Anil Murlidhar Deshmukh, Nashik V. Income-tax Officer,

ITA 361/PUN/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9231 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 07-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR CHAWARE
• Keywords: Capital asset; Salary income; Cost of acquisition
• Section: 143(3); 54F; 148; 54; 11; 139

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.361/PUN/2016 / ASSESSMENT YEAR : 2010-11 SHRI ANIL MURLIDHAR DESHMUKH, PLOT NO.80A, BEHIND ESSAR PETROL PUMP, MAHATMA NAGAR, NASHIK 422007. PAN ADWPD4520B. . / APPELLANT V/S INCOME TAX OFFICER, WARD 3(2), NASHIK. . / RESPONDENT / APPELLANT BY : SHRI SANKET JOSHI. / RESPONDENT BY : SHRI ANIL KUMAR CHAWARE. / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF T HE ORDER OF COMMISSIONER OF INCOME TAX (A)-1, NASHIK, DT.01.12.2 015 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- / DATE OF HEARING : 25.05.2017 / DATE OF PRONOUNCEMENT: 30.06.2017 2 2.1 ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVING INCOME FROM SALARY. ASSESSEE ELECTRONICALLY FILED HIS RETURN OF INCOME F OR A.Y. 2010-11 ON 26.11.2010 DECLARING TOTAL INCOME OF RS.4,13,720 /- WHICH WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. SUBSEQ UENTLY, THE CASE WAS RE-OPENED BY ISSUING NOTICE U/S 148 OF TH E ACT AND NOTICE WAS SERVED ON THE ASSESSEE ON 20.02.2013. THERE AFTER THE ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DT.26.03.2014 AND THE TOTAL INCOME WAS DETERMINED AT RS.34,84,770/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CA RRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE ORDER DT.01.12.2015 GRANT ED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FO LLOWING GROUNDS : 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS. 25,22,549/- MADE BY THE A.O BY DISALLOWING EXEM PTION U/S 54F CLAIMED IN RESPECT OF LONG TERM CAPITAL GAINS ARISI NG ON SALE OF PLOT. 2. THE LEARNED CIT(A) ERRED IN DENYING THE BENEFIT U/S 54F ON THE GROUND THAT THE PLOT PURCHASED BY THE ASSESSEE FOR CONSTRUCTION OF RESIDENTIAL HOUSE OUT OF SALE PROCEEDS OF THE ORIGI NAL ASSET WAS SOLD WITHIN A PERIOD OF THREE YEARS WITHOUT UNDERTAKING ANY CONSTRUCTION THEREON. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE ASSESSEE HAD TO SELL THE SAID PLOT DUE TO MITIGATING FACTORS ON ACCOUNT OF IMPENDING LITIGATION AND THE ENTIRE CONSIDERATION O N SALE OF ORIGINAL ASSET WAS INVESTED IN CONSTRUCTION OF RESIDENTIAL H OUSE ON ANOTHER PLOT WITHIN THREE YEARS FROM TRANSFER OF ORIGINAL A SSET AND THEREFORE, THE EXEMPTION U/S 54F SHOULD HAVE BEEN ALLOWED TO T HE ASSESSEE. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT SEC TION 54F IS A BENEFICIAL PROVISION GRANTING INCENTIVE FOR PROMOTI NG HOUSING SECTOR AND HENCE, THE SAME SHOULD HAVE BEEN INTERPRETED LI BERALLY SO AS TO PROMOTE THE OBJECT FOR WHICH IT WAS INTRODUCED AND THEREFORE, THE SAID EXEMPTION SHOULD NOT HAVE BEEN DENIED WHEN THE ENTIRE CONSIDERATION ON SALE OF ORIGINAL ASSET WAS INVESTE D BY THE ASSESSEE IN CONSTRUCTION OF RESIDENTIAL HOUSE ON ANOTHER PLO T WITHIN THE STIPULATED TIME LIMIT OF THREE YEARS. 3 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE SOLE CONTR OVERSY IS WITH RESPECT TO DENIAL OF CLAIM OF DEDUCTION U/S 54F OF THE ACT. 4. AO NOTICED THAT A JOINTLY HELD RESIDENTIAL PLOT AT NAS HIK WAS SOLD ON 15.12.1990 FOR RS.1,80,00,000/- IN WHICH ASSESSEES SHARE WAS RS.40,00,000/-. ASSESSEE HAD CLAIMED DEDUCTION OF RS.25,22,549/- U/S 54F OF THE ACT. THE ASSESSEE WAS ASK ED TO SUBSTANTIATE ITS CLAIM. ASSESSEE SUBMITTED COPY OF PURCH ASE DEED DT.03.06.2010 IN RESPECT OF PLOT NO.16 OF S.NO.726/1B YEOLEKAR MALA, NASHIK IN SUPPORT OF EXEMPTION U/S 54F OF THE ACT W HICH WAS PURCHASED FOR RS.32,63,930/-. AO GATHERED INFORMATION FROM TALATI, NASHIK WHEREIN HE WAS INFORMED THAT THE AFORESAID PLO T WAS SOLD BY THE ASSESSEE ON 23.07.2012 AND ASSESSEE HAD NO T CONSTRUCTED ANY HOUSE ON THE SAID PLOT. AO WAS THEREFO RE OF THE VIEW THAT THE CLAIM OF DEDUCTION U/S 54F WAS INADMISSIBLE. ACCORDING TO AO, FOR CLAIMING DEDUCTION U/S 54F THE CONDITIO N WAS THE PURCHASE OF HOUSE WITHIN ONE YEAR OR PRIOR OR AFTER TWO YEARS OR WITHIN 3 YEARS AFTER TRANSFER OF LONG TERM CAPITAL GAINS OT HER THAN THE RESIDENTIAL HOUSE. ACCORDING TO AO, THE CONDITIONS OF SEC.54F WAS NOT FULFILLED BY THE ASSESSEE. AO ALSO NOTICED THAT ASS ESSEE HAD CLAIMED EXPENSES ON ACCOUNT OF IMPROVEMENT COST A T RS.4,00,000/- FOR CONSTRUCTION OF COMPOUND WALL. AO NOTICED THAT THERE WAS NO MENTION OF THE COMPOUND WALL IN THE SALE DEE D AND THAT ASSESSEE HAD ALSO NOT FURNISHED ANY EVIDENCE TO P ROVE THAT THE COMPOUND WALL WAS CONSTRUCTED ON THE PLOT. HE THEREFORE HELD THA T 4 THE ASSESSEE HAS WRONGLY CLAIMED THE INDEXED COST OF IMP ROVEMENT ON ACCOUNT OF CONSTRUCTION OF COMPOUND WALL EXPENSES. HE ACCORDINGLY DISALLOWED THE COST OF IMPROVEMENT. HE ALSO DISALLOWED THE CLAIM OF DEDUCTION U/S 54F OF THE ACT. AGGR IEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO UPHELD THE ORDER OF AO WITH RESPECT TO DENIAL OF CLAIM ON D EDUCTION U/S 54F BY HOLDING AS UNDER : 5.2 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMIS SION OF THE APPELLANT THE REMAND REPORT AND REJOINDER TO THE RE MAND REPORT. A BARE READING OF SECTION 54F CLEARLY SHOWS THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION IN CASE HE/SHE PURCHASE/ CON STRUCTS A RESIDENTIAL HOUSE WITHIN A PERIOD OF TWO/THREE YEAR S AFTER THE SALE OF THE CAPITAL ASSET PROVIDED THAT THE NEW RESIDENT IAL HOUSE PROPERTY PURCHASED OR CONSTRUCTED IS NOT TRANSFERRED WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF ACQUISITION. IF THE NEW PROP ERTY IS SOLD WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF ACQUISITIO N, THEN FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN ON THIS TRANS FER, THE COST OF ACQUISITION OF THIS HOUSE PROPERTY SHALL BE REDUCED BY THE AMOUNT OF CAPITAL GAIN EXEMPT UNDER SECTION 54 EARLIER. THE C APITAL GAIN ARISING FROM THIS TRANSFER WILL ALWAYS BE SHORT TER M CAPITAL GAIN. 5.3 IN THE INSTANT CASE THE ASSESSEE SOLD THE JOINT LY HELD PLOT ON 12/11/2009 FOR RS.1,80,00,000/-. THE ASSESSEES SHA RE ON THE SAME WAS RS. 40,00,000/- THE ASSESSEE INVESTED THE SALE PROCEEDS ON TRANSFER OF CAPITAL ASSET AND PURCHASED THE PLOT ON 03.06.2010 FOR CONSIDERATION OF RS.32.63 LACS AND CLAIMED 54F EXEMPTION ON THE SAME. THE AO GATHERED INFORMATION THAT THE SAID PLOT WAS SOLD ON 23/11/2012 WITHOUT CONSTRUCTING ANY RESIDENTIAL HOUSE FOR RS.42 LACS. HENCE THE AO DENIED THE DEDUCTION CLAIM ED UNDER SECTION 54F AS NO RESIDENTIAL HOUSE WAS CONSTRUCTED AND THE PLOT WAS ALSO SOLD WITHIN 3 YEARS. 5.4 THE LD. AR OF THE ASSESSEE STATED THAT THE SALE PROCEED OF RS.42 LACS FROM THE PLOT PURCHASED FOR RS. 32.63 LACS WAS INVESTED IN ANOTHER PLOT OF LAND WHICH WAS PURCHASED FOR RS. 60 .61 LACS. THE CONSTRUCTION OF RESIDENTIAL BUNGLOW WAS COMPLETED O N 31.12.2013 AND SUBSTANTIAL PORTION WAS COMPLETED BEFORE THREE YEARS OF SALE OF ORIGINAL PLOT. HENCE 54F DEDUCTION SHOULD BE ALLOWE D. THE FACTS ON RECORD DEMONSTRATES THAT THE PROCEEDS FROM CAPITAL ASSET WAS INVESTED IN PLOT WHICH WAS SUBSEQUENTLY SOLD WITHOU T BUILDING HOUSE. THEREFORE, THE AO HAS RIGHTLY DENIED THE DED UCTION UNDER SECTION 54F ON THE SAME. 5.5 THE SUBSEQUENT SALE OF THIS PLOT CANNOT BE TERM ED AS TRANSFER OF CAPITAL ASSET AS THIS PLOT WAS HELD FOR LESS THAN T HREE YEARS. THEREFORE, NO DEDUCTION UNDER SECTION 54F IS APPLIC ABLE ON REINVESTMENT IN ANOTHER PLOT AND SUBSEQUENT CONSTRU CTION OF HOUSE 5 ON THE SAME. THE PROFIT ARISING ON THE SALE OF THIS PLOT IS TO BE TAXED AS SHORT TERM CAPITAL GAIN. THE ASSESSING OFFICER I S DIRECTED TO TAKE NECESSARY ACTION TO BRING THE SAME TO TAX IF NOT AL READY DONE. THE ARGUMENT TO THE LD. AR THAT CONSTRUCTION OF RESIDEN TIAL HOUSE CANNOT BE DONE ON FIRST PLOT DUE TO MITIGATING CIRCUMSTANC ES LIKE LITIGATION; NON-VASTU COMPLIANT ETC CANNOT COME TO ITS RESCUE A S THERE IS NO CLAUSE IN THE ACT UNDER WHICH IT CAN BE CONSIDERED. HENCE STANDS REJECTED. WITH RESPECT TO THE IMPROVEMENT COST, THE ISSUE WAS DEC IDED IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER :- 4.4 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMI SSION OF THE APPELLANT THE REMAND REPORT AND REJOINDER TO THE RE MAND REPORT. THE AO HAS NOT ALLOWED THE COST OF IMPROVEMENT CLAIMED BY THE APPELLANT AS NO TANGIBLE EVIDENCE WAS PRODUCED BEFO RE HIM TO DEPICT THE CONSTRUCTION OF BOUNDARY WALL ON THE PLO T THAT IS SOLD. EVEN THE SALE DEED OF THE PLOT DOES NOT MENTION THE COMPOUND WALL. AT THE TIME OF REMAND PROCEEDINGS TO THE AO HAS REI TERATED ON THE ORIGINAL FINDINGS OF THE AO. IN REJOINDER TO THE RE MAND REPORT THE APPELLANT HAS NOT MADE ANY SUBMISSION ON THE FINDIN GS OF THE AO. THE APPELLANT HAS STATED THAT IN THE PROPERTY DESCR IPTION INADVERTENTLY IT REMAINED TO BE MENTIONED THAT THE PROPERTY WAS SURROUNDED BY COMPOUND WALL. HOWEVER THE CONTRACTOR EXAMINED BY AO ON OATH WHO CONSTRUCTED THE WALL HAS ACCEPTED TH E CONSTRUCTION OF COMPOUND WALL. HE HAS ALSO STATED THAT THE PAYME NT RECEIVED IS OFFERED FOR TAXATION BY HIM. THE ASSESSING OFFICER HAS NOT GIVEN ANY ADVERSE FINDINGS ON THE STATEMENT OF CONTRACTOR NOR ON BILLS EITHER AT THE TIME OF ASSESSMENT PROCEEDINGS NOT AT THE TIME OF REMAND PROCEEDINGS. IT IS SETTLED LAW THAT THE SAME AMOUNT CANNOT BE TAXED TWICE. THUS, IF THE CONTRACTOR HAS OFFERED THE RECE IPT FROM APPELLANT FOR TAXATION THE APPELLANT CANNOT BE TAXED ON THE S AME. THE AO IS FREE TO INFORM ASSESSING OFFICER OF SHRI RAJU DENGA LE , THE CONTRACTOR, TO TAX THE SAME IF IT HAS NOT BEEN OFFERED FOR TAX ATION BY HIM. MEANWHILE THE APPELLANT CANNOT BE DENIED THE BENEFI T OF EXPENDITURE INCURRED ON CONSTRUCTION OF COMPOUND WA LL ONLY BECAUSE IT WAS NOT MENTIONED IN PROPERTY DESCRIPTIO N. THERE IS THIRD PARTY EVIDENCE AVAILABLE TO PROVE THAT THE COMPOUND WALL WAS CONSTRUCTED ON THE PROPERTY BEFORE ITS SALE. THERE IS NO ADVERSE FINDING ON RECORD TO CONTRADICT THE STATEMENT OF CO NTRACTOR. THEREFORE IN MY CONSIDERED VIEW THE ASSESSEE IS TO BE ALLOWED COST OF IMPROVEMENT AS CLAIMED OF RS. 5,48,000/- AND CAPITAL GAIN TO BE COMPUTED ACCORDINGLY. AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS NOW IN AP PEAL BEFORE US. 5. BEFORE US, LD.A.R. REITERATED THE SUBMISSIONS MADE BEFORE AO AND LD. CIT(A) AND FURTHER SUBMITTED THAT ASSESSEE HA D SOLD A PLOT AT NASHIK ON 15.12.2009 FOR RS.40,00,000/-. ASSESSEE PURCHASED A PLOT AT YEOLEKAR MALA, NASHIK FOR CONSTRUCTION OF 6 RESIDENTIAL HOUSE VIDE PURCHASE DEED DT.03.06.2010 AND HAD CLAIMED EXEMPTION U/S 54F IN RESPECT OF THE SAID INVESTMEN T AGAINST THE LONG TERM CAPITAL GAINS ARISING ON THE SALE O F ORIGINAL ASSET. HE SUBMITTED THAT THE SAID PLOT WAS UNDER LITIGATIO N DUE TO WHICH IT WAS NOT POSSIBLE TO UNDERTAKE CONSTRUCTION ON T HE SAID PLOT. HENCE, THE ASSESSEE HAS TO SELL THE PLOT FOR RS.42,0 0,000/- VIDE SALE DEED DT.23.11.2012 AND THE SALE CONSIDERATION REC EIVED WAS IMMEDIATELY INVESTED FOR PURCHASE OF PLOT OF LAND FOR CONSTRUCTION OF HOUSE AT MAHATMA NAGAR, NASHIK VIDE PU RCHASE DEED DT.13.12.2011 FOR RS.60.61 LAKHS. HE FURTHER SUBMITTED THAT ASSESSEE HAD STARTED CONSTRUCTION OF HOUSE IN THE SAID PLOT VIDE COMMENCEMENT CERTIFICATE DT.16.06.2012. THE APPLICATION FOR COMPLETION OF CERTIFICATE WAS MADE ON 24.10.2013 AND THE COMPLETION CERTIFICATE WAS RECEIVED ON 31.12.2013. HE FURTHE R SUBMITTED THAT ASSESSEE HAD ALSO RECEIVED CERTIFICATES FRO M ARCHITECT TO PROVE THAT THE ENTIRE RCC WORKS WERE COM PLETED PRIOR TO 14.12.2012 I.E., 3 YEARS FROM THE DATE OF TRANSFER OF ORIG INAL ASSET. HE FURTHER SUBMITTED THAT THE NEW PLOT AT NASHI K WAS PURCHASED FOR RS.60.61 LAKHS AND THE ASSESSEE HAD COMP LETED SUBSTANTIAL CONSTRUCTION WORK PRIOR TO 14.12.2012 BY INCUR RING CONSTRUCTION COST OF RS.3.28 LAKHS AND THUS THE ENTIRE S ALE CONSIDERATION OF RS.40,00,000/- RECEIVED ON SALE OF LAND HAS BEEN INVESTED IN CONSTRUCTION OF HOUSE WITHIN THREE YEARS AND THEREFORE THE EXEMPTION U/S 54F IS ALLOWABLE AND FOR THIS PROPOSITIO N, HE PLACED RELIANCE ON THE DECISION OF CIT VS. SAMBANDHAM UDAYKUMAR [72 DTR 232 (KAR)], CIT VS. MRS. HILLA J.B. WADIA [216 ITR 376 (BOM)] AND OTHER DECISIONS. HE FURTHER SUBMITTED T HAT THE 7 ENTIRE CONSIDERATION ON SALE OF ORIGINAL ASSET WAS INVESTED IN CONSTRUCTION OF RESIDENTIAL HOUSE PRIOR TO 31.03.2012 WHICH WAS THE LAST DATE FOR FURNISHING RETURN U/S 139(4) OF THE ACT FO R A.Y. 2010-11 AND THEREFORE THE ASSESSEE WAS NOT REQUIRED TO DEPOSIT ANY AMOUNT IN LONG TERM CAPITAL GAIN SCHEME OF NATIONALIS ED BANK AND SUBMITTED THAT DEDUCTION UNDER SEC.54 F IS ALLO WABLE IF THE CONSTRUCTIONS ARE MADE WITHIN THE EXTENDED DUE DAT E PRESCRIBED U/S 139(4) FOR FILING THE RETURN OF INCOME AND IN S UPPORT OF THE PROPOSITION, HE RELIED ON DECISION IN CASE OF CIT VS. R AJESH KUMAR [286 ITR 274 (GAU)], PUNE TRIBUNAL DECISION IN THE CAS E OF DCIT VS. ASHOK BHUTADA IN ITA NO.966/PN/2011 AND OTHE R DECISIONS. HE FURTHER SUBMITTED THAT SEC.54F IS A BENEFICIAL PROVISION AND THEREFORE IT HAS TO BE CONSTRUED LIBERALLY AND FOR THIS PROPOSITION, HE PLACED RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. B.S. SHANTA KUMARI IN ITA NO.165/2014 DT.13.07.2015. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE THEREFORE SUBMITTED THAT THE ASSESSEE HAD FULFILLED ALL THE CONDITIONS LAID DOWN U/S 54F A ND THEREFORE THE ASSESSEE IS ELIGIBLE FOR DEDUCTION. LD.D.R. ON T HE OTHER HAND SUPPORTED THE ORDER OF AO. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DENIAL OF CLAIM OF DEDUCTION U/S 54F OF THE ACT. IT IS AN UNDISPUTED FACT THAT THE ORIGINAL ASSET WAS SOLD BY THE A SSESSEE ON 15.12.2009 AND THE ASSESSEES SHARE OF TOTAL CONSIDERATIO N WAS RS.40,00,000/-. ON 03.06.2010 ASSESSEE PURCHASED A PLOT A T 8 YEOLEKAR MALA, NASHIK FOR RS.32,63,930/- FOR CONSTRUCTION OF RESIDENTIAL HOUSE WAS UNDER LITIGATION AND THE ASSESSEE CO ULD NOT CONSTRUCT ANY HOUSE THEREIN. ASSESSEE HAD PURCHASED A NEW PLOT AT MAHTMA NAGAR, NASHIK ON 30.10.2011 FOR RS.57,00,000/- FOR CONSTRUCTION OF RESIDENTIAL BUNGLOW. THE PLOT AT YEOLEKAR MALA, NASHIK WAS SOLD FOR CONSIDERATION OF RS.42,00,000/- AND THE CONSIDERATION WAS RECEIVED IN ADVANCE IN SEPTEMBER AND N OVEMBER 2011 AND THE SAME WAS INVESTED FOR PURCHASE OF PLOT AT MAHTMA NAGAR, NASHIK. THE ENTIRE CONSIDERATION ON SALE OF ORIGINAL ASSET WAS INVESTED IN PURCHASE OF PLOT AT MAHTMA NAGAR PRIOR T O THE DUE DATE U/S 139(4) DT.31.03.2012. IT CAN BE THUS SEEN THAT THE TOTAL SALE CONSIDERATION OF RS.40,00,000/- ASSESSEE HAD INVESTED IN PURCHASE OF PLOT AT M.G. NAGAR AND HAD INVESTED RS.28.25 L ACS ON 14.12.2012 FOR CONSTRUCTION OF A HOUSE AND THE AMOUNT INV ESTED FOR CONSTRUCTION OF HOUSE WITHIN THREE YEARS IS 85,25,000/- . THE AFORESAID FACTS WITH RESPECT TO DATES AND AMOUNTS HAD N OT BEEN CONTROVERTED BY THE REVENUE. 7. WE FIND THAT THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. B.S. SHANTAKUMARI (SUPRA) AT PARA 8 HAS NOTED AS UNDER : 8. SECTION 54F OF THE ACT IS A BENEFICIAL PROVISIO N WHICH PROMOTES FOR CONSTRUCTION OF RESIDENTIAL HOUSE. SUCH PROVISI ON HAS TO BE CONSTRUED LIBERALLY FOR ACHIEVING THE PURPOSE FOR W HICH IT IS INCORPORATED IN THE STATUTE. THE INTENTION OF THE L EGISLATURE, AS COULD BE DISCERNED FROM THE READING OF THE PROVISION, WOU LD CLEARLY INDICATE THAT IT WAS TO ENCOURAGE INVESTMENTS IN TH E ACQUISITION OF A RESIDENTIAL PLOT AND COMPLETION OF CONSTRUCTION OF A RESIDENTIAL HOUSE IN THE PLOT SO ACQUIRED. A BARE PERUSAL OF SAID PRO VISION DOES NOT EVEN REMOTELY SUGGEST THAT IT INTENDS TO CONVEY THA T SUCH CONSTRUCTION SHOULD BE COMPLETED IN ALL RESPECTS IN THREE (3) YEARS AND/OR MAKE IT HABITABLE. THE ESSENCE OF SAID PROVI SION IS TO ENSURE THAT ASSESSEE WHO RECEIVED CAPITAL GAINS WOULD INVE ST SAME BY CONSTRUCTING A RESIDENTIAL HOUSE AND ONCE IT IS EST ABLISHED THAT CONSIDERATION SO RECEIVED ON TRANSFER OF HIS LONG T ERM CAPITAL ASSET 9 HAS INVESTED IN CONSTRUCTING A RESIDENTIAL HOUSE, IT WOULD SATISFY THE INGREDIENTS OF SECTION 54F. IF THE ASSESSEE IS ABLE TO ESTABLISH THAT HE HAD INVESTED THE ENTIRE NET CONSIDERATION W ITHIN THE STIPULATED PERIOD, IT WOULD MEET THE REQUIREMENT OF SECTION 54F AND AS SUCH, ASSESSEE WOULD BE ENTITLED TO GET THE BENE FIT OF SECTION 54F OF THE ACT. THOUGH SUCH CONSTRUCTION OF BUILDING MA Y NOT BE COMPLETE IN ALL RESPECT THAT BY ITSELF WOULD NOT D ISENTITLE THE ASSESSEE TO THE BENEFIT FLOWING FROM SECTION 54F. IN FACT, APPELLATE COMMISSIONER HAS NOT ONLY TAKEN NOTE OF THE JUDGMENT OF THE CO- ORDINATE BENCH OF THIS COURT IN SAMBANDAMS CASE RE FERRED TO SUPRA, BUT HAD ALSO TAKEN NOTE OF THE JUDGMENT OF H IGH COURT OF MADRAS IN THE CASE OF CIT VS SARDARMAL KOTHARI REPO RTED IN (2008) 302 ITR 286, WHICH WAS ON SIMILAR FACTS AS OBTAINED IN SAMBANDAM UDAYKUMARS CASE AND AS SUCH IN THE INSTA NT CASE, APPELLATE COMMISSIONER ALLOWED ASSESSEES APPEAL NO TING THAT THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF HI GH COURT OF MADRAS BEFORE APEX COURT IN CC NO.3953-3954/2009 HA D BEEN DISMISSED ON 06.04.2009. PROVISIONS OF SEC.54F OF THE ACT ARE BENEFICIAL PROVISIONS AS NOTED BY HONBLE KARNATAKA HIGH COURT. WITH RESPECT TO THE P ROPOSITION THAT THE UNUTILIZED PORTION OF SALE PROCEEDS OF THE ORIGINAL ASSET CAN BE UTILIZED UPTO THE TIME LIMIT AND REPORTED TO BE FILED U/S 139(4) OF THE ACT. WE FIND THAT THE CO-ORDINATE BENCH OF THE TRIBU NAL IN THE CASE OF DCIT VS. ASHOK D. BHUTADA (SUPRA) AT PARA 7 HA S NOTED AS UNDER : 7. IN THE PRESENT CASE, THE ASSESSEE ENTERED INTO PURCHASE AGREEMENT OF THE FLAT WITH THE BUILDER ON 30-12-200 9 AND AVAILED THE LOAN FROM THE HDFC BANK TO THE EXTENT OF RS.50, 00,000/- AND BANK PAID RS.47,00,000/- DIRECTLY TO THE BUILDER IN THE MONTH OF MARCH, 2010 ON 31-03-2010. THE ASSESSEE HAS MADE TH E TOTAL PAYMENT TO THE BUILDER TO THE EXTENT OF RS. 55,91,7 40/-, THEREFORE, THE ISSUE BEFORE THE LD.CIT(A) WAS WHETHER THE ASSE SSEE HAS FULFILLED THE CONDITION OF THE TIME LIMIT. ADMITTED LY, THE ASSESSEE MADE THE PAYMENT BEYOND THE PERIOD OF 2 YEARS FROM THE DATE OF SALE OF ORIGINAL ASSET I.E. 25-11-2007 BUT WITHIN 3 YEARS HE HAS MADE THE INVESTMENT BY AVAILING THE LOAN FROM THE H DFC BANK TO THE EXTENT OF RS. 47,00,000/-. WE FIND THAT THE ASS ESSEES CASE IS IDENTICAL TO THAT OF MUKESH G. DESAI (HUF) VS. ITO, (2009) 18 DTR 71 (MUM). ANOTHER ASPECT TO BE CONSIDERED HERE IS I N RESPECT OF ONE OF THE CONDITIONS THAT UNUTILIZED PORTION OF THE SA LE PROCEEDS OF ORIGINAL ASSET IS TO BE DEPOSITED IN THE NOTIFIED S CHEME UP TO THE TIME LIMIT FOR FILING OF THE RETURN OF INCOME U/S.139 OF THE ACT. THE ASSESSEE CONTENDED THAT THE TIME LIMIT UP TO WHICH THE RETURN CAN BE FILED U/S.139(4) IS TO BE CONSIDERED AS IT IS NO WH ERE MENTIONED THAT IN THE SAID SCHEME THAT AMOUNT IS TO BE DEPOSITED W ITHIN THE TIME LIMIT PRESCRIBED IN SUB-SEC.(1) OF SECTION 139. THE LD. CIT(A) ACCEPTED THE SAID PLEA OF THE ASSESSEE AND HELD THA T THE ASSESSEE HAS FULFILLED THE CONDITION AS IN THE CASE OF THE A SSESSEES TIME LIMIT 10 FOR FILING THE BELATED RETURN U/S.139(4) WAS UP TO 31-03-2010 AND BEFORE THAT PERIOD THE ASSESSEE HAS INVESTED AMOUNT OF RS.55,91,740/- FOR ACQUIRING THE FLAT AND HENCE, TH ERE IS NO NEED TO DEPOSIT THE AMOUNT IN ANY NOTIFIED SCHEME AS TO THA T EXTENT SALE PROCEEDS OF THE ORIGINAL ASSET ARE UTILIZED. WE FIN D THAT THE SAID CONTENTION OF THE ASSESSEE IS WELL SUPPORTED BY THE FOLLOWING DECISIONS: A. CIT VS. RAJESH KUMAR JALAN [286ITR 274 (GAU)] B. FATHIMA BAI VS. ITO [32 DTR 243(KAR)] C. CIT VS. MS. JAGRITI AGGARWAL [339 ITR 610 (P&H)] D. ITO VS. SAPNA DIMRI [50 SOT 96 (DEL)] E. KISHORE H. GALAIYA [137 ITD 229 (MUMBAI)] F. P. THIRUMOORTHY VS. ITO [7 ITR 10 ( CHENNAI)] G. NIPUN MEHROTRA VS. ACIT [110 ITD 520 (BANG)] IN OUR OPINION, THE LD. CIT(A) IS RIGHTLY APPLIED T HE LAW TO THE FACTS OF THE ASSESSEES CASE AND NO INTERFERENCE IS CALLED F OR IS IN ORDER. ACCORDINGLY, THE SAME IS CONFIRMED. 8. WE FURTHER FIND THAT IN THE CASE OF CIT VS. JAGRITI AGG ARWAL [339] ITR 610 (P&H) THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. THE HEAD NOTE OF THE DECISION IS AS FOLLOWS: CAPITAL GAINS EXEMPTION UNDER S.54 TIME-LIMIT FOR MAKING DEPOSIT UNDER THE SCHEME VIS--VIS PURCHASE OF NEW HOUSE PROPERTY AS PER SUB-S (2) OF S.54, THE AMOUNT OF CAPITAL G AINS IS REQUIRED TO BE DEPOSITED BY THE ASSESSEE BEFORE FURNISHING THE RETURN NOT LATER THAN THE DUE DATE UNDER S.139(1) IN A SPECIFIED ACC OUNT ONLY IF SUCH AMOUNT IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OR CONSTRUCTION OF NEW ASSET BEFORE THE DATE OF FUR NISHING THE RETURN UNDER S.139-SUB-S.(4) OF S. 139 IS IN FACT, A PROVI SO TO SUB-S. (1) AND PROVIDES FOR EXTENSION OF PERIOD OF DUE DATE FOR FI LING THE RETURN IN CERTAIN CIRCUMSTANCES SUCH PROVISION IS NOT AN IN DEPENDENT PROVISION BUT RELATES TO THE TIME CONTEMPLATED UNDE R SUB-S. (1) OF S.139-DUE DATE FOR FURNISHING THE RETURN OF INCOME AS PER S.139(1) IS SUBJECT TO THE EXTENDED PERIOD PROVIDED UNDER SUB-S . (4) OF S.139 IN THE INSTANT CASE, ASSESSEE WITH HER FATHER-IN-LA W ON 2 ND JUNE, 2007, AND FILED HER RETURN ON 28 TH MARCH, 2007, I.E., BEFORE THE EXTENDED DUE DATE OF FILING OF RETURN UNDER S.139(4 ) FOR THE RELEVANT ASST. YR. 2006-07 THEREFORE, ASSESSEE IS ENTITLED TO EXEMPTION UNDER S.54. CONSIDERING THE AFORESAID FACTS AND IN VIEW OF THE DECISIONS CITED HEREIN ABOVE AND MORE SO WHERE THE PROVISIONS OF SEC.54F ARE HELD TO BE BENEFICIAL PROVISIONS AND THEREFORE TO BE INTERPRETED LIBERALLY, WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCT ION 11 U/S 54F OF THE ACT AND THEREFORE HOLD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54F. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 30 TH DAY OF JUNE, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; ! DATED : 30 TH JUNE, 2017. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(A)-I, NASHIK. PRL.CIT-1, NASHIK. #$% &&'(,* '(, / DR, ITAT, A PUNE; %+,-/ GUARD FILE. / BY ORDER, // //// // TRUE COP // /// TRUE // //COPY // TRUE COPY // . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.