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TMI Blog2020 (4) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... aming the assessment under Sec. 143(3) for the year under consideration had not assessed the Annual Lettable Value (ALV) of the aforesaid Bungalow at Lonawala under Sec. 23 of the Act, therein proved that the assessee was not the owner of the said residential property during the year under consideration, we are afraid does not find favour with us - the documents forming part of the APB clearly reveals beyond any scope of doubt that the assessee during the year under consideration was the owner of the residential house/Bungalow at Lonawala. Accordingly, finding no infirmity in the view taken by the CIT(A), who in our considered view had rightly affirmed the declining of the assesses claim for deduction under Sec. 54F by the A.O, we uphold the same. Levy of interest under Sec. 234A and 234B - HELD THAT:- As the levy of interest under the aforesaid statutory provisions is mandatory as per the judgment of the Hon ble Supreme Court in the case of CIT Vs. Anjum M.H. Ghaswala [ 2001 (10) TMI 4 - SUPREME COURT] therefore, finding no infirmity in charging of the aforesaid interest by the A.O, we uphold the same. X X X X Extracts X X X X X X X X Extracts X X X X ..... No. Amount Section Nature of Investment (i) ₹ 50,00,000/- U/s. 54EC Investment of REC (ii) ₹ 49,50,500/- U/s.54F Investment of ₹ 50,00,000/- towards purchase of residential property. (iii) ₹ 1,50,54,470/- U/s. 54F Deposit of ₹ 1,52,05,000/- under capital gain account scheme toward purchase of another residential property. Accordingly, the assessee after claiming the aforesaid deductions had reflected the balance LTCG of ₹ 19,28,17,022/- in his return of income for the year under consideration. It was observed by the A.O that the assessee had claimed deduction under Sec. 54F in respect of investments which were claimed to have been made by him towards in two different residential units viz. (i) investment towards purchase of residential property at Pune, vide registered agreement dated 05.02.2013: ₹ 49,50,500/-; and (ii) investment towards deposit in capital gain account scheme for purchase of another residential property: ₹ 1,52,05,000/-. Observing, that as the provisions of Sec.54F restricted the deduction only in respect of an investment made in one residential unit, the A.O called upon the assessee to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also the fact as to whether the possession of the same was not taken by him, he was vested with the ownership of the same. Insofar, the residential house at Kamothe was concerned, the A.O was of the view that though the assessee had allowed his son to use the said residential property for his accommodation, however, he remained the legal owner of the said property. Accordingly, the A.O not finding favour with the aforesaid reasoning that was given by the assessee to buttress his claim towards deduction under Sec. 54F of the Act, declined to allow the same. However, as the A.O had already disallowed the assesses claim for deduction under Sec. 54F in respect of the investment that was made by him in CGAS account, therefore, he restricted the disallowance under Sec.54F to the extent of the balance claim that was raised by him on the basis of the investment made towards purchase of residential property at Pune for ₹ 49,50,500/- . As such, the A.O on the basis of his aforesaid observations declined the assesses claim for deduction under Sec. 54F aggregating to an amount of ₹ 2,00,04,970/- [₹ 49,50,500/- (+) ₹ 1,50,54,470/-]. On the basis of his aforesaid deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... habitation. Further, the ld. A.R drew our attention to a letter of an architect, dated 03.09.2005, wherein he had certified that the construction of the property under consideration was critical and not good. Also, the ld. A.R in order to buttress his claim that the property under consideration was unfit for habitation, therein took us through certain other documents forming part of the APB. In order to drive home his claim that the concept of habitability is inherent in the word 'house' and unless it is habitable, the word would not answer the common sense meaning of 'house', the ld. A.R relied on the judgment of the Hon'ble High Court of Madras in the case of R. Venkatavaradha Raddier Vs. Commissioner of Wealth Tax (1995) 214 ITR 76 (Mad). On the basis of the aforesaid facts, it was the claim of the ld. A.R that as the property situated at Lonawala was not a residential house in possession of the assessee, therefore, the lower authorities were in error in concluding to the contrary. As such, it was the claim of the ld. A.R that as the assessee on the date of sale of the 'Original' asset i.e land was not an owner of more than one residential house, therefore, he was duly eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where - (a) the assessee - (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property". Explanation- for the purpose of this section,- (1) XXXX (2) XXXX (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him. Apart from that, the assessee has drawn our attention towards certain documents which therein reveals that certain disputes as regards the quality of construction etc. are ongoing inter se the assessee and the builder/developer. In sum and substance, it is the claim of the assessee that as the possession of the property at Lonawala could not be taken by him, for the reason, that the same was unfit for human habitation, therefore, it would be incorrect to conclude that the assessee was an owner of a residential house at Lonawala. 10. We have deliberated at length on the issue under consideration, and are unable to persuade ourselves to subscribe to the contentions advanced by the ld. A.R in support of the assessee claim of deduction under Sec. 54Fof the Act. As observed by us hereinabove, the assessee would be inter alia eligible for claim of deduction under Sec. 54F of the Act, if on the date of transfer of the 'Original' asset he does not own more than one residential house, other than the new asset. In the case before us, the ld. A.R had tried to impress upon us that the assessee did not own the residential house at Lonawala. It is the claim of the ld. A.R that as the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/4/2002; whereas the quality and workmanship is so poor that the Walls, Joints, Ceilings have all got cracks and there is heavy leakage during rains and the paint and other outer parts of the walls are peeling off at almost every place; (iii) I state that, the Bungalow having its measurements 21'-9' x 31'-7" at plinth/stilt level with open RCC staircase 3'-7" wide leading to its first floor; and the plinth is of very thin structure unable to bear the load of the entire structure; (iv) I state that, the entire stilt area is spanned by only 10 Nos. of RCC column without any intermediate column support to a width of 21'-9" square; which is very dangerous and unsafe, as the entire bungalow is constructed on stilt on just 10 no. of small size columns; (v) I state that, though the building was constructed on stilt, yet the stilt is of low quality with very , thin pillars, in that the building may collapse any time; (vi) I state that, the remaining columns are of 10 VT x 1 0 Yi " at every extreme side; thus, making it unbearable to bear the load of the entire structure; (vii) I state that, the entire load of the First floor is loaded on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma teak wood doors etc: (xxx) I state that, As the MS grills not properly fitted by the Opponents, we have got the grills properly fitted; (xxxi) I state that, ISI marked electrical appliances were not used by the Opponents;" On a perusal of the aforesaid facts as had been deposed by the assessee before the Consumer Reddressal Forum, it stands revealed beyond any scope of doubt that pursuant to the 'agreement' for construction, dated 06.04.2002 executed by the assessee with the aforesaid contractor viz. M/s Chaitanaya Dham Associate, a Bungalow was constructed on the aforesaid plot that was purchased by the assessee, vide purchase agreement dated 06.04.2002. In sum and substance, the fact that the assessee during the period relevant to the year under consideration viz. A.Y. 2013-14 was the owner of the Bungalow stands proved beyond any scope of doubt. As a matter of fact, we find that the assessee in his aforesaid complaint had sought a demolition of the aforesaid constructed structure along with a refund of the cost of construction from the contractor. However, it is not the case of the assessee either before the lower authorities or before us that that the aforesaid Bungalow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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