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TMI Blog2017 (1) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... 03-06-2006 , wherein 50% of the undivided share, right, title and interest in the schedule property working out to 5238.50 sq.ft. of land & 150 sq.ft. of building and the another one by the sale deed dated 01-07-2006 wherein the remaining 50% of the undivided share i.e. 5238.50 sq.ft. of land & 150 sq.ft. of building, thus, the entire 10477 sqft. of land & 300 sq ft of building was purchased for a consideration of Rs. 15,00,000/- excluding stamp duty & registration charges. 03. During the assessment proceedings, the assessee filed a computation of total income dated 24-10-2013, claiming deduction U/s.54 in respect of the investments made in two apartments, one at residential flat D-1407, Brigade Gateway, Cygnus Wing, Bangalore, through a sale deed dated 16-10-2009 ( long before the sale of the original asset dt 25-05-2010) for a consideration of Rs. 20,62,740/- & the another residential flat at F 1605, 16th floor, "Marigold" Block, The Gardens, Binnyston Garden, Magadi Road, Bangalore, through a sale deed dated 16-06-2010 for a consideration of Rs. 57, 77, 137/- and arrived the long term capital gains at Nil. 04. When the AO by his letter dated 03-12-72013 , inter alia, informed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is said to have existed . The latest tax paid receipt is related to F.Y. 2010-11 which specifies the land tax alone. In order to qualify for deduction U/s.54, the transferred asset should be a residential house. Generally a house means a dwelling unit, abode which is in a habitable condition where people can live, i.e. with a compound wall, a washroom, kitchen, sewerage connection etc., in which an ordinary person can make a living. When these bare minimum facilities are not provided in a building, then it is considered that it is not fit for human habitation. The language of section 54 comprehends that the asset transferred should be predominantly residential building which may have land appurtenant thereto, but not an open plot of land having some insignificant structure which might under some constraints be used for residence, or which might actually be used by some caretaker or watchman for taking care of the plot. The assessee has not produced evidence to show that the impugned house was in a habitable condition and it was occupied by someone. Hence, the AO held that the asset originally transferred at Uttarahalli cannot be treated as a 'residential house' for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akalasandra Village, Uttarahalli Hobli, Bangalore South Taluk (Property 1) to tax. 3. The Learned Appellate Authority and the LAO erred in denying benefit under section 54, as the building sold was a proper residential building in a habitable condition. 4. Without prejudice to Ground No.3, The Learned Appellate Authority and the LAO erred in not granting, alternatively benefit under Section 54F. 5. The LAo erred in levying interest under section 234B of the Act. 08. The AR submitted that the A O denied relief under section 54 incorrectly for the reason that the property sold is not 'predominantly' a residential building, but a land. He did not consider that: a. Section 54 provides exemption on profit on sale of property used for residence. The property was (and still is) used for residence by a family. b. Photographs in p. 64 and p. 65 of the paper book show that the house is habitable with a permanent structure, roofing and furniture. c. Section 54 contemplates transfer of building and lands appurtenant thereto, with the same being a residential house. The property transferred was a building used as a house and the lands appurtenant thereto. d. Merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly evidence the use of the property for residential purposes, such that its transfer is eligible for relief under section 54. 8. The AO and Hon. CIT (A) also erred in facts and in law denying relief under section 54F by holding that the Appellant has purchased a new residential property, i.e., the Magadi Road property within 2 years from the date of transfer of the original asset which violated the stipulation under section 54F. 9. The Appellant submits that the AO and the CIT (A) have misconstrued the facts and the provisions of section 54F. The Appellant claimed relief under section 54F for having purchased the Magadi Road property itself ( p. 5 of the paper book). The AO and the CIT (A) have erroneously considered that as if the claim is made in respect of the property at Brigade Gateway . The AO and the CIT (A) have erroneously stated that the Appellant owns 2 residential houses. On the other hand, the claim of exemption is made on the Magadi Road property. After the purchase of the Brigade property, the Appellant owns 2 residential houses, thereby satisfying the clause (a) to Proviso to section 54F of the Act. Thus, the AR submitted an alternate plea that assuming but n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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