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2017 (8) TMI 480 - AT - Income TaxDeduction u/s 54F - satisfaction of relevant conditions - owning more than one house - another house was under construction - Held that - What is relevant is whether the assessee satisfies the conditions of section 54F of the Act in the year under consideration. Before us, the Ld. senior DR could not controvert findings of the Ld. CIT-(A). In view of the facts and circumstances of the case, we are of the view that the assessee is entitled for deduction under section 54F of the Act because house property at 9, Mehandi Farms was under construction during the year under consideration and it cannot be said as another residential house owned by the assessee. As the assessee owned only one residential house at D-3/8 Vasant Vihar, New Delhi, the assessee is entitled for deduction under section 54F Act for investment in construction of the house property at 9, Mehandi Farms. - Decided in favour of assessee. Disallowance of vehicle running and maintenance expenses - allowable business expenditure - Held that - Assessing Officer has failed to bring on record any documentary evidence to establish that business promotion expenses were utilised for personal purpose. Similarly regarding for disallowance out of vehicle running and maintenance expenses, the only basis adopted by the Assessing Officer, is status of the assessee and no other cogent material has been brought on record for disallowing the expenses. In our opinion, the finding of the Ld. CIT-(A) on the issue in dispute is well reasoned and no further interference is required in said finding.- Decided in favour of assessee.
Issues Involved:
1. Deduction under section 54F of the Income-tax Act. 2. Deletion of addition on account of business promotion expenses. 3. Deletion of addition on account of vehicle running expenses. Issue-wise Detailed Analysis: 1. Deduction under section 54F of the Income-tax Act: The primary issue was whether the assessee was eligible for a deduction of ?1,59,77,680 under section 54F of the Income-tax Act for investment in a residential house at 9, Mehandi Farms, Bhatti Mines, New Delhi. The Assessing Officer (AO) disallowed the deduction, arguing that the assessee owned more than one residential house on the date of transfer of the original asset, thus violating section 54F conditions. The AO noted that the assessee had already claimed a deduction for the same property in previous years and had accepted a disallowance in the assessment year 2010-11. The Commissioner of Income-tax (Appeals) [CIT-(A)] allowed the deduction, observing that the house at D-3/8 Vasant Vihar was let out and not used by the assessee for residence, and the construction at 9, Mehandi Farms was incomplete. The CIT-(A) emphasized that section 54F should be interpreted liberally and that the assessee was eligible for the deduction as he did not own more than one residential house, excluding the new asset. The Tribunal upheld the CIT-(A)'s decision, noting that the assessee met the conditions of section 54F during the relevant year, and the property at 9, Mehandi Farms was under construction, not qualifying as another residential house. 2. Deletion of addition on account of business promotion expenses: The AO made an addition of ?50,000 on account of business promotion expenses, suspecting personal use. The CIT-(A) deleted this addition, stating that the AO's disallowance was based on surmises without any evidence of personal use. The Tribunal agreed with the CIT-(A), noting that the AO did not provide any concrete evidence to support the claim of personal use of business promotion expenses. 3. Deletion of addition on account of vehicle running expenses: The AO disallowed ?1,20,000 of vehicle running and maintenance expenses, assuming personal use based on the assessee's status. The CIT-(A) deleted this addition, arguing that the AO had made the disallowance without any evidence of personal use of the vehicle. The Tribunal upheld the CIT-(A)'s decision, emphasizing that the AO failed to provide any documentary evidence to substantiate the claim of personal use of the vehicle. Conclusion: The Tribunal dismissed the Revenue's appeal, affirming the CIT-(A)'s findings on all issues. The decision was pronounced in the open court on 4th August 2017.
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