TMI Blog2017 (4) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the Commissioner of Income Tax (Appeals), hence, we incline to uphold the order of the Commissioner of Income Tax (Appeals) and dismiss the appeal filed by the Revenue. - Decided in favour of assessee - ITA No. 548/VIZ/2014, C.O.No.04/VIZ/2015 - - - Dated:- 28-3-2017 - SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA, HON BLE ACCOUNTANT MEMBER Assessee by : Shri G.V.N. Hari Advocate. Department By : Shri T. Satyanandam - DR ORDER PER G. MANJUNATHA, ACCOUNTANT MEMBER This appeal filed by the Revenue and the Cross Objection filed by the assessee are directed against order of the Commissioner of Income Tax (Appeals), Visakhapatnam, dated 14/08/2014 and it pertains to the Assessment Year 2010-11. 2. Facts of the case, in brief, are that the assessee is an individual deriving income from business, filed his return of income for the Assessment Year 2010-11 on 29/09/2010, declaring total income of ₹ 50,24,759/- consisting of income from business, income from long term capital gain and income from other sources, besides agricultural income of ₹ 40,000/-. The case of the assessee has been selected for scrutiny under CASS (Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after considering the explanation of the assessee, observed that section 54/54F of the Act, unambiguously state that construction of the new property should invariably be after the transfer of the existing property and such exemption is not available when the new construction is made or commenced before the transfer or sale of the original asset. For this purpose, the Assessing Officer relied upon the decision of Hon'ble Gujarat High Court in the case of Smt. Shantaben P. Gandhi vs. CIT (129 ITR 218)(Guj.). The Assessing Officer further noted that it is well settled rule of legal construction that grammatical sense of the words is to be adhered to. When there is no ambiguity in the provisions of the statute, the provisions cannot be interpreted to confer the benefit on the assessee. The Assessing Officer further noted that there is a clear case of Casus omissus , which means matters which should have been provided but have not been provided for in the statute. In such situation, it is well settled that such omissions cannot be read beyond and supplied by the Courts. As a result, the Assessing Officer came to a conclusion that the assessee is not eligible for exemption under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of section 54F should not be applicable in respect of construction made prior to the date of transfer is not justified. 7. The Commissioner of Income Tax (Appeals), after considering the relevant submissions of the assessee and also by following the ratio laid down by the Hon'ble Karnataka High Court in the case of J.R. Subrahmanya Bhat (supra) and also the decision of the Hon'ble Delhi High Court in the case of Bharathi Mishra (supra), observed that the prevalent judicial views suggests that the assessee cannot be denied benefit of section 54F, because construction of house was commenced before the sale of capital asset. Accordingly, he directed the Assessing Officer to allow exemption under section 54F of the Act, for the amount invested prior to the date of sale of original asset. Aggrieved by the Commissioner of Income Tax (Appeals) s order, the Revenue is in appeal before us. 8. The Departmental Representative submitted that the Commissioner of Income Tax (Appeals) erred in interpreting the fiscal statute on the basis of the language used under section 54/54F as the said section unambiguously states that construction of the new property should invariably be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the construction of house property after the date of transfer of original asset. The Assessing Officer, referring to the provisions of section 54F of the Act and also by following certain judicial precedents, has observed that when there is no ambiguity in the provisions of the statute, provisions cannot be interpreted to confer the benefit on the assessee. It is the contention of the assessee that there is no restriction in the provisions of section 54F as to the date of commencement of construction of house property and the Act stipulates only completion of construction of house property, which should be invariable completed within three years after the date of transfer of original asset. The assessee referring to certain judicial precedents submitted that it is well settled position of law that the benefit of exemption under section 54F is available even though construction of house property commenced prior to the date of transfer of original asset. In support of his argument, relied upon the decision of the ITAT, Visakhapatnam Bench in the case of Dr. Chalasani Mallikarjuna Rao (supra). 11. Having heard both the sides, we find that the Coordinate Bench of this Tribunal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that the date of commencement of construction is immaterial, but it is only the date of completion of construction. As per the provisions of section 54 of the Act, the construction of new residential house should be completed within 3 years from the date of transfer of original asset, however, the section does not prescribe any condition as to date of commencement of construction. 10. We find force in the argument of the assessee for the reason that the Act does not prescribe any condition as to the date of commencement of construction of new house property. The only condition is that construction of the house property should be completed within 3 years from the date of transfer. The date of commencement of construction is irrelevant and the construction may be commenced even before the transfer of asset as held by the Hon'ble High Court of Delhi, in the case of CIT Vs. Bharathi Mishra (2014) 222 Taxman 2. A similar view was expressed by the Hon'ble High Court of Karnataka, in the case of CIT Vs. J.R. Subrahmanya Bhat (1987) 165 ITR 571, which was in turn followed by the Hon'ble High Court of Allahabad in the case of CIT Vs. H.K. Kapoor (1998) 234 ITR 75 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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