JCIT 21(2), MUMBAI V. VIJAY S. SHRODKAR, MUMBAI

ITA 4141/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55056 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Department
• Bench Allotted: F
• Next Hearing Date: 03-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2010
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: M P MAKHIJA
• Keywords: Capital asset
• Section: 54F; 6; 10; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F BEFORE SHRI D. MANMOHAN (VP) & SHRI T.R. SOOD (AM) I.T.A.NO. 4141/MUM/2010 (ASSESSMENT YEAR : 2007-08) ACIT CIRCLE 21(2) MUMBAI-400 051. VS. SHRI VIJAY S. SHIRODKAR MUMBAI-400 104. PAN NO. AGLPS7663N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. MAKHIJA DEPARTMENT BY : SHRI A.K. NAYAK DATE OF HEARING : 03.8.2011 DATE OF PRONOUNCEMENT : .8.2011 ORDER PER D. MANMOHAN (VP) :- 1. THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSE D BY THE CIT(A)-32, MUMBAI AND IT PERTAINS TO THE ASSESSMENT YEAR 2007-2008. ASSESSEE WAS AN EMPLOYEE OF M/S. L & T. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION THE ASSESSEE DERIVED INCOME FROM LIC COMMISSION, INTEREST, DIVIDEND, AND CAPITAL GAINS. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSE SSING OFFICER NOTICED THAT THE ASSESSEE HAD SURRENDERED HIS TENANCY RIGHT S IN FAVOUR OF M/S. HBS DEVELOPERS FOR A CONSIDERATION OF ` 1.20 CRORES. HE CLAIMED EXEMPTION UNDER SECTION 54F AND 54EC OF THE ACT ON THE GROUND THAT PART OF THE SALE CONSIDERATION WAS INVESTED IN THE BONDS (IN THE NAME OF SELF AND HIS WIFE) AND HE CLAIMED TO HAVE PURCHASED TWO FLATS BEARING 102A AND 102B ON THE FIRST FLOOR IN THE BUILDING KN OWN AS HERCULES VASANT GALAXY FOR A CONSIDERATION OF ` 22,38,920/- AND ` 31,74,620/- RESPECTIVELY. (ASSESSING OFFICER OBSERVED THAT PURC HASE CONSIDERATION, AS PER SALE AGREEMENTS DATED 22-8-2006, WAS RS.22,31,5 00/- FOR FLAT 102A AND RS.31,64,120/- FOR FLAT 102B). SHRI VIJAY S. SHIRODKAR 2 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, C OUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE WAS BORN IN TH E SAME PLACE AND FROM TIME OF HIS BIRTH HE WAS LIVING IN THE GROUND FLOOR PORTION OF BUNGALOW, KNOWN AS MAYANK, HAVING AN AREA OF ABOU T 1300 SQ. FEET CARPET AREA, AS TENANTS. THEY ALSO HAD THE USE OF C OMPOUND ON GARDEN AREA OF THE BUNGALOW. SINCE ASSESSEE AND HIS WIFE W ERE ACCUSTOMED TO LIVE IN A LARGE SPACE FOR MANY YEARS, AS TENANTS, U PON DEVELOPMENT AND PURCHASE OF FLATS, THEY HAD TO COMBINE THE ADJACENT FLATS TO MAKE IT INTO ONE SINGLE UNIT. THE CARPET AREA OF FLAT NO. 102A W AS 394SQ. FEET AND 102B WAS 554 SQ. FEET AND THUS THE TOTAL CARPET ARE A WORKS OUT TO 948SQ. FEET. IT WAS THUS CONTENDED THAT BOTH THE RESIDENTI AL UNITS WERE TREATED AS ONE RESIDENTIAL UNIT AND EXEMPTION UNDER SECTION 54F BE GRANTED. 3. ASSESSING OFFICER HAD SENT A WARD INSPECTOR TO VISIT THE PREMISES ON 16-1-2009 WHO REPORTED THAT THERE WERE NO MODIFICATIONS OR ALTERATIONS TO THE FLAT OCCUPIED BY ASSESSEE SO AS TO SUGGEST THAT TWO ADJACENT FLATS HAVE BEEN COMBINED INTO ONE SINGLE F LAT. IN FACT, THERE ARE NO ADJACENT FLATS AND THERE IS ONLY ONE FLAT I.E., FLAT NO. A-102 HAVING ONE ENTRANCE, HALL, KITCHEN, 3 BED ROOMS AND 3 BATH-ROO MS AND THERE IS NO FLAT NUMBERING 102B IN THE A WING OF THE BUILDING . IT WAS ALSO SATED THAT SECRETARY OF VASANT GALAXY HERCULES COOP. HOU SING SOCIETY HAS CONFIRMED THAT THERE IS NO FLAT BEARING NO. 102B AN D FURNISHED COPY OF AGREEMENT OF FLAT NO. 102A. BASED ON THE SAID REPOR T THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAS NOT PURCHAS ED FLAT NO. 102B AS PER THE RECORDS OF THE SOCIETY. IN OTHERWORDS, THER E WAS NO BONAFIDE PURCHASE AND CONSEQUENTLY ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 54F ON THE PURCHASE CONSIDERATION SHOWN AGA INST FLAT NO. 102B. DESPITE THIS FINDING, ASSESSING OFFICER CHOSE TO AL LOW THE ASSESSEES CLAIM OF DEDUCTION REFERABLE TO PURCHASE CONSIDERATION SH OWN AGAINST FLAT NO. SHRI VIJAY S. SHIRODKAR 3 102-B, PRESUMABLY ON THE GROUND THAT HIGHER OF THE TWO PURCHASE VALUE HAS TO BE ALLOWED UNDER SECTION 54F OF THE ACT. HE THUS DISALLOWED RS.22,31,500/-; REFERABLE TO PURCHASE OF FLAT NO. 1 02A (394 SQ. FEET), ON THE GROUND THAT ASSESSEE IS ENTITLED TO CLAIM DEDUC TION U/S. 54F ONLY WITH REFERENCE TO ONE RESIDENTIAL HOUSE. 4. ASSESSEE CLAIMED A FURTHER DEDUCTION U/S. 54EC OF THE ACT ON THE GROUND THAT HE INVESTED A TOTAL SUM OF ` 46 LAKHS IN REC BONDS, OUT OF THE AMOUNT RECEIVED IN RESPECT OF SURRENDER OF HIS TENANCY RIGHTS IN THE PREMISES SITUATED AT BUNGALOW KNOWN AS MAYA NK. INVESTMENT WAS MADE IN TWO DIFFERENT NAMES AND ACCORDINGLY BON D CERTIFICATES WERE ISSUED FOR A SUM OF ` 23 LAKHS EACH. IN THE FIRST CERTIFICATE SHRI VIJAY S. SHIRODKAR WAS MENTIONED AS THE MAIN HOLDER OF THE B ONDS WHEREAS SMT. SABITA V. SHIRODKAR AND RENUKA R. JALAN WERE SHOWN AS THE JOINT HOLDERS. IN THE LIGHT OF THE DECISION OF THE ITAT, MUMBAI BENCH IN THE CASE OF DR. SUDHA S. TRIVEDI, THE ASSESSING OFFICER ACCEPTED THE CLAIM OF DEDUCTION U/S. 54EC OF THE ACT IN RESPECT OF THE AF ORESAID INVESTMENT THOUGH HIS WIFE AND DAUGHTER WERE CO-HOLDERS. 5. HOWEVER, IN RESPECT OF OTHER CERTIFICATE FOR A SUM OF ` 23 LAKHS THE ASSESSING OFFICER OBSERVED THAT SMT. SABI TA SHIRODKAR, WIFE OF THE ASSESSEE, WAS THE MAIN-HOLDER OF THE CERTIFICAT E AND THE ASSESSEE ALONGWITH HIS SON ARE ONLY THE NOMINEES OF THE FIRS T BENEFICIAL OWNER. UNDER THE CIRCUMSTANCES, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE DECISION OF THE ITAT IN THE CASE OF DR. SUDHA TRIVE DI (ITA. NO. 6040 AND 6186/MUM/2007) IS DISTINGUISHABLE SINCE THE ASSESSE E WAS NOT THE MAIN-HOLDER OF THE SHARES. HE ACCORDINGLY DISALLOWE D A SUM OF ` 23 LAKHS. SHRI VIJAY S. SHIRODKAR 4 6. ON AN APPEAL FILED BEFORE LEARNED CIT(A) THE PL EA OF THE ASSESSEE WAS THAT THE OCCUPATION OF THE FLAT HAVING NOT BEEN DISPUTED AS A SINGLE UNIT MERELY BECAUSE TWO SEPARATE AGREEMENT S WERE ENTERED INTO FOR THE SAKE OF REGISTRATION; IT SHOULD NOT COME IN THE WAY OF CLAIMING DEDUCTION U/S. 54F OF THE ACT. SIMILARLY IT WAS CON TENDED THAT THE ASSESSEE INVESTED A SUM OF ` 46 LAKHS IN REC BONDS AND MERELY BECAUSE NAME OF THE WIFE IS ALSO APPEARING IN THE CERTIFICA TE CLAIM MADE U/S. 54EC OF THE ACT SHOULD NOT BE DENIED. 7. LEARNED CIT(A) OBSERVED THAT THE INSPECTORS RE PORT CLEARLY INDICATES THAT THERE IS ONE SINGLE UNIT AND HENCE I T IS NOT POSSIBLE THAT UNIT NO. 102B HAS VANISHED AT THE TIME OF HIS VISIT . HE THEREFORE CONCLUDED THAT ONLY ONE SINGLE UNIT WAS PURCHASED B Y THE ASSESSEE VIDE TWO SEPARATE AGREEMENTS. WITHOUT PREJUDICE, HE ASSU MED THAT EVEN IF TWO OR MORE SEPARATE UNITS WERE PURCHASED AND/OR COMBIN ED FOR THE PURPOSE OF USING AS ONE DWELLING UNIT IT WOULD QUALIFY FOR CLAIMING DEDUCTION U/S. 54F OF THE ACT. THE ASSESSING OFFICER WAS DIRECTED ACCORDINGLY. 8. IN RESPECT OF THE ASSESSEES INVESTMENT IN REC BONDS LEARNED CIT(A) OBSERVED THAT THE PRIMARY REQUIREMENT FOR CL AIMING DEDUCTION U/S. 54EC OF THE ACT WAS FULFILLED IN THE INSTANT C ASE BY VIRTUE OF THE FACT THAT THE FUNDS INVESTED EMANATED FROM THE SUM RECEI VED OUT OF THE TRANSFER OF LONG TERM CAPITAL ASSET AND THAT IT WAS INVESTED WITHIN A SPECIFIED TIME. IN HIS OPINION PAYMENT OF THE MATUR ITY PROCEEDS TO ANY ONE OF THE BOND HOLDERS IS NOT A MATERIAL FACTOR FO R DECIDING THE OWNERSHIP OF THE BONDS. AT THIS STAGE WE MAY NOTICE THAT IN THE STATEMENT OF FACTS BEFORE LEARNED CIT(A) THE ASSESS EE STATED THAT THOUGH RULES WERE FRAMED FOR EASE OF OPERATION AND NOT FOR DETERMINING OWNERSHIP AND/OR SUCCESSION RIGHTS, THE FACT REMAIN S THAT THE ASSESSEES WIFE HAD INSTRUCTED REC TO REMIT THE MATURITY PROCE EDS DIRECTLY TO THE SHRI VIJAY S. SHIRODKAR 5 ACCOUNT OF THE ASSESSEE AND REC HAD AGREED TO THE C HANGE READILY WITHOUT ASKING FOR ANY DOCUMENTATION FOR THE REASO N THAT THEY ARE NOT CONCERNED WITH THE QUESTION AS TO WHO AMONG THE JOI NT APPLICANTS ARE THE TRUE OWNERS OF THE BONDS. IT WAS STATED THAT THE R EC HAD CONFIRMED THE CHANGE VIDE THEIR LETTER DATED 27.7.2009. HAVING RE GARD TO THE FACTUAL MATRIX, LEARNED CIT(A) OBSERVED THAT THE PAYMENT OF THE MATURITY DEPOSIT TO ANY ONE OF THE BOND HOLDERS IS NOT A MATERIAL FA CTOR SO LONG AS INVESTMENT WAS MADE OUT OF THE SALE PROCEEDS AND AS SESSEES NAME ALSO FIGURES AS ONE OF THE INVESTORS, MORE PARTICULARLY WHEN REC CHANGED THE NAME OF RECIPIENT IN ITS RECORDS. THUS, CIT(A) HEL D THAT THE ASSESSEE HAD INVESTED IN REC BONDS. UNDER THE CIRCUMSTANCES THE ASSESSING OFFICER WAS DIRECTED TO ALLOW CLAIM OF DEDUCTION U/S. 54EC OF THE ACT. 9. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. CASE OF THE REVENUE IS THAT THE CLAIM OF PURCHASE OF TWO PROPERTIES WAS BOGUS/NON-GENUINE AND HENCE THE ASSESSEE IS NOT ENT ITLED TO CLAIM DEDUCTION U/S. 54EC OF THE ACT ON THE STRENGTH OF T HE REGISTERED DEEDS. 10. AS REGARDS THE CLAIM OF DEDUCTION U/S. 54EC OF THE ACT THE REVENUE CONTENDED THAT THE ASSESSEES WIFE IS THE F IRST OWNER OF THE BOND AND HENCE THE ASSESSEE CANNOT BE SAID TO HAVE INVES TED IN THE BONDS SO AS TO QUALIFY FOR DEDUCTION U/S. 54EC OF THE ACT. 11. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT U/S. 54F OF THE INCOME TAX ACT THE ASSESSEE HAS TO PROVE THAT HE HAS PURCHASED A RESIDENTIAL HOUSE WITHIN A PERIOD OF TW O YEARS FROM THE DATE OF TRANSFER OF A CAPITAL ASSET WHEREAS IN THE INSTA NT CASE THERE IS NO PROOF TO SHOW THAT THE ASSESSEE HAS PURCHASED A RESIDENTI AL PROPERTY; MERELY BECAUSE HE IS RESIDING IN HERCULES VASANT GALAXY FLAT IT CANNOT BE SAID THAT THE PROPERTY WAS PURCHASED SINCE THERE IS NO E VIDENCE TO THAT EFFECT. SHRI VIJAY S. SHIRODKAR 6 ON THE CONTRARY, SALE DEEDS DEPICT THAT HE HAD PURC HASED TWO SEPARATE PROPERTIES IN THE BUILDING KNOWN AS HERCULES VASAN T GALAXY, HAVING TWO WINGS AS PER BUILDING LAY OUT/PLAN SANCTIONED BY TH E MUNICIPAL CORPORATION. FIRST SALE AGREEMENT REFERS TO AN AGRE EMENT TO PURCHASE CARPET AREA OF 394 SQ.FT. ONLY AND NOTHING HAS BEEN INDICATED WITH REGARD TO THE SO-CALLED FLAT THOUGH IT WAS STATED THAT IT REFERS TO FLAT NO. 102A ON WING A. SIMILARLY SALE AGREEMENT FOR A CARPET AR EA 554 SQ.FT., REFERABLE TO FLAT NO. 102B, IN THE BUILDING KNOWN AS HERCULE S DO NOT INDICATE SPECIFICATION AND DESIGN OF THE FLAT. IT IS DIFFICU LT TO ASSUME THAT THE PARTY WOULD BE SO NAIVE TO ENTER INTO SALE DEEDS WITHOUT SEEING THE DESIGN OF THE PROPERTY. IT IS NOT KNOWN AS TO WHETHER MUNICIP AL AUTHORITIES HAVE GIVEN COMPLETION CERTIFICATE IN RESPECT OF TWO SEPA RATE FLATS OR ONE LARGER FLAT. WITHOUT ANY EVIDENCE ON RECORD TO SHOW THAT T HEY ARE TWO SEPARATE FLATS WHICH WERE COMBINED TOGETHER IT HAS TO BE ASS UMED THAT THE CLAIM OF PURCHASE OF TWO FLATS WAS NOT GENUINE. IN OTHERW ORDS, IT HAS TO BE HELD AS NON-GENUINE AND HENCE DEDUCTION IS NOT ALLOWABLE U/S. 54F OF THE ACT. AS REGARDS DEDUCTION U/S. 54EC OF THE ACT, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 12. ON THE OTHER HAND LEARNED COUNSEL, APPEARING O N BEHALF OF THE ASSESSEE, SUBMITTED THAT THE INCOME TAX INSPECT OR INSPECTED THE PREMISES OF THE ASSESSEE AND FOUND ONE FLAT KNOWN A S FLAT NO. 102A. THEREFORE IT CANNOT BE SAID THAT THEY ARE TWO SEPAR ATE FLATS AND THUS HE STRONGLY RELIED UPON THE ORDER PASSED BY LEARNED CI T(A). AS REGARDS CLAIM OF DEDUCTION U/S. 54EC OF THE ACT, LEARNED COUNSEL SUBMITTED THAT THE ASSESSEE IS A CO-HOLDER OF REC BONDS AND IN FACT A LETTER WAS OBTAINED FROM REC TO PROVE THAT THE MATURITY PROCEEDS WOULD DIRECTLY BE SENT TO THE ACCOUNT OF THE ASSESSEE. UNDER THE CIRCUMSTANCE S, DECISION OF ITAT, SHRI VIJAY S. SHIRODKAR 7 MUMBAI BENCH IN THE CASE OF DR. SUDHA TRIVEDI (SUPR A) SQUARELY COVERS THE ISSUE. HE THUS SUPPORTED THE ORDER OF LEARNED C IT(A). 13. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS ION AND PERUSED THE RECORD. IT IS WELL SETTLED THAT IN ORD ER TO CLAIM ANY DEDUCTION AGAINST TAXABLE INCOME, INITIAL ONUS IS CAST UPON T HE ASSESSEE TO PROVE THAT HE HAS COMPLIED WITH THE CONDITIONS LAID DOWN THEREIN. UNDER SECTION 54F OF THE I.T. ACT, A DEDUCTION IS PERMISS IBLE AGAINST THE CONSIDERATION RECEIVED ON SURRENDER OF TENANCY RIGH TS PROVIDED ASSESSEE HAS PURCHASED A RESIDENTIAL HOUSE WITHIN A PERIOD O F TWO YEARS. IN THE INSTANT CASE, THE DOCUMENTS PRODUCED BY THE ASSESSE E SMACKS OF BONAFIDE DEAL. ASSESSEE HAS WORKED FOR L & T FOR A CONSIDERABLE LENGTH OF PERIOD AND WAS AWARE OF HIS TENANCY RIGHTS AND THE IMPLICATIONS THEREIN AND HENCE, IT CANNOT BE SAID THAT HE IS NOT AWARE O F WHAT SHOULD BE THE PRECAUTION TO BE TAKEN WHILE ENTERING INTO A SALE A GREEMENT. NO BONAFIDE PURCHASER WILL ENTER INTO A SALE AGREEMENT WHICH DO ES NOT CONTAIN ANY DETAILS WITH REGARD TO THE PLAN OF THE PROPERTY. IN THE INSTANT CASE, SALE DEED FOR 394 SQ. FEET AREA SIMPLY MENTIONS THAT THE ASSESSEE IS ENTITLED TO 394 SQ. FEET WITHOUT MENTIONING AS TO WHETHER IT CO NSISTS OF ONE ROOM, KITCHEN, BALCONY ETC., OR OF ANY OTHER DIMENSION. S IMILARLY, THE SECOND AGREEMENT ALSO MERELY MENTIONS ABOUT 554 SQ. FEET A ND BOTH THE SALE DEEDS DO NOT CONTAIN THE SPECIFICATIONS OF CARPET A REA OF THE FLATS. EVEN BEFORE US ASSESSEE COULD NOT FURNISH ANY MUNICIPAL PLAN OR BROCHURE TO SUGGEST THAT HE HAS ENTERED INTO A BONAFIDE PURCHAS E TRANSACTIONS UNDER TWO SEPARATE SALE DEEDS WITH AN INTENTION TO CONVE RT THEM FOR USE AS ONE RESIDENTIAL HOUSE. 14. WE HAVE CALLED FOR THE MUNICIPAL APPROVED PLAN AND THE ASSESSEE COULD NOT FURNISH THE SAME. IT MAY BE NOTI CED THAT SOME PLAN IS ANNEXED TO THE SALE DEEDS (AT PAGES 93, 94 AND 173 AND 174) BUT THE SHRI VIJAY S. SHIRODKAR 8 LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASSESSE E, HAS NOT REFERRED TO THAT. AT ANY RATE, IT CONSISTS OF WING-A AND WING-B AND IT IS NOT KNOWN AS TO HOW THE MUNICIPAL CORPORATION HAS GIVEN ITS APPR OVAL IF THE CONSTRUCTION ITSELF IS OF ONE FLAT EACH IN THE PLAC E OF TWO FLATS SHOWN IN TWO WINGS IN THE APPROVED PLAN. A PERSON CLAIMING A DEDUCTION SHOULD COME WITH CLEAN HANDS. IN THE INSTANT CASE, THE FAC TS APPEAR TO BE DIFFERENT. IT IS NOT THE CASE OF THE ASSESSEE THAT ATLEAST SOME OF THE FLATS, OTHER THAN HIS FLAT, CONSISTS OF A-WING AND B-WING AND SUCH INDEPENDENT SMALL FLATS WERE SEPARATELY PURCHASED ATLEAST BY SO ME PERSONS. 15. ON THE CONTRARY, THE INCOME TAX INSPECTORS RE PORT INDICATES THAT TWO SEPARATE BLOCKS DO NOT EXIST. A SALE AGREE MENT IS A PRIMA FACIE/VALID EVIDENCE TO PROVE THAT THERE ARE TWO SE PARATE FLATS. BUT AT THE SAME TIME ASSESSEE WAS NOT ABLE TO PINPOINT AS TO W HETHER THOSE FLATS WERE EXISTING. THE FLAT IN WHICH HE IS STAYING MIGH T BE REGISTERED IN SOMEBODYS ELSE NAME SINCE THERE IS NO LEGAL EVIDEN CE (SALE DEED) AVAILABLE ON RECORD TO SUGGEST THAT FLAT NO. 102-A, CONSISTING OF 948 SQ. FEET WITH 3 BED ROOMS ETC., IS PURCHASED BY ASSESSE E. IT IS ALSO NOT KNOWN AS TO WHETHER MUNICIPAL AUTHORITIES HAVE GIVEN COMP LETION CERTIFICATE IN RESPECT OF FLAT 102-A CONSISTING OF 948 SQ. FEET. T HUS, LEGALLY ASSESSEE DID NOT ESTABLISH THAT HE HAS PURCHASED THE FLAT. NO DO UBT SALE DEEDS IN RESPECT OF FLAT NO. 102-A AND 102-B WERE PRODUCED B UT IT IS NOT ESTABLISHED THAT SUCH CONSTRUCTION WAS LEGALLY PERM ITTED BY THE MUNICIPAL AUTHORITIES I.E., BY JOINING THE TWO FLAT S. DESPITE LACK OF EVIDENCE, ASSESSING OFFICER WAS REASONABLE IN ALLOW ING DEDUCTION UNDER SECTION 54F OF THE ACT TO THE EXTENT OF RS.31,64,12 0/-. 16. ON A CONSPECTUS OF THE MATTER, WE ARE OF THE V IEW THAT DEDUCTION UNDER SECTION 54F OF THE ACT IS PERMISSIB LE ONLY UPON FURNISHING ADMISSIBLE EVIDENCE TO SHOW THAT THE ASS ESSEE HAS PURCHASED SHRI VIJAY S. SHIRODKAR 9 A RESIDENTIAL HOUSE WITHIN A PERIOD OF TWO YEARS. I N THE INTEREST OF JUSTICE, WE DIRECT THE ASSESSING OFFICER TO GIVE THE ASSESSE E ONE MORE OPPORTUNITY TO PROVE THAT THE SALE DEEDS WITH REFERENCE TO WHIC H ASSESSEE CLAIMS TO HAVE PURCHASED THE PROPERTY WAS THE SAME WHICH WAS OCCUPIED BY THE ASSESSEE AND IT IS LEGALLY PERMITTED TO BE CONSTRUC TED BY THE MUNICIPAL AUTHORITIES. IT MAY NOT BE OUT OF PLACE TO MENTION THAT IF THE CONSTRUCTION IS ILLEGAL AND THE SAME IS NOT COMPOUNDED OR REGULA RIZED BY THE MUNICIPAL AUTHORITIES, IT MAY NOT, IN STRICT LEGAL SENSE, BE TREATED AS A PURCHASE OF A RESIDENTIAL HOUSE. HOWEVER, THE ASSES SEE IS AT LIBERTY TO SHOW THAT HE IS LEGALLY ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54F. WITH THESE OBSERVATIONS CLAIM OF DEDUCTION UNDER SE CTION 54F OF THE ACT IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. 17. AS REGARDS THE PURCHASE OF RAC BONDS IN THE NA ME OF ASSESSEE AND HIS WIFE, IN THE LIGHT OF DECISION OF THE ITAT, MUMBAI BENCH CITED (SUPRA) WE DO NOT FIND ANY INFIRMITY IN THE O RDER PASSED BY THE LEARNED CIT (A). 18. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS TREATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-08-2011. SD/- (T.R. SOOD) ACCOUNTANT MEMBER SD/- (D. MANMOHAN) VICE-PRESIDENT MUMBAI, DATE 30 TH AUGUST, 2011. VBP/- SHRI VIJAY S. SHIRODKAR 10 COPY TO 1. ACIT CIRCLE 21(2), 508, 5 TH FLOOR, C-10, BANDRA KURLA COMPLEX, BANDRA MUMBAI-400 051. 2. SHRI VIJAY S. SHIRODKAR, A-102, HERCULES VASANTH GALAXY, M.G. LINK ROAD, BANGUR NAGAR, GOREGAON WEST, MUMBAI-400 104. 3. CIT(A)-32, MITTAL COURT, B WING, R.NOS. 13 & 14, 3 RD FLOOR, NARIMAN POINT, MUMBAI 400 021. 4. CIT, CITY-21, MUMBAI 5. DR F BENCH 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI