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TMI Blog2024 (10) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... the head capital gain by disallowing exemption under section 54/54F of the Act and without giving the benefit of the cost of improvement. 3. The facts in brief are that the assessee is an individual who during the year under consideration sold immovable property being land &building vide deed dated 6th April 2016 for consideration of Rs. 1.75 crore. The assessee further purchased immovable property vide deed dated 11th July 2016 for Rs. 1.5 crore. The assesses claimed that the property sold during the year was purchased in the year 1996 as on 18th April 1996 for an amount of Rs. 2 lakhs plus and registered expenses of Rs. 50,000.00 only. The assessee further claimed that he incurred construction expenses in the year 2003-04 for Rs. 12.5 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idential property. 6. Based on the above observation, the AO treated the land value and value of one of property as long term capital assets and accordingly long-term capital gain was computed on the same after index cost of acquisition and further provided exemption under section 54 of the Act on account of investment in residential property i.e. only for TC No. 25/1729. Thus, the net long term capital gain was worked out at Rs. 1,19,46,720/-only chargeable to tax. 7. Likewise, the AO treated the other three property as short term capital assets and accordingly worked out short term capital gain after deducting WDV from proportionate sales consideration at Rs. 25,75,931/- only. Thus, the AO in view of the above made the addition of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial property/qualify so as to qualify the benefit of exemption under section 54/54F of the act. 13. Regarding the issue relating to the cost of improvement of Rs. 12.52 lakhs, we note that admittedly the assessee has taken loan for the construction of the building amounting to Rs. 7.36 lakhs which was also accepted by the AO. It is a prevailing practice in the market that the banks do not give hundred percent loan to the parties for any project. As such, the banks advance loans to the parties to the tune of 70 to 80% of the total cost of the project depending upon the profile of the party. In other words, in the given case the loan given by the bank stood at Rs. 7.36 lakhs and therefore it is implied that it shall be within the range of 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54/54F of the Act. It is a fact on record that the depreciable assets are subject to short-term capital gain in pursuance to the provisions of section 50 of the Act irrespective of the period of holding. However, there is no such distinction made under the provisions of section 54/ 54F of the Act and in the definition of long-term capital asset provided under section 2(29AA)/ 2(42A) of the Act. In other words, the gain arising from the depreciable asset shall be eligible for the exemption under section 54/ 54F of the Act if the period of holding exceeds 36 months as provided under the provisions of law. Accordingly, we hold that the assessee cannot be denied the benefit of exemption under section 54/ 54F of the Act with respect to the shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of residence than the requirement of section is satisfied. We do not find any direct support from various case laws which have been relied upon by the learned counsel for the assessee as well as the learned DR except for the decision in the case of Sham Sunder Mukhija(supra). The decision in the case of Vidya Prakash Talwar (supra) dealt with a different aspect altogether. The court has held that the expression house property takes into account an independent residential unit. To this extent, the said decision is of some assistance to the case pleaded by the assessee. The decision in the case of Pushpalata Kanodia (supra) is in the context in the provisions of Wealth Tax Act and in the context of the definition of a 'house' under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above, we have already held that the property should be capable of being used as a residential house and need not be actually used as a residence. In view of the above conclusion, the above case laws are not of much relevance to decide the controversy in the present case. In the decision in the case of Sham Sunder Mukhija (supra), the Tribunal has taken a view that a farm house is also a residential house as it was capable of being used as a residence. Taking into consideration all these aspects, we are of the view that in the facts and circumstances of the present case the basement was capable of being used as residence. The fact that the assessee did not actually use the same for his residence will not disentitle him to the claim of exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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