IN HIGH COURT OF KARNATAKA, BANGALORE DATED THIS 25TH DAY OF NOVEMBER, 2014 PRESENT HON'BLE Mr.JUSTICE N.KUMAR AND HON'BLE Mr.JUSTICE B.MANOHAR INCOME TAX APPEAL NO.193 OF 2009 BETWEEN 1. COMMISSIONER OF INCOME-TAX C.R.BUILDING QUEENS ROAD BANGALORE. 2. INCOME-TAX OFFICER WARD-3(2) C.R.BUILDING QUEENS ROAD BANGALORE. .APPELLANTS (BY SRI.K.V.ARAVIND, ADV.) AND SRI.ANANDRAJ NO.253/1, 5TH MAIN 2ND CROSS, CHAMARAJPET BANGALORE -560 018. .RESPONDENT (BY SRI.S.PARATHASARATHI ADV.) THIS APPEAL IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 21-11-2008 PASSED IN ITA NO.631/BNG/2008, FOR ASSESSMETN YEAR 2004-05, PRAYING THAT THIS HON BLE COURT MAY BE PLEASED TO 2 i. FORMULATE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ii. ALLOW APPEAL AND SET ASIDE ORDER PASSED BY ITAT BANGALORE IN ITA NO.631/BNG/2008, DATED 21-11-2008 CONFIRMING ORDER OF APPELLATE COMMISSIONER AND CONFIRM ORDER PASSED BY INCOME TAX OFFICER, WARD-3(2), BANGALORE IN INTEREST OF JUSTICE AND EQUITY. THIS APPEAL COMING ON FOR HEARING, THIS DAY, N.KUMAR, J., DELIVERED FOLLOWING JUDGMENT revenue has preferred this appeal against order passed by Tribunal granting benefit to assessee under section 54F of Income Tax Act, 1961. 2. assessee is assessed in status of individual. He filed his return of income for assessment year 2004-05 on 31.01.2005 declaring income of Rs.26,30,067/- which included capital gain of Rs.21,91,200/-. Assessing Authority allowed benefit under Section 54F of Act to assessee. Commissioner of Income Tax invoked his powers under Section 263 of Act and reviewed order. Commissioner found that assessee had received net 3 consideration of Rs.30,00,000/- from sale of agricultural land. same was invested in building and total investment of building as on 31.03.2004 was Rs.34,03,531/-. assessee had also availed housing loan of Rs.19,54,152/- from Vijaya Bank. He was of view Assessing Authority has not taken into consideration housing loan of Rs.19,54,152/- which was also invested in construction of house and therefore, he arrived at conclusion that order of Assessing Authority is erroneous and prejudicial to interest of revenue. After hearing assessee, he set- aside order passed by Assessing Authority and directed Assessing Authority to make fresh assessment taking into consideration housing loan. Aggrieved by said order assessee preferred appeal to Tribunal. Tribunal by impugned order held that benefit extended to assessee was strictly in conformity with Section 54F of Act. There is no scope for different interpretation as sought to be made out by Revisional Authority and therefore, he allowed appeal setting aside order passed by 4 Revisional Authority. Aggrieved by said order, revenue is in appeal. 3. appeal was admitted to consider following substantial question of law. Whether Tribunal was correct in holding that order passed by Commissioner under Section 263 of Act with direction to pass fresh assessment by considering housing loan raised by assessee before getting benefit under Section 54F of Act is not erroneous and prejudicial to interest of revenue? 4. learned counsel for revenue assailing impugned order contended that even if it is to be held that assessee is entitled to benefit of Section 54F of Act, fact that he has raised housing loan for purpose of construction and he is claiming benefit of deduction of tax paid on housing loan if granted, would result in double benefit and therefore, he submits that Revisional Authority was justified in invoking its power under Section 263 of Act and setting aside order of 5 Assessing Authority, which order has been very rightly interfered with by Tribunal. 5. Per contra, learned counsel appearing for Assessee supported impugned order. 6. It is not in dispute that assessee sold agricultural land and consideration received is in nature of long term capital gain. Even before sale of property, he had borrowed housing loan and started construction on site belonging to him. After sale, amount spent towards construction of house is more than consideration received by sale of agricultural land and therefore, he is entitled to benefit of Section 54F of Act. 7. Therefore, we do not see any infirmity in order passed by Tribunal which calls for interference. However, argument of learned counsel for revenue that without fully investing money which he received as consideration from sale, he has completed construction and he is claiming benefit of deduction of tax 6 paid towards housing loan which would amount to double benefit. That is question which is to be considered, if they arise and not at time of granting benefit under Section 54F is available or not. Accordingly, substantial question of law is answered in favour of assessee and against revenue. In that view of matter, we do not see any merit in appeal. Accordingly, it is dismissed. Sd/- JUDGE Sd/- JUDGE GH Commissioner of Income-tax, Bangalore / Income-tax Officer, Ward-3(2), Bangalore v. Anandraj