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TMI Blog2022 (5) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... estion, viz., who has funded the acquisition? - Admittedly, in the instant case, the assessee s husband had advanced money initially. Subsequently, the admitted fact is that the assessee has reimbursed the money to her husband and finally, it is the assessee who has actually given funds for the acquisition of the property. CIT(A) has taken the view that the funds given by the assessee should not be taken in account and in our view, the said view of the Ld CIT(A) is not, in our view, correct in law. Deduction u/s 54F of the Act only induces an assessee to make investment in residential house property. If the assessee has herein has given money for acquisition of the property either directly to the builder or as reimbursement to her husband, then the assessee should be given benefit of deduction u/s 54F of the Act for the cost of acquisition. Plot was purchased jointly in the name of the assessee and her husband and hence it should be held that both held 50% right each and hence the assessee could have purchased only her husband s share only - We are unable to agree with this logic. There is no dispute that the assessee has actually given funds for the acquisition of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al by filing appeal before Hon ble High Court of Karnataka. The Hon ble High Court has restored the matter back to the file of the Tribunal with the following observations:- 8. From close scrutiny of the order passed by the Tribunal, it is evident that the tribunal while deciding the appeal preferred by the revenue has adjudicated only grounds 2 and 3 and has not adjudicated the ground with regard to the claim of assessee under Section 54F of the Act in the light of law laid down by Delhi High Court in CIT Vs. GITA DUGGA , (2013) 257 CTR (DEL.) 208. The Tribunal has failed to adjudicate the grounds raised by the assessee in her appeal. The impugned order therefore, cannot be sustained in the eye of law. It is accordingly quashed. The matter is remitted to the tribunal to decide the appeal preferred by the assessee as well as the revenue afresh in accordance with law laid down by this Court in NAVIN JOLLY, GITA DUGGAL, M. GEORGE JOSEPH, M/S. JENNIFER BHIDE AND KAMALA WAHAL supra. It is therefore, not necessary for us to answer the substantial questions of law. We notice that the Hon ble High Court has directed the Tribunal to decide the appeals afresh. 3. At the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cost of land as per agreement dt 5.5.04 Rs.39,69,933.00 Cost of Construction as per agreement dt. 5.5.2004 Rs.46,35,210.00 Common Maintenance Charges as per clause 8(b) Rs.87,500.00 Common Maintenance Charges as per cluse 8(d) Rs.87,500.00 Payment made to Prestige and other structural changes Rs.34,17,560.00 Payment made to Morph Design vide letter dt 6.3.2007 for changes in the villa Rs.30,66,252.00 Material purchased and supplied by the assessee Rs.7,89,677.00 Cost of registration of land on 24.02.2007 Rs.3.77,540.00 Other costs Rs.8,98,421.00 Total cost Rs.1,72,29,993.00 8. The A.O. examined the cost of purchase of property furnished to him and noticed that the assessee could not furnish evidence with regard to the expenses incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 lakhs was included for computing capital gain disregarding the claim of gift to the assessee herein. Accordingly, it was prayed that the above said amount should be reduced from the value of sale consideration offered by the assessee, since it has already been assessed in the hands of the assessee. Since the assessee has made detailed explanations with regard to the various observations made by the A.O, the Ld. CIT(A) called for a remand report from the A.O. 11. The assessee submitted she does not own the property mentioned in her return of income as located at Outer Ring Road. It was submitted that the rental income shown against that property was actually received from the property purchased in Prestige Ozone and the mistake has happened due to typographical mistake. We notice this fact was accepted by the tax authorities. 12. (a) With regard to the residential flat located in Ooty, the A.O. observed in the remand report that it consisted of 3 residential buildings and hence, the condition prescribed in section 54F of the Act is violated. (b) The AO reiterated that the assessee has given advance for purchase of a flat at Prestige Nottingghill, which is a violation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2007 cannot be considered as part of acquisition of property, he computed the cost of acquisition as under:- Cost of construction - Rs.46,35,610/- Cost of land as per sale deed - Rs.43,47,473/- Maintenance charges - Rs. 1,75,000/- Total - Rs.91,58,083/- Accordingly, the Ld CIT(A) held that the assessee is eligible for deduction u/s 54F of the Act only in respect of 50% of the cost of property, i.e., 50% of Rs.91,58,083/-, i.e., Rs.45,79,042/-. 16. Aggrieved by the order passed by Ld CIT(A), both the parties have filed appeals before the Tribunal. We have already dismissed the appeal of the Tribunal, since the tax effect involved therein was less than the monetary limits prescribed by CBDT for pursuing its appeals. Hence the issues urged by the assessee are only need to be adjudicated. Following issues are contested by the assessee:- (a) Whether the Ld CIT(A) was justified in ignoring expenditure of Rs.81,71,910/- incurred on the new house property for computing deduction u/s 54F of the Act. (b) Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase of property, how it can be held that her husband was owner of 50% of the property merely for the reason that his name appears in the conveyance agreement and also in the rental agreement. The deduction under sec.54F of the Act shall be given only to the person who has invested the money. In the instant case, it is the assessee who has invested the money and hence the assessee should be given deduction u/s 54F of the Act for the money invested by her. 20. The next issue is with regard to the cost of acquisition. The assessee claimed the cost of acquisition to be Rs.1,72,29,993/-. During the remand proceedings, the assessee herself has agreed for reduction of cost of acquisition by Rs.16,97,098/-, since she could not prove the incurring of expenses to that extent. Hence the cost of acquisition as per the assessee now stands at Rs.1,55,32,895/-. There is no dispute that the assessee has invested the money to the above said extent in acquisition of the property. 21. The Ld CIT(A) has taken the view that the amount spent after the date of registration of land, i.e., 24.02.2007 for interiors, renovation, furnishing etc cannot be part of acquisition. The Hon ble Karnataka High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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