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2017 (4) TMI 119 - AT - Income TaxDisallowance of exemption u/s 54F - Held that:- It is a fact that assessee is holding two properties on the date of purchasing the new property. The second property at Ooty consist of land and outhouse. Whether the outhouse can be treated as residential property or not, is the issue before us. The assessee claims that this house cannot be fit for residential use and she never stayed in that house. At the same time, AO in his remand report opines that this outhouse is big enough having 1600 sft. Area and the photo submitted by the assessee shows that it is habitable. In our considered view, assessee’s house can be regarded as residential only when it is livable. Mere fact that there exists super structure, it cannot be considered as residential. We are also not in a position to adjudicate or give findings by merely looking at the photo submitted by the assessee. In our view, assessee should submit few more photos of the house from interior portion to substantiate that it cannot be used for residential purpose. Hence, we remit this case back to the AO to verify the claim of the assessee in the light of the additional evidence and complete the assessment. This ground is treated as allowed for statistical purposes. Disallowance of the expenditure on cost of improvement of the property sold - Held that:- The cost of improvement was allowed in the case of assessee’s husband and denied in the case of assessee. The property sold was joint property. We are inclined to remit this case back to the AO to verify the assessee’s claim and if it is proper, it should be allowed to the assessee also. Needless to say that assessee may be given proper opportunity of being heard. This ground is also allowed for statistical purposes.
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