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TMI Blog2021 (10) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the same. The orders passed by lower authorities is bad in law, and are liable be quashed in toto 2. In any case the learned Assessing officer has erred in denying exemption u/s. 54F of the Act, to the appellant and learned Commissioner of Income- tax (Appeals) has erred in confirming the same. On proper appreciation of facts and law applicable. the appellant is entitled to exemption u/s. 54F of the Act, and the same is to be allowed to appellant. 3. In any case and without prejudice, the learned Assessing officer had erred in holding that while computing income from capital gains, the appellant is not entitled to deduction for brokerage and commission of Rs. 1,70,000/- and cost of improvement of Rs. 1,25,630/-and the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd alternatively, the deduction for brokerage and cost of improvement be allowed while computing capital gains and interest levied be also deleted." 2. All the above grounds of appeal are directed against the deduction claimed by the assessee u/s 54F of the Income-tax Act,1961 ['the Act' for short]. The facts relating to the issue are stated in brief. The assessee initially filed his return of income for the year under consideration on 27.3.2014 and the same was processed u/s 143(1) of the Act. Subsequently, it was noticed by the AO that the assessee has sold a vacant site bearing No.5A.C- 318 situated at 3rd Block, Hennur Road, Banaswadi Road Extension, Bengaluru on 30.8.2012 for a consideration of Rs. 85 lakhs. It was noticed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by the developer VSPL on 10.2.2017 to another person named Mr. Kamal Tej, i.e., the assessee has not purchased the residential flat as claimed by him. 5. In view of the above, the A.O. issued summons to the assessee u/s 131 of the Act and recorded sworn statement from him. For the purpose of this appeal, the question No.6 and answer given thereto are relevant and hence they are extracted below: Q.No.6 Please furnish the details of your fixed assets and the sources of income received by you? Ans: The residential property situated at No.166 7th B Main Road, 16th Cross, J.P. Nagar, 4th Phase, Bangalore 560 078 consists of three independent houses. Out of this, one is self-occupied and the other two have been let out for rent. The mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee also submitted that the builder VSPL has given contradictory statement in order to suit his convenience and his statements are not true. In view of divergent claims, the A.O. issued summons to both the assessee and the Managing Director of VSPL Mr. Vikram Prabhakar. However, Shri Vikram Prabhakar did not appear before the A.O on the appointed day. 8. In view of the above said factual findings, the A.O. disallowed deduction claimed u/s 54F of the Act on the following two reasons: a) The flat No.B-401 at VSPL Gardenia, Marappa Garden, Bengaluru which is claimed to have been booked by the assessee has actually been sold by the builder to another person named Mr. Kamal Tej. Hence, in effect, the assessee has not made any investment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F on two reasons. (a) With regard to the first reason that the assessee has not purchased/constructed any new residential house, we notice that the assessee has submitted before Ld CIT that M/s VSPL, to whom advance of Rs. 80.00 lakhs was given, has finally executed a sale deed dated 19-12-2018 in favour of the assessee selling a residential apartment no. A001 in Block A, 1st Floor, Vaishnavi Mandara, Situated at Ward 11, Industrial suburb, 3rd Cross, 2nd Stage, Yeshwantpur, Bangalore having PID No.11-59-46 for a sale consideration of Rs. 80 lakhs. (refer page 9 of order of CIT(A).) We have noticed that the assessee has paid the amount of Rs. 80.00 lakhs on 22.4.2013, while the vacant plot was sold on 30-8-2012, meaning thereby, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation at the end of the AO. If the assessee owns only one residential property, which consisted of three residential units, in our view, it should be considered as one residential house only. In this regard, we derive support from the decision rendered by the co-ordinate bench in the case of Shri Bhatkal Ramarao Prakash vs. ITO (ITA No.2692/Bang/2018 dated 04-01-2019). 11. In view of the above, we set aside the order passed by Ld CIT(A) and restore this issue to the file of the AO for examining the above said two points in the light of discussions made supra. 12. The assessee has also raised some other issues with regard to the computation of deduction u/s 54F of the Act. Since the main issue is restored to the file of the AO, we restore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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