Mr. Sunil Sachdeva, Gurgaon V. ACIT, Gurgaon

ITA 4179/DEL/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1265 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 02-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHAND
• Assessee Lawyers: RUPESH J AIN; AMIT SACHDEVA
• Keywords: Capital asset; Benefit of exemption
• Section: 54F; 54; 139

Judgement Text

ITA NO. 4179/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4179/DEL/2011 A.Y. : 2008-09 MR. SUNIL SACHDEVA, C/O CAPITAL ADVERTISING PVT. LTD., DLF CYBER CITY, PASE-II, GURGAON (PAN : AAA[S0710P) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -2, GURGAON (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. RUPESH JAIN & MR. AMIT SACHDEVA DEPARTMENT BY : SH. RAMESH CHAND, C.I.T.(D.R.) ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), PANCHKULA D ATED 26.8.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), PANCHKULA ( 'THE CIT(A)') ERRED IN LAW IN UPHOLDING THE ACTION OF TH E ASSESSING OFFICER IN DENYING THE APPELLANT'S CLAIM F OR EXEMPTION OF RS.L,22,23,250 UNDER SECTION 54F OF THE INCOME-TAX ACT, 1961 ('THE ACT'). ITA NO. 4179/DEL/2011 2 1.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN LAW HOLDING THAT THE ACTION OF THE APPELLANT IN ISSUING VERBAL DIRECTIONS TO THE BANK TO TRANSFE R UNUTILIZED NET CONSIDERATION ARISING FROM THE SALE OF SHARES OF CAPITAL ADVERTISING PRIVATE LIMITED ('CAPL') TO THE SPECIAL C APITAL GAINS ACCOUNT DID NOT, IN LAW, CONSTITUTE 'DEPOSIT' ON SUCH DATE OF SUCH NET CONSIDERATION IN THE SPECIAL CAPIT AL GAINS ACCOUNT AS REQUIRED BY SECTION 54F(4) OF THE ACT. 1.2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN LAW IN HOLDING THAT NON-FURNISHING OF PROOF OF DEPOSIT OF NET CONSIDERATION ON 30.7.2008 IN THE SP ECIAL CAPITAL GAINS ACCOUNT WAS FATAL TO THE CLAIM OF THE APPELLANT FOR EXEMPTION UNDER SECTION 54F(4) OF THE ACT. 1.3 THAT, WITHOUT PREJUDICE, ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE, THE CIT(A) FAILED TO APPR ECIATE THAT THE UNUTILIZED NET CONSIDERATION ARISING FROM SALE OF SHARES OF CAPL HAVING BEING CONSIDERED BY THE ASSES SING OFFICER AS DEPOSITED IN THE SPECIAL CAPITAL GAINS A CCOUNT ON 31.07.2008, I.E., BEFORE DATE STIPULATED UNDER SECT ION 139(1) FOR FILING OF RETURN OF INCOME, THE EXEMPTION CLAIMED UNDER SECTION 54F OF THE ACT WAS ADMISSIBLE IN LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE CIT(A) ERRED IN LAW IN ENHANCING THE ASSESSMENT BY WITHDRAWING THE APPELLANT'S CLAIM FOR EXEMPTION OF RS.55,70,800 UNDER SECTION 54F OF THE ACT. 2.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) ERRED IN DENYING EXEMPTION OF RS.55,70,800 UN DER ITA NO. 4179/DEL/2011 3 SECTION 54F OF THE ACT ON THE GROUND THAT THE SAID AMOUNT HAD BEEN PAID BY CAPL (AND NOT BY THE APPELLANT) TO THE BUILDER TOWARDS CONSTRUCTION OF RESIDENTIAL PROPERT Y OF THE APPELLANT. 2.2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAD DULY REPAID THE AFORESAID AMOUNT OF RS.55,70,800 TO CAPL, WHICH CAPL HAD ORIGINALLY PAID TO THE BUILDER TOWARDS CONS TRUCTION OF RESIDENTIAL PROPERTY OF THE APPELLANT ON BEHALF OF THE APPELLANT. 2.3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) ERRED IN FAILING TO APPRECIATE THAT SECTION 54F(1) OF THE ACT DID NOT CONTEMPLATE ONE TO ONE CORRELATION B ETWEEN THE PROCEEDS/CONSIDERATION ARISING ON SALE OF LONG TERM CAPITAL ASSET AND UTILIZATION THEREOF FOR THE PURCHASE/CONSTRUCTION OF RESIDENTIAL PROPERTY. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, DELETE , MODIFY OR VARY THE ABOVE GROUNDS OF APPEAL AT OR BEFORE THE TIME O F THE HEARING. 3. IN THIS CASE DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, ASSESSING OFFICER NOTICED THAT ASSESSEE SOLD SHA RES OF M/S CAPITAL ADVERTISING PVT. LTD. FOR A SALE CONSIDERATION OF ` 5,62,87,500/-. ASSESSEE CLAIMED DEDUCTION OF ` 1,22,23,250/- U/S. 54F OF THE I.T. ACT. THE ASSESSEE HAS INVESTED ` 1,22,23,250/- ON 31.7.2 008 IN THE SPECIAL GAIN ACCOUNT MAINTAINED WITH THE SYNDICATE BANK. T HE CLAIM OF THE ASSESSEE U/S. 54F OF THE ACT WAS REJECTED BY THE AS SESSING OFFICER ON THE FOLLOWING REASONS:- ITA NO. 4179/DEL/2011 4 A) DEPOSIT IN THE SPECIAL GAINS ACCOUNT SCHEME WAS MA DE AFTER FILING THE RETURN OF INCOME. B) RETURN OF INCOME FILED U/S. 139(1) WAS NOT ACCOMP ANIED BY PROOF OF DEPOSIT. C) THE AMOUNT WAS NOT UTILIZED AS PER PROVISION OF S ECTION 54F(1). ACCORDING LY, THE CLAIM OF DEDUCTION OF ` 1,22,23, 250/- WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (A), ASS ESSEES SUBMISSIONS WERE AS UNDER:- DURING THE COURSE OF APPELLATE PROCEEDINGS, THE CO UNSEL FOR THE APPELLANT FILED WRITTEN SUBMISSIONS WHICH IS REPRODU CED AS UNDER:- ON 20.9.2007, THE APPELLANT SOLD CERTAIN SHARES HE LD BY HIM IN CAPITAL ADVERTISING PRIVATE LIMITED (CAPL), FOR ` 5,62,87,500/-, WHICH RESULTED IN CAPITAL GAINS OF ` 5,50,93,628. OUT OF THE AFORESAID OF CAPITAL GAINS , THE APPELLANT OFFERED ` 1,19,52,809 TO TAX UNDER SECTIO N 45 OF THE ACT. AS REGARDS THE BALANCE AMOUNT OF CAPITAL GA INS THE APPELLANT CLAIMED EXEMPTION, AS FOLLOWS: S.NO. PARTICULARS AMOUNT 1 EXEMPTION UNDER SECTION 54EC OF THE ACT, BEING INVESTMENT IN NOTIFIED BONDS ` 50,00,000 2 EXEMPTION UNDER SECTION 54F(1) OF THE ACT, BEING AMOUNT UTILIZED FOR ` 2,60,41,875 ITA NO. 4179/DEL/2011 5 PURCHASE/ CONSTRUCTION OF A RESIDENTIAL HOUSE 3 EXEMPTION UNDER SECTION 54F( 4) OF THE ACT, BEING UNUTILIZED NET CONSIDERATION DEPOSITED IN SPECIAL CAPITAL GAINS ACCOUNT ` 1,22,23,250 IN ORDER TO AVAIL THE EXEMPTION IN RESPECT OF THE SU M OF RS. 1,22,23,250 (POINT NO.3 IN THE TABLE ABOVE) UNDER S ECTION 54F(4) OF THE ACT, THE APPELLANT ON 30.07.2008, ISSU ED INSTRUCTIONS TO THE SYNDICATE BANK, HAUZ KHAS BRANC H, NEW DELHI TO TRANSFER THE AFORESAID AMOUNT OF RS.1,22,23 ,250 FROM THE SAVINGS BANK ACCOUNT MAINTAINED BY THE APPE LLANT IN THE AFORESAID BRANCH (BEARING ACCOUNT NO. 90492010070924) TO THE SPECIAL CAPITAL GAINS ACCOUN T MAINTAINED IN THE SAME BRANCH OF THE SAME BANK (BEAR ING ACCOUNT NO. 90492110000077). THE AFORESAID BANK, IN THIS REGARD, HAS ISSUED A CERTIFICATE, DATED, 15.12.2010 , CONFIRMING RECEIPT OF INSTRUCTIONS FROM THE APPELLANT ON 30.07.2008, FOR TRANSFER/DEPOSIT OF FUNDS TO THE SP ECIAL CAPITAL GAINS ACCOUNT. THE APPELLANT HAVING ISSUED THE NECESSARY INSTRUCTI ON TO THE AFORESAID BANK, IN WHICH BOTH THE ACCOUNTS (J:E., S AVINGS BANK ACCOUNT AS WELL AS SPECIAL CAPITAL GAINS ACCOU NT) WERE MAINTAINED, FOR TRANSFER/DEPOSIT OF THE CAPITA L GAINS OF RS.1,22,23,250, IN THE SPECIAL CAPITAL GAIN ACCOUNT , ON 30.07.2008, THE APPELLANT PROCEEDED TO FILE HIS RET URN OF INCOME ON THE SAME DATE I.E., 30.07.2008, WHEREIN I T ITA NO. 4179/DEL/2011 6 CLAIMED EXEMPTION OF THE AFORESAID DEPOSIT OF RS. 1,22,23,250 UNDER SECTION 54F(4) OF THE ACT. THE INSTRUCTIONS WERE, HOWEVER, ACTED UPON AND EFFE CTED BY THE SYNDICATE BANK ONLY ON 31.07.2008. VIDE THE IMPUGNED ORDER, THE ASSESSING OFFICER DENIE D EXEMPTION OF LONG TERM CAPITAL GAINS TAX IN RESPECT O F THE AFORESAID AMOUNT CLAIMED UNDER SECTION 54F(4) OF THE ACT, ON THE GROUND THAT THE DEPOSIT IN QUESTION HAD BEEN MADE ON 31.07.2008, I.E. AFTER THE DATE OF FILING OF RET URN OF INCOME BY THE APPELLANT AND THAT THE RETURN OF INCO ME WAS NOT ACCOMPANIED BY THE CERTIFICATE OF DEPOSIT AS REQ UIRED UNDER THAT SECTION. THE ASSESSING OFFICER FURTHER OBSERVED, THAT EXEMPTI ON UNDER SECTION 54F OF THE ACT IS AVAILABLE ONLY IF T HE AMOUNT DEPOSITED IN THE SPECIAL CAPITAL GAINS ACCOUNT IS U TILIZED WITHIN A PERIOD OF THREE YEARS FOR CONSTRUCTION/PUR CHASE OF A RESIDENTIAL HOUSE. THE ASSESSING OFFICER ALLEGED TH AT THE APPELLANT HAD FAILED TO FURNISH EVIDENCE TO DEMONSTR ATE THAT THE AMOUNT DEPOSITED AS AFORESAID (WITH RESPECT TO W HICH EXEMPTION UNDER SECTION 54F READ WITH SECTION 45 OF T HE ACT WAS BEING CLAIMED), HAD BEEN UTILIZED FOR CONSTRUCTION/PURCHASE OF RESIDENTIAL HOUSE WITHIN T HE PERIOD SPECIFIED IN THAT SECTION. IT IS MOST RESPECTFULLY SUBMITTED, THAT THE ACTION O F THE ASSESSING OFFICER IN DENYING EXEMPTION UNDER SECTION 54F(4) OF THE ACT TO THE APPELLANT IS NOT BASED ON PROPER ITA NO. 4179/DEL/2011 7 APPRECIATION OF FACTS AND THE POSITION IN LAW AND C ALLS FOR BEING DELETED, FOR THE REASONS ELABORATED HEREUNDER : SECTION 54F(1) OF THE ACT EXEMPTS TAXABLE CAPITAL GAI NS ARISING ON TRANSFER OF A LONG-TERM CAPITAL ASSET, O THER THAN THE RESIDENTIAL HOUSE PROPERTY, WHERE THE AMOUNT OF NET SALE CONSIDERATION IS UTILIZED BY THE ASSESSEE TO: A) PURCHASE A RESIDENTIAL HOUSE WITHIN ONE YEAR BEFORE OR WITHIN 2 YEARS AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR, B) CONSTRUCT A RESIDENTIAL HOUSE WITHIN THREE YEAR S AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET. WHERE, HOWEVER, AN ASSESSEE IS UNABLE TO UTILIZE TH E NET SALE CONSIDERATION RECEIVED ON THE TRANSFER OF THE LONG TERM CAPITAL ASSET BEFORE THE DATE OF FILING THE RETURN, SUB-SECTION (4) OF SECTION 54F PROVIDES THAT EXEMPTION FROM THE CA PITAL GAINS TAX UNDER SECTION 45 OF THE ACT WOULD STILL B E AVAILABLE, PROVIDED THAT THE ASSESSEE DEPOSITS THE UNUTILIZED/ UNAPPROPRIATED CONSIDERATION IN THE SPE CIAL CAPITAL GAINS ACCOUNT AND THE AMOUNTS SO DEPOSITED SHALL BE DEEMED TO BE COST OF THE NEW ASSET. RECEIPT OF INSTRUCTIONS BY SYNDICATE BONK CONSTITUT ED DEPOSIT THE CAPITAL GAINS ACCOUNT SCHEME, 1988 ('THE SCHEME') , HAS BEEN NOTIFIED VIDE GSR 725(E), DATED, 22.06.198 8. THE SCHEME BROADLY PROVIDES THAT AN ASSESSEE INTENDING TO AVAIL BENEFIT, INTER ALIA, UNDER SECTION 54F OF THE ACT MAY ITA NO. 4179/DEL/2011 8 DEPOSIT THE AMOUNT IN A PRESCRIBED ACCOUNT WITH THE PRESCRIBED BANKS DEFINED AS 'DEPOSIT OFFICE'. NON- FURNISHING OF EVIDENCE OF DEPOSIT WITH THE RET URN OF INCOME AS REGARDS THE CONTENTION OF THE ASSESSING OFFICER THAT THE EVIDENCE OF DEPOSIT WAS NOT FILED ALONG WITH THE RE TURN OF INCOME, IT WOULD BE PERTINENT TO NOTE FOR THE ASSES SMENT YEAR UNDER CONSIDERATION, THE RETURN OF INCOME WAS FILED IN ELECTRONIC FORM. THE RETURN IN ELECTRONIC MODE DOES N OT PERMIT FILING OF ANY DOCUMENT/ANNEXURE THEREWITH (RE FER INSTRUCTIONS TO THE RETURN FORM) AND ACCORDINGLY THE APPELLANT WAS PREVENTED BY LAW TO FILE THE CERTIFIC ATE OF DEPOSIT ALONG WITH THE RETURN OF INCOME. THE EVIDEN CE OF DEPOSIT WAS THUS FILED BY THE APPELLANT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. WITHOUT PREJUDICE, IT IS RESPECTFULLY SUBMITTED, THAT THE COURTS HAVE REPEATEDLY HELD THAT THE CLAIM FOR DEDUCTION/EXEMPTION UNDER THE ACT CANNOT BE DENIED MERELY BECAUSE THE RETURN OF INCOME WAS NOT ACCOMPANIE D BY THE PRESCRIBED DOCUMENT/CERTIFICATE. THE COURTS HAVE HELD THAT SUCH REQUIREMENT IS ONLY DIRECTORY AND FI LING OF NECESSARY DOCUMENT/CERTIFICATE IN THE ASSESSMENT PROCEEDINGS WOULD BE IN COMPLIANCE WITH LAW. IN THIS REGARD IS INVITED TO THE FOLLOWING DECISION S: CIT V. GUPTA FABS.: 274 ITR 620 (P&H) CIT V. BERGER PAINTS (INDIA) LTD: 254 ITR 503 ITA NO. 4179/DEL/2011 9 C.I.T. V. HARDEODAS AGARWALLA TRUST: 198 ITR 511 IN VIEW OF THE ABOVE, IT IS THE RESPECTFUL SUBMISSI ON OF THE APPELLANT THAT ASSUMING FOR THE SAKE OF ARGUMENT THA T THE REQUIREMENT OF FILING CERTIFICATE OF DEPOSIT ALONG WITH THE RETURN, IN TERMS OF PROVISIONS OF SECTION 54F(4) OF THE ACT, WAS NOT SATISFIED, SO LONG AS THE CERTIFICATE OF DE POSIT WAS AVAILABLE WITH THE ASSESSING OFFICER DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE FACT THAT THE SAME HAD N OT BEEN FURNISHED ALONG WITH THE RETURN WOULD NOT ML1IT ATE AGAINST AVAL1ABILITY OF BENEFIT OF EXEMPTION UNDER S ECTION 54F(4) OF THE ACT. IT IS, THEREFORE, RESPECTFULLY SUBMITTED THAT THE D ENIAL OF EXEMPTION UNDER SECTION 54F(4) OF THE ACT ON THE ABOV E GROUND WAS CONTRARY TO LAW. MANNER OF UTILIZATION COULD NOT HAVE BEEN THE BASIS FOR DENIAL OF EXEMPTION IN THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS ALLEGED THAT THE APPELLANT FAILED TO FURNISH ANY EVIDENCE O F UTILIZATION OF THE AFORESAID AMOUNT DEPOSITED UNDER THE SCHEME, FOR THE PURPOSES OF PURCHASE/CONSTRUCTION O F RESIDENTIAL HOUSE. ON THAT BASIS, TOO, THE ASSESSIN G OFFICER HELD THAT THE CLAIM OF THE APPELLANT FOR EXEMPTION UN DER SECTION 54F OF THE ACT WAS NOT ACCEPTABLE. IT IS FURTHER RESPECTFULLY SUBMITTED, THAT THE APPEL LANT FROM TIME TO TIME PAID THE SUM, DEPOSITED IN THE SPECIAL CAPITAL ITA NO. 4179/DEL/2011 10 GAINS ACCOUNT, TO DLF HOTELS & APARTMENTS PRIVATE LI MITED TOWARDS THE COST OF FIT-OUTS AS. PART OF CONSTRUCTI ON OF APARTMENT NO. MG704A IN 'THE MAGNOLIAS', DLF GOLF LIN KS, DLF CITY, GURGAON. SINCE THE AMOUNT DEPOSITED IN THE SPECIAL CAPITAL GAINS ACCOUNT HAS BEEN UT,1IZED BY THE APPELLANT WITHIN THE PERIOD OF 3 YEARS, FOR THE PUR POSES OF CONSTRUCTION OF THE ABOVE RESIDENTIAL HOUSE, THE EX EMPTION UNDER SECTION 54F OF THE ACT WAS NOT HIT BY THE PRO VISO TO THAT SECTION. THE ASSESSING OFFICER, THEREFORE, ERR ED IN DENYING EXEMPTION UNDER THAT SECTION TO THE APPELLAN T ON THE ABOVE GROUND. IT IS FURTHER SUBMITTED, WITHOUT PREJUDICE, THAT T HE ASSESSING OFFICER, IN THE FIRST PLACE ERRED IN GOING INTO THE QUESTION OF UTILIZATION OF THE NET CONSIDERATION DEPOSITED BY T HE APPELLANT IN THE SPECIAL CAPITAL GAINS ACCOUNT DURI NG THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR UNDE R CONSIDERATION. THE ASSESSING OFFICER GLOSSED OVER T HE PROVISIONS OF PROVISO TO SUB-SECTION (4) OF SECTION 54F OF THE ACT. THE SAID PROVISO READS AS UNDER: ''PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB- SECTION IS NOT UTILISED WHOLLY OR PARTLY FOR THE PU RCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPE CIFIED IN SUB-SECTION (1), THEN, - I) THE AMOUNT BY WHICH - A) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSF ER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF ITA NO. 4179/DEL/2011 11 THE COST OF THE NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB-SECTION (1), EXCEEDS B) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGED HA D THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PUR CHASE OR CONSTRUCTION OF THE NEW ASSESSEE WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1) BEEN THE COST OF THE NEW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DAT E OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW THE UN-UTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID ADMITTEDLY, IN THE CASE OF THE PRESENT APPELLANT, TH E ASSET IN QUESTION, BEING SHARES HELD BY THE APPELLANT IN CAPL WERE TRANSFERRED BY THE APPELLANT A 20.09.2007. THE PERIOD OF 3 YEARS FROM THE SAID DATE ACCORDINGLY EXPIRED 19.09.2010. THE SAID DATE FELL IN THE PREVIOUS YEAR 2010-11 (RELEVANT TO THE ASSESSMENT YEAR 2011-12) AND NOT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND, THEREFORE, DENIAL OF EXEMPTION UN DER SECTION 54F(4) OF THE ACT FOR THE ASSESSMENT YEAR UN DER CONSIDERATION WAS UNCALLED FOR. IN VIEW OF THE ABOVE, THE DENIAL OF EXEMPTION UNDER SECTION 54F OF THE ACT BY THE ASSESSING OFFICER IN RESPECT OF THE AFORESAID AMOUNT OF ` 1,22,23,250/-, IT IS MOST RESP ECTFULLY SUBMITTED, IS WITHOUT BASIS AND CONSEQUENTLY CALLS FOR BEING DELETED. ITA NO. 4179/DEL/2011 12 4.1 CONSIDERING THE AFORESAID SUBMISSIONS, LD. COMMIS SIONER OF INCOME TAX (A) OBSERVED THAT CAPITAL GAIN OF ` 5,50 ,93,628/- HAS ARISEN TO THE ASSESSEE FROM THE TRANSFER OF LONG TERM ASSET OTHER THAN RESIDENTIAL HOUSE I.E. SHARES OF M/S CAPITAL ADVERT ISING PVT. LTD. ON 20.9.2007. OUT OF THIS AMOUNT THE ASSESSEE CLAIMED E XEMPTION U/S. 54F(1) OF ` 2,60,41,875/- ON ACCOUNT OF INVESTMENT IN HOUSE IN FLAT NO. 704-A, MAGNOLIAS, DLF, GURGAON. LD. COMMISSIONER OF I NCOME TAX (A) FURTHER OBSERVED THAT OUT OF THIS AMOUNT ASSESSEE IS NOT ELIGIBLE U/S. 54F(1) ON PAYMENT OF ` 55,70,800/- BY M/S CAPITAL AD VERTISING PVT. LTD. AND NOT BY THE ASSESSEE. LD. COMMISSIONER OF INCO ME TAX (A) GAVE THE ASSESSEE AN OPPORTUNITY TO EXPLAIN WHY THE DEDU CTION SHOULD NOT BE DISALLOWED. ASSESSEE SUBMITTED THAT SECTION 54F D OES NOT REQUIRE ONE TO ONE CO-RELATION BETWEEN CAPITAL GAIN ARISING OUT OF TRANSFER OF LONG TERM CAPITAL ASSETS AND UTILIZATION THEREOF FOR PURCHASE / CONSTRUCTION OF RESIDENTIAL HOUSE. LD. COMMISSIO NER OF INCOME TAX (A) FURTHER REFERRED TO THE PROVISIONS OF SECTION 5 4F(1), HE HELD THAT KEEPING IN VIEW THE FACT THAT PAYMENT WAS NOT MADE BY THE COMPANY NAMELY M/S CAPITAL ADVERTISING PVT. LTD., THE ASSESSE E IS NOT ENTITLED FOR EXEMPTION. LD. COMMISSIONER OF INCOME TAX (A) FU RTHER OBSERVED THAT INVESTMENT IN RESIDENTIAL HOUSE WAS TO BE MADE BY THE ASSESSEE INDIVIDUAL AND NOT BY THE COMPANY IN WHICH ASSESSEE IS ONE OF THE DIRECTORS. SINCE THE ASSESSEE HAS FAILED TO INVES T ` 55,70,800/- IN INDIVIDUAL CAPACITY, HE DOES NOT QUALIFY FOR DEDUCT ION U/S. 54F. ACCORDINGLY, HE HELD THAT EXEMPTION TO THE EXTENT O F ` 55,70,800/- IS NOT AVAILABLE TO THE ASSESSEE. 4.2 LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT AS FAR AS EXEMPTION U/S. 54F(4) ON THE AMOUNT OF ` 1,22,23,250/- ON ACCOUNT OF ITA NO. 4179/DEL/2011 13 INVESTMENT IN SPECIAL GAIN ACCOUNT IS CONCERNED, TH E DATE ON WHICH THE CHEQUE IS RECEIVED BY THE DEPOSIT OFFICE IS TO BE T REATED AS THE DATE OF DEPOSIT IN VIEW OF PARA 5(6) OF THE CAPITAL GAIN AC COUNT SCHEME, 1988. KEEPING IN VIEW OF THE SAID PROVISIONS, LD. COMMISSI ONER OF INCOME TAX (A) HELD THAT THE ASSESSEES PLEA THAT ISSUE OF VER BAL DIRECTIONS TO THE BANK AMOUNTED TO ISSUE OF CHEQUE HAS NO MERIT. H E HELD THAT VERBAL DIRECTIONS TO THE BANK DO NOT AMOUNT TO ISSUE OF C HEQUE/DEPOSIT. LD. COMMISSIONER OF INCOME TAX (A) FURTHER REFERRED TO THE PROVISIONS OF SECTION 54F(4), HE OBSERVED THAT ASSESSEE HAS FAILED TO DEPOSIT IN CAPITAL GAIN SCHEME BEFORE FURNISHING OF RETURN ON 31.7.2008. THEREFORE, HE HELD THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE PRE- REQUISITE CONDITIONS OF SECTION 54F(4):- I) THE AMOUNT OF NET CONSIDERATION NOT UTILIZED FOR PURCHASE OF HOUSE NOT DEPOSITED IN BANK IN CAPITAL GAIN SCHEME BEFORE FILING RETURN OF INCOME. II) RETURN IS NOT ACCOMPANIED BY PROOF OF DEPOSIT . ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (A) HEL D THAT EXEMPTION IS DENIED U/S. 54F(1) TO THE EXTENT OF ` 5 5,70,800/- ON ACCOUNT OF INVESTMENT IN HOUSE PROPERTY AND U/S. 54 F(4) TO THE EXTENT OF ` 1,22,23,250/- ON ACCOUNT OF INVESTMENT IN SPEC IAL CAPITAL GAINS ACCOUNT AFTER FILING OF RETURN. HENCE, THIS RESU LTED IN AN ENHANCEMENT OF ` 55,70,800/-. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APP EAL BEFORE US. ITA NO. 4179/DEL/2011 14 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE CAN GAINFU LLY REFER THE PROVISIONS OF SECTION 54F, WHICH READ AS UNDER:- [ CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. 54F. (1) [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 (HEREAFTER IN THIS SECTIO N REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PER IOD OF ONE YEAR BEFORE OR [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFE R TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AF TER THAT DATE CONSTRUCTED, A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE CAPITAL GAIN SHALL BE DEALT WIT H IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS T O 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 CA PITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 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 CAPIT AL GAIN AS BEARS TO THE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION A S THE COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION, SHALL NOT BE CHARGED UNDER SECTION 45 : [ PROVIDED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL A PPLY WHERE (A) THE ASSESSEE, (I) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSE T; OR (II) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANS FER OF THE ORIGINAL ASSET; OR ITA NO. 4179/DEL/2011 15 (III) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TR ANSFER OF THE ORIGINAL ASSET; AND (B) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HO USE PROPERTY'.] EXPLANATION.FOR THE PURPOSES OF THIS SECTION, [***] [***] 'NET CONSIDERATION', IN RELATION TO THE TRAN SFER OF A CAPITAL ASSET, MEANS THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET AS REDU CED BY ANY EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONN ECTION WITH SUCH TRANSFER. (2) WHERE THE ASSESSEE PURCHASES, WITHIN THE PERIOD OF [TWO YEARS] AFTER THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET, OR CONSTRUCTS, WITHIN THE PERIOD OF THREE YEARS AFTER SUCH DATE, ANY RESIDENT IAL HOUSE, THE INCOME FROM WHICH IS CHARGEABLE UNDER THE HEAD 'INCOME FRO M HOUSE PROPERTY', OTHER THAN THE NEW ASSET, THE AMOUNT OF CAPITAL GAI N ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SE CTION 45 ON THE BASIS OF THE COST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE (A), OR, AS THE CASE MAY BE, CLAUSE (B), OF SUB-SECTION (1), SHALL BE DE EMED TO BE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH RESIDENTI AL HOUSE IS PURCHASED OR CONSTRUCTED. (3) WHERE THE NEW ASSET IS TRANSFERRED WITHIN A PER IOD OF THREE YEARS FROM THE DATE OF ITS PURCHASE OR, AS THE CASE MAY B E, ITS CONSTRUCTION, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST O F SUCH NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAU SE (B), OF SUB-SECTION (1) SHALL BE DEEMED TO BE INCOME CHARGEABLE UNDER T HE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH NEW ASSET IS TRANSFERRED.] [(4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR ITA NO. 4179/DEL/2011 16 BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGIN AL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CO NSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF I NCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SU CH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE D UE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139 ] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION I N THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RET URN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT ; AND, FOR THE PURPOSES OF SUB- SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILISED B Y THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1 ), THEN, (I) THE AMOUNT BY WHICH (A) THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TR ANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE COST OF THE NEW ASSET AS PROVIDED IN CLAUSE (A) OR, AS THE CASE MAY BE, CLAUSE (B) OF SUB-SECTION (1), EXCEEDS (B) THE AMOUNT THAT WOULD NOT HAVE BEEN SO CHARGE D HAD THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PU RCHASE OR CONSTRUCTION OF THE NEW ASSET WITHIN THE PERIOD SPE CIFIED IN SUB-SECTION (1) BEEN THE COST OF THE NEW ASSET, SHALL BE CHARGED UNDER SECTION 45 AS INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF TH E TRANSFER OF THE ORIGINAL ASSET EXPIRES ; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW TH E UNUTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. ITA NO. 4179/DEL/2011 17 6.1 WE FIND THAT IN THIS CASE THE ASSESSEE HAS BEEN DENIED BENEFIT OF EXEMPTION U/S. 54F ON THE AMOUNT OF ` 1,22,23,250/- ON ACCOUNT OF INVESTMENT IN SPECIAL CAPITAL GAIN ACCOUNT AFTER FI LING OF RETURN. IN THIS REGARD, IT IS THE SUBMISSIONS OF THE ASSESSEE THAT I N ORDER TO AVAIL THE EXEMPTION IN RESPECT OF A SUM OF ` 1,22,23,250/- U/ S. 54F(4) OF THE ACT, THE ASSESSEE ON 30.7.2008 ISSUED INSTRUCTION TO THE SYNDICATE BANK, HAUZ KHAS, NEW DELHI TO TRANSFER THE AFORESAID AMOUNT OF ` 1,22,23,250/- FROM THE SAVINGS BANK ACCOUNT MAINTAIN ED BY THE ASSESSEE IN THE AFORESAID BRANCH TO THE SPECIAL CAP ITAL GAIN ACCOUNT MAINTAINED WITH THE SAME BRANCH OF THE SAID BANK. IN THIS REGARD, ASSESSEE HAS FURNISHED A CERTIFICATE ISSUED BY THE BANK ON 15.12.2010 WHEREIN IT HAS BEEN CONFIRMED THAT INSTRUCTION HA S BEEN RECEIVED FROM THE ASSESSEE ON 30.7.2008 FOR TRANSFER / DEPOSI TS OF FUNDS TO THE SPECIAL CAPITAL GAIN ACCOUNT. IT HAS FURTHER BEEN CLAIMED BY THE ASSESSEE THAT ASSESSEE HAVING ISSUED NECESSARY INST RUCTIONS TO THE AFORESAID BANK IN WHICH BOTH THE ACCOUNTS (I.E. SAV INGS BANK ACCOUNT AS WELL AS SPECIAL CAPITAL GAIN ACCOUNT) WERE MAINT AINED FOR TRANSFER / DEPOSITS IN THE CAPITAL GAIN OF ` 1,22,23,250/- IN THE SPECIAL CAPITAL GAIN ACCOUNT ON 30.7.2008, THE ASSESSEE PROCEEDED TO F ILE HIS RETURN OF INCOME ON THE SAME DATE I.E. 30.7.2008 WHEREIN IT C LAIMED THAT EXEMPTION OF THE AFORESAID DEPOSITS OF ` 1,22,23,250 /- U/S. 54F(4) OF THE ACT. THE INSTRUCTIONS OF THE ASSESSEE WERE ACTED UPON THE SYNDICATE BANK ONLY ON 31.7.2008. IT HAS FURTHER BE EN SUBMITTED THAT AS REGARDS THE CONTENTION OF THE ASSESSING OFFICER THAT EVIDENCE OF DEPOSITS WAS NOT FILED ALONGWITH THE RETURN OF INC OME, IT WOULD BE PERTINENT TO NOTE THAT THE ASSESSMENT YEAR UNDER C ONSIDERATION THE RETURN OF INCOME WAS FILED IN ELECTRONIC FORM. T HE RETURN IN ELECTRONIC MODE DOES NOT PERMIT FILING OF ANY DOCUMENTS/ ANNEXURE S THEREWITH ITA NO. 4179/DEL/2011 18 AND ACCORDINGLY, THE ASSESSEE WAS PREVENTED BY LAW TO FILE A CERTIFICATE OF DEPOSITS ALONGWITH RETURN OF INCOME. IT HAS BEE N CLAIMED THAT HENCE THE EVIDENCE OF DEPOSITS WAS FILED BY THE ASS ESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT HAS FURTHER BEEN SUBMITTED THAT COURTS HAVE REPEATEDLY HELD THAT CLAIM OF DEDUCTION / EXEMPTION UNDER THE ACT CANNOT BE DENIED MERELY BECAUSE OF THE RET URN OF INCOME WAS NOT ACCOMPANIED BY THE PRESCRIBED DOCUMENT / CERTIFI CATE. IT HAS BEEN CLAIMED THAT COURTS HAVE HELD THAT SUCH REQUIR EMENTS IS ONLY DIRECTORY AND FILING OF NECESSARY DOCUMENTS / CERT IFICATE IN THE ASSESSMENT PROCEEDINGS WOULD BE IN COMPLIANCE WITH L AW. THE ABOVE SUBMISSIONS WERE NOT ACCEPTED BY THE ASSESSING OFFICER AND THE LD. COMMISSIONER OF INCOME TAX (A) AND THE DEDU CTION FOR AN AMOUNT OF ` 1,22,23,250/- WAS DENIED TO THE ASSESSE E. 6.2 UPON CAREFUL CONSIDERATION, WE FIND THAT THE AS SESSEES SUBMISSIONS HAVE CONSIDERABLE COGENCY. IT IS EMANA TING FROM THE SUBMISSIONS AND RECORDS THAT ASSESSEE HAS GIVEN INS TRUCTION ON 30.7.2008 TO THE BANK TO TRANSFER THE AMOUNT FROM TH E SAVINGS BANK ACCOUNT TO THE SPECIAL CAPITAL GAIN ACCOUNT. THIS HAS BEEN DULY ACKNOWLEDGED BY THE BANK AND THE BANK HAS ISSUED CE RTIFICATE IN THIS REGARD. THE BANK HAD ACTED UPON THE INSTRUCTION O F THE ASSESSEE ON 31.7.2008. HENCE, WE FIND THAT ASSESSEE HAS DULY C OMPLIED WITH THE REQUIREMENTS OF LAW. FURTHERMORE, WE NOTE THAT TH E RETURN OF INCOME WAS FURNISHED IN ELECTRONIC FORM. THE RETURN OF E LECTRONIC MODE DOES NOT PERMIT FILING OF ANY DOCUMENTS/ ANNEXURES THEREW ITH. HENCE, IT IS APPARENT THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN NOT FILING THE CERTIFICATE OF DEPOSITS ALONGWITH RETURN OF INC OME. THE EVIDENCE OF DEPOSITS WAS DULY FILED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WE FURTHER TAKE NOTE OF TH E FACT THAT COURTS ITA NO. 4179/DEL/2011 19 HAVE REPEATEDLY HELD THAT THE CLAIM OF DEDUCTION / E XEMPTION UNDER THE ACT MERELY BECAUSE THE RETURN OF INCOME WAS NOT ACCOMPANIED BY THE PRESCRIBED DOCUMENTS / CERTIFICATE. THE CO URTS HAVE HELD THAT SUCH REQUIREMENT IS ONLY DIRECTORY AND FILING OF NEC ESSARY DOCUMENT/CERTIFICATE IN THE ASSESSMENT PROCEEDINGS WO ULD BE IN COMPLIANCE WITH LAW. ACCORDINGLY, WE HOLD THAT ASSE SSEES CLAIM IS PERFECTLY COGENT AND ACCORDINGLY, THE DISALLOWANCE OF EXEMPTION U/S. 54F OF THE I.T. ACT AMOUNTING TO ` 1,22,23,250/- IS W ITHOUT APPROPRIATE BASIS, CONSEQUENTLY THE SAME IS DELETED. 6.3 AS REGARDS ANOTHER FACET OF ADDITION IN THIS CASE WHICH HAS RESULTED FROM ENHANCEMENT MADE BY THE LD. COMMISSIONER OF INCOME TAX (A) BY HOLDING THAT ASSESSEE IS NOT ELIGIBLE FO R DEDUCTION U/S. 54F(1) ON THE PAYMENT OF ` 55,70,800/-. THIS HAS BEE N DENIED ON THE GROUND THAT THE PAYMENT WAS MADE BY M/S CAPITAL ADV ERTISING PVT. LTD. WHEREIN THE ASSESSEE WAS DIRECTOR AND NOT BY THE ASSESSEE HIMSELF. IN THIS REGARD, IT IS THE ASSESSEES CL AIM THAT THE ASSESSEE HAS DULY MADE THE ARRANGEMENT FOR BOOKING OF THE F LAT AND NECESSARY DOCUMENTATION WERE MADE BY THE ASSESSEE IN HIS INDIV IDUAL CAPACITY. ONLY THE PAYMENT OF ` 55,70,800/- WAS DONE ON BEHAL F OF THE ASSESSEE BY M/S CAPITAL ADVERTISING PVT. LTD. AND SUBSEQUENTL Y, THE ASSESSEE HAD DULY REIMBURSED THE COMPANY AMOUNT INVOLVED. WE FU RTHER AGREE WITH THE ASSESSEES CONTENTION THAT SECTION 54F DO ES NOT REQUIRE ONE TO ONE CORRELATION BETWEEN THE CAPITAL GAIN ARISING OUT OF TRANSFER OF ITA NO. 4179/DEL/2011 20 LONG TERM CAPITAL ASSET AND UTILIZATION THEREOF FOR PURCHASE / CONSTRUCTION OF RESIDENTIAL HOUSE. UNDER THE CIRCU MSTANCES, IN OUR CONSIDERED OPINION, SUBMISSIONS OF THE ASSESSEE AR E QUITE COGENT AND ENHANCEMENT BY THE LD. COMMISSIONER OF INCOME TA X (A) ON THIS ACCOUNT IS NOT SUSTAINABLE. ACCORDINGLY, WE HOLD THAT EXEMPTION TO THE EXTENT OF ` 55,70,800/- CANNOT BE DENIED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY, WE SET ASID E THE ORDERS OF THE AUTHORITIES BELOW AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/01/2013. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [ [[ [A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 15/01/2013 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES