Adusumalli Sasi Mohan, Vijayawada V. THE ITO, Vijayawada

ITA 658/VIZ/2014

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9708 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S N MURTHY
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Source of fund; Question of law; Assessment record; Benefit of exemption; Reason to believe
• Section: 143(3); 50C; 54F; 142(1); 147; 148; 54; 263; 69

Judgement Text

ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.308/VIZAG/2013 ( / ASSESSMENT YEAR: 2008-09) SRI ADUSUMILLI LOKA SATYA RATNA KUMAR, VIJAYAWADA VS. ITO, WARD - 2(3), VIJAYAWADA [PAN: ABEPA8375K ] ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NO.658/VIZAG/2014 ( / ASSESSMENT YEAR: 2011-12) SRI A. SASI MOHAN VIJAYAWADA VS. ITO, WARD - 2(3), VIJAYAWADA [PAN: ABEPA8375K ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SRI G.V.N. HARI, AR / RESPONDENT BY : SRI T.S.N. MUR THY, DR / DATE OF HEARING : 09.11.2016 / DATE OF PRONOUNCEMENT : 25.11.2016 ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 2 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE TWO APPEALS FILED BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST ORDER OF THE CIT, VIJAYAWADA U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') AND THE CIT(A), V IJAYAWADA U/S 250 OF THE ACT AND IT PERTAINS TO THE ASSESSMENT YEARS 200 8-09 & 2011-12. SINCE, THE FACTS ARE IDENTICAL, THEY ARE HEARD TOGE THER, BUT DISPOSED OF SEPARATELY, AS THE ISSUES INVOLVED IN THESE APPEALS ARE DIFFERENT. ITA NO.308/VIZAG/2013: 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNER IN M/S. DURGA COMMERCIAL CORPORATION AND M/S. SIVA GAY ATRI THERMO PLASTICS, FILED HIS RETURN OF INCOME FOR THE ASSESS MENT YEAR 2008-09 ON 31.3.2010 DECLARING TOTAL INCOME OF ` 3,61,630/-, CONSISTING OF INCOME FROM BUSINESS BEING REMUNERATION FROM THE PARTNERSH IP FIRM, INCOME FROM LONG TERM CAPITAL GAINS AND INCOME FROM OTHER SOURCES. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 3 1.12.2010 BY ACCEPTING THE TOTAL INCOME RETURNED BY THE ASSESSEE . 3. THE CIT, VIJAYAWADA ISSUED A SHOW CAUSE NOTICE D ATED 20.3.2013 AND ASKED TO EXPLAIN WHY THE ASSESSMENT ORDER PASSE D BY THE A.O., U/S 143(3) OF THE ACT, DATED 31.12.2010 SHALL NOT BE RE VISED UNDER THE ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 3 PROVISIONS OF SECTION 263 OF THE ACT. THE CIT, PRO POSED TO REVISE THE ASSESSMENT ORDER FOR THE REASON THAT ON EXAMINATION OF ASSESSMENT RECORDS, IT WAS NOTICED THAT THE A.O. HAS COMPLETED THE ASSESSMENT WITHOUT EXAMINING THE ALLOWABILITY OF EXEMPTION U/S 54F OF THE ACT TOWARDS RE-INVESTMENT IN PURCHASE OF RESIDENTIAL PR OPERTY. THE CIT FURTHER OBSERVED THAT ON EXAMINATION OF ASSESSMENT RECORDS, IT WAS NOTICED THAT THE ASSESSEE HAS SOLD A VACANT SITE FO R A CONSIDERATION OF ` 52,15,000/- AND DECLARED NIL CAPITAL GAINS AFTER CL AIMING EXEMPTION U/S 54F OF THE ACT FOR ` 52,15,000/- TOWARDS RE-INVESTMENT OF SALE CONSIDERATION FOR CONSTRUCTION OF ANOTHER RESIDENTI AL HOUSE. ON VERIFICATION OF THE DETAILS FILED BY THE ASSESSEE A T THE TIME OF ASSESSMENT, LIKE COPIES OF SALE DEED AND COMPUTATIO N OF STATEMENT OF TOTAL INCOME, IT WAS NOTICED THAT THE ASSESSEE HAS PURCHASED ANOTHER RESIDENTIAL SITE FOR A CONSIDERATION OF ` 31,36,000/- ON 18.7.2007 VIDE DOCUMENT NO.3166/2007 BY WAY OF REGISTERED SALE AGR EEMENT-CUM-GPA IN THE NAME OF HIS SON. ON FURTHER VERIFICATION OF THE SALE AGREEMENT, IT WAS NOTICED THAT OUT OF THE TOTAL CONSIDERATION OF ` 31,36,000/-, A SUM OF ` 31,35,000/- HAS BEEN PAID AND GOT POSSESSION OF TH E PROPERTY. THE MUNICIPAL CORPORATION OF VIJAYAWADA HAS GIVEN PLAN APPROVAL FOR CONSTRUCTION OF THE BUILDING IN THE NAME OF HIS SON VIDE LETTER IN R.F. 54/09/G-7/BA NO.00569/2009 DATED 25.4.2009. FROM T HIS INFORMATION, ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 4 IT IS CLEAR THAT THE NEW PROPERTY HAS BEEN PURCHASE D IN THE NAME OF ASSESSEES SON WHEREAS THE ASSESSEE HAS CLAIMED EXE MPTION U/S 54F OF THE ACT AGAINST HIS CAPITAL GAIN. THE A.O. WITHOUT EXAMINING THE ABOVE ISSUE AND ALSO WITHOUT APPLICATION OF MIND AS TO WH ETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 54F OF THE ACT OR NOT, H E HAS SIMPLY COMPLETED THE ASSESSMENT, WHICH RENDERED THE ASSESS MENT ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE. THEREFORE, ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE ASSESSMENT ORDER SHALL NOT BE REVISED UNDER THE PRO VISIONS OF SECTION 263 OF THE ACT. 4. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE S UBMITTED THAT THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) OF T HE ACT DATED 31.12.2010 IS NOT ERRONEOUS IN SO FAR AS IT IS PREJ UDICIAL TO THE INTEREST OF THE REVENUE, AS THE A.O. HAS EXAMINED THE ISSUE OF EXEMPTION U/S 54F OF THE ACT, TOWARDS RE-INVESTMENT IN CONSTRUCTION O F NEW RESIDENTIAL HOUSE PROPERTY. THE ASSESSEE FURTHER SUBMITTED THA T THE A.O. ISSUED A NOTICE U/S 143(2) OF THE ACT ON 18.8.2010 CALLING F OR DETAILS OF COMPUTATION OF CAPITAL GAIN AND PROOF OF INVESTMENT S MADE TOWARDS PURCHASE OF RESIDENTIAL HOUSE TO CLAIM EXEMPTION U/ S 54F OF THE ACT. THE ASSESSEE VIDE HIS REPLY DATED 27.12.2010, HAS F URNISHED COMPLETE DETAILS OF CAPITAL GAIN INCLUDING SALE DEED COPIES OF ASSET SOLD AND SALE ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 5 AGREEMENT-CUM-GPA TOWARDS PURCHASE OF ANOTHER RESID ENTIAL HOUSE PROPERTY IN THE NAME OF HIS SON. THE A.O. AFTER EX AMINING THE DETAILS FURNISHED BY THE ASSESSEE, HAD ACCEPTED THE EXPLANA TIONS AND ALLOWED EXEMPTION CLAIMED U/S 54F OF THE ACT. IT WAS FURTH ER SUBMITTED THAT DURING THE FINANCIAL YEAR 2008-09, THE ASSESSEE HAD SPENT AN AMOUNT OF ` 52,15,000/- TOWARDS PURCHASE OF VACANT SITE AND CO NSTRUCTION OF BUILDING. THE SOURCES FOR THE PURCHASE OF SITE AS WELL AS CONSTRUCTION OF BUILDING IN THE NAME OF HIS SON HAVE BEEN COMPLETEL Y PAID OUT OF SALE PROCEEDS OF VACANT SITE IN HIS NAME. THE ASSESSEE FURTHER SUBMITTED THAT HE HAD NO INTENTION TO PURCHASE THE HOUSE IN T HE NAME OF HIS SON, BECAUSE OF THAT HE HAD PURCHASED THE PROPERTY BY EN TERING INTO A SALE AGREEMENT-CUM-GPA PENDING REGISTRATION OF THE PROPE RTY. FINALLY, THE PROPERTY HAS BEEN REGISTERED IN THE NAME OF THE ASS ESSEE ON 24.12.2010 FOR A CONSIDERATION OF ` 31,36,000/-. THE CONSIDERATION PAID FOR PURCHASE OF SITE AND CONSTRUCTION OF BUILDING WAS C OMPLETELY OUT OF THE SALE PROCEEDS OF SITE IN ASSESSEES NAME AND THE AS SESSEES SON DOES NOT HAVE ANY OTHER SOURCE OF INCOME TO EXPLAIN THE SOURCES OF INCOME TOWARDS PURCHASE OF PROPERTY. THE A.O. HAS TAKEN A CONSCIOUS DECISION AFTER THOROUGH EXAMINATION OF THE DETAILS AND ALSO APPLIED HIS MIND TO THE PROVISIONS OF SECTION 54F OF THE ACT. THEREFOR E, THE ASSESSMENT ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 6 ORDER PASSED BY THE A.O. CANNOT BE CONSIDERED AS ER RONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5. THE CIT, AFTER CONSIDERING THE EXPLANATIONS OF T HE ASSESSEE, HELD THAT THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 14 3(3) OF THE ACT IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE, AS THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE ISS UE OF EXEMPTION CLAIMED U/S 54F OF THE ACT TOWARDS RE-INVESTMENT OF SALE CONSIDERATION FOR PURCHASE OF ANOTHER RESIDENTIAL HOUSE PROPERTY. THE CIT FURTHER OBSERVED THAT THE DOCUMENTS FURNISHED BY THE ASSESS EE CLEARLY INDICATE THAT NEW RESIDENTIAL PROPERTY HAS BEEN PURCHASED IN THE NAME OF HIS SON. THOUGH, THE ASSESSEE GOT TRANSFERRED THE NEW ASSET IN HIS NAME ON 24.12.2010, WHICH HAS EXCEEDED THE TIME LIMIT BY 6 MONTHS AS PER SECTION 54F OF THE ACT. EVEN OTHERWISE, THE CLAIM OF THE ASSESSEE THAT HE HAD INVESTED ENTIRE SALE CONSIDERATION OF ` 52,15,000/- DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2008-09 IS ALSO NOT ACCEPTABLE, AS THE ASSESSEE HAS PURCHASED A SITE IN THE NAME OF HIS SON FOR A CONSIDERATION OF ` 31,35,000/-. THE REMAINING AMOUNT OF ` 20,80,000/- STATED TO BE INVESTED FOR THE PURPOSE O F CONSTRUCTION WITHIN THE DUE DATE SPECIFIED U/S 54F OF THE ACT IS UNTENA BLE, BECAUSE AS PER THE APPROVAL OF THE MUNICIPAL AUTHORITIES, THE PLAN HAS BEEN APPROVED ON 25.4.2009. WITHOUT APPROVED PLAN, THE ASSESSEE CANN OT START ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 7 CONSTRUCTION. THEREFORE, IT IS INFERRED THAT THE A SSESSEE HAS NOT INVESTED REMAINING PART OF CONSIDERATION WITHIN THE DUE DATE SPECIFIED UNDER SUB- SECTION (4) OF SECTION 54F OF THE ACT. IN SUPPORT OF HIS ARGUMENTS RELIED UPON THE DECISION OF ITAT, NAGPUR IN THE CASE OF IT O VS. PRAKASH TIMAJI DHANJODE (81 TTJ 694) AND OTHER JUDICIAL PRONOUNCEM ENTS. THE CIT ALSO RELIED UPON THE DECISIONS OF THE HONBLE SUPRE ME COURT, IN THE CASE OF MALABAR INDUSTRIAL COMPANY LIMITED VS. CIT (243 ITR 83) AND RAMPYARI DEVI SARAOGI VS. CIT (67 ITR 84) AND OBSER VED THAT THE COMMISSIONER MAY CONSIDER AN ORDER OF THE A.O. TO B E ERRONEOUS NOT ONLY IT CONTAINS SOME APPARENT ERROR OF REASONING O R OF LAW OR OF FACT ON THE FACE OF IT, BUT ALSO BECAUSE IT IS A STEREO TYP ED ORDER WHICH SIMPLY ACCEPTS WHAT THE ASSESSEE HAS STATED IN HIS RETURN AND FAILS TO MAKE ENQUIRIES WHICH ARE CALLED FOR IN THE CIRCUMSTANCE OF THE CASE. IN THE PRESENT CASE, ON VERIFICATION OF THE ASSESSMENT ORD ER PASSED BY THE A.O., IT IS ABUNDANTLY CLEAR THAT THE ORDER PASSED BY THE A.O. IS CRYPTIC AND STEREO TYPED. THE A.O. NEVER DISCUSSED ANYTHIN G ABOUT THE ALLOWABILITY OF EXEMPTION CLAIMED U/S 54F OF THE AC T. THEREFORE, THE ASSESSMENT ORDER PASSED BY THE A.O., U/S 143(3) OF THE ACT IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. HENCE, THE ASSESSMENT ORDER PASSED BY THE A.O. HAS BEEN SET AS IDE FOR RE-DOING THE ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 8 ASSESSMENT DE-NOVO WITH THE DIRECTIONS AS ABOVE AFT ER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 6. THE LD. A.R. FOR THE ASSESSEE, SUBMITTED THAT TH E LD. COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN INVO KING THE PROVISIONS OF SECTION 263 OF THE ACT, IN AS MUCH ORDER DATED 31.1 2.2010 PASSED BY THE A.O. U/S 143(3) OF THE ACT, IS NEITHER ERRONEOU S NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. CIT IS NOT JUSTIF IED IN DIRECTING THE A.O. TO DISALLOW EXEMPTION OF ` 52,15,000/- CLAIMED U/S 54F OF THE ACT, THAT WAS CLAIMED AND ALLOWED IN ASSESSMENT U/S 143(3) OF THE ACT. THE A.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED COMPL ETE DETAILS OF LONG TERM CAPITAL GAIN ALONG WITH COPIES OF SALE DEED AN D PURCHASE DEED OF NEW PROPERTY. THE A.O. AFTER EXAMINING THE ISSUE H AS COMPLETED ASSESSMENT WHICH CANNOT BE TERMED AS ERRONEOUS IN S O FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ON THE OTHER HAND, THE LD. D.R., STRONGLY SUPPORTED THE ORDER OF THE CIT. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CIT ASSUMED JURISDICTION TO REVISE THE ASSESSMENT ORDER FOR THE REASON THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUIRY BEFORE CO MPLETION OF ASSESSMENT, THEREBY THE ASSESSMENT ORDER PASSED BY THE A.O. U/S ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 9 143(3) OF THE ACT, IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT, REVISED THE ASSESSMENT OR DER FOR THE REASON THAT THE A.O. FAILED TO EXAMINE THE ALLOWABILITY OF EXEMPTION U/S 54F OF THE ACT, EVEN THOUGH DOCUMENTS INDICATE THAT NEW PR OPERTY HAS BEEN PURCHASED IN THE NAME OF HIS SON. THE CIT, FURTHER , OBSERVED THAT AS PER THE PROVISIONS OF SECTION 54F OF THE ACT, THE A SSESSEE NEEDS TO INVEST SALE CONSIDERATION FOR PURCHASE OF NEW HOUSE IN HIS OWN NAME, HOWEVER, THE ASSESSEE HAS INVESTED SALE CONSIDERATI ON IN THE NAME OF HIS SON AND CLAIMED EXEMPTION WHICH IS OTHERWISE NO T ALLOWABLE AS PER THE PROVISIONS OF SECTION 54F OF THE ACT. THE CIT FURTHER OBSERVED THAT THERE IS NO MERIT IN THE CLAIM OF THE ASSESSEE THAT HE HAD INVESTED ` 52,15,000/- DURING THE FINANCIAL YEAR RELEVANT TO A SSESSMENT YEAR 2008- 09, AS THE DOCUMENTS INDICATE THAT THE ASSESSEE HAS SPENT AN AMOUNT OF ` 31,35,000/- TOWARDS PURCHASE OF SITE IN THE NAME O F HIS SON. THE REMAINING AMOUNT OF ` 20,80,000/- STATED TO BE INVESTED FOR CONSTRUCTION OF BUILDING IS INCORRECT, BECAUSE AS P ER THE APPROVAL OF THE MUNICIPAL AUTHORITIES, THE BUILDING PLAN HAS BEEN A PPROVED ON 25.4.2009. WITHOUT THE APPROVAL PLAN, THE ASSESSEE CANNOT START CONSTRUCTION. AS PER THE PROVISIONS OF SECTION 54F OF THE ACT, THE ASSESSEE OUGHT TO HAVE INVESTED SALE CONSIDERATION WITHIN THE DUE DATE OF FILING RETURN OF INCOME U/S 139(1) OF THE ACT. THE DUE DATE OF FILING ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 10 RETURN OF INCOME U/S 139(1) OF THE ACT FOR THE ASSE SSMENT YEAR 2008-09 IS 31.7.2007. THEREFORE, IT IS NOT POSSIBLE FOR TH E ASSESSEE TO INVEST THE REMAINING AMOUNT OF ` 20,80,000/- WITHIN THE DUE DATE SPECIFIED U/S 54F OF THE ACT. 8. IT IS THE CONTENTION OF THE ASSESSEE THAT THE A. O. HAS EXAMINED THE ISSUE OF EXEMPTION U/S 54F OF THE ACT, AT THE TIME OF ASSESSMENT WHICH IS EVIDENT FROM THE FACT THAT THE A.O. HAS ISSUED A NOTICE U/S 143(2) OF THE ACT ON 18.8.2010, WHEREIN HE HAD CALLED FOR SPE CIFIC DETAILS ABOUT COMPUTATION OF LONG TERM CAPITAL GAIN AS WELL AS PR OOF OF INVESTMENT U/S 54F OF THE ACT. THE ASSESSEE HAS FILED ALL DETAILS IN RESPONSE TO A NOTICE AND THE A.O. AFTER SATISFIED WITH THE EXPLANATIONS FURNISHED BY THE ASSESSEE, HAS ACCEPTED EXEMPTION CLAIMED U/S 54F OF THE ACT. THEREFORE, IT CANNOT BE HELD THAT THE A.O. HAS NOT EXAMINED THE ISSUE OR ORDER PASSED BY THE A.O. IS LACK OF ENQUIRY. AS RE GARDS, ALLOWABILITY OF EXEMPTION U/S 54F OF THE ACT, THE ASSESSEE CONTENDE D THAT IT IS NOT NECESSARY TO INVEST SALE CONSIDERATION IN THE NAME OF THE ASSESSEE. EVEN IF INVESTMENT IS MADE IN THE NAME OF HIS FAMIL Y MEMBERS, THEN EXEMPTION U/S 54F OF THE ACT CAN BE CLAIMED. WE FIN D FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT ON VE RIFICATION OF THE DETAILS FILED BY THE ASSESSEE, WE FIND THAT THE A.O . HAS ISSUED A SPECIFIC QUESTIONNAIRE, CALLING FOR ALL DETAILS PERTAINING T O COMPUTATION OF LONG ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 11 TERM CAPITAL GAIN FROM SALE OF PROPERTY AND ALSO PR OOF OF INVESTMENT U/S 54F OF THE ACT. THE ASSESSEE VIDE HIS REPLY DATED 27.12.2010 AND 30.12.2010 HAD FURNISHED COMPLETE DETAILS OF EXEMPT ION CLAIMED U/S 54F OF THE ACT. THE A.O. AFTER SATISFIED WITH THE DETA ILS FILED BY THE ASSESSEE, ALLOWED EXEMPTION U/S 54F OF THE ACT TOWA RDS RE-INVESTMENT IN PURCHASE/CONSTRUCTION OF ANOTHER RESIDENTIAL HOU SE PROPERTY. THEREFORE, WE ARE OF THE VIEW THAT THE CIT WAS INCO RRECT IN HOLDING THAT THE A.O. HAS NOT EXAMINED THE ISSUE OF EXEMPTION U/ S 54F OF THE ACT AT THE TIME OF COMPLETION OF ASSESSMENT. 9. THE CIT ASSUMED JURISDICTION TO REVISE THE ASSES SMENT ORDER ON THE SOLE GROUND THAT THERE IS A LACK OF ENQUIRY ON THE PART OF THE A.O. IN EXAMINING THE ISSUE OF EXEMPTION U/S 54F OF THE ACT . THE ASSESSEE HAS FILED A PAPER BOOK WHICH CONTAINS DETAILS FURNISHED BEFORE THE A.O. ON PERUSAL OF THE PAPER BOOK FILED BY THE ASSESSEE, WE FIND THAT THE ASSESSEE HAS FILED A STATEMENT OF TOTAL INCOME, WHE REIN HE HAD CLAIMED EXEMPTION U/S 54F OF THE ACT FOR ` 52,15,000/-. ON FURTHER VERIFICATION OF THE DETAILS FILED BY THE ASSESSEE, WE FIND THAT THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED DETAILS FOR COMPUTATION OF L ONG TERM CAPITAL GAIN AS WELL AS PROOF OF INVESTMENT TOWARDS EXEMPTION U/ S 54F OF THE ACT. THE ASSESSEE VIDE HIS LETTER DATED 27.12.2010 AND 3 0.12.2010 HAD FURNISHED COMPLETE DETAILS OF SALE OF PROPERTY, PUR CHASE OF NEW PROPERTY ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 12 AND OTHER DETAILS. THEREFORE, WE ARE OF THE VIEW T HAT THE A.O. HAS EXAMINED THE ISSUE OF EXEMPTION U/S 54F OF THE ACT AT THE TIME OF ASSESSMENT AND HENCE, THE CIT WAS INCORRECT IN HOLD ING THAT THE A.O. HAS NOT EXAMINED THE ISSUE. IN OUR CONSIDERED VIEW , THE ISSUE RAISED BY THE CIT HAS BEEN THOROUGHLY EXAMINED BY THE A.O., T HEREFORE, THE CIT WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT TH E A.O. HAS NOT EXAMINED THE ISSUE AND ALSO NOT APPLIED HIS MIND. 10. HAVING SAID, LET US EXAMINE WHETHER THE ASSESSM ENT ORDER PASSED BY THE A.O. IS PREJUDICIAL TO THE INTEREST OF THE R EVENUE. THE CIT WAS OF THE OPINION THAT THE A.O. HAS ALLOWED EXEMPTION U/S 54F OF THE ACT TOWARDS PURCHASE OF ANOTHER RESIDENTIAL HOUSE IN TH E NAME OF HIS SON WHICH IS OTHERWISE NOT ALLOWABLE TO THE ASSESSEE. THE CIT GAVE HIS OWN REASONS FOR DENYING THE BENEFIT OF EXEMPTION U/S 54 F OF THE ACT. ACCORDING TO THE CIT, TO CLAIM EXEMPTION U/S 54F OF THE ACT, THE ASSESSEE NEEDS TO INVEST SALE CONSIDERATION FOR PUR CHASE OF NEW RESIDENTIAL HOUSE PROPERTY IN HIS OWN NAME. IN SUP PORT OF HIS ARGUMENTS RELIED UPON CERTAIN JUDICIAL PRONOUNCEMEN TS. WE FIND NO MERITS IN THE FINDINGS OF THE CIT, FOR THE REASON T HAT FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 54F OF THE ACT, THE NEW RESI DENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NO R IS IT NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVELY IN HIS NAME . THE ONLY ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 13 REQUIREMENT IS THAT THE ASSESSEE NEEDS TO RE-INVEST THE SALE CONSIDERATION FOR PURCHASE OF NEW RESIDENTIAL HOUSE PROPERTY, WITHIN THE DUE DATE SPECIFIED U/S 54F OF THE ACT. 11. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE DETAILS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS SOLD PROPERTY FOR A CONSIDERATION OF ` 52,15,000/- ON 7.6.2007. THE ASSESSEE HAS PURCHAS ED ANOTHER RESIDENTIAL VACANT SITE FOR A CONSIDERATION OF ` 31,36,000/- IN THE NAME OF HIS SON BY WAY OF SALE AGREEMENT-CUM-GPA. THE A SSESSEE ALSO CONSTRUCTED A RESIDENTIAL HOUSE ON THE SAID SITE BY OBTAINING A PLAN APPROVAL FROM THE MUNICIPAL AUTHORITIES. SUBSEQUEN TLY, THE SAID RESIDENTIAL HOUSE HAS BEEN TRANSFERRED IN THE NAME OF THE ASSESSEE N 24.12.2010. THOUGH THE ASSESSEE FAILED TO GIVE ANY EXPLANATIONS FOR INITIALLY ENTERING INTO AGREEMENT IN THE NAME OF HI S SON, THE FACTS REMAIN THAT THE PROPERTY HAS BEEN FINALLY REGISTERED IN TH E NAME OF ASSESSEE. IT IS ALSO AN UNDISPUTED FACT THAT THE ASSESSEE HAS SP ENT AN AMOUNT OF ` 31,35,000/- FOR PURCHASE OF SITE. THE REMAINING AM OUNT OF ` 20,80,000/- HAS BEEN SPENT TOWARDS CONSTRUCTION OF RESIDENTIAL HOUSE PROPERTY. IT IS THE CONTENTION OF THE CIT THAT THE ASSESSEE HAS OBTAINED, PLAN APPROVAL IN THE NAME OF HIS SON AND ALSO PLAN APPROVAL HAS BEEN OBTAINED BEYOND THE DUE DATE SPECIFIED U/S 54F OF T HE ACT. WE DO NOT FIND ANY MERITS IN THE FINDINGS OF THE CIT, FOR THE REASON THAT THE ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 14 PROVISIONS OF SECTION 54F OF THE ACT IS A BENEFICIA L PROVISION TO ENCOURAGE THE ASSESSEES TO PURCHASE RESIDENTIAL HOUSES OUT OF SALE PROCEEDS OF ANY ASSETS OTHER THAN RESIDENTIAL HOUSES. AS LONG AS, THE ASSESSEES HAVE MADE INVESTMENT IN PURCHASE OF RESIDENTIAL HOUSE PR OPERTY, THERE IS NO REASON TO DENY THE BENEFIT ON TECHNICAL GROUNDS. 12. IN THE PRESENT CASE ON HAND, THOUGH THE ASSESSE E DID NOT PROVE WITH NECESSARY EVIDENCES THAT THE REMAINING AMOUNT OF ` 20,80,000/- HAS BEEN SPENT WITHIN THE DUE DATE U/S 139(1) OF TH E ACT, BUT UNDOUBTEDLY THE ASSESSEE HAS PROVED THAT HE HAD SPE NT THE AMOUNT WITHIN THE DUE DATE SPECIFIED U/S 139(4) OF THE ACT . THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ELIGIBLE FOR EXEMP TION U/S 54F OF THE ACT, EVEN THOUGH THE PROPERTY WAS PURCHASED IN THE NAME OF HIS CLOSE FAMILY MEMBERS. IN THIS CASE, THE ASSESSEE HAS PUR CHASED THE PROPERTY IN THE NAME OF HIS SON BY ENTERING INTO SALE AGREEM ENT-CUM-GPA. AS CLAIMED BY THE ASSESSEE, THERE IS NO INTENTION TO P URCHASE PROPERTY IN THE NAME OF HIS SON, WHICH IS EVIDENT FROM THE FACT THAT FINALLY THE PROPERTY HAS BEEN TRANSFERRED IN THE NAME OF THE AS SESSEE. THEREFORE, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 54F OF T HE ACT AND THE A.O. HAS RIGHTLY ALLOWED EXEMPTION AND HENCE, WE ARE OF THE VIEW THAT THERE IS NO PREJUDICE IS CAUSED TO THE REVENUE. ACCORDIN GLY, THE CIT WAS ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 15 INCORRECT IN ASSUMING JURISDICTION TO REVISE THE AS SESSMENT ORDER U/S 263 OF THE ACT. 13. THE CIT HAS POWER TO REVISE ASSESSMENT ORDER U/ S 263 OF THE ACT, BUT TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, THE TWIN CONDITIONS MUST BE SATISFIED I.E. (1) THE ORDER OF THE A.O. IS ERRONEOUS (2) FURTHER IT MUST BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNLESS BOTH THE CONDITIONS ARE SATISFIED, THE CIT CANNOT A SSUME JURISDICTION U/S 263 OF THE ACT. IT IS NOT NECESSARY THAT EVERY ORD ER WHICH IS ERRONEOUS MAY BE PREJUDICIAL TO THE INTEREST OF THE REVENUE O R VICE VERSA. IN SOME CASES THE ORDER PASSED BY THE A.O. MAY BE ERRONEOUS BUT IT MAY NOT BE PREJUDICIAL TO THE INTEREST OF THE REVENUE OR VICE VERSA. UNLESS THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND ALSO PREJUDICIA L TO THE INTEREST OF THE REVENUE, THE CIT CANNOT ASSUME JURISDICTION TO REVISE THE ASSESSMENT ORDER, THIS IS BECAUSE THE TWIN CONDITIO NS I.E. THE ORDER IS ERRONEOUS AND THE SAME IS PREJUDICIAL TO THE INTERE ST OF THE REVENUE ARE CO-EXIST. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE FACTS AVAILABLE ON RECORD, WE FIND THAT THE A.O. HAS CONDUCTED DETA ILED ENQUIRY AND ALSO EXAMINED THE ISSUE OF EXEMPTION U/S 54F OF THE ACT. THE ASSESSEE HAS FILED EACH AND EVERY DETAILS BEFORE THE A.O. ONCE THE ASSESSEE FILED NECESSARY DETAILS BEFORE THE A.O., IT IS A GENERAL PRESUMPTION THAT THE A.O. HAS CONSIDERED ALL THE DETAILS BEFORE ACCEPTIN G THE CLAIM OF THE ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 16 ASSESSEE. THEREFORE, WE ARE OF THE VIEW THAT THE A SSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) IS NOT ERRONEOUS IN S O FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 14. NOW IT IS PERTINENT TO DISCUSS CASE LAW RELIED UPON BY THE ASSESSEE. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. KAMAL WAHAL (2013) 3 51 ITR 0004. THE HONBLE HIGH COURT OF DELHI, UNDER SIMILAR CIRCUMST ANCES HELD THAT FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 54F OF THE AC T, A NEW RESIDENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NOR IS IT NECESSARY THAT IT SHOULD BE PURCHASED EXCLUSIVELY I N HIS NAME. A PURPOSEFUL CONSTRUCTION IS TO BE PREFERRED AS AGAIN ST THE LITERAL CONSTRUCTION. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED HEREUNDER: IN THE CASE OF CIT VS. RAVINDER KUMAR ARORA (2012) 342 ITR 38 (DEL.) IT WAS HELD THAT THE ENTIRE PURCHASE CONSIDE RATION WAS PAID ONLY BY THE ASSESSEE AND NOT A SINGLE PENNY WAS CONTRIBUTED BY THE ASSESSEES WIFE. IT ALSO NOTED THAT A PURPOSIVE CONSTRUCTION I S TO BE PREFERRED AS AGAINST A LITERAL CONSTRUCTION, MORE SO WHEN EVEN A PPLYING THE LITERAL CONSTRUCTION, THERE IS NOTHING IN THE SECTION TO SH OW THAT THE HOUSE SHOULD BE PURCHASED IN THE NAME OF THE ASSESSEE ONLY. AS A MATTER OF FACT, SECTION 54F IN TERMS DOES NOT REQUIRE THAT THE NEW RESIDENTIAL PROPERTY SHALL BE PURCHASED IN THE NAME OF THE ASSESSEE; IT MERELY SAYS THAT THE ASSESSEE SHOULD HAVE PURCHASED/CONSTRUCTED A RESID ENTIAL HOUSE. IN VIEW OF THE ABOVE DECISION IT WAS HELD THAT FOR THE PURPOSES OF SECTION 54F, THE NEW RESIDENTIAL HOUSE NEED NOT BE PURCHASED BY THE ASSESSEE IN HIS OWN NAME NOR IS IT NECESSARY THAT I T SHOULD BE PURCHASED EXCLUSIVELY IN HIS NAME. THE ASSESSEE IN THE PRESE NT CASE HAD NOT PURCHASED THE NEW HOUSE IN THE NAME OF A STRANGER O R SOMEBODY WHO WAS UNCONNECTED WITH HIM. HE PURCHASED IT ONLY IN THE NAME OF HIS WIFE. THERE WAS ALSO NO DISPUTE THAT THE ENTIRE INVESTMEN T HAD COME OUT OF THE SALE PROCEEDS AND THAT THERE WAS NO CONTRIBUTION FR OM THE ASSESSEES WIFE. HAVING REGARD TO THE RULE OF PURPOSIVE CONST RUCTION AND THE OBJECT ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 17 WHICH SECTION 54F SEEKS TO ACHIEVE AND RESPECTFULLY AGREEING WITH THE ABOVE JUDGEMENT, THE SUBSTANTIAL QUESTION OF LAW FR AMED WAS ANSWERED IN THE AFFIRMATIVE, IN FAVOUR OF THE ASSESSEE AND AGAI NST THE REVENUE. 15. THE ASSESSEE RELIED UPON THE DECISION OF ITAT, CHANDIGARH BENCH IN THE CASE OF BANT SINGH VS. ITO (2014) 34 ITR (TR IB) 0679. THE COORDINATE BENCH UNDER SIMILAR CIRCUMSTANCES HELD A S UNDER: ASSESSEE WAS BASICALLY AN AGRICULTURIST AND WAS AGE D ABOUT 75 YEARS. FURTHER THE LAND WHICH WAS SOLD BY THE ASSE SSEE WAS IN THE JOINT NAME OF THE ASSESSEE ALONG WITH HIS SON WHICH MEANS THE SON WAS ALSO PART OWNER OF THE LAND, THEREFORE, THE ISSUE WOULD STAND COVERED BY THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT I N CASE OF CIT VS. GURNAM SINGH WHEREIN TRIBUNAL HAD RECORDED A PURE F INDING OF FACT THAT THE LAND IN QUESTION WAS PURCHASED OUT OF THE SALE PROCEEDS OF THE AGRICULTURAL LAND WHICH WAS USED ONLY FOR AGRICULTU RAL PURPOSES AND MERELY BECAUSE THE ASSESSEES SON WAS SHOWN IN THE SALE DE ED AS CO-OWNER, IT DID NOT MAKE ANY DIFFERENCE. IT WAS NOT THE CASE OF THE REVENUE THAT THE LAND IN QUESTION WAS EXCLUSIVELY USED BY HIS SON. THEREFORE THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S 54B. 16. THE ASSESSEE ALSO RELIED UPON THE DECISION OF I TAT, VISAKHAPATNAM, IN THE CASE OF NUTECH ENGINEERS VS. CIT 570/VIZAG/2013 DATED 10.6.2016. THE COORDINATE BENCH OF THIS TRIB UNAL, UNDER SIMILAR CIRCUMSTANCES HELD THAT ONCE, THE A.O. EXAMINED THE ISSUE ON WHICH THE CIT WANTS FURTHER VERIFICATION, THE CIT CANNOT ASSU ME JURISDICTION ON THE SAME ISSUE WHICH WAS ALREADY EXAMINED BY THE A.O. U NLESS HE PROVED THAT THE A.O. FAILED TO EXAMINE THE ISSUE AND ALSO APPLIED HIS MIND. THE RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUND ER: CIT(A) ASSUMED JURISDICTION TO REVISE THE ASSESSME NT ORDER ON THE SOLE GROUND THAT THERE IS A LACK OF ENQUIRY ON THE PART OF THE A.O. IN EXAMINING THE ISSUES REFERRED TO IN HIS SHOW CAUSE NOTICE. TH E QUESTION OF LOW NET ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 18 PROFIT DECLARED BY THE ASSESSEE AND ALSO TDS ON REN T AND HIRE CHARGES HAVE BEEN CONSIDERED BY THE A.O. AT THE TIME OF COM PLETION OF ASSESSMENT. THE ASSESSES FILED A PAPER BOOK WHICH C ONTAINS THE DETAILS FURNISHED BEFORE THE A.O. AT THE TIME OF ASSESSMENT . ON PERUSAL OF THE PAPER BOOK FILED BY THE ASSESSEE, ITAT FIND THAT TH E A.O. HAS ISSUED A DETAILED QUESTIONNAIRE IN RESPECT OF NET PROFIT AND ALSO TDS IN RESPECT OF RENT AND HIRE CHARGES. THE A.O. AFTER SATISFIED WIT H THE EXPLANATIONS FURNISHED BY THE ASSESSEE HAS ACCEPTED THE INCOME R ETURNED. THEREFORE, ITAT ARE OF THE VIEW THAT ONCE THE ISSUES WHICH ARE SUBJECT MATTER OF REVISION U/S 263 OF THE ACT, HAVE BEEN EXAMINED BY THE A.O. AT THE TIME OF ASSESSMENT, THE CIT HAS NO JURISDICTION TO ENTER TAIN FRESH ENQUIRY ON THE SAME ISSUES, BECAUSE HE HAS A DIFFERENT OPINION ON THE ISSUES. IN ITAT CONSIDERED OPINION, THE ISSUE OF NET PROFIT AND TDS ON RENT AND HIRE CHARGES HAS BEEN EXAMINED BY THE A.O. AT THE TIME O F ASSESSMENT, THEREFORE, THE CIT WAS NOT CORRECT IN COMING TO THE CONCLUSION THAT THE A.O. HAS NOT EXAMINED THE ISSUES. 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO APPLYING THE RATIOS OF CASE LAWS DISCUSSED ABOVE, W E ARE OF THE VIEW THAT ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) OF THE ACT DATED 31.12.2010 IS NOT ERRONEOUS IN SO FAR AS IT IS PREJ UDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, WE QUASH THE ORDER PASSED BY THE CIT U/S 263 OF THE ACT AND RESTORE THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) OF THE ACT. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ITA 658/VIZAG/2014: 19. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 30.3.2013 DECLARING TOTAL INCOME OF ` 9,82,960/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE HAS BEEN RE-OPENED BY ISSUE ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 19 OF NOTICE U/S 148 OF THE ACT, FOR THE REASON THAT I NCOME CHARGEABLE TO TAX HAS BEEN ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. THE A.O. RE-OPENED THE ASSESSMENT BY RECO RDING REASONS THAT AS PER THE INFORMATION FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IN THE CASE OF SH. A.LOKA SATYA RATNA KUMAR, FATHER OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09, IT HAS BE EN NOTICED THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT-CUM-GPA ON 1 8.7.2007 WITH SHRI CHALASANI KRISHNA RAO VIDE DOCUMENT NO.3166/20 07 FOR PURCHASE OF LAND ADMEASURING 392 SQ.YDS. AND PAID AN AMOUNT OF ` 31,36,000/-. SUBSEQUENTLY, THE ASSESSEE HAD CONSTRUCTED A BUILDI NG CONSISTING OF GROUND, FIRST AND SECOND FLOOR WITH A TOTAL PLINTH AREA OF 6496 SQ.FT AFTER OBTAINING NECESSARY PLAN APPROVALS FROM MUNICIPAL A UTHORITIES. LATER ON, THE PROPERTY WAS TRANSFERRED TO HIS FATHER SHRI A.L .S.R. KUMAR ON 24.12.2010 VIDE DOCUMENT NO.4631/2010 FOR A CONSIDE RATION OF ` 31,36,000/-, WHEREAS, THE MARKET VALUE ADOPTED BY T HE SRO FOR THE PURPOSE OF PAYMENT OF STAMP DUTY WAS AT ` 1,00,41,000/-. AS THE ASSESSEE HAS TRANSFERRED LONG TERM CAPITAL ASSET DU RING THE FINANCIAL YEAR 2010-11, HE IS LIABLE FOR PAYMENT OF TAX ON LO NG TERM CAPITAL GAIN ARISING OUT OF THIS TRANSACTION. HOWEVER, ON VERIF ICATION OF RECORDS, IT IS NOTICED THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME. IN VIEW OF THE ABOVE, THE A.O. HAS REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 20 TAX FOR THE ASSESSMENT YEAR 2011-12 HAD ESCAPED ASS ESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT, ACCORDINGLY, A N OTICE U/S 148 OF THE ACT WAS ISSUED. IN RESPONSE TO NOTICE U/S 148 OF THE ACT, THE ASSESSEE HAS FILED A LETTER ON 28.6.2013 AND REQUESTED TO TR EAT THE RETURN OF INCOME FILED ELECTRONICALLY ON 30.3.2013 AS THE RET URN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. 20. SUBSEQUENTLY, THE CASE HAS BEEN SELECTED FOR SC RUTINY, ACCORDINGLY, NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED . IN RESPONSE TO NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSES SEE APPEARED FROM TIME TO TIME AND PRODUCED INFORMATION CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BASED ON INFORMATION AVAILA BLE ON RECORD, THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAI N WHY CAPITAL GAIN SHALL NOT BE COMPUTED ON TRANSFER OF PROPERTY TO HI S FATHER. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE VIDE HIS REPLY D ATED 11.11.2013 SUBMITTED THAT THERE IS NO TRANSFER WITHIN THE MEAN ING OF SECTION 2(47)(V) OF THE ACT, AS SOURCE FOR INVESTMENT FOR P URCHASE OF VACANT SITE AND CONSTRUCTION OF BUILDING HAS BEEN MADE BY MY FA THER SHRI A.L.S.R. KUMAR AND THE SOURCES HAVE BEEN SHOWN IN HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE FURTHER SUBM ITTED THAT HIS FATHER HAS SOLD PROPERTY AND RE-INVESTED SALE CONSI DERATION FOR PURCHASE OF ANOTHER RESIDENTIAL HOUSE PROPERTY BY ENTERING I NTO AN AGREEMENT- ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 21 CUM-GPA IN HIS NAME. HOWEVER, THE PROPERTY HAS BEE N FINALLY REGISTERED IN THE NAME OF HIS FATHER VIDE SALE DEED DATED 24.12.2010. THE ASSESSEE FURTHER SUBMITTED THAT MY FATHER HAD E NTERED INTO AN AGREEMENT FOR A CONSIDERATION OF ` 31,36,000/- AND PAID A SUM OF ` 31,35,000/- AS ON THE DATE OF AGREEMENT. THE PROPE RTY HAS BEEN FINALLY REGISTERED IN MY FATHERS NAME FOR A CONSIDERATION OF ` 31,36,000/- AND THE SELLER SHRI CH. K. RAO HAS ACCEPTED THAT HE HAD RECEIVED SALE CONSIDERATION IN FULL FROM SHRI A.L.S.R. KUMAR. IT WAS FURTHER SUBMITTED THAT MY FATHER SHRI A.L.S.R. KUMAR HAD PURCHASED TH E PROPERTY AND I DO NOT HAVE ANY INTEREST IN THE PROPERTY EXCEPT AS THE HOLDER OF THE GPA, THEREFORE, THE QUESTION OF TRANSFER AND PAYMENT OF CAPITAL GAIN TAX DOES NOT ARISE. 21. THE A.O. AFTER CONSIDERING THE EXPLANATIONS OF THE ASSESSEE, HELD THAT THE ASSESSEE HAS TRANSFERRED PROPERTY TO HIS F ATHER FOR A CONSIDERATION OF ` 31,36,000/-, WHEREAS THE MARKET VALUE OF THE PROPERTY AS PER THE GUIDANCE VALUE FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IS AT ` 1,00,41,000/-. SINCE, THE ASSESSEE HAS TRANSFERRE D AN IMMOVABLE PROPERTY, THE ASSESSEE IS LIABLE TO PAY C APITAL GAIN TAX AS PER THE PROVISIONS OF SECTION 50C OF THE ACT, ACCORDING LY, COMPUTED CAPITAL GAIN BY TAKING SALE CONSIDERATION OF ` 1,00,41,000/-. IN ADDITION TO CAPITAL GAIN, THE A.O. MADE ADDITIONS TOWARDS COST OF CONSTRUCTION OF ` ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 22 35,73,000/- U/S 69 OF THE ACT. AGGRIEVED BY THE AS SESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). TH E CIT(A), FOR THE REASONS RECORDED IN HER ORDER DATED 24.11.2014, CON FIRMED THE ACTION OF THE A.O. IN TAXING CAPITAL GAIN IN THE HANDS OF THE ASSESSEE TOWARDS TRANSFER OF PROPERTY TO HIS FATHERS NAME AND ALSO CONFIRMED THE ADDITIONS MADE BY THE A.O. TOWARDS UNEXPLAINED INVE STMENT IN CONSTRUCTION OF PROPERTY. HOWEVER, THE CIT(A) HAS RE-WORKED CAPITAL GAIN AFTER ALLOWING COST OF CONSTRUCTION OF ` 35,73,000/-, AS THE SAME HAS BEEN CONSIDERED U/S 69 OF THE ACT. AGGRIEVED B Y THE CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 22. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERAT ION IS COMPUTATION OF CAPITAL GAIN TOWARDS TRANSFER OF ASSET BETWEEN T HE ASSESSEE AND HIS FATHER. THE A.O. WAS OF THE OPINION THAT THE ASSES SEE IS LIABLE TO PAY TAX ON CAPITAL GAINS TOWARDS TRANSFER OF PROPERTY TO HI S FATHER. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE PURCHASED A PROP ERTY BY WAY OF REGISTERED SALE AGREEMENT-CUM-GPA AND ALSO HAS TAKE N POSSESSION OF THE PROPERTY AS ON THE DATE OF AGREEMENT. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS CONSTRUCTED A BUILDING BY TAK ING APPROVED PLAN FROM MUNICIPAL AUTHORITIES. THEREFORE, OPINED THAT THE SUBSEQUENT TRANSFER BETWEEN THE ASSESSEE AND HIS FATHER COMING WITHIN THE MEANING OF TRANSFER AS DEFINED U/S 2(47)(V) OF THE ACT. IT IS THE CONTENTION OF THE ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 23 ASSESSEE THAT THERE IS NO TRANSFER WITHIN THE MEANI NG OF SECTION 2(47)(V) OF THE ACT, AS THE ASSESSEE IS NOT THE OWNER OF THE PROPERTY. THE ASSESSEE FURTHER CONTENDED THAT THE PROPERTY HAS BE EN PURCHASED BY HIS FATHER OUT OF HIS INCOME AND THE ASSESSEE IS ONLY A GPA HOLDER. THE PROPERTY HAS BEEN FINALLY TRANSFERRED TO HIS FATHER FOR THE SAME CONSIDERATION AS AGREED BETWEEN THE SELLER AND HIS FATHER AS PER THE ORIGINAL SALE AGREEMENT AND THERE IS NO CONSIDERATI ON PASSED BETWEEN HIMSELF AND HIS FATHER, THEREFORE, THE A.O. WAS ERR ED IN HOLDING THAT THERE IS A TRANSFER WITHIN THE MEANING OF SECTION 2 (47)(V) OF THE ACT. 23. HAVING HEARD BOTH THE SIDES, WE FIND FORCE IN T HE ARGUMENT OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE, IN THE C APACITY OF A GPA HOLDER HAS EXECUTED A SALE DEED IN FAVOUR OF HIS FA THER. INITIALLY, THE PROPERTY HAS BEEN PURCHASED BY HIS FATHER IN THE NA ME OF THE ASSESSEE FOR A CONSIDERATION OF ` 31,36,000/-. THOUGH, PLAN APPROVAL HAS BEEN TAKEN IN THE NAME OF THE ASSESSEE, THE SOURCE FOR I NVESTMENT IN CONSTRUCTION OF PROPERTY IS OUT OF SALE PROCEEDS OF PROPERTY IN THE NAME OF HIS FATHER. THE ASSESSEE IS NOT HAVING ANY SOUR CE OF INCOME TO JUSTIFY INVESTMENT FOR PURCHASE OF SITE AS WELL AS CONSTRUC TION OF PROPERTY. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEES FATHER HA S DISCLOSED SAID TRANSACTION IN HIS RETURN OF INCOME FILED FOR THE A SSESSMENT YEAR 2008- 09. IT IS FURTHER PROVED THAT THE ASSESSEES FATHE R HAS TAKEN A HOUSING ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 24 LOAN FROM BANK TOWARDS CONSTRUCTION OF PROPERTY AND WHICH WAS DISCLOSED IN HIS RETURN OF INCOME FILED FOR THE ASS ESSMENT YEAR 2008-09. FROM THESE FACTS, IT IS ABUNDANTLY CLEAR THAT THE A SSESSEE IS ONLY A GPA HOLDER FOR THE LIMITED PURPOSE OF EXECUTION OF SALE DEED, BUT PROPERTY HAS BEEN TRANSFERRED TO ASSESSEES FATHER NAME FROM THE SELLER SHRI CH. K. RAO. AS PER THE AGREEMENT OF SALE DATED 7.6.200 7 AND SALE DEED DATED 24.12.2010, THE CONSIDERATION PAID FOR PURCHA SE OF PROPERTY IS ONE AND THE SAME. AS PER THE SAID DOCUMENTS, THE CONSI DERATION HAS BEEN PAID TO THE SELLER SHRI CH. K. RAO. THERE IS NO CON SIDERATION PASSED BETWEEN THE ASSESSEE AND HIS FATHER. THOUGH, THE D EFINITION OF TRANSFER INCLUDES GIVING POSSESSION OF IMMOVABLE PROPERTIES UNDER PART PERFORMANCE OF A CONTRACT REFERRED TO IN SECTION 53 A OF THE TRANSFER OF PROPERTY ACT, 1882, AS PER PROVISIONS OF SECTION 53 A, A PARTICULAR TRANSACTION TO BE TREATED AS TRANSFER, THERE SHOULD BE A CONSIDERATION PAID OR TO BE PAID. IN THE PRESENT CASE ON HAND, O N PERUSAL OF THE FACTS AVAILABLE ON RECORD, WE FIND THAT THERE IS NO CONSI DERATION PASSED ON BETWEEN THE ASSESSEE AND HIS FATHER. THE CONSIDERA TION HAS BEEN PAID FOR PURCHASE OF PROPERTY TO THE SELLER OF THE PROPE RTY AS PER THE ORIGINAL SALE AGREEMENT DATED 7.6.2007 HAS BEEN DIRECTLY PAI D BY THE ASSESSEES FATHER TO THE SELLER. THEREFORE, WE ARE OF THE VIE W THAT THERE IS NO TRANSFER WITHIN THE MEANING OF SECTION 2(47)(V) OF THE ACT, TOWARDS ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 25 TRANSFER OF PROPERTY BETWEEN THE ASSESSEE AND HIS F ATHER. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE ADDITION MADE TOWARDS COMPUTATION OF LONG TERM CAPITAL GAIN. 24. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATI ON IS ADDITION TOWARDS COST OF CONSTRUCTION U/S 69 OF THE ACT. TH E A.O. MADE ADDITION OF ` 35,73,000/- U/S 69 OF THE ACT TOWARDS COST OF CONS TRUCTION. THE A.O. WAS OF THE OPINION THAT THE ASSESSEE FAILED TO EXPLAIN SOURCES FOR INVESTMENT IN COST OF CONSTRUCTION. IT IS THE CONT ENTION OF THE ASSESSEE THAT PROPERTY HAS BEEN PURCHASED BY HIS FATHER AND THE COST OF CONSTRUCTION HAS BEEN INCURRED BY HIS FATHER AND AL SO WHICH WAS DISCLOSED IN HIS FATHERS INCOME TAX RETURNS. WE FI ND FORCE IN THE ARGUMENTS OF THE ASSESSEE, FOR THE REASON THAT IN T HE PRECEDING PARAGRAPHS, WE HOLD THAT THE TRANSACTION BETWEEN TH E ASSESSEE AND HIS FATHER TOWARDS TRANSFER OF PROPERTY IS A TRANSACTIO N BELONGING TO HIS FATHER. SINCE, WE HOLD THAT THE ASSESSEES FATHER HAS PURCHASED SITE IN ASSESSEES NAME AND ALSO THE ASSESSEES FATHER HAS INVESTED TOWARDS CONSTRUCTION OF PROPERTY, THE A.O. WAS INCORRECT IN MAKING ADDITION TOWARDS COST OF CONSTRUCTION IN THE HANDS OF THE AS SESSEE. THE CIT(A) WITHOUT APPRECIATING THE FACTS, SIMPLY CONFIRMED AD DITIONS MADE BY THE A.O. THEREFORE, WE REVERSE THE ORDER OF CIT(A) AND DIRECT THE A.O. TO DELETE ADDITIONS MADE TOWARDS COST OF CONSTRUCTION U/S 69 OF THE ACT. ITA NO.ITA 308/VIZAG/2013 & NO.658/VIZAG/2014 SRI ADUSUMILLI LOKA SATYA RATNA KUMAR & SRI A. SASI MOHAN, VJA 26 25. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . 26. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEES VIDE ITA NO.308/VIZAG/2013 & ITA NO.658/VIZAG/2014 ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 25 TH NOV16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 25.11.2016 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI ADUSUMILLI LOKA SATYA RATNA KUMAR, D.NO.32-2-5, PRAJASAKTHI NAGAR, VIJAYAWADA 2. / THE RESPONDENT THE ITO, WARD-2(3), VIJAYAWADA 3. + / THE CIT, VIJAYAWADA 4. + ( ) / THE CIT (A), VIJAYAWADA 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM