TMI Blog2014 (4) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) set aside and the AO is directed for fresh examination and grant relief u/s 54 of the Act – Decided in favour of Assessee. - ITA No. 675/Hyd/11 - - - Dated:- 21-3-2014 - Shri Chandra Poojari And Smt. Asha Vijayaraghavan,JJ. For the Appellant : Shri S. Rama Rao For the Respondent : Shri Shri Jeevan Lal Lavidiya DR ORDER Per Smt. Asha Vijayaraghavan, Judicial Member: This appeal by the assessee is directed against the order of the Commissioner of Income-tax(Appeals) VI, Hyderabad dated 3.12.2010, for the assessment year 2005-06. 2. The only grievance of the assessee in this appeal is that the CIT(A) erred in confirming the action of the Assessing Officer in disallowing the exemption claimed under S.54 of Rs.22,73,732. 3. Brief facts of the case leading to the filing of the present appeal are that the assessee, an individual, deriving income by way of rent from property and capital gains from sale of residential house during the year under appeal, has filed return declaring a loss of Rs.4,54,269 from house property. During the course of assessment, the Assessing Officer noted that the assessee inherited a house property situated at Banjara Hills, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, 7620 and 830 sft. in 1st Floor. The Assessing Officer further noted that the assessee acquired built up space in different floors, and the property acquired was leased for commercial usage by the assessee. While 1675 sft on the ground floor and 2250 sft in the stilt portion was leased out to M/s. Venkateshwara Motors, authorized dealer for Hero Honda motors, entire 3rd floor and 4th floor area admeasuring 8,940sft. was leased to St. Joseph Education Society, who in turn runs a college. The entire car parking, converted in the stilt portion admeasuring 2,250 sq.ft., was leased out to Venkateswara Motors for the purpose of show room which is in gross violation of the permission from municipal authorities. Taking into account this factual background, the Assessing Officer was of the view that the assessee's claim for exemption under S.54 of the Act cannot be accepted, since such exemption is available only in respect of acquisition of residential property. In support of that view, the Assessing Officer relied on the decision of the AP High Court in the case of Siva Reddy Vs. ITO3(6), Hyderabad, in ITTA No.76 of 2000, wherein the expression, 'residential house' occurri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. Aggrieved by the orders of the Revenue authorities, assessee preferred this second appeal before us. 6. The learned counsel for the assessee reiterating the contentions urged before the lower authorities submitted that the assessee is very much entitled for relief under S.54 of the Act. He submitted that the assessee has given land for development and got in return, constructed residential property, which is eligible for relief under S.54 of the Act. He further submitted that the land was given by the assessee to the developer for construction of a residential building. In this behalf, he submitted that in several decisions of this Tribunal it has been consistently held that subsequent change in the usage of the property does not disentitle the assessee to the relief under S.54, if what was acquired was originally a residential property. The learned counsel for the assessee, in support of this contention, placed reliance on the decision of the A.P. High Court in the case of Dr. J.V.Desai V/s. CIT(154 ITR 828). He further submitted that in the year under consideration, viz. assessment year 2005-06, the property acquired by the assessee was of residential nature only, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinate benches of the Tribunal in similar mattes. In one such decision in the case of Shri M.V. Subramanyeswara Reddy (HUF), Hyderabad ITA No.1014/Hyd/2009, this Tribunal vide para 48 of its order dated 27.12.2011, held as follows- 48. We have heard both the parties. We find that the CIT(A) has accepted the claims of the assessees for relief under the provisions of S.54F of the Act, keeping in view the following factual aspects of the matter- a) Perusal of the sale deed shows that the property was a residential property especially the narration at para 10 at Page 14 of the deed, which has been reproduced by the CIT(A) at page 4 at para 2.4 of his order. b) The plan attached to the sale deed shows the construction of bed room, Kitchen, study etc., showing that the property is residential one. c) The MCH permission dated 10.05.2000 has approved the property as residential complex d) The bank guarantee for security deposit given by State Bank of India to MCH also refers to the property as residential complex. e) Permission / No objection certificate given by the Fire Service Department also refers to the property as residential complex. f) The memorandum of un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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