Dy.CIT, Circle-3(1), Hyderabad V. Sri Vidyasagar Dontineni, Hyderabad

ITA 632/HYD/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8993 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ESTHER N HANGHAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Capital asset; Additional evidence; Valuation report
• Section: 143(3); 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA.NO.632 & 1238/HYD/2013 ASSESSMENT YEAR 2009-2010 & 2010-2011 DCIT, CIRCLE 3(1) HYDERABAD. VS. SRI VIDYASAGAR DONTINENI HYDERABAD 500 037 PAN ACNPD7892C (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. ESTHER N. HANGHAL FOR ASSESSEE : MR. A.V. RAGHURAM DATE OF HEARING : 19.01.2015 DATE OF PRONOUNCEMENT : 28.01.2015 ORDER PER P.M. JAGTAP, A.M. THESE TWO APPEALS PREFERRED BY THE REVENUE AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-IV, H YDERABAD DATED 07.02.2013 AND 07.06.2013 FOR A.YS. 2009-2010 AND 2010-2011 INVOLVE A COMMON ISSUE AND THE SAME THERE FORE, HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE SOLITARY COMMON ISSUE INVOLVED IN THESE TWO APPEALS IS RAISED BY THE REVENUE BY WAY OF IDENTICA L GROUND WHICH READS AS UNDER : THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE DISALLOWANCE MADE U/S. 54 BY A.O. AS THE ASSESSEE H AS NOT INVESTED IN PURCHASE/CONSTRUCTION OF THE NEW AS SET AS STIPULATED U/S.54 AND THE CONSTRUCTION OF THE NEW H OUSE STARTED WAY BACK IN THE YEAR 2002-03. 2 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. 3. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDU AL WHO IS THE MANAGING DIRECTOR OF M/S. SEC INDUSTRIES P. LTD., THE RETURNS OF INCOME FOR BOTH THE YEARS UNDER CONS IDERATION WERE FILED BY HIM ON 28.08.2009 AND 31.07.2010 DECL ARING TOTAL INCOME OF RS.2,65,81,270 AND RS.1,27,37,210 F OR A.YS. 2009-2010 AND 2010-2011 RESPECTIVELY. AS DECLARED I N THE SAID RETURNS, LONG TERM CAPITAL GAIN OF RS.79,35,64 2 AND RS.99,13,046 HAD ARISEN TO THE ASSESSEE FROM THE SA LE OF FLATS IN A.YS. 2009-2010 AND 2010-2011 RESPECTIVELY AND D EDUCTION OF RS.79,35,642 AND RS.85,43,720 WAS CLAIMED BY THE ASSESSEE IN RESPECT OF SUCH LONG TERM CAPITAL GAIN FOR A.YS. 2009-2010 AND 2010-2011 RESPECTIVELY ON ACCOUNT OF INVESTMENT MADE IN THE CONSTRUCTION OF RESIDENTIAL HOUSE AT PLOT NO.99 5, SURVEY NO.102/1 IN JUBILEE HILLS CO-OPERATIVE HOUSING SOCI ETY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y . 2009- 2010, THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54 CAME TO BE EXAMINED BY THE A.O. FOR THE FIRST TIME. ON SUCH EXAMINATION, HE FOUND THAT THE FOLLOWING EXPENDITUR E AGGREGATING TO RS.78,11,375 WAS INCURRED BY THE ASS ESSEE FOR PROVIDING AMENITIES SUCH AS LIFT, STAIR CASE, AIR C ONDITIONER, FURNITURE ETC., IN THE EXISTING HOUSE WHICH WAS REA LLY NOT ESSENTIAL TO MAKE THE HOUSE HABITABLE. SL.NO. DESCRIPTION AMOUNT 1. STAIR CASE RAILING RS. 2,05,273 2. STAIR CASE RS. 83,250 3. SECURITY SYSTEM RS. 10,000 4. ELECTRICAL & FITTINGS (INCLUDING STABILIZER, DECORATIVE & IMPORTED ITEMS) AND OTHERS RS.36,26,613 5. WOOD & PLY WOOD RS. 5,07,591 6. SANITARY FITTINGS RS. 8,22,965 7. PUMPS AND MOTORS CONNECTED TO SUMP RS. 49,200 8. AIR CONDITIONS RS. 2,00,000 3 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. 9. STONE CARVING RS .1,00,000 10. MODULAR KITCHEN RS. 42,826 11. SOLAR WATER SYSTEM RS. 1,03,960 12. LIFT RS. 96,416 13. HARDWARE FITTINGS RS. 2,10,700 14. MISCELLANEOUS EXPENSES RS. 9,610 15. GLASSES & GLASS FITTINGS RS. 59,173 16. FURNITURE AND FITTINGS RS. 6,67,423 17. MARBLE STATUE RS. 3,00,000 18. LABOUR FOR SANITARY FITTINGS RS. 60,675 19. LABOUR FOR ELECTRICAL WORKS RS. 3,80,000 20. LABOUR FOR CARPENTER WORKS RS. 2,75,700 TOTAL RS.78,11,375 4. THE ASSESSING OFFICER ALSO FOUND THAT THE CONSTRUCTION OF HOUSE AT JUBILEE HILLS HAD COMMENCE D WAY BACK IN APRIL, 2002 AND THE SAID HOUSE WAS IN HABIT ABLE CONDITION MUCH BEFORE THE TRANSFER OF NEW ASSETS BY THE ASSESSEE DURING THE YEARS UNDER CONSIDERATION. HE F URTHER HELD THAT THE INVESTMENT MADE BY THE ASSESSEE WAS NOT IN THE CONSTRUCTION OF A NEW HOUSE AND THE ASSESSEE, THERE FORE, WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54 FO R SUCH INVESTMENT. ACCORDINGLY, THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54F WAS DISALLOWED BY THE A .O. IN THE ASSESSMENT MADE FOR A.Y. 2009-2010 UNDER SECTION 14 3(3) VIDE ITS ORDER DATED 20.12.2011 AND THE SAME WAS FOLLOWE D BY HIM EVEN IN A.Y. 2010-2011 TO DISALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54. 5. AGAINST THE ORDERS PASSED BY THE A.O. UNDER SECTION 143(3) FOR BOTH THE YEARS UNDER CONSIDERATI ON, APPEALS WERE PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A ) CHALLENGING THE DISALLOWANCE MADE BY THE A.O. ON AC COUNT OF HIS CLAIM FOR DEDUCTION UNDER SECTION 54. DURING TH E APPEAL PROCEEDINGS BEFORE THE LD. CIT(A), THE FOLLOWING AD DITIONAL EVIDENCE WAS FILED BY THE ASSESSEE. 4 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. I. PURCHASE DEED OF PLOT NO.995 DATED 25.7.1987. II. CONSTRUCTION PLAN FOR HOUSE AT PLOT NO.995 APPROVED BY MCH. III. VALUATION REPORT DATED 1.7.2003 IV. LEDGER ACCOUNT FOR COST OF CONSTRUCTION FROM 10.3.2001 TO 31.3.2010. V. LETTER OF MUNICIPALITY ON COMPLETION OF HOUSE DATED 28.6.2010. VI. REVISED MUNICIPAL ASSESSMENT ORDER DATED 29.12.2011. 5.1. RELYING ON THE ABOVE ADDITIONAL EVIDENCE, IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) THAT AFTER THE PURCHASE OF PLOT NO.995 IN 1987, A TEMPOR ARY STRUCTURE WAS CONSTRUCTED ON THE SAID PLOT. IT WAS SUBMITTED THAT THE SAID STRUCTURE, HOWEVER, WAS DEMOLISHED BY THE ASSESSEE BEFORE THE COMMENCEMENT OF CONSTRUCTION OF NEW HOUSE IN THE YEAR 2002. IT WAS SUBMITTED THAT THE C ONSTRUCTION OF NEW HOUSE WAS DELAYED AND THE SAME WAS COMPLETED IN THE YEAR 2010 AS PER THE COMPLETION CERTIFICATE ISSUED BY THE MUNICIPALITY ON 28.06.2010. IT WAS PLEADED THAT THE EXPENDITURE IN QUESTION INCURRED IN BOTH THE YEARS UNDER CONSIDERATION THUS WAS FOR CONSTRUCTION OF A NEW HO USE AND SINCE THE SAME WAS INCURRED TO MAKE THE NEW HOUSE H ABITABLE, THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54. AS REGARDS THE COMMENCEMENT OF CONSTRUCTION OF NEW HOUSE IN THE YEAR 2002, IT WAS CONTENDED ON BEHALF OF THE AS SESSEE THAT THE DATE OF COMMENCEMENT OF CONSTRUCTION OF NEW HOU SE IS NOT RELEVANT FOR THE PURPOSE OF DEDUCTION UNDER SECTION 54 AND WHAT IS RELEVANT IS THE DATE OF COMPLETION OF CONST RUCTION AND THE SPECIFIED PERIOD IN WHICH THE EXPENDITURE CLAIM ED TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 54 IS INCURRED . IT WAS CONTENDED THAT THE EXPENDITURE INCURRED BY THE ASSE SSEE ON THE CONSTRUCTION OF NEW HOUSE DURING THE SPECIFIED PERIOD THUS 5 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 54 AND THE A.O. WAS NOT JUSTIFIED IN DISALLOWING THE SAID DEDUCTION CLA IMED BY THE ASSESSEE. IT WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A) BY THE ASSESSEE THAT THE ACTUAL EXPENDITURE INCURRED O N CONSTRUCTION OF NEW HOUSE DURING THE SPECIFIED PERI OD RELEVANT TO A.Y. 2009-2010 WAS RS.95,03,268. 5.2. THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSE SSEE WAS FORWARDED BY THE LD. CIT(A) TO THE A.O. FOR VER IFICATION AND COMMENTS. IN HIS REMAND REPORT DATED 30.11.2012 SUB MITTED THE LD. CIT(A), IT WAS STATED BY THE A.O. THAT THE FACT THAT THE MUNICIPAL ASSESSMENT OF THE ASSESSEES JUBILEE HILL S HOUSE WAS REVISED IN DECEMBER, 2011 ITSELF WAS SUFFICIENT TO SHOW THAT THE SAID HOUSE WAS NOT A NEW HOUSE AND THERE W AS AN OLD HOUSE ALREADY IN EXISTENCE. THE A.O. CONTENDED THAT THE ASSESSEE, THEREFORE, WAS NOT ENTITLED TO CLAIM DEDU CTION UNDER SECTION 54 IN RESPECT OF THE EXPENDITURE INCURRED O N RENOVATION OF OLD HOUSE. 6. AFTER TAKING INTO CONSIDERATION THE MATERIAL AVAILABLE ON RECORD INCLUDING THE ADDITIONAL EVIDEN CE FILED BY THE ASSESSEE AS WELL AS THE REMAND REPORT SUBMITTED BY THE A.O., THE LD. CIT(A) HELD THAT THE ASSESSEE WAS ELI GIBLE TO CLAIM DEDUCTION UNDER SECTION 54 IN RESPECT OF EXPENDITUR E INCURRED ON CONSTRUCTION OF NEW HOUSE AT JUBILEE HILLS FOR B OTH THE YEARS UNDER CONSIDERATION. ACCORDING TO HIM, EVEN T HOUGH THERE WAS A OLD STRUCTURE ALREADY IN EXISTENCE ON T HE LAND OF THE ASSESSEE, THE SAME WAS DEMOLISHED AS THERE WAS NO REFERENCE TO SUCH OLD STRUCTURE EVEN IN THE VALUATI ON REPORT. HE ALSO HELD THAT THE OTHER DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE FURTHER CORROBORATED THE CLAIM OF THE ASSE SSEE THAT THE HOUSE CONSTRUCTED BY THE ASSESSEE AT JUBILEE HI LLS WAS 6 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. ENTIRELY NEW HOUSE AND IT WAS NOT THE CASE OF A MER E EXPANSION OR MODIFICATION OF AN OLD HOUSE AS ALLEGED BY THE A .O. AS REGARDS THE COMMENCEMENT OF CONSTRUCTION OF NEW HOU SE IN THE YEAR 2002, THE LD. CIT(A) HELD THAT SECTION 54 MERELY SPECIFIES THE DATE BY WHICH CONSTRUCTION SHOULD BE COMPLETED AND THEREFORE, THE FACT THAT THE ASSESSEE HAD INITI ATED CONSTRUCTION MUCH BEFORE THE TRANSFER OF A CAPITAL ASSET DID NOT DISENTITLE HIM FROM CLAIMING DEDUCTION UNDER SECTIO N 54. HE ALSO HELD THAT THE EXPENDITURE INCURRED BY THE ASSE SSEE FOR PROVIDING FACILITIES LIKE ELECTRICAL AND OTHER FIXT URES, WARD-ROBE AND SANITARY FITTINGS ETC., WAS NECESSARY TO MAKE T HE NEW HOUSE HABITABLE AND THEREFORE, SUCH EXPENDITURE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 54. HE HOWEVER, FOUND T HAT EXPENDITURE INCURRED BY THE ASSESSEE FOR CERTAIN IT EMS, WHICH DID NOT FORM AN INTEGRAL AND INALIENABLE PART OF TH E HOUSE SUCH AS MARBLE STATUE, FURNITURES, FITTINGS ETC., WAS NO T REQUIRED TO BE INCURRED TO MAKE THE HOUSE HABITABLE AND SINCE S UCH EXPENDITURE WAS INCURRED MAINLY TO DECORATE THE NEW HOUSE OF THE ASSESSEE, HE HELD THAT IT WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54. SUCH EXPENDITURE AS IDENTIFIED BY THE LD. CIT(A) FOR BOTH THE YEARS UNDER CONSIDERATION WAS U NDER : ASSESSMENT YEAR 2009-2010 A. MARBLE STATUE RS.3,00,000 B. GLASS AND GLASS FITTINGS (INCLUDING GLASSES, PERMETS, CURTAIN CLOTH, SHEER BLINDS, HONEY COMB BLINDS. RS.3,20,889 C. FURNITURE & FITTINGS (BED, TABLE SOFA AND CUSHION CURTAINS AND DECORATIVE ITEMS) RS.15,99,376 TOTAL RS.22,20,265 ASSESSMENT YEAR 2010-2011 A. AUDIO VISUAL SYSTEM (HOME THEATRE) RS.16,00,000 B. GLASS AND GLASS FITTINGS (INCLUDING GLASSES, PERMETS, CURTAIN CLOTH, SHEER BLINDS, HONEY COMB BLINDS RS. 3,20,889 7 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. C. FURNITURE & FITTIGS (BED, TABLE SOFA AND CUSHION CURTAINS AND DECORATIVE ITEMS. RS.15,99,376 TOTAL RS.35,20,265 6.1. ACCORDINGLY, THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54 WAS HELD TO BE ALLOWABLE BY THE LD. CIT(A) TO THE EXTENT OF RS.72,83,003 (RS.95,03,268 RS.22,20,265) AND RS.50,23,455 (RS.85,43,720 RS.35,20,265). THE LD. CIT(A) ALSO DIRECTED THE A.O . TO VERIFY THE EXPENDITURE INCURRED BY THE ASSESSEE FOR CONSTR UCTION OF NEW HOUSE ELIGIBLE FOR DEDUCTION UNDER SECTION 54 F OR BOTH THE YEARS UNDER CONSIDERATION IN ORDER TO ENSURE THAT D EDUCTION IN RESPECT OF THE SAME EXPENDITURE IS NOT ALLOWED FOR BOTH THE YEARS UNDER CONSIDERATION. AGGRIEVED BY THE ORDERS OF THE LD. CIT(A), REVENUE HAS PREFERRED THESE APPEALS BEFORE THE TRIBUNAL. 7. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTI ON UNDER SECTION 54 FOR INVESTMENT MADE IN THE CONSTRUCTION OF RESIDENTIAL HOUSE FROM THE LONG TERM CAPITAL GAIN ARISING FROM THE SALE OF RESIDENTIAL FLATS MADE IN BOTH THE YEAR S UNDER CONSIDERATION WAS DISALLOWED BY THE A.O. MAINLY ON THE GROUNDS THAT SUCH INVESTMENT WAS NOT MADE BY THE AS SESSEE IN THE CONSTRUCTION OF NEW RESIDENTIAL HOUSE, AS TH E HOUSE ON THE PLOT OF LAND AT JUBILEE HILLS WAS ALREADY IN EX ISTENCE AND THAT THE EXPENDITURE IN QUESTION ON CONSTRUCTION OF HOUSE WAS INCURRED BY THE ASSESSEE MAINLY FOR PROVIDING AMENI TIES SUCH AS LIFT, STAIR CASE, AIR CONDITIONER, FURNITURE ETC ., TO THE EXISTING HOUSE WHICH WERE NOT ESSENTIAL TO MAKE THE SAID HOU SE HABITABLE. IN SO FAR AS THE NATURE OF EXPENDITURE I N QUESTION IS 8 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. CONCERNED, THE LD. CIT(A) HAS ALREADY EXAMINED THE SAME AND HAS FOUND ON SUCH EXAMINATION THAT THE SAID EXPENDI TURE WAS PARTLY INCURRED BY THE ASSESSEE TO MAKE THE HOUSE H ABITABLE WHEREAS, THE REMAINING EXPENDITURE INCURRED MAINLY TO DECORATE THE HOUSE WAS NOT INCURRED FOR MAKING THE HOUSE HABITABLE. ACCORDINGLY, HE HAS RESTRICTED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 54 ONLY TO THE EXTENT IT IS ON ACCOUNT OF EXPENDITURE INCURRED BY THE ASSESSEE TO MAKE THE HOUSE HABITABLE AND THE DEPARTMENT HAS NOT RAIS ED ANY GROUND SPECIFICALLY IN THE PRESENT APPEALS DISPUTIN G THIS ASPECT OF THE MATTER. 8. THE GRIEVANCE OF THE REVENUE AS PROJECTED IN T HE COMMON GROUND RAISED IN THESE APPEALS IS THAT THE CONSTRUCTION OF HOUSE HAVING BEEN STARTED WAY BACK IN THE YEAR 2002-2003, THE INVESTMENT MADE BY THE ASSESSEE IN THE CONSTRUCTION OF THE SAID HOUSE CANNOT BE REGARDED A S INVESTMENT IN CONSTRUCTION OF THE NEW HOUSE ELIGIBL E FOR DEDUCTION AS ENVISAGED IN SECTION 54. THE PROVISION S OF SECTION 54 TO THE EXTENT RELEVANT IN THIS CONTEXT ARE REPRO DUCED BELOW : PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE. 54. [(1)] [SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDU AL OR A HINDU UNDIVIDED FAMILY], THE CAPITAL GAIN ARISES FR OM THE TRANSFER OF A LONG-TERM CAPITAL ASSET [***], BEING BUILDINGS OR LANDS APPURTENANT THERETO, AND BEING A RESIDENTIAL HOUSE , THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' (HEREAFTER IN THIS SEC TION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSE E HAS WITHIN A PERIOD OF [ONE YEAR BEFORE OR TWO YEARS AF TER THE DATE ON WHICH THE TRANSFER TOOK PLACE PURCHASED], O R HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE [ CONSTRUCTED, A RESIDENTIAL HOUSE ] , THEN], INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIO US YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT 9 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. WITH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (I) IF THE AMOUNT OF THE CAPITAL GAIN [IS GREATER T HAN THE COST OF [THE RESIDENTIAL HOUSE] SO PURCHASED OR CONSTRUC TED (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET) ], THE DIFFERENCE BETWEEN THE AMOUNT OF THE CAPITAL GA IN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SE CTION 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, T HE COST SHALL BE NIL; OR (II) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET , THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, T HE COST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. 8.1. A CAREFUL READING OF THE RELEVANT PROVISIONS OF SECTION 54 MAKES IT CLEAR THAT THE CAPITAL GAIN ARI SING FROM THE TRANSFER OF LONG TERM CAPITAL ASSET BEING THE RESID ENTIAL HOUSE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 54 TO THE E XTENT THE SAME IS INVESTED OR UTILIZED DURING THE SPECIFIED P ERIOD FOR PURCHASE OR CONSTRUCTION OF A RESIDENTIAL HOUSE. TH ERE IS HOWEVER, NOTHING TO SHOW THAT SUCH A RESIDENTIAL HO USE HAS TO BE ONLY A NEW RESIDENTIAL HOUSE AND NOT A OLD RESID ENTIAL HOUSE. SUCH A RESIDENTIAL HOUSE IS REFERRED TO AS THE NEW ASSET IN CLAUSES (I) AND (II) OF SUB-SECTION(1) OF SECTION 54 IN ORDER TO DISTINGUISH IT FROM THE SIMILAR EXPRESSION A RESIDENTIAL HOUSE, THE TRANSFER OF WHICH HAS GIVEN THE RISE TO THE CAPITAL GAIN USED IN THE SAME PROVISIONS. WHAT THEREFORE IS ENVISAGED IN SECTION 54 FOR CLAIMING DEDUCTION IS T HE INVESTMENT MADE IN PURCHASE OR CONSTRUCTION OF RESI DENTIAL HOUSE AND NOT NEW RESIDENTIAL HOUSE AS INTERPRETED BY THE A.O. AS RIGHTLY HELD BY THE LD. CIT(A), IN THIS CONTEXT, ALTHOUGH 10 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. THERE WAS AN OLD STRUCTURE ON THE PLOT OF THE ASSES SEE AT JUBILEE HILLS WHICH WAS DEMOLISHED AND THE CONSTRUC TION OF NEW HOUSE HAD COMMENCED WAY BACK IN THE YEAR 2002-2 003, THE DATE OF COMMENCEMENT OF CONSTRUCTION IS NOT REL EVANT FOR THE PURPOSE OF DEDUCTION UNDER SECTION 54 AND WHAT IS RELEVANT IS THE DATE OF COMPLETION OF THE CONSTRUCT ION AS WELL AS THE PERIOD OF INVESTMENT MADE BY THE ASSESSEE IN SU CH CONSTRUCTION. IN THIS REGARD, THERE IS NO DISPUTE T HAT THE AMOUNT IN QUESTION SPENT BY THE ASSESSEE ON CONSTRU CTION OF THE RESIDENTIAL HOUSE WAS WITHIN THE SPECIFIED PERI OD AND THAT THE CONSTRUCTION OF HOUSE WAS COMPLETED ON 28.06.20 10. AS SUCH, CONSIDERING ALL THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER S ECTION 54 TO THE EXTENT ALLOWED BY THE LD. CIT(A) IN BOTH THE YE ARS UNDER CONSIDERATION AND WE FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDERS OF THE LD. CIT(A) ON THIS ISSUE. THE SAME ARE THEREFORE UPHELD AND THESE APPEALS FILED B Y THE REVENUE ARE DISMISSED. 9. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.01.2015. SD/- SD/- (ASHA VIJAYARAGHAVAN) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 28 TH JANUARY, 2015 VBP/- 11 ITA.NO.632 & 1238/HYD/2013 SRI VIDYASAGAR DONTINENI, HYDERABAD. COPY TO 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1), 7 TH FLOOR, B BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERAB AD. 2. SRI VIDYASAGAR DONTINENI, 6/25, KUKATPALLY, OPP. ID PL PROJECT, HYDERABAD 500 037. 3. CIT(A)-IV, HYDERABAD. 4. CIT-III, HYDERABAD. 5. D.R. I.T.A.T. A BENCH, HYDERABAD.