9911796707
TMI Blog2021 (12) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... n, electricity and sewerage connection and therefore, an affidavit so filed without any corroborative evidence on record which demonstrate the physical attributes of a residential/dwelling unit cannot come to the aid and assistance of the assessee and thus, the alternate contention so raised that atleast a part of the property being used for residential purposes cannot be accepted and is hereby dismissed. Therefore, we find that the instant case, the property which was sold was clearly not a residential house and thus, the basic condition for claiming exemption u/s 54 has not been satisfied in the instant case. Whether the property is actually let out or not, barring exceptions, the annual value of the property has to be determined and the income to be offered to tax under the head Income from house property . There could be actual usage of the house for residential purposes either in terms of let out or being self-occupied and there could be potential usage of house for residential house, thus bringing in complete flexibility for the purposes of section 54 of the Act. The basic nature, attributes and character of the property being a residential house however need to be satisf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1,91,100 * 711/259) claimed by the assessee on account of construction cost incurred in construction of three shops, basement, one room (Kotari) as well as boundary wall all along 4 sides of the Plot. 3. That under the facts and in totality of the circumstances of the case the assessee is entitled to benefit of exemption u/s. 54 of the Act so claimed on the actual sale consideration of ₹ 35 Lacs received to the appellant instead of ₹ 43,08,360/- as assumed by the AO as per DLC Rates u/s. 50C of the Act. 2. Briefly stated, the facts of the case are that the assessment in the case of assessee was completed u/s 143(3) read with section 147 of the Act. The AO considered deemed sale consideration as per stamp duty value u/s 50C at ₹ 43,08,360/-, disallowed claim of cost of construction (after indexation) amounting to ₹ 5,24,602/- and disallowed claim of deduction u/s 54 amounting to ₹ 12,00,000/-while computing capital gains on sale of immoveable property and assessed total income at ₹ 44,79,732/- as against returned income of ₹ 19,46,770/-. 3. Being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- .The AO has accepted the existence of the Construction of the Basement, Kotari Shops in front of the Plot which is about 910 Sq Ft as per the Map being the forming part of the sale deed [Page No 21 to 26 Specially page 26] but has taken the cost thereof at Zero Rupees on the pretext that the cost is unverifiable in absence of the Supporting Vouchers for Construction. The Construction took place in the year 1992 and the cost was duly depicted in the Balance sheets of the assessee filed in your good office (ITD OFFICE) as annexure to the Income Tax Return annexures for the year ending 31.3.2000 [Page No 93 to 96], 31.3.2002 (Audited u/s 44AB) [Page 97 to 103], 31.3.2003 (Audited u/s 44AB) etc [Page no 104 to 107] No queries whatsoever were raised by the. Income tax Officials on the Tax Audit Report and Balance Sheet Profit Loss account filed therewith for these years Thus Accepting the Construction but taking cost thereof at Zero Rupee is a very harsh decision of the learned Assessing officer for a detrimental interest of the assessee. There cannot be a magic of construction without a cost thereof. Disbelief on the papers filed with your good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it, shall be dealt with in accordance with the following provisions of this section, that is to say,- (i ) . (ii) .. 10. A reading of the aforesaid provision makes it clear that the property being sold, referred to as original asset, is described as buildings or lands appurtenant thereto and being a residential house. The emphasis is on the nature of the property being a residential house which may consist of building or land appurtenant thereto and secondly, the income of such residential house is chargeable under the head income from house property. 11. As held by the Courts from time to time, the term 'residential house' has not been given any statutory definition and, thus, has to be assigned meaning as understood in common parlance. As per dictionary m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also residence by the assessee in the new property purchased or constructed by him. However, realizing certain practical difficulties, the legislature by way of amendment brought in through the Finance Act, 1982 removed such condition of residence by the assessee or his parent in the property which was transferred, as also residence by the assessee in the new property purchased or constructed by him as can be gathered from contents of the CBDT Circular No. 346, dated 30-6-1982. And the provisions of sub-section (1) were consequently amended to read, as contained in the current provisions, where it talks about transfer of a residential house, the income of which is chargeable under the head Income from house property . 14. If we look at the provisions of section 22 and 23 of the Act relevant for the purposes of computation of income chargeable under the head Income from house property , it talks about the determination of annual value of the property which is actually let out or expected to be let out. Further, in the context of house or a part of the house which is in occupation of the owner of the property for his own residence, the annual value of such property has been stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
