DR JAYANT KASHINATH BAPAT, MUMBAI V. ITO 16(2)(5), MUMBAI

ITA 965/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4974 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIV GUBGOTRA
• Keywords: Capital asset; Opportunity of being heard; Cost of acquisition
• Section: 143(3); 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 965/MUM/2017 ASSESSMENT YEAR: 2009 - 10 DR. JAYANT KASHINATH BAPAT C/O V.S. GOKHALE FLAT N O . 404, GURUKRUPA BUILDING, PLOT NO. 19/324, KASTUR PARK, SHIMPOLI ROAD, BORIVALI WEST, MUMBAI - 400092. VS. ITO - 16(2)(5), AAYAKAR BHAVA, 4 TH FLOOR, R. NO. 443, M.K. ROAD, MUMBAI - 400020. PAN NO. AABPB0599G APPELLANT RESPONDENT ASSESSEE BY : MR. MANDAR VAIDYA , AR REVENUE BY : MR. RAJIV GUBGOTRA, DR DATE OF HEARING : 2 2 /10/2018 DATE OF PRONOUNCEMENT : 21/01/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2009 - 10 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 5 , MUMBAI [IN SHORT CIT(A)], AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME TAX ACT 1961, (THE ACT). THERE HAS BEEN A DELAY OF 45 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. THE WIFE AND LEGAL HEIR OF THE ASSESSEE MRS. SNEHAL JAYANT BAPAT FILED AN AFFIDAVIT STATING THAT DUE TO OLD AGE AND ILL HEALTH, SHE AND DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 2 HER LATE HUSBAND SHIFTED TO PUNE AND THE IMPUGNED ORDER WAS RECEIVED ON 28.10.2016 AT THEIR CHARTERED ACCOUNTANTS ADDRESS, BUT THEY RECEIVED IT LATE. HAVING GONE THROUGH THE CONTENTS OF THE SAID AFFIDAVIT, WE FEEL THAT THERE IS MERIT IN THE CONTENTIONS OF THE LEGAL HEIR AND WE CONDONE THE DELAY OF 45 DAYS IN FILING THE PRESENT APPEAL. 2. THE 1 ST AND 2 ND GROUND OF APPEAL ADDRESS A COMMON ISSUE. 1 ST GR OUND OF APPEAL THE LD. CIT(APPEALS) ERRED IN NOT COMPLYING WITH THE DIRECTIONS OF THE HON'BLE TRIBUNAL. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE JUDICIAL AUTHORITIES CITED BEFORE THE HON'BLE TRIBUNAL AND DIRECTED TO BE CONSIDERED BY THE HON'BLE TRIBUNAL . 2 ND GROUND OF APPEAL THE LD. CIT(A) ERRED IN DISALLOWING THE BENEFIT OF SECTION 54EC FOR AN AMOUNT OF RS.25,00,000. 3. IN A NUTSHELL, THE FACTS ARE THAT THE ASSESSEE HAD RECEIVED COMPENSATION OF RS.50,00,000/ - FROM SURRENDERING OF TENANCY RIGHTS. HE HA D CLAIMED DEDUCTION OF RS.25,00,000/ - ON ACCOUNT OF INVESTMENT MADE IN CAPITAL BONDS FROM THE CAPITAL GAINS ON SURRENDER OF THE SAID TENANCY RIGHTS AS PER SECTION 54EC OF THE ACT. THE ASSESSING OFFICER (AO) VIDE ORDER DATED 20.03.2015 PASSED U/S 143(3) R.W.S. 263 HELD THAT THE ASSESSEE HAD TO MAKE INVESTMENT IN BONDS WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF THE TRANSFER OF THE CAPITAL ASSETS. HOWEVER, THE INVESTMENT IN BONDS WAS MADE BY THE ASSESSEE BEYOND A PERIOD OF SIX MONTHS. THUS THE AO HELD THAT : DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 3 FROM THE INFORMATION AVAILABLE IN PUBLIC DOMAIN, IT IS CLEARLY EVIDENT THAT TAX EXEMPTION BONDS WERE MADE AVAILABLE BY THE RURAL ELECTRIFICATION CORPORATION (REC) ALSO (DATE OF ISSUE: 28.05.2008). A S THE ASSESSEE HAD RECEIVED THE RS.5,00,000/ - BEING THE FIRST INSTALLMENT FOR SURRENDERING THE TENANCY RIGHTS ON 12.04.2008 AND SECOND INSTALLMENT ON 06.05.2008 OF RS.45,00,000/ - VIDE THE SURRENDER DEED DATED 07.04.2008, THE ASSESSEE HAD STILL SUFFICIENT TI ME IN ADVANCE TO INVEST, IF HE HAD SO DESIRED, PLANNED OR HAD MADE ANY EFFORTS TOWARDS THE SAME AND HAS NO COGENT REASON TO POSTPONE THE INVESTMENT OF RS.25,00,000/ - TILL TOWARDS THE SAME AND HAS NO COGENT REASON TO POSTPONE THE INVESTMENT OF RS.2,500,000/ - TILL MARCH 2009 (DATE OF ENTRY IN BANK ACCOUNT IS FOUND AT 13.03.2009) I.E. WAY PAST THE STIPULATED PERIOD OF 6 MONTHS FROM THE DATE OF TRANSFER OF CAPITAL ASSET I.E. 07.04.2008. HOWEVER, THE REPRESENTATIVE OF THE ASSESSEE EXPRESSED INABILITY TO PRODUCE ANY DOCUMENTARY EVIDENCE OR PROOF THAT THE TAX EXEMPTION BONDS WERE NOT AVAILABLE TO THE ASSESSEE DURING THE RELEVANT PERIOD. IN VIEW OF THE ABOVE LEGAL POSITION AND FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSEES CONTENTION OF NON - AVAILABILITY OF BON DS IS REJECTED. IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO MA K E THE INVESTMENT IN CAPITAL GAINS EXEMPTION BONDS WITHIN THE STIPULATED PERIOD OF SIX MONTHS FROM THE DATE OF TRANSFER OF CAPITAL ASSET AND HENCE NOT ELIGIBLE TO THE CLAIM U/S 54EC OF THE INCOM E - TAX ACT, 1961 IN RESPECT OF THE CAPITAL GAINS. WITH THE ABOVE OBSERVATIONS, THE AO REJECTED THE CLAIM OF EXEMPTION MADE BY THE ASSESSEE U/S 54EC AND BROUGHT TO TAX THE WHOLE SUM OF RS.50,00,000/ - DETERMINED AS LONG TERM CAPITAL GAINS AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HELD THAT : DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 4 10. ACCORDING TO APPELLANT, APPELLANT RECEIVED RS.5,00,000/ - ON 12/04/2008 AND RS.45,00,000/ - WAS RECEIVED ON 6/05 /2008 FOR SURRENDERING THE TENANCY RIGHTS. APPELLANT INVESTED NABARD CAPITAL GAIN BONDS ON 10/3/2009. ACCORDING TO APPELLANT AS CAPITAL GAIN BONDS ARE NOT AVAILABLE IMMEDIATELY AFTER RECEIVING OF AMOUNT FROM TENANCY RIGHTS. APPELLANT HAD INVESTED THIS AMOU NT IN BANK FIXED DEPOSITS ON 10/05/2008. 11. ACCORDING TO THE APPELLANT OWN STATEMENT ON 29/05/2008 CAPITAL GAINS BONDS BECOME AVAILABLE AS THE APPELLANT IS NOT EXPECTED TO BREAK THE FIXED DEPOSIT RECEIPTS. APPELLANT HAD NOT INVESTED THIS AMOUNT IN CAPITAL GAIN BONDS. FURTHER, APPELLANT STATES THAT ON 6/03/2009 FIXED DEPOSITS OF RS.25,00,000/ - WAS MATURED ON 10/03/2009 THEN HE INVESTED IN N ABARD CAPITAL GAIN BONDS. HENCE, APPELLANT STATES THAT THOUGH IT IS MISTAKE THIS IS CLEAR FROM THE RECEIPT OF THE TENANCY RIGHT FROM THE AMOUNT RECEIVED TENANCY RIGHT ON 06/05/2008 AS THE CAPITAL GAIN BONDS ARE NOT AVAILABLE INITIALLY BUT HE HAD INVESTED A FTER FIXED DEPOSIT ON MATURITY AFTER SIX MONTHS RECEIPT OF CAPITAL GAINS. HENCE, HIS CLAIM FOR 54EC RS.25,00,000/ - HAS TO BE ALLOWED. FROM THE ABOVE FACTS OF THE CASE IT IS CLEAR THAT APPELLANT HAD SURRENDERED FINALLY HIS TENANCY RIGHT ON 8/05/2008 ON WHIC H DATE APPELLANT HAD RECEIVED RS,45,00,000/ - AND RS.5,00,000 WAS RECEIVED BEFORE 12/04/2008 THOUGH BONDS ARE NOT AVAILABLE ON 10/05/2008 CAPITAL GAIN BONDS BECOME AVAILABLE FROM 29/05/2008 WHICH APPELLANT HIMSELF AGREES. HERE APPELLANT INSTEAD OF INVESTING IN CAPITAL GAIN BONDS, APPELLANT HAD INVESTED IN FIXED DEPOSITS AND AFTER THE MATURITY OF FIXED DEPOSITS APPELLANT HAD INVESTED IN NABARD CAPITAL GAIN BONDS, IT IS CLEAR THAT THOUGH THE BONDS ARE AVAILABLE WITHIN THE PRESCRIBED TIME, PRESCRIBED BY THE I.T . ACT. I.E. 6 MONTHS FROM THE RECEIPT OF THE CAPITAL GAINS AMOUNT. AS APPELLANT HAD FAILED TO INVEST IN CAPITAL GAIN BONDS AS REQUIRED FOR THE LAW. APPELLANT CLAIM FOR DEDUCTION U/S. 54EC IS DISALLOWED. HENCE, A.O.'S DISALLOWANCE OF APPELLANT EXEMPTION UND ER 54EC IS UPHELD. DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 5 THUS THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF EXEMPTION CLAIMED BY THE ASSESSEE U/S 54EC OF THE ACT. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THE SAID CAPITAL INVESTMENT BONDS WERE NOT AVAILABLE ON 06.05.2008, T HE DAY ON WHICH THE FINAL AMOUNT WAS RECEIVED BY THE ASSESSEE. IN THESE CIRCUMSTANCES, THE ASSESSEE CANNOT KEEP HIS FUNDS IDLE TILL THE TIME WHEN SUCH BONDS BECOME AVAILABLE. IT IS STATED BY HIM THAT IMMEDIATELY ON MATURITY OF THE PARTIAL FIXED DEPOSITS ON 06.03.2009, THE ASSESSEE STARTED THE PROCESS OF INVESTING THE MATURED FIXED DEPOSIT AMOUNT IN NABARD CAPITAL GAIN BONDS AND ULTIMATELY THE CHEQUE WAS ISSUED AND PRESENTED TO THE BANK ON 10.03.2009. IN THIS REGARD THE LD. COUNSEL RELIES ON THE ORDER OF THE HONBLE BOMBAY HIGH COURT IN CIT V. CELLO PLAST [2012] 24 TAXMANN.COM 111 (BOM.) . ON THE OTHER HAND, THE LD. DR RELIES ON THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. A SIMILAR ISSUE IN CELLO PLAST (SUPRA). IN THAT CASE, THE HONBLE BOMBAY HIGH COURT HELD THAT : THE SUBMISSIONS OF REVENUE ARE NOT WELL FOUNDED. THE REC BONDS COULD NOT BE PURCHASED AS THEY WERE NOT AVAILABLE THROUGHOUT THE PERIOD OF SIX MONTHS COMMENCING FROM THE DATE OF THE SALE OF THE FACTORY BY THE ASSESSEE AND EVEN THEREAFTER TILL THE EXTENDED D ATE OF 31 - 12 - 2006 UNDER THE CBDT CIRCULAR. THAT THE BONDS WERE AVAILABLE FOR A LIMITED TIME DURING THIS PERIOD BETWEEN 1 - 7 - 2006 TO 31 - 8 - 2008, MAKES NO DIFFERENCE. THE ASSESSEE HAD TIME TILL 21 - 9 - 2006, TO INVEST IN THESE BONDS TO AVAIL THE BENEFIT UNDER SEC TION 54EC. SECTION 54EC PROVIDES A PERSON FACILITY TO AVAIL OF THE RIGHT CONFERRED THEREBY AT ANY DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 6 TIME DURING THE PERIOD OF SIX MONTHS FROM THE DATE OF SALE OF THE ASSET. THE ASSESSEE CANNOT BE DEPRIVED OF THIS RIGHT CONFERRED BY THE ACT FOR NO FAULT OF TH EIRS. THUS, THE AVAILABILITY OF THE BONDS ONLY FOR A LIMITED TIME DURING THIS PERIOD CANNOT PREJUDICE THE ASSESSEE'S RIGHT TO EXERCISE THE SAME UP TO THE LAST DATE. THE BONDS WERE ADMITTEDLY NOT AVAILABLE EXCEPT DURING THE SAID PERIOD. [PARA 17] LEX NOT CO GIT IMPOSSIBILA (LAW DOES NOT COMPEL A MAN TO DO THAT WHICH HE CANNOT POSSIBLY PERFORM) AND IMPOSSIBILUM NULLA OBLIGNTO EST (LAW DOES NOT EXPECT A PARTY TO DO THE IMPOSSIBLE) ARE WELL KNOWN MAXIMS IN LAW AND WOULD SQUARELY APPLY TO THE INSTANT CASE. THE ST ATUTE VIZ ., SECTION 54EC PROVIDES FOR EXEMPTION FROM TAX TO LONG TERM CAPITAL GAIN PROVIDED THE SAME IS INVESTED IN BONDS OF RURAL ELECTRIFICATION CORPORATION LIMITED OR NATIONAL HIGHWAY AUTHORITY OF INDIA. HOWEVER, THE BONDS WERE NOT AVAILABLE AND, THERE FORE, IT WAS IMPOSSIBLE FOR THE ASSESSEE TO INVEST IN THEM WITHIN SIX MONTHS OF THE SALE OF THEIR FACTORY BUILDING. IN THE CIRCUMSTANCE, ONE WOULD HAVE TO INTERPRET SECTION 54EC TO ENSURE THAT IT DOES NOT LEAD TO INJUSTICE, THEREFORE, IN THE INSTANT CASE, THE SIX MONTHS PROVIDED FOR INVESTING IN BONDS MAY BE REASONABLY EXTENDED IN VIEW OF THE NON - AVAILABILITY OF BONDS TILL 22 - 1 - 2007. [PARA 18] THE CONTENTION OF THE REVENUE THAT RURAL ELECTRIFICATION BONDS WERE AVAILABLE UP TO 3 - 8 - 2006 AND THE ASSESSEE SHOUL D HAVE PURCHASED THE BONDS BEFORE 3 - 8 - 2006 IS NOT SUSTAINABLE AS THE TIME GIVEN BY THE STATUTE TO INVEST IN BONDS UNDER SECTION 54EC IS SIX MONTHS FROM THE DATE OF SALE OF ASSETS AND, THEREFORE, THE ASSESSEE WAS ENTITLED IN LAW TO WAIT TILL 21 - 9 - 2006 TO IN VEST IN THE BONDS. [PARA 19] THERE REMAINS AN IMPORTANT ASPECT OF SOME DIFFICULTY TO BE CONSIDERED VIZ. , THE EXTENT TO AND PRECISE PERIOD DURING WHICH THE EXTENSION OUGHT TO BE GRANTED TO AVAIL THE BENEFIT OF THE PROVISIONS OF SECTION 54EC WHEN THE BONDS REFERRED TO THEREIN ARE NOT AVAILABLE. THESE ASPECTS WOULD HAVE TO BE DETERMINED, BASED ON TWO FACTORS THE DURATION WHEN THE BONDS WERE NOT DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 7 AVAILABLE TO BE PURCHASED, AND THE PERIOD DURING WHICH TO WIT THE POINT OF TIME DURING THE SIX MONTHS OR THE EXTENDE D PERIOD, IF ANY, WHEN THEY WERE NOT AVAILABLE. FOR INSTANCE, THE BONDS MAY NOT HAVE BEEN AVAILABLE AT THE COMMENCEMENT OF THE SIX MONTHS PERIOD OR FOR A BROKEN PERIOD OR PERIODS DURING THE SIX MONTHS OR TOWARDS THE END OF THE SIX MONTHS. [PARA 20] IT IS D IFFICULT TO LAY DOWN ANY PARTICULAR RULE IN THIS REGARD. IT IS PRUDENT AND PROPER TO CONSIDER ONLY THE CASE BEFORE AND ONLY TO THE EXTENT WHERE THE BONDS WERE NOT AVAILABLE PRIOR TO THE EXPIRY OF THE SIX MONTH PERIOD, INCLUDING THE LAST DAY. A PERSON IS EN TITLED TO INVEST IN THESE BONDS UP TO THE LAST AVAILABLE DATE. IF THAT IS SO, THE EXTENSION OUGHT TO BE GRANTED AT LEAST FOR THE PERIOD PRIOR TO THE EXPIRY OF SIX MONTHS WHEN THE BONDS WERE NOT AVAILABLE AND UP TO THE DATE ON WHICH THEY WERE ULTIMATELY MAD E AVAILABLE. IN ANY EVENT, IN SUCH A CASE AN ASSESSEE WOULD BE ENTITLED TO A REASONABLE EXTENSION WHICH MUST THEN BE DECIDED, DEPENDING UPON THE FACTS OF EACH CASE. AN ASSESSEE CANNOT BE EXPECTED TO MAKE THE INVESTMENT ON THE FIRST POSSIBLE DATE ON WHICH T HE BONDS WERE MADE AVAILABLE AFTER THE EXPIRY OF THE SIX MONTHS PERIOD OR ANY EXTENDED DATE PRESCRIBED BY THE CBDT. DURING THE PERIOD THE BONDS WERE NOT AVAILABLE, A PERSON IS LIKELY TO INVEST THE AMOUNT ELSEWHERE. TO EXPECT OR REQUIRE HIM TO DO SO WOULD B E UNJUST FOR REASONS TOO OBVIOUS TO STATE. HE CANNOT THEN BE EXPECTED AT A DAY'S NOTICE TO BREAK THE INVESTMENT AND TRANSFER THE SAME TO THE BONDS STIPULATED IN SECTION 54EC. [PARA 21] IN THE INSTANT CASE, THE BONDS WERE NOT AVAILABLE FROM 4 - 8 - 2006 TO 22 - 1 - 2007. THE LAST DATE FOR INVESTMENT IN THE NORMAL COURSE WOULD HAVE BEEN 21 - 9 - 2006 WHICH WAS EXTENDED UP TO 31 - 12 - 2006. THE ASSESSEE OUGHT TO BE ENTITLED TO AN EXTENSION OF THE NUMBER OF DAYS BETWEEN 4 - 8 - 2006 TO 21 - 9 - 2006 AT THE VERY LEAST AND, IN ANY EVEN T, TO A REASONABLE EXTENSION. THE ASSESSEE ADMITTEDLY INVESTED IN THE BONDS ON 31 - 1 - 2007 I.E., WITHIN NINE DAYS OF THEIR BEING AVAILABLE ONCE AGAIN FROM 22 - 1 - 2007. CONSIDERING THAT THE DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 8 BONDS WERE NOT AVAILABLE FOR SUCH A LONG PERIOD, AN EXTENSION OF MERELY NINE DAYS IS EXTREMELY REASONABLE IN THE INSTANT FACTS. [PARA 22] AT THE COST OF REPETITION, IT IS CLARIFIED THAT NO EXPRESSED OPINION IS GIVEN AS TO THE EXTENT AND SPECIFIC PERIOD OF EXTENSION IN ANY OTHER SITUATION, INCLUDING WHERE THE BONDS MAY NOT HAV E BEEN AVAILABLE ONLY FOR A DAY OR TWO PRIOR TO THE EXPIRY OF THE SIX MONTHS PERIOD. [PARA 23] SECTION 54EC HAVING GIVEN ASSESSEE A CHOICE OF INVESTING EITHER IN THE BONDS OF RURAL ELECTRIFICATION CORPORATION LIMITED OR THE NATIONAL HIGHWAY AUTHORITY, THE REVENUE CANNOT INSIST THAT THE ASSESSEE OUGHT TO HAVE INVESTED ITS CAPITAL GAIN ON SALE OF PROPERTY IN THE BONDS OF THE NATIONAL HIGHWAY AUTHORITY. [PARA 25] THE STATUTE ITSELF PROVIDES THAT THE ASSESSEE, WHO IS SUBJECT TO LONG TERMS CAPITAL GAIN TAX, CAN AVAIL OF EXEMPTION UNDER SECTION 54EC IF HE INVESTS IN BONDS OF EITHER THE NATIONAL HIGHWAY AUTHORITY OF INDIA OR THE RURAL ELECTRIFICATION CORPORATION LTD. THE CHOICE OF INVESTING IN ONE OF THE TWO ORGANIZATIONS IS WITH THE RESPONDENT AND CONTRARY TO THE STATUTE THE REVENUE CANNOT FORCE THE ASSESSEE TO INVEST ONLY IN THE BONDS OF ONE IN PREFERENCE TO THE OTHER. THE CHOICE OF SELECTING ANY OF THE BONDS TO PURCHASE IS ENTIRELY WITH THE ASSESSEE AND IN CASE THE BONDS OF ASSESSEE'S CHOICE ARE NOT AVAILABLE AS IS PROVED IN THE INSTANT CASE, THE TIME TO INVEST IN THE BONDS GET AUTOMATICALLY EXTENDED TILL THE BONDS ARE AVAILABLE IN THE MARKET AND THE ASSESSEE CAN PURCHASE THE SAME. [PARA 26] 6.1 THUS, AS PER THE ABOVE DECISION, I F BONDS OF ASSESSEE'S CHOICE ARE NOT AVAILABLE THROUGHOUT PERIOD OF SIX MONTHS AS PROVIDED UNDER SECTION 54EC, TIME TO INVEST IN BONDS WOULD GET AUTOMATICALLY EXTENDED TILL BONDS ARE AVAILABLE IN MARKET . FACTS BEING IDENTICAL, WE FOLLOW THE ABOVE ORDER OF THE HON BLE BOMBAY HIGH COURT A ND ALLOW THE 1 ST AND 2 ND GROUND OF APPEAL. DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 9 7. THE 3 RD GROUND OF APPEAL THE LD. CIT(A), ERRED IN DISALLOWING AN EXPENDITURE OF RS3,77,780/ - , AS 'COST OF IMPROVEMENT', WHILE COMPUTING THE CAPITAL GAINS. THE 4 TH GROUND OF APPEAL THE LD. CIT(A) ERRED IN DISALLOWING INITIAL PAYMENT OF RS.12500/ - AS 'COST OF ACQUISITION FOR ACQUIRING THE TENANCY RIGHTS. THE SAID DEPOSIT WAS NOT RETURNED AT THE TIME OF SURRENDERING THE TENANCY RIGHTS. 8. THE AO ON EXAMINATION OF THE COPY OF THE AGREEMENT DATED 18.06.1975, WHICH THE ASSESSEE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, OBSERVED THAT THE SAME RELATED TO PURCHASE OF TAKING POSSESSION BY THE ASSESSEE OF CERTAIN EQUIPMENT, INSTRUMENTS AND FURNITURE AGREED TO BE SOLD BY SMT. RADHA CHANDRAN ON PAYMENT OF RS. 15,000/ - BY THE ASSESSEE. AS PER THE AO, THIS COPY OF AGREEMENT DATED 18.06.1975 IS MERELY FOR THE PAYMENT OF PURCHASE OF CERTAIN EQUIPMENTS, INSTRUMENTS, FURNITURE AND FIXTURE BY SMT. RADHA CHANDRANAN. BUT IT DOES NOT SHOW ANY DEPOSIT, AMOUNT WHICH THE AS SESSEE HAD PAID TO THE OWNER FOR OBTAINING THE PROPERTY UNDER RENT. EVEN BEFORE THE LD. CIT(A), THE ASSESSEE FAILED TO FILE ANY DEPOSIT RECEIPT. REGARDING THE COST OF IMPROVEMENT, THE ASSESSEE FAILED TO FILE ANY COGENT EVIDENCE BEFORE THE AO OR THE LD. C IT(A). IN VIEW OF THE ABOVE FACTUAL SCENARIO, WE AGREE WITH THE ORDER OF THE LD. CIT(A) AND DISMISS THE 3 RD AND 4 TH GROUND OF APPEAL. 9. THE 5 TH GROUND OF APPEAL THE LD. CIT(A)ERRED IN NOT CONSIDERING THE FRESH CLAIM OF INVESTMENT. U/S. 54F OF THE ACT, MADE BY THE ASSESSEE FOR PURCHASE OF HOUSE AT PUNE. DR. JAYANT KASHINATH ITA NO. 965/MUM/2017 10 10. AS THE FRESH CLAIM OF INVESTMENT MADE BY THE ASSESSEE U/S 54 IN RESPECT OF PURCHASE OF HOUSE AT PUNE HAS NOT BEEN ADJUDICATED BY THE LOWER AUTHORITIES, WE REMIT THE MATTER TO THE FILE OF THE AO TO EXA MINE IT AND PASS AN ORDER, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE AO. 11. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/01/2019. SD/ - SD/ - (C.N. PRASAD) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 21/01/2019 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI