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2020 (8) TMI 355 - ITAT NEW DELHIDenial of exemption u/s 54F - investment of capital gains in the Ansal property and invested in the capital gains bonds - HELD THAT:- In the instant case, the issue is different from what has been examined in the case laws cited by the ld. Counsel of the assessee. In all the situations, the Courts upheld the deduction in the situations where the multiple units were either adjacent or on the same floor or on the different floors or multiple units in the same residential complex owing to division of property. Whereas in the instant case, there was no such division of property among the members and the investments are at different locations one being the investment in residential property at Jungpura of ₹ 24,20,000/- and the other being at Ansal properties in NCR. No case law has been brought to our notice wherein two distinctly placed properties have been allowed for claim of deduction u/s 54F. Keeping in view, the geographical distances, the investment in two differently placed properties cannot be termed to be “a residential house” even after resorting to liberal interpretation of “a residential unit”. All the case laws relied by the counsel are found to be factually different from the instant case. Keeping in view, the provisions of Section 54F, the amendments, the ratio of judgments wherein two residential units are considered as “a residential house” and keeping view the facts of the instant case wherein the assessee has invested in two distinctly identifiable properties at separate locations, we hereby hold that the assessee is eligible to claim deduction on the investment of capital gains in the Ansal property invested in the capital gains bonds. The investment in the residential property at Jungpura is liable to be taxed under the head “capital gains”. Business Loss - The assessee was in the trading business of car seat covers. During the year, the loss computed at ₹ 3,13,826/- has been set off against the other income. AO observed that as against receipt of ₹ 10,522/-, the assessee has claimed expenses on account of depreciation on car, salary of employee, petrol and other expenses. The AO disallowed 50% of the salary expenses of the employees. We hold that the salary paid by the assessee to the employees cannot be disallowed without bringing anything on record to prove that such payments were bogus in nature. Hence, the disallowance made by the AO is hereby directed to be deleted.
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