New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 1452 - ITAT JAIPUR

2015 (11) TMI 1452 - ITAT JAIPUR - [2016] 45 ITR (Trib) 664 - Deduction u/s 54 - transfer of three adjacent plots - plot in the name of assessee and family members (Join ownership) - the house purchased from Rajasthan Housing Board was skeleton in which it was allotted as was envisaged by comparing the other houses which existed there. - Held that:- The first property was originally booked by Smt. Krishna Beniwal under Kalptaru Yojna of Rajasthan Housing Board in the year 1992 and thereafter she .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ade 17 months prior to the date of sale of first flat i.e 20/10/2007. The possession letter was issued in the name of Smt. Krishna Beniwal on 7/11/2006 and possession was to be taken by Smt. Krishna Beniwal on or before 14/12/2006, which was taken by her on 15/11/2006. Perpetual lease was executed on 23/6/2007, in which name of Smt. Krishna Beniwal and Smt. Seema Singh Beniwal had been shown. As held by the various courts that purchase of constructed house in self financing scheme from any autho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rds, was habitable for human being either servant or master or any employee. There is also no restriction that what percentage of the size of flat should be used for residential purposes either under the Income Tax law but there is a restriction of maximum construction by the local authorities of the respective states.

It is also admitted fact that the assessee electric connection in the constructed premises and the first flat was sold by the assessee on 20/10/2007 and second flat wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see : Shri Mahendra Gargieya (Adv) For The Revenue : Shri O.P. Bhateja (Addl.CIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 30/12/2011 of the learned C.I.T.(A)-II Jaipur for A.Y. 2008-09. The respective grounds of appeal are as under:- 1. The impugned additions and disallowances made in the order U/s 143(3) of the Act dated 10/12/2010 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

34A & 234B of the Act. The appellant totally denies its liability of charging of any such interest. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 2. Ground No. 1 of the assessee s appeal is not pressed, therefore, the same is dismissed as not pressed. 3. Ground No. 2 of the appeal is against confirming the addition of ₹ 38,30,114/- by not allowing the deduction U/s 54 of the Income Tax Act, 1961 (in short the Act) by the ld CIT(A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

total income of ₹ 5,66,910/-. The case was scrutinized U/s 143(3) of the Act. The assessee did not file the return in terms of provisions of Section 139(1) and therefore revised return filed by her cannot be accepted by the Assessing Officer. Further, the ld Assessing Officer observed that in the original return the assessee had not shown the income from capital gain earned on sale of property the assessee had also not claimed the interest paid by her amounting to ₹ 42,000/- against .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

77; 19,51,000/- totaling ₹ 41,89,000/-. The assessee had shown the cost of acquisition at ₹ 3,58,886/- and resultantly, long term capital gain was shown at ₹ 38,30,114/-. This income had been claimed exempt in terms of provisions of Section 54 by way of investment of ₹ 12,22,900/- in purchase of house property and an amount of ₹ 30.00 lacs were deposited in capital gain account scheme. The ld Assessing Officer gave reasonable opportunity of being heard on this issue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tions of flats sold was ₹ 22,38,000/- (sold on 20/10/2007) and ₹ 19,51,000/- (sold on 15/03/2008), in total sale consideration was ₹ 41,89,000/-. The long term capital gain had been worked out at ₹ 37,99,147/-. The assessee had claimed deduction U/s 54 of the Act as under:- 1. Investment for purchase of residential House 64/108, Pratap Nagar, Jaipur. ₹ 12,22,900/- 2. Investment in capital gain account scheme ₹ 30,00,000/- The ld Assessing Officer further repro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

By Bank Amt. Paid to RHB 20/07/2005 32726.00 233000.00 265726.00 15/10/2005 55000.00 220000.00 275000.00 14/01/2006 55000.00 220000.00 275000.00 15/04/2006 55000.00 220000.00 275000.00 Total 197726.00 893000.00 1090726.00 Another letter was issued by Rajasthan Housing Board on 07/11/2006 stating that Smt. Krishna Beniwal has deposited the full amount and also stating that she must take possession of the house till 14/12/2006. The office order of Rajasthan Housing Board dated 31/5/2007 states tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the possession letter which indicates that the assessee got her name added alongwith Smt. Krishna Beniwal, mother in law of the assessee with a simple motive to be eligible for claiming deduction U/s 54 endorsing a Hindi proverb Heeng Lage Na Phitkari Rang Chokha . The entire payment was made before the date on which the assessee became co-owner of the said property and not out of the sale proceeds but out of the loan taken from the bank of Rajasthan. Besides, the last payment for the allotment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng Board was skeleton in which it was allotted as was envisaged by comparing the othr houses which existed there. The house allotted by the Rajasthan Housing Board was not a finished house and was in such a condition which could not be called a dwelling unit. Therefore, the assessee s claim was found by the Assessing Officer as bogus. The ld Assessing Officer again gave reasonable opportunity of being heard to the assessee on various points raised during the assessment proceedings, which was exp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4, Hanuman Nagar, Jaipur for a sum of ₹ 28 lacs on 25/01/2010. The assessee had deposited a sum of ₹ 30 lacs in capital gain account scheme with State Bank of India and this plot was purchased out of this capital gain account deposit. The assessee further claimed to have invested a sum of ₹ 1,10,250/- on above plot for construction of garage portion. The size of the plot is 50 x70 giving area of the total plot is 3500 sq ft or 388 sq. yards while the size of the constructed por .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. The field inquiry was also got conducted at the site which revealed that the claimed construction work carried out by the assessee on the above plot was simply a room constructed in a corner of the plot which was locked. The area of construction was also hardly 125-150 sq.ft and was having only a section window which suggested that it was only a room without toilet, kitchen as claimed by the assessee as per the enquiry report. This room could solve the purpose of store room or hardly, at the m .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ons of Section 54 of the Act. Therefore, he held that claim of the assessee in respect of Hanuman Nagar, Jaipur property U/s 54F is not liable to be allowed. The ld Assessing Officer again had given reasonable opportunity of being heard and case was fixed for 09/12/2010 and the assessee submitted that Rs. 30 lacs was deposited in capital gain account on 29/07/2008 in capital gain tax account No. 30427064659 in State Bank of India, Hatwara Road Branch, Jaipur as per provisions of Section 54 of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

from the date of sale. The ld Assessing Officer observed that the assessee s claim was not found eligible U/s 54F on the ground that the assessee had purchased land and constructed a small room on it. The ld Assessing Officer has not considered this investment as residential house. He further relied on the decision of the Hon ble Jurisdictional High Court in the case of Rajesh Surana Vs. CIT 306 ITR 368 wherein the Hon ble High Court has very emphatically given the definition of residential hous .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

under the head income from long term capital gain. 3. Being aggrieved by the order of the ld Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition by observing that the assessee can claim deduction U/s 54 of the Act only in respect of one house and that too after fulfilling the necessary conditions. Whereas the assessee has claimed deduction U/s 54 in respect of two properties. The first property was at 64/108, Pratap Nagar, Jaipur and second pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n four installments out of loan obtained from the Bank of Rajasthan by 15/04/2006. The name of the appellant was added in the application for taking loan just to increase the amount of loan which could be available to Smt. Krishna Beniwal. However, it was not repudiated that the entire payments of Rajasthan Housing Board had been made by Smt. Krishna Beniwal by 15/04/2006. The appellant had sold her first flat on 20/10/2007 and second flat on 15/03/2008. Thus even if the date of sale of first fl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an Housing Board on 15/05/2006 in the name of Smt. Krishna Beniwal only, which was applied by her in residential scheme Kalp Taru Yojana in the year 1992. The name of the appellant was added as a joint owner only by the order of Rajasthan Housing Board dated 31/5/2007. Even the letter of resident engineer dated 07/11/2006 for handing over the possession of the house mentioned the name of Smt. Krishna Beniwal only. These series of events do showed that the appellant had got her name added as a jo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

penditure of ₹ 65,000/- on the finishing of this house was also not substantiated with the proper bills/supporting. The appellant had submitted some plain sheets of paper wherein certain narration was given and it did not constitute proper evidence in the eyes of law. The entire expenditure was incurred in cash and no cognizance could be accorded to the claim of the appellant. The field inquiries made by the Assessing Officer revealed that the house was in the same skeleton as it was allot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bed room, kitchen, bathroom or toilet. The field enquiries conducted by the Assessing Officer showed that it was never used for residential purpose by the assessee. The ld CIT(A) also remanded this issue to the Assessing Officer but the assessee did not cooperate with the Assessing Officer, which shows that the assessee did not have any clinching evidence for construction of house on plot No. C-114, Hanuman Nagar, Jaipur. The predominant intention of the nature of construction can be the decisi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng of documentary evidence in the form of photographs is concerned, he relied on the decision of Hon ble Supreme Court in the case of Director of Income Tax Vs. Bharat Diamond Bourse (259 ITR 280) and evidence filed in form of photographs were rejected by the ld CIT(A). There is no evidence that the appellant had used the said structure as her residence at any point of time for which he relied on the decision in the case of Sunita Oberoi Vs. ITO 126 TTJ 745. He further held that the assessee did .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al before us. The ld AR of the assessee has reiterated the arguments made before the ld CIT(A) and claimed that the assessee applied for including her name to the Rajasthan Housing Board. Through the office order dated 31.05.2007, allotment was shown in the name of the assessee also as a joint owner. The perpetual lease deed between the Rajasthan Housing Board and the joint owners i.e. the assessee and Smt. Krishna Beniwal was executed on 23.06.2007, which is within one year before the date of s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

roperty Act. The total cost of ₹ 10,90,726/-, except the initial deposit of ₹ 1,10,000/- by Smt. Krishna Beniwal however, almost entire cost was paid by the assessee only. All the installments were paid from the saving bank account of the assessee as evident from different entries shown in the pass book. Hence the fact of payment out of the loan is not relevant. Thus, virtually it was the assessee who purchased the house. Smt. Krishna Beniwal was running short of funds and for that r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r in the records of the RHB. However, it was also agreed between the parties that in case the borrower Smt. Krishna Beniwal fails to make the repayment up to dated 31st October, 2006, the lender i.e. the assessee shall be entitled to get her name included in the record of Rajasthan Housing Board and shall become the owner of the property or in other words, the house will become the property of the assessee. Unfortunately, later when Smt. Krishna Beniwal, was unable to make payment even upto 31.0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e ld CIT(A) s observation that original purchaser of flat of Rajasthan Housing Board and the Krishna Beniwal made the payment by 15.04.2006 i.e. 17 months prior, is legally and factually wrong. The law u/s 54 requires to purchase a new house and since legally speaking, the purchase took place within one year only, the assessee was confident of getting the claim. The objection made by the Assessing Officer that the payment of house was made out of loan and not out of the sale consideration, is a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

igh Court has held that, law does not insist U/s 54 that sale consideration obtained by assessee itself should be utilized for purchase or construction of new house property. The construction expenses were duly supported by the bill dated 31.7.2007 raised by the contractor bearing complete name, address and signature of the contractor which prima facie proved the cost incurred and it was for the AO to bring contrary material by making inquiries or otherwise. Appearance of name of Smt. Krishna Be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which a construction of room measuring 10 20 = 200 sq. ft. or 23.33 yards was made thereon. The observation made by the ld Assessing Officer as well as by the ld CIT(A) that room constructed in the plot was not habitable. The findings of both the authorities are baseless and nothing more than suspicions. The ld CIT(A) was not right in holding that there is no facility in that room like bathroom, toilet etc. as the ld Assessing Officer had not made any comment in the remand report. The room was h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

room switches are there. Thus, it was a complete residential unit itself having all the basic facilities/amenities which required for human habitation. The construction was completed by 15.03.2010. The ld CIT(A), further was held wrong that this room can only be used by servant or as a godown only. By own admission of Revenue, the construction was habitable even if it was capable of housing a servant. In other words, it was habitable for a human being be it a servant/master/any other employee f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d residential house or the word house . He relied on the decision in the case of Shiv Narain Chaudhari vs. Commissioner of Wealth Tax (1977) 108 ITR 104 (All), wherein it has been held that building for human habitation, especially a dwelling place has considered as house. In the case of ACIT vs. Narendra Mohan Uniyal (2009) 34 SOT 152 (Del) wherein it has been held that when the land is purchased and building is constructed thereon, it is not necessary that such construction should be on the en .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le High Court has held that the main purpose of the statute is to give relief for the acquisition of a new residential house whether it is partly constructed or partly purchased. In the case of CIT & Anr. vs. Dr. R. Balaji (2014) 111 DTR 288 (Kar) wherein it has been held that deduction U/s 54F could not be denied on the ground that property was not suitable for residence of assessee. He has further drawn our attention on CBDT Circular No.667 dated 18.10.1993 wherein it has been clarified by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed on the decision in the case of CIT vs. Khoobchand Makhija (2014) 223 TAXMAN 0189 (Karnataka) wherein it was held that a residential house is used in section 54 makes it clear that it was not intention of legislature to convey the meaning that it refers to a single residential house. Letter a in context, which is used, should not be construed as meaning singular, but being a indefinite article. A residential house also permits use of plural by virtue of section 13(2) of General Clauses Act, th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s acquired by her. He also relied on the decision in the case of CIT & Anr. Vs. D Anand Basappa. (2009) 309 ITR 329 (Kar). He further argued that from A.Y. 2015-16, an amendment has been made wherein word a has been replaced by the word one , however this amendment has made effective from AY 2015-16 onwards. The amendment is substantive and not being clarificatory, therefore cannot be applied retrospectively for which he relied on the decision in the case of ITO v/s Ekta Promoters (P) Ltd. ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

therefore, the case laws relied by him is not applicable on the facts of the present case. Similarly the case law relied by the ld CIT(A) i.e. Rajesh Surana v/s CIT (supra) is also not squarely applicable as the Hon ble High Court noted in the order itself that there is no kitchen, toilet in that house and the testator himself mentioned the property to be a garage cum room but not a residential house. The property sold which must be a residential house the income of which should necessarily be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ee. However, the assessee s name was added to get benefit of Section 54 by purchase of Rajasthan Housing Board flat was prior to 17 months from the date of sale. The house purchased from Rajasthan Housing Board got registered in the mother in law s name and the assessee was second, therefore, same was added for future litigation. Smt. Krishna Beniwal had paid all the installments from the Housing Board taken from bank of Rajasthan. It is also found that the assessee has not transferred any amoun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f financing scheme of DDA treated construction for the purposes of Section 54 and 54F. The Hon ble Delhi High Court in the case of CIT Vs. R.L. Sood (2000) 108 Taxman 227 (Delhi) has held that any payment made in the self financing scheme by the allotee, this payment is to be treated cost of construction for the purposes of capital gain, which was also considered by the Hon ble Bombay High Court in the case of CIT Vs. Mrs. Hilla J.B. Wadia (1993) 69 Taxman 114 (Bom) wherein similar views has bee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n was invested in second property. Further as held by the ld CIT(A) that there was a hardly any construction which can be said as a residential house. The ld CIT(A) has given detailed finding on nature of property claimed to be residential house, which also verified by the Ward Inspector. The photograph submitted by the assessee cannot be a conclusive evidence to demonstrate that the construction made on that flat was really a residential house. The assessee was also not residing there, therefor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the case of Rajesh Surana Vs. CIT (supra), the Hon ble Rajasthan High Court has held that a plot of land having a boundary wall and garage-cum-room constructed thereon, cannot be treated as a residential house for allowing exemption U/s 53 of the Act. He further relied on the decision of Hon ble Mumbai ITAT Bench in the case of Kishore H. Galaiya Vs. ITO (2012) 24 Taxmann.com 11 (Mum) wherein it has been held that booking of flat with a builder was a case of construction and not purchase of res .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

taken by Smt. Krishna Beniwal and appellant jointly in November, 2006. The assessee filed an application before Rajasthan Housing Board on 31/5/2007 to adde her name, which has been accepted by it. The registration letter for lease deed was issued in the joint name of Smt. Krishna Beniwal and the appellant. All the payments were made 17 months prior to the date of sale of first flat i.e 20/10/2007. The possession letter was issued in the name of Smt. Krishna Beniwal on 7/11/2006 and possession w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ble, therefore we uphold the order of the ld CIT(A) on first exemption claim U/s 54F of the Act. Therefore, we are not giving any finding on additional expenditure incurred on finishing of the house. 6.1 It is undisputed fact that from the order of the Assessing Officer that the assessee had deposited the sale proceeds in the capital gain account at ₹ 30 lacs in SBI, Hatwara Road, Branch, Jaipur in capital gain tax account No. 30427064659 on 29/07/2008 whereas the assessee filed the return .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version