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2015 (10) TMI 534 - ITAT HYDERABAD

2015 (10) TMI 534 - ITAT HYDERABAD - TMI - Revision u/s 263 - CIT held that the consideration received under a separate agreement towards sale of fixtures and fittings does not qualify for deduction u/s 54 as according to him the fittings and furnitures are not capital asset u/s 2(14) of the I. T. Act, thus AO has failed to assess the sum under the head “income from other sources” and therefore, held that the assessment order passed is both erroneous and prejudicial to the interests of the reven .....

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held for her personal use and income from such affects is not chargeable to tax. Whether the amount is considered as sale consideration and allowed deduction u/s 54F or excluded from computation and disallowed the deductions, there is no tax effect. Therefore, by not bringing it to tax, there is no prejudice caused to the Revenue. The additional grounds of appeal are accordingly allowed. Since the assessment order is held to be not prejudicial to the interests of Revenue, the revision order u/s .....

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eturn of income for A.Y 2009-10 on 22.03.2010, declaring an income of ₹ 1,82,630. The AO observed that the assessee has income from house property, long term capital gain and income from other sources. During the assessment proceedings u/s 143(3) of the Income Tax Act, he called for various details and after verification of the details filed by the assessee, he accepted the income returned by the assessee. Thereafter, on a perusal of the assessment record of the assessee, the ld CIT observ .....

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her agreement with M/s Vijay Krishna Promoters for complete development of flat for a consideration of ₹ 2,46,000. It was observed that the assessee had sold the said flat on 17.12.2008 for a consideration of ₹ 28,00,000 and that the assessee had also received a further sum of ₹ 23,50,000 towards sale of fixtures and fittings and that the assessee had worked out Nil income from Long Term Capital Gain, after claiming exemption u/s 54 of the Act. According to the CIT, considerati .....

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its written submission stating that during the course of assessment proceedings u/s 143(3) of the Act, assessee had furnished all the documentary evidences in support of the claim made by her in the return of income which were examined by the AO with proper application of mind and therefore resorting to revision proceedings u/s 263 of the Act was unwarranted. Further it was also submitted that the consideration of ₹ 23,50,000 received towards sale of fixtures and fittings in a separate ag .....

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aracter of the consideration received. Therefore, it was submitted that the total consideration of ₹ 51.50 lakhs received, was in respect of sale of the flat alongwith fixtures and fittings and the assessee is eligible for exemption either u/s 54 or section 54F of the I. T. Act on the entire amount. 4. The ld CIT however, was not satisfied with the contentions of the assessee and held that the consideration of ₹ 23,50,000 received under a separate agreement towards sale of fixtures a .....

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um of ₹ 23,50,000 as income from other sources. 5. Against this order of the CIT u/s 263 of the Act, assessee is in appeal before us by raising the following grounds of appeal: 1. The order of the learned CIT passed u/s.263 is erroneous both on facts and in law. 2. The learned CIT erred in invoking his jurisdiction u/s.263 of IT. Act though the assessment which is revised is passed after application of mind on the issue on which revision is made. 3. The learned CIT erred in holding that th .....

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in the document through which they are sold and there is no basis to hold that what is sold is not a capital asset and therefore erred in holding that they are not capital asset. 6. The learned CIT ought to have appreciated the fact that the assets income from which are assessed under the head property are nothinq but capital assets and further that if not deduction u/s.54 deduction u/s.54 F will be available being any other capital asset other than residential house and that the assessee has i .....

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) under the head capital gains or to treat the same as personal asset to be outside the purview of section 2(14) of the Income Tax Act, 1961 (hereinafter "the Act"). 2. The Appellant sold the flat for a consideration of ₹ 28 lakhs and further sold fixtures and fittings (which are part of flat but sold separately to the same buyer) for 23,50,000. The Appellant claimed exemption of the entire amount i.e., ₹ 51,50,000 by investing the same, and also further amount in all amoun .....

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l against this order. 3. The Appellant in the appeal memorandum has raised the grounds on the merits of the matter that sale proceeds of fixtures and fittings which form part of flat should be treated as capital asset, and the sale of the same results in capital gains. However, the Appellant has not taken the alternative ground that the entire amount of ₹ 23,50,OOO will go out of the purview of tax if the same are held to be 'not capital " asset' and therefore cannot be otherw .....

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ellant which cannot be brought to tax even under the head 'Income from Other Sources'. 4. It is submitted that the above ground is alternate ground and is without prejudice to the main contention of the Appellant. It is submitted that the facts with respect to the above ground are already on record and there is no need for fresh investigation in to facts. It is therefore prayed that the Hon'ble Tribunal may grant leave to the Appellant to raise the above additional ground, admit it a .....

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all. For admission of the additional ground of appeal, he placed reliance upon the judgment of the Hon'ble Supreme Court in the case of NTPC reported in 229 ITR 383. Thus the ld Counsel for the assessee prayed for admission of the additional grounds of appeal. The ld DR however, opposed the additional grounds of appeal. 8. Having regard to the rival contentions and the material on record, we find that the additional ground of appeal raised by the assessee is a legal ground and further needs .....

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