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2017 (4) TMI 120 - AT - Income TaxEligibility for deduction u/s 54F - house is leased out to an educational society - Held that:- Assessee is eligible for exemption u/s 54F of the Act, towards all the flats received in pursuance to development agreement. See CIT Vs. Syed Ali Adil [2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT ] The flats constructed by the assessee are commercial property but not residential house, we find that the assessee has filed necessary evidences to prove that the property in question is a residential flat. The assessee has furnished a copy of plan sanctioned by the municipal authorities, which clearly shows that the apartments constructed by the builder are residential houses. Though the assessee has leased out the premises to an educational society, the tenant has used the premises for the purpose of accommodation of students. Therefore,merely because the house is leased out to an educational society, it cannot be said that the property in question is a commercial property, which is not entitled for exemption u/s 54F of the Act. The CIT(A), after considering the relevant facts, and also by following certain judicial precedents has rightly directed the A.O. to allow exemption claimed u/s 54F of the Act. We do not find any reasons to interfere with the order of the CIT(A). Hence, we uphold the CIT(A) order and reject the ground raised by the revenue. Computation of long term capital gain in pursuance of joint development agreement and adoption of consideration for transfer of property - Held that:- Once the issue has been decided that the assessee is eligible for exemption u/s 54F of the Act, in respect of all the flats, the other issues, i.e. computation of capital gains and adoption of guidance value for the purpose of determination of capital gain becomes academic, as the assessee is eligible for exemption towards all the flats received in pursuance of a joint development agreement and hence computation of capital gain and adoption of guidance value for the purpose of determination consideration has no impact on the total income. Clubbing of income of the minor children in the hands of the assessee - Held that:- we are of the view that even though section 64(1)(a) of the Act, applies for clubbing of income of minors in the hands of the assessee, before clubbing of income, the normal procedure for computation of capital gain has to be adopted. Therefore, before arriving at net income for the purpose of clubbing in the hands of the assessee, the deduction available u/s 54F of the Act has to be considered separately in the hands of the minor children. The CIT(A) has rightly considered the issue and we do not find any reasons to interfere with the order of the CIT(A). Accordingly, we uphold the CIT(A) order and reject the ground raised by the revenue. Assessee appeal allowed.
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