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2015 (12) TMI 344 - ITAT MUMBAI

2015 (12) TMI 344 - ITAT MUMBAI - TMI - Rejection of deduction claimed u/s 54F - Held that:- On a careful perusal of the orders passed by the tax authorities, we notice that the assessee as well as the tax authorities has not properly applied the provisions of sec. 54 and 54F. The deduction allowed u/s 54 and 54F is property specific. Hence, we are unable to understand as to how the assessee and AO could deduct the amount of ₹ 5.00 lakhs on the reasoning that the deduction to that extent w .....

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Assessment of rental income under the head Income from house property instead of assessing the same as Business income - Held that:- Ld A.R placed reliance on the recent decision rendered by the Hon’ble Supreme Court in the case of Chennai Properties & Investments Ltd.[2015 (5) TMI 46 - SUPREME COURT] Hence, we are of the view that this issue also requires fresh examination in the light of the decision of Hon’ble Apex Court, referred above. Accordingly, we set aside the order of Ld CIT .....

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he following issues:- (a) Rejection of deduction claimed u/s 54F of the Act (b) Assessment of rental income under the head Income from house property instead of assessing the same as Business income. 2. We heard the parties and perused the record. During the year under consideration, the assessee sold following assets and claimed exemption u/s 54 of the Act as detailed below:- I .T.A. No.6361/M/2011 2 2.2 During the year under consideration, the assessee had sold certain properties and computed .....

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d deduction of the cost of new residential house purchased at B-3, Satyanand, Thane u/s 54 of the Act. Since deduction u/s 54 is available on sale of residential house property, the AO asked the assessee to explain as to how he could claim deduction u/s 54 on sale proceeds of FSI and land. The assessee submitted that he has actually claimed deduction u/s 54F of the Act. The deduction u/s 54F is available on the capital gain arising on transfer of any long term capital asset other than a resident .....

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a residential house, viz., RH No.16, Madhuban CHS Ltd for a consideration of ₹ 19,40,399/-. It appears that the assessee had claimed deduction of ₹ 5.00 lakhs in the immediately preceding year. Accordingly, the AO allowed deduction u/s 54 of the Act on the amount of ₹ 14,40,399/- (Rs.19,40,399 less ₹ 5.00 lakhs) in respect of the residential house purchased at B-3 Satyanand, Thane. The Ld CIT(A) also confirmed the same and hence the assessee has filed this appeal before u .....

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/-. (b) The deduction allowed u/s 54 and 54F is property specific. Hence, we are unable to understand as to how the assessee and AO could deduct the amount of ₹ 5.00 lakhs on the reasoning that the deduction to that extent was allowed in the immediately preceding year. We are unable to understand as to the provisions under which such kind of reduction is allowed. (c) The deduction u/s 54F was denied on the reasoning that the assessee owns a farm house, which was also considered as resident .....

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used as a residential house. The assessing officer has also not conducted necessary enquiries/inspection to find out the actual user of the property. Hence, in the absence of relevant details, we are unable to resolve this controversy. (d) The assessee has filed a letter dated 26.12.2008 before the assessing officer, which was discussed in paragraph 3.8 of the assessment order. A perusal of the same would show that the assessee is referring to many other properties viz., F1, F2 & G, G-302, .....

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ee to claim deduction u/s 54F should be ascertained as per the number of residential houses available on the date of sale of the long term capital asset other than the residential house property. Hence, the date of sale of the above said assets is crucial to determine the eligibility of the assessee to claim deduction u/s 54F of the Act. (f) The deduction u/s 54 should be allowed against the long term capital gain. However, the AO has not computed the long term capital gain, but allowed the same .....

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