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TMI Blog2019 (8) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... treating the income of the assessee from sale of property during the year as business income. The order of the lower authorities on this issue is set aside and the Assessing Officer is directed to treat the income from the sale of property as under the head capital gain . This issue is accordingly allowed in favour of the assessee. Deduction u/s 54F - amount spent for construction of residential house - assessee is owner of other commercial property - construction was not completed within three years - HELD THAT:- Except a share in the ancestral house in the property mentioned at S.No.4, the assessee did not possess any other residential property on the date of sale of the property and in view of above, the assessee has rightly claimed the deduction u/s 54/54F on construction of a residential house. So far as the rejection of the claim on the ground that the construction was not completed within three years from the date of sale of property is concerned, considering the beneficial provisions of this chapter intended to promote the construction of residential houses, and also considering the evidence furnished by the assessee of approved plan of municipal corporation r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of ₹ 11,13,37,414/- and short term capital gains of ₹ 11,55,058/- during the year. The Assessing Officer noticed that the assessee made huge investments in 28 properties to the tune of ₹ 1,97,05,815/- as on 31.3.2008. The nature of properties included booths, Plots, SCOs, houses, lands and shops. Out of these, 16 properties were purchased during the year and 7 other properties sold in the same year. The Assessing Officer also observed that out of the 28 investments, 15 were shops and booths. In view of the number of transactions of sale and purchase of the property carried out by the assessee, the Assessing Officer treated the income of the assessee from the sale purchase of property as business income against the claim of the assessee of capital gains income. 6. Being aggrieved by the above order of the Assessing Officer, the assessee preferred the appeal before the CIT(A), However, the same was dismissed by the then ld. CIT(A) vide an ex parte order dated 06.12.2012. The assessee preferred further appeal before the Tribunal, whereupon, this Tribunal set aside the order of the CIT(A) and remanded the matter back to the file of the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th very less gain, which was otherwise not regular business of the assessee. It has been further submitted that the assessee had surplus funds from sale of old asset during the year and wanted to invest the funds in real estate, which prompted him to purchase various properties with these funds. The assessee had purchased all the properties by paying full consideration and also paid full stamp duty by getting these properties registered in his own name, which clearly shows the intent and purpose of the investment by the assessee. The assessee had also shown all these assets as investment and not as stock in trade in his books of accounts. The majority of these assets are still held by the assessee as owner and not put to sale during the last 6-7 years which also shows the intent and purpose of the investment by the assessee. The ld. Counsel, therefore, has submitted that immovable property purchased by the assessee were shown as investment in the books of account right from the year 1991 till date and even most of the properties were still held by the assessee as investment. Only some properties were sold due to the circumstances narrated above and this fact alone is not sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et better appreciation, does not change the nature of the investment to categorize it as business transaction. We, therefore, do not find any justification on the part of the lower authorities in treating the income of the assessee from sale of property during the year as business income. The order of the lower authorities on this issue is set aside and the Assessing Officer is directed to treat the income from the sale of property as under the head capital gain . This issue is accordingly allowed in favour of the assessee. 12. In Ground No.4, the assessee has agitated the action of the lower authorities in rejecting the deduction claimed by the assessee under Section 54F of the Income Tax Act, 1961 (hereinafter referred as the Act )on the amount spent for construction of residential house. The aforesaid claim of the assessee was rejected by the Assessing officer on two grounds. Firstly, that the assessee was owner of more than one residential property and secondly, that the house was not constructed within three years from the date of sale of property. 13. We have considered the rival contentions on this issue. So far as the issue that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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