GANESH CHAWLA, Jaipur V. ACIT, Jaipur

ITA 452/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2169 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 01-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA
• Assessee Lawyers: S L PODAR
• Keywords: Capital asset; Gift; Question of law; Difference of opinion; Corroborative evidences; Revised return; Change of opinion
• Section: 54B; 54F; 54; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 452/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 SHRI GANESH CHAWLA PROP. M/S CHAWALA SWEETS, 867, RAM BHAWAN, MOTI DONNGARI, JAIPUR. CUKE VS. THE ACIT, CIRCLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAOPC7441D VIHYKFKHZ@ AP PELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L. PODAR (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. ROSHANTA MEENA LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 22/11/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 25/01/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 27.03.2017 OF LD. CIT(APPEALS) FOR THE ASSESSMENT Y EAR 2013-14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LE ARNED ASSESSING OFFICER IN DISALLOWING CLAIM U/S 54F OF T HE INCOME TAX ACT, 1961 FOR RS. 60,63,980/-. 2. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 2 2. THE ASSESSEE IS AN INDIVIDUAL AND PROPRIETOR OF SHRI CHAWLA SWEETS & HOTEL CHAWLAS. THE ASSESSEE FILED ITS RET URN OF INCOME ON 30.09.2013 DECLARING TOTAL INCOME OF RS. 98,25,330/ - COMPRISING INCOME FROM RENT, CAPITAL GAIN AND INTEREST. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SOLD A PIECE OF LAND AND DISCLOSED LONG TERM CAPITAL GAIN OF RS. 89,07,273/- IN THE RETURN OF IN COME. THE ASSESSEE WHILE COMPUTING THE CAPITAL GAIN HAS CLAIMED DEDUC TION U/S 54F OF THE ACT OF RS. 60,63,980/- ON ACCOUNT OF CONSTRUCTION O F HOUSE PROPERTY ON PLOT NO. C-105, TANEJA BLOCK, ADARSH NAGAR, JAIPUR. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S 54F O N THE GROUND THAT THE ASSESSEE DID NOT CONSTRUCT ANY HOUSE PROPERTY BUT H AD DONE ONLY RENOVATION OF THE EXISTING HOUSE. THE ASSESSEE CHAL LENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AND CONTENDED THAT THE ASSESSEE HAS CONSTRUCTED A NEW HOUSE AFTER DEMOLITION OF OLD HO USE. HOWEVER, THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASS ESSEE AS WELL AS CLAIM OF DEDUCTION U/S 54F OF THE ACT AND CONFIRMED THE A CTION OF THE AO. THE LD. CIT(A) FURTHER HELD THAT THE HOUSE PROPERTY WHE RE THE CONSTRUCTION WAS STATED TO HAVE MADE BELONGS TO THE MOTHER OF TH E ASSESSEE SMT. THAKRI DEVI CHAWLA. AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT(A) THE ASSESSEE FILED THE PRESENT APPEAL. ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 3 3. BEFORE US THE LD. AR OF THE ASSESSEE HAS REFERRE D TO THE PROVISIONS OF SECTION 54F OF THE INCOME TAX ACT AND SUBMITTED THAT THIS PROVISIONS STIPULATED THAT DEDUCTION IN RESPECT OF CAPITAL GAIN SHALL BE ALLOWED TO THE ASSESSEE ON TRANSFER OF ANY CAPITAL ASSET EXCEPT RESIDENTIAL HOUSE INTER ALIA IF THE ASSESSEE CONSTR UCTED RESIDENTIAL HOUSE WITHIN A PERIOD OF 3 YEARS FROM THE DATE OF TRANSFE R OF THE EXISTING CAPITAL ASSET. THE LD. AR HAS THUS CONTENDED THAT T HE PROVISIONS OF SECTION 54F DO NOT STIPULATE ANYWHERE THAT THE HOUS E PROPERTY SHOULD BE PURCHASED OR CONSTRUCTED BY THE ASSESEE IN HIS O WN NAME. THE LD. AR AS CONTENDED THAT THERE IS NO DISPUTE THAT THE A SSESSEE HAS CONSTRUACTED THE HOUSE AT C-105 TANEJA BLOCK, ADARS H NAGAR, JAIPUR WITHIN A PERIOD OF 2 YEARS FROM THE DATE OF TRANSFE R OF LONG TERM CAPITAL ASSET MAKING INVESTMENT OF RS. 60,63,980/. THE ASSE SSEE WAS RESIDING AT THE SAME PLACE FOR LAST 20 YEARS ALTHOUGH THE HO USE PROPERTY STOOD IN THE NAME OF HIS MOTHER SMT. THAKRI DEVI BUT FOR ALL PRACTICAL PURPOSE THE ASSESSEE WAS HAVING USUFRUCTUARY OWNERSHIP OVER THE HOUSE PROPERTY. THE LD. AR HAS EXPLAINED THAT THIS PROPER TY BEARING NO. C-105 TANEJA BLOCK, ADARSH NAGAR, JAIPUR WAS MEASURING 60 0 SQUARE YARDS AND THE MOTHER OF THE ASSESSEE HAD ALREADY GIFTED1/ 2 SHARE OF THE PROPERTY TO HER DAUGHTER-IN-LAW SMT. VIBHA CHAWLA W HO WAS WIDOW OF ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 4 THE ELDER BROTHER OF THE ASSESSEE. THE REMAINING 30 0 SQUARE YARDS WAS IN THE POSSESSION OF THE ASSESSEE AND THE ASSESSEE WAS LIVING WITH HIS FAMILY AND ENJOYING ALL THE RIGHTS AS AN OWNER. THE LD. AR HAS FURTHER SUBMITTED THAT THE ASSESSEE WERE ONLY TWO BROTHERS AND ASSESSEE HAS CONSTRUCTED THE NEW HOUSE ON THE SHARES OF THE PR OPERTY BELONGING TO THE ASSESSEE AS THE MOTHER OF THE ASSESSEE GAVE A DECLARATION OF HER NO OBJECTION IN THIS REGARD. HE HAS REFERRED TO THE COPY OF DECLARATION DATED 03.02.2011 AT PAGE 19 OF THE P.B. AND SUBMITT ED THAT IT WAS IN THIS BACK GROUND THAT THE HOUSE PROPERTY STOOD IN THE NAME OF THE MOTHER AND THAT THE ASSEEE WAS HAVING USUFRUCTUARY OWNERSHIP ON IT. THE LD. AR HAS THEN REFERRED TO LEDGER ACCOUNTS AT PAGE 22 TO 36 OF THE P.B. AS WELL AS VOUCHERS OF PURCHASE OF BUILDING MA TERIAL AT PAGE 37 TO 145 OF THE P.B. AND SUBMITTED THAT THE ASSESSEE HAS PRODUCED THE EVIDENCE OF INVESTMENT IN THE CONSTRUCTION OF THE H OUSE PROPERTY OF RS. 1,08,64,061/- AS PER PROVISIONS OF SECTION 54 OF TH E INCOME TAX ACT. SINCE, THE DEDUCTION IS ALLOWABLE FOR CONSTRUCTION OF THE HOUSE PROPERTY DURING THE PERIOD OF 3 YEARS FROM THE DATE OF TRANS FER OF THE CAPITAL ASSET, THEREFORE, THE INVESTMENT MADE IN CONSTRUCTI ON OF THE HOUSE AFTER THE DATE OF TRANSFER I.E. 30.05.2012 HAS BEEN CLAIM ED BY THE ASSESSEE AND THE SAME IS IN ORDER AND DESERVED TO BE ALLOWED . THE LD. AR OF THE ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 5 ASSESSEE HAS SUBMITTED THAT THE ASSEEE IN POSSESSIO N AND LIVING AT THE SAME PLACE FOR LAST ABOUT 20 YEARS AND THE MOTHER O F THE ASSESSEE GAVE NO OBJECTION OF DEMOLITION AND RECONSTRUCTION OF TH E HOUSE AND TO SUBSTANTIATE THIS FACT THE MOTHER OF THE ASSESSEE H AS ALSO EXECUTED A GIFT DEED DATED 26.07.2013 AT PAGE 146 TO 154 OF TH E P.B. HE POINTED OUT THAT THE ASSESSEE SUBMITTED ALL DOCUMENTARY EVI DENCE OF CONSTRUCTION OF NEW HOUSE BUT THE AUTHORITIES BELOW HAVE DISREGARDED THE EVIDENCE PRODUCED BY THE ASSESSEE WHILE DECIDIN G THIS ISSUE AND DENIED THE CLAIM OF THE ASSESSEE ONLY ON CONJECTURE S AND SURMISES. THE LD. AR HAS FURTHER SUBMITTED THAT DURING THE COURSE OF CONSTRUCTION WORK A LABOUR DIED ON ACCOUNT OF ACCIDENT AND THE POLICE CASE WAS REGISTERED VIDE FIR DATED 01.02.2011 A COPY OF WHICH FILED AT PAGE 155 OF THE P.B. FURTHER, THE NOTICE WAS ISSUED BY THE COMMISSIONER OF MUNICIPAL CORPORATION REGARDING CONSTRUCTION OF NEW HOUSE AFT ER DISMANTLING OF OLD ONE. A COPY OF THE NOTICE DATED 01.02.2011 ISSU ED BY THE COMMISSIONER MUNICIPAL CORPORATION, JAIPUR IS FILED AT PAGE 156 OF THE P.B. IN THIS LETTER THE MUNICIPAL COMMISSIONER HAS VERY CLEARLY MENTIONED THAT THE ASSESSEE WAS GETTING CONSTRUCTED A NEW HOUSE PROPERTY AFTER DISMANTLING AN OLD HOUSE. THEREFORE, THE ASSESSEE PRODUCED IRREFUTABLE EVIDENCE TO PROVE THAT THE ASS ESSEE HAS ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 6 CONSTRUCTED A NEW HOUSE AFTER DEMOLITION OF OLD HOU SE. THE LD. AR THEN REFERRED TO THE LEASE DEED IN RESPECT OF FLAT NO. 1 01 WHICH WAS TAKEN BY THE ASSESSEE ON RENT FOR HIS RESIDENTIAL PURPOSE DU RING THE PERIOD OF CONSTRUCTION OF NEW HOUSE FROM 01.04.2011 TO 28.02. 2012. THE LD. AR THEN REFERRED TO THE AGREEMENT UNDER WHICH THE ASSE SSEE RECEIVED RS. 60,000/- FROM THE CONTRACTOR WHO DEMOLISHED THE EXI STING STRUCTURE AND SUBMITTED THAT ALL THESE EVIDENCES MAKE IT CLEAR TH AT NEW CONSTRUCTION WAS CARRIED OUT AFTER DEMOLITION OF OLD STRUCTURE. THE COPIES OF THE CITE PLAN OF NEW HOUSE ARE PLACED AT PAGE 175 TO 179 OF THE P.B. THUS, THE LD. AR HAS CONTENDED THAT THE ONCE THE ASSESSEE EST ABLISHED THAT A NEW HOUSE WAS CONSTRUCTED THEN THE DEDUCTION U/S 54F I S ALLOWABLE. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE FO LLOWING DECISION AS UNDER:- CIT & ANR. VS. P.R. SESHADRI 329 ITR 377 CIT VS. P.V. NARASIMHAN 181 ITR 101 CIT VS. V. NATARAJAN 287 ITR 271 CIT VS. KAMAL WAHAL 351 ITR 0004 SHRI LAXMI NARAYAN VS. CIT IN ITA NO. 20/2016 THUS, THE LD. AR HAS SUBMITTED THAT THE HONBLE DEL HI HIGH COURT IN CASE OF CIT VS. KAMAL WAHAL (SUPRA) HAS HELD THAT THERE IS NOTHING IN SECTION ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 7 54F TO SHOW THAT THE ASSESSEE SHOULD HAVE PURCHASED /CONSTRUCTED A RESIDENTIAL HOUSE IN HIS OWN NAME. A SIMILAR VIEW H AS BEEN TAKEN BY THE HONBLE JURISDICTION HIGH COURT IN CASE OF SHRI LAX MI NARAYAN VS. CIT (SUPRA) WHEREIN THE HONBLE HIGH COURT AFTER CONSID ERING THE EARLIER DECISION IN CASE OF KALIA VS. CIT 251 CTR 174 HAS H ELD THAT THE LAND PURCHASED IN LAW NAME OF HIS WIFE IS ELIGIBLE FOR DEDUCTION U/S 54B OF THE I.T. ACT. 4. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT TH ERE IS NO DISPUTE THAT THE ASSESSEE WAS RESIDING AT THE SAME PROPERTY WHICH IS FULLY CONSTRUCTED HOUSE SINCE, THE LAST MORE 20 YEARS. TH E SAID CONSTRUCTED HOUSE WAS OWNED BY THE MOTHER OF THE ASSESSEE NAMEL Y SMT. THAKRI DEVI CHAWLA AND WAS GIFTED BY THE MOTHER VIDE GIFT DEED DATED 26.07.2013 WHEREAS THE ASSESSEE HAS CLAIMED TO HAVE CONSTRUCTED HOUSE IN THE YEAR 2011-12 WHICH IS CONTRARY TO THE FACTS. THE LD. DR HAS FURTHER SUBMITTED THAT THE BILLS PRODUCE BY THE ASS ESSEE FOR INCURRING EXPENDITURE ARE IN THE NAME OF CHAWLA SWEETS OR UNN AMED WHEREAS THE BILLS TO THE LABOUR CONTRACTURE PAYMENT WAS SEL F MADE VOUCHERS WHICH ARE NOT VERIFIABLE. THE LD. DR HAS POINTED OU T THAT THE LABOUR BILLS WHICH HAS BEEN PAID BY THE ASSESSEE ON DAILY BASIS OF RS. 19,500/- TO AVOID THE PROVISIONS OF SECTION 14A(3) OF THE ACT BECAUSE ALL THE ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 8 PAYMENTS WERE IN CASH AND BILL AMOUNT IS LESS THA N RS. 20,000/-.THUS IN THE ABSENCE OF THE COMPLETE DETAILS THE SELF MA DE VOUCHERS CANNOT BE VERIFIED. HE HAS FURTHER CONTENDED THAT ALL THE NATURE OF ENTIRE EXPENDITURE INCURRED BY THE ASSESSE SHOW THAT THE A SSESSEE HAS DONE RENOVATION WORK OF THE PREMISES AND NOT CONSTRUCTIO N A NEW HOUSE AS CLAIMED BY THE ASSESSEE. THE ASSESSEE HAS FAILED TO PRODUCE THE BILLS OF THE ENTIRE EXPENDITURE CLAIM AS INVESTMENT FOR CONS TRUCTION OF THE HOUSE U/S 54F OF THE ACT. IN THE LEDGER THE ASSESSEE HAS CLAIMED TO HAVE INCURRED RS. 57,53,799/- FOR RENOVATION FROM THE P ERIOD 01.04.2012 TO 31.03.2013 BUT NO PROOF OF THE REMAINING AMOUNT WAS PRODUCED BY THE ASSESSEE. THE LD. DR HAS FURTHER CONTENDED THAT IN THE RETURN OF INCOME THE ASSESEE CLAIMED DEDUCTION U/S 54 AND NOT U/S 54 F WHEREAS THE ASSESSEE HAS NOT SOLD RESIDENTIAL HOUSE AND THEREFO RE, THE ASSESSEE HAS MADE A CLAIM OF EXEMPTION U/S 54F WITHOUT FILING TH E REVISED RETURN. THE AO HAS SPECIFICALLY GIVEN A FINDING THAT THE AS SESSEE HAS FAILED TO PRODUCE THE SUPPORTING EVIDENCE FOR RS. 18,00,000/- OF THE EXPENDITURE CLAIM FOR CONSTRUCTION OF HOUSE. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE CLAIM OF DEDUCTION U/S 54F OF THE ACT WAS ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 9 DENIED BY THE AUTHORITIES BELOW ON PRIMARILY ON TWO GROUNDS THAT THE WORK CARRIED OUT BY THE ASSESSEE IS NOT A RECONSTRU CTION OF THE HOUSE AND SECONDLY ON THE GROUND THAT THE PROPERTY ON WHI CH THE ASSESSEE CLAIMED TO HAVE CONSTRUCTED HOUSE IS OWNED BY THE M OTHER OF THE ASSESSEE AND NOT BY THE ASSESSEE. AS REGARDS THE PR OPERTY IS OWNED BY THE MOTHER OF THE ASSESSEE WE ARE OF THE VIEW THAT IF THE ASSESSEE HAS CONSTRUCTED A NEW ON THE PLOT OF LAND WHICH IS OWNE D BY THE MOTHER OF THE ASSESSEE THEN, THE INVESTMENT MADE BY THE ASSES SEE IN CONSTRUCTION OF NEW HOUSE IS ELIGIBLE FOR DEDUCTION U/S 54F OF T HE ACT. A RESIDENTIAL HOUSE IS NOT A PERSONAL EFFECTS BUT IT IS MEANT FOR RESIDENTIAL PURPOSE OF THE FAMILY. THEREFORE, THE INVESTMENT MADE BY THE A SSESSEE FOR PURCHASE OR CONSTRUCTION OF HOUSE EVEN IN THE NAME OF THE MOTHER IS ELIGIBLE FOR DEDUCTION U/S 54F AS HELD BY THE HONB LE DELHI HIGH COURT IN CASE OF CIT VS. KAMAL WAHAL (SUPRA) IN PARAS 7 TO 1 0 AS UNDER:- 7. WE HAVE NO HESITATION IN AGREEING WITH THE VIEW TAK EN BY THE TRIBUNAL. APART FROM THE FACT THAT THE JUDGMENTS OF THE MADRAS AND KARNATAKA HIGH COURTS (SUPRA) ARE IN FAVOUR OF THE ASSESSEE, THE REVENUE FAIRLY BROUGHT TO OUR NOTICE A SIMILAR VIEW OF THIS COURT IN CIT V. RAVINDER KUMAR ARORA [2012] 342 ITR 38/[2011] 203 TAXMAN 289/15 TAXMANN.COM 307 . THAT WAS ALSO A CASE WHICH AROSE UNDER SECTION 54F OF THE ACT. THE NEW RESIDEN TIAL PROPERTY WAS ACQUIRED IN THE JOINT NAMES OF THE ASSESSEE AND HIS WIFE. THE INCOME TAX AUTHORITIES RESTRICTED THE DEDUCTION UND ER SECTION 54F TO 50% ON THE FOOTING THAT THE DEDUCTION WAS NOT AVAIL ABLE ON THE PORTION OF THE INVESTMENT WHICH STANDS IN THE NAME OF THE ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 10 ASSESSEE'S WIFE. THIS VIEW WAS DISAPPROVED BY THIS COURT. IT NOTED THAT THE ENTIRE PURCHASE CONSIDERATION WAS PAID ONL Y BY THE ASSESSEE AND NOT A SINGLE PENNY WAS CONTRIBUTED BY THE ASSESSEE'S WIFE. IT ALSO NOTED THAT A PURPOSIVE CONSTRUCTION I S TO BE PREFERRED AS AGAINST A LITERAL CONSTRUCTION, MORE SO WHEN EVE N APPLYING THE LITERAL CONSTRUCTION, THERE IS NOTHING IN THE SECTI ON TO SHOW THAT THE HOUSE SHOULD BE PURCHASED IN THE NAME OF THE ASSESS EE ONLY. AS A MATTER OF FACT, SECTION 54F IN TERMS DOES NOT REQUI RE THAT THE NEW RESIDENTIAL PROPERTY SHALL BE PURCHASED IN THE NAME OF THE ASSESSEE; IT MERELY SAYS THAT THE ASSESSEE SHOULD HAVE PURCHA SED/CONSTRUCTED 'A RESIDENTIAL HOUSE'. 8. THIS COURT IN THE DECISION CITED ALONE ALSO NOTICE D THE JUDGMENT OF THE MADRAS HIGH COURT (SUPRA) AND AGREED WITH TH E SAME, OBSERVING THAT THOUGH THE MADRAS CASE WAS DECIDED I N RELATION TO SECTION 54 OF THE ACT, THAT SECTION WAS IN PARI MAT ERIA WITH SECTION 54F. THE JUDGMENT OF THE PUNJAB AND HARYANA HIGH CO URT IN THE CASE OF CIT V. GURNAM SINGH [2010] 327 ITR 278/[2008] 170 TAXMAN 160 IN WHICH THE SAME VIEW WAS TAKEN WITH REFERENCE TO SECTION 54F WAS ALSO NOTICED BY THIS COURT. 9. IT THUS APPEARS TO US THAT THE PREDOMINANT JUDICIA L VIEW, INCLUDING THAT OF THIS COURT, IS THAT FOR THE PURPO SES OF SECTION 54F, THE NEW RESIDENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NOR IS IT NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVELY IN HIS NAME. IT IS MOREOVER TO BE NOTED THAT THE ASSESSEE IN THE PRESENT CASE HAS NOT PURCHASED THE NEW HOUSE IN THE NAME OF A STRANGER OR SOMEBODY WHO IS UNCONNECTED WITH H IM. HE HAS PURCHASED IT ONLY IN THE NAME OF HIS WIFE. THERE IS ALSO NO DISPUTE THAT THE ENTIRE INVESTMENT HAS COME OUT OF THE SALE PROCEEDS AND THAT THERE WAS NO CONTRIBUTION FROM THE ASSESSEE'S WIFE. 10. HAVING REGARD TO THE RULE OF PURPOSIVE CONSTRUCTIO N AND THE OBJECT WHICH SECTION 54F SEEKS TO ACHIEVE AND RESPE CTFULLY AGREEING WITH THE JUDGMENT OF THIS COURT, WE ANSWER THE SUBS TANTIAL QUESTION OF LAW FRAMED BY US IN THE AFFIRMATIVE, IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE. ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 11 FURTHER, THE HONBLE JURISDICTION HIGH COURT IN CAS E OF LAXMI NARAYAN VS. CIT(SUPRA) WHILE CONSIDERING THIS ISSUE OF INVESTME NT MADE BY THE ASSESSEE IN THE NAME OF HIS WIFE HAS HELD IN PARA 7 TO 7.5 AS UNDER:- 7. WE HAVE HEARD COUNSEL FOR THE PARTIES. 7.1 ON THE FIRST ISSUE OF SEC. 263 IN VIEW OF THE D ECISION OF MALABAR INDUSTRIAL COMPANY LTD. (SUPRA) SEC. 263 PR OVISIONS ARE TAKEN ONLY ON THE GROUND OF PREJUDICIAL AND INTERES T LOSS OF THE REVENUE TO THE GOVERNMENT. MERELY CHANGE OF OPINION WILL NOT GIVE ANYRIGHT U/S 263 HENCE, THE ISSUE REGARDING SE C. 263 IS REQUIRED TO BE ANSWERED IN FAVOUR OF THE ASSESSEE A ND AGAINST THE DEPARTMENT. 7.2 ON THE GROUND OF INVESTMENT MADE BY THE ASSESSE E IN THE NAME OF HIS WIFE, IN VIEW OF THE DECISION OF DELHI HIGH COURT IN SUNDEAM AUTO LTD. AND OTHER JUDGMENTS OF DIFFERENT HIGH COURTS, THE WORD USED IS ASSESSEE HAS TO INVEST IT IS NOT S PECIFIED THAT IT IS TO BE IN THE NAME OF ASSESSEE. 7.3 IT IS TRUE THAT THE CONTENTIONS WHICH HAVE BEEN RAISED BY THE DEPARTMENT IS THAT THE INVESTMENT IS MADE BY THE AS SESSEE IN HIS OWN NAME BUT THE LEGISLATURE WHILE USING LANGUAGE H AS NOT USED SPECIFIC LANGUAGE WITH PRECISION AND THE SECOND REA SON IS THAT VIEW HAS ALSO BEEN TAKEN BY THE DELHI HIGH COURT TH AT IT CAN BE IN THE NAME OF WIFE. IN THAT VIEW OF THE MATTER, THE C ONTENTION RAISED BY THE ASSESSEE IS REQUIRED TO BE ACCEPTED W ITH REGARD TO SECTION 54B REGARDING INVESTMENT IN TUBEWELL AND OT HERS. IN OUR CONSIDERED OPINION, FOR THE PURPOSE OF CARRYING ON THE AGRICULTURAL ACTIVITY, TUBEWEL AND OTHER EXPENSES ARE FOR BETTER MENT OF LAND AND THEREFORE, IT WILL BE CONSIDERED A PART OF INVE STMENT IN THE LAND AND SAME IS REQUIRED TO BE ACCEPTED. 7.4 IN VIEW OF THE ABOVE, ALL THE ISSUES ARE ANSWE RED IN FAVOUR OF THE ASSESEE AND AGAINST THE DEPARTMENT. ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 12 ACCORDINGLY, IN VIEW OF THE BINDING PRECEDENT WE HO LD THAT MERELY BECAUSE THE NEW HOUSE IS CONSTRUCTED ON A PLOT OF L AND OWNED BY THE MOTHER OF THE ASSESSEE WILL NOT DISENTITLE THE ASSE SEE FOR CLAIM OF DEDUCTION U/S 54F OF THE INCOME TAX ACT. 6. AS REGARDS THE ISSUE WHETHER IT IS A CONSTRUCTI ON OF NEW HOUSE AFTER DEMOLITION OF THE EXISTING HOUSE OR IT IS ONL Y A RENOVATION WORK CARRIED OUT BY THE ASSESSEE THE SAME IS PURELY FACT UAL MATTER AND CAN BE ASCERTAIN FROM THE PROPER PHYSICAL ENQUIRY CONDU CTED AT THE SITE ITSELF. THE ASSESSEE IN SUPPORT OF HIS CLAIM HAS PR ODUCED THE COPIES OF VOUCHERS, COPIES OF FIR, COPY OF NOTICE ISSUED BY T HE MUNICIPAL CORPORATION, JAIPUR REGARDING UNAUTHORIZED CONSTRUC TION. SO FAR AS THE COPIES OF FIR AND NOTICE ISSUED BY THE MUNICIPAL CO RPORATION IT IS NOT A CONCLUSIVE PROOF OF WHAT KIND OF WORK WAS CARRIED OUT WHETHER CONSTRUCTION OF HOUSE OR RENOVATION OF HOUSE. THE A SSESSEE HAS ALSO PRODUCE A COPY OF LEASE DEED UNDER WHICH THE ASSESS EE HAS HIRED A HOUSE FOR RESIDENTIAL PURPOSE DURING THE PERIOD OF CONSTRUCTION HOWEVER, THIS ITSELF CANNOT BE CONSIDERED AS AN EVI DENCE FOR CONSTRUCTION OF NEW HOUSE BECAUSE EVEN IF THE ASSES SEE HAS CARRIED WAS A SUBSTANTIAL RENOVATION WORK THEN, THE ASSESSEE HA D TO VACATE THE HOUSE AND RESIDE IN THE ALTERNATIVE ACCOMMODATION. ON EXAMINATION THE ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 13 DETAIL OF THE NATURE OF EXPENDITURE INCURRED BY THE ASSESSEE WE FIND THAT THE ASSESSEE HAS INSTALLED ELEVATOR IN THE PRO PERTY AND THE OTHER EXPENDITURE INCURRED PRIMA FACIE REVEALS THAT CONST RUCTION OF THE PROPERTY MAY NOT BE ENTIRELY A RESIDENTIAL HOUSE AN D SOME COMMERCIAL CONSTRUCTION OR CONVERSION OF THE PROPERTY INTO COM MERCIAL CANNOT BE RULED OUT. HOWEVER, BEFORE INTO THE CONTROVERSY AND EXPRESSING ANY VIEW ON THIS ISSUE IT REQUIRES A PROPER VERIFICATIO N OF THE FACTS AT THE GROUND. ACCORDINGLY, TO ASCERTAIN WHETHER THE ASSES SEE HAS CONSTRUCTED A NEW HOUSE OR ONLY RENOVATED THE EXISTING HOUSE A PROPER INVESTIGATION AND ENQUIRY IS REQUIRED TO BE CONDUCTED BY PHYSICAL VERIFICATION OF THE PROPERTY AS WELL AS THE EXPERTS OPINION MAY ALSO BE TAKEN IN THIS RESPECT BECAUSE THE ALLEGED DEMOLITION AND RECONSTR UCTION IS WITHOUT ANY PERMISSION FROM THE MUNICIPAL CORPORATION. THER EFORE, IN THE ABSENCE OF SANCTIONED SITE PLAN OR COMPLETION CERTI FICATE THE EVIDENCE PRODUCE BY THE ASSESSEE CANNOT BE CONSIDERED AS CON CLUSIVE PROOF TO ESTABLISH THE NATURE OF CONSTRUCTION CARRIED OUT BY THE ASSESSEE AT THE PROPERTY IN QUESTION. ACCORDING, IN THE FACTS AND C IRCUMSTANCES OF THE CASE, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE ASSESSING OFFICER FOR PROPER VERIFICATION AND INVESTIGATION OF THE FACT R EGARDING THE NATURE OF CONSTRUCTION AND ALSO WHETHER THE NEW BUILDING IS O NLY RESIDENTIAL OR ITA NO. 452/JP/2017 SH. GENESH CHAWLA VS. ACIT 14 COMMERCIAL OR RESIDENTIAL-CUM-COMMERCIAL. AFTER ASC ERTAIN THE FACT THE AO TO DECIDE THIS ISSUE AFRESH. NEEDLESS TO SAY THE ASSESSEE BE GIVEN AN OPPORTUNITY OF HEARING. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/01/2018 SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25/01/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI GENESH CHAWLA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT. CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 452/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR