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TMI Blog2018 (6) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... 302/- in purchasing the villa and has also invested an amount of ₹ 15 lakhs in Canara Bank, a scheduled bank - Held that:- the assessee is entitled to the exemption for the amount spent either for fixing the doors or amount paid to the architects or purchasing the installations which were necessary for making the house habitable to the maximum amount of ₹ 16,26,300/-. - As in terms of Section 54F the assessee is only entitled to proportionate exemption vis-a-vis, cost of the original asset and the cost of the new assets. In the light of the above, the AO is directed to recomputed the capital gains exemption. - I.T.A No.703/Bang/2016 And I. T. A. No.423/Bang/2016 - - - Dated:- 6-6-2018 - SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER For The Assessee : Shri. Pratik P, CA For The Revenue : Dr. P. V. Pradeep Kumar, Addl. CIT ORDER PER LALIET KUMAR, JUDICIAL MEMBER : These are cross appeals by the Revenue and the assessee respectively, against the order of the CIT (A) -3, Bengaluru, dt.11.01.2018, for the assessment year 2011-12. Grounds of appeal raised by the Revenue are as under : 2. The Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,99,21,202/- and assessee is for the relief not granted. ITA.703/Bang/2016 : Revenue s appeal : 04. It was the case of the Revenue before us that the assessee immediately after selling the house had invested the sale proceeds in mutual funds to the extent of ₹ 10 lakhs and ₹ 2 crores. Thereafter had only purchased the villa on 31.03.2011 by investing an amount of ₹ 1,99,21,202/- and therefore the assessee is not entitled to the benefit of Section 54F as the money was not directly invested by the assessee into purchasing the property, rather it was invested firstly in mutual funds and thereafter in the property. 05. On the other hand the Ld. AR has submitted that the assessee had invested the amount in accordance with the provisions of Section 54F within the period provided under the Act and therefore the assessee is entitled to exemption u/s.54F of the Act. 06. We have heard the rival contentions and perused the record. Undisputedly the assessee had invested in the villa as on 31.03.2011 by paying ₹ 1,94,49,302/0. However, the quarrel before us is that the amount is not directly invested in purchasing of the villa, rather it is routed throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the villa for ₹ 1,94,49,302/-, the assessee had also made payment for the purchase of various fixtures and appliances from Home Studio India for which direct payment of ₹ 4,74,032/- was made. Further it was the case of the assessee that an amount of ₹ 5,51,500/- and ₹ 2,80,900/- was given to M/s. Nambisan Associates, Architects, for the purpose of designing, architecture and construction work in the villa purchased by the assessee. The assessee had also paid an amount of ₹ 3,19,868/- to M/s. Hemanth Constructions for purchasing the doors of the villa. Thus the assessee has claimed additional amount which in the estimation of the assessee was necessary and was in the nature of the construction / improvement and cost incurred by the assessee for interior decoration. The total of all these claims of ₹ 16,26,300/-, which was disallowed by the CIT(A) and therefore the assessee is in appeal before us. 08. It was submitted that all these payments made by the assessee were in respect of additional fixtures and furniture and for that purposes, the assessee relies upon the decision of the Ahmedabad bench of the Tribunal in the matter of Rajat B Meh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial precedent vis- -vis the case in our hands, and treat it as a covered matter. Whatever be the merits of this approach, and there are certainly many merits in this approach, even when it results in a lapse, such a lapse cannot be allowed to prejudice the legitimate interests of the assessee. Here is an NRI who decided to sell a fairly spacious house in his hometown, and yet, to keep his India connection alive, invested a part of these sale proceeds in a smaller residential unit, but he has been declined the legitimate deduction under section 54 in respect of the same, only for the reason, as the circumstances suggest, that he is made an unwilling party to artificially splitting of sale consideration to minimise the capital gains burden of the seller. Leaving even this aspect of the matter aside, quite clearly the sale of furniture and fixtures was an integral part of the deal of buying the house property. Whichever we way look at it thus, the assessee was wronged in partial denial of deduction. Now that the facts on record demonstrate that the actual consideration for the new house property was ₹ 78,00,000, he is being sought to be declined resultant relief on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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