9911796707
TMI Blog2007 (4) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... ng disposed of by this consolidated order for the sake of convenience. 2. The revenue has raised the following grounds of appeal in assessment year 1997-98 : "1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in directing to grant exemption under section 54F of Rs. 1,52,18,000 against capital gain even though the assessee was in possession of property, income form which was chargeable to tax as 'Income from house property' on the date of transfer of the original asset." 3. The revenue has raised the following grounds of appeal in assessment year 1998-99 : "1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in directing to grant exemption under section 54F of Rs. 63,02, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be carried out to re-examine the matter after considering the evidence produced by the assessee and also the leased agreement with PSEB. In the second round of assessment, no on-site verification was carried out by the Assessing Officer and after going through the lease agreement and the letter issued by Dy. Chief Engineer, PSEB and other documents, the Assessing Officer rejected the claim of the assessee holding it not eligible for the deduction under section 54F of the Income-tax Act and the capital gains of Rs. 1,52,18,000 was held to be taxable. During the course of second round of Appellate Proceedings the assessee clarified that at the time when the property was leased to PSEB, the assessee was a minor and an application to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was claimed under section 54F of the Act to the extent of Rs. 63,02,650 in assessment year 1998-99, which was also rejected by the Assessing Officer and allowed by the CIT(A). The revenue is aggrieved and is in appeal before us. 6. We have heard the rival submissions and perused the records. The assessee along with her brother Shri Martand Singh Mahindra were the owners of the property at Harnala which was leased to PSEB as per lease agreement dated 28-3-1977. The preamble of the lease provided as under: "WHEREAS the lessee has undertaken to occupy and take on lease the property known as Harnala Complex owned by the lessors and comprising of the land measuring 9 Bigha 18 Biswa along with all huts, out-houses buildings etc. without furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the compound of Punjab State Electricity Board; that the property is not utilized for any other purpose. ..." [Emphasis supplied] The District Judge after consideration of the petition had held as under : "From a consideration of the documents exte. P.1 and Producing-2 and the evidence of P.W.-1, it is clear, that the property in question, belongs to the minors who are residing with their father at Yelakanka, and property which is situated at Himachal Pradesh and consists of some dwelling houses and out-houses which are used as cattle-sheds, is not fetching any income to the minors, and the proposed lease of the petition Schedule property in favour of Punjab State Electricity Board, on lease on a rental value of Rs. 2,000 per year for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years 1997-98 and 1998-99. Though the Assessing Officer was directed to make on-site verification but the same was not carried out by the Assessing Officer and the CIT(A) after taking into consideration the documents produced by the assessee including the letters issued by PSEB directed the Assessing Officer to allow the claim of the assessee in respect of deduction claimed under section 54F of the Income-tax Act. 8. The provisions of section 54F of the Income-tax Act provides the exemption from capital gains on sale of any capital assets other than a residential property if the sale proceeds are invested in a residential house. The proviso to section 54F of the Income-tax Act categorically provides the said exemption shall be allowed to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said land on the date of lease belonging to the assessee and PSEB has merely done some repairing work on the existing structure and demolition for construction of new building. The primary piece of evidence to be considered in the present case is the order passed by the District Judge at Bangalore on 27-1-1977, which very categorically stated that the said piece of land is an agricultural plot consisting of huts and out-houses, which in-turn are being used as cattle sheds. It was further stated that the huts were in a dilapidated condition and had never been used or occupied by the petitioners. In view of the categoric finding of the District Judge who in-turn had also taken the evidence of the witnesses, there is no merit in the stand of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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