Income Tax Officer-1(1), Lucknow V. Smt. Aarti Kumaria, Lucknow

ITA 97/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1072 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-03-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 02-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHWETA MITTAL ACA
• Keywords: Capital asset; Bonafide belief; Question of law; Cost of acquisition; Reasonable cause; Procedural lapse; Competent authority; Benefit of exemption; Revised return; Ignorance of law
• Section: 273B; 143(3); 54B; 54F; 54; 263; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 97/LKW/2017 ASSESSMENT YEAR: 2012 - 13 INCOME TAX OFFICER 1(1) RANGE 1 LUCKNOW V. SMT . AARTI KUMARIA 5/253, VIPUL KHAND GOMTI NAGAR, LUCKNOW T AN /PAN : AJRPK0919Q (APP ELL ANT) (RESPONDENT) APPELLANT BY: SMT. ALKA SINGH, D.R. RESPONDENT BY: SMT. SHWETA MITTAL, ACA DATE OF HEARING: 08 0 3 201 8 DATE OF PRONOUNCEMENT: 14 0 3 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF THE LD. CIT(A) - 1, LUCKNOW DATED 29/9/2016. 2 . THE CRUX OF THE GRIEVANCE OF THE REVENUE AS PER THE GROUNDS OF APPEAL IS THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT. 3 . THE FACTS OF THE CASE IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT ASSESSEE JOINTLY WITH SMT. NEERA MUMARIA PURCHASED AN OLD HOUSE DURING TH E YEAR 1993 - 94 SITUATED AT 13A, EARLE STREET, KOLKATA - 26 AND RE - CONSTRUCTED IT OVER THE YEARS WITH A SHARE OF INVESTMENT OF RS. 23,28,290/ - EACH. THE PROPERTY WAS SOLD AT A SALE CONSIDERATION OF RS.2,26,00,000/ - ON 4 TH FEBRUARY, 2012 AND THE ASSESSEE GOT HE R SHARE OF RS.1,13,00,000/ - . THE CERTIFIED ITA NO.97/LKW/2017 PAGE 2 OF 33 MARKET VALUE OF THE PROPERTY AS PER ADSR - I, KOLKATA WAS RS. 2,26,07,917/ - . FROM THE COMPUTATION OF TOTAL INCOME AS SUBMITTED, IT IS FOUND THAT THE LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.60,85,432/ - AFTER TAKING INDEXATION AND CLAIMED DEDUCTION U/S 54 ON THE FULL AMOUNT AS EVIDENT FROM THE RETURN. DURING THE COURSE OF HEARING, THE ASSESSEE WAS ASKED TO PRODUCE THE DOCUMENTARY EVIDENCE OF HER CLAIM U/S 54 OF THE ACT. FROM THE DOCUMENTS AS SUBMITTED IT IS FOND THA T THE ASSESSEE DEPOSITED RS.1,11,50,000/ - IN AN UNFIXED DEPOSIT (TERM DEPOSIT) IN SBI JOINTLY WITH RAJIV KUMARIA ON 09.03.2012. THE RETURN OF INCOME WAS FILED ON 20.03.2013 AND THE DUE DATE WAS 31.07.2012. THE 1 ST PAYMENT TOWARDS PURCHASE OF A NEW FLAT WAS MADE ON 19.02.2013 AND THE ALLOTMENT LETTER WAS ISSUED BY THE M/S A NDES TOWN PLANNERS PVT. LTD. ON 19.02.2013. THEREFORE, IT IS EVIDENT THAT THE AMOUNT OF CAPITAL GAIN WAS NOT UTILIZED BY THE ASSESSEE FOR PURCHASE OF NEW RESIDENTIAL HOUSE BEFORE THE DUE D ATE OF FURNISHING THE N OF INCOME NOR THE AMOUNT WAS DEPOSITED IN THE ACCOUNT IN ACCORDANCE WITH THE CAPITAL G AINS A CCOUNTS SCHEME, 1988. THE ASSESSING OFFICER HELD THAT T HERE WA S A CLEAR VIOLATION OF SECTION 54 OF THE ACT AND ASSESSEE VIDE LETTER DATED 9/ 9/2014 WAS ASKED TO SHOW CAUSE WHY AMOUNT CLAIMED AS DEDUCTION UNDER SECTION 54 OF THE ACT SHOULD NOT BE DISALLOWED. IN REPLY DATED 3/11/2014, ASSESSEE STATED, INTER ALIA, THAT THE SAID PROPERTY WAS SOLD ON 4 TH FEBRUARY 2012 AND THE ASSESSEE PAID RS. 57,9 9,985/ - OUT OF THE AMOUNT OF SALE PROCEEDS TO M/S. ANDES TOWN PVT. LTD AT GOMTI NAGAR, LUCKNOW FOR PURCHASE OF ANOTHER FLAT AT LUCKNOW; BUT THE ASSESSEE DUE TO IGNORANCE DID NOT INVEST THE AMOUNT TO CAPITAL GAIN INVESTMENT SCHEME WITHIN 6 MONTHS; BUT THE U LTIMATE INTENTION OF THE ASSESSEE WAS TO PURCHASE AN IMMOVEABLE PROPERTY WITHIN THE PRESCRIBED TIME LIMIT AS PER THE INCOME TAX ACT, 1961. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER BECAUSE THE ITA NO.97/LKW/2017 PAGE 3 OF 33 CONTENTION ITSELF, ACCORDING T O THE ASSESSING OFFICER, WAS SELF CONTRADICTORY. THE ASSESSEE IS CLAIMING DEDUCTION U/S 54 WITHOUT KNOWING THAT SHE HAD TO INVEST THE SALE PROCEEDS IN CAPITAL GAINS ACCOUNTS SCHEME BUT SHE INVESTED THE AMOUNT IN A PROPERTY WITHIN THE TIME LIMIT IN ACCORDAN CE WITH THE INCOME TAX ACT. IGNORANCE OF LAW EXONERATES THE ASSESSEE FROM THE MISCHIEF COMMITTED. IN THIS CONTEXT, THE ASSESSING OFFICER NOTED THAT NEW PROPERTY IN QUESTION HAS NOT Y ET BEEN REGISTERED IN THE ASSESSEE'S NAME BY M /S ADNES TOWN PLANNERS PVT. LTD. MOREOVER THE ASSESSEE HAD INVESTED THE SUM FOR BOOKING TWO SEPARATE FLATS ON TWO SEPARATE FL OORS. THE BOOKING SLIPS FOR THE TWO SEPARATE FLATS ARE MARKED AS ANNEXURE A AND ANNEXURE 'B AND FORMS PART OF THE ASSESSMENT ORDER. THEREFORE, THE DEDUCTION CLAIMED U/S 54 WA S DISALLOWED AND THE LONG TERM CAPITAL GAIN WA S RE - COMPUTED AS UNDER TAKING CERTIFIED MARKET VALUE OF THE PROPERTY. 4 . BEING FURTHER AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND FILED WRITTEN SUBMISSION. THE RELEVAN T EXTRACT OF THE WRITTEN SUBMISSION IS AS UNDER: - 'THE FOLLOWING WRITTEN SUBMISSIONS ARE BEING MADE IN RESPECT OF THE AFORESAID APPEAL IN ADDITION TO THE ORAL SUBMISSIONS TO BE MADE AT THE TIME OF HEARING OF APPEAL. GROUND NOS. 1,2 AND 5 THESE ARE GENERAL GROUNDS WHICH HAVE BEEN DEALT WITH WHILE DEALING WITH OTHER GROUNDS OF APPEAL. GROUND NOS. 3 AND 4 THE LD. ASSESSING OFFICER HAS MADE ADDITION OF LONG TERM CAPITAL GAIN AMOUNTING TO RS. 61,46,459 / - ON THE FOLLOWING GROUNDS AS MENTIONED IN THE ASSESSMENT ORDER: ITA NO.97/LKW/2017 PAGE 4 OF 33 'THE CONTENTION OF THE ASSESSES IS NOT ACCEPTABLE, BECAUSE THE CONTENTION ITSELF IS SELF CONTRADICTORY, THE ASSESSEE IS CLAIMING DEDUCTION U/S 54 WITHOUT KNOWING THAT SHE HAD TO INVEST THE SALE PROCEEDS IN CAPITAL GAIN ACCOUNTS SCHEME BUT SHE INVEST ED THE AMOUNT IN A PROPERTY WITHIN THE TIME LIMIT IN ACCORDANCE WITH THE INCOME - TAX ACT. IGNORANCE OF LAW CAN'T EXONERATE THE ASSESSEE FROM THE MISCHIEF COMMITTED. INFRACTION OF LAW MAKES HER CLAIM INELIGIBLE. IN THIS CONTEXT, IT IS TO BE RIOTED THAT THE N EW PROPERTY IN QUESTION HAS NOT YET BEEN REGISTERED IN THE ASSESSEE'S NAME BY M/S ADNES TOWN PLANNERS PVT. LTD. MOREOVER, THE ASSESSEE HAD INVESTED THE SUM FOR BOOKING TWO SEPARATE FLATS OH TWO SEPARATE FLOORS. THE BOOKING 'SLIPS FOR THE TWO SEPARATE FLATS ARE MARKED AS ANNEXURE 'A' AND ANNEXURE B AND FORMS PART, OF THE ASSESSMENT ORDER.' THE APPELLANT FILED HER INCOME TAX RETURN FOR THE YEAR UNDER CONSIDERATION ON 20.03.2013 U/S 139(4) OF THE ACT DECLARING TOTAL INCOME OF RS.2,68,715/ - . THIS INCOME TAX RETURN WAS DULY PROCESSED U/S 143(1) OF THE INCOME - TAX ACT, 1961 ON 07.05.2013. THE CASE OF THE APPELLANT WAS SELECTED THROUGH, CASS AND AN ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED BY LD. ASSESSING OFFICER ON 31.12.2014 ENHANCING THE INCOME OF THE APPELLANT BY RS. 61,46,459/ - AS LONG TERM CAPITAL GAIN BY DISALLOWING THE CLAIM OF DEDUCTION U/S 54 OF THE ACT. IN THIS RESPECT WE WOULD LIKE TO SUBMIT THAT THE LD. ASSESSING OFFICER HAS MISTAKENLY CALCULATED THE L.T.C.G. TO RS. 61,46,459/ - INSTEAD OF RS. 61,38,391/ - (I.E. 50% OF MARKET VALUE OF PROPERTY BEING RS.1,13,03,959/ - LESS INDEXED COST OF ACQUISITION BEING RS. 50,08,068/ - LESS BROKERAGE AND LEGAL EXPENSE BEING RS. 1,57,500/ - ) IN THE ASSESSMENT ORDER. THE FACTS OF THE CASE ARE THAT THE APPELLANT A ND HER SISTER - IN - LAW SOLD A HOUSE PROPERTY SITUATED AT 13A, EARLE STREET, KOLKATA FOR TOTAL SALE CONSIDERATION OF RS.2,26,00,000/ - WHOSE MARKET VALUE WAS RS.2,26,07,917/ - ON 04.02.2012. AS THE SAID PROPERTY WAS ITA NO.97/LKW/2017 PAGE 5 OF 33 JOINTLY HELD BY HER AND HER SISTER - IN - LAW, SHE GOT HER SHARE OF RS. 1,13,00,000/ - OUT OF AFORESAID TOTAL SALE CONSIDERATION. THE COMPUTATION OF CAPITAL GAIN IS GIVEN BELOW: DETAILS OF ACQUISITION OF HOUSE PROPERTY YEAR OF INVESTMENT COST OF ACQUISITION INDEXED COST OF ACQUISITION 1995 - 199 4 2,87,000.00 9,23,340.00 1996 - 1997 1,11,214.00 2,86,239.00 1997 - 1998 1,13,523.00 2,69,231.00 1998 - 1999 2,50,000.00 5,59,117.00 1999 - 2000 4,75,400.00 9,59,355.00 2000 - 2001 1,08,050.00 2,05,047.00 2001 - 2002 8,75,000.00 16,12,382.00 2002 - 2003 1,10,103.00 1,93,357.00 TOTAL 23,28,290.00 50,08,068.00 DETAILS OF SALE OF HOUSE PRO P ERTY AMOUNT IN RS. SALE CONSIDERATION (50% OF APPELLANT'S SHARE) 1,13,00,000.00 LESS .INDEXED COST OF ACQUISITION AS SHOWN ABOVE 50,08,068.00 LESS: LEGAL & BROKERAGE EXPENSES 1,57,500.00 LESS: AS APPELLANT RESIDED IN - LUCKNOW, TRAVELLING EXPENSE BORNE ON SALE OF PROPERTY SITUATED IN KOLKATA 56,500.00 LONG TERM CAPITAL GAIN 60,77,932.00 ITA NO.97/LKW/2017 PAGE 6 OF 33 INVESTMENT U/S 54 OF THE INCOME - TAX ACT, 1 961 (D ETAILS GIVEN 60,74,811.00 THE APPELLANT CLAIMED DEDUCTION U/S 54 OF THE ACT BY INVESTING IN FLAT NO. E - 904 SITUATED AT ROHTAS ELURHERIA HOMES GOMTI NAGAR, LUCKNOW BEFORE EXPIRE OF TIME PERIOD MENTIONED IN U/S 54 O. THE ACT. THE SAID FLAT WAS PURCHASED FROM M/S ANDES TOWN PLANNERS PVT. LTD. FURTHER, IT IS SUBMITTED THAT THE APPELLANT WITH BONAFIDE BELIEF FOR CLAIMING EXEMPTION U/S 54 KEPT THE SALE RECEIPTS FROM PROPERTY SITUATED IN KOLKATA IN HER SAVING BANK ACCOUNT INSTEAD OF DEPOSITING IN CAPITAL GAIN S ACCOUNT SCHEME BEFORE INVESTING IN FLAT NO. E - 904 SITUATED AT ROHTAS PLUMERIA HOMES, GOMTI NAGAR, LUCKNOW. THE DETAILS OF INVESTMENT MADE BY THE APPELLANT TOWARDS THE AFORESAID PROPERTY ARE AS UNDER: PARTICULARS AMOUNT DATE PAYMENT MADE TOWARDS PURC HASE COST OF AFORESAID FLAT ANDES TOWN PLANNERS PVT. LTD. 2,00,000/ - 16.02.2013 10,00,000/ - 19.02.2013 10,00,000/ - 19.02.2013 10,00,000/ - 19.02.2013 10,00,000/ - 19.02.2013 10,00,000/ - 19.02.2013 1,00,000/ - 02.04.2014 4,65,251/ - 02.04.2014 ITA NO.97/LKW/2017 PAGE 7 OF 33 34,733/ - 02.04.2014 TOTAL 'A' 57,99,984/ - PAYMENTS MADE WITH RESPECT TO INTERIORS OF THE AFORESAID FLAT SEVAK COMPLETE ELECTRICAL SOLUTIONS 23,150 / - 25.11.2014 28,000/ - 29.01.2015 SAROJ PLY & DEEDING HOUSE 3,8 36 / - 17.11.2014 34,548 / - 21.11.2014 15,293/ - 04.12.2014 THE COPIES OF AFORESAID BILLS ARE ENCLOSED HEREWITH. FURTHER, IT IS SUBMITTED THAT ON THE RECEIPT NO. 3071 DATED 19.02.2013 M/S ANDES TOWN PLANNERS PVT. LTD. MISTAKENLY MENTIONED FLAT N O. E - 1004 INSTEAD OF E - 904. THE COPY OF LETTER FROM M/S ANDES TOWN PLANNERS PVT. LTD. ACKNOWLEDGING THEIR MISTAKE IS ENCLOSED HEREWITH FOR YOUR KIND PERUSAL. THE BASIS ON WHICH THE LD. ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEDUCTION U/S 54 IS DISC USSED BELOW: (A) CAPITAL GAIN WAS NOT DEPOSITED IN CAPITAL GAIN ACCOUNT SCHEME : (I) IGNORANCE OF LAW THE CAPITAL GAIN EARNED BY THE APPELLANT WAS NOT UTILISED FOR PURCHASE OR CONSTR UCTION OF NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME U/S 139(1) OF THE INCOME - TAX ACT, 1961. THE CAPITAL GAIN EARNED BY THE APPELLANT WAS KEPT IN HER ITA NO.97/LKW/2017 PAGE 8 OF 33 SAVING BANK ACCOUNT IN THE STATE BANK OF INDIA TILL ITS UTILIZATION FOR PURCHASE OF NEW ASSETS. IN FACT, THE APPELLANT DID NOT KNOW THAT THE CAPITAL GAIN WAS REQUIRED TO BE DEPOSITED UNDER THE CAPITAL GAINS ACCOUNT SCHEME IF IT WAS NOT UTILISED BEFORE THE DUE DATE FOR FILING OF RETURN U/S 139(1). HAD THE APPELLANT KNOWN IT, SHE WOULD CERTAINL Y HAVE DEPOSITED THE CAPITAL GAIN UNDER THE CAPITAL GAINS ACCOUNT SCHEME IN WHICH THE RATE OF INTEREST IS HIGHER THAN IN SAVING BANK ACCOUNT. HUGE AMOUNT WAS INVOLVED AND HAD THE APPELLANT KNOWN THAT THE CAPITAL GAIN WAS REQUIRED TO BE DEPOSITED UNDER THE CAPITAL GAIN ACCOUNT SCHEME, SHE WOULD HAVE CERTAINLY DONE SO AND WOULD HAVE, THUS, EARNED HIGHER INTEREST. WHY SHOULD THE APPELLANT LOSE CONSIDERABLE INTEREST INCOME BY KEEPING THE CAPITAL GAIN IN SAVING BANK ACCOUNT INSTEAD OF UNDER THE CAPITAL GAIN ACCO UNT SCHEME IN WHICH THE RATE OF INTEREST IS HIGHER AND RISK OF LOSING EXEMPTION U/S 54 OF THE I. T. ACT. THE ONLY REASON FOR DOING SO WAS THAT THE APPELLANT WAS NOT AWARE OF THE PROVISION OF SUB - SECTION (2) OF SECTION 54 WHICH REQUIRES THE ASSESSEE TO DEPO SIT THE CAPITAL GAIN UNDER CAPITAL GAIN ACCOUNT SCHEME IF NOT UTILISED BEFORE THE DUE DATE OF FILING OF RETURN U/S 139(1) THE AFORESAID MISTAKE HAD OCCURRED DUE TO IGNORANCE OF LAW ON THE PART OF THE APPELLANT. THE SAID MISTAKE WAS BONAFIDE. THEREFORE, EXE MPTION U/S 54 DESERVES TO BE ALLOWED AND THE ADDITION OF RS. 61,46,459/ - AS LONG TERM CAPITAL GAIN DESERVES, BE DELETED. IN THIS REGARD/RELIANCE IS PLACED ON FOLLOWING JUDGMENTS: (1). MOTILAL PADAMPAL SUGAR MILLS CO. LTD VS. STATE OF UTTAR PRADESH AND OTHERS 118 ITR 326 (SC) IN WHICH HON'BLE SUPREME COURT HAS HELD AS UNDER: - 'MOREOVER, IT MUST BE REMEMBERED THAT THERE IS NO PRESUMPTION THAT EVERY PERSON KNOWS THE LAW. IT IS OFTEN SAID THAT EVERYONE IS PRESUMED TO KNOW THE LAW, BUT THAT IS NOT A CORR ECT STATEMENT ITA NO.97/LKW/2017 PAGE 9 OF 33 THERE IS NO SUCH MAXIM KNOWN TO THE LAW. OVER A HUNDRED AND THIRTY YEARS AGO, MAULA J. POINTED OUT IN MARTINDALE THIS VS FALKNER [1846] 2 CB 706: 'THERE IS NO PRESUMPTION IN THIS COUNTRY THAT EVERY PERSON KNOWS THE LAW: IT WOULD BE CONTRARY T O COMMON SENSE AND REASON IF IT WERE SO. 'SCRUTTON L. J. ALSO ONCE SAID: 'IT IS IMPOSSIBLE TO KNOW ALL THE STATUTORY LAWS, AND NOT VERY POSSIBLE TO KNOW ALL THE COMMON LAWS'. BUT IT WAS LORD ATKPIPN WHO, AS IN SO MANY OTHER SPHERES, PUT THE POINTS IN IT PR OPER CONTEXT WHEN HE SAID IN EVANS V BARTLAM [1937] AC 473: '.....THE FACT IS THAT THERE IS NOT AND NEVER HAS BEEN A PRESUMPTION THAT EVERY ONE KNOWS THE LAW.' (2) COMMISSIONER OF WEALTH - TAX, ORISSA VS RAMNIKLAL D. MEHTA REPORTED IN (1982) 136 ITR 729 (ORR I), IN WHICH THE HON'BLE HIGH COURT HAS MADE THE FOLLOWING OBSERVATION AND CANCELLED THE PENALTY UNDER SECTION 18(1)(A) OF THE W.T ACT FOR LATE FILING OF RETURN ON THE GROUND THAT THE ASSESSEE WAS NOT AWARE OF ITS LEGAL OBLIGATION WHICH WAS REASONABLE CAUS E FOR CANCELLATION OF PENALTY: 'THE NORMAL PRESUMPTION IS THAT ALMOST ALL THE ASSESSEE ARE COMPLETELY DEPENDENT UPON THEIR LAWYERS OR ADVISERS FOR THE HIGHLY TECHNICAL TAXATION AFFAIRS INVOLVING CHANGE ALMOST IN EVERY YEAR AND SOMETIMES MORE THAN ONCE WITH IN ONE YEAR AND, CONSEQUENTLY, THEY CANNOT COMPLY WITH THE TERMS OF THE IN ACT UNLESS THEY ARE ADVISED BY THEIR TAXATION LAWYERS. IT IS NOT THE CASE OF THE APPELLATE ASSISTANT COMMISSIONER THAT THE ASSESSEE HAD NOT FILED HER WEALTH - TAX RETURN ALTHOUGH SHE WAS ADVISED TO FILE THE SAME BY HER LAWYERS. THE FACT THAT THE ASSESSEE'S WEALTH BECAME TAXABLE IN THE YEAR 1964 WAS WITHIN THE KNOWLEDGE OF HIS TAXATION LAWYERS CANNOT BE DEFINED BECAUSE THAT WEALTH CONSISTED OF MAINLY HER INTEREST IN TWO CONCERNS - M/S. RAMNIKLAL & CO. AND M/S. VENILAL & CO., THE INCOMES FROM WHICH WERE USED TO BE RETURNED BY THE ASSESSEE YEAR AFTER YEAR FOR HER INCOME - TAX ASSESSMENT.' ITA NO.97/LKW/2017 PAGE 10 OF 33 (3) MUSLIM URBAN CO - OPERATIVE CREDIT SOCIETY LTD V. JOINT COMMISSIONER OF INCOME - TAX, SARIGLI REPORTED I N (2005) 96 ITD 863(PUNE) IN WHICH IT HAS HELD AS UNDER: - 'IN THE CASE OF FARIDKOT BATHINDAS KSHETRIYA GRAMIN BANK (SUPRA), THE COMPETENT AUTHORITY IMPOSED THE PENALTY UNDER SECTION 271E FOR CONTRAVENING THE PROVISIONS OF SECTION 269T OF THE ACT. IN THE SAID CASE IT WAS ONE OF THE CONTENTIONS OF THE ASSESSEE - BANK THAT THE OFFICER OF THE ASSESSEE - BANK, WHO HAD MADE REPAYMENTS TO THE DEPOSITORS, WAS NOT WELL CONVERSANT WITH THE PROVISION OF THE INCOME TAX ACT. FURTHERMORE, THERE WAS NO FINDING BY THE LOWER AUTHORITIES THAT THE TRANSACTIONS WERE NOT GENUINE OR THE TRANSACTIONS WERE BENAMI. THERE WAS NO FINDING THAT THE ASSESSEE - BANK INTENDED TO DEFRAUD THE INCOME - TAX DEPARTMENT WHEN THE, REPAYMENTS WERE MADE. . 'HEADNOTE: THE STAFF OF THE AS SESSEE - BANK WAS WORKING IN THE AREA WHERE THEIR EXPOSURE TO THE BANKING AND OTHER LAWS, LIKE INCOME - TAX WAS VERY LIMITED. THE ASSESSEE - BANK HAD NO TRAINING COLLEGE OF ITS OWN AS IN THE CASE OF OTHER NATIONALIZED BANKS. IN THE ABOVE BACKGROUND , THE PLEA OF THE ASSESSEE CANNOT BE REJECTED THAT THE RELEVANT TIME, THE PAYMENT PASSING OFFICER IN BANK WAS NEW AND HAD NO KNOWLEDGE ABOUT THE INCOME - TAX LAW, PARTICULARLY, THE PROVISIONS OF SECTION 269T, READ WITH SECTION 271E. HOWEVER, THE DEPARTMENTAL AUTHORITIES HAVE ALSO NOT REJECTED THIS CONTENTION OF THE ASSESSEE. ON THIS COUNT, IT CAN BE HELD THAT DUE TO IGNORANCE OF LAW, THE CONCERNED OFFICER WAS UNDER THE BONAFIDE BELIEF THAT REPAYMENTS EXCEEDING RS.20,000 CAN BE MADE IN CASH ALSO. SECTION 271E, READ WITH SECTION 273B PROVIDES THAT IF THE ASSESSEE PROVES THAT IT WAS PREVENTED BY REASONABLE CAUSE FROM COMPLYING WITH THE PROVISIONS OF ABOVE SECTIONS, NO PENALTY CAN BE IMPOSED. THE COURTS OF THE COUNTRY HAVE HELD THAT IGNORANCE OF LAW CAN BE TAKEN A S A VALID PLEA FOR NON - COMPLIANCE OF PROVISIONS OF INCOME - TAX LAW AND RULES. AT THE ITA NO.97/LKW/2017 PAGE 11 OF 33 SAME TIME, IT HAS ALSO BEEN HELD BY THE VARIOUS BENCHES OF THE TRIBUNAL THAT ORDINARILY A PLEA AS TO THE IGNORANCE OF LAW CANNOT SUPPORT THE BREACH OF A STATUTORY PROVISION , BUT THE FACT OF SUCH AN INNOCENT MISTAKE DUE TO IGNORANCE OF THE RELEVANT PROVISIONS OF LAW COUPLED WITH THE FACT THAT THE TRANSACTIONS IN QUESTION WERE GENUINE AND BONAFIDE TRANSACTIONS AND WERE UNDERTAKEN DURING THE REGULAR COURSE OF THE BUSIN ESS, WILL CONSTITUTE A REASONABLE CAUSE. IN THE INSTANT CASE, IT WAS THE CONTENTION OF THE ASSESSEE THAT THE STAFF OF THE ASSESSEE - BANK WERE ACTING ON A BONA FIDE BELIEF THAT NO OFFENCE IS BEING MADE WHILE MAKING THE PAYMENTS OF VARIOUS DEPOSITS IN CA SH. DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE FILED THE AFFIDAVITS AND PRODUCED EVIDENCE REGARDING IDENTITY OF THE DEPOSITORS. IT IS NOTICED THAT THE DEPARTMENT HAS NOT IMPEACHED THE TRANSACTION AS NON - GENUINE. AT THE SAME TIME, IT IS ALSO NOT CASE OF THE DEPARTMENT THAT THE DEPOSITORS WERE BENAMI. IN THAT VIEW OF THE MATTER, IT CAN BE SAFELY HELD THAT THE BONA FIDE BELIEF COUPLED WITH THE GENUINENESS OF THE TRANSACTIONS CONSTITUTE ALL REASONABLE CAUSE, AS. PROVIDED THE UNDER SECTION 273B. THE REPAYMENTS WERE GENUINE TRANSACTIONS AND THERE WAS NO MENS REA ON THE PART OF THE ASSESSEE AT THE TIME WHEN THE REPAYMENTS WERE MADE. IN VIEW OF THE ABOVE, THE PENALTY LEVIED BY THE JT. CIT AND SUSTAINED BY THE CIT(A) IS CANCELLED. (4) CIT V. EETACHI AGENC IES (2001) 248;ITR525 (BOM), IN WHICH THE HOH''BLE BOMBAY HIGH COURT DISMISSED THE APPEAL OF THE DEPARTMENT BY MAKING THE FOLLOWING OBSERVATIONS: 'ON AN EXAMINATION OF THE FACTS, 'THE TRIBUNAL FOUND THAT THE ASSESSEE HAD ACTED UNDER A GENUINE BELIEF THA T SECTION 269T HAD. NO APPLICATION TO DEPOSITS AND THAT IT ONLY APPLIED TO LOANS AND, THEREFORE/THE TRIBUNAL ORDERED DELETION OF PENALTY.' IN THE ASSESSMENT ORDER, THE LD. ASSESSING OFFICER HAS OBSERVED AS UNDER.' ITA NO.97/LKW/2017 PAGE 12 OF 33 'IN REPLY DATED 03.11.2014 ASSESSEE STATE D INTER ALIA THAT 'THE SAID PROPERTY WAS SOLD ON 4TH FEBRUARY, 2012 AND THE ASSESSEE PAID RS. 57,99,985/ - OUT OF THE AMOUNT OF SALE PROCEEDS TO M/S. ANDES TOWN PLANNERS PVT. LTD AT GOMTI NAGAR, LUCKNOW FOR PURCHASE OF ANOTHER FLAT AT LUCKNOW; BUT THE ASSES SEE DUE TO IGNORANCE DID NOT INVEST THE AMOUNT TO CAPITAL GAIN INVESTMENT SCHEME WITHIN 6 MONTHS; BUT THE ULTIMATE INTENTION OF THE ASSESSEE WAS TO PURCHASE AN IMMOVABLE PROPERTY WITHIN THE PRESCRIBED TIME LIMIT AS PER THE INCOME TAX ACT, 1961.' THE CONTEN TION OF THE ASSESSEE IS NOT ACCEPTABLE, BECAUSE THE CONTENTION ITSELF IS SELF CONTRADICTORY, THE ASSESSEE IS CLAIMING DEDUCTION U/S 54 WITHOUT KNOWING THAT SHE HAD TO INVEST THE SALE PROCEEDS IN CAPITAL GAINS ACCOUNTS SCHEME BUT SHE INVESTED THE AMOUNT IN A PROPERTY WITHIN THE TIME LIMIT IN ACCORDANCE WITH THE INCOME TAX ACT. IGNORANCE OF LAW CAN'T EXONERATE THE ASSESSEE FROM THE MISCHIEF COMMITTED. INFRACTION OF LAW MAKES HER CLAIM INELIGIBLE.' IN THIS REGARD, IT IS SUBMITTED THAT GENERALLY PEOPLE HAVE GEN ERAL IDEA OF A PARTICULAR ACT, RULE OR LAW OR PART THEREOF BUT THEY ARE NOT AWARE OF THE ENTIRE ACT OR RULE OR LAW OR PART THEREOF. IF PEOPLE HAVE COMPLETE KNOWLEDGE OF ACTS, RULES OR LAWS, THE NEED FOR LAWYERS WOULD NOT ARISE. THE APPELLANT WAS AWARE THAT CAPITAL GAIN TAX CAN BE SAVED BY INVESTING IT IN PURCHASE OF NEW HOUSE BUT SHE WAS NOT AWARE OF THE LAW THAT IF THE CAPITAL GAIN IS NOT UTILISED UP TO THE DUE DATE OF FILING OF RETURN U/S 139(1), IT WILL BE REQUIRED TO BE DEPOSITED UNDER CAPITAL GAIN ACCO UNT SCHEME. THEREFORE, THE AFORESAID REMARK OF THE LD. ASSESSING OFFICER DESERVES TO BE IGNORED. IN THIS REGARD IT IS FURTHER SUBMITTED THAT THE CAPITAL GAIN WAS KEPT IN A BANK ACCOUNT EVEN THOUGH IT WAS NOT KEPT UNDER CAPITAL GAIN. ACCOUNT SCHEME DUE TO I GNORANCE OF LAW. THEREFORE, EXEMPTION U/S 54 DESERVES TO BE ALLOWED TO THE APPELLANT. ITA NO.97/LKW/2017 PAGE 13 OF 33 (II) DEDUCTION U/S 54 ALLOWABLE IF CAPITAL GAIN WAS NOT DEPOSITED UNDER THE CAPITAL GAIN ACCOUNT SCHEME BEFORE DUE DATE FOR FILING RETURN U/S 139(1) RELIANCE IS PLA CED ON THE FOLLOWING JUDGEMENTS IN SUPPORT OF CLAIM FOR DEDUCTION U/S. 54: - (1) COMMISSIONER OF INCOME - TAX - II, CHANDIGARH V. MRS JAGRITI AGGARWAL (2011) 203 TAXMAN 203 (F&H) HEADNOTE . 'SECTION 54, READ WITH SECTION 139, OF THE INCOME - TAX ACT, 19 61 - CAPITAL GAINS PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE - ASSESSMENT YEAR 2006 - 07 - ASSESSEE SOLD HER HOUSE PROPERTY ON 13 - 1 - 2006 WHILE FILED HER, RETURN ON 28 - 3 - 2007 CLAIMING DEDUCTION UNDER SECTION 54 ON GROUND THAT SHE HAD PURCHASED ANOTHE R PROPERTY JOINTLY ON 2 - 1 - 2007 FOR HIGHER SUM - ASSESSING OFFICER DECLINED SAID CLAIM - ONE OF GROUNDS WAS THAT ASSESSEE HAD FAILED TO PURCHASE HOUSE PROPERTY BEFORE DUE DATE OF FILING RETURN INCOME UNDER SECTION 139(1), I.E., PRIOR TO 31 - 7 - 2006 - ACC ORDING TO ASSESSEE, DUE DATE OF FILING RETURN OF INCOME IN HER CASE WAS NOT AS SPECIFIED IN SECTION!39(L) BUT AS SPECIFIED IN SECTION 139{4) I.E., 31 - 7 - 2007 - WHETHER DUE DATE FOR FURNISHING RETURN OF INCOME AS PER SECTION 139(1) IS SUBJECT TO EXTENDED PER IOD PROVIDED UNDER SUB - SECTION (4) OF SECTION 139 AND, IF A PERSON HAD NOT FURNISHED RETURN OF PREVIOUS YEAR WITHIN TIME ALLOWED UNDER SUB - SECTION (1), ASSESSEE COULD FILE RETURN UNDER SUB - SECTION (4) BEFORE EXPIRY OF ONE YEAR FROM END OF RELEVANT ASSESSME NT YEAR - HELD, YES - WHETHER, THEREFORE, SECTION 54 DEDUCTION COULD NOT DENIED TO ASSESSEE ON THIS COUNT - HELD, YES [IN FAVOUR OF ASSESSEE]' (2) FATHIMA BAI VS INCOME - TAX OFFICER (2009) 32 DTK 243 (KAR) RELEVANT PORTION ITA NO.97/LKW/2017 PAGE 14 OF 33 'THE S. 54(1) DECLARES THAT WHEN THE ASSESSEE SELLS ANY LONG TERM CAPITAL ASSET, THE ASSESSEE SHOULD PURCHASE THE BUILDING WITHIN ONE YEAR BEFORE THE TRANSFER OR WITHIN TWO YEARS AFTER THE TRANSFER BY INVESTING CAPITAL GAINS. IN WHICH EVENT THE ASSESSEE WILL NOT BE LIABLE FOR CAPITAL GAIN TA X. THE S. 54(2) DECLARES THAT WITHIN ONE YEAR FROM THE DATE OF TRANSFER IF THE CAPITAL GAIN IS NOT INVESTED IN PURCHASE OF BUILDING, HE SHOULD DEPOSIT THE AMOUNT IN THE 'CAPITAL GAIN ACCOUNT SCHEME1 OR ELSE THE ASSESSEE SHOULD INVEST THE CAPITAL GAINS BEFO RE FILING OF RETURN WITHIN THE PERMITTED PERIOD UNDER S. 139. IN WHICH EVENT, THE ASSESSEE WILL NOT BE L IABLE TO PAY CAPITAL GAIN TAX. THE S. 139(4) DECLARES THAT THE ASSESSEE SHOULD FILE RETURNS WITHIN THE TIME PRESCRIBED, IF HE FALLS TO FILE RETURNS; HE MAY FILE RETURNS FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE EXPIRY OF ONE YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. IN THE INSTANT CASE, THE DUE DATE FOR FILING OF RETURN IS 30TH JULY,1988. UNDER S.139(4) THE ASSESSEE WAS ENTITLED TO FILE RETURN IN T HE EXTENDED TIME, WHICH IS WITHIN 31ST MARCH, 1990. THE EXTENDED DUE DATE UNDER/S. 139(4) WOULD BE 31ST MARCH, 1990. THE ASSESSEE DID NOT FILE THE RETURN WITHIN HE EXTENDED DUE DATE, BUT FILED THE RETURN ON 27TH FEBRUARY, - 2000: HOWEVER, THE ASSESSEE HAD UT ILISED THE ENTIRE CAPITAL GAINS BY PURCHASE OF A HOUSE PROPERTY WITHIN THE STIPULATED PERIOD OF S. 54(2) I.E. BEFORE THE EXTENDED DUE DATE FOR RETURN UNDER S. 139. THE ASSESSEE TECHNICALLY MAY HAVE DEFAULTED IN NOT FILING THE RETURN UNDER S. 139(4). BUT, HOWEVER, UTILISED THE CAPITAL GAINS FOR PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DATE UNDER S. 139(4). THE CONTENTION OF THE REVENUE THAT THIS DEPOSIT IN THE SCHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DUE DATE IS AN U NTENABLE CONTENTION. THE GAUHATI HIGH COURT IN CIT V. RAIESH KUMAR TALAN (2006) 206 CTR (GAU) 361 : (2006) 286 ITR 274 (GAU) HAS TAKEN A SIMILAR ITA NO.97/LKW/2017 PAGE 15 OF 33 VIEW THAT THE TIME LIMIT FOR DEPOSIT UNDER THE SCHEME OR UTILISATION CAN BE MADE BEFORE THE DUE DATE FOR FILING OF RETURNS UNDER S. 139(4). FOR THE REASONS AND DISCUSSIONS MADE ABOVE WE ANSWER THE SUBSTANTIAL QUESTION OF LAW IN FAVOUR OF THE ASSESSEE. THE APPEAL IS ALLOWED.' (3) CIT VS RAIESH KUMAR JALAN(2006) 286 ITR 274/157 TAXMAN 398 (GAUHATI) CASE SUMMARY 'TH E ASSESSING OFFICER (FOR SHORT THE 'AO') UNDER HIS ASSESSMENT ORDER REJECTED THE RESPONDENT/ASSESSEE'S CLAIM FOR EXEMPTION UNDER SECTION 54 OF THE INCOME - TAX ACT, 1961, FOR THE REASON THAT (A) THE APPELLANT/ASSESSEE HAS TAKEN ONLY A SUBLEASE OF THE PROPERT Y VIDE INDENTURE OF SUBLEASE DATED JANUARY 17, 1998, IN BETWEEN HIM AND M/S. AGARWAL COMPANY LTD. AND THE SAID INDENTURE HAS BEEN EXECUTED IN PURSUANCE OF THE LETTER DATED AUGUST 28,1961, WRITTEN BY SHRI R. K. JALAN AND SMT. ANGURI DEVI JALAN TO THE SAID L ESSEE; (B) THE SUBLEASE CANNOT BE TAKEN AS A CLEAR PURCHASE AS PER THE MEANING OF THE PROVISIONS OF SECTION 54(1) OF THE INCOME - TAX ACT AND ALSO THAT THERE WAS NO TRANSFER OF PROPERTY AS CLAIMED AND THE SAME WAS MERELY A SUBLEASE; (C) THE APPELLANT/ASSESSE E HAD NOT COMPLIED WITH THE PROVISIONS OF SECTION 54(2) .OF THE INCOME - TAX ACT BY NOT DEPOSITING THE UN. APPROPRIATED AMOUNT, OF CAPITAL GAIN IN THE CAPITAL GAINS DEPOSIT SCHEME, 1988,. WITHIN THE STIPULATED TIME' OF FURNISHING THE .RETURN OF INCOME TAX UN DER SECTION 139(1) OF THE INCOME - TAX ACT. THE RESPONDENT/ ASSESSEE PREFERRED THE FIRST APPEAL BEING APPEAL. NO.GUWA75/99/2000 AGAINST THE ASSESSMENT ORDER - OF THE ASSESSING OFFICER TO THE 'COMMISSIONER OF INCOME - TAX (APPEALS), GUWAHATI. THE FIRST APPELLATE AUTHORITY HAD PARTLY ALLOWED THE APPEAL BY PASSING THE FINAL ORDER DATED SEPTEMBER 24/1999, WHEREIN THE FIRST APPELLATE AUTHORITY HELD THAT EVEN A LEASE ALSO ITA NO.97/LKW/2017 PAGE 16 OF 33 AMOUNTS TO A TRANSFER WITHIN THE MEANING OF THE TRANSFER OF PROPERTY ACT,1882, BY REFERRING TO TW O DECISIONS OF THE SUPREME COURT IN R. K. PALSHIKAR. (HUF) V. CIT [1988] 172 ITR 311 AND A. R. KRISHNAMURTHY V. CIT [1989] 176 ITR 417, 421, AND AS SUCH THE TRANSFER IN QUESTION BETWEEN THE RESPONDENT/ASSESSEE ON THE ONE SIDE AND SHRI RADHA KRISHNA JALAN A ND SMT. ANGURI DEVI JALAN ON THE OTHER SIDE IS THE TRANSFER OF CAPITAL ASSET WITHIN THE PROVISIONS OF SECTION 2(47) (V) OF THE INCOME - TAX ACT BUT THE FIRST APPELLATE AUTHORITY HELD THAT THE RESPONDENT/ ASSESSEE COULD UTILISE ONLY RS. 14,43,254 (RUPEES FOUR TEEN LAKHS FORTY THREE THOUSAND TWO HUNDRED AND FIFTY FOUR) UP TO AUGUST 31,1996, TOWARDS THE PURCHASE OF THE PROPERTY AND BALANCE AMOUNT OF CAPITAL GAIN OF RS. 15,29,794 (RUPEES FIFTEEN LAKHS TWENTY NINE THOUSAND SEVEN HUNDRED AND NINETY FOUR) WAS NOT DEP OSITED IN A SEPARATE CAPITAL GAIN ACCOUNT WITH THE BANK BY CONSTRUING SUBSECTION (2) OF SECTION 54 OF THE INCOME TAX ACT, 1961, IN SUCH A MANNER THAT THE APPELLANT/ASSESSEE DID NOT DEPOSIT THE UNUTILIZED PORTION OF THE CAPITAL GAIN BEFORE THE DATE OF FURNI SHING THE RETURN OF INCOME TAX UNDER SECTION 139(1) OF THE INCOME - TAX ACT, 1961. '9. BENCH CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES. BENCH HAD ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE COPIES OF THE DOCUM ENTS TO WHICH OUR ATTENTION WAS DRAWN BY THE LEARNED REPRESENTATIVES OF THE PARTIES AT THE TIME OF HEARING OF THE APPEALS. THEREFORE, FOR THE PURPOSE OF TRANSFER THE POSSESSION OF THE FLAT IN PART PERFORMANCE OF THE CONTRACT UNDER SECTION 53A OF THE TRANSF ER OF PROPERTY ACT IS ESSENTIAL. FURTHER, UNDER THE PROVISION OF SECTION 54(1) OF THE ACT, IT IS STIPULATED THAT A PERSON IS ENTITLED TO TAKE THE BENEFIT IF THE PURCHASE HAS BEEN MADE WITHIN THE STIPULATED PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE D ATE ON WHICH THE TRANSFER TOOK PLACE. IN THE CASE BEFORE BENCH, THE ASSESSEE HAS UNDISPUTEDLY ENTERED INTO AGREEMENT FOR PURCHASE OF THE FLAT AND TAKEN POSSESSION WITHIN ONE YEAR FROM THE DATE OF SALE OF THE OLD ITA NO.97/LKW/2017 PAGE 17 OF 33 RESIDENTIAL HOUSE. THEREFORE, BENCH AGREE WI TH THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE HAS COMPLIED WITH THE REQUIREMENTS AS LAID DOWN IN SECTION 54(1) OF THE ACT BY PURCHASING THE FLAT AT A COST OF RS. 30 LAKHS AS AGAINST THE CAPITAL GAIN OF RS. 29,73,048. THEREFORE, BENCH AGREE WITH THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THERE HAS BEEN NO NECESSITY TO COMPLY WITH THE CONDITIONS FOR AVAILING OF THE BENEFIT FROM TAX OF THE CAPITAL GAIN, AS LAID DOWN UNDER SECTION 54(2) OF THE ACT, I.E. TO DEPOSIT TH E UNPAID AMOUNT IN A SEPARATE BANK ACCOUNT UNDER THE CAPITAL GAIN ACCOUNT SCHEME, BENCH IS OF THE VIEW THAT THE ASSESSEE HAD ALREADY APPROPRIATED THE ENTIRE CAPITAL GAIN FOR PURCHASE OF THE NEW ASSET WITHIN THE STIPULATED TIME. IN THIS REGARD BENCH FINDS S UPPORT FROM THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF K. C. GOPALAN WHEREIN IT WAS HELD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION UNDER SECTION 54 EVEN THOUGH FOR THE CONSTRUCTIPN OF THE NEW HOUSE, THE AMOUNT THAT WAS RECEIVED BY WAY OF SALE O F HIS OLD PROPERTY AS SUCH WAS NOT UTILISED. IT WAS HELD BY THE KERALA HIGH COURT THAT NO PROVISION IS MADE BY THE STATUTE THAT THE ASSESSEE SHOULD UTILISE THE AMOUNT WHICH HE OBTAINED BY WAY OF SALE CONSIDERATION FOR THE PURPOSE OF MEETING THE COST OF THE NEW ASSET. IT WAS HELD THAT SECTION 54 ONLY PROVIDES THAT HE ASSESSEE HAS TO PURCHASE A HOUSE PROPERTY FOR THE PURPOSE OF HIS OWN RESIDENCE WITHIN A PERIOD OF ONE YEAR BEFORE OR AFTER THE DATE ON WHICH THE TRANSFER OF HIS PROPERTY TOOK PLACE OR HE SHOULD HAVE CONSTRUCTED A HOUSE PROPERTY WITHIN A PERIOD OF TWO YEARS AFTER THE DATE OF TRANSFER. IT WAS FURTHER HELD THAT ENTITLEMENT OF EXEMPTION UNDER SECTION 54 RELATES TO THE COST OF ACQUISITION OF A NEW ESTATE IN THE NATURE OF A HOUSE PROPERTY FOR THE PURPO SE OF HIS OWN RESIDENCE WITHIN THE SPECIFIED PERIOD.' (4) INCOME - TAX OFFICER VS. SMT. SWARNAMBAL DAYASHANKAR IN ITA NO.1472/MDS/2012 OF HON'BLE ITAT, CHENNAI DATED 24.01.2013 RELEVANT PORTION ITA NO.97/LKW/2017 PAGE 18 OF 33 '1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LA W AND FACTS OF THE CASE 2.1 THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S 54 EVEN THOUGH THE ASSESSEE HAD NOT INVESTED THE ENTIRE CAPITAL GAIN WITHIN THE DUE DATE AS MENTIONED U/S 54 OR 54F AND ALSO NOT WITHIN THE DUE DATE FOR FILING OF RETURN OF INCOME U/S 139(1) OF THE I.T ACT. 2.2 THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE HAD MADE THE PAYMENT OF RS 40 LAKHS OUT OF THE TOTAL CAPITAL GAINS, ONLY ON 248.2007 BEYOND THE DUE DATE FOR FILING OF RETURN O F INCOME AS PER SEC. 139( 1) OF THE IT ACT 2.3 IT IS SUBMITTED THAT THE DUE DATE OF FILING OF RETURN OF INCOME IS SPECIFICALLY MENTIONED FOR CLAIMING DEDUCTION U/S 54 (2) AS SEC 139(1) AND NOT AS PER SEC 139(4) OF THE IT ACT. THE ASSESSING OFFICER IS DIREC TED TO COMPUTE THE TAXABLE LONG TERM CAPITAL GAINS AT RS.NIL BY ALLOWING DEDUCTION OF RS.86,92,810/ - (BUT RESTRICTED TO THE AMOUNT OF 'LONG TERM CAPITAL GAINS) U/S 54 OF THE ACT. 7. NO SPECIFIC ERROR COULD BE POINTED OUT BY THE DR IN THE ORDER OF THE CIT (A). THE DR COULD NOT CITE ANY CONTRARY: DECISIONS TO THE DECISION OF THE HIGH COURT AND THE TRIBUNAL RELIED ORT BY THE CIT{A) IN ALLOWING THE CLAIM FOR DEDUCTION OF 40 LAKHS U/S. 54 OF THE ACT TO THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY GOOD AND JUST IFIABLE SEASON TO INTERFERE WITH THE ORDER OF THE CIT(A}WHICH IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. (5) ITO, WARD - 11 VS. KANWAR PAL RAJPUT IN ITA NO.1325/DEL/2012 DATED 17.04.2015 RELEVANT PORTION ITA NO.97/LKW/2017 PAGE 19 OF 33 '2.FR O M THE ABOVE GROUNDS, IT IS GATHERED THAT ONLY GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF DISALLOWANCE OF RS.18 LAKH MADE BY THE AO ON ACCOUNT OF NON - UTILISATION OF CAPITAL GAIN BEFORE THE DUE DATE OF FURNISHING OF THE RETURN. 3. FACTS, OF THE CASE I N BRIEF ARE THAT THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 13/7/2007 DECLARING AN INCOME OF RS.1,69,274/ - WHICH WAS PROCESSED U/S 143(1) OF THE IT ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT). THEREAFTER THE ASSESSEE FILED THE REVISED RETURN ON 12/3 /2008 DECLARING THE SAME INCOME BUT REVISED THE LONG TERM CAPITAL GAIN TO RS. 26,97,829/ - AS AGAINST RS.30 LAKH DECLARED IN THE ORIGINAL RETURN AND THE CAPITAL GAIN WAS CLAIMED EXEMPT U/S 54B OF THE ACT. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE SOLD URBAN AGRICULTURAL LAND SITUATED AT PALWAL ON 7112/2006 FOR A CONSIDERATION OF RS.30 LAKHS AND WORKED OUT THE LONG TERM CAPITAL GAIN AT RS.26,97,829/ - AFTER REDUCING INDEXED COST OF A CQUISITION OF RS.3,41,070/ - . AGAINST THE SAID LONG TERM CAPITAL GAIN ASSESSEE CLAIMED DEDUCTION OF RS.4,98,500/ - U/S 54B ON ACCOUNT OF INVESTMENT MADE ON 2017/2006 PURCHASE OF A FARM HOUSE AT PUNE, DEDUCTION OF RS.5,05,968/ - IN RESPECT OF PURCHASE OF RESID ENTIAL HOUSE NO. K - 66, JALVAYU VIHAR, SECTOR 29, FARIDABAD AND DEDUCTION OF RS.18 LAKH U/S 54B OF THE ACT ON ACCOUNT OF INVESTMENT IN AGRICULTURAL LAND. THE AO DISALLOWED THE CLAIM OF DEDUCTION U/S 54B AMOUNTING TO RS.18 LAKH ON THE GROUND THAT THE AMOUNT OF CAPITAL GAIN WAS NOT INVESTED IN CAPITAL GAIN ACCOUNT SCHEME AS LAID DOWN U/S 54B (2) OF THE ACT BUT ONLY IN FDRS, PRIOR TO PURCHASE OF AGRICULTURAL LAND. 11. FROM THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO CASE, IT IS CLEAR THAT THE ASSESSEE CAN FURNISH THE RETURN OF INCOME AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF ASSESSMENT WHICHEVER IS EARLIER. IN THE PRESENT CASE, THE ASSESSMENT YEAR ASSESSMENT YEAR 2007 - 08 WHICH ENDS ON 31/8/2008. THEREFORE, THE PERIOD EXTENDED BY ONE YEAR END ON TO 31ST MARCH 2009 AND ITA NO.97/LKW/2017 PAGE 20 OF 33 IN THE PRESENT CASE THE ASSESSEE MADE THE INVESTMENT IN THE AGRICULTURAL LAND BEFORE THE EXTENDED DUE DATE FOR FILING THE RETURN OF INCOME U/S 139(4) OF THE ACT I.E. 31/3/2 009. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN DIRECTING THE AO TO ALLOW THE DEDUCTION U/S 54B OF THE ACT. WE DO NOT SEE ANY INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE. (B) EXEMPTION U/S 54 CAN NOT BE DENIED IF PROPERTY NOT REGI STERED ONE OF THE GROUNDS ON WHICH THE LD. ASSESSING OFFICER HAS REFUSED EXEMPTION U/S 54 IS THAT ONLY BOOKING/ALLOTMENT' OF FLATS, BEING NEW ASSETS WAS MADE AND THEY WERE NOT REGISTERED IN THE NAME OF THE APPELLANT. IN THIS REGARD, IT IS SUBMITTED TH AT REGISTRATION OF THE NEW HOUSE IS NOT LEGALLY REQUIRED FOR THE PURPOSE OF AVAILING OF EXEMPTION U/S 54. REQUIREMENT OF LAW FOR GRANTING OF EXEMPTION U/S 54 IS FULFILLED, IF THE PROPERTY IS BOOKED/ALLOTTED. IN THIS REGARD, RELIANCE IS PLACED ON - THE FOL LOWING JUDGEMENTS AND CBDT - CIRCULARS: (1) JUDGEMENTS . 1. VINOD KUMAR JAIN V. CIT, LUDHIANA (2010) 195 TAXMAN 174 (P&H)) HEADNOTE 'SECTION 2(29A), READ WITH SECTION 54 OF THE INCOME - TAX ACT, 1961 - CAPITAL . GAINS - LONG - TERM CAPITAL GAINS/ASSETS - ASSE SSMENT YEAR 1989 - 90 - ASSESSEE WAS ALLOTTED A FLAT UNDER SCHEME OF DDA ON 27 - 2 - 1982 - DELIVERY OF POSSESSION OF SAID FLAT TOOK PLACE ON 15 - 5 - 1986 WHEN ACTUAL FLAT NUMBER WAS ALLOCATED TO ASSESSEE - ASSESSEE SOLD SAID FLAT ON 6 - 1 - 1989 - HE CLAIMED THAT CAPI TAL GAINS ARISING ON SALE OF FLAT WAS A LONG - TERM CAPITAL GAIN BUT ACCORDING TO REVENUE AUTHORITIES, FLAT WAS ALLOTTED ON 15 - 5 - 1986 AND, ITA NO.97/LKW/2017 PAGE 21 OF 33 THEREFORE, CAPITAL GAIN WAS SHORT - TERM CAPITAL GAIN - WHETHER UNDER SELF - FINANCING SCHEME, AN ALLOTTEE GETS TITLE TO PRO PERTY ON ISSUANCE OF AN ALLOTMENT LETTER AND PAYMENT OF INSTALMENTS IS ONLY A CONSEQUENTIAL ACTION UPON WHICH DELIVERY OF POSSESSION . FLOWS - HELD, YES - WHETHER THEREFORE, RIGHT OF ASSESSEE PRIOR TO 15 - 5 - 1986 WAS A RIGHT IN PROPERTY AND EVEN PRIOR TO SAI D DALE ASSESSEE WAS HOLDING SAID FLAT - HELD, YES - WHETHER, THEREFORE, CAPITAL GAIN ARISING ON SALE OF SAID FLAT WAS A LONG - TERM CAPITAL GAIN AND, CONSEQUENTLY, ASSESSEE WAS ENTITLED TO SET OFF SAME UNDER SECTION 54 - HELD, YES.' 2. CIT V K. RAMAKRISHNA N (2014) 225 TAXMAN 123 (DEL) HEADNOTE 'SECTION 2(42A) OF THE INCOME - TAX ACT, 1961 - CAPITAL GAINS - SHORT - TERM CAPITAL GAINS (IMMOVABLE PROPERTY) - A PLOT WAS ALLOTTED TO ASSESSEE BY HUDA ON 3 - 8 - 1999 - SUBSEQUENTLY, A CONVEYANCE DEED WAS EXECUTED AND POSS ESSION OF PLOT WAS GIVEN ON 12 - 12 - 2005 - ASSESSEE SOLD SAID PLOT THROUGH REGISTERED SALE DEED ON. 9 - 1 - 2008 - ASSESSING OFFICER BROUGHT TO TAX/CAPITAL GAIN ARISING FROM SALE OF PLOT AS SHORT - TERM /CAPITAL GAIN - WHETHER IN VIEW OF ORDER PASSED IN CASE OF JITENDRA MOHAN V. INCOME TAX OFFICER [2007] 11 SOT 594 (DELHI), IT IS DATE OF ALLOTMENT - WHICH IS RELEVANT FOR PURPOSE OF COMPUTING HOLDING PERIOD, AND NOT. DATE OF - REGISTRATION OF CONVEYANCE DEED - HELD, YES - WHETHER, THEREFORE, AMOUNT IN QUESTION WAS TO BE TAXED AS LONG - TERM CAPITAL GAIN - HELD, YES [PARAS 2 & 3] (IN FAVOUR OF ASSESSEE]' 3. CIT SALARY CIRCLE, CHENNAI V S. R. JAYASHANKAR (2015) 228 TAXMAN 289 (MAD) HEADNOTE 'SECTION 2(29A), READ WITH SECTION 2(42A) OF THE INCOME - TAX ACT, 1961 - CAPITAL GAINS - LONG TERM CAPITAL GAINS (LAND, AND BUILDING) - ASSESSMENT YEAR 2009 - 10 - WHETHER WHERE ASSESSEE HAD ITA NO.97/LKW/2017 PAGE 22 OF 33 ENTERED INTO AN AGREEMENT WITH BUILDER FOR PURCHASE OF UNDIVIDED SHARE OF LAND AND CONSTRUCTI ON, DATE OF ALLOTMENT OF UNDIVIDED SHARE IN LAND WAS TO BE ADOPTED AS DATE OF ACQUISITION FOR COMPUTING CAPITAL GAIN INSTEAD OF DATE OF SALE DEED - HELD, YES [PARA 10] [IN FAVOUR OF ASSESSEE]' 4. ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE 25(3) V SMT . SUNDER KAUR SUJAN SINGH GADH (2005) 3 SOT 206 (MUM) GIST BRIEF FACTS OF THE CASE ARE,' THAT THE ASSESSEE HAD SOLD A RESIDENTIAL FLAT NO. 4 IN VASANT VIHAR, 14TH KHAR ROAD, MUMBAI - 52, FOR A TOTAL CONSIDERATION OF RS. 41 LAKHS AS PER AGREEMENT DATED 13 - 1 - 1997. THE SAID FLAT HAD BEEN PURCHASED BY THE ASSESSEE FOR A SUM OF RS. 7.75 LAKHS ON 10 - 7 - 1992. AS AGAINST THE SALE PROCEEDS OF RS. 41 LAKHS THE ASSESSEE HAD INVESTED A SUM OF RS. 11,47,500/ - TOWARDS PURCHASE OF ANOTHER RESIDENTIAL HOUSE PROPERTY AT AHMEDABAD. THE BUILDERS M/S. RADHE DEVELOPERS (INDIA) LTD., OF AHMEDABAD, GUJARAT HAD, ISSUED AN ALLOTMENT LETTER DATED 26 - 2 - 1996 TO THE ASSESSEE ALLOTTING FLAT NO. B - 62 IN THE BUILDING NAMES AS THIRTHDHAM AND RS. 11,47,500/ - WERE PAID BY THE ASSESSEE TO T HE DEVELOPERS IN TWO INSTALMENTS, I.E., RS. 10 LAKHS WERE PAID ON 5.01.1996 AND RS. 1,47,500/ - WERE AID ON 12.1.1996 OUT OF HER CAPITAL ACCOUNT WITH M/S. HARRNCHAN SINGH SUJAN SINGH. SUBSEQUENTLY, THE BUILDER HAD NOT CONSTRUCTED THE 'B' - BLOCK IN THIRTHDHA M IN RESPECT OF WHICH THE ALLOTMENT LETTER WAS ISSUED BY THEM TO THE ASSESSEE AND AS AN ALTERNATIVE THE MEMBERSHIP OF THE ASSESSEE WAS SHIFTED TO FLAT NO. C - 32 IN THE SAME BUILDING. THE POSSESSION OF THE SAID FLAT NO. C - 32 WAS HANDED OVER TO THE ASSESSEE BEFORE 4.1.2000 AS IS EVIDENT FROM THE BUILDER'S LETTERS DATED 19.11.1999 AND 4.1.2000. THE DECISION OF TRIBUNAL WAS ITA NO.97/LKW/2017 PAGE 23 OF 33 VIDE BOARD'S CIRCULAR NO. 411, DATED 15 - 10 - 1986 IT HAS TEEN EXPLAINED THAT TO QUALIFY, INVESTMENT FOR CONSTRUCTION UNDER SECTION 54F THE CRUCIAL DATE IS THE DATE OF ALLOTMENT OF FIAT BY DDA AND PAYMENT OF INSTALMENT WAS ONLY A FOLLOW - UP ACTION AND TAKING POSSESSION OF THE FLAT IS ONLY A FORMALITY OF COURSE INSTALMENTS HAVE TO BE PAID BY THE ALLOTTEE AS PER THE SCHEDULE FIXED BY THE DDA. AS PER BOARD'S CIRCULAR NFO.672, DATED 16 - 12 - 1993 THE - BOARD AFTER REFERRING TO THE ABOVE MENTIONED CIRCULAR NO.471 EXTENDED THE FACILITY OF EXEMPTION UNDER SECTIONS 54 AND 54F IN RESPECT OF ALLOTMENT OF FLATS/HOUSE BY CO - OPERATIVE SOCIETIES AND OTHER INSTIT UTIONS/ AND THE - ALLOTMENT AND CONSTRUCTION OF THE FLAT BY CO - OPERATIVE SOCIETIES AND OTHER INSTITUTIONS ARE TO BE CONSIDERED IN SIMILAR MANNER FOR THE PURPOSE OF ALLOWING EXEMPTION UNDER SECTION 54. THE ABOVE CIRCULARS ARE BINDING ON THE REVENUE AUTHORITI ES UNDER SECTION 119 OF THE ACT. SINCE THE FLAT HAS BEEN ALLOTTED TO THE ASSESSEE BY THE BUILDER WHO WOULD FALL IN THE CATEGORY OF OTHER INSTITUTIONS MENTIONED IN THE CIRCULARS/ IT HAS TO BE TAKEN AS CASE OF CONSTRUCTION OF THE RESIDENTIAL FLAT AND NOT AS A PURCHASE OF A RESIDENTIAL FLAT. 5. MRS. SEETHA SUBRAMANIAM V. ASSISTANT COMMISSSIONER OF INCOME - TAX (59 ITD 94) GIST THE SECOND DECISION IN THIS REGARD IS THAT ITAT, MADRAS WHICH IN CASE OF MRS. SEETHA SUBRAMANIAM. V ASSISTANT COMMISSIONER OF INCOME - TAX [59 ITD 94] ON THE FACT THAT COMMISSIONER OF INCOME - TAX, AFTER ENQUIRY BY AN INSPECTOR FOUND THAT THE HOUSE IS NOT COMPLETED AND PASSED ORDER U/S 263 BY WHICH HE DISALLOWED THE CLAIM OF ASSESSEE U/S 54F RULED AS UNDER: BEFORE THE TRIBUNAL, THE CONTENTI ON OF THE ASSESSEE WAS THAT THE PROVISION OF SECTION 54F IS A BENEFICIAL PROVISION FOR PROMOTING THE CONSTRUCTION OF RESIDENTIAL HOUSES. THEREFORE, THE SAID PROVISION HAS O BE CONSTRUED LIBERALLY AND FOR ACHIEVING THE PURPOSE FOR ITA NO.97/LKW/2017 PAGE 24 OF 33 WHICH IT WAS INCORPORATED IN THE STATUTE. IN SUPPORT OF THE SAID CONTENTION THE ASSESSEE RELIED UPON THE DECISION IN THE CASE OF BAJAJ TEMPO LTD. THE ASSESSEE ALSO RELIED UPON CERTAIN CIRCULARS ISSUED BY THE CBDT. ONE OF THE CIRCULARS WAS CIRCULAR NO. 471, DATED 15TH OCTOBER, 1 986. THIS WAS ISSUED BY THE CBDT CLARIFYING THE - POSITION THAT WHERE AN ASSESSEE ACQUIRES A FLAT BY AN ALLOTMENT UNDER THE SELF - FINANCING SCHEME OF THE DELHI DEVELOPMENT AUTHORITY THE ALLOTMENT ITSELF IS SUFFICIENT COMPLIANCE FOR GETTING THE BENEFIT UNDER SECTION 54F, EVEN THOUGH THE ASSESSEE HAS NOT PAID ALL THE INSTALMENTS DUE UNDER THE SAID SCHEME. LATER BY ANOTHER CIRCULAR NO. 672, DATED 16TH DECEMBER, 1993, THE CBDT HAS ISSUED CLARIFICATION EXTENDING THE SAME BENEFITS FOR ACQUISITION OF HOUSES OR F LATS ON ALLOTMENT UNDER SIMILAR SCHEMES. THEREFORE IT WAS CONTENDED THAT THE INTENTION OF THE LEGISLATURE WAS TO INVEST IN THE ACQUISITION OF A RESIDENTIAL HOUSE AND COMPLETION OF CONSTRUCTION OR OCCUPATION IS NOT REQUIRED. WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE. THE SAID INTENTION IS VERY CLEAR FROM THE TWO CIRCULARS - ISSUED BY THE CBDT, WHERE IT WAS HELD - THAT AN ASSESSEE IS ENTITLED TO THE BENEFIT OF SECTIONS 54 AND 54F, IF AN ASSESSEE GETS AN ALLOTMENT UNDER 'THE SELF FIN ANCING SCHEME AND PAYS THE FIRST INSTALMENT OF THE COST OF CONSTRUCTION. FROM THAT IT IS CLEAR THAT IN ORDER TO GET THE BENEFIT UNDER SECTION 54F THE ASSESSEE NEED NOT COMPLETE THE CONSTRUCTION OF THE HOUSE AND OCCUPY THE SAME. ADMITTEDLY IN THE PRESENT CA SE, THE ASSESSEE HAD INVESTED THE ENTIRE NET CONSIDERATION WITHIN THE STIPULATED PERIOD AND IN FACT HAS EVEN CONSTRUCTED THE ENTIRE RESIDENTIAL PROPERTY, EXCEPT SOME FINISHING TO MAKE IT FIT FOR OCCUPATION. AS THE ASSESSEE HAS SUBSTANTIALLY COMPLETED ALL T HE WORK OF CONSTRUCTION AND HAS INVESTED THE ENTIRE NET CONSIDERATION, IT HAS TO BE INFERRED THAT THE ASSESSEE HAS COMPLIED WITH THE CONDITIONS PROVIDED UNDER SECTION 54F. 6. SATISH CHANDRA GUPTA ASSESSING OFFICER (1995) 54 ITD 508 (ITAT,DELHI) ITA NO.97/LKW/2017 PAGE 25 OF 33 GIST A SIMILAR CASE WAS CONSIDERED BY THE DELHI BRANCH OF THIS TRIBUNAL IN THE CASE OF SATISH CHANDRA GUPTA V ASSESSING OFFICER [1995] 54 ITD 508 AND THIS TRIBUNAL AFTER CONSIDERING THE PROVISIONS OF SECTION 54 AS WELL AS SECTION 55 HELD THAT THE CLAIM CANNOT BE DENIED ON THE GROUND THAT THE CONSTRUCTION THE HOUSE STARTED BY THE ASSESSEE WAS NOT COMPLETED WITHIN THE STIPULATED PERIOD OF THREE YEARS AND SOME WORK WAS CARRIED OUT THEREAFTER. THE SAID DECISION ALSO SUPPORTS THE ASSESSEE'S CONTENTION. UNDER THE ABOVE CIRCUMSTANCES, ESPECIALLY IN THE LIGHT OF THE CIRCULARS ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WE HOLD THAT THE COMMISSIONER OF INCOME - TAX WAS NOT JUSTIFIED IN REVISING THE ASSESSMENT OF THE ASSESSING OFFICER. HENCE WE SET ASIDE THE ORDER OF THE CIT AND RESTORE THAT OF THE ASSESSING OFFICER. A SIMILAR CASE WAS CONSIDERED BY THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF SATISH CHANDRA GUPTA VS. ASSESSING OFFICER [1995] 54 ITD, 508 AND THIS TRIBUNAL AFTER, CONSIDERING THE PROVISIONS OF SECTION 54 AS W ELL AS SECTION 55 HELD THAT THE CLAIM CANNOT BE DENIED ON THE GROUND THAT THE CONSTRUCTION THE HOUSE STARTED BY THE ASSESSEE WAS HOT COMPLETED WITHIN THE STIPULATED PERIOD OF THREE/YEARS AND SOME WORK WAS CARRIED OUT THEREAFTER. THE SAID DECISION ALSO SU PPORTS THE ASSESSEE'S CONTENTION. UNDER THE ABOVE CIRCUMSTANCES, ESPECIALLY IN THE LIGHT OF THE CIRCULAR ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WE HOLD THAT THE COMMISSIONER OF INCOME - TAX WAS NOT JUSTIFIED IN REVISING OF THE ASSESSING OFFI CER. HENCE WE SET ASIDE THE ORDER OF THE CIT AND RESTORE THAT OF THE ASSESSING OFFICER. (2) CBDT CIRCULARS I. CIRCULAR NO. 471 DATED 15/10/1986 'FLATS ALLOTTED UNDER SFS SCHEMES OF DDA - FOR THE PURPOSE OF CAPITAL GAINS TAX THE COST OF THE NEW ASSE T IS THE TENTATIVE COST OF ITA NO.97/LKW/2017 PAGE 26 OF 33 CONSTRUCTION OF THE FACT THAT THE AMOUNT WAS ALLOWED TO BE PAID IN INSTALMENTS DOES NOT AFFECT THE LEGAL POSITIONS. THEREFORE, CASES OF ALLOTMENT OF FLATS UNDER THE SELF - FINANCING SCHEME OF THE D.D.A. SHALL BE TREATED AS CASES OF X CONSTRUCTION FOR THE PURPOSE OF CAPITAL GAIN - CIRCULAR: NO. 471 [F. NO.207/27/85 - IT (A - II)], DATED 15/10/1986.' II. CIRCULAR NO 672 DATED 16/12/1993 'CONSTRUCTION, CONNOTATION OF - ALLOTMENT OF FLATS/HOUSES BY COOPERATIVE SOCIETIES AND OTHER INSTI TUTIONS, WHOSE SCHEMES OF ALLOTMENT AND CONSTRUCTION, ARE SIMILAR TO THOSE OF DDA (SEE CIRCULAR NO. 471), SHOULD BE TREATED AS CASES OF CONSTRUCTION - CIRCULAR: NO. 672, DATED 16/12/1993.' (C)NOT MORE THAN ONE HOUSES WAS PURCHASED THE FACT OF THE - CASE IS TH AT THE APPELLANT HAD PURCHASED FLAT NO. E - 904 SITUATED AT ROHTAS PLUMERIA HOMES, GOMTI NAGAR, LUCKNOW FROM M/S ANDES TOWN PLANNERS PVT. LTD. ON PAYMENT OF. RS.57,99,984/ - BUT OF THE AFOREMENTIONED SALE PROCEEDS. HOWEVER, ON THE RECEIPT NO. 3071 DATED 19.0 2.2013 M/S ANDES TOWN PLANNERS PVT. LTD. MISTAKENLY MENTIONED FLAT NO. E - 1004 INSTEAD OF E - 904. DUE TO THIS THE LD. ASSESSING OFFICER INFERRED THAT THE APPELLANT HAD PURCHASED TWO FLATS ON DIFFERENT FLOORS. THE MISTAKE IN THE SLIPS SUBMITTED BEFORE THE AS SESSING OFFICER CAME TO THE NOTICE OF APPELLANT ONLY WHEN SHE RECEIVED THE ASSESSMENT ORDER. THE COPY OF LETTER FROM M/S ANDE TOWN PLANNERS PVT. LTD. ACKNOWLEDGING THE MISTAKE HAVE ALREADY BEEN ENCLOSED/ABOVE FOR YOUR KIND PERUSAL. IN VIEW OF THE AFORESAID FACTS, CIRCUMSTANCES AND JUDGEMENTS, EXEMPTION U/S 54 DESERVES TO BE ALLOWED TO THE APPELLANT AND THE ADDITION OF RS. 6 1 ,46,459/ - MADE BY THE LD. ASSESSING OFFICER DESERVE TO BE DELETED.' 5 . AFTER CONSIDERING THE WRITTEN SUBMISSION OF THE ASSESSEE AND THE AS SESSMENT ORDER, THE LD. CIT(A) HELD AS FOLLOWS: - ITA NO.97/LKW/2017 PAGE 27 OF 33 5. I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMISSION OF APPELLANT AND VARIOUS CASE LAWS MENTIONED IN WRITTEN SUBMISSION AND FINDING GIVEN BY AO IN ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE THE ADDI TION ON ACCOUNT OF CAPITAL GAIN AS DISCUSSED IN ASSESSMENT ORDER, AND REJECTED THE CLAIM OF THE APPELLANT DEDUCTION CLAIMED U/S 54 OF THE I.T. ACT. THE ASSESSING OFFICER HAS MENTIONED THAT THE APPELLANT DID NOT INVESTED THE CAPITAL GAIN EITHER PURCHASES/CO NSTRUCTION NEW HOUSE PROPERTY OR DEPOSITED THE CAPITAL GAIN AMOUNT IN SPECIFIED CAPITAL GAIN ACCOUNT SCHEME ON OR BEFORE DUE DATE OF FILING OF RETURN U/S 139(1) OF THE I.T. ACT. THE APPELLANT HAS STATED IN HIS WRITTEN SUBMISSION THAT HE HAD PURCHASED NEW F LAT ON 19.02.2013 AND INVESTED THE CAPITAL GAIN TO THE EXTENT OF RS.57,99,984/ - WHICH WAS PAID TO ANDES TOWN PLANNERS PVT. LTD, GOMTI NAGAR LUCKNOW TO PURCHASE NEW FLAT. THE APPELLANT HAS ALSO STATED IN HIS WRITTEN SUBMISSION AND FILED COPY OF CERTIFICATE ISSUED BY ANDES TOWN PVT. LTD., THAT THE FLAT NO. E - 904 SITUATED AT ROHTAS PLUMER HOMES GOMTI NAGAR, LUCKNOW SOLD TO APPELLANT. M/S ANDES TOWN PLANNERS PVT. LTD, AS CERTIFIED IN THE CERTIFICATE ISSUED ON 23.01.2015, TO M/S AARTI KUMARIA APPELLANT AND CERTI FIED THAT 'THIS IS TO INFORM YOU THAT IN OVER RECEIPTS NO. 307 DATED 19.02.2013 AMOUNTING TO RS.10,00,000/ - DUE TO OVERSIGHT THE FLAT NUMBER HAS BEEN MENTIONED E - 1004 IN PLACE OF FLAT NO. E - 904. KINDLY CORRECT YOUR RECORD ACCORDINGLY. FURTHER, THE A PPELLANT HAS FILED FOLLOWING PAPERS/DOCUMENTS IN COMPLIANCE TO THE DIRECTION GIVEN VIDE ORDER SHEET ENTRY DATED 12.09.2016: (I.) COPY OF LETTER FROM M/S ANDES TOWN PLANNERS LTD. REGARDING CORRECTION IN THE RECEIPTS ISSUED EARLIER FOR FLAT NO. E - 904 AT PAG E NO. 37 OF WRITTEN SUBMISSION. (II.) COPY OF AGREEMENT WITH THE BUILDER. (III.) PROOF OF INVESTMENT AMOUNTING TO RS. 60,74,811/ - ITA NO.97/LKW/2017 PAGE 28 OF 33 THE APPELLANT HAS EXPLAINED AND ARGUED THAT SHE HAD KEPT THE EQUIVALENT AMOUNT TO CAPITAL GAIN ARISEN FROM SALE OF P ROPERTY HAS BEEN DEPOSITED IN HER BANK ACCOUNT AND THE DEPOSITED AMOUNT WITHDRAWN FROM HER BANK ACCOUNT AT THE TIME OF PAYMENT TO M/S. ANDES TOWN PLANNERS PVT. LTD, FOR PURCHASES OF NEW FLAT. THOUGH SHE HAD ADMITTED THE SAID AMOUNT DEPOSITED IN SPECIFIED C APITAL GAIN ACCOUNT SCHEME BUT IT IS FACT THAT THE MONEY EQUAL TO CAPITAL GAIN ACCOUNT HAS BEEN DEPOSITED AND KEPT IN NATIONALIZED BANK. THE APPELLANT HAS ALSO CATEGORICALLY ARGUED THAT SHE HAD PURCHASED NEW FLAT AND INVESTED ENTIRE CAPITAL GAIN BEFORE THE YEAR ENDING 31.03.2013, WHICH WAS THE EXTENDED TIME FOR FILING OF I.T. RETURN U/S 139(4) OF THE I.T. ACT. THE APPELLANT HAS STATED THAT THE CLAIM U/S 54 IS ALLOWABLE ALSO IN A SITUATION WHERE THE CAPITAL GAIN UTILIZED IN PURCHASES OF NEW HOUSE PROPERTY ON OR BEFORE THE TIME LIMIT AVAILABLE U/S 139(4) OF I.T. ACT. SINCE, SHE HAD PURCHASED AND INVESTED CAPITAL GAIN ON 19.02.2013, .THEREFORE; SHE HAD RIGHTLY CLAIMED THE DEDUCTION U/S 54 OF THE I.T. ACT. THE APPELLANT HAS ALSO EXPLAINED AND ARGUED THAT THE ASS ESSING OFFICER DID NOT CONSIDER THESE FACTS WHILE DENYING FOR DEDUCTION U/S 54 CLAIMED BY HER. THE APPELLANT HAS ALSO MENTIONED IN DETAILED IN HER WRITTEN SUBMISSION VARIOUS CASE LAWS IN SUPPORT OF HER VERSION THAT THE DEDUCTION U/S 54 IS ALLOWABLE EVEN IF THE CAPITAL GAIN UTILIZED IN PURCHASES OF NEW HOUSE PROPERTY ON OR BEFORE THE TIME LIMIT ALLOW IN FILING OF ITR U/S 139(4). THE APPELLANT HAS ALSO RELIED ON THE CBDT CIRCULAR 471 DATED 15.10.1986 AND CIRCULAR NO. 672 DATED 16.10.1993 ISSUED BY CBDT. THE A PPELLANT HAS CLAIMED THAT IN THESE CIRCULARS IT HAS BEEN CLEARLY MENTIONED THAT WHERE AN ASSESSEE ACQUIRES A FLAT BY AN ALLOTMENT UNDER THE SELF FINANCING SCHEME OF THE DDA THE ALLOTMENT ITSELF IS SUFFICIENT COMPLIANCE FOR GETTING THE BENEFIT U/S 54 EVEN T HOUGH THE ASSESSEE HAS NOT PAID ALL THE INSTALMENT DUE UNDER SAID SCHEME. FURTHER, IN VARIOUS CASE LAWS CITED BY APPELLANT, THE DECISIONS DELIVERED BY THE HON'BLE COURT FAVOURS THE ITA NO.97/LKW/2017 PAGE 29 OF 33 CLAIM OF THE APPELLANT THAT THE BENEFIT U/S 54 OF THE I.T. ACT IS ALLOWABLE TO A PERSON IF HE OR SHE INVESTED IN PURCHASES OF NEW PROPERTY WITHIN THE TIME LIMIT AVAILABLE FOR FILING OF ITR U/S 139(4) OF I.T. ACT. THE APPELLANT HAS ALSO EXPLAINED IN HER WRITTEN SUBMISSION MENTIONED SUPRA THAT SHE HAD NOT PURCHASED MORE THAN ONE H OUSE AS WRONGLY STATED BY AO IN THE ASSESSMENT ORDER. THE CONTENTION OF APPELLANT ON THIS POINT IS REPRODUCED: THE FACT OF THE CASE IS THAT THE APPELLANT HAD PURCHASED FLAT NO. E - 904 SITUATED AT ROHTAS PLUMERIA HOMES, GOMTI NAGAR, LUCKNOW FROM M/S ANDES TOWN PLANNERS PVT. LTD. ON PAYMENT OF RS.57,99,984/ - OUT OF THE AFOREMENTIONED SALE PROCEEDS. HOWEVER, ON THE RECEIPT NO, 3071 DATED 19.02.2013 M/S ANDES TOWN PLANNERS PVT. LTD. MISTAKENLY MENTIONED FLAT NO. E - 1004 INSTEAD OF E - 904. DUE TO THIS THE LD. ASS ESSING OFFICER INFERRED THAT THE APPELLANT HAD PURCHASED TWO FLATS ON DIFFERENT FLOORS. THE MISTAKE IN THE SLIPS SUBMITTED BEFORE LD. ASSESSING OFFICER CAME TO THE NOTICE OF APPELLANT ONLY WHEN SHE RECEIVED THE ASSESSMENT ORDER. THE COPY OF LETTER FROM M/S ANDES TOWN PLANNERS PVT. LTD. ACKNOWLEDGING THEIR MISTAKE HAVE ALREADY BEEN ENCLOSED ABOVE FOR YOUR KIND PERUSAL. 5.1 I HAVE EXAMINED THE WRITTEN SUBMISSION OF APPELLANT AND RELEVANT EVIDENCES ON THIS ISSUES WERE CALLED THROUGH ORDER SHEET ENTRY DATED 12.09.2016. I FIND THE CLAIM OF APPELLANT APPEARS TO BE CORRECT BECAUSE OF IN THE CORRECTION CERTIFICATE ISSUED BY M/S ANDES TOWN PLANNERS PVT. LTD. IN WHICH IT HAS BEEN CERTIFIED THAT THE FLAT NO. WAS WRONGLY MENTIONED E - L004 INSTEAD OF 904. THIS IS FACT UAL POSITION WHICH MAY BE VERIFIED FROM THE RECORDS OF CONCERNED PARTY M/S ANDES TOWN PLANNERS PVT. LTD. 5.2 THE APPELLANT HAS CLAIMED TRAVELLING EXPENSES IN COMPUTING CAPITAL GAIN OF RS. 56,500/ - BUT THE APPELLANT DID NOT FURNISH ANY JUSTIFICATION OF TH E EXPENSES INCURRED AND CLAIMED FOR DEDUCTION IN ITA NO.97/LKW/2017 PAGE 30 OF 33 COMPUTING CAPITAL GAIN DURING ASSESSMENT PROCEEDINGS AS WELL AS DURING APPELLATE PROCEEDINGS. THEREFORE, THE LONG TERM CAPITAL GAIN CORRECTLY WORKED OUT AT RS. 61,46,459/ - BY AO AFTER DISALLOWING THE TRAVELL ING EXPENSES AS CLAIMED BY THE APPELLANT. THE APPELLANT HAS CONTENDED THAT THE AO HAS COMMITTED ARITHMETICAL MISTAKE IN CALCULATION OF CAPITAL GAIN AMOUNTING TO RS.8,068/ - , HENCE THE CORRECT CAPITAL GAIN COMES TO RS.61,38,391/ - . SINCE, THE APPELLANT INVEST ED IN PURCHASES OF NEW FLAT OF RS.57,99,985/ - AND RS.2,74,827/ - IN FURNISHING EXPENSES IN THE FLAT FOR WHICH THE APPELLANT HAS SUBMITTED THE RELEVANT BILLS AND VOUCHERS. THEREFORE, DEDUCTION U/S 54 IS ALLOWED TO THIS EXTENT OF RS.60,74,811/ - ONLY. SINCE, T HE APPELLANT HAS INVESTED THE CAPITAL GAIN TO THE EXTENT OF RS.60,74,811/ - IN PURCHASES OF NEW FLAT AND FURNISHING EXPENSES WHICH IS WITHIN THE EXTENDED PERIOD OF FILING OF ITR U/S 139(4) OF THE I.T. ACT. THEREFORE, THE CLAIM OF APPELLANT OF DEDUCTION U/S 54 OF I.T. ACT IS ALLOWABLE AS PER PROVISIONS OF I.T. ACT. 5.3 CONSIDERING THE WRITTEN SUBMISSION OF APPELLANT, RESPECTFULLY FOLLOWING THE JUDICIAL DECISIONS OF HON'BLE HIGH COURTS CITED ABOVE IN THE WRITTEN SUBMISSION OF 'THE APPELLANT AND OTHER ALL FAC TS MENTIONED SUPRA TAKEN INTO CONSIDERATION, I HOLD THAT THE APPELLANT HAS CORRECTLY CLAIMED THE DEDUCTION U/S 54 OF THE I.T. ACT. THE AO WAS NOT JUSTIFIED IN NOT ALLOWING THE DEDUCTION AS CLAIMED BY APPELLANT U/S 54 OF THE I.T. ACT. THE AO IS DIRECTED TO ALLOW THE CLAIM MADE BY APPELLANT U/S 54 OF THE APPELLANT TO THE EXTENT OF RS. 60,74,811/. 6 . WE HAVE PERUSED THE CASE RECORDS, ANALYSED THE FACTS AND CIRCUMSTANCES OF THE CASE AND WE FIND THAT THE CONTENTION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WAS THAT ASSESSEE DID NOT INVEST CAPITAL GAIN FOR PURCHASE/CONSTRUCTION OF NEW HOUSE PROPERTY OR DEPOSITED THE CAPITAL GAIN AMOUNT IN SPECIFIED CAPITAL GAIN ACCOUNTS SCHEME ON OR BEFORE THE DUE DATE OF FILING OF RETURN UNDER SECTION ITA NO.97/LKW/2017 PAGE 31 OF 33 139(1) OF THE ACT. THE ASSESSEE HAS STATED THAT HE HAS PUR CHASED A NEW FLAT AND INVESTED CAPITAL GAIN TO THE EXTENT OF RS. 57,99,984/ - WHICH WAS PAID TO M/S ADNES TOWN PLANNERS PVT. LTD FOR FLAT NO.E - 904 SITUATED AT ROHTAS PLUMERIA HOMES, GOMTI NAGAR, LUCKNOW WAS SOLD TO THE ASS ESSEE. M/S ADNES TOWN PLANNERS PVT. LTD HAS CERTIFIED IN THE CERTIFICATE TO SMT. AARTI KUMARIA, ASSESSEE AND CERTIFIED THAT THIS IS TO INFORM YOU THAT HANDOVER RECEIPT NO.307 DATED 19/2/2013 AMOUNTING TO RS.10 LAKHS DUE TO OVERSIGHT FLAT NUMBER HAS BEEN MENTIONED E - 1004 IN PLACE OF FLAT NO.E - 904. KINDLY CORRECT YOUR RECORD ACCORDINGLY. IT IS ALSO ON RECORD THAT ASSESSEE HAS FILED VARIOUS PAPERS/DOCUMENTS IN COMPLIANCE TO THE DIRECTION GIVEN VIDE ORDER SHEET ENTRY DATED 12/9/2016 I.E. (1) COPY OF LETTER FROM M/S ADNES TOWN PLANNERS PVT. LTD REGARDING CORRECTION IN RECEIPTS ISSUED EARLIER FOR FLAT NO.E - 904 AT PAGE 37 OF THE WRITTEN SUBMISSION; (2) COPY OF AGREEMENT WITH BUILDER AND (3) BRIEF OF INVESTMENT AMOUNTING TO RS.60,74,811/ - . ASSESSEE HAS EXPLAIN ED THAT SHE HAD KEPT EQUIVALENT AMOUNT TO CAPITAL GAIN ARISING FROM SALE PROPERTY HAS BEEN DEPOSITED IN HER BANK ACCOUNT AND THE DEPOSITED AMOUNT WITHDRAWN FROM HER BANK ACCOUNT AT THE TIME OF PAYMENT TO M/S ADNES TOWN PLANNERS PVT. LTD. FOR PURCHASE OF NE W FLAT. THERE WAS ONLY A PROCEDURAL LAPSE THAT THE ASSESSEE DID NOT DEPOSIT THE AMOUNT IN THE SPECIFIED CAPITAL GAIN ACCOUNT SCHEME. RECORDS ARE CLEAR THAT THE ASSESSEE HAS INVESTED THE AMOUNT IN PURCHASE OF NEW PROPERTY. WE ALSO FIND EVEN CBDT CIRCULAR NO.471 AND 672 ARE IN FAVOUR OF THE ASSESSEE. AT THIS JUNCTURE, WE OBSERVE THAT SECTION 54 IS ENACTED IN ORDER TO PROMOTE PURCHASE/CONSTRUCTION OF RESIDENTIAL HOUSES . SECTION 54(1) IS A SUBSTANTIVE PROVISION. SECTION 54(2) IS AN ENABLING PROVISION WHIC H PROVIDES THAT ASSESSEE SHOULD DEPOSIT THE AMOUNT EARNED FROM CAPITAL GAIN IN A SCHEME FRAMED IN THIS RESPECT BY THE CENTRAL GOVERNMENT TILL THE AMOUNT IS INVESTED FOR PURCHASE OF RESIDENTIAL ITA NO.97/LKW/2017 PAGE 32 OF 33 HOUSE. THE SUBSTANTIVE PROVISION ON ONE HAND PROMOTES HOUSING AND IN A WAY LEADS US TO ASSESS THE INTENTION OF THE ASSESSEE AND IF THE INTENTION OF THE ASSESSEE IS TO PURCHASE A NEW PROPERTY AND THAT IS FULFILLED BY THE FACTS ON RECORD, THEN ENABLING PROVISION OF KEEPING THE AMOUNT IN A PARTICULAR SCHEME WHETHER THAT IS FULFILLED OR NOT SHOULD NOT DESTROY THE ULTIMATE BONA - FIDE INTENTION OF THE ASSESSEE AS ENSHRINED IN SECTION 54(1). THE PROCEDURAL AND ENABLING PROVISION OF SUB - SECTION (2) OF SECTION 54 CANNOT BE STRICTLY CONSTRUED TO IMPOSE STRICT LIMITATIONS ON THE ASSESSEE AND ANY DEFAULT THEREOF TO DENY HIM THE BENEFIT OF EXEMPTION UNDER THE PROVISION. IN OUR VIEW, ASSESSEE AT THE TIME OF ASSESSMENT ITSELF HAS PROVED THAT HE HAS ALREADY INVESTED CAPITAL GAINS ON PURCHASE OF NEW RESIDENTIAL HOUSE WITHIN THE STIPUL ATED PERIOD. THEREFORE, BENEFIT UNDER THE SUBSTANTIVE PROVISIONS OF SECTION 54(1) CANNOT BE DENIED TO THE ASSESSEE. WE FURTHER TAKE GUIDANCE FROM THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS . SHRI K RAMACHANDRA RAO IN ITA NO 47/ 2014 WHEREIN THE HON'BLE HIGH COURT HELD THAT AS IS CLEAR FROM SUB SECTION (4) IN THE EVENT OF THE ASSESSEE NOT INVESTING THE CAPITAL GAINS EITHER IN PURCHASING THE RESIDENTIAL HOUSE OR IN CONSTRUCTING A RESIDENTIAL HOUSE WITHIN THE PERIOD STIPULATED IN S ECTION 54F(1), IF THE ASSESSEE WANTS THE BENEFIT OF SECTION 54F, THEN HE SHOULD DEPOSIT THE SAID CAPITAL GAINS IN AN ACCOUNT WHICH IS DULY NOTIFIED BY THE CENTRAL GOVERNMENT. IN OTHER WORDS IF HE WANT OF CLAIM EXEMPTION FROM PAYMENT OF INCOME TAX BY RETAIN ING THE CASH, THEN THE SAID AMOUNT IS TO BE INVESTED IN THE SAID ACCOUNT. IF THE INTENTION IS NOT TO RETAIN CASH BUT TO INVEST IN CONSTRUCTION OR ANY PURCHASE OF THE PROPERTY AND IF SUCH INVESTMENT IS MADE WITHIN THE PERIOD STIPULATED THEREIN, THEN SECTION 54F(4) IS NOT AT ALL ATTRACTED AND THEREFORE THE CONTENTION THAT THE ASSESSEE HAS NOT DEPOSITED THE AMOUNT IN THE BANK ACCOUNT AS STIPULATED AND THEREFORE, HE IS NOT ENTITLED TO THE BENEFIT ITA NO.97/LKW/2017 PAGE 33 OF 33 EVEN THOUGH HE HAS INVESTED THE MONEY IN CONSTRUCTION IS ALSO NOT CORRECT. THEREFORE, WHAT HON'BLE HIGH COURT ESSENTIALLY HELD WAS THAT IF THE INTENTION OF THE ASSESSEE WAS NOT TO RETAIN CASH BUT TO INVEST IN CONSTRUCTION OR PURCHASE OF PROPERTY AND IF SUCH INVESTMENT IS MADE WITHIN THE STIPULATED PERIOD, THEN SECTION 54F(4) IS NOT ATTRACTED. AT THIS JUNCTURE, WE MAY NOTE THAT THE WORDINGS OF SECTION 54(2) ARE ALMOST IDENTICAL TO SECTION 54F(4). NOW IN THE GIVEN FACTS AND SITUATION, WE FIND THAT THE ASSESSEE HAS PROVED INVESTMENT OF AMOUNT FOR PURCHASE OF HOUSE PROPER TY AND SUCH INVESTMENT WAS MADE DURING THE ASSESSMENT PROCEEDINGS AND THEREFORE ASSESSEE HAS COMPLIED WITH SUBSTANTIVE PROVISION AS ENSHRINED UNDER SECTION 54(1) OF THE ACT. WE ARE, THEREFORE, OF THE CONSIDERED VIEW AS FOR THE AFORESAID FACTS AND ANALYSIS THAT THE LD. CIT(A) HAS CORRECTLY DIRECTED THE ASSESSING OFFICER TO GRANT DEDUCTION TO THE ASSESSEE UNDER SECTION 54 OF THE ACT. WE FIND NO INFIRMITY WITH THE FINDINGS OF THE LD. CIT(A) AND RELIEF GRANTED TO THE ASSESSEE IS SUSTAINED. 7 . IN THE RESULT, APPE AL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 / 0 3 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14 TH MARCH , 201 8 JJ: 0803 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR