9911796707
TMI Blog2024 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of a residential house in the documents. The enquiries conducted by the revenue authorities have clearly proved with photographic evidences that the area has been used for concrete brick manufacturing unit run by one Sh. Bharat Bhushan under the name of M/s Surabh Ferrocon. As gone through the lease deed submitted along with the paper book which shows that the land has been given on rent of some of the building and open parking area when there was no such building existing as per records. Further, at point no. 7, it mentions that the premises should be used only for residential purpose of its staff whereas there was no dwelling unit available at the said premises. Further, the enquiries and the photographs clearly proves that the said land was used for manufacturing of concrete, bricks (page 20 of AO). Hence, no credence can be given to the rent agreement or the subsequent notices. Section 54F demands reinvestment of the capital gains in new residential property to qualify for exemption. The provision was brought in to encourage individuals to reinvest their gains into new housing thereby fostering home ownership, stable investment growth and to augment the growth of other ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was allowed by the AO proportionately. 4. Whether on the facts in the circumstances of the case and in law, the Ld. CIT(A) has erred by allowing full cost of improvement of land alongwith indexation in the case of land sold at Pataudi vide deed No.987 despite the fact that the assessee has failed to substantiate the claim of cost of improvement during the assessment proceedings. The AD has categorically mentioned that the cheques regarding cost of improvement were issued by the assessee in October 2007 whereas the impugned property was purchased on 26.03.2008 and the said fact was not duly appreciated by the Ld. CIT(A). 5. Whether on the facts in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 47,53,116/- made on account of disallowance of 'cost of improvement and indexation without appreciating the fact that the assessee has failed to substantiate the said claim before the AO. 6. Whether on the facts in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 30,65,000/- without appreciating the fact that the said addition was made by the AO on account of disallowance of claim regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47,49,200/- 4. Taj Land Rs. 1,84,23,729/- claimed exemption u/s 54F 5. Other Land Rs. 15,40,600/- Total LTCG Rs. 66,23,000/- (excluding Section 54F) Short Term Capital Gains 1. Patudi Nabab 1 Rs. 5,58,475/- 2. Patudi Nabab 2 Rs. 4,24,000/- Total Rs. 9,82,000/- 6. The Assessing Officer examined each transaction and redetermined the capital gains. 1. Deed No. 72 Rs. 5,93,000/- 7. The details submitted by the assessee before the Assessing Officer pertaining to the transactions of deed no. 72 are as under: Cost of acquisition Rs. 13,46,820/- Cost of improvement Rs. 21,59,570/- Sale consideration Rs. 62,50,250/- LTCG Rs. 5,93,000 8. The Assessing Officer held that out of the total cost of improvement of Rs. 21,59,570/-, the assessee has paid Rs. 7,50,000/- by cheque and the remaining amount was paid by cash. The Assessing Officer issued notice u/s 133(6) to Sh. Kishan Pal, the alleged contractor for improvement of land, which was returned unserved. Later, a reply has been received from the contractor that the work was done in the year 2010 whereas the assessee claimed that the work was undertaken in the year 2008. Further, the AO held that the assessee has sold only half portion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty purchased and thereby make it more readily resaleable; any act prior to the purchase showing a design or purpose; the incidents associated with the purchase and resale: the similarity of the transaction to operations usually associated with trade or business; the repetition of the transaction; the element of pride of possession. A person may purchase a piece of art, hold it for some time and, if a profitable offer is received, sell it. During the time that the purchaser had its possession, he may be able to claim pride of possession and aesthetic satisfaction; and if such a claim is upheld, that would be a factor against the transaction being in the nature of trade. The presence of all these relevant factors may help the court to drawn an inference that a transaction is in the nature of trade, but it is not a matter of merely counting the number of facts and circumstances pro and con; what is important to consider is their distinctive character. In each case, it is the total effect of all the relevant factors and circumstances that determines the character of the transaction. 13. In Jankiram Bahadur Ram vs. CIT 57 ITR 21 SC, it has been held that the mere fact that the owner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as stock in trade so as to give it a colour of business activity or adventure in the nature of trade. Applying the principles emerging from the above cases to the facts and circumstances instant case it is held that there is nothing to show that the first step of purchase of land was taken in the course of a trading transaction. The land was kept well over 5 years. What was realized on the sale of land was accretion to the capital. It is not a case where the appellant can be set to have plunged into the waters of trade. 18. Having gone through the undisputed facts on record that the assessee held the entire piece of land for more than 5 years cannot give it a colour of adventure in the nature of trade . Applying the principles laid down by the various judgments, we hold that the assets sold is a capital asset and the profits earned be considered as capital gains. Order of the ld. CIT(A) on this issue is affirmed. 2. Deed No. 987 Rs. 47,49,200 and Cross Objection 19. As per the AO, Assessee purchased 4 Kanal for Rs. 18,72,500/- on 28.09.2010 Assessee purchased 15 Kanal 19 Marla for Rs. 54,00,000/- on 26.03.2008 Assessee sold 16 Kanal 11 Marla for Rs. 2,06,88,000/- Assessee disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to disallowance of half of the cost of acquisition and further the entire cost of improvement, the submission of the Appellant is twofold. As regards the disallowance of Cost of Acquisition it has been submitted that while it is true that the assessee/Appellant did not sell the entire piece of land evidenced by deed, but the claim of entire cost of acquisition to be deducted from the sale consideration was made on the peculiar facts on hand. That the assessee had purchased the land which was irregular in shape and the prospective buyers were not ready to buy the entire piece in such shape. That it is through process of strenuous negotiations that the assessee was able to make a deal of three pieces which have been parted off in haphazard manner of land parcels on the total plot size leading to narrow and irregular vacant spaces abutting these plots. Thus the so called left over strips of land even while remaining to continue in assessee's possession is not saleable as it does not have any market. In support of this submission the Appellant has enclosed the map of land showing such strips, enclosed as Annexure- E. Further, a letter from Patwari of Pataudi dated 14.11.2014 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances nonservice cannot be used against the appellant. Regarding the payment in cash it needs to be appreciated that these payments are disbursed over a period of time of holding the property and not is onetime payment. The assessee is not running a business and hence not maintaining formal books of accounts in the context. Otherwise this has been met out of cash in hand. The assessee/ appellant has also placed on record his letter to Nagarpalika of Patuadi (Annexure-G) in response of a notice (the same is enclosed), in support of his claim that assessee has incurred certain expenses for maintenance and development of land till the time of sale of land. That therefore the Appellant is clearly entitled for the entire payments made to the contractor, both by cheque as well as by cash, amounting to Rs. 20,30,250/-. 7.4 I have carefully considered the facts of the case with reference to the Ground of Appeal No. 5. As regards the issue of restricting the cost of acquisition to an amount of Rs. 15,36,525/- instead of full claim of cost of acquisition at Rs. 34,14,500/-, the essence of the submission of the Appellant is that in the peculiar facts of the this case the entire cos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it is the AO who had all the powers to enforce the attendance of Darshan Pal the Contractor, the addition made by the AO by disallowing the cost of improvement for Rs. 20,30,250/- is directed to be deleted and the Ground of Appeal No. 5 is allowed. 26. Having heard the arguments of both the parties. We find that the ld. CIT(A) has given relief observing, There was an old house which has to be demolished. Land has to be cleared, filled and levelled. Boundary was constructed. The fact that half of the land was sold has been accepted. The land was irregular in shape and the site plan of the plotting has been examined. From the examination of the above, the ld. CIT(A) held that the remaining land was unsaleable, hence the entire part of improvement has to be loaded on the said land. 27. Since, a categorical finding has been given by the ld. CIT(A) with regard to the shape, boundary, ground leveling work, the area of the plot sold and unsaleable land parcel. We find no reason to interfere with the order of the ld. CIT(A) in allowing the cost of improvement. 4. Taj Land Rs. 1,84,23,729/- Exemption u/s 54F 28. For the sake of brevity and ready reference, the relevant portion of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,39,64,771/- Long term capital gain Rs. 1,84,23,729/- Less: Exemption u/s 54F (-) Rs. 1,84,23,729/- Analysis of Claim of exemption u/s 54F of the Act: 10.4 The assessee in support of his claim u/s 54F has furnished a copy of registered deed dated 11.7.2013 purchased by assessee jointly in the name of Smt. Meenu Gupta, Smt. Nirmal Garg and Shri Himanshu Garg (assessee). On perusal of this registry, it is observed that the purchased property is a land of 4 bigha, 8 biswa (appxt 1 Acre) comprising of a constructed area of 500 sq.ft. The total cost of above property paid by the co-owners was Rs. 5,41,36,367/- (Five crore forty one lacs thirty six thousand and three hundred and sixty seven). The share of the assessee in the above property is 47.5/119 from the total land of 4 bigha 8 biswa (appx. 1 Acre) and constructed area. 10.5 On perusal of the documents of registry of the property it is observed that the claimed property was mainly a land of about one Acre size where a covered area of a size of 500 sq. ft. is also stated to be situated. Further, it is nowhere mentioned in the registry that said constructed building is a residential house. The registry mentions a covered area of 500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. The registered sale deed as well as the khasra issued by the Patwari clearly mentions this fact. The issue under examination is as to whether the said Makan was a Rihayashi Makan (Residentail House) or any other type of Makan . Further, if at all this covered area was a residential house, is the assessee eligible to claim deduction under section 54F on the entire property being mainly a land of about one Acre size. 10.9 It is the duty of the assessee to satisfy with the evidences to prove any claim made under section 54F of the Act. More so when at present there is a permanent connection of 45 KW and a factory is being run from the said place. Merely having a domestic electricity connection does not prove that it was a residential house. The assessee was requested to furnish the evidences to prove that how a small area of 500 sq. ft. which was purchased jointly in the name of 3 co-owners could be eligible for deduction u/s 54F on a land of more than 90 times size for which the total investment of Rs. 5,41,36,367/- was made. The assessee has not been able to substantiate his claim in respect of the residential house. 10.10 Supreme Court in Associated Indem Mechanical Private Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,500/- was for the remaining agricultural land. 10.15 The inquiries conducted by this office, therefore, establishes that the claimed investment of Rs. 1.84 crore was not in the purchase of a residential house but was for the purchase of a land .It may be seen that the nature of the property purchased by the assessee is not a residential house but an urban agricultural land where some constructed area was existing when the assessee purchased it. This structure may have been used for any purpose but there is nothing on record to prove that it was a residential house. For claiming exemption of Rs. 1.84 crores u/s 54F the assessee has made investment jointly with two other buyers in a 500 sq. ft, of constructed area whose market value as per the registrar was Rs. 3,25,000/- and on which stamp duty of Rs. 20,500/- was charged from the buyers. It is obvious that the investment was primarily in the land and not in the residential house as claimed by the assessee. The total area of the land was about 45,000 sq.ft. and the covered area was of 500 sq. ft. as per the registry. A question here arises as to whether the remaining land can be claimed to be Land appurtenant to the house in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected that the value of the plot on which the farm house is located and the land appurtenant be fixed as Rs. 2 lakhs. We are unable to accept the contention of the appellant that the value of the entire land must be considered in arriving at the value of the residential building. 10.19 In view of the above the claim of assessee that the amount of capital gain was invested in purchase of a residential house is not proved on the basis that, the facts gathered during the course of assessment and the documents placed on record. 10.20 Without prejudice to the above, even if the constructed area of 500 sq. ft. is treated to be a residential house, the claim of the assessee will be restricted to the value of the house and his share in the said house. As per the sub-registrar its value was appxt. Rs. 3.50 lacs (stamp duty of Rs. 20,500/- charged @ 6% of the market rate of the property) and the share of assessee in that house comes to Only Rs. 1.75 lacs. Thus out of the total claim of Rs. 1.84 crores, if the assessee is eligible at all u/s 54F, he will get a deduction of only Rs. 1.75 lacs. 10.21 However, in this case the facts clearly establishes that the claim of assessee u/s 54F is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has contended that the AO has erred in refusing to give the benefit of section 54F to the assessee, with respect to investment made in a residential house out of proceeds of land sold at Taj Real Estate Pvt. Ltd., on the ground of having not proven his claim and consequently made an addition of Rs. 1,84,23,729/-. It has been submitted that through oversight this ground could not be filed originally and that the said ground may kindly be therefore admitted. In the interest of justice, the said Ground of Appeal No. 6 is hereby admitted. 8.1 From the assessment order it is seen that in support the claim of 54F the assessee has furnished copy of registered sale deed dated 11.07.2013 of the property purchased by the assessee jointly in the name of Smt. Menu Gupta, Smt. Nirmal Garg and Shri Himanshu Garg (the assessee). The AO notes the purchased property is a land of 4 Bigha 8 Biswa (approximately 1 acre) comprising of a constructed area of 500 square feet. The total cost of above property paid by the co-owners was Rs. 5,41,36,367/- and the share of the assessee in the said property is 47.5/119 from the total of 4 Bigha 8 Biswa and the constructed area. That the registry mentions a cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only 500 sq. ft. is the area of constructed portion with no evidence of use a residential house and that therefore the land about 45,000 sq. ft. cannot be stated to be land appurtenant to the house as claimed by the assessee. That considering the fact that the market value of the constructed area of 500 sq. ft. was Rs. 3,25,000/- with the stamp duty of Rs. 20,500/- in all, therefore out of the total claim of Rs. 1.84 crores the assessee is eligible of a deduction u/ s 54F only to the extent of Rs. 1.75 lakhs, if at all . That however in para 10.23 an addition of Rs. 1,84,23,729/- has been made by the AO by denying the claim of exemption u/s 54F. 8.2 Vide reply submitted during the appellate proceeding the assessee / appellant has inter-alia submitted in substance that the purchase deed or the registry, does state that there is 500 sq. ft. makan (Enclosed as Annexure- H). Further the assessee has submitted a certificate from town and country planning to the effect that the area where the land is located is residential in nature. Also the khasra of the patwari certifies to the existence of a Makaan on the land. All this goes to prove that there does exist a structure on the land whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l area.. The land is ARJAI JARAI or agricultural is in itself a bland statement in this specific context. Even inspector's report does not refer about any agricultural operations taking place in the appurtenant land. Moreover the concerned Patwari's Khasra, relied upon by assessee in the assessment proceedings does once again certify the existence of the house. As far as the issue of size of appurtenant land is concerned, again the Act is neutral on this. Buying a particular residential house is decision of an assessee, influenced by so many factors and circumstances. Some people want to stay in gated communities of flats while others want a lot of greenery around its living areas. The benefit of the section cannot be denied simply because the assessee decided to go for a house with a large open green space. That land appurtenant to the house is not a criteria for grant of deduction under section 54F and even a farm house with all in appurtenant land can be called a residential house (refer case of Shyam Sunder Mukhija Vs. ITO, supra) neither the Act nor the tenets of natural justice require assessing officer to sit on judgment about the appropriate area of appurtenant to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch bill is again enclosed as Annexure-L.) That hence in view of detailed submission on each and every point raised by A.O., the Assessee would object to any disallowance of its claim for section 54F, whether fully or partially because both as per facts and law the assessee is well entitled for the entire deduction, as submitted in the preceding paragraphs. 8.31 have carefully considered the facts of the case with reference to the Ground of Appeal No. 6. The issue in question is quite narrow, simple and no more res-integra i.e. whether the claim of deduction u/s 54F in case of purchase of a residential house within the period stipulated in the said section is allowable on only that part of the residence which is constructed through brick and mortar or that whether the claim of deduction u/s 54F would also encompass the landed area in which this residence is situated and which in the facts of the case is a residential user plot and capable of further extension and also made more livable with all natural facilities, garden etc. It is not the case as if the AO is not satisfied to grant the claim of exemption u/s 54F per se as he has himself agreed in para 10.20 of the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be on the entire plot of land, meaning thereby a part of the land which is appurtenant to the building and on which no construction is made, there is no denial of exemption on such investment. Therefore, the contention of the learned DR that there is a distinction with respect to investment in appurtenant land as per Section 54 and 54F is not tenable at all . The comments of the AO to the effect that exemption u/s 54F is eligible only for construction of house is not tenable insofar as even cost of land forming part of the residential unit on which no construction is done is also eligible for exemption u/s 54F. Thus, the cost of vacant land appurtenant to and forming part of the residential unit is to be considered for claim of exemption u/s 54F even if no construction has been done on the appurtenant land. II. ACIT, Circle - 2 Ajmer vs. Shri Om Prakash Goyal (ITA No. Jaipur/2011). 8. The assessee claimed exemption under section 54F stating that the amount in question has been invested for purchase of land for constructing the house. However, AO did not accept the contention of the assessee on two grounds i.e. firstly, the land in question purchased through an agreement and the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment on land on which building is being constructed. When the land is purchased and building is constructed thereon, it is not necessary tint such construction should be on the entire plot of land, meaning thereby a part of the land which is appurtenant to the building and on which no construction is made, there is no denial of exemption on such investment. Therefore, the contention of the revenue that there is a distinction with respect to investment in appurtenant land as per sections 54 and 54F is not tenable at all . The provisions of section 54F clearly provide for exemption if the net consideration received as a result of transfer of any capital asset, other than a residential house, is invested in the purchase or construction of a residential house. The new residential house is not debarred from having a land appurtenant to any size . 8.4 Thus considering the established facts and circumstances of the case, the facts of the case, submissions of the assessee as well as the supporting documents like the plan of the house which was already constructed at the time of purchase and duly mentioned in the title Deed, the photographs of the house showing habitability like kitchen, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences in any form as mentioned by CIT(A) were not produced before the AO and also he has not been allowed to examine the same. 33. Against the arguments of the Revenue, the ld. AR argued supporting the decision of the ld. CIT(A). The submissions of the ld. AR in writing are as under: Stand of AO Decision of CIT(A) Comments in support of revenue Assessee s Comments The AO has denied exemption claimed u/s 54F except to the extent of Rs. 1.75 lacs on cogent reasons evidences including for reason that a brick manufacturing unit was found on said property and images of untenable. same also inserted in order. Further, many other anomalies have been pointed out including the fact that on a land of around 1 acre, SO called structure building was on 500 sq fit only and said structure cannot be called as residential one. (refer pages 19 to 26 of AO s Order) CIT(A) has ignored all the gathered evidences and also underplayed of evidence of having brick manufacturing unit over there. The reasons / alleged evidences /case laws relied upon are simply untenable. With all force and conviction, the order of AO is relied upon. The evidences in any form as mentioned by CIT(A) were not produced before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e registry deed dated 11.07.2013 of the property reveals that the property was mainly a land of about 1 acre with a covered area of 500 sq.ft. The page 68 of the paper book which is the first page of the purchase deed mentions the description of the property as kism jamin/jaydad araji jarai i.e. detail of the property agricultural land. The Rakba 4 bigha 8 biswa i.e. area - 4 bigha 8 biswa, Covered area 500 varg foot i.e. covered area 500 sq. ft. . The Assessing Officer has also sent the Inspector to visit the property and he found a concrete brick manufacturing unit under the name M/s Surabh Ferrocon. The photographs have been enclosed in the Assessment Order clearly proving that a brick manufacturing unit is being run from the premises. 37. Before the Assessing Officer, the assessee submitted that it should be considered as a residential property eligible for deduction u/s 54F owing to, A 1 KW electricity connection which shows it is a domestic connection, hence a residential house, Intention of the assessee to reside with his parents using the entire land and the said covered area as residential house. It was submitted that there was no need to obtain any approval of constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the net consideration in respect of the original asset, the whole of such capital gain shall not be charged under section 45; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: [Provided that nothing contained in this sub-section shall 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then, (i) the amount by which (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of subsection (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and (ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid. 42. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermining the purchase of residential house. The master plan of any urban area is the future perspective planning urban land scheme. The Gurgaon master plan 2012, master plan 2020, master plan 2025, master plan 2031 are the perspective development plan of the urban area. Hence, notification of the land as residential land do not give any credence to the factum of purchase of residential house when all the evidences are proving contrary. The ld. CIT(A) has also misinterpreted the arjai jarai , the agricultural land as capable of agricultural operations. The ld. CIT(A) deleted the addition on the wrong pretest that no agriculture operations have been taken place in the land and since agricultural operations have not taken place, the ld. CIT(A) tacitly held that the residential land. The ld. CIT(A) relied on the case of Addl. CIT Vs. Narendera Mohan Uniyal in ITA No. 1624/Del/2009 and DCIT Vs. Kalyan Raman Natraja (88 Taxman 93). In this case, the issue was whether the house should be on the entire plot of land or not. The Coordinate Bench of ITAT held that the exemption need not be denied on the grounds that the entire plot has not been utilized for the construction of house. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oves that the land is of 4 bigha 8 biswa and is an agricultural land as per the registration document. The registration fee is also paid as per Circle rate of agricultural land. The covered area of 500 varg foot (sq. ft.) do not mention it as a residential house in the registration document. There is no evidence or certificate of conversion of land use (CLU) from agricultural land to residential land. There is no dispute that the land purchased is an agricultural land and the registry has also been paid on the rate equal to registration of agricultural land. The land has been purchased in Bigha and Biswa not in square yards. The residential land is generally sold in square meter or square yards but not in Bigha or Biswa. The Assessing Officer has also separately enquired from the sub-Registrar who has replied in affirmative that the land is agricultural land and he has given reference of Khasra Girdhawari further proves it to be an agricultural land. The sub-Registrar has also clarified that the stamp duty of Rs. 33,99,500/- was charged for registration for agricultural land and Rs. 20,500 was charged for against the covered area. There was no mention of a residential house in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is capable of being used for the purpose of residence than the requirement of section is satisfied. 47. The Hon ble HIGH COURT OF KERALA in the case of Smt. Asha George vs. ITO 351 ITR 123 (2013) on the similar issue concluded as under: 12. Section 54F is intended to encourage construction of or acquisition of residential house with the aid of the proceeds from the transfer of any long term capital asset, which is not a residential house. The provision contemplates computing the cost of the residential building, but the value of the plot on which the farm house stands and the land appurtenant could also be considered. The tribunal has categorically found that the appellant has not produced material to show that the entire area of 1.92 acres should be considered as land appurtenant to it. It is in such circumstances, the tribunal made an estimation and directed that the value of the plot on which the farm house is located and the land appurtenant be fixed as Rs. 2 lakhs. We are unable to accept the contention of the appellant that the value of the entire land must be considered in arriving at the value of the residential building. 48. Section 54F demands reinvestment of the capit ..... 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