SMT. USHA JAIN, Jaipur V. ITO, Jaipur

ITA 480/JPR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3577 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Assessee Lawyers: RAJEEV SAGONI
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Valuation report; Capital Gains
• Section: 143(3); 54B; 50C; 54F; 54EC; 54; 15; 139

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 HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 480/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 SMT. USHA JAIN 2-GHA-27, JAWAHAR NAGAR, JAIPUR. CUKE VS. THE ITO, WARD-6(5), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AANPJ 9521 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI RAJEEV SAGONI (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 22/05/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 11/06/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 11.04.2017 OF CIT (A), JAIPUR FOR THE ASSESSMENT YE AR 2013-14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. (A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE LD. AO IN MAKING ADDITION OF RS. 13,49,532 AS LONG TERM CAPITAL GAIN. THE ACTION OF THE ID. CIT(A) IS ILLEGAL, UNJU STIFIED, ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 2 ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 13, 49,532. (B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE ID. AO IN INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961 AND ADOPTING THE SALE CONSIDERATION A T RS. 2,03,49,532 AGAINST THE DECLARED SALE CONSIDERATION OF RS. 1,90,00,000. THE ACTION OF THE ID. CIT(A) IS ILLEGA L, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE SALE CONSIDE RATION AT RS. 1,90,00,000 AS EVIDENCED BY THE SALE DEED. (C) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E ID. AO IN NOT APPLYING THE DLC RATE OF LAND AS ON THE DATE OF AGREEMENT TO SALE. THE ACTION OF THE ID. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY APPLYING THE DLC RATE OF L AND AS ON THE DATE OF AGREEMENT TO SALE. (D) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E LD. AO IN NOT TREATING THE PROPOSED AMENDMENT IN BUDGET 2016 IN SECTION 50C OF THE INCOME TAX ACT, 1961, AS RETROSP ECTIVE. THE ACTION OF THE ID. CIT(A) IS ILLEGAL, UNJUSTIFIED, A RBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY TREATING THE SAID AMENDMENT AS RETROSPECTIVE. (E) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E LD. AO IN EXTENDING THE SCOPE OF SECTION 50C OF THE INCOME TA X ACT, 1961, ON THE INVESTMENTS REQUIRED UNDER SECTION 54B OF THE INCOME TAX ACT, 1961. THE ACTION OF THE ID. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 3 MAY PLEASE BE GRANTED BY LIMITING THE SCOPE OF SECT ION 50C OF THE INCOME TAX ACT, 1961 IN SAID MATTER. 2. (A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW THE ID. CIT(A HAS ERRED IN CONFIRMING THE ACTION OF THE LD. AO IN MAKING ADDITION OF LONG TERM CAPITAL GAIN AT RS. 1,93,81,842. THE ACTION OF THE ID. CIT(A) IS ILLEGA L, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID ADDITION OF RS. 1,93,8 1,842. (B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E LD. AO IN INVOKING THE PROVISIONS OF SECTION 50C OF THE INCOM E TAX ACT, 1961 AND ADOPTING THE SALE CONSIDERATION AT RS. 5,7 6,13,300 AGAINST THE DECLARED SALE CONSIDERATION OF RS. 3,75 ,00,000. THE ACTION OF THE ID. CIT(A) IS ILLEGAL, UNJUSTIFIE D, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEAS E BE GRANTED BY ACCEPTING THE SALE CONSIDERATION AT RS. 3,75,00,000 AS EVIDENCED BY THE SALE DEED. (C) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E ID. AO IN NOT APPLYING THE DLC RATE OF LAND AS ON THE DATE OF AGREEMENT TO SALE.. THE ACTION OF THE ID. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY APPLYING THE DLC RATE OF L AND AS ON THE DATE OF AGREEMENT TO SALE. (D) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E ID. AO IN NOT TREATING THE PROPOSED AMENDMENT IN BUDGET 2016 IN SECTION 50C OF THE INCOME TAX ACT, 1961, AS RETROSP ECTIVE. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, A RBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY TREATING THE SAID AMENDMENT AS RETROSPECTIVE. ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 4 (E) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ID. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E ID. AO IN EXTENDING THE SCOPE OF SECTION 50C OF THE INCOME TA X ACT, 1961, ON THE INVESTMENTS REQUIRED UNDER SECTION 54B AND 54F OF THE INCOME TAX ACT, 1961. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY LIMITING THE SCOPE OF SECTION 50C OF THE INCOME TAX ACT, 1961 IN SAID MATTER. THE ASSESSEE CRAVES HER RIGHTS TO ADD, AMEND OR AL TER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. THE ASSESSEE IS AN INDIVIDUAL AND DERIVE INCOME FROM RENT, INTEREST, DIVIDEND AND CAPITAL GAIN ON SALE OF LAND . THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 31.03.2014 DECLARING TOTAL INCOME OF RS. 35,28,010/ -. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE IT ACT ON 23.03.201 6 AT A TOTAL ASSESSED INCOME OF RS. 2,42,59,384/- WHICH INCLUDES THE ADDITION MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAIN OF M ORE THAN RS. 2 CRORES. THE CONTROVERSY INVOLVED IN THIS APPEAL IS ONLY REGARDING THE ADDITION MADE BY THE AO ON ACCOUNT OF LONG TERM CAP ITAL GAIN BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT A ND RESTRICTED THE BENEFIT OF CLAIM U/SS 54B AND 54F OF THE ACT. THE A SSESSEE PURCHASE AGRICULTURAL LAND VIDE AGREEMENT DATED 22.09.2011 A ND SUBSEQUENTLY THREE SALE DEEDS WERE EXECUTED ON 20.03.2012, 05.06 .2012 AND ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 5 19.12.2012 RESPECTIVELY. THE FIRST TRANSACTION OF S ALE VIDE SALE DEED DATED 20.03.2012 DOES NOT FALL IN THE ASSESSMENT YE AR UNDER CONSIDERATION, THEREFORE, THE DISPUTE BEFORE US IS REGARDING THE LAND SOLD VIDE SALE DEED DATED 05.06.2012 AND 19.12.2012 RESPECTIVELY. THE ASSESSEE COMPUTED CAPITAL GAIN AS PER THE ACTUAL SA LE CONSIDERATION AS RECORDED IN THE SALE DEEDS AND ALSO CLAIMED THE BEN EFIT U/SS 54B AND 54F OF THE ACT. THE AO WHILE COMPUTING THE CAPITAL GAIN HAS ADOPTED THE STAMP DUTY VALUATION U/S 50C AND ON THE OBJECTI ON OF THE ASSESSEE THE VALUATION OF THE LAND WERE REFERRED TO THE DVO. AFTER RECEIVING THE DVOS VALUATION REPORT THE AO HAS COMPUTED THE CAPIT AL GAIN AND CONSEQUENTLY THE CLAIM U/SS 54B AND 54F OF THE ACT WERE RESTRICTED TO THE EXTENT OF ACTUAL INVESTMENT MADE BY THE ASSESSE E. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT( A) HOWEVER, COULD NOT SUCCEED. 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT THE AO ADOPTED THE DLC RATES AS ON THE DATES OF SALE DEEDS WHEREAS THE ASSESSEE HAD AGREED TO SELL VIDE AGREEMENT DATED 22 .09.2011 AND PART PAYMENT OF RS. 1.40 CRORES WAS ALSO RECEIVED THROUG H CHEQUE ON THE DATE OF AGREEMENT WHICH IS NOT IN DISPUTE. THUS, TH E LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE DLC RATES AS ON THE DATE OF AGREEMENT ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 6 SHOULD BE ADOPTED IN TERMS OF SECTION 50C OF THE IT ACT. FURTHER, MERELY BECAUSE THE AGREEMENT TO SELL IS NOT REGISTE RED THE EXISTENCE OF SAME CANNOT BE DENIED WITH THE PART CONSIDERATION R ECEIVED BY THE ASSESSEE. THE LD. AR HAS FURTHER CONTENDED THAT THE RE WAS ENHANCEMENT OF DLC RATES AT THE TIME OF THE SALE DE ED DATED 05.06.2012 WHICH WAS WITHDRAWN BY THE AUTHORITY SUB SEQUENTLY AND THEREFORE, THE DLC RATES AT THE TIME OF FIRST SALE DEED ON 20.03.2012 AND 19.12.2012 WERE NOT IN DISPUTE. THUS, ONLY FOR A SHORT PERIOD OF TIME THE DLC RATES WERE ENHANCED WHICH WERE SUBSEQU ENTLY WITHDRAWN. THE DVO DETERMINED THE FAIR MARKET VALUE OF THE LAN D BY CONSIDERING THE ENHANCED THE DLC RATES. HE HAS REFERRED TO THE NOTIFICATION ON THIS ISSUED WHEREBY THE DLC RATES OF THE LAND IN QUESTIO N WERE ENHANCED ONLY FOR A SHORT PERIOD OF TIME. THE LD. AR HAS FUR THER SUBMITTED THAT THE ENTIRE SALE CONSIDERATION RECEIVED BY THE ASSES SEE WAS INVESTED FOR PURCHASE AGRICULTURAL LAND AS WELL AS NEW HOUSE PRO PERTY AND THEREFORE, THE ASSESSEE IS ELIGIBLE FOR FULL BENEFIT CLAIM U/S S 54B AND 54F OF THE IT ACT WITHOUT ANY TAX LIABILITY ON THE CAPITAL GAIN C OMPUTED AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DECISION OF COORDINATE BENCHES OF T HIS TRIBUNAL IN CASE OF SHRI SUNIL JAIN VS. DCIT IN ITA NO. IT(IT) A NO. 04/JP2017 VIDE ORDER ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 7 DATED 27.04.2018. THUS, THE LD. AR HAS SUBMITTED TH AT EVEN OTHERWISE WHEN THE ASSESSEE INVESTED THE ENTIRE SALE CONSIDER ATION FOR PURCHASE OF AGRICULTURAL LAND ELIGIBLE FOR BENEFIT U/S 54B A S WELL AS PURCHASE OF RESIDENTIAL HOUSE ELIGIBLE FOR BENEFIT OF U/S 54F O F THE IT ACT THEN, THE COMPUTATION OF CAPITAL GAIN BY THE AO AS PER THE PR OVISIONS OF SECTION 50C WOULD BE INCONSEQUENTIAL. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE CLAIM OF THE ASSESSEE CANOT BE ACCEPTED AS THE ALLEGED AGREEMENT DATED 22.09.2011 IS NOT SUPPORTED BY ANY VALID EVIDENCE AS THE SAID AGREEMENT IS NEITHER REGISTERED NOR ON STAMP PAPER. FURTHER, THE SALE DE EDS IN QUESTION DO NOT MENTION ANY PRIOR AGREEMENT BETWEEN THE PARTIES WHEREAS THE TRANSACTION OF EARLIER SALE DEEDS WERE MENTIONED IN THE SUBSEQUENT SALE DEEDS. THEREFORE, THE ALLEGED AGREEMENT TO SELL IS ONLY SELF SERVING DOCUMENT PRODUCED BY THE ASSESSEE FOR REDUCING THE FAIR MARKET VALUE OF THE LAND IN QUESTION AS PER PROVISIONS OF SECTIO N 50C OF THE ACT. THE LD. DR HAS THUS SUBMITTED THAT THE AO HAS RIGHTLY A DOPTED THE FAIR MARKET VALUE OF THE LAND AS PER THE DVOS VALUATION REPORT BASED ON THE PREVAILING FAIR MARKET VALUE. THE LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 8 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIALS ON RECORD. THE ASSESSEE SOLD TWO PIECES O F LAND DURING THE YEAR UNDER CONSIDERATION VIDE SALE DEEDS DATED 05.0 6.2012 AND 19.12.2012 FOR A TOTAL CONSIDERATION OF RS. 5, 65,0 0,000/-. THE DETAILS OF THE SALE TRANSACTION ON VARIOUS DATES, THEIR SALE VALUE AS PER SALE DEED, STAMP DUTY VALUATION AND FAIR MARKET VALUE AS PER D VO ARE AS UNDER:- PROPORTION OF LAND SOLD DATE OF AGREEMENT/SALE DEED A.Y. SALE VALE (RS.) DLC VALUE (STAMP DUTY VALUATION ( RS.) FAIR MARKET VALUE AS PER DVO (RS.) AGREEMENT TO SELL 22.09.2011 - 7,52,50,000 - - ONE FOURTH(1/4) 20.03.2012 2012 - 13 1,87,50,000 1,87,48,872 - HALF (1/2) (LAND A) G2 05.06.2012 2013 - 14 3,75,00,000 5,83,46,400 5,76,13,300 ONE FOURTH(1/4) LAND B) G1 16.12.2012 2013 - 14 1,90,00,000 2,03,49,532 2,80,81,700 THE FIRST CONTROVERSY IS REGARDING THE DLC VALUATIO N/STAMP DUTY VALUATION AS PER SALE DEED AS AGAINST THE CLAIM OF THE ASSESSEE THAT THE STAMP DUTY VALUATION SHALL BE ADOPTED AS ON THE DAT E OF AGREEMENT TO SELL. FURTHER, THE ASSESSEE HAS ALSO RAISED AN OBJE CTION AGAINST THE FAIR MARKET VALUE ADOPTED BY THE DVO BASED ON THE DLC RA TES WHICH WERE ENHANCED DURING THE SHORT PERIOD VIDE NOTIFICATION DATED 08.05.2012 AND WERE SUBSEQUENTLY WITHDRAWN VIDE NOTIFICATION D ATED 12.07.2012. ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 9 THUS, IT IS CLEAR THAT THE ENHANCED DLC RATES WERE EXISTENCE ONLY FOR A SHORT PERIOD OF 2 MONTHS WHILE THE SALE DEED DATED 05.06.2012 WAS EXECUTED. WE FIND MERITS AND SUBSTANCE IN THE CONTE NTION OF THE LD. AR THAT WHILE DETERMINING THE FAIR MARKET VALUE OF THE LAND IN QUESTION THE DVO OUGHT TO HAVE TAKEN INTO CONSIDERATION THE FAIR MARKET PRICE OF THE LAND INSTEAD OF TEMPORARY ENHANCEMENT IN THE DLC RA TES. HOWEVER, WITHOUT GOING INTO THE CONTROVERSY OF FAIR MARKET V ALUE OF THE LAND IN QUESTION, AT THE OUTSET WE NOTE THAT THERE IS NO DI SPUTE ON THE FACT THAT THE ASSESSEES CLAIM OF BENEFIT OF UNDER SECTIONS 5 4B AND 54F OF THE ACT WAS ALLOWED BY THE AO AS WELL AS THE LD. CIT(A). HO WEVER, THE AO HAS MADE ADDITION OF THE CAPITAL GAIN WHICH IS OVER AND ABOVE THE INVESTMENT MADE IN THE AGRICULTURAL LAND AND RESIDE NTIAL HOUSE DUE TO THE FAIR MARKET VALUE ADOPTED AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. ONCE, THE ASSESSEE HAS INVESTED THE ENTIRE ACTUAL SALE CONSIDERATION FOR PURCHASE OF AGRICULTURAL LAND ELI GIBLE FOR DEDUCTION U/S 54B AS WELL PURCHASE OF NEW RESIDENTIAL HOUSE ELIGI BLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT THEN, NO ADDITION IS J USTIFIED BASED ON THE DEEMED FULL VALUE CONSIDERATION AS PER THE PROVISIO NS OF SECTION 50C OF THE ACT. AN IDENTICAL ISSUE WAS CONSIDERED BY THIS TRIBUNAL IN CASE OF SHRI SUNIL JAIN VS. DCIT(SUPRA) AND HELD IN PARAS 1 1 AND 12 AS UNDER:- ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 10 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS SOLD A PROPERTY FOR CONSIDERATION OF RS. 27,61,000/- ON 16.01.2008. THE ASSESSEE THEREAFTER PURCHASE A NEW PROPERTY FOR A T OTAL INVESTMENT OF RS. 55,03,270/-. INITIALLY THE FULL V ALUE CONSIDERATION FOR THE EXISTING THE CAPITAL ASSET WA S TAKEN/ADOPTED AT RS. 29,09,705/- BEING STAMP DUTY V ALUATION FOR THE PURPOSE OF THE REGISTRATION OF THE SALE DEE D HOWEVER, SUBSEQUENTLY THE STAMP DUTY AUTHORITY REVISED VALUA TION TO RS. 71,14,200/- AND CONSEQUENTLY THE AO AS REASSESS ED THE INCOME OF THE ASSESSEE AND COMPUTED THE CAPITAL GAI N BY RESTRICTING THE DEDUCTION U/S 54/54F OF THE ACT TO THE AMOUNT WHICH WAS DEPOSITED IN THE CAPITAL GAIN ACCOUNT. TH ERE IS NO DISPUTE THAT THE ASSESSEE RECEIVED THE SALE CONSIDE RATION OF RS. 27,61,000/- AND INVESTED IN THE NEW ASSET WAS M ADE OF RS. 55,03,270/-. THEREFORE, WHEN THE ENTIRE SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS INVESTED IN THE NEW PROPERTY, THEN THE ASSESSEE CANNOT BE EXCEPTED TO INVEST MORE THAN THE SALE CONSIDERATION OF EXISTING ASSET. THE HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. CELLO PLAST (SUPRA) WHILE CONSIDERING THE ISSUE OF PERFORMANCE OF IMPOSSIBLE TASK AS HELD IN PARA 18 AS UNDER:- 18. LEX NOT COGIT IMPOSSIBILA (LAW DOES NOT COMPEL A M AN TO DO THAT WHICH HE CANNOT POSSIBLY PERFORM) AND IMPOSSIB ILUM NULLA OBLIGNTO EST (LAW DOES NOT EXPECT A PARTY TO DO THE IMPOSSIBLE) ARE WELL KNOWN MAXIMS IN LAW AND WOULD SQUARELY APP LY TO THE PRESENT CASE. THE STATUTE VIZ. SECTION 54EC OF THE ACT PROVIDES FOR EXEMPTION FROM TAX TO LONG TERM CAPITAL GAIN PR OVIDED THE SAME IS INVESTED IN BONDS OF RURAL ELECTRIFICATION CORPORATION LIMITED OR NATIONAL HIGHWAY AUTHORITY OF INDIA. HOW EVER, AS THE BONDS WERE NOT AVAILABLE, IT WAS IMPOSSIBLE FOR THE RESPONDENT- ASSESSEE TO INVEST IN THEM WITHIN SIX MONTHS OF THE SALE OF THEIR FACTORY BUILDING. THEREFORE, IN THE CIRCUMSTANCE ON E WOULD HAVE TO INTERPRET SECTION 54EC OF THE ACT TO ENSURE THAT IT DOES NOT ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 11 LEAD TO INJUSTICE. THE APEX COURT IN THE MATTER OF DIRECTORATE OF ENFORCEMENT V. DEEPAK MAHAJAN [1994] 3 SCC 440 OBSE RVED AS UNDER: 'THOUGH THE FUNCTION OF THE COURT IS ONLY TO EXPOUN D THE LAW AND NOT LEGISLATE, NONE THE LESS THE LEGISLATURE CANNOT BE ASKED TO SIT TO RESOLVE THE DIFFICULTIES IN THE IMPLEMENTATION OF I TS INTENTION AND THE SPIRIT OF THE LAW. IN SUCH CIRCUMSTANCES, IT IS THE DUTY OF THE COURT TO MOULD OR CREATIVELY INTERPRET THE LEGISLATION BY LI BERALLY INTERPRETING THE STATUE'. THEREFORE, IN THE PRESENT FACTS, THE SIX MONTHS PRO VIDED FOR INVESTING IN BONDS MAY BE REASONABLY EXTENDED IN VI EW OF THE NON AVAILABILITY OF BONDS TILL 22/1/2007. FURTHER, IT IS ALSO SETTLED PROPOSITION OF LAW THAT WHEN THE ASSESSEE HAS COMPLIED WITH SUBSTANTIAL REQUIREMENT AND CONDITION OF SECTION 54/54F OF THE ACT BY INVESTIN G THE REQUISITE AMOUNT IN PURCHASE OF NEW ASSET WITHIN THE TIME PRE SCRIBED UNDER THE SAID PROVISION, THEN THE BENEFIT OF SECTI ON 54/54F CANNOT BE DENIED MERELY ON THE GROUND THAT THE ASSE SSEE DID NOT DEPOSIT THE SALE CONSIDERATION IN THE CAPITAL G AIN ACCOUNT SCHEME PRIOR TO PURCHASE OF THE PROPERTY. THE HONB LE KARNATAKA HIGH COURT IN CASE OF CIT VS. K. RAMACHA NDRA RAO WHILE DEALING WITH AN IDENTICAL ISSUE AS HELD IN PA RA 4 AND 5 AS UNDER:- 4. RE.POINT NO. 1 SECTION 54(F) DEALS WITH CAPITAL GAINS ON TRANSFER OF CERTAIN CAPITAL ASSETS NOT TO BE CHARGED IN CASE, OF INVESTMENT ON HOUSE. IT READS AS UNDER: 54F. CAPITAL GAIN ON TRANSFER OF CERTAIN CAPITAL AS SETS NOT TO BE CHARGED INCOME OF INVESTMENT IN RESIDENTIAL HOUSE. (1) [SUBJECT TO THE PROVISIONS OF SUB-SECTION (4), WHERE, IN THE CA SE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY], T HE CAPITAL GAIN ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 12 ARISES FROM THE TRANSFER OF ANY LONG-TERM CAPITAL A SSET, NOT BEING A RESIDENTIAL HOUSE (HEREAFTER IN THIS SECTION REFERR ED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS, WITHIN A PERIOD OF ON E YEAR BEFORE OR [TWO YEARS] AFTER THE DATE ON WHICH THE TRANSFER TO OK 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 WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (A ) IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE N ET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, THE WHOLE OF SUCH CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45; (B ) IF THE COST O F 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 PROPORTIO N AS 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 APPLY WHERE (A) THE ASSESSEE, (I ) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN TH E NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR (II ) PURCHASES ANY RE SIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET; OR (III ) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NE W ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF TH E 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 ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 13 PROPERTY'. EXPLANATION. - FOR THE PURPOSES OF THIS SECTION - ** ** ** 'NET CONSIDERATION', IN RELATION TO THE TRANSFER 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 ASSE T, OR CONSTRUCTS, WITHIN THE PERIOD OF THREE YEARS AFTER SUCH DATE, A NY RESIDENTIAL HOUSE, THE INCOME FROM WHICH IS CHARGEABLE UNDER TH E HEAD 'INCOME FROM HOUSE PROPERTY', OTHER THAN THE NEW AS SET, THE AMOUNT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 45 ON THE BASIS OF THE CO ST OF SUCH NEW ASSET AS PROVIDED IN CLAUSE (A), OR, AS THE CASE MA Y BE, CLAUSE (B), OF SUB-SECTION (1), SHALL BE DEEMED TO BE INCOME CH ARGEABLE UNDER THE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPI TAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH RESIDENTIAL HOUSE IS PU RCHASED 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 BE, ITS CONSTRUCTION, THE AMOUNT OF CAPITAL GAIN ARISING FR OM THE TRANSFER OF THE ORIGINAL ASSET NOT CHARGED UNDER SECTION 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 DEEMED TO BE INCOME CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS' RELATING TO LONG-TERM CAPITAL ASSETS OF THE PREVIOUS YEAR IN WHICH SUCH N EW ASSET IS TRANSFERRED. (4) THE AMOUNT OF THE NET CONSIDERATION WHICH IS NO T APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASS ET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF T HE ORIGINAL ASSET ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 14 TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FU RNISHING THE RETURN OF INCOME UNDER..' SECTION 139, SHALL BE DEP OSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING M ADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTI ON (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION A S MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFI CIAL GAZETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOM PANIED BY PROOF OF SUCH DEPOSIT ; AND, FOR THE PURPOSES OF SUB-SECT ION (1), THE AMOUNT, IF ANY, ALREADY UTILISED BY THE ASSESSEE FO R THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMO UNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET: PROVIDED THAT THE AMOUNT DEPOSITED UNDER THIS SUB-S ECTION 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 TRANSFE R 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 CHARGED HAD THE AMOUNT ACTUALLY UTILISED BY THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET 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 DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES ; AND (II ) THE ASSESSEE SHALL BE ENT ITLED TO WITHDRAW THE UNUTILISED AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID.' ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 15 SECTION 54F(1) PROVIDES, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, NOT BE ING A RESIDENTIAL HOUSE AND THE ASSESSEE WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLA CE, : PURCHASED OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DA TE CONSTRUCTED A RESIDENTIAL HOUSE, THE CAPITAL GAIN SHALL BE DEALT WITH IN ACCORDANCE WITH THE SAID PROVISION. THIS IS SUBJECT TO THE PRO VISIONS OF SUB- SECTION (4). SUB-SECTION (4) STIPULATES IF THE AMOUNT OF NET CON SIDERATION WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PUR CHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON W HICH TRANSFER OF THE ORIGINAL ASSET TOOK PLACE OR WHICH IS NOT UT ILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFOR E THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139 O F THE ACT SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN I N ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF T HE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SECTION 139(1 ) OF THE ACT IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS SPECI FIED AND UTILIZED IN ACCORDANCE WITH ANY SCHEME WHICH THE CENTRAL GOV ERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE FRAMED IN T HIS BEHALF. SUB-SECTION (4) IS ATTRACTED ONLY TO A CASE WHERE T HE SALE CONSIDERATION IS NOT UTILIZED EITHER FOR PURCHASE O R FOR CONSTRUCTION OF A RESIDENTIAL HOUSE. IT HAS NO APPLICATION TO A CASE WHERE THE ASSESSEE INVESTS THE SALE CONSIDERATION DERIVED FRO M THE TRANSFER EITHER IN PURCHASING THE PROPERTY OR CONSTRUCTING T HE RESIDENTIAL HOUSE WITHIN THE PERIOD STIPULATED IN SECTION 54F(1 ). THE PROVISO TO SECTION 54F PUTS AN EMBARGO ON THE APPLICATION OF S ECTION 54F TO CASES WHICH ARE MENTIONED IN THE SAID PROVISO. THAT IS TO BE ELIGIBLE FOR THE BENEFIT UNDER SECTION 54F(1) THE ASSESSEE S HOULD NOT BE OWNING MORE THAN ONE RESIDENTIAL HOUSE OTHER THAN T HE NEW ASSET ACQUIRED OR HE SHOULD NOT PURCHASE ANY RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF RESIDENTIAL ASSET OR CONSTRUCTS ANY RESIDENTIAL HOUSE OTHER THAN ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 16 THE NEW ASSET WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF THE RESIDENTIAL ASSET. IN THE ENTIRE SC HEME THERE IS NO PROHIBITION FOR THE ASSESSEE PUTTING UP CONSTRUCTIO N OUT OF SALE CONSTRUCTION RECEIVED BY SUCH TRANSFER OF A SITE WH ICH IS OWNED BY HIM AS IS CLEAR FROM THE LANGUAGE USED. IT IS OPEN FOR THE ASSESSEE TO PUT UP A RESIDENTIAL CONSTRUCTION OR TO PURCHASE A RESIDENTIAL HOUSE. IT IS NOT THE REQUIREMENT OF LAW THAT HE SHO ULD PURCHASE A RESIDENTIAL SITE AND THEN PUTUP CONSTRUCTION. THERE FORE, IN THE INSTANT CASE ADMITTEDLY THE ASSESSEE HAS PURCHASED A VACANT SITE PRI-31.3.2001. HE SOLD THE ORIGINAL ASSET ON 27.8.2 003 ON WHICH DATE HE WAS ALREADY OWNING A SITE. IN FACT EVEN BEF ORE SALE OF THE ORIGINAL ASSET HE HAD STARTED CONSTRUCTION ON SUCH SITE BY AVAILING LOAN FROM THE BANK. IN TERMS OF SECTION 54F(1) ALL INVESTMENTS MADE IN THE CONSTRUCTION OF THE RESIDENTIAL HOUSE O F THE SAID SITE WITHIN A PERIOD OF ONE YEAR PRIOR TO 27.8.2003 WOUL D BE ELIGIBLE FOR EXEMPTION UNDER SECTION 54F(1). SIMILARLY ALL INVES TMENTS IN THE SAID CONSTRUCTION AFTER 27.8.2003 WITHIN A PERIOD O F THREE YEARS THEREFROM IS ALSO ELIGIBLE FOR EXEMPTION. THEREFORE , THE ARGUMENT THAT SUCH INVESTMENT IN PUTTING UP A RESIDENTIAL CO NSTRUCTION CANNOT BE MADE ON A SITE OWNED BY HIM TO BE ELIGIBLE FOR E XEMPTION IS WITHOUT ANY SUBSTANCE. BOTH THE APPELLATE AUTHORITI ES HAVE RIGHTLY EXTENDED THE BENEFIT TO THE ASSESSEE AND THERE IS N O ERROR COMMITTED BY THEM WHICH CALLS FOR INTERFERENCE. 4.1 RE.QUESTION NO.2 : 'AS IS CLEAR FROM SUB-SECTION (4) IN THE EVENT OF T HE ASSESSEE NOT INVESTING THE CAPITAL GAINS EITHER IN PURCHASING TH E RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE WITHIN THE P ERIOD STIPULATED IN SECTION 54F(1), IF THE ASSESSEE WANTS THE BENEFIT O F SECTION 54F, THEN HE SHOULD DEPOSIT THE SAID CAPITAL GAINS IN AN ACCOUNT WHICH IS DULY NOTIFIED BY THE CENTRAL GOVERNMENT. IN OTHER W ORDS IF HE WANT OF CLAIM EXEMPTION FROM PAYMENT OF INCOME TAX BY RE TAINING THE CASH, THEN THE SAID AMOUNT IS TO BE INVESTED IN THE SAID ACCOUNT. IF THE INTENTION IS NOT TO RETAIN CASH BUT TO INVEST I N CONSTRUCTION OR ANY PURCHASE OF THE PROPERTY AND IF SUCH INVESTMENT IS MADE WITHIN ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 17 THE PERIOD STIPULATED THEREIN, THEN SECTION 54F(4) IS NOT AT ALL ATTRACTED AND THEREFORE THE CONTENTION THAT THE ASS ESSEE HAS NOT DEPOSITED THE AMOUNT IN THE BANK ACCOUNT AS STIPULA TED AND THEREFORE, HE IS NOT ENTITLED TO THE BENEFIT EVEN T HOUGH HE HAS INVESTED THE MONEY IN CONSTRUCTION IS ALSO NOT CORR ECT.' 5. FOR THE AFORESAID REASONS BOTH THE SUBSTANTIAL QUES TIONS OF LAW ARE ANSWERED IN FAVOUR OF THE, ASSESSEE AND AGAINST THE REVENUE. THEREFORE, WE DO NOT SEE MERIT IN ANY OF THE APPEAL S. ACCORDINGLY, ALL THE FOUR APPEALS ARE DISMISSED. THUS, IT IS CLEAR THAT WHEN THE ASSESSEE HAS ALREAD Y INVESTED THE ENTIRE SALE CONSIDERATION FOR PURCHASE OF NEW P ROPERTY WITHIN THE PERIOD AS STIPULATED UNDER THE PROVISION S OF SECTION 54/54F OF THE ACT THEN THE BENEFIT CANNOT BE RESTRI CTED OR DENIED TO THE ASSESSEE DUE TO THE REASONS THAT THE FULL VALUE CONSIDERATION WAS ADMITTED AT THE HIGHER BEING THE VALUATION BY THE STAMP DUTY AUTHORITY. 12. AS REGARDS THAT THE EXISTING PROPERTY SOLD BY T HE ASSESSEE IS A RESIDENTIAL HOUSE PROPERTY AND THEREF ORE THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 54 INSTEAD O F SECTION 54F OF THE ACT IS CONCERNED WE NOT THAT THIS IS ONL Y FACTUAL ASPECT AS CLEARLY EVIDENT FROM THE SALE DEED THAT T HE PROPERTY SOLD BY THE ASSESSEE WAS A RESIDENTIAL PROPERTY. TH EREFORE, THE NATURE AND CHARACTER OF THE PROPERTY AS ON THE DATE OF SALE AND THE REAL NATURE AND CHARACTER AS PER AUTH ORIZED USE OF THE PROPERTY HAS TO BE CONSIDERED AND NOT THE CH ANGE OF USE AFTER THE SALE. IT IS CLEARLY STATED IN THE SAL E DEED THAT THE PROPERTY IN QUESTION WAS A RESIDENTIAL PLOT NO. D-1 67 MOTI MARG, BAPUR NAGAR, JAIPUR THOUGH THE AO SUBSEQUENTL Y FOUND THAT PART OF THE PROPERTY IS BEING USED FOR NON-RES IDENTIAL PURPOSE AS IT WAS CONSIDERED BY THE STAMP DUTY AUTH ORITY WHILE REVISING THE VALUE OF THE SAID PROPERTY FOR T HE PURPOSE OF STAMP DUTY. THE HYDERABAD BENCHES OF THE TRIBUNA L IN CASE OF N REVATHI VS. ITO 45 TAMANN.COM 30 AS RELIED ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 18 UPON BY THE LD. AR OF THE ASSESSEE HAS CONSIDERED T HIS ISSUE IN PARA 10 AS UNDER:- 10. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND P ERUSED MATERIALS ON RECORD AS WELL AS ORDERS OF THE REVENU E AUTHORITIES. THE SOLE ISSUE BEFORE US IS WHETHER THE BUILDING IN QUESTION CONSTRUCTED BY THE ASSESSEE ON WHICH EXEMPTION U/S 54F OF THE ACT HAS BEEN CLAIMED IS A RESIDENTIAL BUILDING AS C LAIMED BY THE ASSESSEE OR A BUILDING CONSTRUCTED FOR COMMERCIAL U SE. AS CAN BE SEEN FROM THE ASSESSMENT ORDER THE ASSESSING OFFICE R HAS COME TO A CONCLUSION THAT THE BUILDING IS NOT A RESIDENT IAL BUILDING BASICALLY FOR THE REASON THAT THE BUILDING IS USED FOR A SCHOOL. HOWEVER, ONLY BECAUSE THE BUILDING IS USED AS A SCH OOL CANNOT CHANGE THE NATURE AND CHARACTER OF THE BUILDING FRO M RESIDENTIAL TO COMMERCIAL. EVEN A RESIDENTIAL BUILDING CAN BE U SED AS A SCHOOL OR FOR ANY OTHER COMMERCIAL PURPOSE BUT THE RELEVANT FACTOR TO JUDGE IS WHETHER THE CONSTRUCTION MADE IS FOR RESIDENTIAL HOUSE OR FOR COMMERCIAL PURPOSE. IF THE BUILDING HA S BEEN CONSTRUCTED FOR RESIDENTIAL USE WITH ALL AMENITIES LIKE KITCHEN, BATHROOM ETC., WHICH ARE NECESSARY FOR RESIDENTIAL ACCOMMODATION THEN EVEN IF IT IS USED AS A SCHOOL O R FOR ANY OTHER COMMERCIAL PURPOSE, IT CANNOT LOSE ITS CHARAC TER AS A RESIDENTIAL BUILDING. HENCE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT THE ASSESSEE IS ELIGIBLE FOR DEDU CTION U/S 54 OF THE ACT TO THE FULL AMOUNT OF CAPITAL GAIN COMPU TED ON THE BASIS OF DEEMED FULL VALUE CONSIDERATION U/S 50C OF THE ACT WHEN THE ACTUAL SALE CONSIDERATION WAS FULLY INVEST ED IN THE NEW CAPITAL ASSET. SINCE, WE HAVE ALLOWED THE CLAIM OF DEDUCTION U/S 54 OF THE ACT, THEREFORE, THE ISSUE R AISED BY THE ASSESSEE REGARDING THE VALUATION ADOPTED U/S 50C WI THOUT REFERRING TO THE DVO BECOMES INFRUCTUOUS. ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 19 FOLLOWING THE ORDER OF THE COORDINATE BENCHES OF TH IS TRIBUNAL WE HOLD THAT WHEN THE CAPITAL GAIN WAS FULLY INVESTED IN TH E NEW CAPITAL ASSET ELIGIBLE FOR DEDUCTION U/SS 54B AND 54F OF THE IT A CT THEN THE BENEFIT OF THE PROVISIONS OF SECTIONS 54B AND 54F OF THE ACT W OULD BE AVAILABLE TO THE ASSESSEE TO THE FULL AMOUNT OF CAPITAL GAIN COM PUTED ON THE BASIS OF DEEMED FULL VALUE U/S 50C OF THE ACT. HENCE, THE AD DITION MADE BY THE AO ON ACCOUNT OF CAPITAL GAIN IS DELETED. SINCE WE HAVE DELETED THE ADDITION MADE BY THE AO, THEREFORE, THE OTHER ISSUE S RAISED BY THE ASSESSEE IN THIS APPEAL BECOME ACADEMIC IN NATURE A ND DO NOT REQUIRE ANY SPECIFIC FINDINGS. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/06/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11/06/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. USHA JAIN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT - ITO, WARD-6(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. ITA NO. 480/JP/2017 SMT. USHA JAIN VS. ITO 20 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 480/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR