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2015 (11) TMI 1850 - ITAT CHENNAIDeduction u/s 54F - assessee an individual purchased several plots from seven members of a family - contiguous property purchase or multiple units - restricted deduction only to that portion of land where the building is situated which is purchased from Mr. Y.J.Alex and ignored the other plots of land purchased from other family members under separate sale deeds for the purpose of allowing deduction under section 54 - whether the assessee is entitled for deduction u/s 54F on the seven plots of land or is entitled to deduction only in respect of land purchased from Mr. Y.J.Alex in survey numbers 98/9, 98/10, 98/11 and 98/2-3? - HELD THAT:- On a perusal of the map furnished by the assessee, we find that this map is not prepared by any government agency or any government recognized agency, so no much credence can be given to the map furnished. AO made clear in the assessment order that huge land is adjacent to the Vambanadu lake which joins Arabian sea, in and around this lake there are several resorts and tourism is a major activity in the surroundings. The land purchased by the assessee is surrounded by canals in which passenger boats ply which is common way of transport in this particular area, therefore approach should not be a problem to the assessee. Interpretation given by the Revenue that assessee purchased several pieces of land by way of separate sale deeds and therefore not eligible for deduction under section 54F of the Act on the entire land is hyper technical and contrary to the intention of the provision. No doubt provision is intended to benefit the assessee that invests in acquisition of residential house. However, in this case the intention of the assessee appears to be not to purchase residential house but to develop a resort. The developmental activities, if any on the property are at the instance of M/s. Arun Excello Construction and the assessee has no connection therewith. All these things go to clearly show that assessee’s intention was to purchase land and develop a resort rather than a residential house for residing purpose. If the version of the assessee that all the land purchased is contiguous land forms part of one property with one residential house though purchased from several individuals of a family should be considered as eligible for deduction under section 54F of the Act, it defeats the very purpose of introducing the provisions of section 54F of the Act which is enacted to intend the benefit to the assessee who invests in acquisition of residential house especially in the present circumstances where the assessee purchased huge extent of 5.61 acres of land stating to be contiguous which was later developed into a resort for commercial purposes. Even assuming that survey numbers 98/2/1A, 99/5-3, 99/5-2, 99/51 are taken to be independent properties the land in survey numbers 98/2-2, 98/2-1 are contiguous to survey number 98/9 housing residential property and relief under section 54F is liable to be granted also cannot be accepted for the reason that all the properties are independent properties purchased from several individuals even though from the same family having various water bodies with clear demarcation of land of each property with buildings thereon in the three of the properties with municipal door numbers. In the facts and circumstances of the case, it is to be noted that each transaction as a separate transaction and it cannot be considered as contiguous properties - Assessing Officer is perfectly justified in restricting the deduction only to the portion of the land purchased from Mr. Y.J.Alex in survey numbers 98/9, 98/10, 98/11 and 98/2-3. Thus, we uphold the order of the AO - Decided in favour of revenue.
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