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TMI Blog2015 (10) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... he flat. The assets in question are fittings and fixtures in the flat. Even if they are not accepted to be part of the flat, whether the income from sale of such assets is taxable in the hands of the assessee as “income from other sources”?. The furniture and fittings are in the nature of personal effects of the assessee held for her personal use and income from such affects is not chargeable to tax. Whether the amount is considered as sale consideration and allowed deduction u/s 54F or excluded from computation and disallowed the deductions, there is no tax effect. Therefore, by not bringing it to tax, there is no prejudice caused to the Revenue. The additional grounds of appeal are accordingly allowed. Since the assessment order is held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of land for a consideration of ₹ 6,81,000 on 29.05.2005 and the assessee had also entered into another agreement with M/s Vijay Krishna Promoters for complete development of flat for a consideration of ₹ 2,46,000. It was observed that the assessee had sold the said flat on 17.12.2008 for a consideration of ₹ 28,00,000 and that the assessee had also received a further sum of ₹ 23,50,000 towards sale of fixtures and fittings and that the assessee had worked out Nil income from Long Term Capital Gain, after claiming exemption u/s 54 of the Act. According to the CIT, consideration of ₹ 23,50,000 received from the sale of fixtures, electrical fittings, interiors and other amenities/facilities form do not integra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of sale of the flat alongwith fixtures and fittings and the assessee is eligible for exemption either u/s 54 or section 54F of the I. T. Act on the entire amount. 4. The ld CIT however, was not satisfied with the contentions of the assessee and held that the consideration of ₹ 23,50,000 received under a separate agreement towards sale of fixtures and fittings does not qualify for deduction u/s 54 of the Act, as according to him the fittings and furnitures are not capital asset u/s 2(14) of the I. T. Act. He accordingly, observed, that the AO has failed to assess the sum of ₹ 23,50,000 under the head income from other sources and therefore, held that the assessment order passed is both erroneous and prejudicial to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at if not deduction u/s.54 deduction u/s.54 F will be available being any other capital asset other than residential house and that the assessee has invested amounts required for such deduction also and thereby erred in passing order u/s.263. 7. Any other ground that may be urged at the time of hearing . 6. In addition to the above grounds, assessee has also filed the following application for filing the additional ground of appeal: 1. The only issue in the present appeal is whether to tax fixtures and fittings etc., that were sold as part of flat (though separate agreements were entered into for sale of flat and sale of fixtures and fittings) under the head capital gains or to treat the same as personal asset to be outside t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leave of the Hon'ble Tribunal is raising the following additional ground: ADDITIONAL GROUND On the facts and in the circumstances of the case, the learned Commissioner of Income Tax failed to appreciate that if the 'fittings and fixtures' which are part of flat does not fall within the meaning of 'capital asset' then, by the same reason they become personal asset of the Appellant which cannot be brought to tax even under the head 'Income from Other Sources'. 4. It is submitted that the above ground is alternate ground and is without prejudice to the main contention of the Appellant. It is submitted that the facts with respect to the above ground are already on record and there is no need for fresh in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and fixtures are not treated as part of the flat, as rightly pointed out by the assessee, they cannot be treated as capital asset as well and they become the personal assets of the assessee. The ld Counsel for the assessee had placed reliance upon the judgment of the Hon'ble Delhi Court in ITA No.655/2014 in the case of Shri Sachinder Mohan Mehta vs. ACIT, wherein, on similar set of facts, the Hon'ble High Court held that the furniture and fixtures are personal effects and income from sale of such assets is excluded from the definition of capital assets u/s 2(14) of the Act and is not eligible for deduction u/s 54F of the Act. 9. Having regard to the rival contentions, we find that the basic question before us is whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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