSMENT YEARS 1995-96 AND 1996-97 AND HAD SOUGHT DEDUCTION UNDER SECTION 54F IN RESPECT OF PURCHASE OF SAME RESIDENTIAL FLAT - W HETHER SINCE TOTAL CAPITAL GAIN ARISEN TO ASSESSEE IN ALL ASSESSMENT Y EARS 1995-96 TO 1997-98 WAS LESS THAN COST OF FLAT, ASSESSEE WAS EN TITLED TO DEDUCTION UNDER SECTION 54F IN RELEVANT ASSESSMENT YEAR - HELD, YES FACTS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE EARNED CAPITAL GAIN ON ACCOUNT OF SALE OF SHARES AND CLAIMED DEDUCTION UNDER SECTION 54F IN R ESPECT OF CAPITAL GAIN FOR PURCHASE OF RESIDENTIAL FLAT ON 18-8-1995. THE ASSESSING ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 6 - OFFICER HAVING NOTED THAT IN EARLIER ASSESSMENT YEA RS 1995-96 AND 1996-97, CAPITAL GAIN HAD ARISEN TO THE ASSESSEE IN RESPECT OF SALE OF SHARES AND THE ASSESSEE HAD SOUGHT DEDUCTION UNDER SECTION 54F IN THOSE YEARS ALSO IN RESPECT OF PURCHASE OF SAME RES IDENTIAL FLAT, HELD THAT SINCE THE ASSESSEE HAD ALREADY CLAIMED DEDUCTI ON UNDER SECTION 54F IN THE ASSESSMENT YEARS 1995-96 AND 1996-97, TH E ASSESSEE COULD NOT CLAIM DEDUCTION IN RESPECT OF SAME RESIDENTIAL FLAT IN THE RELEVANT ASSESSMENT YEAR. THE ASSESSING OFFICER, THEREFORE, DENIED DEDUCTION UNDER SECTION 54F TO THE ASSESSEE IN THE RELEVANT A SSESSMENT YEAR. ON APPEAL, THE COMMISSIONER (APPEALS) HELD THAT SIN CE THE ASSESSEE HAD NOT APPROPRIATED THE SALE CONSIDERATION TOWARDS PURCHASE OF FLAT IN THE RELEVANT ASSESSMENT YEAR DEDUCTION UNDER SEC TION 54F COULD NOT BE ALLOWED TO THE ASSESSEE. ON SECOND APPEAL: HELD THERE IS NO BAR IN SECTION 54F FOR CLAIMING DEDUCTI ON SECOND TIME OR THIRD TIME FOR THE SAME PROPERTY IF COST OF THE PRO PERTY IS WITHIN THE CAPITAL GAIN ARISEN TO THE ASSESSEE. IN THE INSTANT CASE, TOTAL CAPITAL GAIN ARISEN TO THE ASSESSEE IN ALL THE THREE YEARS 1995-96 TO 1997-98 WAS LESS THAN THE COST OF FLAT. FURTHER, FROM THE L ANGUAGE OF SECTION 54F IT IS CLEAR THAT THE LEGISLATURE HAS PROVIDED L EVERAGE TO THE ASSESSEE FOR CLAIMING DEDUCTION UNDER SECTION 54F I N THE SENSE THAT THE ASSESSEE CAN BUY THE PROPERTY FIRST AND CLAIM D EDUCTION LATER ON, I.E., WITHIN ONE YEAR OR CAN HAVE CAPITAL GAIN FIRS T AND CAN CLAIM DEDUCTION WITHIN TWO YEARS BY PURCHASING THE RESIDE NTIAL FIAT. IN ALL THE ASSESSMENT YEARS, THESE CONDITIONS WERE SATISFI ED. THEREFORE, IN RESPECT OF RESIDENTIAL PROPERTY TILL COST OF PURCHA SE OF PROPERTY IS EXHAUSTED BY THE CLAIM OF THE CAPITAL GAIN BUT REMA INING IN THE TIME- FRAME STIPULATED IN SECTION 54F, DEDUCTION UNDER SE CTION CANNOT BE DENIED. IF THE ASSESSEE FALLS OUT OF THE TIME-LIMIT IN SECTION 54F THEN PROBABLY DEPARTMENT CAN HAVE A CASE. THE COMMISSION ER (APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE BY INTERPRETIN G SUB-SECTION (4) BY HOLDING THAT THE ASSESSEE HAD NOT APPROPRIATED T HE SALE CONSIDERATION TOWARDS PURCHASE OF FLAT, BUT THE COM MISSIONER (APPEALS) HAD IGNORED THE MAIN PROVISIONS OF SECTIO N 54F. SUB- SECTION (4) HAS BEEN INSERTED WITH A VIEW TO FACILI TATE THE ASSESSEE TO CLAIM THE CAPITAL GAIN EXEMPTION WHEN THE ASSESSEE OPTS FOR PURCHASE OF FLAT AFTER ARISING OF THE CAPITAL GAIN AND DEPOS IT THE SALE CONSIDERATION IN THE BANK ACCOUNT TILL SUCH APPROPR IATION. THE ASSESSEE CANNOT BE EXPECTED TO APPROPRIATE THE SALE CONSIDERATION IN RESPECT OF THE ALREADY PURCHASED FLAT. IF SUCH INTE RPRETATION OF THE COMMISSIONER (APPEALS) WAS ACCEPTED, IT WOULD FRUST RATE THE OBJECT OF THE PROVISIONS OF SECTION 54F AND LEAD TO ABSURD ITY. THEREFORE, THE ORDER OF COMMISSIONER (APPEALS) WAS SET ASIDE AND T HE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 54F IN THE RELE VANT ASSESSMENT YEAR. [PARA 7] ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 7 - EDITOR'S NOTE IT WAS ALSO HELD BY THE TRIBUNAL THAT THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION OF INTEREST PAYMENT AGAINST RENTAL INCOME AS FROM THE CONFIRMATION OF ACCOUNTS FILED BY THE ASSESSEE IT WAS FOUND THAT PAYMENT OF INTEREST HAD BEEN REFLECTED BY THE CONFI RMING PARTY. C.N. VAZE FOR THE APPELLANT. ASHWINI MAHAJAN FOR THE RESPONDENT. ORDER S.K. PRANSUKHKA, ACCOUNTANT MEMBER. - THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-XXV, MUMBAI DA TED 17-2-2003. 2. THE ASSESSEE HAS RAISED THE FOLLOWING TWO GROUND S IN THIS APPEAL: '1. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF DEDUCTION FOR LONG TERM CAPITAL GAINS UNDER SECTION 54F AMOUNTING TO RS. 3,74,276 2. THE LD. CIT(A) ERRED IN DISALLOWING INTEREST PAY MENT OF RS. 25,200 FOR WANT OF DETAILS EVEN THOUGH THE DETAILS WAS FILED AT THE TIME OF FILING OF RETURN OF INCOME ITSELF.' 3. THE RELEVANT FACTS IN THIS CASE ARE THAT CAPITAL GAIN HAS ARISEN TO THE ASSESSEE ON ACCOUNT OF SALE OF SHARES AMOUNTING TO RS.3,83,976 OUT OF SALE CONSIDERATION OF RS.5,08,040. THE ASSES SEE SOUGHT DEDUCTION UNDER SECTION 54F IN RESPECT OF CAPITAL G AIN FOR PURCHASE OF RESIDENTIAL FLAT ON 18-8-1995 AT RS. 9,00,000. T HE ASSESSING OFFICER FURTHER OBSERVED THAT IN EARLIER ASSESSMENT YEARS I.E. 1995-96 AND 1996-97, CAPITAL GAIN HAS ARISEN TO THE ASSESSE E IN RESPECT OF SALE OF SHARES AND ASSESSEE HAS SOUGHT DEDUCTION UN DER SECTION 54F IN THOSE YEARS ALSO IN RESPECT OF PURCHASE OF SAME RESIDENTIAL FLAT. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE TH E ASSESSEE HAS ALREADY CLAIMED DEDUCTION UNDER SECTION 54F IN ASSE SSMENT YEAR 1995-96, THE ASSESSEE CANNOT CLAIM DEDUCTION IN RES PECT OF SAME RESIDENTIAL FLAT IN THE RELEVANT ASSESSMENT YEAR. T HEREFORE, THE ASSESSING OFFICER DENIED DEDUCTION UNDER SECTION 54 F TO THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. FOR THE SAKE OF BE TTER UNDERSTANDING, TRANSACTION OF SALE OF SHARES, CAPIT AL GAIN AND DEDUCTION CLAIMED BY THE ASSESSEE IS DEPICTED HEREU NDER IN THE FORM OF CHART : F.Y. ENDED AY. 31-3- 1995 1995-96 31-3- 1996 1996-97 31-3- 1997 1997-98 TOTAL SALE CONSIDERATION 3,24,865 1,25,240 5,08,040 9,58,145 LONG TERM CAPITAL GAIN 2,71,815 92,270 3,83,976 7,48,061 ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 8 - DEDUCTION UNDER SECTION 54F 2,71,815 92,670 3,74,276 7,38,761 4. THE ISSUE WAS CARRIED BEFORE CIT(A) IN APPEAL. T HE CONTENTION RAISED BY THE ASSESSEE BEFORE CIT(A) WAS THAT ALL T HE CONDITIONS FOR CLAIMING DEDUCTION UNDER SECTION 54F HAS BEEN FULFI LLED BY THE ASSESSEE IN ALL THESE THREE ASSESSMENT YEARS; THEREFORE, DEDUCTION UNDER SECTION 54F CANNOT BE DENIED TO THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR. THE CONDITIONS TO BE FULFILLED FOR CLAIMING DEDUCTION UNDER SECTION 54F AS STATED BY THE ASSESS EE ARE AS UNDER : (I) ASSESSEE SHOULD BE AN INDIVIDUAL OR HUF (II) CAPITAL GAINS SHOULD ARISE FORM LONG TERM CAPI TAL GAIN OTHER THAN RESIDENTIAL HOUSE. (III) ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFO RE OR WITHIN TWO YEARS AFTER THE SALE OF SUCH LONG-TERM CAPITAL ASSE T PURCHASED OR WITHIN THREE YEARS HAVE CONSTRUCTED A RESIDENTIAL H OUSE. (IV) THE NEW HOUSE PURCHASED IS NOT SOLD WITHIN 3 Y EARS FROM DATE OF PURCHASE/CONSTRUCTION. (V) THE COST OF NEW RESIDENTIAL HOUSE IS MORE THAN THE DEDUCTION UNDER SECTION 54F SHALL BE PROPORTIONATE TO SALE OF ASSET OF THE COST OF NEW ASSETS VIS-A-VIS THE CAPITAL GAINS. (VI) THE ASSESSEE SHOULD NOT OWN ANY OTHER RESIDENT IAL HOUSE OTHER THAN THE NEW HOUSE. (VII) THE ASSESSEE SHOULD NOT PURCHASE ANY OTHER NE W RESIDENTIAL HOUSE WITHIN YEAR OR CONSTRUCT ANY OTHER NEW RESIDE NTIAL WITHIN THREE YEARS. THE LD. CIT(A) DECIDED THE ISSUE AGAINST THE ASSESS EE CONSIDERING SUB-SECTION (4) OF SECTION 54F BY OBSERVING THAT AS ASSESSEE HAS NOT APPROPRIATED THE SALE CONSIDERATION TOWARDS PURCHAS E OF FLAT IN THE RELEVANT ASSESSMENT YEAR, DEDUCTION UNDER SECTION 5 4F CANNOT BE ALLOWED TO THE ASSESSEE. THE LD. CIT(A) DECIDED THE ISSUE ONLY CONSIDERING SUB-SECTION (4) OF SECTION 54F MAKING I T AS A CENTRAL ISSUE. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE AS SESSEE HAS COME IN APPEAL BEFORE US. 5. THE LD. AR REITERATED THE SAME SUBMISSIONS AS WE RE MADE BEFORE LD. CIT(A) AND FURTHER ARGUED THAT AS PER TH E LANGUAGE OF SECTION 54F IF ASSESSEE PURCHASED THE FLAT WITHIN O NE YEAR BEFORE OR WITHIN TWO YEARS OF THE ARISING OF CAPITAL GAIN, TH E ASSESSEE SHALL BE ENTITLED TO DEDUCTION UNDER SECTION 54F. SINCE IN T HE RELEVANT ASSESSMENT YEAR THE FLAT WAS PURCHASED ON 18-8-1995 AND SAME WAS ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 9 - SOLD ON 13-6-1996, IT WAS VERY WELL WITHIN THE TIME -LIMIT LAID DOWN IN SECTION 54F. EMPHASIS OF ARGUMENT OF LD. AR WAS THA T SINCE THE FLAT WAS PURCHASED WITHIN ONE YEAR BEFORE THE ARISING OF CAPITAL GAIN, ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 54 F. THE ID. AR ALSO REFERRED TO SUB-SECTION (4) OF SECTION 54F AND ARGUED THAT ASSESSEE HAD PURCHASED THE FLAT IN 1995 FROM HIS OW N FUND WHICH HAS BEEN REPLACED BY THE CAPITAL GAIN DURING THE RELEVA NT ASSESSMENT YEAR AND IT IS EQUIVALENT TO THE APPROPRIATION OF T HE SAME FOR THE PURCHASE OF RESIDENTIAL FLAT. 6. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, CONTENDED THAT ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 54F IN RESPECT OF SAME PROPERTY FOR THE THREE ASSESSMENT Y EARS AND IN THE RELEVANT ASSESSMENT YEAR IT CANNOT BE SAID THAT ASS ESSEE HAD APPROPRIATED SALE CONSIDERATION FOR THE PURCHASE OF RESIDENTIAL FLAT, AS THE FLAT WAS ALREADY PURCHASED BY THE ASSESSEE O N 18-8-1995. THEREFORE, THE LD. DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT LD. ASSESSING OFFICER AS WELL AS LD. CIT(A) WAS JUSTIFI ED IN DENYING THE DEDUCTION UNDER SECTION 54F. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. UNDISPUTED FACT AS WE HAVE STATED EARLIER WAS THAT FLAT WAS PURCHASED BY THE A SSESSEE ON 18-8- 1995 FOR RS.9,00,000 AND ASSESSEE HAVING CAPITAL GA IN IN ASSESSMENT YEARS 1995-96, 1996-97 AND 1997-98 HAVE CLAIMED DED UCTION FOR ALL THESE THREE YEARS AS PER CHART GIVEN ABOVE, WHICH S HOWS THAT IN TOTAL THE ASSESSEE HAS CLAIMED DEDUCTION NOT MORE THAN RS . 9 LAKHS. IN OUR CONSIDERATION, THERE IS NO BAR IN SECTION 54F FOR C LAIMING DEDUCTION FOR THE SAME PROPERTY IF COST OF THE FLAT IS WITHIN THE CAPITAL GAIN ARISEN TO THE ASSESSEE. IN THIS CASE, TOTAL CAPITAL GAIN ARISEN TO THE ASSESEE IN ALL THESE THREE YEARS IS RS.7,48,061 AGA INST THE COST OF FLAT RS.9 LAKHS. NOW TO EXAMINE THE CASE OF THE ASSESSEE FROM THE LANGUAGE OF SECTION 54, IT WILL BE USEFUL TO REPROD UCE SECTION 54F AS UNDER: '54F. SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIV IDED FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-T ERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREINAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHI N A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TH E TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YE ARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE (THEREAFTER IN THI S SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEA LT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SE CTION.' SUB-SECTION (4) OF SECTION 54F IS AS UNDER : '(4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS N OT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASS ET MADE WITHIN ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 10 - ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF T HE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASS ESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION ( 1) OF SECTION 139] IN AN ACCOUNT IN ANY WAY SUCH BANK OR INSTITUTION A S MAY BE SPECIFIED IN, AND UTILIZED IN ACCORDANCE WITH, ANY SCHEME WHI CH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZ ETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILIZED BY THE ASSESSEE FOR THE PURCHASE O R CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET.' WE FIND THAT FROM THE LANGUAGE OF SECTION, LEGISLAT URE HAS PROVIDED LEVERAGE TO THE ASSESSEE FOR CLAIMING DEDUCTION UND ER SECTION 54F IN THE SENSE THAT ASSESSEE CAN BUY THE PROPERTY FIRST AND CLAIM REDUCTION LATER ON I.E., WITHIN ONE YEAR OR CAN HAV E CAPITAL GAIN FIRST AND CAN CLAIM DEDUCTION WITHIN TWO YEARS BY PURCHAS ING THE RESIDENTIAL FLAT. IN ALL THESE THREE ASSESSMENT YEA RS, THESE CONDITIONS WERE SATISFIED. THEREFORE, IN OUR CONSIDERATION, IN RESPECT OF RESIDENTIAL PROPERTY TILL COST OF PURCHASE OF FLAT IS EXHAUSTED BY THE CLAIM OF THE CAPITAL GAIN BUT REMAINING IN THE TIME -FRAME STIPULATED IN SECTION 54F, DEDUCTION CANNOT BE DENIED. IF ASSE SSEE FALLS OUT OF THE TIME-LIMIT IN SECTION 54F THEN PROBABLY DEPARTM ENT CAN HAVE A CASE. THE ID. CIT(A) HAS DISMISSED THE APPEAL OF TH E ASSESSEE BY INTERPRETING SUB-SECTION (4) BY HOLDING THAT ASSESS EE HAS NOT APPROPRIATED THE SALE CONSIDERATION TOWARDS PURCHAS E OF FLAT, BUT ID. CIT(A) HAS IGNORED THE MAIN PROVISIONS OF SECTION 5 4F. SUB-SECTION (4) HAS BEEN INSERTED WITH A VIEW TO FACILITATE THE ASSESSEE TO CLAIM THE CAPITAL GAIN EXEMPTION WHEN ASSESSEE OPTS FOR P URCHASE OF FLAT AFTER ARISING OF THE CAPITAL GAIN AND DEPOSIT THE S ALE CONSIDERATION IN THE BANK ACCOUNT TILL SUCH APPROPRIATION. THE ASSES SEE CANNOT BE EXPECTED TO APPROPRIATE THE SALE CONSIDERATION IN R ESPECT OF THE ALREADY PURCHASED FLAT. IF SUCH INTERPRETATION OF C IT(A) IS ACCEPTED, IT WILL FRUSTRATE THE OBJECT OF THE PROVISIONS OF S ECTION 54F AND LEAD TO ABSURDITY. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE GROUND OF THE ASSESSEE. 8. AS REGARDS SECOND GROUND, THE ASSESSING OFFICER DISALLOWED (SIC) THE INTEREST OF RS. 25,300 CLAIMED BY THE ASSESSEE AGAINST RENTAL INCOME FOR WANT OF EVIDENCE. THE LD. CIT(A) ALSO CO NFIRMED THE SAME. 9. IT WAS STATED BEFORE US BY THE ID. AR THAT ASSES SEE HAS SUBMITTED THE CONFIRMATION OF ACCOUNTS FROM THE BOR ROWER REFLECTING THE PAYMENT OF INTEREST AND LD. AR ALSO REFERRED TO THE SAME CONFIRMATION APPENDED IN THE PAPER BOOK. THE LD. DE PARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF AUTHORITIES BELOW. WE FIND ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 11 - FROM THE CONFIRMATION OF ACCOUNTS FILED BY THE LD. AR THAT PAYMENT OF INTEREST HAS BEEN REFLECTED BY THE CONFIRMING PARTY . THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) IN THIS REGARD ALSO A ND ALLOW THIS GROUND OF THE ASSESSEE. 10. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSE E IS ALLOWED.' (III) THE APPELLANT'S CASE IS FURTHER FOUND COVERED BY THE ORDER OF HON'BLE ITAT, MUMBAI 'A BENCH IN THE CASE OF MRS. KRISHNADEVI KEJRIWAL V/S. ITO IN ITA NO.93/MUM/2009 & 2961/MUM/ 2008 DTD 25- 06-2010. THE OPERATIVE PARA OF THE SAID ORDER IS RE PRODUCED BELOW : '13. AS DISCUSSED FOR THE EARLIER ASSESSMENT YEAR A BOVE, THE A.O. HAS ORIGINALLY COMPLETED THE ASSESSMENT IN A.Y. 2003-04 AND REOPENED THE ASSESSMENT IN A.Y. 2002-03. HOWEVER, THE CAPITA L GAIN IN THIS YEAR WAS ONLY RS.3,81,324/- ON THE SALE OF 5,000 SH ARES OF M/S. BOLTON PROPERTIES LTD. FOR THE REASONS DISCUSSED AB OVE IN THE OTHER APPEAL THE A.O. IS DIRECTED TO TREAT THE CAPITAL GA IN AS GENUINE AND ALLOW THE DEDUCTION UNDER SECTION 54F. ONE OF THE C ONTENTIONS: FOR DISALLOWING THE DEDUCTION UNDER SECTION 54F WAS THA T THE ASSESSEE HAS CLAIMED SIMILAR INVESTMENT IN EARLIER YEAR ON T HE SAME PROPERTY. THERE WAS NO RESTRICTION THAT THE ASSESSEE CANNOT C LAIM INVESTMENT IN HOUSE PROPERTY OVER A PERIOD OF 2 YEARS. THIS ISSUE WAS DISCUSSED ELABORATELY BY THE ITAT 'C' BENCH, MUMBAI IN THE CA SE OF SMT. ANAGHA AJIT PATNEKAR VS. ITO 9 SOT 685 WHEREIN IT W AS HELD AS UNDER: - 'THERE IS NO BAR IN SECTION 54F FOR CLAIMING DEDUCT ION SECOND TIME OR THIRD TIME FOR THE SAME PROPERTY IF COST OF THE PROPERTY IS WITHIN THE CAPITAL GAIN ARISING TO THE ASSESSEE. IN THE IN STANT CASE, TOTAL CAPITAL GAIN ARISEN TO THE ASSESSEE IN ALL THE THRE E YEARS 1995-96 TO 1997-98 WAS LESS THAN THE COST OF FLAT. FURTHER, FR OM THE LANGUAGE OF SECTION 54F IT IS CLEAR THAT THE LEGISLATURE HAS PR OVIDED LEVERAGE TO THE ASSESSEE FOR CLAIMING DEDUCTION UNDER SECTION 5 4F IN THE SENSE THAT THE ASSESSEE CAN BUY THE PROPERTY FIRST AND CL AIM DEDUCTION LATER ON, I.E., WITHIN ONE YEAR OR CAN HAVE CAPITAL GAIN FIRST AND CAN CLAIM DEDUCTION WITHIN TWO YEARS BY PURCHASING THE RESIDE NTIAL FLAT. IN ALL THE ASSESSMENT YEARS, THESE CONDITIONS WERE SATISFI ED. THEREFORE, IN RESPECT OF RESIDENTIAL PROPERTY TILL COST OF PURCHA SE OF PROPERTY IS EXHAUSTED BY THE CLAIM OF THE CAPITAL GAIN BUT REMA INING IN THE TIME- FRAME STIPULATED IN SECTION 54F, DEDUCTION; UNDER S ECTION CANNOT BE DENIED. IF THE ASSESSEE FALLS OUT OF THE TIME-LIMIT IN SECTION 54F THEN PROBABLY DEPARTMENT CAN HAVE A CASE. THE COMMISSION ER (APPEALS) DISMISSED THE APPEAL OF! THE ASSESSEE BY INTERPRETI NG SUB-SECTION (4) BY HOLDING THAT THE ASSESSEE HAD NOT APPROPRIATED T HE SALE CONSIDERATION TOWARDS PURCHASE OF FLAT, BUT THE COM MISSIONER (APPEALS) HAD IGNORED THE MAIN PROVISIONS OF SECTIO N 54F. SUB- SECTION (4) HAS BEEN INSERTED WITH A VIEW FACILITAT E THE ASSESSEE TO CLAIM THE CAPITAL GAIN EXEMPTION WHEN THE ASSESSEE OPTS FOR PURCHASE OF FLAT AFTER ARISING OF THE CAPITAL GAIN AND DEPOS IT THE SALE ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 12 - CONSIDERATION IN THE BANK ACCOUNT TILL SUCH APPROPR IATION. THE ASSESSEE CANNOT BE MRS. KRISHNADEVI KEJRIWAL EXPECT ED TO APPROPRIATE THE SALE CONSIDERATION IN RESPECT OF TH E ALREADY PURCHASED FLAT. IF SUCH INTERPRETATION OF THE COMMI SSIONER (APPEALS) WAS ACCEPTED, IT WOULD FRUSTRATE THE OBJECT OF THE PROVISIONS OF SECTION 54F AND LEAD TO ABSURDITY. THEREFORE, THE O RDER OF COMMISSIONER (APPEALS) WAS SET ASIDE AND THE ASSESS EE WAS ENTITLED TO DEDUCTION UNDER SECTION 54F IN THE ASSESSMENT YE AR.' 14. ACCORDINGLY THE ASSESSEE IS ENTITLED TO CLAIM D EDUCTION UNDER SECTION 54F ON THE PROPERTY PURCHASED IN A.Y. 2002- 03 SINCE THE LONG TERM CAPITAL HAS ARISEN WITHIN ONE YEAR FROM THE PU RCHASE OF THE ABOVE PROPERTY. THE A.O. IS DIRECTED TO ALLOW DEDUC TION UNDER SECTION 54F AS CLAIMED.' AS THE FACTS OF THE APPELLANT CASE ARE IDENTICAL TO THE FACTS OF THE CASES DECIDED BY THE HON'BLE ITAT, MUMBAI IN ABOVE MENTIONED TWO CASES, THE APPELLANTS CASE IS FOUND SQUARELY COVER ED BY THE ABOVE MENTIONED TWO CASE LAWS. THEREFORE, THE ADDITIONS M ADE BY THE AO ARE NOT FOUND JUSTIFIED, HENCE ADDITIONS ARE DELETED . THIS GROUND OF APPEAL IS ALLOWED . 6. AGGRIEVED, THE REVENUE PREFERRED THE APPEAL BEFO RE THE TRIBUNAL. 7. THE LEARNED DR FOR THE REVENUE RELIED UPON THE O RDER OF THE AO AND SUBMITTED IN FURTHERANCE THAT SECTION 54F IS A PROVISION MEANT FOR EXEMPTION/DEDUCTION FROM THE TAXABLE INCOME OF THE ASSESSEE AND THEREFORE, LESSENS THE BURDEN ON THE ASSESSEE AT TH E COST OF OTHER TAX PAYERS. THIS BEING SO, THE PROVISION OF SECTION 54 F OF THE ACT REQUIRES TO RECEIVE STRICT INTERPRETATION AND THE B URDEN OF SHOWING AVAILABILITY OF DEDUCTION SHIFTS SQUARELY ON THE AS SESSE. THE ASSESSEE IS THUS REQUIRED TO SHOW THAT HIS CASE FOR DEDUCTIO N COMES WITHIN THE PARAMETERS LAID DOWN IN THE AFORESAID PROVISION. F OR THIS PROPOSITION, THE LEARNED DR REFERRED TO RECENT JUDGMENT OF THE C ONSTITUTIONAL BENCH IN DILIPKUMAR AND COMPANY (2018) 9 SCC 1. THE LEAR NED DR POINTED OUT THAT MULTIPLE DEDUCTION FOR THE PURCHASE OF SAM E ASSET IS NOT PERMISSIBLE IN VIEW OF THE EXPRESS LANGUAGE OF SECT ION 54F OF THE ACT ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 13 - AS THE CONCEPT OF LIBERAL CONSTRUCTION OF BENEFICIA L PROVISIONS HAS BEEN DONE AWAY WITH. THE LEARNED DR THUS SOUGHT REVERSA L OF THE ORDER OF THE CIT(A). 8. THE LEARNED AR, ON THE OTHER HAND, SUBMITTED THA T THE ISSUE INVOLVED IS NO LONGER RES INTEGRA AND HAS BEEN JUDICIALLY INTERPRETED IN FAVOUR OF THE ASSESSEE BY SEVERAL CO-ORDINATE BENCH ES AS REFERRED TO AND RELIED UPON BY THE CIT(A). 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE ESSENTIAL CONTROVERSY IN THE INSTANT CASE IS WHETHE R DEDUCTION UNDER S.54F OF THE ACT IS AVAILABLE IN RESPECT OF CAPITAL GAINS ARISING FROM SALE OF MORE THAN ONE LONG TERM CAPITAL ASSETS, NOT BEING RESIDENTIAL HOUSE (ORIGINAL ASSET) AGAINST THE CONSTRUCTION OR PURCHASE OF ONE RESIDENTIAL HOUSE (NEW ASSET). THE INCIDENTAL ISSU E THAT ARISES IS WHETHER CAPITAL GAINS OF MULTIPLE YEARS CAN BE CLAI MED AGAINST PURCHASE/CONSTRUCTION OF SAME NEW RESIDENTIAL HOUSE I.E. NEW ASSET SUBJECT TO FULFILLMENT OF OTHER CONDITIONS. THE RE VENUE SEEKS TO DENY THE DEDUCTION ON TWO GROUNDS (I) THE EXPRESSION USE D IN SECTION 54F(1) IS TRANSFER OF ANY LONG TERM ASSET, WHICH CONNOTE S SINGULARITY AND (II) THE ACTION OF PURCHASE CAN HAPPEN ONLY ONCE. IT WILL BE APT TO REFER TO SECTION 54F(1) OF THE ACT WITH WHICH WE ARE PRES ENTLY CONCERNED: 54F. (1) [SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY], THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE (HEREA FTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSE E HAS, WITHIN A PERIOD OF ONE YEAR BEFORE OR [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERI OD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE (H EREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 14 - (A) IF THE COST OF THE NEW ASSET IS NOT LESS THAN T HE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SEC TION 45; (B) IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO THE WHOLE OF THE CAPIT AL GAIN THE SAME PROPORTION AS THE COST OF THE NEW ASSET BE ARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER S ECTION 45 : [PROVIDED THAT ************************************ ********* [UNDERLINE IS OURS] 10. WE FIND AT THE OUTSET THAT THE IDENTICAL ISSUE OF ALLOWABILITY OF SECTION 54F OF THE ACT ON SALE OF MULTIPLE ASSETS C AME UP FOR CONSIDERATION BEFORE THE CO-ORDINATE BENCH IN THE P AST. USEFUL REFERENCE CAN BE MADE TO ANAGHA AJIT PANEKAR (SUPRA ); KRISHNADEVI KEJRIWAL (SUPRA) AND ACIT VS. MAHINDRAKUMAR JAIN (2 017) 84 TAXMANN.COM 141 (DEL) AS QUOTED IN THE APPELLATE OR DER OF CIT(A). IN THE LIGHT OF THE AFORESAID DECISIONS, THE ORDER OF THE CIT(A), IN OUR VIEW, CANNOT BE FAULTED. 11. HOWEVER, TO ADDRESS THE CONCERN OF REVENUE FOR STRICT CONSTRUCTION OF BENEFICIAL PROVISIONS IN THE LIGHT OF DILIP KUMAR & CO. (SUPRA), WE NOTICE THAT THE DEDUCTION UNDER S.54F O F THE ACT ESSENTIALLY DEPENDS UPON THE EXTENT OF UTILIZATION OF THE SALE PROCEEDS IN THE NEW ASSET. THE BENEFITS OF SECTION 54F OF T HE ACT ALSO STANDS DENIED WHERE THE ASSESSEE OWNS MORE THAN ONE RESIDE NTIAL HOUSE OTHER THAN NEW ASSET ON THE DATE OF TRANSFER OF THE ORIGI NAL ASSET. THE OBJECT OF SECTION 54F IS TO ENCOURAGE AN ASSESSEE TO CONVE RT ANY OF HIS LONG TERM ASSETS INTO A RESIDENTIAL HOUSE SUBJECT TO THE CONDITION THAT ASSESSEE DOES NOT OWN MORE THAN ONE RESIDENTIAL HOU SE OTHER THAN THE NEW RESIDENTIAL HOUSE ON THE DATE OF TRANSFER OF LO NG TERM ASSET. THE ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 15 - SECTION, THUS, IN ESSENCE, OFFERS SOME INCENTIVES T O A TAX PAYER TO CHANGE ITS UNPRODUCTIVE ASSETS INTO A RESIDENTIAL H OUSE. THE ACTION OF THE ASSESSEE IS THUS IN CONFORMITY WITH THE OBJECT AND PURPOSE OF SECTION 54F OF THE ACT. TO SAY THAT THE ASSESSEE I S ENTITLED FOR DEDUCTION IN RESPECT OF CAPITAL GAINS ARISING FROM SALE OF ONLY ONE LONG TERM CAPITAL ASSET AND CONVERSION THEREOF IN RESIDE NTIAL PROPERTY WOULD IN EFFECT SERIOUSLY LIMIT THE OBJECT AND PURPOSE OF SECTION 54F OF THE ACT. 12. TO DELINEATE FURTHER, AN INCIDENTAL SITUATION M AY ALSO CROP UP WHETHER CAPITAL GAINS DEDUCTION WITH REFERENCE TO S ECTION 54F OF THE ACT WOULD APPLY WITH RESPECT TO A SOLITARY TRANSACT ION AND NOT ON WHOLE OF SEVERAL DIFFERENT TRANSACTIONS OF CAPITAL ASSETS IN THE FORM OF EQUITY, MUTUAL FUND AND SO ON. IF THE INTERPRETATI ON OF ANY LONG TERM ASSET AS SUGGESTED BY REVENUE IS READ TO MEAN DEDU CTION IN RESPECT OF ONLY ONE TRANSACTION OF TRANSFER IS ENDORSED, IT WI LL SERIOUSLY CURTAIL THE APPLICATION OF SECTION 54F OF THE ACT. SUCH IN TERPRETATION WOULD LEAD TO ABSURD RESULTS AND REQUIRES TO BE SHUNNED. SIGNIFICANTLY, WE ALSO NOTICE THE USE OF BROADER EXPRESSION ANY LON G TERM ASSET IN DISTINCTION TO EXPRESSION A LONG TERM ASSET AS US ED IN SECTION 10(38) OF THE ACT. THUS, THE LEGISLATIVE INTENT WHEN GATH ERED FROM THE DISTINCT LANGUAGE USED, IT IS CLEAR THAT A NARROWER INTERPRETATION WOULD FAIL TO ACHIEVE MANIFEST PURPOSE OF THE DEDUCTION P ROVISION. WE THUS, PREFER TO AVOID A CONSTRUCTION WHICH WOULD REDUCE T HE LEGISLATION TO FUTILITY AND GRANT BROADER CONSTRUCTION TO BRING EF FECTIVE RESULT ON AVAILABILITY OF SUCH DEDUCTION. 13. AS A COROLLARY, THE DECISION OF THE CO-ORDINATE BENCH IN FAVOUR OF THE ASSESSEE IS, IN EFFECT, HARMONIOUS INTERPRETATI ON OF SECTION 54F OF THE ACT AND NOT NECESSARILY A LIBERAL INTERPRETATIO N OF THE DEDUCTION ITA NO.3179/AHD/16 [DCIT VS. SHRI PANKAJ C. PATEL (HUF)] A.Y. 2012-13 - 16 - PROVISION. WE ARE THUS OF THE VIEW THAT THE DECISI ON OF THE HONBLE SUPREME COURT IN DILIPKUMAR & CO. (SUPRA) DOES NOT HINDER THE CLAIM OF ASSESSEE. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 12/12/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 12/12/2 018