Smt. Sajida Begum, Bangalore V. ITO, Bangalore

ITA 440/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86027 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: V SRINIVASAN
• Keywords: Deemed Gift on Purchase of immovable Property below Jantri value; Capital asset; Gift; Salary income; Additional evidence
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO. 440/BANG/2014 ASSESSMENT YEAR : 2009-10 SMT. SAJIDA BEGUM, # 518, MALAPRABHA BLOCK, NATIONAL GAMES VILLAGE, KORAMANGALA, BANGALORE 560 047. PAN : ADNPB 1313R VS. THE INCOME TAX OFFICER, WARD 15(2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, C.A. REVENUE BY : DR. P.K. SRIHARI, ADDL. CIT(DR) DATE OF HEARING : 02.02.2015 DATE OF PRONOUNCEMENT : 13.02.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 18.2.14 OF THE CIT(APPEALS), LTU, BENGALURU RELATING TO ASSESS MENT YEAR 2009-10. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE REVENUE AUTHORITIES WERE JUSTIFIED IN D ENYING THE CLAIM OF DEDUCTION U/S. 54F OF THE ACT. ITA NO.440/BANG/2014 PAGE 2 OF 13 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH THE AFO RESAID ISSUE ARISES FOR CONSIDERATION ARE AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL. DURING THE PREVIOUS YEAR I.E., ON 4.9.2008, THE ASSESSEE SOLD A VACANT SITE FOR A CONSIDERATION OF RS.65,65,000. THE ASSESSEE PURCHA SED ANOTHER VACANT SITE ON 9.7.2009 FOR A SUM OF RS.42,75,000 AND DEPO SITED THE BALANCE CAPITAL GAIN IN THE CAPITAL GAINS ACCOUNT SCHEME WI TH SYNDICATE BANK, WITH A VIEW TO CLAIM EXEMPTION OF THE ENTIRE CAPITA L GAIN ON THE SALE OF VACANT SITE BY INVESTING THE ENTIRE SALE CONSIDERAT ION RECEIVED BY ACQUIRING ANOTHER SITE AND CONSTRUCTING RESIDENTIAL HOUSE THE REON. 4. U/S. 54F OF THE ACT, WHERE CAPITAL GAIN ARISES FROM TRANSFER OF ANY LONG TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HO USE AND THE ASSESSEE HAS WITHIN A PERIOD OF THREE YEARS, AFTER THE DATE OF T RANSFER, CONSTRUCTED A RESIDENTIAL HOUSE AND THE ENTIRE NET CONSIDERATION ON SALE OF ORIGINAL ASSET IS INVESTED FOR CONSTRUCTION OF RESIDENTIAL HOUSE, THEN THE CAPITAL GAIN SHALL NOT BE CHARGED TO TAX U/S. 45 OF THE ACT. PROVISO TO SECTION 54(1) OF THE ACT PROVIDES THAT THE ASSESSEE SHALL NOT OWN ON THE DAT E OF TRANSFER OF ORIGINAL ASSET, MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET. 5. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER CALLED UPON THE ASSESSEE TO FURNISH VARIOUS DETAILS AND PARTICULARS AND THE SAME WAS FURNISHED. ON VERIFICATION OF THE DOCUMENT S PRODUCED THE AO OBSERVED THAT ASSESSEE HAD TAKEN TWO HOUSING LOANS, ONE FROM HSBC AND OTHER FROM ICICI BANK. THEREAFTER, THE LEARNED A.O. CALLED UPON THE BANKS ITA NO.440/BANG/2014 PAGE 3 OF 13 TO FURNISH THE INFORMATION AND ON VERIFICATION, THE A.O. FOUND THAT THE ASSESSEE HAD PURCHASED A HOUSE PROPERTY AT #228, OD D NO.25, KADIRENAHALLI VILLAGE, I LLIYASNAGAR, UTTARAHALLI HOBLI, BANGALORE SOUTH TAL UK ON 06/09/2003 BY AVAILING HOUSING LOAN FROM HSBC BA NK AND THE ASSESSEE HAD PURCHASED ANOTHER HOUSE PROPERTY AT NO .518, 8-3, MALAPRABHA BLOCK, NATIONAL GAMES VILLAGE, KORAMANGA LA, BANGALORE ON 03/06/2006. THE A.O. REFERRED TO THE PROVISIONS OF SECTION 54F OF THE ACT AND OBSERVED THAT UNDER THE PROVISO TO SECTION 54F OF THE ACT, THE EXEMPTION WILL NOT BE ALLOWED IF AN ASSESSEE OWNS M ORE THAN ONE RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET ON THE D ATE OF TRANSFER OF THE ORIGINAL ASSET. THE AO HELD THAT THE ASSESSEE WAS O WNER OF MORE THAN ONE RESIDENTIAL HOUSE ON THE DATE OF TRANSFER OF THE VA CANT SITE AND HENCE, THE CLAIM OF EXEMPTION U/S.54F OF THE ACT WAS NOT ALLOW ABLE. IN THIS VIEW OF THE MATTER, THE AO DENIED THE EXEMPTION CLAIMED U/S. 54 F OF THE ACT AND ASSESSED THE LONG TERM CAPITAL GAINS OF RS. 53,69,9 52 TO TAX IN THE IMPUGNED ORDER. 6. DETAILS OF PARTICULARS FURNISHED BY THE ASSESSE E REFERRED TO ABOVE IS A STATEMENT OF AFFAIRS AS ON 31.3.2009 FILED BEFORE THE AO. AS PER THE AFORESAID STATEMENT, ASSETS SIDE OF THE STATEMENT O F AFFAIRS DISCLOSED THE FOLLOWING THREE PROPERTIES:- (1) NO.222, NO.25, KADERANAHALLI VILLAGE, UTTARAHA LLI HOBLI, BANGALORE. (2) NO.518, 5 TH FLOOR, MALAPRABHA, BANGALORE NGHP, KORAMANGALA. ITA NO.440/BANG/2014 PAGE 4 OF 13 (3) NO.228, KADERANAHALLI VILLAGE, UTTARAHALLI HOBL I, BANGALORE. 7. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THAT THE ASSESSEE MERELY DERIVES INCOME FROM SALARY AND OTHER SOURCES AND WAS FILING HER RETURNS OF INCOME AND APART FROM THE SAME, SHE WAS NOT AWARE OF THE INCOME-TAX PROCEEDINGS. DURING THE COURSE OF THE AS SESSMENT PROCEEDINGS, WHEN THE LEARNED A.O. CALLED UPON HER TO PRODUCE DETAILS, SHE HAD PLACED THE MATTER IN THE HANDS OF HER ADVOCATE/ TAX PRACTITIONER FOR NECESSARY ACTION. IT APPEARS THAT THE ADVOCATE/TAX PRACTITIONER OF THE ASSESSEE PRODUCED CERTAIN DETAILS, BUT, HE DID NOT APPRAISE HER ABOUT THE CONDUCT OF THE ASSESSMENT PROCEEDINGS AND HENCE, TH E ASSESSEE COULD NOT FURNISH CERTAIN DOCUMENTS TO SHOW THAT THE CONCLUSI ONS OF THE AO FOR DENYING THE EXEMPTION CLAIMED WAS NOT WARRANTED. TH US, THE ASSESSEE COULD NOT APPRAISE THE AO THAT SHE WAS NOT THE OWNE R OF 2 RESIDENTIAL HOUSES AS ON THE DATE OF TRANSFER OF THE ORIGINAL A SSET I.E., ON 04/09/2008 AND HENCE, THE CLAIM OF EXEMPTION U/S. 54F OF THE A CT WAS JUSTIFIED. 8. IT WAS SUBMITTED THAT THERE IS A PROPERTY BEARI NG NO.222, 6TH MAIN, KADIRANAHALLI VILLAGE, BANGALORE THAT WAS ORIGINALL Y ACQUIRED BY THE ASSESSEE ON 05/09/2001. HOWEVER, THIS PROPERTY ACQU IRED BY THE ASSESSEE HAS NOT BEEN NOTICED BY THE AO IN THE ASSESSMENT OR DER AT ALL. BE THAT AS IT MAY, AFTER THE ACQUISITION OF THE AFORESAID PROPERT Y, THE ASSESSEE HAD MADE AN ORAL HIBA ON 18/08/2008 BY WHICH, THE AFORE SAID PROPERTY WAS ITA NO.440/BANG/2014 PAGE 5 OF 13 GIVEN AS A GIFT TO HER DAUGHTER MS. RISHMA SIDRA, M INOR BORN ON 11/04/2001. THE DECLARATION OF THE ORAL HIBA IS CON FIRMED BY THE AFFIDAVIT IN CONFIRMATION OF ORAL HIBA DATED 18/08/2008 EXECUTED BY THE APPELLANT BEFORE A NOTARY PUBLIC. IN ACCORDANCE WITH THE PRIN CIPLES OF SUNNI MOHAMMADEN LAW, THE AFORESAID HIBA EXECUTED BY THE ASSESSEE IS VALID AND HAS DIVESTED THE ASSESSEE OF THE TITLE AND OWNE RSHIP OF THE SAID PROPERTY BEFORE THE SALE OF THE VACANT SITE ON 04/0 9/2008. 9. APART FROM THE ABOVE, IT WAS SUBMITTED THAT THER E IS ANOTHER PROPERTY BEARING NO.228, 6 MAIN, I LLIYASNAGAR, KADIRANAHALLI VILLAGE, BANGALORE, WHICH WAS ORIGINALLY ACQUIRED BY THE ASSESSEE ON 06 /09/2003. THE ACQUISITION OF THIS PROPERTY HAS BEEN NOTICED BY TH E AO IN THE IMPUGNED ORDER. HOWEVER, AFTER THE ACQUISITION OF THE AFORES AID PROPERTY, THE ASSESSEE HAD SIMILARLY MADE AN ORAL HIBA ON 18/08/2 008 BY WHICH, THE AFORESAID PROPERTY WAS GIVEN AS A GIFT TO HER DAUGH TER MS. RIDHA FATHIMA, MINOR BORN ON 05/07/2008. THE DECLARATION OF THE OR AL HIBA IS CONFIRMED BY THE AFFIDAVIT IN CONFIRMATION OF ORAL HIBA DATED 18 /08/2008 EXECUTED BY THE ASSESSEE BEFORE A NOTARY PUBLIC. IN ACCORDANCE WITH THE PRINCIPLES OF SUNNI MOHAMMADEN LAW, THE AFORESAID HIBA EXECUTED BY THE ASSESSEE IS VALID AND HAS DIVESTED THE APPELLANT OF THE TITLE AND OWN ERSHIP OF THE AFORESAID PROPERTY BEFORE THE SALE OF THE VACANT SITE ON 04/0 9/2008. 10. IN SUPPORT OF THE ORAL GIFT (HIBA) MADE BY TH E ASSESSEE, TWO AFFIDAVITS WERE FILED ONE IN RESPECT OF THE PROPE RTY NO.222, KADIRENAHALLI ITA NO.440/BANG/2014 PAGE 6 OF 13 VILLAGE, WHICH WAS GIVEN AS GIFT IN FAVOUR OF DAUGH TER, MS. RISHMA SIDRA BORN ON 11.4.2001; AND THE OTHER IN RESPECT OF ORA L GIFT (HIBA) OF THE PROPERTY BEARING NO.228, KADIRENAHALLI VILLAGE, IN FAVOUR OF DAUGHTER, MS. RIDHA FATHIMA BORN ON 5.7.2008. BOTH THESE AFFIDAV ITS WERE SWORN TO BY THE ASSESSEE ON 18.8.2008. THE CONTENTS OF THE AFF IDAVITS ARE COMMON. IT IS NECESSARY TO REPRODUCE THE MANNER AND THE TIME I N WHICH THE GIFTS WERE MADE AS STATED IN THE AFFIDAVIT. THE RELEVANT PORT ION IN THIS REGARD READS AS FOLLOWS:- 2. THAT OUT OF NATURAL LOVE AND AFFECTION, I HAVE EARLIER TODAY, IN THE PRESENCE OF THE WITNESSES; MENTIONED HEREUN DER MADE A HIBA OF THE SCHEDULE PROPERTY TO MY DAUGHTE R MS.RISHMA SIDRA, MINOR BORN ON 11.04.2001 (HEREINAF TER REFERRED TO AS THE SAID DONEE) AND ON BEHALF OF MY MINOR DAUGHTER, MY HUSBAND AND MYSELF AS THE NATURAL GUARDIANS OF THE MINOR CHILD, HAVE ACCEPTED THE HIBA. 3. THAT THE SAID DONEE IS ALSO SIGNING THIS DECLAR ATION IN TOKEN THEREOF FOR HAVING ACCEPTED THE HIBA IN THE P RESENCE OF THE WITNESSES BELOW. 4. THAT I HAVE SIMULTANEOUSLY DELIVERED VACANT POS SESSION OF THE SCHEDULE PROPERTY TO THE SAID DONEE EARLIER TOD AY. 11. SINCE THE AFFIDAVITS AS ABOVE WAS AN ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE CIT(APPEALS) FOR THE FIRST TIME , THE CIT(APPEALS) CALLED FOR A REMAND REPORT FROM THE AO. IN THE REMAND REP ORT, THE AO SUBMITTED THAT THE ASSESSEE APPEARED BEFORE THE AO ON 16.1.20 14 AND WAS ASKED AS TO WHY THE EVIDENCE REGARDING THE ORAL GIFT (HIBA) WAS NOT PRODUCED BEFORE HIM AT THE TIME OF ASSESSMENT PROCEEDINGS. THE REM AND REPORT MENTIONS ITA NO.440/BANG/2014 PAGE 7 OF 13 THAT THE ASSESSEE HAD EXPLAINED THAT ONE SRI MD. AN WAR, ADVOCATE, WAS REPRESENTING THE ASSESSEES CASE BEFORE THE AO AND HE WAS NOT APPRISED OF THE ORAL GIFTS (HIBA) EXECUTED ON 18.8.2008. IN THE REMAND REPORT, THE AO ALSO TOOK A STAND THAT THE GIFTS OF IMMOVABLE PR OPERTY ARE REQUIRED TO BE MADE ONLY BY A REGISTERED DOCUMENT. PERSONS, WHO F OLLOW THE MUSLIM RELIGION, CAN MAKE ORAL GIFTS AND SUCH GIFTS ARE VA LID IN LAW. THE AO, NEVERTHELESS, TOOK A STAND THAT FOR THE VALIDITY OF THE GIFT UNDER MOHAMMEDAN LAW, THREE CONDITIONS ARE REQUIRED TO BE SATISFIED, I.E.,(A) THE DECLARATION BY THE DONOR (OFFER) (B) AN ACCEPTANCE BY THE DONEE (ACCEPTANCE) AND (C) THE DELIVERY OF THE PROPERTY ( TRANSFER). AS HELD BY MANY COURTS, SECTION 129 OF THE TRANSFER OF PROPERT Y ACT DOES NOT EXEMPT THE WRITTEN GIFT DEED EXECUTED BY A MOHAMMEDAN. 1. REGISTRATION OF A GIFT DEED CANNOT CURE A DEFEC T, AS TO CONDITION OF DELIVERY OF POSSESSION. 2. MOHAMMEDAN LAW DOES NOT DISPENSE WITH THE NECES SITY FOR ACCEPTANCE OF THE GIFT EVEN IN CASES WHERE THE DONE ES ARE MINORS. 3. THE FUNDAMENTAL RULE OF MOHAMMEDAN LAW AS TO GI FTS IS THAT THE DONOR SHOULD DIVEST HIMSELF COMPLETELY OF ALL OWNERSHIP AND DOMINION OVER THE SUBJECT OF THE GIFT. 4. THERE MUST BE A DELIVERY OF SUCH POSSESSION AS THE SUBJECT OF THE GIFT. AS TO DELIVERY OF POSSESSION IS CONCERNED , IRRESPECTIVE OF ACTUAL OR CONSTRUCTIVE, THE ULTIMATE TEST OF THE DELIVERY OF POSSESSION IS TO SEE WHETHER THE DONOR OR DONEE REA PS THE BENEFIT. ITA NO.440/BANG/2014 PAGE 8 OF 13 12. THE AO ACCORDINGLY TOOK A STAND THAT ORAL GIFT WAS AN AFTER-THOUGHT AND SHOULD NOT BE ACCEPTED. 13. THE CIT(APPEALS) ON A CONSIDERATION OF THE REM AND REPORT, HELD THAT ORAL GIFTS OF IMMOVABLE PROPERTY ARE NOT VALID IN L AW. HE WAS ALSO OF THE VIEW THAT HAD THE GIFTS BEEN REALLY MADE, THEN THE STATEMENT OF AFFAIRS INCLUDING THE PROPERTIES GIFTED WOULD NOT HAVE BEEN FILED BY THE ASSESSEE BEFORE THE AO. ACCORDING TO HIM, THE ABOVE CIRCUMS TANCES OF FILING THE STATEMENT OF AFFAIRS INCLUDING THE PROPERTIES GIFTE D, CANNOT BE LOST SIGHT OF. HE ALSO REFERRED TO THE FACT THAT ASSESSEE HAS FILE D WEALTH-TAX RETURNS INCLUDING THE AFORESAID PROPERTIES AS PART OF HER W EALTH. 14. THE ABOVE OBSERVATIONS REGARDING WEALTH TAX RET URNS IS FACTUALLY INCORRECT. AS WE HAVE ALREADY SEEN, THE CIT(APPEAL S) CALLED FOR A REMAND REPORT FROM THE AO. IN THE REMAND REPORT, THE AO H AS OBSERVED AS FOLLOWS:- .7. IT IS ALSO PERTINENT TO MENTION HERE THAT AS P ER SECTION 4(1) OF THE WEALTH TAX ACT - IN COMPUTING THE NET WEALTH OF AN INDIVIDUAL, THERE SHALL BE INCLUDED AS BELONGING TO THAT INDIVIDUAL, THE VALUE OF ASSETS, WHICH ON THE VALUATION DATE, A RE HELD BY THE MINOR CHILD NOT BEING A MINOR CHILD SUFFERING FROM ANY DISABILITY OF THE NATURE SPECIFIED IN SECTION 80U OF THE I. T. ACT OR A MARRIED DAUGHTER OF SUCH INDIVIDUAL. IN THIS CASE, THE ASSE SSEE HAS NOT FILED WEALTH TAX RETURN NOR INCLUDED THE ASSETS HEL D BY THE MINOR CHILD IN THE ASSESSEES NAME. 15. THE ABOVE OBSERVATION IN THE REMAND REPORT WAS MISCONSTRUED BY THE CIT(APPEALS) AS A SUBMISSION BY THE AO THAT THE PROPERTIES THAT WERE INCLUDED AS PART OF NET WEALTH BY THE ASSESSEE IN H ER WEALTH-TAX RETURNS. ITA NO.440/BANG/2014 PAGE 9 OF 13 16. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE AS SESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 17. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNS EL FOR THE ASSESSEE, WHO REITERATED THE SUBMISSIONS AS WERE MA DE BEFORE THE CIT(A). THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER OF CIT(A) AND FURTHER SUBMITTED THAT IF THE ORAL GIFT IS TRUE, THEN THERE SHOULD HAVE BEEN A MUTATION OF THE PUBLIC DOCUMENTS RELATING TO THE PR OPERTY, WHICH, ADMITTEDLY, HAD NOT TAKEN PLACE. ACCORDING TO THE LD. DR, THE OTHER CIRCUMSTANCES REGARDING GENUINENESS OF THE GIFT ALS O NEED TO BE LOOKED INTO. 18. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS. THE FIRST ISSUE THAT NEEDS TO BE ANSWERED IS AS TO WHETHER THE GIFT IN QUESTION IS NOT VALID FOR THE REASON THAT IT IS NOT EFFECT BY A REGISTERED DOCUMENT. IN THIS REGARD, THE PROVISIONS OF SECTIO N 123 OF THE TRANSFER OF PROPERTY ACT, 1882, ARE RELEVANT AND THE SAME IS RE PRODUCED HEREUNDER:- 123. TRANSFER HOW EFFECTED. FOR THE PURPOSE OF M AKING A GIFT OF IMMOVABLE PROPERTY, THE TRANSFER MUST BE EFFECTE D BY A REGISTERED INSTRUMENT SIGNED BY OR ON BEHALF OF THE DONOR, AND ATTESTED BY AT LEAST TWO WITNESSES. FOR THE PURPOSE OF MAKING A GIFT OF MOVABLE PROPER TY, THE TRANSFER MAY BE EFFECTED EITHER BY A REGISTERED INS TRUMENT SIGNED AS AFORESAID OR BY DELIVERY. SUCH DELIVERY MAY BE MADE IN THE SAME WAY AS GOODS SOLD MAY BE DELIVERED. ITA NO.440/BANG/2014 PAGE 10 OF 13 19. THE ASSESSEE HEREIN IS A MUSLIM BY RELIGION. U NDER THE MOHAMMEDAN LAW, ESSENTIALS OF A GIFT ARE DECLARATIO N OF GIFT BY THE DONOR AND ACCEPTANCE OF THE GIFT BY THE DONEE AND DELIVER Y OF POSSESSION. THIS RULE OF MOHAMMEDAN LAW IS UNAFFECTED BY THE PROVISI ON OF SECTION 123 OF THE TRANSFER OF PROPERTY ACT, 1882. THIS IS MADE V ERY CLEAR BY THE PROVISIONS OF SECTION 129 OF THE TRANSFER OF PROPER TY ACT, 1882, WHICH READS AS FOLLOWS:- 129. SAVING OF DONATIONS MORTIS CAUSA AND MUHAMMADAN LAW. NOTHING IN THIS CHAPTER RELATES TO GIFTS OF MOVAB LE PROPERTY MADE IN CONTEMPLATION OF DEATH, OR SHALL BE DEEMED TO AFFECT ANY RULE OF MUHAMMANDAN LAW. 20. IN VIEW OF THE ABOVE LEGAL POSITION, WE ARE OF THE VIEW THAT THE ORAL GIFT CLAIMED BY THE ASSESSEE CANNOT BE DISREGARDED BY THE REVENUE AUTHORITIES. THE STAND TAKEN BY THE REVENUE IS THA T THE DOCUMENT OF GIFT OF IMMOVABLE PROPERTY REQUIRES REGISTRATION IN VIEW OF THE PROVISIONS OF SECTION 123 OF THE TRANSFER OF PROPERTY ACT R.W. SECTION 17 OF THE REGISTRATION ACT, 1908. 21. AS WE HAVE ALREADY SEEN, THIS IS NOT THE CORRE CT POSITION IN LAW. AS FAR AS GIFT IN QUESTION IS CONCERNED, THE REQUIREME NTS OF A VALID GIFT AS PER MOHAMMEDAN LAW ARE DULY SATISFIED INASMUCH AS THERE HAS BEEN A DECLARATION OF GIFT BY THE DONOR AND ACCEPTANCE OF GIFT BY THE DONEE AND DELIVERY OF POSSESSION. THE DELIVERY IN THIS CASE WOULD ONLY BE CONSTRUCTIVE. IT IS ALSO SEEN THAT THE GIFT IN QUE STION WAS AN ORAL GIFT MADE ITA NO.440/BANG/2014 PAGE 11 OF 13 ON 18.8.2008. THE GIFT WAS NOT MADE IN WRITING. AN ORAL GIFT ALREADY MADE WAS REDUCED TO WRITING AT A LATER POINT OF TIME ON THE SAME DAY I.E., ON 18.8.2008. THIS WOULD BE CLEAR FROM A READING OF TH E AFFIDAVIT FILED IN CONFIRMATION OF ORAL GIFT, WHICH WE HAVE ALREADY EX TRACTED IN THE EARLIER PART OF THIS ORDER. THEREFORE, THE GIFT IN QUESTION SAT ISFIES ALL THE REQUIREMENTS OF LAW AND HAS TO BE HELD AS VALID IN LAW. SINCE THE GIFTS ARE HELD TO BE VALID, THE ASSESSEE CANNOT BE REGARDED AS OWNER OF THE PRO PERTY NO.222 AND 228 OF KADIRENAHALLI VILLAGE. THEREFORE, THE ASSESSEE WILL BE THE OWNER OF ONLY ONE PROPERTY VIZ., NO.518, 5 TH FLOOR, MALAPRABHA, KORAMANGALA, BANGALORE. APART FROM THIS PROPERTY, THE ASSESSEE CLAIMS TO HA VE PURCHASED A PLOT OF LAND OVER WHICH A NEW RESIDENTIAL HOUSE IS SOUGHT T O BE CONSTRUCTED. THEREFORE, THE RESTRICTION IN THE PROVISO TO SECTIO N 54F(1) OF THE ACT ARE NOT ATTRACTED IN THE CASE OF ASSESSEE. 22. THE ONLY OTHER ARGUMENT THAT NEEDS TO BE EXAMI NED IS AS TO WHY THE ASSESSEE FILED STATEMENT OF AFFAIRS FOR THE YEAR EN DING 31.3.2009 SHOWING THREE PROPERTIES AS OWNED BY HER (INCLUDING THE TWO PROPERTIES GIFTED TO TWO DAUGHTERS). ON THIS ASPECT, THE ASSESSEE HAD EXPLA INED BEFORE THE CIT(APPEALS) THAT THE C.A. WHO WAS REPRESENTING THE ASSESSEE BEFORE THE AO NEITHER ENQUIRED NOR WAS APPRISED ABOUT THE ORAL GIFT. FURTHER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO CONFRONTED THE ASSESSEE ONLY WITH REGARD TO THE PROPERTY AT NO.229, KADIRENAHALL I VILLAGE AND NOTHING WAS ASKED ABOUT THE PROPERTY NO.222, KADIRENHALLI V ILLAGE. THE ASSESSEE POINTED OUT THAT BEFORE THE CIT(A), THE ASSESSEE AL SO BROUGHT THE FACTS WITH ITA NO.440/BANG/2014 PAGE 12 OF 13 REGARD TO THE PROPERTY NO.222, KADIRENAHALLI VILLAG E VOLUNTARILY. THE LD. COUNSEL FOR THE ASSESSEE ALSO POINTED OUT THAT THE STATEMENT OF AFFAIRS AS ON 31.3.2009 FILED BY THE ASSESSEE ON WHICH THE AO PLACED RELIANCE DID NOT CONTAIN ONE HOUSING LOAN AVAILED BY THE ASSESSEE. THESE FACTS WERE POINTED OUT BY THE ASSESSEE BEFORE THE CIT(A). THE LOAN IN QUESTION WAS ONE AVAILED FROM HSBC BANK AND ICICI BANK RESPECTI VELY. THE CIT(A) DID NOT TAKE NOTE OF THE ERROR OF OMISSION OF THESE LOA NS IN THE STATEMENT OF AFFAIRS; BUT CHOSE TO RELY ONLY ON THE DISCLOSURE O F ASSET WHICH WERE CLAIMED TO BE WRONGLY MADE IN THE STATEMENT OF AFFAIRS. IN OUR VIEW, THE EXPLANATION OFFERED BY THE ASSESSEE IS BONA FIDE AND IT HAS BEEN SHOWN BY THE ASSESSEE THAT THE STATEMENT OF AFFAIRS ON WHICH THE REVENUE PLACED RELIANCE WAS NOT RELIABLE AS IT CONTAINED ERRORS. WE ARE, THEREFORE, OF THE VIEW THAT THE ASSESSEE SATISFIES ALL THE CONDITIONS FOR GRANT OF EXEMPTION U/S. 54F OF THE ACT. WE ACCORDINGLY DIRECT THE AO T O ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE. 23. IN THE RESULT, THE APPEAL BY ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF FEBRUARY, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 13 TH FEBRUARY, 2015. /D S/ ITA NO.440/BANG/2014 PAGE 13 OF 13 COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.