2018 (2) TMI 1999 - AT - Income Tax

Deduction u/s 54F - four plots purchased as one single unit - HELD THAT - Assessee could not controvert the findings of the ld. CIT(A) as in this case it does not transpire that all the four plots purchased by the assessee constitute a single unit. All the plots are separate units and the assessee has constructed the house only at one Plot No. 4. In this view of the matter, we decline to interfere with the order of the ld. CIT(A). Thus Ground No. 1 and 2 of the assessee are dismissed.

Summary

Issues:
1. Allowance of deduction claimed under section 54F
2. Consideration of multiple plots as a single unit
3. Charging of interest under sections 234B, 234C, and 234D

Issue 1 - Allowance of deduction claimed under section 54F:
The appellant appealed against the order of the ld. CIT(A) regarding the allowance of deduction claimed under section 54F. The appellant contended that the deduction should be allowed for the entire amount claimed, while the AO only allowed a partial deduction. The ld. CIT(A) upheld the AO's decision, stating that the deduction under section 54F is admissible only for a residential house constructed within the specified period. As per the assessment order, the appellant had constructed the house only on Plot No. 4 and not on Plots No. 1, 2, and 3. The ld. CIT(A) concluded that the four plots did not constitute a single unit as the appellant had not utilized them for constructing a common house property. Therefore, the deduction allowed by the AO for Plot No. 4 was in accordance with the law. The Tribunal upheld the ld. CIT(A)'s decision, dismissing the appellant's appeal on this issue.

Issue 2 - Consideration of multiple plots as a single unit:
The appellant argued that all four plots purchased should be considered as one single unit for the purpose of claiming the deduction under section 54F. However, both the AO and the ld. CIT(A) found that the appellant had only constructed a house on Plot No. 4, while Plots No. 1, 2, and 3 remained vacant. The AO observed that the total area of the other three plots could not be considered part of the land appurtenant to the building on Plot No. 4. Despite the appellant's claim that all plots were appurtenant and in continuation, the authorities found that they were separate units. The Tribunal agreed with this assessment, stating that the appellant did not establish that all four plots formed a single unit. Therefore, the Tribunal dismissed the appellant's appeal on this issue as well.

Issue 3 - Charging of interest under sections 234B, 234C, and 234D:
The appellant denied the liability of interest charged under sections 234B, 234C, and 234D by the AO. These sections pertain to the charging of interest under the Income Tax Act. The Tribunal noted that these interest charges are mandatory and consequential in nature. As the appellant did not provide sufficient grounds to challenge the interest charges, the Tribunal upheld the charging of interest under the relevant sections.

In conclusion, the Tribunal dismissed the appellant's appeal on all grounds, including the allowance of deduction under section 54F, the consideration of multiple plots as a single unit, and the charging of interest under sections 234B, 234C, and 234D. The decision was pronounced in open court on 13-02-2018.