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2016 (3) TMI 1436 - AT - Income TaxDeduction u/s 54F - Claim available for only one residential house purchased or constructed - deduction denied as assessee has utilized the net consideration for investment in two residential properties - assessee has not yet completed the entire residential house - HELD THAT:- Assessee will be entitled for benefit u/s 54F of the Act with respect to investment in only one residential house property at Parsik Hills, Belapur as the said residential house property is completed at later point of time vis-à-vis acquisition of the residential flat at NRI Complex, Nerul in November 2007 and the provisions of Section 54F(2) of the Act will get invoked and be applicable with respect to residential flat at NRI Complex, Nerul being acquired in November 2007 i.e. prior to completion of investment in residential house property at Parsik Hills, Belapur, and the investment in construction of residential house property at Parsik Hills, Belapur shall be entitled for benefit u/s 54F as the assessee has sold two plots of land and the AO has rightly allowed the exemption u/s 54F with respect of investment made by the assessee in the construction of the residential house property at Parsik Hills, Belapur. Benefit u/s 54F of the Act of the investment in construction of residential house property at Parsik Hills, Belapur on the ground that the property was not in livable condition to occupy owing to non-production of evidence with regard to basic amenities like place for cooking/kitchen/toilet, bathroom, approach road within the plot etc. and non production of evidences regarding any electricity or telephone or tap water connection having been granted to the structure - The intention of the Legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are 'purchased' or 'constructed'. For such purpose, the capital gain realized should have been invested in a residential house. The condition precedent for claiming benefit under the said provision is the capital gain realized from sale of capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house.Thus, benefit u/s 54F of the Act cannot be denied to the assessee during the year ending March, 2008 merely because the assessee has not yet completed the entire residential house at Parsik Hills, Belapur while the assessee can complete the house with a stipulated period of three years from the date of transfer of original asset, the deduction cannot be denied merely on the ground that construction is not completed . Our decision is fortified by the decision of Hyderabad- Tribunal in the case of Narsimha Raju Rudra Raju [2013 (11) TMI 415 - ITAT HYDERABAD] Thus, in our considered view, the assessee shall be entitled for benefit u/s 54F of the Act with respect to investment made by the assessee in construction of residential house property at Parsil Hills, Belapur as allowed by the AO and we set aside the orders of the CIT(A) in this regard and restore the orders of the AO. Assessing the agricultural income earned by the assessee as income under the head “income from other sources”- HELD THAT:- No details regarding procurement of seeds or labour or water for carrying out the agricultural operations has been produced by the assessee even in the second round of litigation. No details were produced with respect to the crop cultivated or produced from the agricultural land even by the caretaker - In the absence of any cogent material/evidence brought on record by the assessee with respect to the actual carrying on the agricultural activity in the said land stated to be agriculture land, the said income cannot be assessed to tax as ‘agricultural income’ and the same shall be charged to tax as ‘income from other sources’, hence this ground of appeal raised by the assessee is dismissed and the findings of the authorities below are confirmed. We order accordingly.
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