Smt Shailaja, Hyderabad V. CIT, Hyderabad

ITA 885/HYD/2010

• Counselvise Citation: 88522514 RSA 2010
• Duration Of Justice: 4 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G APARNA RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Revision of order; Cost of acquisition; Fair market value; Corroborative evidences; Assessment record; Non passing of speaking order
• Section: 263; 143(3); 50C; 54F

Judgement Text

ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 1 OF 28 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.886/HYD/2010 (ASSESSMENT YEAR: 2006-07) SMT. S. UMA DEVI 5-9-67/20 L.B. STADIUM HYDERABAD PAN: AIRPS 7720 G VS. COMMISSIONER OF INCOME TAX-IV HYDERABAD (APPELLANT) (RESPONDENT) ITA NO.885/HYD/2010 (A.Y. 2006-07) SMT. V. SHAILAJA 5-9-67/20 L.B. STADIUM HYDERABAD VS. COMMISSIONER OF INCOME TAX-IV HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI A.V. RAGHURAM, ADVOCATE DEPARTMENT BY: SMT. G. APARNA RAO , (DR) DATE OF HEARING: 02/12/2014 DATE OF PRONOUNCEMENT: 30/01/2015 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, J.M. THE ASSESSEE SMT. S. UMA DEVI AND SMT. V. SHAILAJA BEING SISTERS, FILED RETURN OF INCOME FOR A.Y 2006-07 ON 31.10.2006. THE ASSESSMENT WAS COMPLETED U/S 143(3) AND THE AO ACCEPTED THE INCOME RETURNED BY THE ASSESSEE. THE CIT FINDI NG THAT THE RELEVANT ASSESSMENT ORDER TO BE BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE, ASSUMED JURISDICTI ON U/S 263 OF THE I.T. ACT AND ISSUED SHOW CAUSE NOTICE TO THE AS SESSEE, AS TO WHY THE ASSESSMENT SHOULD NOT BE REVISED OR SET ASI DE. THE ASSESSEE REPLIED TO THE SHOW CAUSE NOTICE. HOWEVER, THE CIT PROCEEDED TO SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 2 OF 28 REDO THE SAME IN THE LIGHT OF THE OBSERVATIONS AND DIRECTIONS GIVEN BY HIM IN HIS ORDER U/S 263 OF THE I.T. ACT. ITA NO.886/HYD/2010 SMT. S. UMA DEVI: 2. WE SHALL FIRST TAKE UP THE CASE OF SMT. UMA DEVI . THE ASSESSEE SMT. UMA DEVI HAS RAISED 11 GROUNDS OF APP EAL AGAINST THE ORDER PASSED U/S 263 BY THE CIT. GROUND NO.1 I S GENERAL IN NATURE, HENCE NO SPECIFIC ADJUDICATION IS REQUIRED. 3. GROUND NO.2 RAISED BY THE ASSESSEE IS AS UNDER: THE LD CIT FAILED TO APPRECIATE THE FACT THAT THE AO PASSED THE ORDER AFTER DETAILED SCRUTINY AND AFTER EXAMINING ALL THE ISSUES AND APPLYING HIS MIND TO T HE ISSUES AND THEREBY ERRED IN HOLDING THAT THE ASSESS MENT SO PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF REVENUE AND REVISING THE ASSESSMENT. 3.1 GROUND NO.2 IS AGAINST THE ORDER OF THE CIT IN ASSUMING JURISDICTION U/S 263. WE FIND THAT THE AO HAS PASSE D CRYPTIC, NON SPEAKING ORDER AND HENCE WE ARE OF THE OPINION THAT THE JURISDICTION ASSUMED U/S 263 BY THE CIT IS JUSTIFIE D. OUR OPINION IS BASED ON THE DECISION OF APEX COURT IN CIT VS. T OYOTA MOTOR CORPN.(306 ITR 52). 4. GROUND NO.3 RAISED BY THE ASSESSEE IS GIVEN BELO W: THE LD CIT ERRED IN DIRECTING TO DISALLOW DEDUCTIO N U/S 54FON THE GROUND THAT THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE ON THE DATE OF TRANSFER WITHOUT APPRECIATING THE FACT THAT THE OTHER PROPER TY OWNED BY THE ASSESSEE IS A COMMERCIAL PROPERTY AND NOT A RESIDENTIAL HOUSE AND OTHER PROPERTIES WERE OWNED BY ASSESSEES MINOR CHILDREN WHOSE INCOME ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 3 OF 28 WAS CLUBBED IN ASSESSEES HANDS BY VIRTUE OF FICTIO N CREATED U/S 64(IA) BUT NOT BY THE ASSESSEE. 4.1 THE LD CIT RAISED QUERY AT PARA 2.1 OF 263 ORDE R THAT THE ASSESSEE HAD DISCLOSED LONG TERM CAPITAL GAIN ON SA LE OF UNDIVIDED SHARE IN LAND SITUATED AT RAJAT MANZIL, S OMAJIGUDA, HYDERABAD AT RS.2,18,46,264 AND LONG TERM GAIN OF R S.26,54,263 ON SALE OF LAND AT RAMANTAPUR. HE STATED THAT SHE H AD ADMITTEDLY INVESTED AN AMOUNT OF RS.91,34,388 IN A HOUSE PROPERTY AT VISAKHAPATNAM AND CLAIMED DEDUCTION OF RS.61,91,673 U/S 54F FROM THE LONG TERM CAPITAL GAI N AND AS PER PROVISO TO SECTION 54F(1) DEDUCTION IS NOT ALLOWABL E IN CASE THE ASSESSEE OWNS MORE THAN ONE RESIDENTIAL HOUSE ON TH E DATE OF TRANSFER OF ORIGINAL ASSET. IT WAS FURTHER OBSERVED BY THE CIT THAT AS PER THE ASSESSMENT RECORD, IT CAN BE SEEN THAT T HE ASSESSEE OWNS RESIDENTIAL PROPERTY AT JUBILEE HILLS AND ALSO AT PANCOM CHAMBERS. 4.2 ASSESSEE SUBMITTED THAT DURING THE PREVIOUS YEA R RELEVANT TO THE A.Y UNDER CONSIDERATION, ASSESSEE SOLD LONG TERM ASSETS FOR RS.3,22,29,760 AND DECLARED LONG TERM CAPITAL G AIN OF RS.2,18,46,264, OUT OF WHICH SHE INVESTED RS.91,34, 264 IN A NEW RESIDENTIAL PROPERTY AND CLAIMED DEDUCTION OF RS.61 ,91,673 U/S 54F OF THE INCOME TAX ACT, 1961 WHICH THE CIT DID N OT ALLOW ON THE GROUND THAT ASSESSEE OWNED TWO RESIDENTIAL HOUS ES, ONE AT JUBILEE HILLS AND ANOTHER AT PANCOM CHAMBERS AND TH AT EXEMPTION U/S 54F IS AVAILABLE FOR AN ASSESSEE WHO OWNS ONLY ONE RESIDENTIAL PROPERTY. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 4 OF 28 4.3 IT WAS SUBMITTED THAT THE ASSESSEE ACTUALLY OWN S ONLY ONE RESIDENTIAL PROPERTY AND NOT TWO AS PRESUMED BY THE CIT. THE PROPERTY SITUATED AT SUITE NO.11, PANCOM CHAMBERS, RAJBHAVAN ROAD IS A COMMERCIAL PROPERTY WHICH WAS PURCHASED B Y THE ASSESSEE WAY BACK IN FEBRUARY, 1995. THE SAME WAS L ET OUT FOR COMMERCIAL PURPOSES FOR THE YEAR UNDER CONSIDERATIO N TO M/S SUMIT INOTECH LTD NEW DELHI AND IN THE CURRENT YEAR TO M/S M.U ASSOCIATES, HYDERABAD FORTHEIR BUSINESS PURPOSES, C OPIES OF PURCHASE DEED AND LEASE AGREEMENTS WERE ENCLOSED. T HE ASSESSEE FURTHER SUBMITTED THAT THOUGH RESIDENTIAL HOUSE HAS NOT BEEN DEFINED IN THE STATUTE, THE ISSUE AS TO WH ETHER THE PARTICULAR PROPERTY IS A RESIDENTIAL HOUSE OR NOT A RISES IN THE CONTEXT OF CONCESSION FOR SELF OCCUPATION FOR RESID ENTIAL PURPOSE U/S 23(1) AND EXEMPTION GIVEN UNDER WEALTH TAX ACT FOR ONE RESIDENTIAL HOUSE. THE WORD RESIDENCE SIGNIFIED A MANS ABODE OR CONTINUANCE IN A PLACE AND WHERE THERE IS NOTHIN G TO SHOW THAT IT IS USED IN A MORE EXTENSIVE SENSE. IN P.N. SHUKLA VS. CIT (2005) 276 ITR 642, THE ALLAHABAD HIGH COURT HELD T HAT THE NATURE OF THE USER OF THE BUILDING LET OUT DETERMIN ES THE GRANT OR DENIAL OF RELIEF ENVISAGED BY CLAUSE (B) OF THE SEC OND PROVISO TO SECTION 23(1) OF THE ACT. HAD THE OBJECT OF THE LEG ISLATURE BEEN TO ALLOW THIS CONCESSION IRRESPECTIVE OF THE USER OF T HE BUILDING, IT WAS NOT NECESSARY TO QUALIFY THE WORD UNIT BY THE EXP RESSION RESIDENTIAL. AN OWNER MAY CONSTRUCT A BUILDING WI TH SELF- CONTAINED FLOORS WITH THE OBJECT OF LETTING OUT THE SAME TO TENANTS, BUT SUCH LETTING OUT HAS TO BE FOR THE PURPOSE OF R ESIDENCE OF THE TENANTS AND NOT OTHERWISE. ADMITTEDLY, IN THIS CASE , THE UNITS, WHICH WERE LET OUT TO THE BANK, WERE NOT CONSTRUCTE D AS RESIDENTIAL UNITS. A RESIDENTIAL UNIT IS THAT WHICH IS USED AS A RESIDENCE. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 5 OF 28 4.4 IT WAS SUBMITTED FURTHER THAT THE INTENTION OF THE ASSESSEE WAS TO CONSTRUCT THE BUILDING FOR NON RESIDENTIAL P URPOSE AS THE PROPERTY HAD BEEN LET TO THE FERTILIZER CORPORATION OF INDIA FOR NON RESIDENTIAL PURPOSE. HENCE THE ASSESSEE WAS NOT ENTITLED FOR DEDUCTION UNDER CLAUSE (C) OF THE SECOND PROVISO TO SECTION 23(1). KEEPING IN VIEW THE ABOVE LEGAL PREPOSITION, IT WAS SUBMITTED THAT IN THE INSTANT CASE, THE UNIT OWNED BY THE ASS ESSEE IN PANCOM CHAMBERS IS AN OFFICE SPACE, SITUATED IN A C OMMERCIAL COMPLEX, WHICH IS BEING USED BY THE TENANTS FOR THE IR BUSINESS PURPOSES; HENCE THE SAME CANNOT BE TREATED AS A RES IDENTIAL HOUSE. AS THE ASSESSEE OWNED ONLY ONE RESIDENTIAL PROPERTY ON THE DATE OF TRANSFER, SHE PRAYED THAT SHE IS ENTITL ED FOR DEDUCTION U/S 54F AS CLAIMED BY HER IN THE RETURN OF INCOME. 4.5 THE CIT OBSERVED THAT THE AMOUNT EXEMPTION CLAI MED IS RS.61,91,673, THE GROUND ON WHICH THE SAID EXEMPTIO N CLAIMED WAS THAT THE ASSESSEE HAD INVESTED RS.91,34,588 IN RESIDENTIAL HOUSE AT VISAKHAPATNAM. THE CIT NOTICED FROM THE AS SESSEES RETURN THAT SHE HAD DISCLOSED RENT FROM THE LET-OUT PROPERTIES UNDER THE HEAD INCOME FROM HOUSE PROPERTY. FURTHE R, U/S 64(1A) OF THE I.T. ACT, 1961, ASSESSEE HAD CLUBBED IN HER OWN HANDS THE RENTS RECEIVED FROM CHENNAI FLAT WHICH PR OPERTY STANDS IN THE NAMES OF HER TWO MINOR CHILDREN. HENC E THE CIT DISALLOWED HER CLAIM OF EXEMPTION U/S 54F AS OWNERS HIP OF MORE THAN ONE RESIDENTIAL HOUSE ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET IS LAID DOWN U/S 54F (I.E. PROVISO TO SUB SEC TION (1) AS DISQUALIFYING FACTOR FOR THE EXEMPTION. DURING THE APPELLATE ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 6 OF 28 PROCEEDINGS, THE AR SUBMITTED THAT THE PROPERTY SIT UATED AT SUITE NO.11 PANCOM CHAMBERS, RAJ BHAVAN ROAD IS A COMMERCIAL PROPERTY WHICH WAS LET OUT FOR COMMERCIA L PURPOSES. THE USER OF THE PROPERTY BEING COMMERCIAL, IT SHOUL D NOT BE CONSIDERED AS RESIDENTIAL HOUSE FOR DISQUALIFYING T HE ASSESSEES CLAIM FOR EXEMPTION. ACCORDING TO THE CIT, THE UNDE NIABLE POINT IS THAT IT WAS THE ASSESSEE WHO TREATED THE RENT FR OM PANCOM CHAMBER AS INCOME FROM HOUSE PROPERTY AND CLAIMED A LL INCIDENTAL DEDUCTIONS AND THIS SHE HAD DONE CONSIST ENTLY OVER THE YEARS. FURTHER, THE ASSESSEE HAD INVESTED IN PU RCHASE OF RESIDENTIAL FLAT IN CHENNAI IN THE NAMES OF HER TWO MINOR CHILDREN THE RENTS OF WHICH ARE OFFERED TO TAX IN HER OWN HANDS U/S 64(1A). ALL THESE PROPERTIES EXISTED ON THE DAT E OF TRANSFER OF THE ORIGINAL ASSET. HENCE THE ASSESSEE WOULD NOT BE ELIGIBLE FOR EXEMPTION U/S 54. 4.6 THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE BEFORE THE CIT AND SUBMITTED THAT UNDER THE PROVISIONS OF INCO ME TAX ACT, 1961 INCOME FROM PROPERTY WHETHER COMMERCIAL OR RES IDENTIAL IS TO BE OFFERED FOR TAXATION UNDER THE HEAD INCOME F ROM HOUSE PROPERTY UNLESS THE SAME ASSESSABLE UNDER ANY OTHE R HEAD OF INCOME LIKE BUSINESS OR INCOME FROM OTHER SOURCES. IF THE INCOME FROM A PROPERTY IS OFFERED UNDER THE HEAD HOUSE PRO PERTY, IT CANNOT BE PRESUMED THAT IT IS A RESIDENTIAL PROPERT Y. AS THE ASSESSEE HAS OFFERED INCOME FROM PANCOM CHAMBERS OF FICE UNDER THE HEAD INCOME FROM HOUSE PROPERTY, IT CANNOT BE PRESUMED THAT IT IS A RESIDENTIAL PROPERTY. FURTHER, BY VIRT UE OF FICTION CREATED BY SECTION 64(IA) OF THE I.T. ACT, 1961, TH E INCOMES OF PROPERTIES OWNED BY THE TWO MINOR DAUGHTERS, WERE C LUBBED IN ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 7 OF 28 THE HANDS OF THE ASSESSEE SINCE THE DATE OF PURCHAS E OF THE SAID PROPERTIES. THE INVESTMENT FOR PURCHASE OF SAID PRO PERTIES HAS COME FROM THE INDEPENDENT SOURCES OF THESE DAUGHTER S, WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT YEAR AFTER YEAR . SIMPLY, BY VIRTUE OF INCLUSION OF RENTAL INCOME OF MINOR DAUGH TERS U/S 64(IA) OF THE I.T. ACT, 1961, IT CANNOT BE PRESUMED THAT T HE ASSESSEE WAS OWNER OF THESE PROPERTIES. THUS, THE FINDINGS O F THE LD CIT ARE FACTUALLY INCORRECT AND ARE UNSUSTAINABLE LEGAL LY. 4.7 WE HAVE HEARD BOTH THE PARTIES. THE LD COUNSEL FOR THE ASSESSEE HAS POINTED TO THE PAGE NO.72 OF THE PAPER BOOK WHEREIN THE LEASE AGREEMENT HAS BEEN PRODUCED. SINC E THE ASSESSEE HAS TREATED ONE PROPERTY AS COMMERCIAL PRO PERTY AND THE OTHER PROPERTY IS THE ONLY RESIDENTIAL HOUSE IN THE POSSESSION OF THE ASSESSEE, THE ASSESSEE IS ENTITLED TO EXEMPT ION U/S 54F. FURTHER THE INCOMES OF THE PROPERTIES OWNED BY THE MINOR DAUGHTERS WERE CLUBBED IN THE HANDS OF THE ASSESSEE , BUT THE INVESTMENT FOR PURCHASE OF THE SAID PROPERTIES HAS COME FROM THE INDEPENDENT SOURCES OF THE DAUGHTERS AND HENCE IT C ANNOT BE PRESUMED THAT ASSESSEE IS THE OWNER OF THE PROPERTI ES. HENCE IN OUR OPINION THE ASSESSEE HAVING ONLY ONE RESIDENTIA L HOUSE IS ELIGIBLE FOR CLAIMING EXEMPTION U/S 54F. 5. GROUND NO.4 RAISED BY THE ASSESSEE IS GIVEN BELO W: THE LD CIT WHILE DIRECTING TO DISALLOW THE CLAIM O F DEDUCTION U/S 54F ERRED IN GIVING A FINDING THAT TH E DEDUCTION IS CLAIMED AGAINST SHORT TERM CAPITAL GAI NS WITHOUT APPRECIATING THE FACT THAT THE SALE OF FLAT S INCLUDED SALE OF UNDIVIDED SHARE OF LAND WHICH IS A LONG TERM CAPITAL ASSET . ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 8 OF 28 5.1 THE AO NOTED THAT THE ASSESSEE HAD TREATED THE CAPITAL GAINS ON SALE OF FLATS RECEIVED AS LONG TERM CAPITA L GAINS. THE CAPITAL GAINS ON SALE OF FLATS RECEIVED ARE SHORT T ERM CAPITAL GAINS AS THE FLATS WERE SOLD BY THE ASSESSEE WITHIN FINAN CIAL YEAR 2005- 06 AND ALSO THE FLATS RECEIVED WERE NOT APPEARING I N BALANCE SHEET AS ON 31.3.2005. 5.2 IN THIS CONNECTION, THE ASSESSEE SUBMITTED THAT THOSE 10 FLATS WERE RECEIVED BY THE ASSESSEE IN EXCHANGE OF SURRENDER OF HER RIGHT IN LAND. THOSE FLATS WERE SOLD IMMEDIATEL Y AFTER THEY WERE HANDED OVER TO THE ASSESSEE. WHILE WORKING OUT THE LONG TERM CAPITAL GAIN ON SURRENDER OF LAND, THE ASSESSE E HAS TAKEN MARKET VALUE, THAT IS SALE CONSIDERATION OF SUPERST RUCTURE OF THOSE TEN FLATS AS FULL CONSIDERATION RECEIVED IN LIEU OF SURRENDER OF HER RIGHT IN THE LAND AS HELD BY THE APEX COURT IN THE CASE OF CIT VS. GEORGE HENDERSON LTD AND HAS ACCORDINGLY WO RKED OUT LONG TERM CAPITAL GAIN. SINCE THE SALE CONSIDERATIO N OF SUPERSTRUCTURE OF FLATS HAS BEEN TAKEN AS FULL VALU E OF CONSIDERATION RECEIVED FOR WORKING OUT LONG TERM CA PITAL GAIN ON SURRENDER OF RIGHT IN LAND, THE SAME VALUE HAS BECO ME COST OF ACQUISITION IN THE HANDS OF THE ASSESSEE FOR THE SU PERSTRUCTURE OF THOSE FLATS. THERE WAS NO DIFFERENCE BETWEEN THE CO ST OF ACQUISITION AND SALE CONSIDERATION OF SUPERSTRUCTUR E OF THESE FLATS. HOWEVER, GAIN ON TRANSFER OF UNDIVIDED SHARE IN LAND ALONG WITH THOSE FLATS HAD BEEN OFFERED AS LONG TERM GAIN BY THE ASSESSEE. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 9 OF 28 5.3 THE FULL VALUE OF CONSIDERATION IN RESPECT OF S URRENDER OF THE ASSESSEE SHARE OF LAND TO THE DEVELOPER HAS BEE N TAKEN AS THE MARKET VALUE OF THE SUPERSTRUCTURE OF FLATS AND NOT COST OF CONSTRUCTION OF FLATS TO THE DEVELOPER AS PROPOSED BY THE CIT FOR THE FOLLOWING REASONS: A) AS REQUIRED U/S 48 OF I.T. ACT, 1961 FOR WORKING OUT CAPITAL GAIN, FIRST FULL VALUE OF CONSIDERATION REC EIVED OR ACCRUING AS A RESULT OF TRANSFER OF THE CAPITAL ASSET IS TO BE FOUND OUT. WHERE THE CONSIDERATION FOR THE TRANSFER IS IN KIND, AS FOR INSTANCE, IN A TRANSFER BY WAY OF EXCHANGE OF CAPITAL ASSETS OR IS PARTLY IN C ASH AND PARTLY IN KIND, THE FAIR MARKET VALUE OF THE PROPERTY GRANTED IN EXCHANGE AS ON THE DATE OF THE EXCHANGE SHALL HAVE TO BE ASCERTAINED IN ORDER TO ARRIVE AT THE FIGURE OF CONSIDERATION RECEIVED AS H ELD BY THE HON'BLE SUPREME COURT IN THE CASE OF GEORGE HENDERSON AND CO. LTD (1967) 66 ITR 622. B) ON SCRUTINY OF THE STATEMENT OF COMPUTATION OF L ONG TERM CAPITAL GAIN AS FILED BY THE ASSESSEE, IT CAN BE NOTICED THAT OUT OF 2232 SQ.YARDS OF LAND (AFTER DEDUCTING THE AREA TAKEN BY MCH FOR ROAD WIDENING) THE ASSESSEE SURRENDERED 1116 SQ.YARDS OF LAND IN FAVOUR OF THE DEVELOPER, IN LIEU OF GETTING 10 FLAT S IN EXCHANGE FOR THE SAME. FOR DETERMINING THE GAIN ON THIS SURRENDER OF RIGHT IN LAND, THE MARKET VALUE O F THE SUPERSTRUCTURE OF THOSE FLATS HAS TO BE DETERMINED. SINCE THE FLATS HAVE BEEN SOLD IN THE Y EAR OF POSSESSION ITSELF, THE ASSESSEE OUT OF THE TOTAL CONSIDERATION OF FLATS SOLD REDUCED THE MARKET VALU E ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 10 OF 28 OF UNDIVIDED SHARE OF LAND AND ARRIVED AT THE MARKE T VALUE OF THE SUPERSTRUCTURE AND ADOPTED THE SAME AS FULL VALUE OF CONSIDERATION RECEIVED IN LIEU OF SURRENDER OR RIGHT IN LAND, AS PER THE PRINCIPLE ENUMERATED BY THE HON'BLE SUPREME COURT. C) AS AN AMOUNT OF RS.2,43,18,500/- WAS RECEIVED BY THE ASSESSEE IN EXCHANGE OF SURRENDER OF LAND ADMEASURING 1116.0 SQ. YARDS WHICH IS A LONG TERM ASSET, THE RESULTANT PROFIT HAS BEEN RIGHTLY SHOWN AS LONG TERM CAPITAL GAIN BY THE ASSESSEE. 5.4 THE CIT ON THIS ISSUE HAS OBSERVED, WHETHER THE ASSESSEES METHOD OF TREATING THE ENTIRE SALE PROCEEDS OF 10 F LATS AS LONG TERM CAPITAL GAINS IS CORRECT AND LEGALLY TENABLE. THE MATERIAL FACTS ARE THAT ON 30.12.2002 THE ASSESSEE HAD ENTER ED INTO A DEVELOPMENT AGREEMENT WITH M/S LUMBINI CONSTRUCTION S LTD IN RESPECT OF HER LAND (JOINTLY HELD WITH HER SISTER V . SHAILAJA) BEARING NO.6-3-661 AT KAPADIA LANE, SOMAJIGUDA, HYD ERABAD. THE LD CIT EXTRACTED PARA NOS.3, 6, 7 AND 11 FROM T HE SAID AGREEMENT AS UNDER: 3. THAT THE OWNERS SHALL GRANT AND ALLOW THE DEVELOPER TO UNDERTAKE DEVELOPMENT AND CONSTRUCTION OF A RESIDENTIAL COMPLEX IN THE SCHEDU LE PROPERTY AND THE DEVELOPER SHALL UNDERTAKE THE DEVELOPMENT OF THE SCHEDULE SITE AND TAKE UP CONSTRUCTION. 6. THAT THE OWNERS HEREBY GRANT LICENSE TO THE DEVELOPER AND AUTHORIZE AND EMPOWER IT TO DEVELOP THE SCHEDULE PROPERTY AT THE DEVELOPERS COST INTO A RESIDENTIAL COMPLEX AND TO UNDERTAKE AL L NECESSARY AND INCIDENTAL WORKS IN RESPECT THEREOF I.E. TO SURVEY THE LAND, ENGAGE ARCHITECTS, ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 11 OF 28 CONTRACTORS, WORKERS, AGENTS AND ANY OTHER REQUIRED FOR THE PURPOSE OF CONSTRUCTION ACTIVITIES. 7. IT IS AGREED BY AND BETWEEN THE PARTIES THAT THE PARTIES HERETO ARE ENTITLED TO THE CONSTRUCTED/BUIL T UP AREAS ETC. INCLUDING COMMON SPACES, PARKING SPACES IN THE FOLLOWING RATIOS: I) OWNERS : 50% II) DEVELOPER: 50% 11. THAT AFTER COMPLETION OF THE CONSTRUCTION, THE OWNERS ON ONE HAND AND THE DEVELOPER ON THE OTHER HAND, SHALL BECOME THE ABSOLUTE OWNERS OF 50%:50% OF THE BUILT UP AREAS TOGETHER WITH ALL COMMON AREAS, FACILITIES AMENITIES AND SERVICES PROVIDED IN THE BUILDING ALONG WITH PROPORTIONATE UNDIVIDED SHARE OF LAND AND RIGHTS IN THE TERRACE AND THE PARKING AREAS ETC. 5.5. THE CIT FURTHER OBSERVED THAT THE TOTAL NUMBER OF FLATS PROPOSED TO BE CONSTRUCTED WAS 40. 50% OF IT WOULD BE 20 FLATS I.E. 10 FLATS EACH TO THE SHARE OF THE ASSESSEE AND HER SISTER. IN OTHER WORDS, THE ASSESSEE WAS TO GET 10 FLATS IN LI EU OF HER TRANSFER OF THE EXTENT OF HER SHARE IN THE LAND IN QUESTION. TOTAL AREA OF THE PLOT WAS 5000 SQ. YARDS. THE SHARE OF T HE ASSESSEE IN THE SAID PLOT WAS HALF I.E. 2500 SQ.YARDS. THE ASSE SSEE HAPPENED TO TAKE POSSESSION OF THE 10 FLATS FROM THE BUILDER M/S. LUMBINI CONSTRUCTIONS LTD IN JUNE/JULY 2005 AND IN A MATTER OF 6 MONTHS THEREAFTER, THE ASSESSEE HAPPENED TO DISPOSE OF ALL THE 10 FLATS. THE QUESTION IS AT WHAT POINT THE LONG TERM CAPITAL GAIN CAN BE SAID TO ARISE LEGALLY I.E. WHETHER AT THE POINT OF TIME WHEN THE 10 FLATS WERE RECEIVED BY THE ASSESSEE FROM THE BUI LDER OR AT THE POINT OF TIME WHEN ALL THE FLATS WERE SOLD OUT BY T HE ASSESSEE. IN OTHER WORDS, WHETHER THE SALE PROCEEDS OF 10 FLATS WOULD BE LONG TERM CAPITAL GAINS OR THE COST OF CONSTRUCTION OF T HE 10 FLATS I.E. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 12 OF 28 COST TO THE BUILDER PLUS NON-REFUNDABLE DEPOSIT REC EIVED FROM THE BUILDER, IF ANY, WOULD BE LONG TERM CAPITAL GAINS?. IT IS THE CASE OF THE ASSESSEE THAT THE SALE PROCEEDS OF 10 FLATS WOU LD BE LONG TERM CAPITAL GAINS. IN CANVASSING THIS CONTENTION, THE A R HAS PLACED RELIANCE ON THE DECISION OF THE APEX COURT IN THE C ASE OF CIT VS. GEORGE HENDERSON LTD (66 ITR 622), THE LD CIT EXTRA CTED THE RELEVANT PORTION FROM THE ABOVE DECISION AS UNDER: THE EXPRESSION 'FULL VALUE OF THE CONSIDERATION FO R WHICH THE SALE, EXCHANGE OR TRANSFER OF THE CAPITAL ASSET IS MADE' APPEARING IN SECTION 12B(2) MEANT TH E MARKET VALUE OF THE ASSET TRANSFERRED AND ON THIS GROUND THE APPELLATE TRIBUNAL WAS JUSTIFIED IN TAKI NG THE MARKET VALUE OF THE SHARES TO BE THE FULL VALUE OF THE CONSIDERATION. WE ARE UNABLE TO ACCEPT THIS CONTENTION AS CORRECT. IT IS MANIFEST THAT THE CONSIDERATION FOR THE TRANSFER OF CAPITAL ASSET IS WHAT THE TRANSFEROR RECEIVES IN LIEU OF THE ASSET HE PAR TS WITH, NAMELY, MONEY OR MONEY'S WORTH AND, THEREFORE , THE VERY ASSET TRANSFERRED OR PARTED WITH CANNOT BE THE CONSIDERATION FOR THE TRANSFER. IT FOLLOWS THAT THE EXPRESSION 'FULL CONSIDERATION' IN THE MAIN PART OF SECTION 12B(2) CANNOT BE CONSTRUED AS HAVING A REFERENCE TO THE MARKET VALUE OF THE ASSET TRANSFER RED BUT THE EXPRESSION ONLY MEANS THE FULL VALUE OF THE THING RECEIVED BY THE TRANSFEROR IN EXCHANGE FOR TH E CAPITAL ASSET TRANSFERRED BY HIM. THE MAIN PART OF SECTION 12B(2) PROVIDES THAT THE AMOUNT OF A CAPITA L GAIN SHALL BE COMPUTED AFTER MAKING CERTAIN DEDUCTIONS FROM THE 'FULL VALUE OF THE CONSIDERATIO N FOR WHICH THE SALE, EXCHANGE OR TRANSFER OF THE CAPITAL ASSET IS MADE'. IN CASE OF A SALE, THE FULL VALUE O F THE CONSIDERATION IS THE FULL SALE PRICE ACTUALLY PAID. THE LEGISLATURE HAD TO USE THE WORDS 'FULL VALUE OF THE CONSIDERATION' BECAUSE IT WAS DEALING NOT MERELY WI TH SALE BUT WITH OTHER TYPES OF TRANSFER, SUCH AS EXCHANGE, WHERE THE CONSIDERATION WOULD BE OTHER THAN MONEY ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 13 OF 28 5.6 THE LD CIT OBSERVED THAT THE ABOVE DECISION OF THE APEX COURT, IS DIAMETRICALLY OPPOSITE TO THE ASSESSEES STANCE. THE GIST OF THE SAID DECISION IS THAT THE EXPRESSION FULL C ONSIDERATION OCCURRING IN THE STATUTORY PROVISION RELATING TO CA PITAL GAINS UNDER THE 1922 ACT DOES NOT CONNOTE MARKET VALUE OF THE TRANSFERRED ASSET BUT ONLY THE FULL VALUE OF THE TH ING RECEIVED BY THE TRANSFER IN EXCHANGE FOR THE CAPITAL ASSET TRAN SFERRED. IF THE RATIO IS APPLIED TO THE PRESENT CASE, WHAT WOULD CO NSTITUTE FULL CONSIDERATION FOR THE TRANSFER OF THE ASSESSEES SH ARE IN SOMAJIGUDA LAND. NEEDLESS TO SAY THAT THE FULL CONS IDERATION IN THIS CASE WOULD BE THE 10 FLATS I.E. THE VALUE EMBO DIES IN THE 10 FLATS AS PER THE BUILDERS ACCOUNT BOOKS, NOT THE S ALE PROCEEDS OF THE FLATS AS CONTENDED BY THE ASSESSEE. FOR EXAMPLE , IN THE PRESENT CASE, THE ASSESSEE HAPPENED TO DISPOSE OF T HE FLATS IN THE YEAR OF POSSESSION ITSELF. NOW THERE COULD BE DIFFE RENT SITUATIONS, FOR EXAMPLE WHERE AN ASSESSEE RETAINS ALL THE FLATS FOR PERSONAL FAMILY USE OR FOR COMMERCIAL EXPLOITATION AS LET OU T PROPERTIES. IN THE LATER TYPE OF SITUATION, WHAT WOULD BE THE LONG TERM CAPITAL GAIN AND WHAT WOULD THE COST OF CONSTRUCTION OF THE 10 FLATS AS PER THE BUILDERS ACCOUNT. IF THE CONTENTION OF THE ASSESSEE IS ACCEPTED, THEN THERE WOULD BE NO LONG TERM CAPITAL GAIN IN A CASE WHERE AN ASSESSEE DECIDES TO RETAIN THE FLATS BUT S UCH A STANCE WOULD BE UNTENABLE LEGALLY SINCE FULL CONSIDERATION CAN BE MONEY OR MONEYS WORTH. IN THE PRESENT CASE, THE FULL CON SIDERATION, FOR THE TRANSFER OF THE ASSESSEES SHARE IN THE SOMAJIG UDA LAND WOULD BE THE COST OF CONSTRUCTION OF THE 10 FLATS. STRANGELY AND UNTENABLY, THE ASSESSEE HAS TAKEN THE SALE PROCEEDS OF THE FLATS AS FULL VALUE OF CONSIDERATION, PLEADING THAT THE F AIR MARKET VALUE OF THE PROPERTY GRANTED IN EXCHANGE AS ON DATE OF E XCHANGE SHALL ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 14 OF 28 HAVE TO BE ASCERTAINED IN ORDER TO ARRIVE AT THE FI GURE OF CONSIDERATION. THIS IS ENTIRELY UNTENABLE. THE LANG UAGE USED IS FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING NOT FAIR MARKET VALUE. FOR EXAMPLE, IN A CASE WHERE A PROPERTY IS T RANSFERRED FOR MONEY, THE FULL VALUE OF CONSIDERATION BECOMES THE SUM OF MONEY STATED IN THE SALE DEED, NOT THE FAIR MARKET VALUE. IN FACT IN ORDER TO CURB THE PRACTICE OF GLARING UNDERSTATEMENT OF C ONSIDERATION IN MATTERS OF TRANSFER OF CAPITAL ASSET, SECTION 50C H AD BEEN INTRODUCED W.E.F 1.4.2003 AND THAT TOO IN A SITUATI ON WHERE THE CONSIDERATION STATED IN THE DOCUMENTS IS LESS THAN THE VALUE ADOPTED BY THE REGISTERING AUTHORITY FOR THE PURPOS E OF STAMP DUTY. IT HAS NO REFERENCE TO FAIR MARKET VALUE. 5.7 WE ARE OF THE OPINION THAT THE CIT ERRED IN DET ERMINING THE SHORT TERM CAPITAL GAIN ON THE ENTIRE PROPERTY WHIL E COMPUTING DEDUCTION UNDER THE HEAD CAPITAL GAIN. THE LONG T ERM CAPITAL GAIN HAS TO BE CALCULATED ON THE UNDIVIDED INTEREST IN LAND I.E. ON THE LAND COMPONENT. HENCE WE SET ASIDE THIS ISSUE T O THE FILE OF THE AO TO REWORK THE CAPITAL GAIN COMPUTATION. THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY TO REPRESENT HER CASE, SINC E THE ASSESSEE HAS ELABORATELY SUBMITTED BEFORE US AS STATED SUPRA AT PARA 5.2 AND 5.3. 6. GROUND NO.5 RAISED BY THE ASSESSEE IS REPRODUCED BELOW: THE LD CIT WHILE DIRECTING TO DENY DEDUCTION U/S 5 4F ERRED IN GIVING A FINDING THAT THE POSSESSION OF NE W ASSET IS BEYOND THREE YEARS. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 15 OF 28 6.1 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE LD CIT FURTHER ERRED IN GIVING THE FINDING THAT THE DEDUCTION IS CLAIMED AGAINST THE SHORT TERM CAPITAL GAIN, WITHOU T APPRECIATING THE FACT THAT THE SALE OF FLATS INCLUDED SALE OF UN DIVIDED SHARE IN LAND WHICH HAD BEEN SOLD DURING THE YEAR UNDER CONS IDERATION. HENCE THE PERIOD OF 3 YEARS IS TO BE CALCULATED FRO M THE DATE OF THIS SALE. WHAT IS TO BE SEEN IS THE DATE OF INVEST MENT AND NOT THE DATE WHEN THE HOUSE PROPERTY WAS HANDED OVER TO THE ASSESSEE. EVEN OTHERWISE ALSO, WITHOUT PREJUDICE TO THE STAND THAT THE CONSTRUCTION OF THE NEW ASSET IS WITHIN THREE YEARS , THE LD CIT ERRED IN APPRECIATING THE LEGAL PROVISION THAT FOR SUCH FAILURE TO CONSTRUCT THE NEW RESIDENTIAL UNIT WITHIN THREE YEA RS, THE LONG TERM CAPITAL GAINS IS TO BE BROUGHT TO TAX ONLY IN SUCH YEAR WHEN THE PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER EXPIRES AND NOT IN THE YEAR IN WHICH IT IS CLAIMED. 6.2 WE HEARD BOTH THE PARTIES. THE ITAT HYDERABAD B BENCH IN ITA NO.234/HYD/2012 (35 TAXMANN.COM 90) HAS HELD AS FOLLOWS: PROVISION CONTAINED UNDER SECTION 54F BEING A BENEFICIAL PROVISION HAS TO BE CONSTRUED LIBERALLY. IN VARIOUS JUDICIAL PRECEDENTS IT HAS BEEN HELD THAT T HE CONDITION PRECEDENT FOR CLAIMING BENEFIT UNDER SECT ION 54F IS ONLY THAT THE CAPITAL GAIN REALIZED FROM THE SALE OF CAPITAL ASSET SHOULD BE PARTED BY THE ASSESSEE A ND INVESTED EITHER IN PURCHASING A RESIDENTIAL HOUSE O R IN CONSTRUCTING A RESIDENTIAL HOUSE. IF THE ASSESSEE H AS INVESTED THE MONEY IN CONSTRUCTION OF RESIDENTIAL H OUSE, MERELY BECAUSE THE CONSTRUCTION WAS NOT COMPLETE IN ALL RESPECTS AND IT WAS NOT IN A FIT CONDITION TO B E OCCUPIED WITHIN THE PERIOD STIPULATED, THAT WOULD N OT DISENTITLE THE ASSESSEE FROM CLAIMING THE BENEFIT U NDER SECTION 54F. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 16 OF 28 ONCE THE ASSESSEE DEMONSTRATES THAT THE CONSIDERATI ON RECEIVED ON TRANSFER HAS BEEN INVESTED EITHER IN PURCHASING A RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE, EVEN THOUGH THE TRANSACTIONS ARE NOT COMPLETE IN ALL RESPECTS AND AS REQUIRED UNDER THE LAW, THAT WOULD NOT DISENTITLE THE ASSESSEE FROM AVAILIN G BENEFIT UNDER SECTION 54F. EVEN INVESTMENT MADE IN PURCHASING A PLOT OF LAND FOR THE PURPOSE OF CONSTRUCTION OF A RESIDENTIAL HOUSE HAS BEEN HELD T O BE AN INVESTMENT SATISFYING THE CONDITIONS OF SECTION 54F. THOUGH THERE CANNOT BE ANY DISPUTE WITH REGARD TO T HE ABOVE SAID PROPOSITION OF LAW, THE ASSESSEE IS REQU IRED TO PROVE THE ACTUAL DATE OF INVESTMENT AND THE AMOU NT INVESTED TOWARDS PURCHASE/CONSTRUCTION OF THE RESIDENTIAL HOUSE WITH SUPPORTING EVIDENCE. SINCE THE PRIMARY FACTS RELATING TO WHICH DATE SHOU LD RECKONED AS THE ACTUAL DATE OF INVESTMENT AND WHICH IS THE ACTUAL AMOUNT OF INVESTMENT HAVE NOT BEEN PROPERLY BROUGHT ON RECORD IN THE INSTANT CASE, THE MATTER IS TO BE REMITTED BACK TO THE FILE OF THE AS SESSING OFFICER WHO SHALL DETERMINE THE ISSUE WITH REGARD T O ASSESSEE'S CLAIM UNDER SECTION 54F AFRESH AFTER CONSIDERING ALL THE FACTS AND MATERIALS AVAILABLE B EFORE HIM. 6.3 RESPECTFULLY FOLLOWING THE ABOVE DECISION OF TH E COORDINATE BENCH OF THE ITAT, HYDERABAD BENCH, WE SET ASIDE TH E ISSUE TO THE FILE OF THE AO, WITH A DIRECTION TO FOLLOW THE DECISION OF THE ITAT IN THE CASE OF SHRI NARASIMHA RAJU (SUPRA) IN THE INSTANT CASE BEFORE US. 7. GROUND NO.6 IS THE ALTERNATE GROUND RAISED BY TH E ASSESSEE. SINCE GROUND NO.5 HAS BEEN SET ASIDE BY U S TO THE FILE OF THE AO, GROUND NO.6 HAS BECOME REDUNDANT. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 17 OF 28 8. GROUND NO.7 IN ASSESSEES APPEAL IS AS UNDER: THE LD CIT ERRED IN GIVING DIRECTION TO ADOPT COST OF CONSTRUCTION OF TEN FLATS AT RS.1,43,73,845 WHICH I S AS PER BUILDERS ACCOUNT WITHOUT PROVIDING INFORMATION AS TO HOW THE COST OF CONSTRUCTION TO THE BUILDER FOR 40 FLATS IS ARRIVED AT RS.5,74,95,383.51 8.1 THIS GROUND HAS NOT BEEN PRESSED BY THE ASSES SEE AT THE TIME OF HEARING AND HENCE DISMISSED AS NOT PRESSED. 9. GROUND NO.8 IN ASSESSEES APPEAL IS GIVEN BELOW: THE LD CIT ERRED IN ISSUING DIRECTIONS TO TREAT RS. 10.00 LAKHS AS ADDITIONAL SALE CONSIDERATION WITHOUT APPRECIATING THE FACT THAT TOTAL DEPOSIT RECEIVED B Y THE ASSESSEE WAS REFUNDED BACK TO THE DEVELOPER. 9.1 ACCORDING TO THE AO, AS PER THE DEVELOPMENT AGR EEMENT, THE ADVANCE DEPOSIT RECEIVED BY THE ASSESSEE FROM T HE DEVELOPER IS REFUNDABLE ON DELIVERY OF ASSESSEES SHARE OF FL ATS. THE ADVANCE DEPOSIT RECEIVED FROM THE DEVELOPER IS ASSESSABLE T O TAX IN THE HANDS OF THE ASSESSEE AS THERE WAS NO EVIDENCE AVAI LABLE ON RECORD OF REFUND OF SUCH DEPOSIT TO DEVELOPER AFTER RECEIPT OF ASSESSEES SHARE OF FLATS. 9.2 IN THIS REGARD, THE ASSESSEE SUBMITTED THAT IT RECEIVED A DEPOSIT OF RS.20.00 LAKHS WHICH WAS RETURNED TO THE DEVELOPER BY THE ASSESSEE ON 6.7.2005 VIDE ACK. NO.100822 OF HDFC BANK ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 18 OF 28 LTD, PHOTOCOPY OF WHICH WAS ENCLOSED. HENCE THE QUE STION OF TAXING ADVANCE RECEIVED FROM THE DEVELOPER DOES NOT ARISE. 9.3 ACCORDING TO THE LD CIT (A) THIS ISSUE PERTAINI NG TO THE ADVANCE DEPOSIT RECEIVED BY THE ASSESSEE FROM THE B UILDER I.E. LUMBINI CONSTRUCTIONS LTD. IT IS THE CASE OF THE AS SESSEE THAT SUCH DEPOSITS WERE REFUNDABLE TO THE BUILDER AND TH AT SHE HAD REFUNDED SUCH AMOUNTS. THE LD CIT (A) REPRODUCED TH E RELEVANT PORTIONS FROM THE DEVELOPMENT AGREEMENT AS UNDER: 8. THE DEVELOPER SHALL PAY TO THE OWNERS AN INTERE ST FREE DEPOSIT OF RS.1.00 CRORES. THE DEVELOPER ALREADY PAID AN ADVANCE OF RS.15.00 LAKHS AS BELOW: NAME OF THE OWNER: SMT. T. HEMALATHA DEVI CH. NO.425382 DT. 20.10.2001 RS.10,00,000/- SMT. V.SHAILAJA CH.NO.426381 DT. 20.10.01 RS.2,50,000/- SMT. S. UMA DEVI CH. NO.426380 DT. 20.10.01 RS.2,50,000/- ALL THE CHEQUES DRAWN ON ANDHRA BANK, SOMAJIGUDA BRANCH, HYDERABAD AS INTEREST FREE DEPOSIT OUT OF RS.1.00 CRORES AND THE BALANCE OF RS.85.00 LAKHS SHALL BE PAID TO THE OWNERS WITHIN TWO WEEKS FROM THE DATE OF RECEIPTS OF THE MUNICIPAL SANCTION AND THE DEVELOPER SHALL BE ENTITLED TO TAKE POSSESSION AND COMMENCE THE WORK AFTER PAYMENT OF THE BALANCE DEPOSIT AMOUNT WITHIN THE SPECIFIED TWO WEEKS TIME, THEN THE OWNERS ARE AT LIBERTY TO CANCEL THIS AGREEMENT. THIS DEPOSIT AMOUNT SHALL BE OVER OF THE POSSESSION OF THE COMPLETED BUILT UP AREAS BY THE DEVELOPER TO THE OWNERS OF THEIR SHARE AS PER THIS AGREEMENT. 9.4 THE CIT HELD THAT FROM THE ABOVE, IT CAN BE SEEN THAT THE BUILDER HAD GIVEN INTEREST FREE DEPOSIT OF RS.1.00 CRORES. AS ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 19 OF 28 AGAINST THIS THE AR PRODUCED EVIDENCE OF REFUND OF RS.80.00 LAKHS BY THE ASSESSEE, HER SISTER SMT. V. SHAILAJA AND HE R MOTHER SMT. T. HEMALATHA DEVI. THE MENTION OF THE NAME OF THE M OTHER IS JUST A TOKEN ONE SINCE HER SHARE IN THE LAND HAD FURTHER B EEN SUB-DIVIDED BETWEEN THE TWO DAUGHTERS I.E. THE PRESENT ASSESSEE SMT. S. UMA DEVI AND SMT. V. SHAILAJA. HENCE, MONEYS AS WELL AS MONEYS WORTH FALLING TO THE SHARE OF SMT. T. HEMALATHA DEV I HAVE BEEN APPORTIONED BETWEEN THE TWO DAUGHTERS IN EQUAL SHAR ES. IT BECOMES CLEARLY EVIDENT THAT WHILE THE BUILDER HAD GIVEN ADVANCE DEPOSIT OF RS.1.00 CRORES, THE AGGREGATE OF REFUNDS BY THE ASSESSEE, HER SISTER AND THEIR MOTHER SMT. T. HEMAL ATHA DEVI PUT TOGETHER WORKS OUT TO ONLY RS.80.00 LAKHS. THERE IS ABSOLUTELY NO EVIDENCE OF FURTHER REFUND OF RS.20.00 LAKHS. IN FA CT THE BUILDER ITSELF I.E. M/S. LUMBINI CONSTRUCTIONS LTD HAD CERT IFIED THE AGGREGATE REFUND RECEIVED BY IT TO BE RS.80.00 LAKH S. IN VIEW OF THIS FACT, THE NON REFUNDED AMOUNT OF RS.20.00 LAKH S BECOMES ASSESSABLE AS PART OF SALE CONSIDERATION FOR THE TR ANSFER OF THE RESPECTIVE SHARES IN THE SOMAJIGUDA LAND AND HENCE ASSESSABLE AS LONG TERM CAPITAL GAIN. SINCE THE TWO SISTERS I. E. THE ASSESSEE SMT. S. UMADEVI AND SMT. V.SHAILAJA HAVE HAD EQUAL SHARES IN EVERYTHING CONNECTED WITH THIS TRANSACTION, THE AMO UNT OF RS.20.00 LAKHS HAS TO BE DIVIDED EQUALLY BETWEEN BO TH OF THEM IN THE RATIO OF RS.10.00 LAKHS EACH. IN COMPLETING THE ASSESSMENT THE AO HAD NOT AT ALL APPLIED HIS MIND TO HIS ASPECT. S UCH OMISSION ON HIS PART HAS RENDERED THE ASSESSMENT NOT ONLY ERRON EOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THEREF ORE, THE LD CIT (A) DIRECTED THE AO TO BRING TO TAX RS.10.00 LAKHS AS L ONG TERM CAPITAL GAINS IN ADDITION TO THE COST OF CONSTRUCTION OF 10 FLATS AS PER THE BUILDERS ACCOUNT IN THE HANDS OF THE PRESENT CASE. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 20 OF 28 9.5 ASSESSEE REITERATED ITS SUBMISSION THAT THE AMO UNT OF RS.20.00 LAKHS RECEIVED AS DEPOSIT FROM THE DEVELOP ER AND THE SAME HAD BEEN REFUNDED BACK, COPY OF THE CONFIRMATI ON LETTER IN THIS REGARD FROM LUMBINI CONSTRUCTIONS LTD WAS ENCL OSED. HENCE NO AMOUNT CAN BE ADDED ON THIS COUNT. WE HAVE PERUS ED THE EVIDENCE FOR RETURN OF THE AMOUNT OF DEPOSIT AND AR E SATISFIED WITH THE ASSESSEES CLAIM THAT NO AMOUNT CAN BE ADD ED ON THIS COUNT. THIS GROUND OF APPEAL IS ALLOWED. 10. GROUND NO.9 RAISED IN ASSESSEES APPEAL IS GIVE N BELOW: THE LD CIT ERRED IN DIRECTING TO BRING TO TAX AN A MOUNT OF RS.18,50,000 AS ADDITIONAL SALE CONSIDERATION IN SHORT TERM CAPITAL GAINS WITHOUT APPRECIATING THE F ACT THAT THIS AMOUNT WAS NOT SALE CONSIDERATION BUT WAS TOWARDS SOCIETY CORPUS FUND, WATER AND ELECTRICITY CONNECTION CHARGES, COST OF SOLAR WATER HEATING SYSTEM, WHICH WAS IN TURN TO BE DEFRAYED TO RESPECT IVE AGENCIES. HENCE THE SAME CANNOT BE CONSIDERED AS SALE CONSIDERATION. 10.1 THE NEXT ISSUE IS THAT THE ASSESSEE HAD NOT OFFERED THE AMOUNTS RECEIVED TOWARDS ADDITIONAL AMENITIES, PARK ING CHARGES, LIFT, COMMON AREA ETC. ON SALE OF FLATS. 10.2 ON THIS THE ASSESSEE SUBMITTED THAT WITH REGA RD TO THE AMOUNTS RECEIVED TOWARDS ADDITIONAL AMENITIES, THE SALE CONSIDERATION MENTIONED IN THE SALE DEEDS AND WORK ORDER AGREEMENT IS INCLUSIVE OF THE COST OF VARIOUS AMENI TIES LIKE PARKING ETC, PROVIDED TO THE PROSPECTIVE BUYERS BES IDES COST OF ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 21 OF 28 FLAT WHICH CAN BE VERIFIED FROM THE SALE DEED AND W ORK ORDER WAS MADE USE OF IN RESPECT OF ALL THE 10 FLATS SOLD BY THE ASSESSEE. ALL THE AMOUNTS RECEIVED BY THE ASSESSEE TOWARDS SALE O F FLATS, INCLUDING WORK ORDER CHARGES AND RECEIPTS ON ACCOUN T OF OTHER AMENITIES HAVE BEEN CLUBBED TOGETHER WHILE WORKING OUT THE TOTAL CONSIDERATION RECEIVED. ASSESSEE ALSO ENCLOSED A ST ATEMENT INDICATING THE AMOUNTS RECEIVED UNDER VARIOUS HEADS AND HOW THE SAME HAVE BEEN TREATED FOR ARRIVING AT THE TOTA L SALE CONSIDERATION. A PERUSAL OF THIS STATEMENT WILL REV EAL THAT THE CONSIDERATION TAKEN FOR SALE OF FLATS IS ALL INCLUS IVE OF SALE PRICE AS WELL AS AMENITIES. HENCE IT IS INCORRECT TO ASSUME THAT THE ASSESSEE HAS NOT OFFERED FOR TAXATION, THE AMOUNTS RECEIVED TOWARDS ADDITIONAL AMENITIES, PARKING CHARGES, LIFT COMMON AREAS ETC. ON SALE OF FLATS. 10.3. THE LD CIT (A) ON THIS ISSUE STATED THAT TH E SUBMISSION OF THE ASSESSEE GETS DEMOLISHED BY THE DOCUMENTARY EVI DENCE AVAILABLE ON RECORD I.E. THE RESPECTIVE WORK ORDER. FOR EXAMPLE, THE WORK ORDER RELATING TO THE PURCHASE OF FLAT BY SRI M. RAMASUBBA REDDY EVIDENCES THAT AN AMOUNT OF RS.12,2 1,600/- WAS TO BE PAID TOWARDS WORK ORDER AGREEMENT. THE LD CIT (A) REPRODUCED THE RELEVANT PARA AS UNDER: CONSIDERATION AN AMOUNT RS.12,21,600/- (RUPEES TWELVE LAKHS TWENT Y ONE THOUSAND SIX HUNDRED ONLY) PAYABLE BY THE FIRST PART TO THE LAND OWNER SMT. S. UMADEVI ONLY. THE FI RST PARTY HAS ALREADY PAID AN AMOUNT OF RS.12,21,600/- AND ACKNOWLEDGE THE RECEIPT OF THE SAME. CORPUS FUND RS.50,000/-, WATER AND ELECTRICITY RS.1,10,000/- AND SOLAR WATER HEATING SYSTEMS ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 22 OF 28 RS.25,000/- WILL BE PAID BEFORE TAKING THE DELIVERY OF THE POSSESSION. 10.4. THE CIT HELD THAT FROM THE ABOVE EXTRACT, IT CAN BE SEEN THAT IN ADDITION TO RS.12,21,600/-, THERE WAS FURTH ER OBLIGATION TO PAY RS.1,85,000/- I.E. CORPUS FUND RS.50,000/- WATE R AND ELECTRICITY RS.1,10,000/- AND SOLAR WATER HEATING S YSTEM RS.25,000/-. IT IS CLEAR THAT THE ASSESSEE HAD TAKE N INTO ACCOUNT THE AMOUNT OF RS.12,21,600/- SHE HAD NOT TAKEN INTO ACCOUNT THE FURTHER AMOUNT OF RS.1,85,000/-. THERE CAN BE NO DO UBT THAT THE FURTHER AMOUNT OF RS.1,85,000/- IS A PART OF SALE C ONSIDERATION OF THE FLATS IN QUESTION. THIS FEATURE IS NOTICED IN R ESPECT OF ALL THE 10 FLATS SOLD BY THE ASSESSEE. THE AO HAD COMPLETED TH E ASSESSMENT WITHOUT EXAMINING THIS ASPECT AND WITHOUT APPLYING HIS MIND TO THIS ISSUE. THIS OMISSION ON HIS PART HAD RENDERED THE ASSESSMENT NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTE RESTS OF THE REVENUE. HENCE, THE CIT (A) DIRECTED THE AO TO BRIN G TO TAX, AS A PART OF SHORT TERM CAPITAL GAINS I.E. PART OF SALE PROCEEDS OF THE FLATS I.E. RS.18,50,000/-(RS.1,85,000 X 10). 10.5. WE HAVE HEARD BOTH PARTIES. IN OUR OPINION, THE LD CIT ERRED IN DIRECTING TO BRING TO TAX AN AMOUNT OF RS. 18,50,000/- AS ADDITIONAL SALE CONSIDERATION WITHOUT APPRECIATING THE FACT THAT THIS AMOUNT WAS NOT SALE CONSIDERATION, BUT WAS TOW ARDS SOCIETY CORPUS FUND, WATER AND ELECTRICITY CONNECTION CHARG ES, COST OF SOLAR WATER HEATING SYSTEM, WHICH WAS IN TURN TO BE DEFRAYED TO RESPECTIVE AGENCIES. HENCE, THE SAME CANNOT BE CONS IDERED AS SALE CONSIDERATION. THE LD CIT (A) SEEMS TO HAVE IG NORED THE STATEMENT OF SALE CONSIDERATION RECEIVED, WHICH WAS FILED BEFORE ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 23 OF 28 HIM. THE ASSESSEE DID INCLUDE AMOUNT RECEIVED TOWAR DS ELECTRICITY AND WATER CHARGES (RS.1,10,000 PER FLAT ) FROM 8 FLAT OWNERS, AMOUNT OF RS.1,62,500 RECEIVED TOWARDS SOLA R SYSTEM FROM 8 FLAT OWNERS AND RS.1,50,000 TOWARDS CORPUS F UND FROM THREE FLAT OWNERS WHICH IN TURN, WERE DEFRAYED TO R ESPECTIVE AGENCIES. THOSE FLAT OWNERS WHO HAVE NOT PAID THEIR CONTRIBUTION TO THE ASSESSEE HAVE DIRECTLY PAID THEIR RESPECTIVE SHARES TO THE CONCERNED AGENCIES. HENCE THESE AMOUNTS SHOULD NOT FORM PART OF SALE CONSIDERATION OF THE FLATS SOLD. HENCE THIS GROUND OF APPEAL PREFERRED BY THE ASSESSEE IS ALLOWED. 11. GROUND NO.10 IS AS FOLLOWS: THE LD CIT ERRED IN DIRECTING TO BRING TO TAX THE AMOUNT OF RS.5,00,000 CLAIMED AS COST OF ACQUISITIO N OF SHARES, BEING AMOUNT PAID TO THE CONSULTANT FOR ADVISING ON THE MATTER OF PURCHASE AND SALE OF SHAR ES, INSPITE OF PROVIDING ALL THE DETAILS AND EVIDENCES FOR SUCH EXPENDITURE. 11.1 WITH REGARD TO DEDUCTION OF RS.5.00 LAKHS FRO M SHORT TERM CAPITAL GAINS OF RS.51,41,303 ON SALE OF SHARES TOW ARDS FEE PAID TO INVESTMENT ADVISOR AS SEEN FROM THE STATEMENT O F COMPUTATION OF INCOME, AO WAS OF THE OPINION THAT T HIS EXPENDITURE DOES NOT FORM PART OF COST OF ACQUISIT ION NOR IS IT CONNECTED TO SALE OF SHARES. HENCE THE DEDUCTION CL AIMED BY THE ASSESSEE WAS NOT ADMISSIBLE. 11.2 IN RESPONSE TO THIS, THE ASSESSEE SUBMITTED TH AT: ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 24 OF 28 A) THIS SUM WAS PAID FOR THE PERIODICAL AND TIMELY ADVICE GIVEN BY ROYAL CORPORATE ADVISORS (P) LTD FOR PURCHASE AND SALE OF SHARES, WITHOUT WHICH THE ASSESSEE COULD NOT HAVE EARNED SHORT TERM CAPITAL GAIN OF RS.51,41,313. B) THIS EXPENDITURE HAD TO BE INCURRED WHETHER THE ADVICE GIVEN BY THEM RESULTED IN GAIN OR LOSS TO TH E ASSESSEE. C) ASSESSEE BEING A WOMEN, SHE HAD TO NECESSARILY DEPEND ON PROFESSIONALS TO GIVE TIMELY ADVICE, PARTICULARLY IN PURCHASE AND SALE OF SHARES IN WHIC H PRICES OF SHARES ARE SUBJECT TO UNFORESEEN AND UNEXPECTED FREQUENT FLUCTUATIONS. D) INCURRING OF THE EXPENDITURE WAS A CONTINUOUS PROCESS BUT QUANTIFIED AT THE CLOSE OF THE YEAR. E) SIMILARLY THE EXPENDITURE INCURRED FOR ADVICE ON SALE OF SHARES FORMS PART OF COST OF SALES OF THE SHARES BEFORE THEY ARE TRANSFERRED. UNLESS BOTH TRANSFERS VIZ., TRANSFER IN THE NAME OF THE ASSESSEE WHILE PURCHASI NG AND TRANSFER IN THE NAME OF THE PURCHASER WHILE SELLING, THE TRANSACTION IS NOT COMPLETE AND THE RESULTANT GAIN OR LOSS WOULD NOT ARISE. THUS THE AFORESAID EXPENDITURE IS WHOLLY AND EXCLUSIVELY INCURRED IN CONNECTION WITH TRANSFER AS CONTEMPLATE D U/S 48(1) OF THE ACT AND HENCE ALLOWABLE. RELIANCE WAS PLACED ON THE HON'BLE APEX COURT IN THE CASE OF DHAM DADABHAY KADADIA VS. CIT (1967) 63 ITR 651. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 25 OF 28 11.3. THE LD CIT (A) IN THIS REGARD OBSERVED THAT SECTION 48 OF THE I.T. ACT, 1961 LAYS DOWN THE MODE OF COMPUTATION OF CAPITAL GAINS. THE PERMISSIBLE DEDUCTIONS ARE: I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER II) THE COST OF ACQUISITION OF THE ASSET AND THE CO ST OF ANY IMPROVEMENT THERETO. 11.4 THE CIT (A) HELD THAT FROM THE ABOVE, IT CAN BE SEEN THAT THE AMOUNT OF RS.5.00 LAKHS IN QUESTION, CANNOT BE A PA RT OF COST OF ACQUISITION OF THE SHARES IN QUESTION. SIMILARLY, T HE SAID AMOUNT CANNOT BE SAID TO HAVE BEEN INCURRED WHOLLY AND EXC LUSIVELY IN CONNECTION WITH THE TRANSFER OF THE SHARES IN QUEST ION. MOREOVER, THE ASSESSEE HAS NOT PRODUCED ANY SOLITARY EVIDENCE AS TO THE NATURE OF ADVICE RENDERED. HENCE, THE CIT (A) HELD THAT THE CLAIM OF DEDUCTION OF RS.5.00 LAKHS IS NOT ADMISSIBLE. 11.5 THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND THE LD CIT. IT WAS SUBMITTED THAT THE SAID E XPENDITURE WAS INCURRED BY THE ASSESSEE FOR ADVICE RENDERED BO TH AT THE TIME OF PURCHASE OF SHARES AND AT THE TIME OF SALE OF SHARES. THUS, THE EXPENDITURE INCURRED FOR ADVICE RENDERED AT THE TIME OF PURCHASE FORMS PART OF THE COST OF THE SHARES. SIMI LARLY THE EXPENDITURE INCURRED FOR ADVICE ON SALE OF SHARES F ORMS PART OF COST OF SALES OF THE SHARES BEFORE THEY ARE TRANSFE RRED. UNLESS BOTH TRANSFERS VIZ., TRANSFER IN THE NAME OF THE AS SESSEE WHILE PURCHASING AND TRANSFER IN THE NAME OF THE PURCHASE R WHILE SELLING, THE TRANSACTION IS NOT COMPLETE AND THE RE SULTANT GAIN OR LOSS WOULD NOT ARISE. THUS THE AFORESAID EXPENDITUR E IS WHOLLY ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 26 OF 28 AND EXCLUSIVELY INCURRED IN CONNECTION WITH TRANSFE R AS CONTEMPLATED U/S 48(1) OF THE ACT AND HENCE ALLOWAB LE. 11.6 WE HAVE HEARD BOTH THE PARTIES AND PERUSED T HE RECORD. WE FIND NO INFIRMITY WITH THE ORDER OF THE CIT (A). WE ARE OF THE OPINION THAT THE DEDUCTION IS PERMISSIBLE ONLY WHEN (I) EXPENDITURE IS INCURRED WHOLLY AND EXCLUSIVELY IN C ONNECTION WITH SUCH TRANSFER AND (II) EXPENDITURE IS TOWARDS THE COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROV EMENT THERETO. THE ASSESSEE HAS NOT PROVED THAT IT COMES UNDER ANY ONE OF THE PERMISSIBLE DEDUCTION AS STATED ABOVE AND HENCE IS ELIGIBLE. ALSO NO EVIDENCE HAS BEEN PRODUCED WITH REGARD TO THE AD VICE RENDERED. HENCE THE DEDUCTION IS UNAVAILABLE TO THE ASSESSEE. ITA NO 885/HYD/2010 SMT. V. SHAILAJA 12. IN THE CASE OF SMT. V. SHAILAJA, THE GROUNDS OF APPEAL ARE IDENTICAL AS THAT OF SMT. S. UMA DEVI, EXCEPT FOR G ROUND NO.4 WHICH IS AS FOLLOWS: 4. THE LD CIT ERRED IN DIRECTING TO DISALLOW DEDUCTION U/S 54F ON THE GROUND THAT ASSESSEES DEPOSIT IN BANK A/C MADE IN OCTOBER 2006 IS BEYOND THE DUE DATE FOR FILING OF RETURN OF INCOME OF 31.07.06 WITHOUT APPRECIATING THE FACT THAT THE DUE DATE FOR THIS A.Y WAS EXTENDED TILL 31.10.2006 BY THE CBDT. 13. THE LD COUNSEL SUBMITTED AS FOLLOWS: - THE CIT, WHILE DIRECTING TO DISALLOW THE CLAIM FO R DEDUCTION U/S 54F ERRED IN GIVING A FINDING THAT THE DEDUCTIO N IS CLAIMED AGAINST SHORT TERM CAPITAL GAINS WITHOUT APPRECIATING THE FACT THAT THE SALE OF FLATS INCLUD ED SALE OF UNDIVIDED SHARE OF LAND, WHICH IS A LONG TERM CAPIT AL ASSET. ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 27 OF 28 - THE CIT ERRED IN DIRECTING TO DISALLOW DEDUCTION U/S 54F ON THE GROUND THAT THE ASSESSEES DEPOSIT IN BANK ACCO UNT MADE IN OCTOBER, 2006 IS BEYOND THE DUE DATE FOR FI LING OF RETURN OF INCOME OF 31.07.06 WITHOUT APPRECIATING T HE FACT THAT THE DUE DATE FOR FILING RETURN OF INCOME FOR T HIS A.Y WAS EXTENDED TILL 31.10.2006 BY THE CBDT (VIDE ORDER NO.142/41/2005 TPI CPE DATED 24.07.2006: 284 ITR (S T) 62). - DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED DATE-WISE DETAILS OF INVESTMENT IN NEW RE SIDENTIAL HOUSE SITUATED AT VISAKHAPATNAM. A COPY OF THE SAME WAS ENCLOSED WHICH INDICATE THAT THE ASSESSEE HAS MADE SUBSTANTIAL INVESTMENT WITHIN THREE YEARS FROM THE DATE OF SALE OF ORIGINAL ASSETS. IN ORDER TO GET BENEFIT U/ S 54F, ASSESSEE NEED NOT COMPLETE THE CONSTRUCTION OF HOUS E AND OCCUPY THE SAME WITHIN THE STIPULATED PERIOD (MRS. SEETHA SUBRAMANIUM VS. ACIT (MAD.) (1996) 55 ITD 094. - FURTHER IT IS NOT THE REQUIREMENT OF LAW THAT THE ASSESSEE SHOULD UTILIZE ONLY THE SALE PROCEEDS FOR INVESTMEN T IN NEW RESIDENTIAL HOUSE PROPERTY. SINCE MONEY HAS NO COLO UR, WHAT IS REQUIRED BY LAW IS THAT ASSESSEE SHOULD USE HIS/HER OWN FUNDS FOR INVESTMENT IN ORDER TO CLAIM EXEMPTIO N U/S 54F WHICH THE ASSESSEE HAS DONE. - ASSESSEES TURNOVER FROM SALE OF SECURITIES WAS RS.35,87,875.05 AND SHARE OF PROFIT, WHICH IS BUSIN ESS INCOME ONLY FROM PARTNERSHIP FIRM M/S PIONEER OXYGE N WAS RS.29,48,881.08. BUT PUT TOGETHER AMOUNTED TO RS.65,36,866 WHICH EXCEEDED RS.40.00 LAKHS. HENCE T HE ITA NO.886 OF 2010 S UMA DEVI HYDERABAD PAGE 28 OF 28 ASSESSEE WAS REQUIRED TO GET ITS BOOKS OF ACCOUNTS AUDITED U/S 44AB OF I.T. ACT, 1961. 14. THE LD DR RELIED ON THE ORDER OF THE CIT. 15. WE HAVE HEARD BOTH PARTIES. SINCE THE AO HAS AL LOWED THE EXEMPTION U/S 54F OF THE ACT AS CLAIMED BY THE ASSE SSEE AFTER EXAMINING THE PASS BOOK PRODUCED BY THE ASSESSEE AN D VERIFYING THE DETAILS ALSO, THE ASSESSEE HAD MADE SUBSTANTIAL INVESTMENT WITHIN 3 YEARS FROM THE SALE OF ORIGINAL ASSET. WE ALSO FIND THAT THE DATE OF FILING THE RETURN WAS EXTENDED AND THE AMOUNT WAS DEPOSITED. THE ASSESSEE HAS PRODUCED THE NOTIFICATI ON FOR EXTENSION BY THE CBDT AT PAGE 34 OF THE PAPER BOOK. HENCE, WE ARE OF THE OPINION THAT THE ASSESSEE IS ELIGIBLE FO R DEDUCTION U/S 54F. 16. IN THE RESULT, BOTH THE APPEALS ARE PARTLY ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2015. S D/ - S D/ - ( P.M. JAGTAP ) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 30 TH JANUARY, 2015. VNODAN/SPS COPY TO: 1. SHRI A.V. RAGHU RAM & B. PEDDI RAJULU, ADVOCATES, 4 03, MANISHA TOWERS, D.NO.10-1-18/31, SHYAM NAGAR, HYDERABAD 500004 2. THE CIT-IV, AAYAKARBHAVAN, BASHEERBAGH, HYDERABAD 3. THE CIT HYDERABAD 4. THE DR, ITAT, HYDERABAD 5. GUARD FILE BY ORDER