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TMI Blog2018 (9) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... ted is to be taken into consideration. The issue raised by the assessee requires a proper investigation of facts and also determination of the fact whether the particular land is situated in the area which is beyond 8 KM from the Municipal limits. We set aside this issue to the record of the AO for proper verification and giving the finding about the distance from the Municipal limits to the area in which the land is situated. - Decided in favour of assessee for statistical purposes. Deduction u/S 54F in respect of only one residential property as against three claimed by the assessee - Held that:- The incentive for granting the deduction under section 54F is for investment in the residential house of the assessee which means that the investment is made for own residential requirement of the assessee and not future investment in the property. Therefore, in the absence of any material to show that the three different properties were purchased to meet the residential requirement of the family of the assessee, the claim of the assessee cannot be accepted. It is against the scheme and object of the section 54F of the Act which provides the deduction in respect of the investment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration, the assessee sold agricultural land situated at Bhankrota, Tehsil Sanganer, Jaipur vide Sale Deed dated 28th April, 2010 with his two brothers for a consideration of ₹ 1,62,00,000/-. Thus the assessee s 1/3rd share in the sale consideration was ₹ 54,00,000/-. The assessee in its return of income declared income of ₹ 3,05,840/- after claiming deduction under section 54F of the Act in respect of three new assets purchased by the assessee at three different locations. The AO allowed the deduction under section 54F of the Act only in respect of one new asset of ₹ 12,05,554/- as against claim of the assessee of ₹ 54,08,560/- the total investment made by the assessee in three separate housing plots. The assessee challenged the action of the AO before the ld. CIT (A) and also raised a ground that the agricultural income in question does not fall in the definition of capital asset as per the provisions of section 2(14) of the Act as the agricultural land in question is situated beyond 8 KM of Municipal limits of Jaipur. The ld. CIT (A) did not accept this objection of the assessee and held that when the assessee himself has declared the capital g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee whether the agricultural land in question is capital asset or not involves both factual as well as legal question. Whether the land situated in any area within the distance not more than 8 KM from the local limits of Jaipur Municipality or in the area beyond 8 KM from the local limits of Municipality is a question of fact and only once this question of fact is decided then the question of law comes into play. There is no dispute that the assessee himself has declared the capital gain arising from the sale of agricultural land in question and claimed deduction under section 54F of the Act. However, before the ld. CIT (A) the assessee raised this issue of not chargeable to capital gain due to the reason that the land in question situated in the area which is beyond 8 KM from the local limits of Jaipur Municipality. Thus for considering the issue whether the agricultural land in question situated in the area which is beyond 8 KM from the local limits, a proper enquiry and investigation is required. The assessee filed certain documents in support of the claim before the ld. CIT (A). However, there was no further verification and enquiry conducted by any authority as the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not falling in the definition of capital asset but falling in the exclusion clause of section 2(14) of the Act, the distance from the Municipal limits to the area in which the land is situated is to be taken into consideration. It is pertinent to note that the phrase agricultural land not being land situate in any area within the distance is purposefully used in this provision to avoid the confusion and a situation where one part of a land can fall within the distance of 8 KM and another part can be beyond 8 KM and, therefore, in case when the assessee is selling the land by division in different parts, then one part of the land will be excluded from the definition of capital asset and other part of the same land will be treated as capital asset. Therefore, instead of a particular land, the distance from the Municipal limit to the area in which the land is situated is to be taken into consideration. Accordingly, we find that the issue raised by the assessee requires a proper investigation of facts and also determination of the fact whether the particular land is situated in the area which is beyond 8 KM from the Municipal limits. Hence, in the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the various decisions on this issue, more than one independent unit can be considered as a residential house in terms of section 54F of the Act. Thus the investment made by the assessee in different units is eligible for deduction under section 54F of the Act. In support of his contention he has relied upon the judgment of Hon ble Supreme Court in the case of CIT vs. Vatika Township Pvt. Ltd., 367 ITR 466 (SC) and submitted that the Hon ble Supreme Court has held that legislations which modify accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect. Thus the ld. A/R has submitted that the amendment in the provision whereby it has been specified one residential house in India is treated as prospective. As regards the term a residential house defined and interpreted by the various decisions, the ld. A/R has relied upon the following decisions :- Gita Duggal vs. CIT 357 ITR 153 (Delhi) D. Anand Basappa vs. ITO 309 ITR 329 (Kar.) and submitted that the Hon ble High Court have held that the phrase a residential house ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submissions of the appellant. As regards investments made under section 54F of the I.T. Act, 1961 the assessee has given a list of three properties in three different areas of Jaipur. The Assessing Officer held that the deduction was admissible on one residential house and restricted the same to the property at plot No. 79, Vivek Vihar, Jagatpura since it was the only constructed house and the other two properties were only plots. Further the Authorized Representative placed reliance on a number of judgments but the same are distinguishable because in all those cases the asset purchased was a constructed residential house and the issue was regarding whether two or more units in the same complex could be considered for the deduction. In the assessee s case there is only one constructed house and the other two are plots and that two in different areas, therefore, the deduction has been correctly arrived at by the Assessing Officer. Assessing Officer has placed reliance on the decision of Hon ble Punjab Haryana High Court in the case of Pawan Arya vs. CIT 2011-ITOL- 01-HC-P T IT. This ground of appeal is dismissed. Thus the ld. CIT (A) has followed the decision of Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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