TMI Blog2018 (7) TMI 1752X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to deduction u/s 54F. On further appeal by the assessee, the Tribunal restored the issue to the AO. The Tribunal held that for the convenient enjoyment of the residential house and having regard to the social status of the assessee to the extent of land of 5 cents allowed by the CIT(A) was not reasonable. CIT(A) in the second round of litigation, had considered 50 cents of land as land appurtenant to the residential house while granting deduction u/s 54F. DR in the written submission had agreed that 50 cents of land taken as “land appurtenant thereto” was reasonable. Therefore, this issue raised by the Department is dismissed. - ITA No.472/Coch/2016 And CO No.02/Coch/2017 - - - Dated:- 25-7-2018 - Shri Chandra Poojari, AM And Shri George George K, JM For The Revenue : Sri. A. Dhanaraj, Sr. DR For The Assessee : Smt. Preetha S. Nair ORDER Per Bench This appeal at the instance of the Revenue and the cross objection preferred by the assessee, are directed against the order of the CIT(A) dated 13. 07. 2016. The relevant assessment year is 2007-2008. 2. First we shall adjudicate the Revenue s appeal. In Revenue s appeal, two issues are raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed ₹ 81,41,120 Total ₹ 91,09,668 3. 3 Aggrieved by the order of the CIT(A), both the assessee and the Revenue filed appeal to the Tribunal. The ITAT remanded the case to the Assessing Officer with the following directions :- (i) The extent of 5 cents land allowed by the CIT(A) is not reasonable. The A. O. was directed to determine the area of land which is required for convenient enjoyment of the house having regard to the social status and profession etc. of the assessee and the locality. (ii) The allowability of amount deposited in Capital Gains Account needs to be reconsidered in the light of the decision of apex court in Prakash Nath Khanna Anr v. CIT (2004) 266 ITR 1 (SC). 3. 4 Subsequent to the ITAT order, fresh assessment order was passed by the A. O. on 13. 01. 2016. The Assessing Officer disallowed the entire claim of deduction u/s 54F of the I. T. Act. The Assessing Officer also rejected the assessee s alternative plea of deduction u/s 54B of the I. T. Act. 3. 5 Aggrieved by the order of the Assessing Officer dated 13. 01. 2016, the assessee preferred appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t following the Hon . Supreme Court's decision in Prakash Nath Khanna, time limit mentioned in section 139(1) is sacrosanct . 5 . The CIT(A) has not appreciated that since assessee did not comply with sub section (4) of 54F, the assessee became ineligible for deduction u/s 54F . Therefore the AO did not need to separately deicide on the issue of area of land to allowable as land appurtenant u/s 54F . 5 . The CIT(A) has erred in holding that 50 cents of land is to be treated as land appurtenant to a residential building of area 254 . 94 square meter . The determination made by CIT(A) is excessive even for moderate F . A . R . 5. As regards the first issue whether the assessee is entitled to deduction u/s 54F of the I. T. Act as regards investments made in the residential house up to the period mentioned u/s 139(1) or 139(4) of the I. T. Act, the Tribunal in the recent order in the case of ITO v . Late Shri K . Sasidharan [ITA No . 56/Coch/2017 order dated 10 . 07 . 2018] by following the judicial pronouncements had held that the assessee is entitled to the claim of deduction u/s 54F for investments made up to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilized the capital gains on transfer of capital asset in investment in residential building as specified in section 54F(1) of the Act on the reason that the assessee has not filed the return of income within due date in terms of sec . 139(1) of the Act . 8 . 2 The Ld . DR made a plea that the assessee has not invested the capital gain in the capital gain accounts deposit scheme before the due date of filing of return of income u/s . 139(1) of the Act and the investment in the residential building was made after the due date of filing the return of income and hence, the assessee is not entitled for deduction u/s . 54F of the Act . The Ld . AR s contention is that the assessee has purchased the land with partially completed building on 22/01/2007 for the consideration of Rs . 7 . 03 lakhs and additional expenses were incurred at Rs . 12 . 36 lakhs to complete the project . Thus, the total investment is Rs . 19 . 78 lakhs and hence, deduction u/s . 54F is to be granted . 8 . 3 In our opinion, the decision of the Karnataka High Court in the case of CIT vs . K . Ramachandra Rao (56 taxman . com 163) is applicable whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e . The appeal of the Revenue is partly allowed for statistical purposes . 6. In view of the order of the Cochin Bench of the Tribunal (supra), we hold that the assessee is entitled to deduction u/s 54F of the I. T. Act as regards the investments made in a residential house up to the period mentioned u/s 139(4) of the I. T. Act. This ground of appeal of the Revenue is dismissed. 7. As regards the CIT(A) s direction to the A. O. to treat 50 cents of land as land appurtenant to the residential house for the grant of deduction u/s 54F of the I. T. Act, the relevant finding of the CIT(A) reads as follows:- 14 . It is found that the house constructed by the assessee does not fall in the jurisdiction of Corporation or Municipality and, since it is within the limits of Gram Panchayat, usual requirement of land for constructing the house is much higher . Accordingly, it is held that upto 50 cents of land could be reasonable, having regard to the fact of the case . In view of this, the AO is directed to consider the cost of 50 cents of land for the purpose of deduction u/s 54F . 8. In the instant case, the assessee after selling the original asset o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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