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TMI Blog2022 (1) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... c. 54F AO should not have considered the property E-575A, G.K.II, New Delhi as residential on the basis of municipal record ignoring the actual user thereof, as held in the above cited decisions. The authorities below were thus not justified in denying and upholding the denial of the claimed benefit to the assessee by way of deduction under sec. 54F of the Act on the basis that the assessee was owning more than one residential house (i.e. inclusion of E-575A, GK-II, New Delhi) on the date of transfer of the original assets. We thus setting aside the orders of the authorities below in this regard direct the Assessing Officer to allow the claimed deduction under sec. 54F of the Act. See case ofSHRI. NAVIN JOLLY C/O NAVIN ARCHITECT PRIVATE LIMITED VERSUS THE INCOME-TAX OFFICER, WARD 11 (1) [ 2020 (6) TMI 514 - KARNATAKA HIGH COURT] The ground No.1 is accordingly allowed - ITA No. 7947/Del./2018 - - - Dated:- 4-1-2022 - Shri R.K. Panda, Accountant Member And Shri K.Narasimha Chary, Judicial Member For the Assessee : Shri Ved Jain, Advocate For the Revenue : Sh. Anil Gandhi, Sr DR ORDER PER K. NARASIMHA CHARY, JM Aggrieved by the order dated 23.10.2018 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, no certificate from MCD is produced establishing property as commercial. Further, though the assessee claims to have made payment of charges of conversion into mixed land use to MCD and submitted challan payments, on which, it is written no where the word commercial ; that the assessee can have Retail shop in the residential premises up to maximum 25 percent of the ground floor coverage, or 50 square meters of floor area, whichever is less, only on ground floor or Professional offices up to 25 percent of FAR or 100 square meters, whichever is less, on any floor, but the assessee has not submitted any evidence that any commercial activity has been started in the above house; and that as per the Mixed use policy of DDA, after paying the mixed use charges, the residential house owner can use part of the residential house for commercial activity, but, that does not change the nature of the property which remains residential in nature . Learned Assessing Officer accordingly, held that the property is the residential property and accordingly made the disallowance of exemption of ₹ 36,50,569/- claimed by the assessee u/s 54F of the Act in the assessment order passed u/s 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone through the record in the light of the submissions made on either side. It is an undisputed fact that the inspector who was deputed to visit the premises of the assessee at Shastri Nagar reported that, - As directed by ACIT, Cir-42(1), I visited the premises L-82, Shastri Nagar, Delhi-52 on 10.08.2017. It s a four floor building in which an officer is running at the Ground Floor and rest of the building is used as a godown for keeping stock of stocks in the brand name of Y S. Sh. Akhil Hans who is brand incharge of the product as well as incharge of the building informed that this property i.e. L-82 belongs to SL Group (SL Industries) which is a proprietary concern of Sh. Yash Suneja. There is no rent agreement available in respect of said property and premises is used only for the purpose of keeping stock of finished goods which belong to Sh. Yash Suneja. 8.1. In the case of Navin Jolly (supra), the Hon ble Karnataka High Court held that,- 8. From close scrutiny of Section 54F(1) of the Act, it is evident that in order to attract Section 54F(1) of the Act, the conditions stipulated in clauses (a) and (b) of proviso to Section 54F(1) have to be complied with as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v Puri vs. DCIT [2016] 160 ITD 213- Dated: - 11 July 2016 wherein it was held as under:- 8.7 There is no dispute on fact that the property E-575A, GK-II, New Delhi owned by the assessee was being used as his office during the relevant period but only dispute between the assessee and Revenue remained about the entitlement of deduction of sec. 54F of the Act on the basis of actual user of the property i.e. office use and not merely on the basis of the municipal showing the property meant for residential use or in the sale deed shown as residential type. The ratios laid down in the above cited decisions, support the stand of the assessee that for availing deduction under sec. 54F of the Act, the property though shown as residential on the record of the municipality but the test will be actual user of the premises by the assessee during the relevant period. In other words it does not make difference whether the property has been shown as residential house on the record of the government authority but actual user thereof by the assessee will be considered while adjudicating upon the eligibility of deduction under sec. 54F of the Act claimed by the assessee. In the present case, for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the property was used by the assessee for business purpose by way of lease out to M/s Client Technology Pvt. Ltd. for commercial purpose of stocking of electronic items duly supported with commercial electricity connection for the period relevant. The ld. DR has not brought on record any material evidence in rebuttal to the contention of the assessee. 23. In view of the above, we accept the grievance of the assessee as genuine on this issue and allow his claim of the exemption of ? 21,69,260/- u/s 54F of the Act. Accordingly, Ground No.2 is allowed. 8.4. It is not in dispute that the assessee has paid mixed land use conversion charges. The word Mixed use is defined in the MPD-2021 regulations to mean that the provision for non- residential activity in the residential areas. , and, therefore, the payment of land use conversion charges itself certifies that the payment is made for converting the property from residential to commercial. The Mixed-use charges were paid to use the property as commercial and the nature of property for the purpose of exemption under section 54F is to be ascertained only with respect to the usage of the property. Further the property is bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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