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2017 (6) TMI 1352 - AT - Income TaxDeduction u/s. 54 - assessee has not appropriated towards construction of new residential house as it was not completed - HELD THAT:- In our opinion as held by Hon’ble Karnataka High Court in the case of CIT vs Smt. V.S. Shantha Kumari [2015 (8) TMI 274 - KARNATAKA HIGH COURT] completion of construction within three years was not mandatory and it was necessary that construction should be commenced, it should be proved by the assessee that construction is for residential house. The Hyderabad Bench of the Tribunal in the case of Muneer Khan vs. ITO,[2010 (8) TMI 752 - ITAT HYDERABAD] had held that assessee may use borrowed funds for construction of new residential property and deduction u/s.54 of the Act denied on the reason that assessee used some fund other than consideration received on transfer of capital asset - on that reason deduction u/s.54 of the Act cannot be denied - we remit the entire issue in dispute with regard to Sec. 54 of the Act to the file of the ld. Assessing Officer with a direction to the ld. Assessing Officer to verify whether assessee has actually made investments in construction of new residential property, though it was not completed and decide thereupon. Enhancement of assessment - unexplained investments - payments was not made with reference to the construction of residential house - HELD THAT:- Whether payments made towards construction to other parties on the instruction of assessee’s contractor, it is to be examined by enquiring those parties and it should be seen that it is properly reflected in their books of accounts as per law. Without examining them, it is not possible for us to sustain the addition on this count - are inclined to remit this issue also back to the file of the ld. Assessing Officer for further enquiry. This ground is also remitted to the file of the ld. Assessing Officer for fresh consideration.
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