9911796707
TMI Blog2023 (1) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, thoroughly went wrong in disallowing the alternate relief of Rs 73,80,778/- granted by the assessing officer to the assessee. (i.e 50% of investment in Shobha, Thrissur which was disallowed in the case of her husband Dr. Jose Jospeh Vempilly holding that the said property is jointly owned by assessee and her husband; was granted as alternate relief to the assessee after rejecting the claim of the assessee under section 54F of the IT Act in respect of Skyline Inifnity). 3. The CIT (Appeals) failed to note that in the appellate proceedings, the CIT (Appeals) does not have the jurisdiction to disallow the relief already granted by the assessing officer in favour of the assessee and therefore the said action of the CIT (Appeals) in rejecting the alternate claim of the assessee which was allowed by the assessing officer, is illegal, arbitrary and unjustified. 4. The CIT (Appeals) erred in issuing notice for enhancing the assessment and thereby disallowing the alternate claim of Rs 73,80,778/- granted by the assessing officer in respect of residential property at Shobha. 5. The CIT (Appeals) thoroughly went wrong in holding that the assessee is not entitled for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investment made in 'Skyline Infinity' apartment, Thrissur. The case was selected for scrutiny and a notice under section 143 (2) dated 20-9-2016 was issued. The assessee along with her husband had sold total extend of 25.59 acres of land with building at Thrissur for total consideration of Rs 7,69,26,880/-through a common sale deed registered on 25-9-2014. Out of the above total extent the assessee's portion admeasuring 4.98 acres of land was sold for Rs 1,49,50,575/- The portion admeasuring 20.61 acres of land belonging to the assessee's husband was sold for consideration of Rs 6,19,76,305/-. After claiming indexed cost of acquisition by the assesee, the long team capital gain was worked out to Rs 1,40,42,400/-. The assessee initially claimed Rs 86,24,063/- being investment in residential house property at "Skyline Infinity', Thrissur and Rs 54,18,377 has been admitted as taxable Long Term Capital Gains. In the course of assessment proceedings, the Assessing officer issued notice stating that the assessee is not eligible to claim exemption under section 54F of the Act as according to the AO, the assessee has acquired a residential house (apartment in Sobha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... based on which the claim under section 54F was made held that the above claim is hit by clause (a) (ii) of the proviso to section 54F of the Act. Accordingly the AO allowed the deduction u/s.54F towards the property in "Shobha City" and granted exemption of Rs 73,80,778/- under section 54 F of the Act. 6. Aggrieved the assessee filed the appeal before the CIT(A). The assessee submitted before the CIT(A) the property in "Shobha City" is bought fully out of the funds of assessee's husband and the assessee has invested the sale proceeds of the land in property at "Skyline Infinity'. The AO for both assessee and her husband is the same and while rejecting the 100% claim of assessee's husband for investment in property in "Shobha City" allowed 50% in assessee's husband's case and 50% in assessee's case. The assessee submitted that assessee is entitled for deduction u/s.54F for investment in property at "Skyline Infinity' only since her husband is entitled for 100% of the amount invested in the property in "Shobha City". The assessee further submitted that the property in "Shobha City" is registed on 13.3.2019 in the name of assessee;s husband and submitted the copy of the regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislature. It is further submitted that the intention of the legislature is very clear that from AY 2015-16 and onwards, the investments of an assessee in residential house abroad shall not be considered while deciding the deduction under section 54 or 54F of the Income Tax Act. When the legislature has made it clear that exemption u/s 54/ 54F is available only to residential house owned in India, the investments made in residential houses owned abroad is outside the scope of consideration while deciding the eligibility/allowability of exemption u/s 54/54F of the Income Tax Act with effect from 1-4-2015 i.e., from AY 2015-16 onwards. 9. The learned AR also submitted that the proviso needs to be read along with the main section where as per the amended provisions, the investments in residential house in India is only eligible for deduction under section 54F of the Act. The learned AR argued that what applies to the main section should apply to the proviso also wherein there is a restriction of ownership of the asset other than the new asset. The learned AR further submitted that the intention of the legislature while introducing section 54F of the Act is that to promote real ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall 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 purposes of this section,- "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. 12. The contention of the revenue is that the proviso to section 54F(1) states that the deduction under the subsection (1) is available provided the assessee does not own more than one residential house other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... armoniously with the main section. Accordingly the proviso to section 54F which contains the condition that the deduction is not available if the assessee owns more than one residential house, other than the new asset, should be interpreted to mean ownership of residential houses in India. Therefore the ground on which the deduction u/s.54F is denied that the assessee owns two residential houses in USA in our considered view is not tenable. We accordingly hold that the assessee is entitled for claiming deduction u/s.54F for investments made in India in one residential house within the time limit stipulated under the said section. 13. It is submitted by the ld AR that the AO had allowed the deduction u/s.54F with respect to the Apartment in Sobha City which is not correct since the payments towards cost of the Apartment was paid by assesse's husband Dr. Jose Joseph Vempilly completely out of his fund. It is submitted that the assessee has invested the funds out of the sale proceeds in a property in 'Skyline Infinity' and therefore the deduction u/s.54F should be given for this property. The ld AR further submitted that assessee's husband had filed an appeal against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
