MOHANDAS KURANI, Jaipur V. ITO, Ajmer

ITA 655/JPR/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3683 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MEHLA JCIT DHK
• Keywords: Unexplained investment; Capital asset; Additional evidence; Benefit of exemption; Capital Gains
• Section: 143(3); 244A; 54F; 274; 147; 54; 154

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 JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 655/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. SHRI MOHANDAS KURANI PLOT NO. 826, B.K. KAUL NAGAR, HANUMAN VIHAR, AJMER. CUKE VS. THE INCOME TAX OFFICER, WARD 1(3), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ACJPK 6062 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADVOCATE) JKTLO DH VKSJ L S@ REVENUE BY : SHRI A.K.MEHLA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05.03.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08/03/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25 TH APRIL, 2016 OF LD. CIT (A), AJMER FOR THE ASSESSMENT YEA R 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THE IMPUGNED ADDITIONS AND DISALLOWANCES MADE I N THE ORDER DATED 27.02.2015 U/S 147/148 R/W SEC. 143(3) OF THE ACT, BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VAR IOUS OTHER REASONS AND HENCE, THE SAME KINDLY BE DELETED. 2. RS. 24,00,000/-: THE LD. CIT (A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING DISALLOWANCE OF THE DEDUCTIO N OF RS. 24,00,000/- CLAIMED BY THE ASSESSEE U/S 54. THE DEDUCTION SO DE NIED BY THE AO AND CONFIRMED BY THE LD. CIT (A), IS CONTRARY TO TH E PROVISIONS OF LAW AND FACTS HENCE, THE AO KINDLY BE DIRECTED TO ALLOW THE DEDUCTION U/S 54 AS CLAIMED. 2 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. 3.1. RS. 6,29,830/-: THE LD. CIT (A) ERRED IN LAW A S WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 6,29,830 /- MADE BY THE AO BEING THE CASH PAID TO SMT. PUSHPA GIDWANI TOWARDS THE PURCHASE OF THE PROPERTY. THE ADDITION SO MADE AND CONFIRMED BY THE LD. CIT (A) IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS HENCE, KINDLY BE DELETED IN FULL. 3.2. THE LD. CIT (A) FURTHER ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN NOT ADMITTING & CONSIDERING THE EVIDENCES IN THE SHAPE OF THE CASH BOOK AND COPIES THERE FROM, ALLEGING THE SAME TO BE AN ADDITIONAL EVIDENCE IN NATURE AND ALSO ALLEGING THAT THERE DID NOT EXIST ANY CIRCUMSTANCE AS PRESCRIBED U/R 46A. THE EVIDENCES S O PRODUCED/FURNISHED BUT NOT ADMITTED BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, THE ADDITIONAL EVIDENCES SO FURNI SHED KINDLY BE ADMITTED, CONSIDERED AND THE ADDITION BE DELETED. ALTERNATIVELY, THE LD. CIT (A) KINDLY BE DIRECTED T O CONSIDER THE SAME. 4. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B, 234C & 234D OF TH E ACT AND AS ALSO IN WITHDRAWING OF INTEREST U/S 244A OF THE ACT. TH E APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING AND WITHDRAWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED/WITHDRAWN, BEING CONTRARY TO TH E PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 5. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE TH E DATE OF HEARING. GROUND NO. 1 IS REGARDING VALIDITY OF REASSESSMENT ORDER PASSED UNDER SECTION 147 READ WITH SECTION 143(3) OF THE I T ACT. 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUND NO. 1 OF THE APP EAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED. THE LD. D/R HAS NOT RAISE D ANY OBJECTION IF THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED AS NOT PRES SED. ACCORDINGLY, THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED BEING NOT P RESSED. GROUND NO. 2 IS REGARDING DISALLOWANCE OF DEDUCTION UNDER SECTION 54 OF THE IT ACT. 3 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. 3. AT THE TIME OF HEARING, THE LD. A/R OF THE ASSES SEE HAS SUBMITTED THAT THE LD. CIT (A) WHILE PASSING THE IMPUGNED ORDER HAS DIRECT ED THE AO TO EXAMINE THE ALTERNATIVE CLAIM UNDER SECTION 54F. THE AO AFTER PASSING THE GIVING EFFECT ORDER HAS PASSED AN ORDER UNDER SECTION 154 OF THE ACT DA TED 6 TH JANUARY, 2017 WHEREBY THE CLAIM OF THE ASSESSEE UNDER SECTION 54F WAS ACC EPTED IN PRINCIPLE. HOWEVER, THE DEDUCTION WAS RESTRICTED ONLY TO THE TUNE OF RS. 11 ,00,000/-, THE AMOUNT WHICH WAS DEPOSITED IN THE CAPITAL GAIN ACCOUNT SCHEME INSTEA D OF THE ENTIRE INVESTMENT MADE IN PURCHASE OF NEW RESIDENTIAL HOUSE. THE LD. A/R HAS FURTHER SUBMITTED THAT THE AO INITIALLY DISALLOWED THE CLAIM UNDER SECTION 54 ON THE GROUND THAT THE PROPERTY/ASSETS SOLD BY THE ASSESSEE WAS A RESIDENTIAL-CUM-COMMERCI AL AND, THEREFORE, THE DEDUCTION UNDER SECTION 54 WAS DISALLOWED BY THE AO . THE LD. CIT (A) DIRECTED THE AO TO CONSIDER THE ALTERNATIVE CLAIM UNDER SECTION 54F. HE HAS FURTHER CONTENDED THAT THERE IS NO DISPUTE THAT THE ASSESSEE PURCHASE D THE NEW RESIDENTIAL HOUSE WITHIN THE TIME PERIOD PRESCRIBED UNDER SECTION 54F AND THE INVESTMENT MADE BY THE ASSESSEE IN PURCHASE OF NEW RESIDENTIAL HOUSE IS RS . 24,00,000/- WHEREAS THE SALE CONSIDERATION OF THE EXISTING PROPERTY IS ONLY 1/3 RD SHARE OF TOTAL CONSIDERATION OF RS. 53,04,800/-. THUS THE LD. A/R HAS SUBMITTED THAT I F THE CLAIM OF DEDUCTION UNDER SECTION 54F IS ALLOWED BY CONSIDERING THE ENTIRE IN VESTMENT, THEN THE ASSESSEE WILL GET FULL BENEFIT OF EXEMPTION OF CAPITAL GAIN ARISI NG FROM THE TRANSFER OF THE EXISTING ASSET. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL DATED 31.08.2018 I N CASE OF ACIT VS. ZAHIDA BANOO IN ITA NO. 579/JP/2013. HE HAS ALSO RELIED UPON TH E DECISION OF HONBLE GAUHATI HIGH COURT IN CASE OF CIT VS. RAJESH KUMAR JALAN, 2 96 ITR 274 (GAU.) AS WELL AS THE 4 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. DECISION OF JODHPUR BENCH OF THE TRIBUNAL IN CASE O F NIRMALA YADAV VS. ITO, 146 DTR 63. THUS THE LD. A/R HAS SUBMITTED THAT WHEN THE A SSESSEE HAS INVESTED THE ENTIRE SALE CONSIDERATION RATHER MORE THAN SALE CONSIDERAT ION OF THE EXISTING ASSET IN PURCHASE OF NEW RESIDENTIAL HOUSE WITHIN THE TIME P RESCRIBED UNDER SECTION 54F, THEN THE CLAIM OF THE ASSESSEE OUGHT TO HAVE BEEN A LLOWED IN FULL INSTEAD OF RESTRICTING THE AMOUNT DEPOSITED IN THE CAPITAL GAI N ACCOUNT. 4. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO HAS ALREADY ALLOWED THE CLAIM UNDER SECTION 54F TO THE EXTENT OF THE AMOUNT DEPOSITED IN THE CAPITAL G AIN ACCOUNT. SINCE THE ASSESSEE HAS NOT DEPOSITED THE AMOUNT IN THE CAPITAL GAIN AC COUNT SCHEME, THEREFORE, THERE IS A VIOLATION OF THE CONDITION PROVIDED UNDER SECT ION 54F OF THE ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THOUGH THE ASSESSEE IN THE GROUNDS OF APPE AL HAS CLAIMED THE DEDUCTION UNDER SECTION 54F, HOWEVER, WE FIND THAT THE ASSESS EE HAS INVESTED RS. 24,00,000/- IN PURCHASE OF NEW HOUSE PROPERTY AS AGAINST THE SA LE CONSIDERATION WHICH IS 1/3 RD OF RS. 53,04,800/-. THEREFORE, THERE WILL BE NO CHANGE IN THE QUANTUM OF DEDUCTION WHETHER IT IS ALLOWED UNDER SECTION 54 OR 54F OF TH E ACT. SINCE THE AO HAS ALREADY ACCEPTED THE CLAIM OF DEDUCTION UNDER SECTION 54F W HILE PASSING THE ORDER UNDER SECTION 154 OF THE IT ACT DATED 6 TH JANUARY, 2017, THEREFORE, WITHOUT GOING INTO THE CONTROVERSY OF ALLOWABILITY OF THE CLAIM UNDER SECT ION 54, WE CONSIDER THE DEDUCTION UNDER SECTION 54F ON THE ENTIRE INVESTMENT MADE BY THE ASSESSEE. THERE IS NO DISPUTE THAT THE ASSESSEE HAS PURCHASED THE NEW RES IDENTIAL HOUSE AND INVESTED RS. 24,00,000/- WITHIN THE TIME PERIOD PRESCRIBED UNDER SECTION 54F. HOWEVER, THE AO 5 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. HAS RESTRICTED THE DEDUCTION ONLY ON THE GROUND THA T THE ASSESSEE HAS NOT DEPOSITED THE ENTIRE SALE CONSIDERATION IN THE CAPITAL GAIN A CCOUNT SCHEME. WE FIND THAT ONCE THE SUBSTANTIAL AND PRIMARY CONDITION AS PRESCRIBED IN SECTION 54F FOR INVESTMENT OF THE SALE CONSIDERATION FOR PURCHASE OF NEW RESIDENT IAL HOUSE IS SATISFIED, THEN THE CLAIM OF DEDUCTION CANNOT BE DENIED MERELY ON THE G ROUND THAT PRIOR TO THE INVESTMENT THE ASSESSEE HAS NOT DEPOSITED THE AMOUN T IN THE CAPITAL GAIN ACCOUNT SCHEME. THE COORDINATE BENCH OF THIS TRIBUNAL IN C ASE OF ACIT VS. ZAHIDA BANOO (SUPRA) HAS CONSIDERED AN IDENTICAL ISSUE IN PARA 6 AS UNDER :- 6. WE FURTHER NOTE THAT WHEN THE ASSESSEE HAS CLAI MED DEDUCTION U/S 54F OF THE INCOME TAX ACT FOR THE ASSESSMENT YE AR 2006-07 WHICH WAS ALLOWED BY THE LD. CIT(A) THEN THE SAID CLAIM I S ALSO ALLOWABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION PARTICULARL Y IN VIEW OF THE FACT THAT THE INVESTMENT IN THE NEW HOUSE HAS BEEN MADE BY THE ASSESSEE WITHIN TIME PRESCRIBED UNDER THE PROVISIONS OF SECT ION 54F OF THE ACT. IT WAS BROUGHT TO OUR NOTICE THAT THE ASSESSEE PURC HASED THE NEW PROPERTY ON 26.12.2005 AND THEREFORE THE INVESTMENT IN NEW PROPERTY WAS MADE WITHIN PRESCRIBED TIME UNDER THE PROVISION S OF SECTION 54F OF THE ACT. THOUGH THE REVENUE CAN RAISED AN OBJECTION ABOUT THE ALLOWABILITY OF DEDUCTING U/S 54F OF THE ACT AS TH E ASSESSEE HAS NOT DEPOSITED THE NET CONSIDERATION IN THE CAPITAL GAIN ACCOUNT HOWEVER, WHEN THE ASSESSEE HAS NOT RECEIVED THE ENTIRE SALE CONSIDERATION DURING THE YEAR UNDER CONSIDERATION THEN THE QUESTI ON OF DEPOSITING THE SAME DOES NO ARISE. THE CONDITION OF DEPOSITING THE AMOUNT IN CAPITAL GAIN ACCOUNTS SCHEME PRESUPPOSES THAT THE A SSESSEE HAS ALREADY RECEIVED THE ENTIRE SALE CONSIDERATION. IN THE CASE IN HAND WHEN THE ASSESSEE DID NOT RECEIVE THE SALE CONSIDER ATION DURING THE YEAR UNDER CONSIDERATION THEN, THE SAID CONDITION C ANNOT BE THRUST 6 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. UPON THE ASSESSEE. FURTHER, THE ASSESSEE HAS INVEST ED THE AMOUNT WITHIN THE TIME PERIOD PROVIDED U/S 54F OF THE ACT AND WE FIND THAT THE HONBLE KARNATAKA HIGH COURT IN CASE OF PRINCIPAL C IT VS. C. GOPALASWAMY 384 ITR 307 HAS HELD THAT THE CONDITION PRECEDENT FOR CLAIMING THE BENEFIT U/S 54/54F OF THE ACT IS THAT CAPITAL GAIN REALIZED FROM CAPITAL ASSET SHOULD HAVE BEEN INVESTED EITHER IN PURCHASE OF RESIDENTIAL HOUSE OR IN CONSTRUCTING THE RESIDENTIA L HOUSE. IF IT IS ESTABLISHED THAT THE CONSIDERATION WAS RECEIVED ON ALIENATION PROPERTY HAS BEEN INVESTED FOR PURCHASE OF RESIDENTIAL HOUSE , THE ASSESSEE WOULD BE ENTITLED TO BENEFIT OF SECTION 54F OF THE ACT IRRESPECTIVE OF THE FACT THAT THE TRANSFER WAS NOT COMPLETED IN ALL RESPECT. IN CASE OF CIT VS. SAMBANDAM UDAYKUMAR 345ITR 389 THE HONBLE HIGH COURT HAS IN PARA 10 AND 11 AS UNDER:- 10. A READING OF THE AFORESAID PROVISION MAKES IT VERY CLEAR THAT IF A CAPITAL GAIN ARISES FROM THE TRANSFER OF ANY LONG TERM CAPITAL ASSET, NOT BEING A RESIDENTIAL HOUSE AND TH E ASSESSEE HAS WITHIN THE PERIOD OF ONE YEAR BEFORE OR TWO YEARS A FTER THE DATE ON WHICH TRANSFER TOOK PLACE PURCHASED OR HAS WITHI N A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED A RESIDENTI AL HOUSE, IF THE COST OF THE NEW ASSET IS NOT LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET THE WHOLE SUCH CAP ITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45 OF THE ACT. HOWEVER , IF THE COST OF THE NEW ASSET IS LESS THAN THE NET CONSIDERATION IN RESPECT OF THE ORIGINAL ASSET, SO MUCH OF THE CAPITAL GAIN AS BEARS TO BE WHOLE OF THE CAPITAL GAIN THE SAME PROPORTION AS TH E COST OF THE NEW ASSET BEARS TO THE NET CONSIDERATION SHALL NOT BE CHARGED UNDER SECTION 45 OF THE ACT. 11. SECTION 45 OF THE ACT MAKES IT VERY CLEAR THAT ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PREVIOUS YEAR SHALL, SAVE OR OTHERWISE PROVIDED IN SECTIONS 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G AND 54H IS CHAR GEABLE TO INCOME TAX UNDER THE HEAD 'CAPITAL GAINS' AND SHALL BE DEEMED TO BE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRAN SFER TOOK PLACE. THE AFORESAID SECTIONS WHICH FORM PART OF SE CTION 54 OF THE ACT ARE CASES WHERE CAPITAL GAIN ON TRANSFER OF CAPITAL ASSET 7 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. NOT TO BE CHARGED IN THOSE CASES. SECTION 54F OF TH E ACT IS A BENEFICIAL PROVISION OF PROMOTING THE CONSTRUCTION OF RESIDENTIAL HOUSE. THEREFORE, THE SAID PROVISION HAS TO BE CONS TRUED LIBERALLY FOR ACHIEVING THE PURPOSE FOR WHICH IT WA S INCORPORATED IN THE STATUTE. THE INTENTION OF THE LEGISLATURE WA S TO ENCOURAGE INVESTMENTS IN THE ACQUISITION OF A RESIDENTIAL HOU SE AND COMPLETION OF CONSTRUCTION OR OCCUPATION IS NOT THE REQUIREMENT OF LAW. THE WORDS USED IN THE SECTION ARE 'PURCHASE D' OR 'CONSTRUCTED'. FOR SUCH PURPOSE, THE CAPITAL GAIN R EALIZED SHOULD HAVE BEEN INVESTED IN A RESIDENTIAL HOUSE. THE COND ITION PRECEDENT FOR CLAIMING BENEFIT UNDER THE SAID PREVI SION IS THE CAPITAL GAIN REALIZED FROM SALE OF CAPITAL ASSET SH OULD HAVE BEEN PARTED BY THE ASSESSEE AND INVESTED EITHER IN PURCH ASING A RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE. IF AFTER MAKING THE ENTIRE PAYMENT, MERELY BECAUSE A REGISTE RED SALE DEED HAD NOT BEEN EXECUTED AND REGISTERED IN FAVOUR OF THE ASSESSEE BEFORE THE PERIOD STIPULATED, HE CANNOT BE DENIED THE BENEFIT OF SECTION 54F OF THE ACT. SIMILARLY, IF HE HAS INVESTED THE MONEY IN CONSTRUCTION OF A RESIDENTIAL HOUSE, MEREL Y BECAUSE THE CONSTRUCTION WAS NOT COMPLETE IN ALL RESPECTS A ND IT WAS NOT IN A FIT CONDITION TO BE OCCUPIED WITHIN THE PERIOD STIPULATED, THAT WOULD NOT DISENTITLE THE ASSESSEE FROM CLAIMIN G THE BENEFIT UNDER SECTION 54F OF THE ACT. THE ESSENCE OF THE SA ID PROVISION IS WHETHER THE ASSESSEE WHO RECEIVED CAPITAL GAINS HAS INVESTED IN A RESIDENTIAL HOUSE. ONCE IT IS DEMONSTRATED THA T THE CONSIDERATION RECEIVED ON TRANSFER HAS BEEN INVESTE D EITHER IN PURCHASING A RESIDENTIAL HOUSE OR IN CONSTRUCTION O F A RESIDENTIAL HOUSE EVEN THOUGH THE TRANSACTIONS ARE NOT COMPLETE IN ALL RESPECTS AND AS REQUITED UNDER THE LAW, THAT WOULD NOT DISENTITLE THE ASSESSEE FROM THE SAID BENEFIT. THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES O F THE CASE WHEN THE INVESTMENT WAS MADE WITHIN THE TIME PERIOD EVEN COU NTED FROM THE DATE OF TRANSFER TO BE CONSIDERED ON THE DATE OF AG REEMENT DATED 13.09.2004 THEN THE ASSESSMENT OF CAPITAL GAIN TAX EITHER FOR THE ASSESSMENT YEAR 2006-07 OR FOR THE ASSESSMENT YEAR 2005-06 WOULD BE REVENUE NEUTRAL AS THE BENEFIT OF SECTION 54F IS AVAILABLE TO THE 8 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. ASSESSEE. IN VIEW OF THE ABOVE DISCUSSION, WE DO NO T FIND ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT (A). THEREFORE, ONCE THE INVESTMENT WAS MADE FOR PURCHAS E OF NEW RESIDENTIAL HOUSE WITHIN THE TIME PERIOD AS PRESCRIBED UNDER SECTION 54F, THEN THE NON DEPOSIT OF THE ENTIRE AMOUNT IN THE CAPITAL GAIN ACCOUNT CANNOT BE A REASON FOR DISALLOWANCE OF DEDUCTION. THIS TRIBUNAL IN THE SAID CASE HAS FOLL OWED THE DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF PRINCIPAL CIT VS. C . GOPALASWAMY, 384 ITR 307 (KAR.). THEREFORE, FOLLOWING THE EARLIER DECISION OF THIS TRIBUNAL, WE ALLOW THE FULL CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. GROUND NO. 3 IS REGARDING ADDITION MADE BY THE AO O N ACCOUNT OF UNEXPLAINED INVESTMENT MADE TOWARDS PURCHASE OF THE PROPERTY. 6. THE AO NOTED THAT THE ASSESSEE WHILE PURCHASING THE NEW RESIDENTIAL HOUSE HAS PAID A PART CONSIDERATION OF RS. 6,29,830/- IN CASH AND, THEREFORE, PROPOSED TO MAKE THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTM ENT. THE AO FINALLY MADE THE ADDITION ON ACCOUNT OF THE PAYMENT OF RS. 6,29,830/ - BEING UNDISCLOSED SOURCE OF INCOME. ON APPEAL, THE ASSESSEE PRODUCED THE CASH BOOK TO EXPLAIN THE SOURCE OF THE PAYMENT OF PURCHASE CONSIDERATION OF RS. 6,29,8 30/- IN CASH. THE LD. CIT (A) CALLED FOR A REMAND REPORT AND AFTER CONSIDERING TH E REMAND REPORT, HAS REJECTED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN THE SH APE OF CASH BOOK PRODUCED BY THE ASSESSEE. 7. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AS PER THE REMAND REPORT OF TH E AO, THE AO DENIED THE SOURCE 9 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. OF CASH ON THE GROUND THAT AS PER THE SALE DEED DAT ED 14.10.2011 IT IS STATED THAT THE CASH WAS ALREADY PAID BY THE ASSESSEE, THEREFOR E, THE AVAILABILITY OF CASH ON 14.10.2011 DOES NOT SATISFY THE SOURCE FOR PAYMENT MADE PRIOR TO THE DATE OF SALE DEED. WE HAVE GONE THROUGH THE RELEVANT CLAUSE OF THE SALE DEED WHEREIN IT IS STATED THAT THE ASSESSEE HAS PAID RS. 6,29,830/- IN CASH AND REMAINING PURCHASE CONSIDERATION WAS PAID THROUGH CHEQUE. THE SAID CL AUSE AT PAGE 3 OF THE SALE DEED DOES NOT SPECIFY THE TIME PERIOD WHEN THE CASH WAS PAID, IT ONLY INDICATES THAT THE CASH ALREADY BEEN PAID BY THE ASSESSEE PRIOR TO THE SIGNING OF THE SALE DEED. THEREFORE, EVEN IF IT IS CONSIDERED THAT THE CASH W AS PAID PRIOR TO THE SALE DEED, THE SAID TRANSACTION OF PAYMENT OF CASH DOES NOT FALL I N THE ASSESSMENT YEAR UNDER CONSIDERATION. THERE IS NO DISPUTE THAT THE ASSESS EE HAS PURCHASED THE NEW RESIDENTIAL HOUSE VIDE SALE DEED DATED 14.10.2011 A ND, THEREFORE, THE SAID TRANSACTION WOULD FALL IN THE SUBSEQUENT ASSESSMENT YEAR I.E. 2012-13 AND NOT IN THE ASSESSMENT YEAR UNDER CONSIDERATION. EVEN FOR THE SAKE OF ARGUMENT IT IS ACCEPTED THAT THE PAYMENT WAS MADE PRIOR TO THE SALE DEED, I T CANNOT BE PRIOR TO THE FINANCIAL YEAR 2011-12. HENCE EVEN IF A REASONABLE TIME PERIO D IS CONSIDERED FOR PAYMENT OF CASH PRIOR TO THE SALE DEED, IT WILL NOT GO BACK TO THE FINANCIAL YEAR 2011-12. THEREFORE, THE TRANSACTION OF PURCHASE OF PROPERTY DOES NOT FALL IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND CONSEQUENTLY THE ADDIT ION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH PAYMENT IS NOT SUSTAINABLE FOR THE YEAR UNDER CONSIDERATION. HENCE, THE ADDITION MADE BY THE AO IS DELETED AS NO T FALLING IN THE ASSESSMENT YEAR UNDER CONSIDERATION. EVEN OTHERWISE, ONCE THE ASSE SSEE HAS PRODUCED THE CASH BOOK SHOWING THE AVAILABILITY OF CASH AT THE RELEVA NT POINT OF TIME, THEN THE SAME 10 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER. CANNOT BE REJECTED AT THE THRESHOLD WITHOUT PROPER VERIFICATION AND EXAMINATION. SINCE THE TRANSACTION IS NOT FALLING IN THE YEAR UN DER CONSIDERATION, THEREFORE, WE ARE NOT GOING INTO THE MERITS OF THE SAID ADDITION. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 08/03/ 2019. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 08/03/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI MOHANDAS KURANI, AJMER. 2. THE RESPONDENT THE ITO, WARD 1(3), AJMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 655/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 11 ITA NO. 655/JP/2016 SHRI MOHANDAS KURANI, AJMER.