ITO, Bangalore V. Sri. Vardhaman V Gunjal, Bangalore

ITA 707/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60806 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HANUMESH
• Keywords: Gift; Cost of acquisition; Fair market value
• Section: 143(3); 54F; 54; 139

Judgement Text

PAGE 1 OF 12 ITA NO.70 7/BANG/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI N BARATHVAJA SANKAR, VICE PRESIDENT AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.707/BANG/2011 (ASSESSMENT YEAR 2008-09) THE INCOME-TAX OFFICER, WARD-5(1), BANGALORE. VS SRI VARDHAMAN V GUNJAL, S/O V GUNJAL, #9, DELUXE JAIN RESIDENCY, MODEL HOUSE STREET, BASAVANGUDI, BANGALORE-4. PA NO.ADMPG 0873Q (APPELLANT) (RESPONDENT) DATE OF HEARING : 12.07.2012 DATE OF PRONOUNCEMENT : 20.07.2012 APPELLANT BY : SHRI SARAVANAN B, JCIT RESPONDENT BY : SHRI HANUMESH, C.A. ORD ER PER GEORGE GEORGE K : THIS APPEAL INSTITUTED BY THE DEPARTMENT IS DIRECT ED AGAINST THE ORDER OF THE CIT(A)-II, BANGALORE, DATED 30.3.2 011. THE RELEVANT ASSESSMENT YEAR IS 2008-09. 2. THE SOLITARY ISSUE THAT ARISE FOR OUR CONSIDERAT ION IS WHETHER THE CIT(A) IS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO GRANT EXEMPTION UNDER SECTION 54 IN RESPECT OF INVESTMENT MADE BY TH E ASSESSEE IN PURCHASE OF RESIDENTIAL APARTMENT BEARING APARTMENT NO.3, B HORAS DELUXE PALACE, GROUND FLOOR, MODEL HOUSE STREET, BASAVANAGUDI, BAN GALORE-560 004. PAGE 2 OF 12 ITA NO.70 7/BANG/2011 2 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- THE ASSESSEE IS AN INDIVIDUAL. HE IS AN ADVOCATE BY PROFESSION. THE RETURN OF INCOME WAS FILED FOR THE CONCERNED AS SESSMENT YEAR DECLARING A TOTAL INCOME OF RS.2,29,630/-. ASSESSMENT WAS TA KEN UP FOR SCRUTINY BY ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT AND THE SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMP LETED VIDE ORDER DATED 27/12/2010 DETERMINING A TOTAL TAXABLE INCOME OF RS .39,02,130, WHICH INCLUDE LONG TERM CAPITAL GAINS OF RS.36,62,500/-. THE FACTS IN RELATION TO COMPUTATION OF CAPITAL GAINS ARE AS FOLLOWS:- THE ASSESSEE WAS HAVING 25% UNDIVIDED SHARE IN A RESIDENTIAL PROPERTY IN JAYANAGAR, BANGALORE ALONG WITH HIS FATHE RS (50% SHARE) AND HIS BROTHERS (25% SHARE). THE PROPERTY WAS GIFTED BY H IS FATHER ON 3/5/2007. THE SAID PROPERTY WAS SOLD ON 23/8/2007 FOR A SALE C ONSIDERATION OF RS.1,50,00,000/-, OUT OF WHICH, THE ASSESSEES SHAR ES CONSIDERATION BEING 25% WAS RS.37,50,000/-. IN THE RETURN OF INCOME, T HE ASSESSEE HAD DECLARED A PROFESSIONAL INCOME TO THE TUNE OF RS.2,30,407/-, INCOME FROM OTHER SOURCES AMOUNTING TO RS.9,223/- AND LONG TERM CAPIT AL GAIN NIL. THE ASSESSEE HAD CLAIMED EXEMPTION FROM CAPITAL GAINS U NDER SECTION 54 OF THE ACT IN RESPECT OF THE SALE OF RESIDENTIAL PROPERTY I N JAYANAGAR, BANGALORE. THE DETAILS OF COMPUTATION OF LONG TERM CAPITAL GAI NS FILED ALONG WITH THE RETURN OF INCOME IS REPRODUCED BELOW:- PAGE 3 OF 12 ITA NO.70 7/BANG/2011 3 ACQUISITION BY PREVIOUS OWNER ASSESSEES FATHER SHRI V S GUNJAL (AS PER SEC.49( 1) 25/11/1965 GIFT FROM FATHER TO ASSESSEE 03/05/2007 SOLD ON 23/08/2007 SALE CONSIDERATION 1,50,000.00 FAIR MARKET VALUE AS ON 01/04/1981 3,50,000.00 FY 1981-82 100 FY 2007-08 551 INDEXATION COST OF ACQUISITION 19,28,500.00 LONG TERM CAPITAL GAIN 1,30,71,500. 00 ASSESSEES SHARE OF CAPITAL GAIN BEING 25% OF RS.1,30,71,500.00 32,67,875.00 LESS: EXEMPT UNDER SECTION 54 OF I T ACT PURCHASE OF APARTMENT ON 22/8/2009 FROM M/S JAVERDHAN HOLDINGS AS APARTMENT NO.3, BHORAS DELUXE PALACE, GROUND FLOOR, MODEL HOUSE STREET, BASAVANAGUDI, BANGALORE-560 004 . SALE CONSIDERATION 31,00,000.00 STAMP DUTY 2,08,320.00 REGISTRATION FEES 31,600.00 ----------------- TOTAL COST OF THE APARTMENT 33,39,920.00 ----------------- BUT RESTRICTED TO 32,67,875.00 TAXABLE CAPITAL GAINS ---NIL-- 3.1 THE ASSESSING OFFICER CONCLUDED THE ASSESSMENT BY COMPUTING THE LONG TERM CAPITAL GAINS WHEREIN THE INDEX COST OF ACQUISITION FOR THE YEAR IN WHICH THE GIFT OF THE HOUSE WAS RECEIVED BY THE A SSESSEE WAS TAKEN, INSTEAD OF 1/4/1981. THE ASSESSING OFFICER ALSO DE NIED THE CLAIM OF EXEMPTION UNDER SECTION 54 WITH REGARD TO THE ASSES SEES INVESTMENT IN PURCHASE OF A RESIDENTIAL APARTMENT BEARING APARTME NT NO.3, BHORAS DELUXE PAGE 4 OF 12 ITA NO.70 7/BANG/2011 4 PALACE, GROUND FLOOR, MODEL HOUSE STREET, BASAVANA GUDI, BANGALORE-560 004, STATING THAT THE ASSESSEE HAS NOT DEPOSITED THE CAP ITAL GAINS IN THE CAPITAL GAIN ACCOUNT SCHEME UNDER SECTION 54(2) OF THE ACT. 4. AGGRIEVED BY THE ASSESSMENT, THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5. THE FIRST APPELLATE AUTHORITY, FOLLOWING THE OR DER OF THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF MANJULA J SHAH (35 SOT 105) AND VARIOUS OTHER TRIBUNAL ORDERS, HELD THAT THE FA IR MARKET VALUE OF THE ENTIRE PROPERTY SHOULD BE TAKEN AS ON 1/4/1981 AND N OT IN THE YEAR OF GIFT BY THE ASSESSEES FATHER TO THE ASSESSEE I.E. IN THE A SSESSMENT YEAR 2007-08. WITH REGARD TO EXEMPTION UNDER SECTION 54 OF THE AC T, THE CIT(A) FOLLOWED THE ORDER OF THE TRIBUNAL IN THE CASE OF MUKESH G D ESAI (HUF) V INCOME TAX OFFICER 122 ITD 212 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT FINDING OF THE CIT(A) READS AS FOLLOWS:- 4.3 AN ANALYSIS OF THE DETAILS SHOWS THAT THE APPEL LANT RECEIVED HIS SHARE CONSIDERATION ON THE FOLLOWING D ATES: DATE AMOUNT (RS.) 4/5/2007 10,00,000 4/7/2007 6,25,000 28/8/2007 21,25,000 TOTAL 37,50,000 4.4 IT IS ALSO CONTENDED THAT BEFORE PURCHASE OF TH E PROPERTY FROM M/S JAVERDHAN HOLDINGS, THE APPELLANT HAD BOOKED FOR PURCHASE OF THE APARTMENT WITH ANOTHER BUILDER M/S S N BUILDERS AND DEVELOPERS FOR PURCHAS E OF AN APARTMENT, WHICH HE SUBSEQUENTLY CANCELLED AS THE SAID BUILDER AND DEVELOPER DID NOT DELIVER THE COMP LETED PAGE 5 OF 12 ITA NO.70 7/BANG/2011 5 APARTMENT WITHIN THE TIME STIPULATED. THE DETAILS OF PAYMENTS MADE TO M/S S N BUILDERS AND DEVELOPERS ARE AS FOLLOWS: DATE AMOUNT (RS.) 13/5/2007 25,000 16/5/2007 1,75,000 21/6/2007 10,00,000 12/9/2007 24,11,805 TOTAL 38,11,805 4.5 IN ORDER TO COMPLY WITH THE STATUTORY REQUIREMENT , THE APPELLANT HAD PURCHASED A READY-TO-OCCUPY APARTM ENT FROM ANOTHER BUILDER M/S JAVERDHAN HOLDINGS AND PAYMENTS WERE MADE AS UNDER: DATE AMOUNT(RS.) 22/8/2009 26,00,000 31/5/2010 5,00,000 TOTAL 31,00,000 4.6 FROM THE FACTS NARRATED ABOVE, IT IS CLEAR THAT THE APPELLANT HAS PAID AN AMOUNT OF RS.38,11,805/- FOR PURCHASE OF AN APARTMENT FROM M/S S N BUILDERS AND DEVELOPERS. HENCE, THIS FULFILS THE CONDITIONS LAI D DOWN IN THE PROVISIONS OF SECTION 54(2) OF THE ACT. IN THE LIGHT OF THE ABOVE FACTS, THE AMOUNT REPRESENTING CAPITAL GAINS WAS GIVEN AS PAYMENT TO THE SELLER, WHICH COULD NOT MATERIALIZE DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE APPELLANT. THEREFORE, NO MALA FIDE INTENTION H AS BEEN MADE OUT BY THE ASSESSING OFFICER IN THE SAID TRANSACTION INVOLVING THE PAYMENT OF CAPITAL GAINS T O THE SELLER OF UNCOMPLETED APARTMENT. THE APPELLANT HAS INVESTED CAPITAL GAINS IN A NEW ASSET BEFORE 30/9/2 008. THUS THE FACTS OF THE APPELLANTS CASE ARE SQUARELY APPLICABLE TO THE FACTS OF THE CASE RELIED UPON BY T HE APPELLANT. FOLLOWING THE DECISION OF THE HONBLE I TAT, MUMBAI, I AM OF THE OPINION THAT THE APPELLANT IS E LIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT. THE ASSESSING OFFICER IS, THEREFORE, DIRECTED TO ALLOW PAGE 6 OF 12 ITA NO.70 7/BANG/2011 6 DEDUCTION UNDER SECTION 54 OF THE ACT AS CLAIMED BY THE APPELLANT IN THE RETURN OF INCOME. THE APPEAL IN T HIS GROUND IS ALLOWED. 6. THE REVENUE BEING AGGRIEVED FOR THE GRANT OF EX EMPTION UNDER SECTION 54 OF THE ACT IS IN APPEAL BEFORE US. 7. THE LEARNED DR SUBMITTED THAT THE CIT(A)S DECI SION IN ACCEPTING THE CLAIM OF THE ASSESSEE THAT THE ASSESS EE HAD INVESTED THE SALE CONSIDERATION FOR PURCHASE OF FLAT FROM S N BUILDER S & DEVELOPERS WITHIN THE STIPULATED TIME AND HENCE QUALIFIED FOR EXEMPTION U NDER SECTION 54 IS NOT CORRECT SINCE THE ASSESSEE CANCELLED THE BOOKING AN D FOR ALL PRACTICAL PURPOSES, NEITHER THE ASSET HAS BEEN PURCHASED NOR THE AMOUNT OF CAPITAL GAINS DEPOSITED INTO CAPITAL GAINS ACCOUNT SCHEME W ITHIN THE STIPULATED PERIOD. THE LEARNED DR ARGUED THAT THE SECTION 54( 2) CLEARLY SPECIFIES THAT THE AMOUNT OF CAPITAL GAIN WHICH IS NOT APPROPRIATE D BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR B EFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE OR WHICH IS NOT UTILIZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASS ET BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 13 9, SHALL BE DEPOSITED BY HIM IN CAPITAL GAINS ACCOUNT BEFORE FURNISHING SUCH RETURN. HE CONTENDED THAT THE ASSESSEE PURCHASED THE NEW ASSET AFTER EXP IRY OF TWO YEARS FROM THE DATE OF TRANSFER AND HE HAD NOT DEPOSITED IN CA PITAL GAINS ACCOUNT AND HENCE, THE ASSESSING OFFICER HAD CORRECTLY DISALLOWE D THE ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 54. THE LEARNED DR FURTHER SUBMITTED THAT THE ORDER OF THE TRIBUNAL RELIED ON BY THE FIRST APPELLA TE AUTHORITY HAS NOT PAGE 7 OF 12 ITA NO.70 7/BANG/2011 7 ATTAINED FINALITY AND THE SAME IS PENDING IN APPEAL BEFORE THE HONBLE HIGH COURT OF MUMBAI. 8. THE LEARNED AR ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES AND SUPPORTE D THE CONCLUSION/ FINDING OF THE FIRST APPELLATE AUTHORITY. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. THE ASSESSING OFFICER IN THE IMPUGNED A SSESSMENT ORDER HAD MENTIONED THAT THE ASSESSEE HAD PURCHASED A NEW RES IDENTIAL ASSET FOR A CONSIDERATION OF RS.33,39,920/- ON 22/8/2009, WHICH WAS AFTER THE DUE DATE OF FILING OF THE RETURN OF INCOME UNDER SECTION 139 (1) OF THE ACT AND SINCE THE ASSESSEE HAD NOT DEPOSITED THE SALE PROCEEDS IN THE CAPITAL GAINS DEPOSIT ACCOUNT SCHEME, THE ASSESSEE IS NOT ENTITLE D TO EXEMPTION UNDER SECTION 54 OF THE ACT. IN THE INSTANT CASE, ON ACC OUNT OF SALE OF ORIGINAL ASSET, THE ASSESSEE HAD RECEIVED HIS SHARE TO THE T UNE OF RS.37,50,000/- ON VARIOUS DATES. THE DETAILS OF SALE CONSIDERATION R ECEIVED BY THE ASSESSEE ARE AS UNDER:- DATE AMOUNT (RS.) 4/5/2007 10,00,000 4/7/2007 6,25,000 28/8/2007 21,25,000 TOTAL 37,50,000 9.1 IT IS NOT IN DISPUTE THAT PRIOR TO THE PURCHAS E OF THE NEW ASSET FROM M/S JAVERDHAN HOLDINGS (APARTMENT NO.3, BHORA S DELUXE PALACE, GROUND FLOOR, MODEL HOUSE STREET, BASAVANAGUDI, BAN GALORE-560 004), THE PAGE 8 OF 12 ITA NO.70 7/BANG/2011 8 ASSESSEE HAD BOOKED FOR THE PURCHASE OF APARTMENT W ITH ANOTHER BUILDER NAMELY, M/S S N BUILDERS & DEVELOPERS. THE PAYMENTS WERE MADE TO M/S S N BUILDERS & DEVELOPERS IN TOTAL AMOUNTING TO RS.38 ,11,805/-. THE PAYMENTS WERE MADE PRIOR TO THE DUE DATE OF FILING OF THE RE TURN UNDER SECTION 139(1) OF THE ACT. THE DETAILS OF PAYMENTS MADE TO M/S S N BUILDERS & DEVELOPERS ARE AS FOLLOWS:- DATE AMOUNT (RS.) 13/5/2007 25,000 16/5/2007 1,75,000 21/6/2007 10,00,000 12/9/2007 24,11,805 TOTAL 38,11,805 9.2 THE ASSESSEE CANCELLED THE BOOKING FOR THE PUR CHASE OF APARTMENT FROM M/S S N BUILDERS & DEVELOPERS AS THE BUILDER DID NOT COMPLETE THE CONSTRUCTION OF THE APARTMENT WITHIN T HE AGREED TIME. THE ASSESSEE IN ORDER TO COMPLY WITH THE STATUTORY REQUIR EMENTS HAD PURCHASED A READY TO OCCUPY APARTMENT FROM ANOTHER BUILDER M/S JA VERDHAN HOLDING (APARTMENT NO.3, BHORAS DELUXE PALACE, GROUND FLO OR, MODEL HOUSE STREET, BASAVANAGUDI, BANGALORE-560 004). THE DETAILS OF P AYMENTS MADE FOR THE PURCHASE OF NEW ASSET ARE AS FOLLOWS:- DATE AMOUNT (RS.) 22/8/2009 26,00,000 31/5/2010 5,00,000 TOTAL 31,00,000 9.3 THE ASSESSEE HAS PAID A TOTAL SUM OF RS.38,11, 805/- TO M/S S N BUILDERS & DEVELOPERS WITHIN THE STIPULATED TIME LI MIT PRESCRIBED UNDER SECTION 139(1) OF THE ACT AND THE SAME WAS NOT AVAI LABLE FOR DEPOSIT IN CAPITAL GAIN ACCOUNT SCHEME. IT IS NOT IN DISPUTE THAT THE PURCHASE OF PAGE 9 OF 12 ITA NO.70 7/BANG/2011 9 APARTMENT FROM M/S S N BUILERS & DEVELOPERS COULD N OT MATERIALIZE DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE. T HE ASSESSING OFFICER ON HIS PART HAS NOT ATTRIBUTED ANY MALA FIDE INTENTION IN RESPECT OF THE SAID TRANSACTION. THE NEW ASSET HAD BEEN PURCHASED BEFO RE 30/9/2008. IN AN IDENTICAL CIRCUMSTANCES, THE MUMBAI BENCH OF THE TR IBUNAL IN THE CASE OF MUKESH G DESAI (HUF) V ITO 122 ITD 212 HAS HELD AS FOLLOWS:- 12. WE HAVE ANALYSED THE ABOVE DISPUTE AND ANALYSED THE FACTUAL MATRIX RELATING TO BOTH THE ROW HOUSE N O.30 AND THE FLAT NO.5 IN ABHIJIT BUILDING. THE SEQUENC E OF EVENTS FROM THE ACCRUAL OF LONG TERM CAPITAL GAINS OF RS.27,01,204, ENTERING INTO AN AGREEMENT WITH HARSH AD RAI POONAMCHAND DOSHI, THE BUILDER OF ROW HOUSES IN SHANTI PARK VIDE THE ARTICLES OF AGREEMENT DATED 26/8/1996 AND PAYMENT OFRS.30.50 LAKHS FOR PURCHASE OF A ROW HOUSE NO.30 CONSISTING OF GROUND PLUS FIRST F LOOR, SHANTI VIDYA NAGARI, MEERA ROAD, DIST. THANE, TERMINATION OF THE AGREEMENT DATED 26/8/1996 AND PAYMENT OF RS.30.50 LAKHS FOR PURCHASE OF A ROW HOUS E NO.30 CONSISTING OF GROUND PLUS FIRST FLOOR, SHANTI VIDYA NAGARI, MEERA ROAD, DIST. THANE, TERMINATION OF THE AGREEMENT DATED 26/8/1996 CANCELLING THE PURCHASE O F THE SAID ROW HOUSE VIDE THE ARTICLES OF AGREEMENT O F CANCELLATION AND REFUND OF RS.30.50 LAKHS BY SRI DOS HI, REVEALED THAT THE ASSESSEES INTENTION TO INVEST TH E CAPITAL GAINS IN THE RESIDENTIAL HOUSE TO AVAIL THE EXEMPTION UNDER SECTION 54 IS BEYOND ANY DOUBT. THE ASSESSING OFFICER HAS NOT BROUGHT ANYTHING ON RECORD TO DERIVE ANY MALA FIDE INTENTION IN ASSESSEES DECISIO N TO PAY THE CAPITAL GAINS TO SRI DOSHI AS PER THE AGREEM ENT AND RECEIVING THE REFUND OF THE SAME OWING TO THE POSSIBLE THREAT TO THE PROPOSED ROW HOUSE. ASSESSI NG OFFICER HAS NOT ESTABLISHED THAT ANY OF THE ARTICLES OF AGREEMENT DATED 26/8/1996 AND ARTICLES OF AGREEMENT PAGE 10 OF 12 ITA NO.70 7/BANG/2011 10 FOR CANCELLATION ARE BOGUS. THEREFORE, THE CANCELL ATION OF AGREEMENT BY THE ASSESSEE FALLS WITHIN THE AMBIT OF THE DOCTRINE OF CAVEAT EMPTOR (I.E. BUYERS BEWARE) A ND SURRENDER OF ROW HOUSE NO.30 IS LEGALLY JUSTIFIED. THE ASSESSEE IS NOT EXPECTED TO PROCEED TO BUY A DEFECTI VE RESIDENTIAL HOUSE (NEW ASSET), WHICH IS PRONE TO DEMOLITION BY THE MUNICIPAL AUTHORITIES IN ORDER TO QUALITY FOR EXEMPTION UNDER THE PROVISIONS OF INCOME -TAX ACT. THEREFORE, WE ARE OF THE CONSIDERED OPINION TH AT THE DECISION OF THE LOWER AUTHORITIES IN TREATING T HE ROW HOUSE AS THE NEW ASSET IS MISPLACED. WE FIND THE RELEVANCE OF THE APEX COURT JUDGEMENT IN THE CASE O F CIT V T N ARAVINDA REDDY (1979) 120 ITR 46 FOR THE PROPOSITION THAT IN THE CONTEXT OF RELIEF UNDER SEC TION 54, INVESTMENT HAS TO BE UNDERSTOOD IN A LIBERAL SE NSE WITHOUT LIMITING THE MEANING OF LEXICAL LEGALESE AND WORD PURCHASE SHOULD BE UNDERSTOOD AS IN THE SENSE OF PLAINSPOKEN PEOPLE. FURTHER THE DECISION OF JODH PUR BENCH OF THE ITAT IN THE CASE OF JAGAN NATH SIGH LO DHA (SUPRA) IS RELEVANT FOR THE PROPOSITION THAT EXEMPT ION UNDER SECTION 54F IS AVAILABLE TO THE ASSESSEE, IF THE INTENTION OF THE ASSESSEE FROM THE VERY BEGINNING IS TO INVEST IN THE NEW ASSET, THOUGH CERTAIN CONDITIONS ARE NOT MET FOR GENUINE FACTS AND CIRCUMSTANCES. THEREFORE , WE HAVE NO CONFUSION IN OUR MINDS IN FAVOUR OF IGNORIN G THE WHOLE ISSUE OF INVESTMENT OF CAPITAL GAINS IN THE P URCHASE OF ROW HOUSE NO.30 AND IN NOT IGNORING THE ASSESSEE S INVESTMENT OF SAID CAPITAL GAINS IN THE FLAT NO.5 I N ABHIJIT BUILDING. 14. NOW WE SHALL DISCUSS THE CONDITION SPECIFIED IN THE PROVISIONS OF SUB-SECTION (4) OF SECTION 54F TO THE FACTS OF THE CASE. AS DISCUSSED IN THE ABOVE, SUB-SECTIO N (4) PROVIDES FOR DEPOSITING THE UNUTILIZED CAPITAL GAIN S IN THE BANK AS PER THE PRESCRIBED CAPITAL GAIN SCHEME AND MANNER OF TAXING SUCH GAINS IF NOT UTILIZED AS PER SUB- SECTION (4) BEFORE THE DUE DATE FURNISHING THE RETU RN OF PAGE 11 OF 12 ITA NO.70 7/BANG/2011 11 INCOME UNDER SECTION 139. IN THE GIVEN FACTS OF TH E CASE IN RESPECT OF THE SURRENDERED ROW HOUSE, WE HAVE ANALYSED, IF THE ASSESSEE SHOULD BE TREATED AS DEFAU LTER UNDER SUB-SECTION (4) IN THE LIGHT OF ITS PECULIAR CIRCUMSTANCES. THE PECULIAR CIRCUMSTANCES INCLUDE (I) CAPITAL GAINS WERE GIVEN TO THE SELLER OF THE ROW HOUSE, THEREFORE, THE SAME ARE NOT IN THE POSSESSION OF TH E ASSESSEE, FROM AUGUST 1996 TO JUNE 1997, (II) THERE IS NO MALA FIDE INTENTION MADE OUT BY THE ASSESSING OFFICE R THE SAID TRANSACTION OF GIVING THE CAPITAL GAIN TO THE SELLER OF THE ROW HOUSE, (III) ASSESSEE HAS SUCCE SSFULLY INVESTED IN CONSTRUCTION OF NEW ASSET BEFORE MARC H 1998, ETC. AFTER CONSIDERING THE FACTUAL MATRIX OF THE ASSESSEES CASE, WHERE THE ASSESSEE ALREADY PARTED W ITH THE CAPITAL GAINS BEFORE THE DUE DATE FOR FILING THE RETURN IN CONNECTION WITH THE ROW HOUSE ACQUISITI ON, THERE IS NO WAY THE ASSESSEE WOULD HAVE COMPLIED WIT H THE CONDITION OF DEPOSITING IN THE BANK AS PER SUB- SECTION (4) OF SECTION 54F. THE DECISION OF THE TRIBUNAL I N THE CASE OF JAGAN NATH SINGHLODHA (SUPRA) IS RELEVANT. ACCORDINGLY, WE ARE OF THE CONSIDERED OPINION THAT T HERE IS NO VIOLATION OF THE CONDITION OF SUBSECTION (4) OF SECTION 54F BY THE ASSESSEE IN THIS CASE. 9.4 SINCE THE FACTS CONSIDERED BY THE MUMBAI TRIBUN AL IN THE CASE CITED SUPRA IS IDENTICAL TO THE FACTS OF THE INSTAN T CASE AND NO OTHER JUDGEMENT OR ORDER HAS BEEN PLACED BEFORE US TO DIF FER FROM THE ORDER OF THE MUMBAI TRIBUNAL, WE FOLLOW THE RATIO LAID DOWN BY THE HONBLE COORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE (CITED SUP RA) AND HOLD THAT THE CIT(A) IS JUSTIFIED IN DIRECTING THE ASSESSING OFFI CER TO GRANT EXEMPTION UNDER SECTION 54 OF THE ACT. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AS CORRECT AND IN ACCORDANCE WITH LAW AND NO INTERF ERENCE IS CALLED FOR. IT IS ORDERED ACCORDINGLY. PAGE 12 OF 12 ITA NO.70 7/BANG/2011 12 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER PRONOUNCED ON THE 20 TH DAY OF JULY, 2012 AT BANGALORE. SD/- SD/- (N BARATHVAJA SANKAR) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNE D. 4. THE CIT(A) CONCERNED. 5. DR 6. GF MSP/ BY ORDER SENIOR PRIVATE SECRETARY, ITAT, BANGALORE.