Shri Madan Singh Baghela, JODHPUR V. ITO, UDAIPUR

ITA 334/JODH/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1574 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: G R VERMA
• Keywords: Opportunity of being heard; Fair market value; Valuation report
• Section: 80C; 54F

Judgement Text

[1] IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NO.334/JODH/2010 ASSESSMENT YEAR:2006-07 SHRI MADAN SINGH BAGHELA, VS. INCOME TAX OFFICER, KHAKHRI TEHSIL, WARD-1(1), GOGUNDA. UDAIPUR. PAN:ABQPB2131C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G. R. VERMA, A.R. RESPONDENT BY : SHRI G. R. KOKANI, D. R. DATE OF HEARING : 03/12/2012 DATE OF PRONOUNCEMENT : 21/01/2013 ORDER PER N. K., SAINI: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 04/02/2010 OF CIT(A), UDAIPUR. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1.(A) THAT THE ID. AUTHORITIES BELOW HAVE GROSSLY ERRED IN ASSESSING AND CONFIRMING THE INCOME AT RS. 3,10,110 /- AS AGAINST THE DECLARED INCOME OF RS. 1,84,805/-. (B) THAT THE ID. AUTHORITIES BELOW HAVE NOT CO NSIDERED THE EXEMPTED INCOME CLAIMED U/S 10(37) OF IT ACT AND CONSIDERED THE LONG TERM CAPITAL GAIN OF RS. 21,60, 806/- WHICH IS BAD IN THE EYES OF LAW. [2] (C) THAT THE ASSESSEE DENIES ITS LIABILITIES AS R EGARDS THE ADDITION AND DISALLOWANCES. 2. THAT THE ID. AUTHORITIES BELOW HAVE GROSSLY ERRE D M DISALLOWING THE HOUSE BUILDING LOAN REPAYMENT AND DEDUCTION U/S 80C OF THE ACT IGNORING THE FACT THAT THE ASSESSEE HAS TAKEN LOAN FOR CONSTRUCTION OF HOUSE. 3. THAT THE APPELLANT CRAVES, LEAVE TO ADD, AMEND, ALTER ANY OF THE GROUNDS OF APPEAL ON OR BEFORE ITS FINAL HEARIN G BEFORE YOUR HONOUR. 2. FROM THE ABOVE GROUNDS IT IS GATHERED THAT THE G RIEVANCE OF THE ASSESSEE RELATES TO THE LONG TERM CAPITAL GAIN OF R S.21,60,806/-, WHICH WAS CLAIMED AS EXEMPTED INCOME OF THE ASSESSEE U/S 10( 37) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE, DURING THE YEAR UNDER CONSIDERATION, FILED THE RETURN OF INCOME ON 21/11/2006 DECLARING AN INCOME OFRS.1,84,805/-, WHICH WAS PROCESSED ON 29/1 2/2006. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THE AO NOTICED THAT SOME LAND OF THE ASSESSEE WAS ACQUIRED BY THE NHAI AND THE ASSESSEE HAD RECEIVED COMPENSATION OF RS.24,18,272/-. HE FURTHER OBSERVED THAT THE ASSESSEE CLAIMED THE ENTIRE RECE IPT AS EXEMPT U/S 10(37) OF THE ACT ON THE BASIS THAT THE LAND WAS AGRICULTURE LAND. THE ASSESSING OFFICER OBSERVED THAT THE CLAIM OF THE ASSESSEE WAS INCORRE CT BECAUSE THE ASSESSEE HAD NOT RECEIVED THE ENTIRE COMPENSATION FOR AGRICULTURE LA ND BUT THE COMPENSATION RECEIVED WAS AS UNDER:- [3] KHASARA NO. ACQUIRED AREA TYPE OF LAND COMPENSATION AMOUNT 1121 900 SQ. METER AGRICULTURE 9,164/- 1121 500 SQ. METER COMMERCIAL 16,94,700/- TOTAL COMPENSATION FOR LAND 17,03,864/- COMPENSATION FOR CONSTRUCTION 4,94,565/- TOTAL COMPENSATION 24,18,272/- 3.1 THE AO POINTED OUT THAT AS PER THE DETAILS FILE D BY THE ASSESSEE TO ACQUISITION AUTHORITY THERE WAS BOUNDARY WALL, TOILET, PLATFORM , SEPTIC TANK AND TUBE WELL, WHICH WAS CONSTRUCTED BEFORE 13 YEARS BACK AS PER VALUATI ON REPORT SUBMITTED BY THE ASSESSEE TO ACQUISITION AUTHORITY. THEREFORE, THE ASSESSEE WAS INFORMED THAT THE CLAIM U/S 10(37) OF THE ACT, MADE BY HIM, WAS WRONG AND WHY NOT THE SAME SHOULD BE DISALLOWED. THEN THE ASSESSEE CHANGED HIS STAND AND STATED THAT HE HAD CONSTRUCTED THE HOUSE, AS SUCH HE SHOULD BE ALLOWED DEDUCTION U/S 54F OF THE ACT. THE ASSESSEE FURNISHED A VALUATION REPORT OF THE RE GISTERED VALUER DATED 28/08/2008 AND CLAIMED THAT HE HAD CONSTRUCTED TWO STOREY BUIL DING AND INVESTED RS.18.27 LAKHS IN THE NEW PROPERTY. THE AO VISITED THE SAID PROPE RTY AND WAS OF THE VIEW THAT THE PROPERTY WAS NOT RESIDENTIAL BUT BEING USED FOR COM MERCIAL PURPOSES. HE ALSO OBSERVED THAT THE PROPERTY USED WAS A RESORT AND G UEST HOUSE AND SOME PHOTOGRAPHS OF THE SAID PROPERTY WERE TAKEN, WHICH SHOWED THAT THE PROPERTY WAS NOT RESIDENTIAL PROPERTY AND BEING USED FOR HOTEL P URPOSES AND THAT THE ROADSIDE PICTURE SHOWED THE NAME OF THE HOTEL AS BADAL GUES T HOUSE AND RESORTS. THE AO [4] STATED THAT FROM THE LOCAL ENQUIRY MADE BY HIM, IT WAS GATHERED THAT THE GROUND FLOOR OF THE BUILDING WAS OLD ONE AND IT WAS RENOVATED AN D FIRST FLOOR WAS NEWLY CONSTRUCTED AND FROM THE PICTURES IT WAS CLEAR THA T THE WINDOWS AND VENTILATION OF GROUND FLOOR WERE OF OLD FASHION AND WINDOWS AND VE NTILATION OF FIRST FLOOR WERE OF NEW FASHION AND SINCE THE BUILDING WAS OLD ONE AS SUCH DEDUCTION U/S 54F OF THE ACT WAS NOT ALLOWABLE. THE ASSESSEE SUBMITTED THAT IT WAS C ORRECT THAT THERE WAS AN OLD BUILDING ON THE PLOT BUT HE DEMOLISHED THE ENTIRE B UILDING AND CONSTRUCTED NEW BUILDING, AS SUCH THE CLAIM FOR DEDUCTION U/S 54F O F THE ACT WAS CORRECT. 3.2 THE ASSESSING OFFICER, AFTER CONSIDERING THE SU BMISSIONS OF THE ASSESSEE, OBSERVED THAT THERE WAS VARIATION IN THE STYLE OF THE WINDO WS AND VENTILATION ON THE GROUND FLOOR AND ON THE FIRST FLOOR OF THE BUILDING. ACCORDING TO HIM, IF BOTH THE FLOORS HAD BEEN CONSTRUCTED SIMULTANEOUSLY, THE ELEVATION OF BOTH T HE FLOORS WOULD HAVE BEEN THE SAME. THE ASSESSING OFFICER ALSO CONDUCTED THE ENQ UIRIES WITH ASSISTANT ENGINEER AJMER VIDUTH VITARAN LTD. GOGUNDA, WHO INFORMED THA T THE ELECTRICITY CONNECTION WAS MADE ON THE BUILDING ON 30/06/1997 AND THE ELECTRIC ITY METER WAS NEVER REMOVED FROM THE PLACE AFTER CONNECTION AND THAT THE ELECTRICITY BILLS FROM THE JANUARY, 2006 ONWARDS ALSO SHOWED THAT THE ELECTRICITY WAS REGULARLY CONS UMED. HE, THEREFORE, DID NOT ACCEPT THIS CLAIM OF THE ASSESSEE THAT THE BUILDING WAS D EMOLISHED AND NEW ONE WAS CONSTRUCTED BY OBSERVING THAT IF THE BUILDING WOULD HAVE BEEN DEMOLISHED THE CONSUMPTION OF ELECTRICITY WOULD HAVE BEEN REDUCED FOR SOME TIME, WHICH WAS NOT APPARENT FROM THE CONSUMPTION CHART OF ELECTRICITY PROVIDED BY ELECTRICITY DEPARTMENT. THE ASSESSING OFFICER ALSO POINTED OUT THAT THE ASS ESSEE HAD SUBMITTED A COPY OF [5] HOUSING LOAN ACCOUNT, WHICH REVEALED THAT THE LOAN OF RS.1,20,000/- WAS TAKEN ON 11/01/2003 FROM SBBJ, GOGUNDA FOR RENOVATION OF THE RESIDENCE FOR WHICH THE ASSESSEE WAS CLAIMING THAT THE BUILDING WAS DEMOLIS HED, BUT IT WAS NOT ACCEPTABLE THAT THE PROPERTY IN WHICH HE HAD INVESTED RS.1,20, 000/- ONLY BEFORE TWO YEARS WOULD BE DEMOLISHED WITHOUT ANY REASON. THEREFORE, THE DEDUCTION U/S 54F OF THE ACT WAS NOT ALLOWABLE IN THE CASE OF THE ASSESSEE FOR RENOV ATION/ RECONSTRUCTION/ EXTENSION OF THE BUILDING. RELIANCE WAS PLACED ON THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME-TAX, TAMIL NADU-I VS. PRADEEP KUMAR REPORTED IN [2006] 153 TAXMAN 138 ( MAD.) THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CLAIM OF THE ASSES SEE IN RESPECT OF EXEMPTION U/S 10(37) WAS NOT CORRECT EXCEPT FOR THE COMPENSATION AMOUNT OF RS.9,164/- WHICH WAS RECEIVED FOR AGRICULTURE LAND MEASURING 900 SQ. MET ERS AND THAT THE CLAIM U/S 54F WAS ALSO NOT ALLOWABLE. THE ASSESSING OFFICER POIN TED OUT THAT THE ASSESSEE HAD NOT GIVEN ANY DETAILS OF INVESTMENT IN THE CON STRUCTION OF BOUNDARY WALL, TOILET, PLATFORM, SEPTIC TANK AND TUBE WELL, HOWEVER, THE CONSTRUCTION WAS MADE BEFORE 13 YEARS. THE ASSESSING OFFICER ESTIMATED THE COST OF CONSTRUCTION AT RS.1,00,000/- AND FURTHER OBSERVED THAT THE COST OF 500 SQ. METES LAN D WAS ALSO NOT GIVEN BUT IT WAS THE PART OF AGRICULTURE LAND PREVIOUSLY. HE, THERE FORE, CONSIDERED THAT DLC RATE OF AGRICULTURE LAND FOR THE PURPOSE OF COST OF LAND AN D WORKED OUT THE LONG TERM CAPITAL GAIN AT RS.21,60,806/-. THE ASSESSING OFFI CER ALSO DID NOT ALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80C OF THE ACT BY O BSERVING THAT THE DEDUCTION WAS ALLOWABLE ONLY FOR THE REPAYMENT OF LOAN WHEN THE L OAN HAS BEEN TAKEN FOR PURCHASES [6] OR CONSTRUCTION OF A RESIDENTIAL HOUSE. AS THE LOA N WAS TAKEN FOR RENOVATION, IT WAS NOT ALLOWABLE U/S 80C OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO LEARNED CIT(A) AND SUBMITTED THAT THE A.O. WAS NOT JUSTIFIED IN REJECTING THE CLAIM O F THE ASSESSEE FOR DEDUCTION UNDER SECTION 54F OF THE ACT BECAUSE THE FINDING OF THE A.O GIVEN IN THE ASSESSMENT ORDER WAS TOTALLY CONTRADICTORY TO THE F ACTS OF THE ASSESSEES CASE. IT WAS STATED THAT THERE WERE TWO BUILDINGS, ONE IN T HE NAME OF SHRI KANRAJSINGH BAGHHELA (PAN AGQPB 8587 P) AND THE SECOND WAS OWNE D BY THE ASSESSEE. IT WAS FURTHER STATED THAT ONLY THE WALL OF THE ASSESS EE'S RESIDENTIAL HOUSE WAS USED FOR ADVERTISEMENT AND THE ASSESSEE WAS RESIDING IN THE HOUSE FROM 2005-06. IT WAS FURTHER STATED THAT AT THE TIME OF VISIT OF THE A.O ., THE ASSESSEE HAD GIVEN SOME ROOMS ON RENT TO M/S BADAL RESORTS. IT WAS CONTEND ED THAT THE CAPITAL GAIN REALIZATION WAS REINVESTED IN THE CONSTRUCTION OF T HE HOUSE AND THE ASSESSING OFFICER HAD ACCEPTED THE SAID FACT. IT WAS FURTHER CONTEND ED THAT THE ASSESSEE HAD FILED SUFFICIENT EVIDENCES IN THE FORM OF VALUATION REPOR T FROM THE REGISTERED VALUER, AFFIDAVIT OF THE ASSESSEE ETC. IN SUPPORT OF HIS CL AIM THAT THE HOUSE CONSTRUCTED WAS A RESIDENTIAL HOUSE. IT WAS FURTHER STATED THAT THE ASSESSING OFFICER HAD TAKEN ONLY RS.1,00,000/- FOR THE CONSTRUCTED PART ACQUIRED BY THE NHAI, WHEREAS THE ASSESSEE HAD DECLARED RS.2,25,000/- AND THE CHARTERED ENGINE ER HAD GIVEN VALUATION OF RS.4,94,565/- AS ON 31/10/2005. THEREFORE, THE VAL UE DECLARED BY THE ASSESSEE MAY BE ACCEPTED. AS REGARDS TO THE CLAIM FOR DEDUCTION U/S 80C OF THE ACT, THE ASSESSEE SUBMITTED THAT A LOAN OF RS.1,20,000/- WAS TAKEN ON 11/01/2003 FROM [7] SBBJ, GOGUNDA FOR RENOVATION OF THE RESIDENCE AND A SUM OF RS.53,853/- WAS PAID DURING THE YEAR, WHICH WAS CLAIMED AS A DEDUCTION U /S80C OF THE ACT AND THE REPAYMENT OF LOAN AMOUNTING TO RS.63,275/- WAS MADE BY THE ASSESSEE, WHICH WAS ALLOWABLE AS A DEDUCTION. IN SUPPORT OF THE ABOVE CONTENTION, THE ASSESSEE FURNISHED A PHOTOCOPY OF THE CERTIFICATE FROM THE SAID BANK. 4.1 THE LD CIT(A), AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, OBSERVED THAT THE A.O. HAD BROUGHT SUFFICIENT EVIDENCE ON R ECORD TO SHOW THAT EVEN THOUGH THE ASSESSEE AND HIS FAMILY WAS RESIDING IN SOME P ORTION OF THE BUILDING, BUT IT WAS A FACT THAT FEW ROOMS WERE RENTED OUT FOR THE P URPOSE OF LODGING OF THE CUSTOMERS OF M/S BADAL RESORTS, WHICH CLEARLY INDIC ATED THAT THE BUILDING WAS NOT USED FOR RESIDENCE BUT FOR HOTEL BUSINESS. HE FURT HER OBSERVED THAT AS PER THE PHOTOGRAPHS PRINTED IN THE ASSESSMENT ORDER AND FIL ED BY THE ASSESSEE DURING THE COURSE OF APPEAL PROCEEDINGS, IT WAS SEEN THAT A BO ARD 'BADAL RESORTS & BADAL RESORT GUEST HOUSE' HAD BEEN AFFIXED IN THE BUILDIN G. THEREFORE, CONSIDERING THE PLACE OF THE BOARD WHERE IT HAD BEEN FIXED, IT COUL D NOT BE SAID THAT IT WAS AN ADVERTISEMENT BUT IT SUGGESTED THAT IT WAS THE BADA L RESORT & GUEST HOUSE. THEREFORE, THE CLAIM OF THE ASSESSEE THAT HE HAD IN VESTED THE ENTIRE CAPITAL GAIN RECEIVED BY HIM AS COMPENSATION FROM NHAI IN CONSTR UCTION OF NEW RESIDENTIAL HOUSE COULD NOT BE ACCEPTED. THE LEARNED CIT(A) FU RTHER OBSERVED THAT THE FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE HAD NOT CONSTRUCTED ANY NEW RESIDENTIAL HOUSE, BUT IT WAS AN ALTERATION AND ADD ITION TO THE EXISTING BUILDING WAS ALSO SUPPORTED BY AN ENQUIRY REPORT OBTAINED BY THE ASSESSING OFFICER FROM THE [8] ASSTT. ENGINEER AJMER VIDUTH VITARAN LTD. GOGUNDA. THE LEARNED CIT(A) WAS OF THE VIEW THAT AS PER THE PROVISIONS OF ACT, THE INV ESTMENT IN THE OLD BUILDING WAS NOT ENTITLED FOR DEDUCTION UNDER SECTION 54F OF THE ACT. THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE. THE LEARNED CIT(A) OBSERVED THAT THE ASSESSEE CLAIMED THE ENTIRE CAPIT AL GAIN ARISEN ON ACQUISITION OF LAND BY THE NHAI AS EXEMPT BY CLAIMING THE ENTIRE L AND AS AGRICULTURAL LAND AND WHEN HE NOTICED THAT HIS CLAIM WAS WRONG, THE ASSE SSEE CHANGED HIS STAND AND CLAIMED THE ENTIRE CAPITAL GAIN AS DEDUCTION UNDER SECTION 54F OF THE ACT. THE LEARNED CIT(A) WAS OF THE VIEW THAT THE ASSESSING O FFICER WAS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 54F OF THE ACT AND TAXING THE CAPITAL GAIN IN HIS HANDS. AS REGARDS TO THE DEDUCTION U/S 80C OF THE ACT, THE LD CIT(A) OBSERVED THAT THE SUBMISSIONS OF THE ASSESSEE AND THE CONTEN TS IN CERTIFICATE OF THE BANK WERE CONTRADICTORY TO EACH OTHER BECAUSE THE BANK HAD ME NTIONED THAT THE LOAN WAS TAKEN BY THE ASSESSEE IN THE YEAR 2005-06 WHEREAS THE ASS ESSING OFFICER MENTIONED THAT THE LOAN WAS TAKEN ON 11/01/2003 AND DEDUCTION CLAI MED WAS RS.53,853/- WHILE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE DE DUCTION WAS CLAIMED AT RS.63,275/-. ACCORDINGLY, THE LEARNED CIT(A) CONFI RMED THE ACTION OF THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT TH E LAND OF THE ASSESSEE WAS ACQUIRED BY THE GOVERNMENT AND COMPENSATION OF RS.2 4,18,272/- HAD BEEN RECEIVED BY THE ASSESSEE, WHICH WAS CLAIMED AS EXEMPTED U/S 10(37) OF THE ACT OR SUBJECT TO [9] DEDUCTION U/S 54F OF THE ACT. IT WAS FURTHER STATED THAT THE ASSESSEE FURNISHED CERTIFICATE OF GRAM PANCHAYAT DATED 03/08/.2008 AS REGARDS THE CONFIRMATION OF THE FACT THAT THE HOUSE WAS PRESENT AND THE SAME WAS DE MOLISHED AND NEW CONSTRUCTION HAD BEEN MADE. IT WAS FURTHER STATED THAT THE VALUATION REPORT WAS A PIECE OF EVIDENCE AND COULD NOT BE IGNORED FOR COMP UTATION OF COST AS WELL AS CAPITAL GAIN. IT WAS POINTED OUT THAT THE GRAM PAN CHAYAT CERTIFIED THAT THE ASSESSEE WAS RESIDING IN THE NEWLY CONSTRUCTED HOUSE AND RU NNING OF RESORTS OR HOTEL OR GUEST HOUSE WAS NOT STATED BY THE GRAM PANCHAYAT IN THE SAID CERTIFICATE. IT WAS CONTENDED THAT THE ASSESSEE FURNISHED THE VALUATION REPORT FROM PRIYA ASSOCIATES DATED 19/11/2005 AS REGARDS THE FAIR MARKET VALUE F OR OBTAINING THE COMPENSATION AND THE FAIR MARKET VALUE WAS SHOWN AT RS.4,94,565/ -. IT WAS FURTHER CONTENDED THAT ONE VALUATION REPORT HAD BEEN FURNISHED AS REGARDS THE COST OF CONSTRUCTION OF THE PROPERTY FROM B. L. MANTRI DATED 28/08/2008 WHO DETERMINED THE COST OF CONSTRUCTION AT RS.18.27 LACS. THEREFORE IT WAS CL EAR AND EVIDENT FROM THE CERTIFICATE OF THE GRAM PANCHAYAT AND VALUATION REPORTS THAT TH E OLD HOUSE WAS THERE AND THE SAME WAS DEMOLISHED AND NEW HOUSE WAS BUILT. IT WA S SUBMITTED THAT THE ASSESSING OFFICER HAD NOT MADE ANY ENQUIRY AS REGARDS THE FAC T THAT ANY CUSTOMER WAS STAYING THERE OR NOT AND HAD ALSO NOT MADE ANY ENQUIRY FROM THE LOCAL INHABITANTS OF THE SMALL VILLAGE AS REGARDS THE FACT WEATHER ANY ACTIV ITY OF RUNNING OF RESORTS WAS THERE OR NOT. THEREFORE, ONLY ON THE BASIS OF PHOTOGRAPH WITHOUT ANY EVIDENCE OF DOING COMMERCIAL ACTIVITIES WAS ABSOLUTELY CONTRARY TO TH E PRINCIPLES OF THE SETTLED LAW. IT WAS CONTENDED THAT THE STORY OF RUNNING COMMERCIAL ACTIVITIES OR DOING ANY COMMERCIAL ACTIVITIES WAS VAGUE, NOT SUPPORTED BY ANY EVIDENCE EXCEPT THE ALLEGED PHOTOGRAPH, [10] THEREFORE, THE EXEMPTION OF CAPITAL GAIN WAS ALLOWA BLE. IT WAS ALSO STATED THAT AS THE ASSESSEE REPAID THE HOUSING LOAN, THEREFORE, DEDUCT ION U/S 80C WAS ALLOWABLE. 6. IN HIS RIVAL SUBMISSIONS, THE LEARNED D. R. SUP PORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN T HE PRESENT CASE, THE ONLY DISPUTE RELATES TO THE EXEMPTION ON ACCOUNT OF CAPITAL GAIN FROM THE BUILDING, WHICH WAS CLAIMED BY THE ASSESSEE AS RESIDENTIAL HOUSE, CONST RUCTED OUT OF THE COMPENSATION RECEIVED FROM NHAI. ON THE CONTRARY, THE CASE OF THE AO WAS THAT NO NE W RESIDENTIAL HOUSE WAS CONSTRUCTED DURING THE YEAR U NDER CONSIDERATION AND THE PROPERTY CLAIMED TO BE RESIDENTIAL PROPERTY WAS IN FACT A COMMERCIAL PROPERTY USED AS A HOTEL AND RESORT. THE ASSESSEE, IN SUPPORT OF ITS CLAIM, FURNISHED A CERTIFICATE ISSUED BY THE GRAM PANDHAYA T, GOGUNDA STATING THEREIN THAT THE ASSESSEE CONSTRUCTED A RESIDENTIAL HOUSE AFTER DEMOLISHING THE OLD HOUSE HAVING TWO ROOMS AND ONE KITCHEN. CO PY OF THE SAID CERTIFICATE IS PLACED AT PAGE NO. 4 OF THE ASSESSEES COMPILATI ON. HOWEVER, NEITHER THE AO NOR THE LEARNED CIT(A) DISCUSSED ABOUT THE SAID CERTIFICATE IN THEIR RESPECTIVE ORDERS, SO IT APPEARS THAT THE SAID CERT IFICATE WAS NOT PLACED BEFORE THE AUTHORITIES BELOW OR IF IT WAS FURNISHED THEY H AVE NOT DISCUSSED ABOUT IT. SINCE THERE IS CONTRADICTION IN THE STAND OF THE AS SESSEE AND THE DEPARTMENT [11] AND FACTS ARE NOT CLEAR PARTICULARLY THE EVIDENCE F URNISHED BY THE ASSESSEE IN THE FORM OF A CERTIFICATE FROM GRAM PANCHAYAT,GOGUN DA ABOUT WHICH NOTHING WAS DISCUSSED IN THE ASSESSMENT ORDER OF THE AO OR THE APPELLATE ORDER PASSED BY LEARNED CIT(A). MOREOVER, THE ASSESSEE AL SO FIRSTLY CLAIMED THAT CAPITAL GAIN WAS EXEMPT U/S 10(37) OF THE ACT AND L ATER ON CHANGED THE STAND AND CLAIMED DEDUCTION U/S 54F OF THE ACT. HOWEVER, IT IS NOT CLEAR AS TO WHETHER THE ASSESSEE CONSTRUCTED NEW HOUSE OR IT WA S ONLY RENOVATION OF AN OLD HOUSE FOR WHICH THE ASSESSEE CLAIMED THE DEDUCT ION U/S 54F. IN THE ABSENCE OF THE RELEVANT MATERIAL ON RECORD, WE DEEM IT APPROPRIATE TO REMAND THIS ISSUE BACK TO THE FILE OF THE AO TO BE ADJUDIC ATED AFRESH AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 21/01/2013) SD/. SD/. ( HARI OM MARATHA ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:21/01/2013 *CL SINGH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. D.R. ASSISTANT REGISTRAR