Shri Balbir Singh, Chandigarh V. DCIT, Chandigarh

ITA 791/CHANDI/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9901 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 12-03-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 14-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHISH GUPTA
• Assessee Lawyers: VINEET KHUR ANA
• Keywords: Capital asset; Gift; Business income
• Section: 54F; 133A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A CHANDIGARH !, ' # . %.. . & , '( # BEFORE: SMT. DIVA SINGH, JM & DR. B.R.R.KUMAR, AM ./ ITA NO. 791/CHD/2016 / ASSESSMENT YEAR : 2012-13 SHRI BALBIR SINGH, 455, SECTOR 37-A, CHANDIGARH. VS THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH. ./ PAN NO: AEZPS9538Q / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI TEJ MOHAN SINGH & SHRI VINEET KHURANA, CA # ! ' / REVENUE BY : SHRI ASHISH GUPTA, CIT-DR & SMT. JOSHI, CIT-DR $ % ! &/ DATE OF HEARING : 30.05.2019 '()* ! &/ D ATE OF PRONOUNCEMENT : 31.05.2019 ')/ ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 23.03.2016 OF CIT(A)-3 GU RGAON PERTAINING TO 2013-14 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X APPEALS - 3 IS NOT A SPEAKING ORDER, IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE . 2. THAT THE LD. COMMISSIONER OF INCOME TAX APPEALS - 3 HAS ERRED IN LAW AS WELL AS ON FACTS IN TREATING THE CASH OF RS. 3,74,300/- FOUND AT THE HOUSE OF THE APPELLANT AS UNEXPLAINED CASH. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN DISALLOWING THE DEDUCTION RIGHTLY CL AIMED U/S 54F OF RS. 3,15,87,120/- OF THE INCOME TAX ACT, 1961. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, T O AMEND OR VARY FROM THE AFORESAID GROUNDS OF APPEAL AT OR BEFORE THE TIME O F HEARING OF THE APPEAL. 2. THE APPEAL WAS FIXED FOR CLARIFICATION WHICH THE LD. AR WAS REQUIRED TO ADDRESS. THE LD. AR ADDRESSING GROUND NO. 1 SUBMITTED THAT THE SAID GROUND IS GENERAL AND THE SPECIFIC GRIEVANCE OF THE ASSESSEE IS BASED ON GROUND NOS. 2 AND 3 SPECIFICALLY. AC CORDINGLY, FOR GROUND NO. 1 THERE IS NO SPECIFIC ADJUDICATION. GROUND NO. 4 BEING RESIDUARY IN NATURE, IT IS SEEN ALSO REQUIRES NO SPEC IFIC ADJUDICATION. ITA 791/CHD/2016 A.Y. 2012-13 PAGE 2 OF 26 3. THE FACTS RELATABLE TO GROUND NO. 2 FOUND DISCUSSED IN THE ASSESSMENT ORDER SHOW THAT THE SEARCH & SEIZURE OPER ATION U/S 132(1) AND SURVEY OPERATION U/S 133A OF THE ACT WAS CON DUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES BELONGING TO M/S JAN TA LAND PROMOTERS LTD. AND SISTER CONCERNS ON 02.05.2012. THE ASSESSEE WAS ONE OF THE COMPANIES COVERED U/S 132 OF THE INCOME TAX ACT 1961. 4. THE SUBJECT MATTER OF THE FIRST ADDITION SUSTAINED BY THE CIT(A) CHALLENGED BY THE ASSESSEE VIDE GROUND NO. 2 IS FOUND ADD RESSED IN PARA 6 OF THE ASSESSMENT ORDER. A PERUSAL OF THE SAME SHOWS THAT APART FROM SOME JEWELLERY CASH TO THE EXTENT OF RS. 3,74,3 00/- WAS FOUND FROM HOUSE NO. 454 SECTOR 37A BELONGING TO THE ASS ESSEE. JUSTIFYING THE AVAILABILITY OF THE CASH FOUND, THE ASSESSEE S UBMITTED THAT SUFFICIENT CASH WAS AVAILABLE WITH THE FAMILY CONSISTING OF HIS TWO MARRIED SONS WHO WERE ALSO INCOME TAX ASSESSEES. THE A MOUNTS WERE STATED TO BE EXPLAINABLE BY WAY OF ISTRI DHAN ETC. A LSO OF THE WIFE AND DAUGHTERS-IN-LAW. THE EXPLANATION WAS HELD TO BE GENE RAL AND WAS FOUND TO BE NOT ACCEPTABLE BY THE AO. 5. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSE SSEE AS PER PARA 5 EXTRACTED IN UN-NUMBERED PAGES 9 TO 12 OF THE ORDER SHOWS THAT THE EXPLANATION OFFERED BY THE ASSESSEE BEFO RE THE CIT(A) ALSO DID NOT FIND FAVOUR. AGGRIEVED BY THE SAME, THE ASSE SSEE IS IN APPEAL BEFORE THE ITAT. 6. THE LD. AR INVITING ATTENTION TO THE SPECIFIC UN-NUMBERED PAGE 10 TO 12 SUBMITTED THAT THE ASSESSEE'S FAMILY CONSISTED OF HIMSELF, HIS WIFE ALONGWITH HIS TWO MARRIED SONS AND HIS DAUGHTERS-IN -LAW AND THREE GRAND CHILDREN. THE TAXABLE INCOME OF THE ASSESSEE OVER THE YEARS HAD BEEN DEMONSTRATED BEFORE THE CIT(A) AS WELL AS AO WHEREIN THE AVAILABILITY OF THE MEAGER CASH FOUND AT HIS RESIDENCE IT WAS SUBMITTED, WAS VERY WELL JUSTIFIABLE, HOWEVER, DESPITE THIS, THE CIT(A) DISMISSED THIS GROUND WITHOUT GIVING ANY SPECIFIC FINDING NOR D ID HE ADDRESS THE FACTS. 7. THE LD. CIT-DR MR.ASHISH GUPTA APPEARING ON BEHALF OF TH E REVENUE SUBMITTED THAT NO EFFORT HAS BEEN MADE BY THE ASSESSEE TO DEMONSTRATE THE AVAILABILITY OF CASH FOUND BY WAY OF WITHDRA WALS FROM HIS SPECIFIC BANK ACCOUNT. ON QUERY, IT WAS AGREED TH AT COPIES ITA 791/CHD/2016 A.Y. 2012-13 PAGE 3 OF 26 OF THE BANK ACCOUNTS WERE AVAILABLE, HOWEVER, THE AVAILABILITY OF CASH BY WAY OF WITHDRAWALS WAS NOT DEMONSTRATED BY THE ASSE SSEE. THE ARGUMENTS BEING GENERAL IN NATURE, IT WAS HIS SUBMISSION, CA NNOT BE ALLOWED. REFERRING TO THE SPECIFIC WRITTEN SUBMISSIONS EXTRAC TED IN THE IMPUGNED ORDER AT PAGE 10-12, THE LD. CIT-DR WAS R EQUIRED TO JUSTIFY THE FINDING THAT THERE WAS NO POSSIBILITY OF ANY CAS H WHATSOEVER AVAILABLE AT HOME WITH AN ASSESSEE WHO HAS A DMITTEDLY RETURNED AN INCOME OF RS. 1,58,28,720/-. AS PER SUBMISSIONS EXTRACTED IN THE IMPUGNED ORDER, THE ASSESSEE, IT WAS NO TICED, HAS STATED THAT HE HAS BEEN WORKING FOR THE LAST 45 YEARS AND HIS TWO SONS MR. HARVEEN SINGH AND SHRI ASHWEEN SINGH ALSO ARE S TATED TO BE WORKING FOR THE LAST 23 AND 17 YEARS RESPECTIVELY. IT IS SEEN THAT THE ASSESSEE HAS ALSO TAKEN THE ARGUMENTS QUA THE OT HER FAMILY MEMBERS I.E. THE ASSESSEE'S WIFE ALONGWITH HIS TWO DAUGHT ERS-IN-LAW, IT HAD BEEN CLAIMED, HAD SOME ISTRI DHAN AND MONEYS A VAILABLE WITH THEM RECEIVED ON HOLI, DIWALI, BHAI DOOJ ETC., THUS THE JUS TIFICATION FOR THE TOTAL CASH FOUND FROM THE RESIDENCE AS AN ADDITION WAS QUESTIONED. 8. THE LD. AR IN REPLY STATED THAT THE ASSESSEE HAS NEV ER MAINTAINED ANY PERSONAL BOOKS OF ACCOUNT FOR JUSTIFYING TH E AMOUNTS MAINTAINED AT HOME NOR HAVE HIS SONS EVER MAINTAINED REC ORD JUSTIFYING THE AVAILABILITY OF FUNDS FOR HOUSEHOLD EXPENDITUR E ETC. SIMILARLY, NO DETAILS WERE MAINTAINED OF ISTRI DHAN WITH THE W OMEN OF THE FAMILY. HOWEVER, LOOKING AT THE TAXABLE INCOME OF THE FAMILY MEMBERS, THE AMOUNT CANNOT BE SAID TO BE DIS-PROPORTION ATE AND AT BEST MAY BE ESTIMATED. 9. CONSIDERING THE FACTUAL BACKGROUND, THE PARTIES WERE D IRECTED TO ADDRESS ARGUMENTS ON ESTIMATION SO AS TO DETERMINE THE CASH WHICH COULD POSSIBLY BE SAID TO BE AVAILABLE WITH SUCH AN ASSESSEE. BOTH THE PARTIES WERE HEARD. 10. HOWEVER, BEFORE ADDRESSING THE ARGUMENTS THEREON, IT IS NECESSARY TO EXTRACT THE SPECIFIC WRITTEN SUBMISSIONS EXT RACTED IN THE IMPUGNED ORDER BY THE CIT(A) : II) ADDITION OF CASH AS UNEXPLAINED OF RS. 3, 74,300/- THE LEARNED ASSESSING OFFICER HAS FAILED TO APPRECI ATE THAT A SUM OF RS. 3 , 74,300/- IS NOT , SUBSTANTIAL SUM FOUND AT THE RESIDENCE OF THE ASSES SEE WHO LIVES JOINTLY WITH HIS TWO SON AND THEIR FAMILIES. ITA 791/CHD/2016 A.Y. 2012-13 PAGE 4 OF 26 IT IS PERTINENT TO MENTION THAT THE ASSESSEE HAS BE EN WORKING FOR PAST MORE THAN 45 YEAR HIS TWO SONS MR. HARVEEN SINGH AND MR. ASHVEEN SING H HAVE BEEN WORKING FOR MORE THAN 23 YEARS AND 17 YEARS RESPECTIVELY. THE ASSESSEE AN D HIS SONS HAVE ONE OF THE MOST FAMOUS SHOPS IN CHANDIGARH BY THE NAME OF M/S JAGAT SINGH & SONS. THEY ARE C & F AGENTS OF HAWKINS, DEALERS OF VAN HEUSAN, LOUIS PHILLIP AND A LLEN SOLLY. THEY ARC ALSO IMPORTING HOME DECOR AND GIFT ITEMS FROM CHINA AND TRADING IN THEM. IN ADDITION, THE ASSESSEE AM HIS YOUNGER SON ALSO DEALING IN REAL ESTATE BUSINES S A FAMILY STAYING JOINTLY LONG HAS CASH IN THE FAMIL Y COMPRISING OF CASH FOR HOUSE HOLD AS WELL AS THE ISTRT DHAN OF LADIES OF FAMILY. THE SAME IS BEING EXPLAINED HEREUNDER: THE FAMILY TREE OF THE ASSESSEE IS AS UNDER : S.NO NAME RELATION WITH ASSESSEE 1 MR. BALBIR SINGH ASSESSEE 2 MS. BALBIR KAUR ASSESSEE'S WIFE 3 MR, HARVEEN SINGH ASSESSEE 'S ELDER SON 4 MS. NEETI OBEROI KAUR ASSESSEE'S DAUGHTER-IN-LAW 5 MR. ASHVEEN SINGH ASSESSEE 'S YOUNGER SON 6 MS. GAGANDEEP KAUR ASSESSEE'S DAUGHTER-IN -LAW 7 MASTER SIMAR SINGH GRANDSON 8 MASTER JASMAN SINGH GRANDSON 9 MASTER ANHAD SINGH GRANDSON THE LEARNED ASSESSING OFFICER HAS FAILED TO APPRECI ATE THAT THE ASSESSEE AND HIS TWO SONS HAVE BEEN WORKING AND REGULARLY FILING THEIR TAX RETURNS SINCE A VERY LONG TIME. THE DETAILS OF THE TAX STATUS OF THE ASSESSEE AND H IS TWO SONS ARE AS UNDER: DETAILS OF NET TAXABLE INCOME OF MR. BALBIR SINGH A FTER DEDUCTION UNDER CHAPTER - VI ARE US UNDER: S,NO ASSESSMENT YEAR NET TAXABLE INCOME (RS) REMARKS 1. 2013-14 1,58,28,720/- ANNEXURE - 11 2, 2012-13 29,19,650/- ANNEXURE - 12 DETAILS OF NET TAXABLE INCOME OF MR. HARVEEN SINGH AFTER DEDUCTION UNDER CHAPTER - VI AS UNDER: S . NO ASSESSMENT YEAR NET TAXABLE INCOME (RS) REMARKS I. 2013-14 4,07,710/- ANNEXURE - 13 2. 2012-13 4,10,230/- ANNEXURE - 14 DETAILS OF NET TAXABLE INCOME OF MR. ASHVEEN SINGH AFTER DEDUCTION UNDER CHAPTER VI ARE AS UNDER: S.NO ASSESSMENT YEAR NET TAXABLE INCOME (RS) REMARKS 1. 2013-14 45,30, 630/- ANNEXURE - 15 2. 2012-13 ANNEXURE - 16 THE LEARNED ASSESSING OFFICER HAS ALSO NOT APPRECIA TED THE CASH AVAILABLE WITH THE THREE ASSESSING OFFICER HAS ALSO NOT PASSED ANY ADVERSE R EFERENCE OR COMMENTED ON THE AVAILABILITY OF CASH WITH THE ASSESSEES I.E . HE HAS ACCEPTED THAT THE CASH AVAILABLE IN THE STATEMENT OF AFFAIRS IS CORRECT. T HE DETAILS ARE AS UNDER : DETAILS OF CASH AVAILABLE AS PER STATEMENT OF AFFAI RS (FILED WITH THE LEARNED ASSESSING OFFICER AND ACCEPTED) OF SH. BALBIR SINGH. S . NO PARTICULARS CASH IN HAND W REMARKS 1 AS AT 01.04.201 1 (CLOSING BALANCE OF 31.03.2011) 13,74,741/- ANNEXURE -17 ITA 791/CHD/2016 A.Y. 2012-13 PAGE 5 OF 26 2 AS AT 01.04.2012 (CLOSING BALANCE OF 31.03.2 012) 2,56,641/- ANNEXURE - 18 3. AS AT 31.03.2013 2,03,641 /- ANNEXURE -19 DETAILS OF CASH AVAILABLE AS PER STATEMENT OF AFFAI RS (FILED WITH THE LEARNED ASSESSING OFFICER AND ACCEPTED) OF SH. HARV EEN SINGH. S . NO PARTICULARS CASH IN HAND (RS) REMARKS 1 AS AT 01.04.2012 (CLOSING BALANCE OF 31.03.2012) 1,13,344/- ANNEXURE - 20 2. AS AT 3 1.03.2013 1,00,844/- ANNEXURE - 21 DETAILS OF CASH AVAILABLE AS PER STATEMENT OF AFFAI RS (FILED WITH THE LEARNED ASSESSING OFFICER AND ACCEPTED) OF SH.ASHVEEN SING H . S . NO PARTICULARS CASH IN HAND (RS) REMARKS 1. AS AT 01.04.2012 (CLOSING BALANCE OF 31.03.2012) 3,93,859/- ANNEXURE - 22 2. AS AT 31.03.2013 4,54,374/- ANNEXURE - 23 FROM THE ABOVE CONSIDERING THE STATUS, TAX RETURNS AND STATEMENT OF AFFAIRS OF THE ASSESSEE, MR. HARVEEN SINGH AND MR. ASHVEEN SINGH A LONGWITH THE ISTRI DHAN OF HIS WIFE, DAUGHTER-IN LAWS, THE CASH IS VERY MUCH EXPLA INABLE. THIS AMOUNT OF CASH COMPRISING OF CASH FOR HOUSE HOLD EXPENSES AND ISTR I DHAN OF THE LADIES. 10.1 NO DOUBT, THE ONUS IS UPON THE ASSESSEE TO PROVE ITS CLAIM, HOWEVER, LOOKING AT THE NATURE OF THE ADDITION SUSTAINED IN THE PECULIAR FACTS AND CIRCUMSTANCES, IT CANNOT BE SAID THAT SUSTAINING THE SAME IN TOTO WOULD BE A JUSTIFIABLE DECISION. ACCORDINGL Y, CONSIDERING THE OVERALL FACTUAL MATRIX AND THE RELEVANT PA GES IN THE PAPER BOOK, IT WAS DEEMED APPROPRIATE TO ESTIMATE THE C ASH AVAILABLE TO THE EXTENT OF 60% AS HAVING BEEN EXPLAINED. BOTH THE LD. AR AND THE LD. CIT-DR WERE SPECIFICALLY REQUIRED TO ADDRESS THEIR OBJECTIONS, IF ANY AS THE ADDITION OF THE TOTAL AMOUNT OR FOR THAT MA TTER DELETION OF THE TOTAL AMOUNT BOTH WOULD NOT BE FAIR TO THE PARTIE S CONCERNED. ADMITTEDLY, THE ASSESSEE HAS PLEADED INABILITY TO DEMONST RATE THE AVAILABILITY OF CASH BY WAY OF WITHDRAWALS FROM BANKS AND CONSIDERING THE ARGUMENTS IN REGARD TO AVAILABILITY OF POSSE SSING CASH IN THE HOUSEHOLD CONSISTING OF ASSESSEE AND HIS TWO MARRIED SONS AND POSSIBLE ISTRI DHAN WITH THE WIFE AND THE TWO DAUGHTERS-IN -LAW AND CONSIDERING THE RETURNED INCOME OF THE ASSESSEE AND HIS TWO SONS, ULTIMATELY THE PARTIES AGREED THAT TOTAL CASH OUT OF TH E AMOUNT OF RS. 3,74,300/- TO THE EXTENT OF 60% MAY BE HELD TO BE EXPLAIN ED. ORDERED ACCORDINGLY. IN VIEW THEREOF, GROUND NO. 2 OF THE ASSESSEE IS PARTLY ALLOWED. 11. THE FACTS RELATABLE TO GROUND NO. 3 OF THE ASSESSEE A RE FOUND DISCUSSED AT PAGES 5 TO 12 OF THE ASSESSMENT ORDER WH ICH HAVE BEEN ITA 791/CHD/2016 A.Y. 2012-13 PAGE 6 OF 26 EXTRACTED IN THE IMPUGNED ORDER. A PERUSAL OF THE SAME SHOWS THAT THE ASSESSEE HAD SOLD CAPITAL ASSETS SCO 226-227 SECTO R 34A CHANDIGARH ON 10.12.2012 IN WHICH HE HAD CLAIMED 33.5% SHAR E. THE SALE CONSIDERATION WAS RS. 6 CRORES AND THE CAPITAL GAIN CALCULATED THEREON WAS RS. 4,22,71,154/-. THE ASSESSEE CLA IMED DEDUCTION U/S 54F OF RS. 3,15,87,120/- ON ACCOUNT OF INVEST MENT OF RS. 4,48,35,000/- IN HOUSE PROPERTY IN HOUSE NO. 107 SECTO R 27A, CHANDIGARH BOUGHT ON 30.09.2013. THE ASSESSEE'S CLAIM O F DEDUCTION U/S 54F WAS HELD TO BE NOT ALLOWABLE AND THE ASSESSEE WAS PUT TO NOTICE OF THE FACT BY THE AO THAT THE ASSESSEE WAS THE OWNER OF THE FOLLOWING RESIDENTIAL HOUSES : A. RESIDENTIAL HOUSE NO. 544 SECTOR-10, CHAND IGARH (PURCHASED ON 30/10/2010 AND SOLD ON 06/02/2013) B. HOUSE NO. 1016 SECTOR-8C, CHANDIGARH (PURCHASED ON 04/02/2013 AND SOLD ON 18/03/2013) C. HOUSE NO. 455 SECSTOR 37A, CHANDIGARH (SELF OC CUPIED DURING THE ENTIRE YEAR) D. HOUSE NO. 1106 SECTOR 8C, CHANDIGARH (PURCHASED ON 18.03.2013). 11.1 THE SPECIFIC OBSERVATIONS OF THE AO ARE EXTRACTED HE REUNDER FOR READY REFERENCE : IT IS NOTICED THAT THE ASSESSEE OWNED MORE THAN ONE RESIDENTIAL HOUSE (I.E. H. NO. 455, SECTOR 37A, CHANDIGARH & H. NO. 544, SECTOR 10 ) ON THE DATE TRANSFER ORIGINAL ASSET SCO 226-227, SECTOR 34A, CHA NDIGARH). ALSO THE ASSESSEE PURCHASED RESIDENTIAL HOUSE [I.E. H. NO. 1016, SECTOR 8C & HOUSE NO. 1106 SECTOR 8C) OTHER THAN THE NEW ASSET (H. NO . 107, SECTOR 27A, CHANDIGARH) WITH IN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET. THUS, CONDITIONS (I) AND (II) OF TH E PROVISO TO 54 F(I)(A) ARE VIOLATED AND HENCE THE ASSESSEE IS PRIMA FACIE NOT ELIGIBLE DEDUCTION U/S 54F. VIDE ORDER SHEET DATED 11.03.2015 THE AS SESSEE WAS ASKED TO JUSTIFY HIS CLAIM OF DEDUCTION U/S 54 F CLAIMED DURING YEAR . 11.2 THE ASSESSEE AS PER RECORD IS FOUND TO HAVE GIVEN THE FOLLOWING REPLY DATED 26.03.2015 WHICH ALSO HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER. THE SAME IS REPRODUCED HEREUNDER FO R THE SAKE OF COMPLETENESS: 1. 'THAT I HAVE RIGHTLY CLAIMED THE BENEFIT OF DEDU CTION U/S 54F AS FAR AS HOUSE NO. 107, SECTOR--27A, CHANDIGARH IS CONCERNED. 2. THAT OF THE OTHER THREE PROPERTIES OF WHI CH ONE WAS PURCHASED DURING THE FINANCIAL YEAR 2010-11 I.E. 20% SHARE IN PLOT NO. 5 44, SECTOR-10, CHANDIGARH AND THE SAME WAS EXCHANGED WITH 20% SHARE IN PLOT NO. 1016, SECTOR-SC, CHANDIGARH, DURING THE FINANCIAL 2012-13. 20% SHAR E IN PLOT/ HOUSE NO. 1016 SECTOR-SC, CHANDIGARH WAS LATER EXCHANGED WITH 20 % SHARE IN PLOT NO. 1106, CHANDIGARH DURING THE FINANCIAL YEAR 2012-13 ONLY. THE ABOVE THREE PROPERTIES WERE PURCHASED WITH THE INTENTION OF TRA DING IN THESE PROPERTIES. MY SHARE IN THESE PROPERTIES CONSTITUTED ONLY THE SECO ND FLOOR AND NONE OF THESE HAD SECOND FLOOR WHEN THE ABOVE PROPERTIES WERE B ROUGHT. HANDSOME PROFIT HAS BEEN EARNED IN THESE PROPERTIES AND ACCORDING LY SHOWN IN MY ITR. ITA 791/CHD/2016 A.Y. 2012-13 PAGE 7 OF 26 3. THAT THE ABOVE PROPERTIES ARE APPEARING IN MY STATEMENT OF AFFAIRS AND CORRECTLY SHOWN AS CLOSING STOCK AS THEY WERE PURCH ASED WITH AN INTENTION TO TRADE IN THEM. FOR CLAIMING DEDUCTION U/S 54F THE A SSESSEE SHOULD NOT OWN ON THE DATE OF TRANSFER IF THE ORIGINAL ASSET MORE THA N ONE RESIDENTIAL HOUSE (OTHER THAN THE NEW HOUSE). THE HOUSE REFERRED HERE IS ONE COMPLETE AND LIVE ABLE HOUSE. IN MY CASE I HAD PURCHASED 20% SHARE IN PLOT /HOUSE NO. 544, SECTOR-10, CHANDIGARH DURING 2010-11. IN CHANDIGARH 20 % CONST ITUTE 2ND FLOOR IN CASE OF A RESIDENTIAL PROPERTY. IN THIS CONNECTION I AM ATTACHING HEREWITH MY INTER SE AGREEMENT IN RESPECT OF THE ABOVE PROPERTY WITH SHRI BAJINDER SINGH AND SMT. NAVDEEP KAUR WHO WERE THE OWNERS OF REMAINING 80 % SHARES. THE PLOT AT THE TIME OF ITS PURCHASED HAD SOME CONSTRUCTION ON IT WHICH CONSTITUTED ONLY OF A SERVANT ROOM AND SOME HALF FINISHED WALLS ON THE GROUND FLOOR ONLY. MY OTHER CO OWNERS AND I THEREFORE DECIDED TO START CO NSTRUCTION OF THESE HOUSE BUT DECIDED TO SELL IT BEFORE COMPLETION OF CONSTRU CTION THE 4 TH DAY OF FEBRUARY 2013 AS I MADE HANDSOME PROFIT AMOUNTING T O RS. 25,09,800/-. 4. THAT MY M20% SHARES WAS EXCHANGED WITH 20% SHAR E IN PLOT NO. 1016, SECTOR- 8C, CHANDIGARH. THIS HOUSE WAS ALSO I N SHAMBLES AT THE TIME OF ITS PURCHASE HAD 1 AND A HALF FLOORS WHICH WERE INC OMPLETE. AS PER MY INTERSE AGREEMENT I WOULD HAVE ALSO BECOME OWNER OF SECOND FLOOR ONLY OF THE SAME AS AND WHEN THE FIRST FLOOR AND SECOND FLOOR OF THE SAME WOULD BE HAVE GOT COMPLETED. BEFORE STARTING CONSTRUCTION ON THE SAME I AND THE OTHER TWO OWNERS DECIDED TO EXCHANGE IT WITH PLOT/HOUSE NO. 1 106, SECTOR-8C, CHANDIGARH. THE ABOVE SAID PROPERTY WAS DISPOSED OF F S IT IS AND I MADE A PROFIT OF RS. 140950/- ON THE SAME. 5. THAT MY 20% SHARES IN PLOT/HOUSE NO. 1106, SECT OR-SC, CHANDIGARH SHALL CONSTITUTE THE SECOND FLOOR ONLY A ND THIS HOUSE IS MORE OR LESS A PLOT WITH A PARTIAL CONSTRUCTION ON THE GROU ND FLOOR WHICH IS PROBABLY A SERVANT ROOM. MY INTERSE AGREEMENT WIT H THE OTHER JOINT OWNERS IN THIS CASE IS A/SO BEING ATTACHED HEREWITH . 6. THAT FROM THE ABOVE IT IS VERY CLEAR THAT 20% SHAR E IN PLOT NO. 544, SECTOR-10 WAS DISPOSED OFF DURING THE COURSE OF CON STRUCTION AND THE OTHERS WERE MORE OR LESS PLOTS AND THEREFORE NOT LIVEABLE. 7. THAT I PURCHASE 100 % SHARE IN HOUSE NO. 107, SECTO R 27, CHANDIGARH ON 30/09/2013 WITH THE INTENTION OF CL AIMING BENEFIT OF SECTION 54F AND ACCORDINGLY THE DEDUCTION HAS BEEN CLAIMED BY ME.' 11.3 IT IS SEEN THAT THE AO SUMMARIZED THE ASSESSEE'S CLAIM THAT HE HAD PURCHASED THREE PROPERTIES; PLOT NO. 544, 1016 AND 1 106 WITH THE INTENTION OF TRADING IN THESE PROPERTIES. HE HELD THE CLAIM TO BE NOT ALLOWABLE AS THE ASSESSEE NEITHER IN THE YEAR UNDER CONSIDERATION NOR IN THE SUBSEQUENT YEAR HAD EVER SHOWN BUSINESS AN D PROFESSION INCOME FROM PROPERTY TRADING. THUS, THE FACT THAT FROM TH E SALE OF TWO HOUSES NAMELY HOUSE NO. 544 SECTOR 10 CHANDIGARH AND HOUSE NO. 1016 SECTOR 8-C, CHANDIGARH, INCOME OF RS. 26,50,750/- U NDER THE HEAD SHORT TERM CAPITAL GAIN HE HELD, DID NOT SUPPO RT THE CLAIM. THE AO FURTHER HELD THAT BY MERELY SHOWING HOUSE NO. 1106 SECTOR 8-C AS CLOSING STOCK IN THE STATEMENT OF AFFAIRS A LSO DID NOT CHANGE THE CHARACTER OF THE PROPERTY FROM RESIDENTIAL HO USE TO COMMERCIAL. THE AO WAS FURTHER OF THE VIEW THAT THE ASSESSEE'S S HARE IN THE PROPERTY STATED TO BE OF ONLY SECOND FLOOR WAS NOT ACCEP TABLE AS THERE WAS NO SECOND FLOOR ON THE SAID PROPERTY AS WHEN IT WAS SOLD, ITA 791/CHD/2016 A.Y. 2012-13 PAGE 8 OF 26 THE ORIGINAL PROPERTY HAD NO SUCH FLOOR. IN THE CIRCUMSTA NCES, IT WAS CONCLUDED THAT THIS PROVED THE FACT THAT THE ASSESSEE NEVER ACTUALLY PURCHASED THE SECOND FLOOR AND INFACT ACTUALLY PURCHASED THE BUILT- UP AREA, COMMON AREA, FITTING FIXTURES AND HAD OTHER SUCH OWNERSHIP RIGHTS AS ARE ENJOYED BY AN OWNER OF THE PROPERTY. AFT ER EXTRACTING FROM THE AGREEMENT DATED 27.10.2010 FOR HOUSE NO. 544, T HE AO CONCLUDED THAT INFACT THE ASSESSEE ENJOYED 20% OF THE O WNERSHIP OF THE RESIDENTIAL HOUSES AND WHEN HE WAS REQUIRED TO JUST IFY HIS CLAIM U/S 54F, HE HAS RESORTED TO PRODUCING SELF SERVING AGRE EMENT SIGNED WITH HIS ASSOCIATES TO CLAIM THAT HE WAS NOT THE OWNER O F RESIDENTIAL PROPERTY. THE AO QUESTIONED THAT IF HE WAS NOT OWNER OF THE RESIDENTIAL PROPERTY, WHY WOULD HE GET ANY MONEY ON THE SALE OF HIS SHARE. SIMILAR WAS THE STORY FOR PROPERTIES DESCRIBED AS 1 016 AND 1106. ACCORDINGLY, RELYING UPON DECISION OF THE HON'BLE DE LHI HIGH COURT IN THE CASE OF CIT VS GEETA DUGGAL DATED 21.02.20 13. HE CONCLUDED THE ISSUE IN THE FOLLOWING MANNER: THE ABOVE DISCUSSION LEADS TO THE FOLLOWING OBSERVA TION 1. THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F ON LONG TERM CAPITAL GAIN ACCRUING ON SALE OF SCO 226-227. THE SALE WAS DONE ON 10.12.2012. 2. ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET (AS DEFINED IN SECTION 54F) THE ASSESSEE WAS OWNER OF FOLLOWING RESIDENTIAL HOUSES -RESIDENTIAL HOUSE NO. 544 SECTOR-10, CHANDIGARH (P URCHASED ON 30/10/2010 AND SOLD ON 06/02/2013) - HOUSE NO. 455 SECTOR-37A, CHANDIGARH (SELF OCCUPI ED DURING THE ENTIRE YEAR) THEREBY THE ASSESSEE IS COVERED UNDER PROVISO (A)(I ) OF SECTION 54F(1). 3. ASSESSEE HAS PURCHASED HOUSE NO. 1106 SECTOR-8C, CHANDIGARH, HOUSE NO. 1016 SECTOR-8C CHANDIGARH APART FROM THE NEW ASSET OF 10 7 SECTOR-27A, CHANDIGARH WITH IN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THEREBY THE ASSESSEE IS COVERED UNDER PROVISO (A)(I I) OF SECTION 54F 5. ASSESSEE HAS NOT FURNISHED ANY PROOF OF NOT HAVING TRANSFERRED THE 'NEW ASSET' WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF PURCHASE, THERE BY NOT SATISFYING CLAUSE 3 OF SECTION 54F. 12. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE WRITTEN SUBMISSIONS EXTRACTED IN THE IMPUGNED ORDER ARE AVAILABLE FROM UN-NUMBERED PAGES 12 T O 16 OF THE IMPUGNED ORDER. THE ASSESSEE AFTER SUMMING UP THE POSITION OF FACTS AND POSITION OF LAW REITERATED THE FACT THAT THE 20 % SHARE IN THE PROPERTY DESCRIBED AS 544 CONSISTING OF CONSTRUCTION OF SECOND FLOOR ON THE ROOF OF FIRST FLOOR AS AND WHEN IT WAS CONSTRUCTE D AND WAS EXCHANGED WITH SIMILAR RIGHT IN ANOTHER PROPERTY NAMELY NO. 1016 SECTOR 8-C BY WAY OF AN EXCHANGE DEED. THE SAID PROPER TY AS PER ITA 791/CHD/2016 A.Y. 2012-13 PAGE 9 OF 26 SUBMISSIONS AVAILABLE ON RECORD, WAS ALSO AGAIN EXCHANGED W ITH PROPERTY NO. 1106 SECTOR 8D WHICH WAS SHOWN AS CLOSING STOCK. THE BUSINESS PROFITS OF RS. 25,09,800/- AND RS. 1,40,950/- RESPEC TIVELY FROM THE AFORESAID EXCHANGES WERE DULY OFFERED FOR TAXATIO N AND TAX WAS PAID THEREON. IT WAS CLAIMED THAT INSTEAD OF SHOWING THE SAME UNDER THE BUSINESS HEAD IT WAS DISCLOSED UNDER THE HEA D SHORT TERM CAPITAL GAIN BY THE FRONT OFFICE OF THE CHARTERED AC COUNTANT OF THE ASSESSEE BY MISTAKE. THE MISTAKE OF THE COUNSELS O FFICE, IT WAS PLEADED BY ITSELF CANNOT DETRACT FROM THE MERITS OF THE CLAIMS. 13. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT IT HAD BE EN ARGUED WITHOUT PREJUDICE TO THE EARLIER ARGUMENTS ON FACTS THAT ON THE DATE OF TRANSFER I.E. 10.12.2012 OF THE ORIGINAL ASSET ( I.E. 33.50% O F SCO NO. 226-227 SECTOR 34 CHANDIGARH ) THE ASSESSEE OWNED ONLY ONE RESIDENTIAL HOUSE IN WHICH HE WAS RESIDING WITH HIS FAMILY I.E. H OUSE NO. 455 SECTOR 37A AND BESIDES THIS, THE ASSESSEE HAD NO OTHER RESIDENTIAL HOUSE EXCEPT FOR THE PLOT NO. 544 SECTOR 10 WHEREIN THE ASSESSEE HAD 20% SHARE AND RIGHTS TO CONSTRUCT THE S ECOND FLOOR WHICH WAS TREATED AS ASSESSEE'S STOCK-IN TRADE. THIS R IGHT TO CONSTRUCT WAS EXCHANGED WITH 20% SHARE IN HOUSE NO. 10 16 SECTOR 8-C) ON 04.02.2013 AND HERE ALSO, THE ASSESSEE HAD THE R IGHTS TO CONSTRUCT THE SECOND FLOOR WHEREIN THE BALANCE 80% OWNE RSHIP CONTINUED TO REMAIN WITH SHRI BARJINDER SINGH AND MRS. NAV DEEP KAUR. IT HAD BEEN SUBMITTED AS PER THE SUBMISSIONS EXT RACTED IN THE IMPUGNED ORDER THAT WHEREAS ON PLOT NO. 544, THERE WAS ONLY A SINGLE STOREY AND IT HAD NO FIRST OR SECOND FLOOR. IN HOUS E NO. 1016 ALSO, THE CONSTRUCTION WAS ONLY UPTO THE FIRST FLOOR AND T HE ASSESSEE HEREIN ALSO HAD THE RIGHT TO CONSTRUCT A SECOND FLOOR. THUS, IT WAS ARGUED THAT THE ASSESSEE ON THE DATE OF EXCHANGE I.E. 0 4.02.2013 HAD ONLY THE RIGHT TO CONSTRUCT SECOND FLOOR OF HOUSE NO. 10 16 WHICH WAS ALSO HIS STOCK-IN-TRADE. THE SAID PROPERTY FOR THE ASSES SEE WAS THUS, NOT HIS RESIDENTIAL HOUSE IN TERMS OF THE DEPARTMENTS CIR CULAR AND THE FOLLOWING DECISIONS OF THE ITAT : 1 ASHOK SYAL VS CIT(2012) PUNJAB &HARYANA HIGH COURT (IT APPEAL NO. 566) 2. M.B RAMESH VS IW 320ITR 451 (KAR.) [2010] 3. PASUMARTHI SRIKRISHNA VS AC1T, APPEAL NO. 455 (H YD) OF 1996 ITAT HYDERABAD BENCH B [2003] 1 SOT 407 (HYD) ITA 791/CHD/2016 A.Y. 2012-13 PAGE 10 OF 26 4. PRICE WATERHOUSE COOPERS PRIVATE LIMITED VS. COMMISSIONER OF INCOME TAX (HON'BLE SUPREME COURT) CIVIL APPEAL 69242012 (SIP 10700 OF 2009) 5. SHRI CHANDRASHEKHAR BAHIRWANI VS ASSISTANT CO MMISSIONER OF INCOME TAX - ITA NO. 7810/M/2010 & 6599/M/2012, THE HON'BLE MUMB AI BENCH 'C 13.1 IT IS SEEN THAT RELIANCE HAD BEEN PLACED UPON THE BOARDS CIRCULAR NO. 14 DATED 11.04.1955 HIGHLIGHTING THAT THE REVEN UE IS NOT EXPECTED TO TAKE ADVANTAGE OF THE ASSESSEE'S IGNO RANCE TO COLLECT MORE TAX OUT OF HIM THAN IS LEGITIMATELY DUE FROM HIM. IT WAS SUBMITTED THAT BECAUSE OF THE MISTAKE COMMITTED BY THE STAFF OF THE COUNSEL, THE INCOME ARISING TO THE ASSESSEE HAD BEEN RE TURNED UNDER THE HEAD SHORT TERM CAPITAL GAIN AND NOT UNDER THE H EAD BUSINESS INCOME THE RATE OF TAX REMAINS THE SAME. 13.2 WITHOUT PREJUDICE TO THIS ARGUMENT, IT IS SEEN THA T IT HAD ALSO BEEN ARGUED THAT THE ASSESSEE AT BEST COULD BE SAID T O HAVE THE RIGHT TO CONSTRUCT WHICH COULD BE DESCRIBED AS A CAPITAL ASSET AND THUS, IT COULD NOT BE DESCRIBED AS A RESIDENTIAL HOUSE FOR THE PU RPOSES OF SECTION 54F AS THE ASSESSEE WOULD STILL HAVE ONLY ONE R ESIDENTIAL HOUSE ON THE DATE OF TRANSFER OF ORIGINAL ASSET I.E. HOUSE N O. 455 SECTOR 37A, CHANDIGARH WHERE THE ASSESSEE RESIDED. 13.3 THE ASSESSEE AS PER WRITTEN SUBMISSIONS EXTRACTED AT UN- NUMBERED PAGE 17 OF THE IMPUGNED ORDER SUBMITTED THAT NO DOUBT THE ASSESSEE HAD INTEREST IN THE COMMON AREAS HOWEVER , IT WAS ONLY TO ENSURE THAT THE RIGHT TO CONSTRUCT SECOND FLOOR COU LD BE UTILIZED BY HAVING ACCESS TO THE CONSTRUCTION AREA WHICH HAS BE EN COVERED IN THE 20% SHARE IN THE PROPERTY. RELEVANT EXTRACT OF THE WRITTEN SUBMISSIONS REPRODUCED FROM THE UNNUMBERED PAGE 17 OF T HE IMPUGNED ORDER IS EXTRACTED HEREUNDER FOR READY REFERENCE : THE PURCHASES WERE DONE WITH THE INTENTION OF DOING BUSINESS AND THEREFORE THERE ARE HIS STOCK IN TRADE. FURTHER, THE LEARNED ASSESSING OFFICER HAS FAILED T O APPRECIATE THAT THE 20 PERCENT SHARE IN THE PROPERTY CONSTITUTES THE RIGHT TO CONSTRUCT THE SECOND FLOOR AND NOT 20 PERCENT IN THE CONSTRUCTED GROUND FLOOR OF THE PROPERTY AS STATED IN HIS ASSESSMENT ORDER PARA - 7. IT IS LOGICAL AND LEGALLY CORRECT THAT 20 PERCENT S HARE OF THE PROPERTY WOULD MEAN SOME PART OF LAND WHICH WILL BE COMMON T O ALL SHAREHOLDERS (LATER THE FLOOR OR APARTMENT OWNERS) WHICH WILL BE USED A S PARKING AND ACCESS TO THE SECOND FLOOR. THIS 20 PERCENT SHARE IN THE HOUSE HA S BEEN WRONGLY PRESUMED BY THE LEARNED ASSESSING OFFICER TO THE EXCLUSIVE RIGH T OF THE ASSESSEE. THIS IS A COMMON AREA WHEREIN, THE 20 PERCENT (AS PER THE WRO NG ASSUMPTION OF THE LEARNED ASSESSING OFFICER) IS COMMON AND TO BE SHAR ED AND NOT UNDER THE EXCLUSIVE CONTROL OF THE ASSESSEE. ITA 791/CHD/2016 A.Y. 2012-13 PAGE 11 OF 26 SIMILARLY, THE STAIRS ARE COMMON FOR ACCESS PURPOSE S ONLY. IT IS VERY CLEARLY MENTIONED THAT THE FLOORS WOULD BE DEMARCATED AND IN THE EXCLUSIVE CONTROL OF THE OWNERS. THE COMMON AREA IS NOT TO BE BOUND BUT A RIGHT TO P ASSAGE AND PARK FOR THE OWNERS (APARTMENT OR FLOOR OWNERS). THE ELECTRICITY METERS FOR EVERY FLOOR WOULD BE SEP ARATE AND THE WATER METERS WOULD ALSO BE SUBSEQUENTLY SEPARATE WHICH CL EARLY INDICATES THAT THE OWNERSHIP WOULD BE SEPARATE OF EACH FLOOR. IN THE EVENT THE ASSESSEE WAS NOT THE OWNER IN 20 P ERCENT SHARE, THE ASSESSEE COULD NOT HAVE CONSTRUCTED OR HAVE RIGHTS TO CONSTRUCT THE SECOND FLOOR OF THE PROPERTY WHICH WOULD BE THE EXCLUSIVE DOMAIN AND IN THE OWNERSHIP OF THE ASSESSEE WITH A RIGHT OF PASSAGE AND PARKING IN THE FRONT COURTYARD AND STAIRS COMMONLY. 13.4 THE DECISION OF THE HON'BLE DELHI HIGH COURT RELIED UPON BY THE AO WAS ALSO DISTINGUISHED ON THE FOLLOWING REASONING : THE LEARNED ASSESSING OFFICER HAS CITED THE JUDGEM ENT OF THE HON'BLE DELHI HIGH COURT OF 'COMMISSIONER OF INCOME TAX VS GITA D UGGAL (ITA 1237/2011) WHEREIN HE HAS QUOTED SELECTIVELY AS MENTIONED ON P AGE 11 OF THE ASSESSMENT ORDER. A S LONG AS THE ASSESSEE ACQUIRES A BUILDING, WHICH M AY BE CONSTRUCTED FOR THE SAKE CONVENIENCE IN SUCH A MANNER AS TO CON SIST OF SEVERAL UNITS WHICH CAN IF THE NEED ARISES BE CONVENIENTLY AND INDEPENDENTLY USED AS INDEPENDENT RESIDENCE, THE REQUIREMENT OF T) SECTION SHOULD BE TAKEN TO HAVE BEEN SATISFIED'. THE LEARNED ASSESSING OFFICER HAS FAILED TO APPRECI ATE THAT THE OWNER IN THE ABOVE CASE WAS ONLY ONE AND NOT THREE DIFFERENT OWN ERS WHO HAVE THE LEGAL OWNERSHIP OF DIFFERENT FLOORS/ APARTMENTS WHEN BUIL DING WOULD BE CONSTRUCTED. THE MATERIAL QUESTION IN THIS CASE WAS THE ASSESSEE ENTITLED TO CLAIM THE DEDUCTION UND SECTION 54 OR NOT THE OWNERSHIP OF AL L THE FLOORS IN THE ABOVE CASE WAS WITH ONE OWNER ONLY AND NOT WITH DIFFERENT OWNERS. FURTHER, THE REQUIREMENT IN THE ABOVE CASE WAS FOR RESIDENTIAL USE AND NOT COMMERCIAL USE. HEREIN, THE INTENTION OF THE AS SESSEE WAS TO ACQUIRE THE SAME FOR HIS STOCK IN TRADE A, BUSINESS. THIS JUDGEMENT IS NOT APPLICABLE TO THE ASSESSEE'S CASE AS FIRSTLY THE ASSESSEE IS NOT CLAIMING THE DEDUCTION UNDER SECTIO N 54 OR 54F FOR HIS STOCK IN TRADE. THE SECOND FLOOR APARTMENT IS NOT IN EXISTEN CE I.E. IT IS NOT BEEN CONSTRUCTED. 14. HOWEVER, NOT CONVINCED WITH THE ARGUMENTS, THE CIT(A) AFTER EXTRACTING THE WRITTEN SUBMISSIONS AND SUMMING UP OF THE CASE BY THE AO, DISMISSED THE ASSESSEE'S APPEAL HOLDING AS UNDER : THE APPELLANT DID NOT FILE ANY JUSTIFICATION IN CL AIM OF HIS DEDUCTION U/S 54F INSPITE OF THE VARIOUS OPPORTUNITIES GIVEN BY THE AO DURING ASSESSMENT PROCEEDINGS AND I VIEW OF THE SAME, DEDUCTION CLAIM BY THE APPELLANT WAS DISALLOWED BY THE AO. I HAVE PERUSED SUBMISSIONS OF THE APPELLANT. THE AP PELLANT HAS NOT DENIED THE CONTENTION OF THE AO THAT HE OWNED TWO HOUSES ON TH E DATE OF TRANSFER OF THE ORIGIN, ASSET WHICH WAS ITSELF IN CONTRAVENTION WIT H THE PROVISO (A) (I) OF SECTION 54F(L),THUS NOT FULFILLING THE CONDITIONS THEREIN A ND HENCE NOT ELIGIBLE FOR DEDUCTION U/S 54F. IT HAS BEEN CONTENDED BY THE APP ELLANT THAT THE HAD JUST 20% SHARE IN THE RESIDENTIAL HOUSE NO. 544, SECTOR-10, CHANDIGARH AND HELD THE SAME AS STOCK IN TRADE. PART OWNERSHIP OF RESIDENTI AL HOUSE DOES NOT GIVE ANY IMMUNITY AS PER PROVISIONS OF THE SECTION 54F OF TH E ACT AND THE APPELLANT IS TREATED AS OWNER OF THAT PROPERTY. IT HAS ALSO BEEN STATED THAT THE APPELLANT HAD ITA 791/CHD/2016 A.Y. 2012-13 PAGE 12 OF 26 RIGHT TO CONSTRUCT THE SECOND FLOOR OF THE PROPERTY AS PER THE AGREEMENT BETWEEN THE PARTIES, WHICH IS NO WAY EFFECTS THE STATUS OF THE APPELLANT AS CO OWNER OF PROPERTY. THE CONTENTION OF THE APPELLANT IS NOT ACCEPTED AS THE APPELLANT IS PART-OWNER OF THE SECOND PROPERTY IN SECTOR-10 AND THE AGREEMENT WITH REGARD TO SECOND FLOOR OWNERSHIP IS ONLY SELF-SERVING DOCUMENT. THE CONTEN TION REGARDING THE SAME BEING STOCK IN TRADE IS ALSO NOT ACCEPTED AS IT NEI THER RELEVANT IN THE PRESENT CONTEXT AND THE PROPERTIES SOLD HAVE BEEN OFFERED T O TAX UNDER THE HEAD CAPITAL GAINS AND NOT AS BUSINESS INCOME BY ASSET ON THE DATE OF TRANSFER OF ORIGINAL ASSET, THE APPELLANT IS NOT ELIGIBLE FOR DEDUCTION U/S 54F IN VIEW OF PROVISO (I) TO SECTION 54F(1) OF THE ACT. FURTHER, THE APPELLANT IS ALSO INELIGIBLE FOR DEDUC TION CLAIMED IN VIEW OF PROVISO (II) TO SECTION 54 (1) OF THE ACT, AS HE HA S PURCHASED ANOTHER RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANSFER OF THE ORIGINAL ASSET. THE APPELLANT HAS ALSO NOT FILED CERTIFICATE/PROOF THOUGH SPECIFICALLY ASKED FOR BY THE AO FOR NOT HAVING TRANSFERRED THE 'NEW ASSET ' WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF PURCHASE. THE SAME WAS NOT F ILED DURING THE APPELLATE PROCEEDINGS ALSO SO AS TO SATISFY CLAUSE 3 OF SECTI ON 54F. 15. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 16. THE LD. AR ADDRESSING THE WRITTEN SUBMISSIONS EXTRACT ED IN THE IMPUGNED ORDER AND THE SUBMISSIONS EXTRACTED IN THE ASS ESSMENT ORDER READ ALONGWITH DOCUMENTS AVAILABLE IN THE PAPER BOO K SPECIFIC PAGES 79 TO 116 SUBMITTED THAT THE CONCLUSIONS DRAWN B Y THE CIT(A) WERE COMPLETELY DE-HORSE THE FACTS AND LAW. CARRYING US THROUGH THE RELEVANT DOCUMENTS IN THE PAPER BOOK WHICH CONSISTS OF C OPY OF THE SALE DEED DATED 06.12.2012 IN RESPECT OF SCO: 226-227, SE CTOR 34A, CHANDIGARH ( PAGE NO. 79-83);COPY OF THE SALE DEED DATED 2 7.10.2010 IN RESPECT OF H. NO. 544, SECTOR 10, CHANDIGARH (PAGE NO. 84 -92); COPY OF THE INTER-SE-AGREEMENT EXECUTED ON 28 TH OF OCTOBER,2010 BETWEEN SHRI BALBIR SINGH, SHRI BARJINDER SINGH SE KHON & SMT. NAVEDEP KAUR (PAGE NO. 93-95); COPY OF THE DEED OF EXCHA NGE DATED 04.02.2013 IN RESPECT OF H. NO. 1016, SECTOR 8C, CHANDIGARH ( PAGE NO. 96-101); COPY OF THE INTER-SE-AGREEMENT EXECUTED ON 5' OF FEBRUARY,2013 BETWEEN SHRI BALBIR SINGH, SHRI BARJ INDER SINGH SEKHON & SMT. NAVEDEP KAUR ( PAGE NO. 102-104); COPY OF T HE DEED OF EXCHANGE DATED 18.03.2013 IN RESPECT OF H.NO. 1016, SE CTOR 8C, CHANDIGARH (PAGE NO. 105-113)IT WAS HIS SUBMISSION THAT TH E OBSERVATIONS OF THE CIT(A) IN UN-NUMBERED PAGE 20 THAT T HE ASSESSEE DID NOT FILE ANY JUSTIFICATION FOR CLAIMING DEDUCTION U/S 54F D ESPITE OPPORTUNITIES WAS PATENTLY INCORRECT AND ARBITRARY. THE MECHANICAL DISMISSAL OF THE ASSESSEES CLAIM, IT WAS SUBMITTED, WAS EVID ENT FROM THE ORDER ITSELF. IT WAS ARGUED THAT ON A FAIR CONSIDERAT ION OF THE ITA 791/CHD/2016 A.Y. 2012-13 PAGE 13 OF 26 DETAILED SUBMISSIONS EXTRACTED BY HIM IN THE ORDER ITSELF AND THE COPY OF THE COMPLETE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) RU NNING INTO 21 PAGES ACCOMPANIED BY SUPPORTING DOCUMENTS 22-1 32 IN THE PAPER BOOK ON RECORD, IT WAS SUBMITTED, WOULD SHOW THAT THE SAID FINDING IS PERVERSE AND INCORRECT. APART FROM THESE SUBMIS SIONS MADE BEFORE THE CIT(A), THE DETAILED REPLIES FILED BEFORE THE AO, CO PIES OF WHICH ARE AVAILABLE AT PAGES 133 TO 143, IT WAS SUBMITTED WOULD SHOW THAT THE ASSESSEE'S CLAIM HAS BEEN REJECTED WITHO UT ADDRESSING THE FACTS COMPLETELY. ACCORDINGLY, ASSAILING THE CONCLUSION THAT ASSESSEE HAS NOT DENIED THE CONTENTION OF THE AO THAT HE OWNED TWO HOUSES ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IT W AS HIS SUBMISSION, WAS PATENTLY INCORRECT AND FALSE AS THROUGH O UT THE SUBMISSIONS AS EXTRACTED IN THE ASSESSMENT ORDER AND T HE IMPUGNED ORDER, THE ASSESSEE HAS CONSTANTLY BEEN CANVASSING TH AT THE CONCLUSIONS OF THE AO ON THE FACTS ARE CONSIDERED BY HIM IS CONTRARY TO RECORD. IT WAS HIS SUBMISSION THAT ON A DETAILED READ ING OF THE SUBMISSION EXTRACTED IN THE IMPUGNED ORDER ITSELF, IT CANNOT BE DENIED IN ALL FAIRNESS THAT THE ASSESSEE HAS CONSISTENTLY ARGUED THAT HE ONLY HAD THE RIGHTS TO CONSTRUCT THE SECOND FLOOR A ND THIS VENTURE HAD BEEN DONE AS A BUSINESS ACTIVITY AND SINCE AT THE R ELEVANT POINT OF TIME, THE SECOND FLOOR NEVER STOOD CONSTRUCTED, THE A SSESSEE COULD ONLY TRANSFER THAT RIGHT BUT IT CANNOT BE UNDERSTOOD THAT A RESIDENTIAL HOUSE STOOD EXISTED AS FAR AS THE ASSESSEE IS CONCERNE D. THUS, IN THE CIRCUMSTANCES, THE OCCASION FOR ANY ONE TO CONCLUDE THA T THE ASSESSEE HAD A RESIDENTIAL HOUSE AVAILABLE TO HIM DID NOT A RISE. ACCORDINGLY, THE OBSERVATION OF THE CIT(A) THAT PART OWNE RSHIP OF RESIDENTIAL HOUSE WHILE ADDRESSING 20% SHARE IN RESIDENTIAL H OUSE, IT WAS HIS SUBMISSION, WAS INCORRECT AND IS A CASE OF DELIBERAT E MIS- UNDERSTANDING OF FACTS AS THE RIGHT OWNED BY THE ASSESS EE COULD ONLY TRANSLATE INTO REALITY WHEN THE SECOND FLOOR STOOD CONS TRUCTED. THE OBSERVATION OF THE CIT(A) THAT THE ASSESSEE HAD OFFERED T HE INCOME FROM THE SALE OF THE RIGHT TO CONSTRUCT UNDER THE HEAD CAPITAL GAINS AND NOT AS BUSINESS INCOME IT WAS SUBMITTED, HAD BEEN VARIOUSLY ADDRESSED BEFORE THE AO AS WELL AS THE CIT(A) WHEREIN IT HAD BEEN EXPLAINED THAT THIS WAS ON ACCOUNT OF THE MISTAKE OF THE FRONT OFFICE OF THE ASSESSEE'S COUNSEL AT THE VERY FIRST INSTANCE TH E MISTAKE COULD BE POINTED OUT IT HAD BEEN DONE. IT WAS SUBMITTED THAT THERE ARE ITA 791/CHD/2016 A.Y. 2012-13 PAGE 14 OF 26 MORE THAN AMPLE DECISIONS IN THE PUBLIC DOMAIN STARTING WIT H THE DECISION OF THE APEX COURT IN THE CASE OF PRICE WATER COO PERS PRIVATE LIMITED VS CIT (CIVIL APPEAL 6924 2012 (SLP 10700 OF 2009), CIT VS DEEPAK KUMAR (IT APPEAL NO. 191 OF 2009 38 DTR 118 (P&H) , CIT VS SHDHARTHA ENTERPRISES 322 ITR 80 (P&H) AND CIT VS S. D HANBAL 309 ITR 268 (DELHI) THAT ON ACCOUNT OF A MISTAKE OF THE COUNSE L, THE ASSESSEE CANNOT BE MADE TO SUFFER. THE FACTS ON RECORD ARE THAT THE ASSESSEE VENTURED IN A NEW AREA AND AS WOULD BE EVIDEN T FROM THE SERIES OF INVESTMENTS MADE AND SOLD, IT WAS SUBMITTED, TH AT THE INTENTION OF THE ASSESSEE STANDS WELL ESTABLISHED. IN THE SAID OBSERVATIONS, RELIANCE WAS ALSO PLACED UPON THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF M.B.RAMESH VS ITO 3 20 ITR 451 (KAR). COPY AVAILABLE AT PAGE 122 OF THE PAPER BOOK WHEREIN THE FINDING OF THE ITAT HAD BEEN AFFIRMED IN APPEAL BY THE HON' BLE HIGH COURT AS THE ALLEGED MUD CONSTRUCTION CLAIMED TO BE A R ESIDENTIAL HOUSE FOR WHICH EVEN RENT HAD BEEN SHOWN TO HAVE BEEN RECEIVED WAS HELD TO BE NOT ALLOWABLE AS IT DID NOT SATISFY THE REQUIREM ENT OF A HABITABLE RESIDENTIAL CONSTRUCTION. IT WAS ARGUED THAT TH E SAID CLAIM FAILED AS THE ASSESSEE WAS HELD TO BE NOT ENTITLED TO SAT ISFYING THE CLAIM OF HABITABLE RESIDENTIAL HOUSE. ACCORDINGLY, IT WAS HIS SUBMISSION THAT THE CLAIM OF THE ASSESSEE WHERE RIGHT TO CONSTRUCT WAS ACTUALLY THE ASSET IS ALLOWABLE BOTH IN LAW AND ON FACTS. 17. THE LD. CIT-DR HEAVILY RELYING UPON THE CONSISTENT OR DERS OF THE AO AND THE CIT(A) SUBMITTED THAT THE ASSESSEE HAS SELF CREATED THE DOCUMENTS TO JUSTIFY ITS CLAIM AS ALLOWABLE U/S 54F AS NONE OF THESE DOCUMENTS WERE PLACED BEFORE THE AO ALONGWITH THE RETURN AND IT IS ONLY WHEN HE WAS REQUIRED TO JUSTIFY HIS CLAIM U/S 5 4F BY THE AO THAT HE HAS SO PLANNED HIS AFFAIRS BY WAY OF SELF CREATED DOCUMENTS TO SHOW THAT THE CLAIM IS ALLOWABLE. ACCORDINGLY, IT WAS HIS SUB MISSION THAT THESE DOCUMENTS DO NOT INSPIRE ANY CONFIDENCE AND THE CLAIM HAS RIGHTLY BEEN REJECTED BY THE AO. IT WAS ALSO HIS S UBMISSION REFERRING TO PAGE NO. 86 OF THE PAPER BOOK WHERE THE TR ANSACTION BEING ENTERED INTO RECORD THAT AN OCCUPATION CERTIFICATE HAS BEEN MADE AVAILABLE. THUS, IT WAS ARGUED THAT THE CONSTRUCTION WAS COMPLETE. IN THE CIRCUMSTANCES, THE ARGUMENTS OF THE A SSESSEE TO ARGUE THAT SECOND FLOOR WAS NOT IN EXISTENCE, IT WAS SUBM ITTED, CANNOT BE ACCEPTED. IT WAS ALSO HIS SUBMISSION THAT THE INTENTION OF ITA 791/CHD/2016 A.Y. 2012-13 PAGE 15 OF 26 THE ASSESSEE CAN BE SEEN THAT HE IS ENTERING INTO A S ERIES OF TRANSACTIONS AND EXCHANGING THE PROPERTIES WHICH WOULD S HOW THAT THE DOCUMENTS WHICH HAVE BEEN PLACED BEFORE THE AO FOR THE VERY FIRST TIME HAVE BEEN CREATED SOLELY TO JUSTIFY THE CLAIM O F SECTION 54F. ACCORDINGLY, RELYING ON THE CONSISTENT ORDERS OF AO AND THE CIT(A), IT WAS HIS SUBMISSION THAT THE APPEAL OF THE ASSESSEE MAY B E DISMISSED. 18. THE LD. AR IN REPLY TOOK STRONG EXCEPTION TO THE AR GUMENTS OF THE LD. DEPARTMENTAL REPRESENTATIVE WHICH WERE BASED ON A STRAY SENTENCE USED IN PAGE 86 OF THE PAPER BOOK. REFERRING T O THE SAID PAGE, IT WAS HIS SUBMISSION THAT THE LD. CIT-DR HAS READ OUT FROM THE SALE DEED WHERE THE SELLER AS PER PRACTICE AND USAGE IS JUSTIFYING THAT HE HAS A GOOD TITLE TO TRANSFER THE PROPERTY. THE OCCUP ATION CERTIFICATE BEING REFERRED TO, IT WAS HIS SUBMISSION IS WELL UND ERSTOOD THAT IT IS GIVEN EVEN WHEN A BARE MINIMUM PERCENTAGE OF A REA HAS BEEN CONSTRUCTED WHICH WOULD ENTITLE THE OWNER OF THE PLO T TO SEEK A COMPLETION CERTIFICATE FROM THE AUTHORITY. THE EXISTENCE OF AN OCCUPATION CERTIFICATE IN NO WAY SUGGESTS THAT THE SECON D FLOOR STOOD CONSTRUCTED. REFERRING TO THE SAID PAGES I.E. PAPER BOOK P AGES 84-92 WHICH IS THE COPY OF SALE DEED OF HOUSE NO. 544 SECTOR 10 D DATED 27.10.2010 REFERRED TO BY THE LD. CIT-DR IT WAS SUBMITTED THAT THE DOCUMENTS WOULD SHOW THAT COL. JAI DEEP SINGH DANG SOLD H IS PROPERTY TO THE ASSESSEE WHO HAD 20% SHARE IN THE SA ID PROPERTY WHICH SPECIFICALLY WAS FURTHER ELABORATED IN THE INTER-SE A GREEMENT ENTERED INTO AMONGST THE PARTNERS TO THE RIGHT TO CON STRUCT SECOND FLOOR ON THE ROOF/TOP OF FIRST FLOOR THAT TOO WHEN THE FIRST FLOOR WAS CONSTRUCTED. THE OTHER PARTNERS TO THE PURCHASE WER E THE HUSBAND WIFE DUO WHO HAD THE MAJORITY SHARE I.E. MRS. NAVDEEP KAU R (25% SHARE) AND HER HUSBAND SHRI BARJINDER SINGH (55% SHARE). THE PROPERTY HAD A BUILT UP SINGLE STOREY WHICH FACT IS MENTION ED IN PAGES 84, 87 AND 90 AND TWICE ON PAGE NO. 86. THE SAID P ROPERTY WAS COMPLETELY DEMOLISHED AND THEREAFTER IN THE FRESH CONSTRU CTION EVEN A BASEMENT WAS GOT CONSTRUCTED AND THE RESULTANT EXC HANGE WITH PROPERTY 1016 RECORDS THIS FACT. FOR THE SAID PROPERT Y, ALONGWITH FRESH CONSTRUCTION HAVING A BASEMENT, THE PARTIES HAD RE CEIVED IN EXCHANGE HOUSE NO. 1106 PLUS RS. 1 CRORE RUPEES. THUS, THE OCCASION TO CONSIDER THAT THE ASSESSEE HAD A HOUSE IN 544 WAS ITA 791/CHD/2016 A.Y. 2012-13 PAGE 16 OF 26 COMPLETELY INCORRECT AND UNFAIR. THE SELECTIVE READING OF T HE DOCUMENTS TO WHICH THE DEPARTMENT HAS RESORTED WAS S TRONGLY OBJECTED TO. EVEN THE CIT(A) IN THE ORDER RELIED UPON BY THE REVENUE, IT WAS SUBMITTED, HAS REPEATEDLY FAILED TO ADDRESS THE B ASIC FACTS MENTIONED IN THE PRIMARY DOCUMENT. 18.1. ADDRESSING THE DEPARTMENTAL ARGUMENTS THAT THE DO CUMENTS WERE FILED ONLY BEFORE THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS HIS SUBMISSION THAT THE CIT-DR WELL KNO WS THAT THIS WAS THE FIRST TIME WHEN THE DOCUMENTS COULD BE FILED AND THERE IS NO PROVISION FOR AN ASSESSEE TO FILE THE DOCUMENTS ALON GWITH THE RETURN AND THUS, THESE GENERAL ARGUMENTS OF THE LD. CIT -DR ASSAILING THE CORRECTNESS OF THE DOCUMENTS TRYING TO CREATE A P REJUDICE WHERE NONE EXISTS IN THE MANNER ASSAILED WAS STRONGLY OBJECTE D TO. IT WAS HIS SUBMISSION THAT IT WAS NOT EVEN THE CASE OF THE AO O R THE CIT(A) THAT THE DOCUMENTS WERE NOT FILED EARLIER. THEY HAVE ONLY COMMEN TED UPON THE DOCUMENTS AS SELF-SERVING. ACCORDINGLY, THE ARGUMENTS OF THE CIT-DR STATING THAT THERE WAS NO THIRD PARTY EVID ENCE, IT WAS HIS SUBMISSION, REQUIRES TO BE DISMISSED. IT WAS HIS SUBMISSION THAT THE TRANSACTIONS ARE ENTERED INTO BY THE ASSESSEE ALONGWITH THE OTHER PARTNERS TO THE TRANSACTION AND ALL OF THEM HAVE ABIDED BY THE STATED TERMS AND HAVE ACTED ON THEM. THE CASUAL DESCRIPTION BY THE CI T-DR SO AS TO PREJUDICE THE BEND THAT THESE WERE ASSESSEE 'S FAMILY MEMBERS, IT WAS HIS SUBMISSION, IS CONTRARY TO RECORD AND FACTS AND EVEN IF THEY HAD BEEN FAMILY MEMBERS, IT WAS HIS ARGUMENT THERE IS NO BAR TO ENTER INTO TRANSACTIONS WITH FAMILY MEMBERS OR PARTNERS. IT WAS HIS SUBMISSION THAT IT WAS NOT THE CASE OF THE AO OR THE CIT(A) ALSO THAT THESE WERE FAMILY MEMBERS. THE FACT REMAINS T HAT THESE WERE PERSONS WITH WHOM THE ASSESSEE ENTERED INTO A SE RIES OF TRANSACTIONS AS A BUSINESS VENTURE AND THEY WERE NOT FAMILY MEMBERS. THUS, THE ASSUMPTION OF THE LD. CIT(A) TO CREATE DOUBT ON ISSUES WHICH ARE NOT EVEN THE CASE OF THE AO BASED ON INCORRECT FACTS WAS STRONGLY OBJECTED TO. THE DOCUMENTS RELIED UPON B Y THE ASSESSEE, IT WAS SUBMITTED, WERE NOTARIZED DOCUMENTS AND WERE THE DOCUMENTS ON THE BASIS OF WHICH THE ASSESSEE AS PER HIS UNDERSTANDING CARRIED ON HIS TRANSACTIONS. ACCORDINGLY, IT WAS HIS SUBMISSION THAT THE CLAIM IS ALLOWABLE. ITA 791/CHD/2016 A.Y. 2012-13 PAGE 17 OF 26 19. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS AVAILABLE IN THE RESPECTIVE OR DERS OF THE AO AND THE CIT(A) HAVE BEEN ALLUDED TO AT LENGTH IN THE E ARLIER PART OF THIS ORDER. THE SUBMISSION OF THE PARTIES IN RESPECT THER ETO HAVE ALSO BEEN ELABORATELY DISCUSSED. IN ORDER TO DECIDE THE ISSU E, IT IS RELEVANT TO FIRST ADDRESS THE DOCUMENTS PLACED BY THE ASSESSEE IN THE PAPER BOOK. THE REFERENCE MADE TO THE FACTS REFERRED TO THER EIN NEED TO BE APPRECIATED IN THE CONTEXT OF THE DEPARTMENTAL CLAIM THAT THESE DOCUMENTS ARE AN AFTER THOUGHT AND SELF SERVING AS THE SE HAVE NOT BEEN FILED ALONGWITH THE RETURN AND SINCE THESE WERE DOC UMENTS WHEREIN THERE WAS NO THIRD PARTY EVIDENCE, THEIR CREDIBILITY WAS CONSIDERED TO BE NOT PROVED. ACCORDINGLY, THEY HAVE B EEN ALLEGED TO HAVE BEEN CREATED SOLELY FOR THE PURPOSES OF CLAIMING RELIE F U/S 54F OF THE INCOME TAX ACT, 1961. AS OPPOSED TO THE STRONG OPPOSITION POSED BY THE LD. AR, THE TAX AUTHORITIES HAVE DISCARDED THE DO CUMENTS TREATING THEM TO BE SELF SERVING. THE LD. AR ON BEHALF OF TH E ASSESSEE HAS ARGUED THAT THERE IS NO OCCASION FOR THE ASSESSEE TO FILE THE DOCUMENTS ALONGWITH THE RETURN WHICH POSITION HAS NOT B EEN DISPUTED BY THE LD. CIT-DR. THE LD. AR HAS ALSO CANVASSED T HAT THESE HAVE BEEN FILED IN THE COURSE OF THE ASSESSMENT PROCEEDIN GS AS THAT WAS THE VERY FIRST INSTANCE WHEN THESE COULD HAVE BEEN FILED. THE SAID POSITION I.E. THAT THESE WERE MADE AVAILABLE AT THE ASS ESSMENT STAGE IS BORNE OUT FROM RECORD AND THE LD. CIT-DR DID NO T DISPUTE THIS POSITION ALSO. THUS, THE STRONG DEPARTMENTAL OBJECTIO NS TO THE DOCUMENTS ON THE GROUND THAT SINCE THEY WERE PROVIDED AT THE ASSESSMENT STAGE FOR THE FIRST TIME BY ITSELF WE FIND DOES N OT IN ANY WAY DETRACTS FROM THE CORRECTNESS OF THE SAME. 19.1 IT IS ALSO NECESSARY TO ADDRESS THE DEPARTMENTAL A RGUMENT THAT THE ASSESSEE HAS ENTERED INTO SOME COLLUSIVE DOCUMENTS WITH HIS FAMILY MEMBERS. THE SAID ARGUMENT INITIALLY MADE BY THE LD. CIT-DR WAS ULTIMATELY GIVEN UP. THE POSITION AS PER RECORD IS TH AT THE ASSESSEE AS PER HIS CLAIM SUPPORTED BY SALE DEEDS AND E XCHANGE DEEDS REGISTERED WITH THE LAND REVENUE AUTHORITIES HAD 20% SHARE IN THE RESPECTIVE PROPERTIES AND THE REMAINING SHARE OF 55% AND 25% SHARES IN THOSE PROPERTIES VESTED WITH SHRI BALJINDE R SEKHON AND HIS WIFE NAVDEEP KAUR RESPECTIVELY WHO WERE NOT ASS ESSEE'S RELATIVES. AS NOTED, THE LD. CIT-DR GAVE UP THE PLEA OF FAM ILY ITA 791/CHD/2016 A.Y. 2012-13 PAGE 18 OF 26 COLLUSION HOWEVER, INSISTED THAT THE DOCUMENTS HAVE BEEN CREATED SOLELY FOR THE PURPOSES OF CLAIMING DEDUCTION U/S 54F. IN ORDER TO ADDRESS THE CORRECTNESS OF THE SAID ARGUMENT, IT WOULD BE APPROPRIATE, AS NOTED ABOVE, TO CONSIDER THE SPECIFIC DOCUMENTS RE LIED UPON BY THE ASSESSEE RIGHT FROM THE STAGE OF ASSESSMEN T PROCEEDINGS. THE FIRST DOCUMENT RELIED UPON BY THE ASSESSEE IS COPY O F THE SALE TO DR. DEVINDER SINGH S/O DR. S.S. VIRDI, MOHALI OF PROPERTY DESC RIBED AS SHOP-CUM-OFFICE NO. 2 TO 6 AND 2 TO 7 ON 06.12.2012 FOR A SPECIFIC SUM WHEREIN THE ASSESSEE HAD 33.50% SHARE. SINCE THERE IS NO DISPUTE ON THIS DOCUMENT, EITHER ON THE EVENT OR AMOUNT OR FOR THAT MATTER THE SPECIFIC SHARE OF THE ASSESSEE IN THE SAID PROPERTY AS IT HAS BEEN ACCEPTED BY THE DEPARTMENT AS IT IS ACCORDINGLY T HE CONTENTS OF THE SAID DOCUMENT NEED NOT BE FURTHER DELIBERATED UPON. 19.2 THE NEXT DOCUMENT PLACED ON RECORD ON BEHALF OF THE ASSESSEE IS THE PURCHASE OF HOUSE NO. 544 IN SECTOR 10D CHANDIGAR H FROM RETIRED COLONEL JAIDEEP SINGH DANG, RESIDENT OF VASANT KUNJ , DELHI ON 27.10.2010 BY THE ASSESSEE ALONGWITH SMT. NAVDEEP KA UR W/O SHRI BALJINDER SINGH SEKHON AND SHRI BALJINDER SINGH SEKH ON. THE SPECIFIC PROPERTY WHEREIN THE SHARE OF THE ASSESSEE IS D ESCRIBED AS 20% SHARE. THE COPY OF THE SALE DEED IS AVAILABLE AT PAGES 84 TO 92 WHEREIN AT THE INTERNAL PAGE 2 (PAGE 85 OF THE PAPER BOO K) THE RESPECTIVE SHARE OF THE ASSESSEE HAS BEEN DESCRIBED IN THE FOLLOWING MANNER : (2) (I) SH. BALBIR SINGH, S/O SH. AVTAR SINGH, R/O H.NO. 455, SECTOR 37-A, CHANDIGARH (PAN NO..) (VENDEE OF 20% SHARE), (II) SMT. NAVDEEP KAUR, W/O SH. BARJINDER S INGH SEKHON (PAN NO. AIRPK8605N) (BENDEE OF 25% SHARE) AND (III ) SH. BARJINDER SINGH SEKHON, S/O SH. MOHINDER PAL SINGH SEKHON (PAN NO. AQPPS5295L)(VENDEE OF 55% SHARE), BOTH R/O H.NO. 1538, SECTOR 18-C, CHANDIGARH (HEREINAFTER REFERRED TO AS THE VENDEES, WHICH TERM SHALL WHERE THE CONTEXT SO ADMITS INCLUDE THEI R HEIRS, ASSIGNEES, EXECUTORS, SUCCESSORS, LEGAL REPRESENTATIVES AND ADMINISTRATOR S) OF THE OTHER PART OF THIS DEED. 19.3 SINCE THE LD. CIT-DR ON BEHALF OF THE REVENUE HAS ALS O TAKEN VARIOUS OTHER ARGUMENTS NAMELY THAT IT WAS A HABITABLE HOUSE WHEREIN THE ASSESSEE'S SHARE OF 20% STATED TO BE CONS ISTING OF SECOND FLOOR WAS NOT RELEVANT AS THE ASSESSEE HAD THE USAGE O F THE ENTIRE 20% OF THE CONSTRUCTED AREA; AND EVEN OTHERWISE, IT WAS ALREADY HAVING THE SECOND FLOOR CONSTRUCTED SINCE AS PER PAGE 8 6 THE PAPER BOOK, THE SELLER HAD OBTAINED AN OCCUPATION CERTIFICATE FRO M THE ITA 791/CHD/2016 A.Y. 2012-13 PAGE 19 OF 26 ESTATE OFFICER, U.T. CHANDIGARH. WE FIND THAT IN THE SAID DOC UMENT, THE MERE REFERENCE TO THE FACT AT PAGE 86 OF THE SALE D EED THAT THE SELLER HAD A GOOD TITLE AS THERE WAS AN OCCUPATION CERTIFIC ATE OBTAINED BY ITSELF CANNOT BE READ IN ISOLATION AS IN THE SALE DEED AT PAPER BOOK PAGE 84, TWICE AT PAGE 86, AGAIN AT PAGE 87 AND PAGE 90 IT IS CLEARLY MENTIONED THAT THERE WAS A CONSTRUCTION O F SINGLE STORY ON THE SAID PLOT. THUS, REFERENCE TO AN OCCUPATION CERTIFICATE DOES NOT IN ANY MANNER DETRACT FROM THE STATED CLAIM TH AT IT WAS A SINGLE STORY CONSTRUCTION. IT IS SEEN THAT THE SALE IS BY WAY OF REGISTERED SALE DEED IS REGISTERED BEFORE SUB REGISTRAR, C HANDIGARH WHEREIN THE SHARE OF THE ASSESSEE IS ALSO CLEARLY DEFINED AS 20%. THE CORRECTNESS OF THE SAID DOCUMENT CANNOT BE ASSAILED AS AN AFTER THOUGHT AS IT IS A THIRD PARTY EVIDENCE DULY REGISTERED BEFORE THE LAND REVENUE AUTHORITIES. THUS, THE ARGUMENTS ON BEHALF OF THE REVENUE TO THAT EXTENT FOR WANT OF CONTRARY EVIDENCE, W E FIND CANNOT BE ACCEPTED. 19.4 THE NEXT DOCUMENT RELIED UPON ON BEHALF OF THE ASSE SSEE IS THE INTER-SE AGREEMENT DATED 28.10.2018, COPY OF THIS HAS BEE N PLACED AT PAGES 93-94 AS AN ANNEXURE TO THE WRITTEN SUBMISSIONS BEFORE THE AUTHORITIES. A PERUSAL OF THE SAME SHOWS THAT HEREIN ALSO , THE SPECIFIC SHARES OF THE ASSESSEE AND HIS PARTNERS ARE AGA IN MENTIONED AND THE RIGHT OF THE ASSESSEE TO CARRY OUT CONSTRUCT ION ON THE ROOF OF THE FIRST FLOOR IS RECOGNIZED. FOR READY REFERENCE, RELEVANT EXTRACT FR OM PAPER BOOK PAGE 93 TO 95 IS EXTRACTED HEREUNDER FOR READY REFEREN CE : AND WHEREAS, THE FIRST PARTY, SECOND PARTY AND THE THIRD PARTY ARE J OINT OWNERS OF PLOT/HOUSE NO. 544, SECTOR-10, CHANDIGARH AS 20%, 55% AND 25% SHAR EHOLDERS RESPECTIVELY AND THE LAND IN THE SAME PROPORTION. THE HOUSE PRES ENTLY HAS ONLY ONE FLOOR I.E THE GROUND FLOOR, WHICH IS INCOMPLETE. THE/PARTIES HAVE ENTERED INTO THIS AGREEMENT WITH THE INTENTION TO COMPLETE THIS HOUSE UP TO THREE FLOORS. THAT SHRI BALJINDER SINGH SEKHON AND HIS WIFE SMT. NAVDEEP KA UR ARE THE OWNERS OF 55% SHARE AND 25% SHARE RESPECTIVELY WHICH MAKES IT 80% JOINTLY AND CONSTITUTES THE GROUND FLOOR AND FIRST FLOOR, AS PER THE PREVAILING PRACTICE OF DEMARCATION OF ANY RESIDENTIAL PROPERTY IN CHANDIGARH. IN THIS CAS E ALSO THE SECOND AND THIRD PARTY SHALL FIRST COMPLETE THEIR SHARE OF THE PROPE RTY THAT IS GROUND FLOOR AND FIRST FLOOR OF THE HOUSE. ONCE IT IS COMPLETE, THE ROOF OF THE FIR ST FLOOR SHALL BE HANDED OVER TO SHRI BALBIR SINGH TO PROCEED WITH TH E CONSTRUCTION OF HIS SECOND FLOOR. NOW THIS AGREEMENT FURTHER WITNESSED AS UNDER: 1. THAT THE FRONT COURTYARD OF THE HOUSE SHALL BE USED COMMONLY BY ALL THE PARTIES TO THIS AGREEMENT. ITA 791/CHD/2016 A.Y. 2012-13 PAGE 20 OF 26 2. THAT THE STAIRS FROM THE GROUND FLOOR TO THE FIRST FLOOR AND FROM FIRST FLOOR TO THE SECOND FLOOR SHALL BE USED BY THE PARTIES CO MMONLY. 3. THAT ALL THE PARTIES HEREIN MUTUALLY CONFIRM AND UN DERTAKE NOT TO INTERFERE IN THE VACANT AND PEACEFUL POSSESSION OF THE PROPERTY AS DEMARCATED FLOOR WISE WITHOUT THE CONSENT OF THE RESPECTIVE OWNERS. 4. THAT THE PARTIES SHALL PAY THE DUES OF THE ELECTRIC ITY AS PER THE METER READINGS OF THEIR RESPECTIVE ELECTRICITY METERS. 5. THAT THE WATER CHARGES OF THE PROPERTY SHALL BE PAI D BY THE PARTIES IN THE PROPORTION EQUAL TO THEIR RESPECTIVE SHARE IN THE H OUSE, TILL THE TIME ADMINISTRATION ALLOWS THE SEPARATE CONNECTION/METER S TO THE RESPECTIVE THREE PORTIONS UNDER THE OCCUPATION OF THE RESPECTIVE PAR TIES. 6. THAT ALL THE PARTIES ARE FREE AND INDEPENDENT TO SE LL, MORTGAGE OR ASSIGN FULL OR PART/FLOOR OUT OF THEIR RESPECTIVE SHARES, AS PE R THE PREVALENT RULES OF THE ADMINISTRATION. 7. THAT IN THE EVENT ANY OF THE PARTIES SELL OR TRANSF ERS ITS RIGHTS IN THE PROPERTY AS A WHOLE OR ANY PART THEREOF TO ANY PERSON OR PER SONS, THEN IN THAT EVENT, IT WILL ENSURE THAT THE PROSPECTIVE NEW OWNER OF THE P ROPERTY SHALL CONFIRM TO THE OTHER PARTIES THAT THE TERMS HEREIN AGREED TO I N THIS AGREEMENT SHALL BE BINDING ON THE SAID NEW OWNER, WHO WILL AUTOMATICAL LY STEP INTO THE SHOES OF THE PARTY THUS SELLING/TRANSFERRING HIS/HER RIGHTS. 8. EACH PARTY HEREBY AGREES UNCONDITIONALLY, TO INDEMN IFY THE OTHERS AND KEEP INDEMNIFIED THE OTHER PARTIES AGAINST ALL LOSSES, C LAIMS, LITIGATION, PROSECUTION OR DAMAGES ETC OF WHATSOEVER NATURE AS A CONSEQUENC E OF ANY BREACH BY ANY PARTY OF ANY TERM, CONDITIONS OF THE PRESENT AGREEM ENT. 9. THAT IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIE S ON ANY ISSUE RELATING TO THE PRESENT AGREEMENT, THE SAME SHALL BE AMICABLY S ETTLED AMONGST THEMSELVES WITHOUT THE INTERVENTION OF THE COURT. 10. THAT ALL THE PARTIES SHALL NOT MISUSE THEIR RES PECTIVE PORTIONS IN ANY WAY THAT WILL ENDANGER THE INTEREST AND PEACEFUL USE OF THE OTHER PORTIONS, WHICH EVER PARTY INDULGES IN THE MISUSE OR ANY ACT WHICH ATTRA CTS PENALTY OF ANY KIND, IT HAS TO BE BORNE/PAID BY THE DEFAULTING PARTY ONLY. 11. THAT THIS INTER-SE AGREEMENT IS BEING EXECUTED IN DUPLICATE, AND THE ORIGINAL, ON A STAMP PAPER OF RS. 26/-, WILL BE KEPT BY THE S ECOND AND THIRD PARTY (AS PER THEIR REQUEST) AND THE COPY, DULY SIGNED BY ALL THE PARTIES, WILL BE KEPT BY THE FIRST PARTY. IN WITNESS WHEREOF THE SAME THE PARTIES DO HEREBY S ET THEIR HANDS ON THIS DEED ON THIS DAY, MONTH AND YEAR FIRST ABOVE WRITTEN AT CHANDIGARH AND PRESCRIBED OF WITNESSES. 19.5 IT IS SEEN THAT ON THE SAID PROPERTY, CONSTRUCTION WAS CARRIED OUT BY THE ASSESSEE AS IS EVIDENT FROM THE COPY OF THE DEED OF EXCHANGE DATED 04.02.2013 WHEREIN THE PROPERTY NO. 544 WAS EXCHANGED WITH PROPERTY NO. 1016 IN SECTOR 8-C WHEREIN FOR THE CONSTRUCTION ETC. CARRIED OUT A FURTHER PAYMENT OF RS. 1 CRORE WAS RECEIVED BY THE ASSESSEE AND HIS PARTNERS IN THESE SER IES OF VENTURES. THE EXCHANGE DEED IT IS SEEN IS ALSO DULY REGISTERED WITH THE LAND REVENUE AUTHORITIES AND HAS BEEN ENTERED INTO ON BEHALF OF THE ASSESSEE AND HIS OTHER TWO CO-PARTNERS I.E. SMT. NAVDEEP KAUR AND HER HUSBAND SHRI BALJINDER SINGH SEKHON ON ONE SIDE AND THE PROPERTY OWNERS OF THE EXCHANGED PROPERTY SHRI DHARAMPAL SAGORA ITA 791/CHD/2016 A.Y. 2012-13 PAGE 21 OF 26 W/O SHRI GURCHARAN SINGH AND SMT. MANPREET W/O SHRI KUL WANT SINGH ON THE OTHER HAND. COPY OF THE SAME IS AVAILABLE AT PAPER BOOK PAGE 96 TO 101. A PERUSAL OF THE SAID DOCUMENT ALS O REFLECTS THE RESPECTIVE SHARES OF THE ASSESSEE AND HIS CO-OWNERS HA S BEEN DESCRIBED AS CLAIMED AND ON THE PROPERTY I.E. H.NO. 544, THE FOLLOWING CONSTRUCTION AS RECORDED HAD BEEN CARRIED OUT : WHEREAS THE ABOVE MENTIONED SECOND PART ARE THE JO INT ABSOLUTE OWNER OF NEWLY BUILT-UP HOUSE NO. 544, SECTOR 10-D, CHANDIGA RH BEARING R.P. NO. 9246 MEASURING 500.5 SQ. YARDS NEWLY BUILT AS, BASE MENT, GROUND, FIRST AND SECOND FLOOR WITH COMPLETE WOODEN FIXTURES AND CUPB OARDS ETC, MODULAR KITCHEN ON REACH FLOOR, ALL BATHROOM COMPLETE WITH SANITARY FITTINGS AND 1 PASSENGER LIFT. 19.6 THE SAID DOCUMENT AS NOTICED IS ALSO A THIRD PARTY E VIDENCE IN AS MUCH AS IT IS DULY REGISTERED. AS PER THE EXCHANGE D EED BEARING SR.NO. 60 DATED 04.02.2013, THE DESCRIPTION OF THE SAID PROP ERTY AS PER PAPER BOOK PAGE 97 IS AN OLD BUILT UPTO GROUND AND FIRST FLOOR WHICH DESCRIPTION IS AGAIN REPEATED AT PAGE 100 I.E. THE INT ERNAL UN- NUMBERED PAGE 5. FURTHER, IT MAY BE APPROPRIATE TO EXTR ACT THE FOLLOWING CLAUSE FROM THE SAID DOCUMENTS : 7. THAT BOTH THE PART HAVE ASSURED EACH OTHER T HAT THERE IS NO DEFECT IN THE TITLE OF THE PROPERTIES EXCHANGED BETWEEN THEMSELVE S AND IN CASE ANY PARTY IS DEPRIVED OF THE TITLE OR POSSESSION OF THE PROPERTY ON ACCOUNT OF ANY DEFECT IN THE TITLE, THE SAID DEFAULTING PARTY AND THEIR ESTA TE SHALL BE LIABLE TO COMPENSATE THE OTHER PART IN FULL FOR SUCH LOSS OR DAMAGE OR CLAIM ARISING THERE FROM. 8. THAT ALL THE ORIGINAL TITLE DEEDS OF THE RESP ECTIVE PROPERTIES HAVE BEEN ALSO EXCHANGED WITH EACH OTHER PARTIES TO THIS DEED . 9. THAT BOTH THE PARTS ARE NOW ENTITLED TO GET T HE OWNERSHIP OF THE RESPECTIVE PROPERTIES TRANSFERRED IN THEIR NAMES IN THE RECORD OF THE ESTATE OFFICE, U.T, AND CHANDIGARH. 10. THAT THE SHARES IN THE PROPERTIES ARE BEING TRANSFERRED UNDER THE PROVISIONS OF CAPITAL OF PUNJAB (DEVELOPMENT & REGU LATION) ACT, 1952 AND THE RULES FRAMED THERE UNDER. 11. THAT BOTH THE PARTS HAVE OBTAINED NECESSARY PERMISSION FOR EXECUTION OF THIS DEED OF EXCHANGE FROM THE ESTATE OFFICER, U.T. CHAN DIGARH VIDE LETTER NO. 31113, DATED 15.01.2013. 19.7 THE SAID DOCUMENT HAS BEEN WITNESSED BY SHRI BHAR AT BHUSHAN SHARMA, ADVOCATE, ESTATE OFFICE, CHANDIGARH. IT IS SEEN THAT IN REGARD TO SAID EXCHANGE DEED ALSO, THERE IS AN IN TER-SE AGREEMENT RELIED UPON ON BEHALF OF THE ASSESSEE. COPY OF THIS IS PLACED AT PAGES 102 TO 104. THE SAID AGREEMENT, IT IS SE EN IS CLAIMED TO HAVE BEEN ENTERED ON THE NEXT DAY OF THE EXCHANGE DEED I.E. ON 05.02.2013 WHEREIN AGAIN, THE INTENTION OF THE PARTIES TO HAND OVER TO THE ASSESSEE ROOF OF THE FIRST FLOOR AFTER THE COMPLETION OF CONSTRUCTION ITA 791/CHD/2016 A.Y. 2012-13 PAGE 22 OF 26 ON GROUND AND FIRST FLOOR WHEREIN THE ASSESSEE'S SHARE IS STATED TO BE 20%. THE RELEVANT EXTRACT FROM PAPER BOOK PAGE 102 IS EXTRACTED FOR THE SAKE OF COMPLETENESS : AND WHEREAS, THE FIRST PARTY, SECOND PARTY AND THE THIRD PARTY ARE JOINT OWNERS OF PLOT/HOUSE NO. 1016, SECTOR-8C, CHANDIGAR H MEASURING ABOUT 500 SQ. YDS. AS 20%, 55% AND 25% SHAREHOLDERS RESPECTIV ELY AND THE LAND IN THE SAME PROPORTION. THE PLOT/HOUSE PRESENTLY HAS ONLY ONE FLOOR I.E THE GROUND FLOOR AND FIRST FLOOR WHICH IS INCOMPLETE. THE PART IES HAVE ENTERED INTO THIS AGREEMENT WITH THE INTENTION TO COMPLETE THIS HOUSE UP TO THREE FLOORS. THAT SHRI BALJINDER SINGH SEKHON AND HIS WIFE SMT. NAVDE EP KAUR ARE THE OWNERS OF 55% SHARE AND 25% SHARE RESPECTIVELY WHICH MAKES IT 80% JOINTLY AND IT SHALL CONSTITUTE THE GROUND FLOOR AND FIRST FLOOR, AS PER THE PREVAILING PRACTICE OF DEMARCATION OF ANY RESIDENTIAL PROPERTY IN CHANDIGA RH. IN THIS CASE THE SECOND AND THIRD PARTY SHALL FIRST COMPLETE THEIR SHARE OF THE PROPERTY THAT IS GROUND FLOOR AND FIRST FLOOR OF THE HOUSE. ONCE IT IS COMP LETE, THE ROOF OF THE FIRST FLOOR SHALL BE HANDED OVER TO SHRI BALBIR SINGH TO PROCEED WITH THE CONSTRUCTION OF HIS SECOND FLOOR. 19.8 THE REMAINING CONDITIONS IN REGARD TO THE USAGE OF T HE COMMON AREA AS IN THE EARLIER INTER-SE AGREEMENT, REMAIN THE SAM E. THE SAID INTER-SE AGREEMENT IS ALSO NOTARIZED ON 05.03.2013 LIKE TH E EARLIER INTER-SE AGREEMENT WHICH WAS NOTARIZED ON 28.10.2010. NO CONTRARY EVIDENCE HAS BEEN PLACED BEFORE US DESPITE THE FACT THAT THE DOCUMENTS HAVE BEEN AVAILABLE FROM THE ASSESSMENT STAGE. 19.9. AFTER THIS DOCUMENT, THERE IS ANOTHER DEED OF EXCHANGE ENTERE D INTO BY THE ASSESSEE IN REGARD TO HOUSE NO. 1016 SECTO R 8 WITH PROPERTY NO. 1106 IN SECTOR 8-C ENTERED INTO BY THE AS SESSEE AS OWNER OF 20% SHARE IN HOUSE NO. 1016 WITH THE OWNERS OF HOUSE NO 1106 PRESCRIBED AS SHRI PRITPAL SINGH S/O SHRI DAYAPAL SIN GH AND SMT. KANWALJIT KAUR W/O SHRI PRITPAL SINGH, RESIDENT OF HOUS E NO. 1015, THE DESCRIPTION OF THE PROPERTY OF THE ASSESSEE AN D HIS PARTNERS IN THIS VENTURE IS AGAIN SHOWN AS BUILT UP TO THE GROUND AND FIRST FLOOR AND THE DESCRIPTION OF THE PROPERTY WITH WHICH IT IS EXCHANGED ON THE RECEIPT OF A PRICE DIFFERENCE OF RS. 7 LACS BY THE AS SESSEE AND HIS PARTNERS WITH A PROPERTY WHICH WAS BUILT UPTO GROUND FLOOR AS PER PAPER BOOK PAGE 107. THE SAID EXCHANGE DEED IS ALSO DU LY RECORDED WITH THE CHANDIGARH U.T. ADMINISTRATION AND IS ALSO A THIR D PARTY EVIDENCE. NO CONTRARY EVIDENCE IS AVAILABLE. 19.10 THEREAFTER, ON RECORD THERE IS ANOTHER INTER-SE A GREEMENT ENTERED INTO WITHIN A FEW DAYS OF THE EXCHANGE DEED DAT ED 19.03.2013 WHEREIN ALSO, IT IS AGAIN RECOGNIZED THAT ON THE COMPLETION OF THE GROUND AND THE FIRST FLOOR, THE ROOF OF T HE FIRST FLOOR ITA 791/CHD/2016 A.Y. 2012-13 PAGE 23 OF 26 SHALL BE HANDED OVER TO THE ASSESSEE SHRI BALBIR SINGH TO PROCEED WITH THE CONSTRUCTION OF HIS SECOND FLOOR. THE SAID DOCUME NT IS ALSO DULY NOTARIZED. NO CONTRARY EVIDENCE HAS BEEN FILED OR REFERRED TO . 19.11 ACCORDINGLY, ON A CONSIDERATION OF THESE ABOVE FACT S, EVIDENCES AND ARGUMENTS WE FIND THAT THE SHORT ISSUE W HICH NOW DEVOLVES FOR CONSIDERATION IS WHETHER THE ASSESSEE HAD T HE 20% SHARE IN THE RESPECTIVE PROPERTIES NONE OF WHICH COULD BE CALLED TO BE A HABITABLE RESIDENTIAL HOUSE AVAILABLE TO THE ASSESSEE OR IS THE CLAIM PUT FORTH BY WAY OF THESE DOCUMENTS THAT SINCE THE ASS ESSEE NOT BEING A MAJOR/DOMINANT PARTNER HAVING ONLY 20% SHARE HAD ONLY THE RIGHT TO CONSTRUCT ON THE ROOF OF FIRST FLOOR AND THUS TH E CLAIM OF ROOF RIGHTS BASED ON THESE DOCUMENTS BE DISCARDED AS AN A FTER THOUGHT AND THEY DISENTITLE THE ASSESSEE TO THE CLAIM OF DEDUCTION . WE HAVE CONSIDERED IN DETAIL AND NOTICED THAT BY VIRTUE OF THE SA LE DEED ENTERED INTO BY THE ASSESSEE AS THE FIRST PURCHASE ON 27.10.2010, IT IS SEEN THAT THE SHARE OF THE ASSESSEE HAS BEEN DESCRIBE D AS 20%. SIMILARLY, IN REGARD TO THE EXCHANGE DEED ENTERED INTO BY THE ASSESSEE FOR THE PROPERTY ORIGINALLY PURCHASED I.E. 544, SE CTOR 10D WITH HOUSE NO. 1016 SECTOR 8-C ON 04.02.2013 IS ALSO A D OCUMENT AVAILABLE IN THE PUBLIC DOMAIN AS THE EXCHANGE IS DULY REC ORDED WITH THE ESTATE OFFICE WHEREIN SHARE OF THE ASSESSEE ALSO STAN DS DESCRIBED AS 20%. SIMILARLY, THE NEXT EXCHANGE ENTERED INTO BY TH E ASSESSEE ALONGWITH HIS OTHER CO-PARTNERS IN THIS VENTURE I.E. MRS. NAVDEEP KAUR AND SHRI BALJINDER SEKHON, THE ASSESSEE EXCHANGE D HOUSE NO. 1016 SECTOR 8-C WITH HOUSE NO. 1106 IN SECTOR 8-C WITH SHRI PRITPAL SINGH AND SMT. NAVDEEP KAUR RESIDENTS OF HOUSE NO. 1015 (INTERNAL PAGE 2 OF THE EXCHANGE DEED AT PAPER BOOK PAGE 106). IT IS SEEN THAT THE SAID DOCUMENT IS ALSO AVAILABLE IN THE PUBLIC DOMAIN AND DULY REGISTERED WITH THE CHANDIGARH U.T. ESTATE OFFICE. IN THE SAID DOCUMENT ALSO, IT IS SEEN THAT THE SHARE OF THE ASSESSE E IN THE PROPERTY BEING EXCHANGED IS DESCRIBED AS 20% SHARE. THU S, IT IS SEEN THAT THE FACTUM OF 20% SHARE IN THE RESPECTIVE PROPERT IES OVER A PERIOD OF TIME BY THE ASSESSEE STANDS DEMONSTRATED BY THE THIRD PARTY EVIDENCES. IT IS SEEN THAT AS OPPOSED TO THE TH IRD PARTY EVIDENCES, THE INTER-SE AGREEMENT ENTERED INTO ON 28.10.2 018, 05.02.2013 AND 19.03.2018 ARE DOCUMENTS ON THE BASIS OF WHICH THE ASSESSEE HAVING 20% SHARE SEEKS TO ESTABLISH THAT HIS 2 0% SHARE WAS ITA 791/CHD/2016 A.Y. 2012-13 PAGE 24 OF 26 LIMITED TO THE CONSTRUCTION ON THE FIRST FLOOR ROOF WHEREUPO N HE HAD THE RIGHT TO CONSTRUCT A SECOND FLOOR ON THE SPECIFIC PRO PERTIES. ON A PERUSAL OF THE INTER-SE AGREEMENT ENTERED INTO BY THE A SSESSEE SPECIFICALLY CLAUSE (II) AS WOULD BE EVIDENT FROM PAPER BOOK P AGES 116, 104 AND 95 WHICH HAS BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER, IT IS SEEN THAT THE INTER-SE AGREEMENTS WERE SIGN ED IN DUPLICATE AND THE ORIGINALS WERE ALWAYS KEPT WITH SHRI BALJINDER S INGH SEKHON AND SMT NAVDEEP KAUR WHO HAVING PRE-DOMINANT SHARE OF 55% AND 25% COULD CALL THE SHOTS AND THE ASSESSEE HAVING A COMP ARATIVELY MINOR SHARE COULD ALWAYS RETAIN A COPY OF THE INTER-SE A GREEMENT DULY SIGNED BY ALL THE PARTIES. IT IS SEEN THAT THESE DOC UMENTS ARE DULY NOTARIZED. THE MERE FACT THAT THESE DOCUMENTS WE RE MADE AVAILABLE AT THE ASSESSMENT STAGE BY ITSELF CANNOT DISCRED IT THE DOCUMENTS. THE FACT THAT THERE WAS NO EARLIER OCCASION FOR THE ASSESSEE TO BRING THESE FACTS TO THE AOS NOTICE CANNO T BE IGNORED. THE ONUS IS ON THE PARTY WHO ALLEGES TO THE CONTRARY T O PROVE THAT THE DOCUMENTS RELIED UPON WERE SHAM. NO SUCH EVIDENCE HAS BEEN FILED NOR HAS ANY ATTEMPT BEEN MADE TO DISCREDIT THE EVIDENC E FILED. THE TAX AUTHORITIES CANNOT CLAIM TO BE IN OBLIVION OF TRANSFER O F ROOF RIGHTS OR THE RIGHT OF CONSTRUCTION ON FIRST OR SECOND FLOOR ETC. OF PROPERTIES. THE CONCERNED PARTIES CONSIDERING THEIR RESPECTIVE CONT RIBUTIONS ETC. MAY CHOOSE TO DIVIDE THE PROCEEDS IN A CERTAIN MANNER E VIDENCED BY DOCUMENTS BY WHICH THEY IN THEIR OWN SAFETY CHOOSE TO B IND THEMSELVES CANNOT BE TINKERED WITH BY THE DEPARTMENT M ERELY ON SUSPICIONS. IN THE CONTEXT OF THESE FACTS, WE ARE NOW REQ UIRED TO LOOK INTO THE DECISIONS CITED BY THE TAX AUTHORITIES AND THE POSITION OF LAW AS CANVASSED BY THE LD. AR. WE FIND ON A CAREFUL CONSIDERATION OF THE DECISIONS RELIED UPON BY THE PARTIES WHICH HAVE BEEN CITE D BEFORE US TO CLAIM THAT A HABITABLE HOUSE CAME INTO EXISTENCE OR N OT, WE FIND THAT THE ISSUE IS VERY FACT SPECIFIC. IN ORDER TO DETERMINE THE SAME I.E. WHETHER THE RIGHT TO CARRY OUT A CONSTRUCTION ON THE EVENT OF COMPLETION OF A LOWER FLOOR, CAN THE SAID RIGHT BE CONSIDERE D TO BE A HABITABLE PREMISES FOR THE PURPOSES OF RESIDENCE ETC. WE FIN D DOES NOT REQUIRE ANY REFERENCE TO ANY SPECIFIC DECISION AS THE CONC LUSION IS ON THE FACE OF THE DOCUMENT ITSELF. THE DECISIONS CITED PREVA IL IN THE FACTUAL MATRIX OF THE RESPECTIVE CASES AND REFERENCE THE RETO WOULD NOT SERVE ANY PURPOSE AS THE ISSUE WHICH FALLS FOR CONSIDERATI ON IN THE ITA 791/CHD/2016 A.Y. 2012-13 PAGE 25 OF 26 FACTS OF THE PRESENT CASE, ADMITTEDLY NEVER AROSE IN THE DECISIONS CITED NAMELY WHETHER THE RIGHT TO CONSTRUCT A SECOND FLOOR ON THE CONSTRUCTION COMPLETED ON THE FIRST FLOOR BE CALLED TO BE A HABITABLE RESIDENCE. THE ANSWER CANNOT BE YES AS THE FIRST FLOOR HAS TO BE CONSTRUCTED ONLY THEN THE SECOND FLOOR CAN BE CONSTRU CTED AND THE CONSIDERATION ON THE SECOND FLOOR ALSO HAS TO COMPLETE ON LY THEN IT CAN BE SAID THAT THE SECOND FLOOR IS IN EXISTENCE. TILL IT IS NOT CONSTRUCTED, IT IS ONLY A VALUABLE RIGHT NOT TRANSLATED INT O REALITY FOR THE PURPOSES OF BEING DESCRIBED AS AN ABODE WHERE A RE SIDENCE CAN BE SAID TO BE EXISTING. IN THE FACTS OF THE CASES CITED B EFORE US, THE SAID ISSUE NEVER AROSE FOR CONSIDERATION. BRIEFLY IT MAY BE SUMMED UP THAT IN THE FIRST BUSINESS VENTURE DESCRIBED AS PURCHAS E OF HOUSE NO. 544 SECTOR 10, IT WAS A SINGLE STOREY PROPERTY AND AFTER CARRYING OUT CONSTRUCTION ACTIVITY ALONGWITH HIS CO-PARTNERS, SHRI BARJIN DER SINGH AND SMT. NAVDEEP KAUR, THE SAID PROPERTY WAS RECONSTRU CTED WITH THE BASEMENT, GROUND FLOOR ETC. AND EXCHANGED FOR PROPE RTY WITH AN ADDITIONAL PAYMENT OF ABOVE RS. 1 CRORE. IN THE SAID PROP ERTY ALSO I.E. 1016, THE ASSESSEE HAD THE RIGHT TO CONSTRUCT SECON D FLOOR. WITHIN A SHORT TIME, THE SAID PROPERTY WAS ALSO EXCHANGED FOR P ROPERTY NO. 1106 WHICH WAS AGAIN A PROPERTY WHICH STOOD CONSTRUCTE D ONLY UPTO THE GROUND FLOOR AND THE ASSESSEE'S RIGHTS HEREIN WERE ALSO LIMITED TO RIGHT TO CONSTRUCT THE SECOND FLOOR ON THE FIRST FLOOR ROOF. THUS, ADMITTEDLY THE ASSESSEE ENTERED INTO SERIES OF BUSINESS TRANSACTIONS WITH HIS CO-PARTNERS SHRI BARJINDER SINGH AND WIFE OF SHRI BARJINDER SINGH, SMT. NAVDEEP KAUR WHO HAD THE MAJOR SHARE AMONG ST THEM. WHEREAS THE SHARE OF SHRI BARJINDER SINGH WAS 55%, THE SHARE OF SMT. NAVDEEP KAUR WAS 25% AND THE SHARE OF THE ASSESSEE WAS TO T HE EXTENT OF 20%. IN THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE DEDUCTION CLAIMED U/S 54F OUT OF THE SALE CONSIDERATION OF SCO 226- 277, THE INVESTMENT MADE FOR THE RESIDENTIAL HOUSE NO. 107 SECTOR 27A ON 30.09.2013 WAS NOT ALLOWABLE TO THE ASSESSEE. IT IS SEEN THAT THE TAX AUTHORITIES HAVE CONSISTENTLY FAILED TO READ THE DOCUMENTS AND EVIDENCES IN FULL. IT IS SEEN THAT THE SALE DEEDS AND THE EXCHANGE DEEDS ARE ALL DOCUMENTS DULY REGISTERED IN PUB LIC DOMAIN AND THUS ARE THIRD PARTY EVIDENCES WHEREIN SHARE OF THE ASSESSEE AS PER THE CLAIMS MADE STANDS DEFINED. IT IS SEEN THAT THE RESPECTIVE INTER-SE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH H IS CO-PARTNERS ITA 791/CHD/2016 A.Y. 2012-13 PAGE 26 OF 26 MR. BARJINDER SINGH AND SMT. NAVDEEP KAUR IN THESE VENTU RES ARE DOCUMENTS WHICH HAVE BEEN ENTERED INTO BY THE PARTNER S FOR THEIR OWN UNDERSTANDING AND SAFETY SECURING THEIR RESPECTIVE IN VESTMENTS PROBABLY TO ENSURE THAT FUTURE DISPUTES ON THE SPLITTING UP OF THE PROCEEDS DO NOT ARISE. CONSEQUENTLY, ORIGINAL DOCUMENTS HAVE ALWAYS BEEN RETAINED WITH MR. BARJINDER SINGH AND SMT. NA VDEEP KAUR AND DULY SIGNED COPIES HAVE BEEN MADE AVAILABLE TO THE ASSESSEE WHOSE SHARE WAS LIMITED TO ONLY 20%. THUS, WE FIND THAT APART FROM PRESUMPTIONS AND DOUBTS, THE EVIDENCES, DOCUM ENTS AND THE CLAIMS MADE RESTED ON THESE DOCUMENTS IS NOT SHOWN TO BE EITHER INCORRECT OR CONTRARY TO THE BUSINESS PRACTICES OR ASS AILED BY ANY CONTRARY DOCUMENTS OR EVIDENCES NOR HAS THEIR CREDIBILIT Y BEEN DEMOLISHED IN ANY MANNER. IN THE FACTS AS THEY STAND, WE FIND THAT THE CLAIM CANNOT BE DISCARDED EITHER ON SELECTIVE READING OF THE DOCUMENTS OR ON UNPROVED SUSPICIONS. ACCORDINGLY, SATISF IED WITH THE CONSISTENT EXPLANATION OFFERED BY THE ASSESSEE ON CO NSIDERATION OF THE FACTS, EVIDENCES AND THE CONSISTENT ARGUMENTS ON RE CORD, WE ALLOW THE CLAIM. 20. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.05. 2019. SD/- SD/- ( . %.. . & ) ( ! ) (DR. B.R.R. KUMAR) (DIVA SINGH) '( #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER + , (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; #/ ASSISTANT REGISTRAR