TMI Blog2017 (10) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... ial house even though the transactions are not complete in all respects as required under the law that would not disentitle the assessee from benefit. The assessee has established a prima facie case of claim of deduction under Section 54F. Therefore when the CIT has not afforded an effective opportunity of hearing and the Assessing Officer has not conducted a proper enquiry, then in the facts and circumstances of the case we set aside the impugned revision order passed under Section 263 and remit the matter to the record of the Assessing Officer for considering the relevant record in support of the claim that the assessee has finally constructed the residential house. - Decided in favour of assessee. - I.T. A. No.699/Bang/2014 - - - Dated:- 13-9-2017 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Appellant : Shri P. Dinesh, Advocate For The Respondent : Shri Pramod Singh, CIT (D.R) ORDER Per Shri Vijay Pal Rao, J.M. : This appeal by the assessee is directed against the revision order dt.27.03.2014 of Commissioner of Income Tax, Mysore under Section 263 of the Income Tax Act, 1961 (in short 'the Act&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.28.2.2014. The assessee vide his letter dt.12.3.2014 requested for grant of time to appear before the CIT. Since there was no appearance from the assessee on the date fixed for hearing, the CIT has passed the impugned order on the basis of material available on the assessment record. The CIT has finally held that the assessee is not eligible for deduction under Section 54F in respect of the amount deposited in capital gain account scheme as well as in respect of the investment made for purchase of site. Accordingly, the CIT set aside the assessment order and directed the Assessing Officer to pass fresh order as per the directions given in the impugned order. 4. Before us, the learned Authorised Representative of the assessee has submitted that during the course of assessment proceedings under Section 143(3), the Assessing Officer issued the notice under Section 143(2) along with a detailed questionnaire dt.29.6.2011 whereby the Assessing Officer asked the assessee to furnish the details of immovable properties, property owned including investment made in the property during the year, details of property sold, copy of sale deed and details of capital gain thereon etc. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the rival submissions as well as the relevant material on record. As regards the sufficient and proper opportunity of hearing was not given by the CIT before passing the impugned order, we find that the show cause notice under Section 263 was issued on 28.02.2014 and the case was posted on 14.3.2014. The assessee vide its letter dt.12.3.2014 requested for grant of 15 days time. However the CIT adjourned the case on 21.3.2014 and granted only one week time to the assessee. Further there is nothing in the impugned order to show that the assessee was either intimated or served with the notice of posting of hearing of the case on 21.3.2014. Finally the impugned order was passed by the CIT on 27.3.2014. Thus it appears that due to the time barring case, the CIT has passed the impugned order without granting an appropriate and effective opportunity of hearing to the assessee. The learned Authorised Representative has pointed out that the assessee has finally completed the construction of the house in the year 2012 however the relevant record could not be furnished before the CIT for want of proper opportunity. Thus it is manifest from the record that the show cause notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of residential house then merely the construction was not completed in all respects and it was not in fit condition to occupy within the period prescribed under Section 54F of the Act the benefit u/s.54/54F cannot be claimed. Once it is demonstrated that the consideration received on transfer of the asset has been invested either in purchasing a residential house or in construction of residential house even though the transactions are not complete in all respects as required under the law that would not disentitle the assessee from benefit. The Hon'ble High Court has reiterated its view again in the case of CIT Vs. Shakuntala Devi (supra) wherein the relevant facts were recorded in para 3 and the findings have been given in paras 10 to 13 as under : 10. Facts on hand would clearly indicate that assessee had sold a flat at Mumbai for a total consideration of ₹ 1,71,00,000/- on 04.02.2003 and thereby Long Term Capital Gains was arrived at ₹ 1,44,68,032/-. In the return of income assessee claimed exemption under Section 54 of the Act, contending interalia that said amount had been reinvested by her for purchase of another residential proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139 in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset: Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is required to be deposited in Capital Gain Account Scheme. Thus, if the above conditions are satisfied, assessee is entitled to claim benefit of the provision of Section 54. 13. Facts on hand would disclose that assessee had owned a flat at Mumbai and sold the same on 04.02.2003 for a total consideration of ₹ 1,70,00,000/-. Subsequent to such sale she entered into an agreement for purchasing another property for a total consideration of ₹ 3,25,00,000/- by agreement dated 08.09.2003. Said agreement came to be entered into within six months from the date of sale i.e., 04.02.2003 and assessee had paid a total consideration of ₹ 2,40,00,000/- between April' 2003 to September' 2003. After making the payment, a registered sale deed had not been executed in favour of the assessee before completion of two years period pursuant to Memorandum of Understanding dated 08.09.2003. The consideration received by her under sale dated 04.02.2003 has been paid by the assessee for purchasing another property and reinvestment has been made within two years as contemplated under Section 54 of the Act. These facts are not in dispute. Thus, long-term capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and registered in favour of the assessee before the period stipulated, he cannot be denied the benefit of Section 54F of the Act. Similarly, if he has invested the money in construction of a residential house, merely because the construction was not complete in all respects and it was not in a fit condition to be occupied within the period stipulated, that would not disentitle the assessee from claiming the benefit under Section 54F of the Act. . 10. We are in complete agreement with the ratio laid down by the co-ordinate bench of this Court. It has also been noticed by this Court that on the facts of the present case, assessee had produced material evidence before the First Appellate Authority to demonstrate that the construction was on the verge of completion by producing photographs and this aspect, though not noticed in detail, same came to be noticed by the Tribunal to reject the appeal of Revenue. It was also noticed by the Tribunal that construction of the building having been completed and same having been occupied by the assessee, is also a factor to dismiss the appeal of the revenue. In the circumstances narrated hereinabove, we are of the considered view t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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