9911796707
TMI Blog2006 (8) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... lat and, therefore, he is entitled for the exemption under section 54F. On enquiries, the Assessing Officer found that the assessee had purchased the said flat, in Sheetal Building at Vile Parle for the purpose of conducting coaching classes. Thereafter the premises were let out to M/s. Aptech Ltd. Therefore, the Assessing Officer held that the premises acquired by the assessee could not be held as property used for residential purposes. He accordingly denied the claim of deduction under section 54F. 3. In first appeal, the CIT(A) held that the property purchased by the assessee was residential in nature. Therefore, he directed the Assessing Officer to give the relief under section 54F. 4. The above order of the CIT(A) was taken in second appeal before ITAT, Mumbai Bench "C". The Tribunal heard the matter and disposed of the appeal through their order dated 17-9-2003 in ITA No. 2345/Mum./1998. As far as this issue is concerned, the Tribunal held as follows : "7. We have carefully considered the rival submissions. It appears that the premises were capable of being put to residential use as well as commercial use. In these circumstances what is material is the purpose and the mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yed in the flat. The Assessing Officer thereafter asked for the accounts of the Society to which the Secretary of the Society replied that all the files and correspondence kept in the office have been sidelined from the Society Office and he would not be able to produce the same before the Assessing Officer. In the light of the above circumstances the Assessing Officer came to the conclusion that the assessee never stayed in the said building. The Assessing Officer also examined the veracity of the certificate produced by the assessee before the CIT(A) at the first round of proceedings. The assessee was asked to explain as to who signed the letter. In his reply, the assessee explained that the letter was signed by Shri Dinesh Avlani on the letter head of the Society and also bore the stamp of the Society. When contacted, Shri Avlani stated before the Assessing Officer that he was never Secretary of the Society and he never issued any such letter or certificate. In the light of the above submission, the assessee was confronted. The assessee asked for cross-examining Shri Navin Avlani and his son Shri Dinesh Avlani. But in spite of notices, Avlanis did not appear. They could not be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice it is conclusively established with the evidence on record that at the time of purchase the premises acquired was residential and only after about a year that it was used for commercial purposes. Even if it is presumed for the same of argument that the premises was not actually used by the appellant for his own residence it does remain a residential house at the time of purchase and immediately thereafter." 7. We heard Shri H.S. Khurana, the learned counsel appearing for the assessee and Shri T. Shivkumar, the learned counsel appearing for the assessee. 8. The Assessing Officer has proceeded on the ground that the residential flat purchased by the assessee was not put to residential use but it was put to commercial use. Therefore, he held that the assessee is not entitled for the benefit of section 54F. The whole enquiry of the case was directed towards the question whether the assessee and his family had ever resided in the flat after the purchase of the flat. Even the issue highlighted before the Tribunal in the first round of proceedings was the question whether the assessee had stayed in the residential flat or not. The veracity of the certificate issued by the Secr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee and his family did not stay in that property for a long time. Therefore, the insistence of the Assessing Officer that the assessee and his family did not stay in the new residential flat is not sufficient to decide the matter. 10. There is no doubt regarding the fact that the new asset purchased by the assessee was a residential flat. The residential flat in a housing co-operative society is apartment buildings. Under the provisions of the Maharashtra Housing Co-operative Societies, Act and the relevant rules, an apartment in a housing society is invariably identified as a residential flat. There is no condition that the assessee must stay there immediately. The only condition specified in section 54F is that the consideration received on sale of the old asset is not diverted but used for acquiring or constructing a residential property. This legal aspect was not considered by the Assessing Officer either in the first proceedings or in the second proceedings. There may be a situation where the assessee has later on, after purchase of the property put the property for commercial use. That may be a violation of the rules governing Housing Co-operative Societies or ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
