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TMI Blog2019 (12) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... sesee to submit information on or before 18.09.2017. In response thereto the assessee filed the reply on 16.09.2017 alongwith computation of taxable income, bank account statement, collaboration agreement and construction agreement. Notices u/s. 142(1) of the Act alongwith certain queries were issued online on 15.6.2018 requiring assessee to furnish information as required on or before 25.06.2018. Another notice u/s. 142(1) of the Act was issued to the assessee on 19.7.2018 requiring him to furnish desired information on or before 26.07.2018. However, no reply was furnished. AO issued fresh notice to the assessee on 22.9.2018 requiring him to furnish information as required on or before 01.10.2018. In response thereto the assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of exemption u/s. 54 of the Act cannot be accepted fully as the assessee sold the rights of first floor to the builder, and kept ground and second floor to himself under collaboration agreement, therefore, long term capital gain on proportionate sale value of first floor which comes to Rs. 34,64,495/- (1/3rd of long term capital gain as calculated by assessee at Rs. 1,03,93,485/-), is the deemed long term capital gain on transfer of rights of first floor to the second party Sh. Krishan Lal and was to be taxed in the hands of the assessee. The assessee vide show cause letter dated 12.12.2018, has to furnish his reply as to why long term capital gain should not be charted on proportionate sale value of first floor which comes to Rs. 34,64,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the construction of the ground floor, second floor of the above mentioned property in dispute. He further submitted that the AO vide his order dated 28.12.2018 considered the 1/3rd of presumed cost of construction as capital gains and added the same in the income of the assessee without appreciating the fact that on the basis of collaboration agreement, the builder has incurred all the costs for the construction of the property. He further submitted that assessee has not parted with any part of the residential property except the first floor of the house property in lieu of construction of the entire property by the builder. But the AO has wrongly mentioned that the assessee has sold the second floor of the property. Finally, he submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi High Court in the case of Commissioner of Income Tax vs. Geeta Duggal in ITA No. 1237/2011 vide judgment dated 21.02.2013. The held portion of the aforesaid judgment is reproduced as under:- "18. There could also be another angle. Section 54/54F uses the expression ''a residential house". The expression used is not ''a residential unit", This is a new concept introduced by the assessing officer into the section. Section 54/54F requires the assessee to acquire a "residential house" and so long as the assessee acquires a building, which may be constructed, for the sake of convenience, in such a manner as to consist of several units which can, if the need arises, be conveniently and independently used as an independent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be several such considerations for a person while constructing a residential house. We are therefore, unable to see how or why the physical structuring of the new residential house, whether it is lateral or vertical, should come in the way of considering the building as a residential house. We do not think that the fact that the residential house consists of several independent units can be permitted to act as an impediment to the allowance of the deduction under Section 54/54F. It is neither expressly nor by necessary implication prohibited." 5.1 After going through the aforesaid judgement of the Hon'ble Delhi High Court in the case of CIT vs. Gita Duggal (Supra) and the orders of the revenue authorities on the issue in dispute, I am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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