TMI Blog2015 (1) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... sidential house as interpreted by the A.O. As rightly held by the Ld. CIT(A), in this context, although there was an old structure on the plot of the assessee at Jubilee Hills which was demolished and the construction of new house had commenced way back in the year 2002-2003, the date of commencement of construction is not relevant for the purpose of deduction under section 54 and what is relevant is the date of completion of the construction as well as the period of investment made by the assessee in such construction. In this regard, there is no dispute that the amount in question spent by the assessee on construction of the residential house was within the specified period and that the construction of house was completed on 28.06.2010. As such, considering all the facts of the case, we are of the view that the assessee is eligible for deduction under section 54 to the extent allowed by the Ld. CIT(A) in both the years under consideration and we find no justifiable reason to interfere with the impugned orders of the Ld. CIT(A) on this issue. - Decided in favour of assessee - ITA.No.632 & 1238/Hyd/2013 - - - Dated:- 28-1-2015 - SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Stair Case ₹ 83,250 3. Security System ₹ 10,000 4. Electrical Fittings (including stabilizer, decorative imported items) and others Rs.36,26,613 5. Wood Ply Wood ₹ 5,07,591 6. Sanitary fittings ₹ 8,22,965 7. Pumps and Motors Connected to sump ₹ 49,200 8. Air Conditions ₹ 2,00,000 9. Stone carving Rs .1,00,000 10. Modular kitchen ₹ 42,826 11. Solar water system ₹ 1,03,960 12. Lift ₹ 96,416 13. Hardware Fittings ₹ 2,10,700 14. Miscellaneous expenses ₹ 9, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture was constructed on the said plot. It was submitted that the said structure, however, was demolished by the assessee before the commencement of construction of new house in the year 2002. It was submitted that the construction of new house was delayed and the same was completed in the year 2010 as per the completion certificate issued by the Municipality on 28.06.2010. It was pleaded that the expenditure in question incurred in both the years under consideration thus was for construction of a new house and since the same was incurred to make the new house habitable, the assessee was entitled to claim deduction under section 54. As regards the commencement of construction of new house in the year 2002, it was contended on behalf of the assessee that the date of commencement of construction of new house is not relevant for the purpose of deduction under section 54 and what is relevant is the date of completion of construction and the specified period in which the expenditure claimed to be eligible for deduction under section 54 is incurred. It was contended that the expenditure incurred by the assessee on the construction of new house during the specified period thus was eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use habitable and therefore, such expenditure was eligible for deduction under section 54. He however, found that expenditure incurred by the assessee for certain items, which did not form an integral and inalienable part of the house such as marble statue, furnitures, fittings etc., was not required to be incurred to make the house habitable and since such expenditure was incurred mainly to decorate the new house of the assessee, he held that it was not eligible for deduction under section 54. Such expenditure as identified by the Ld. CIT(A) for both the years under consideration was under : Assessment Year 2009-2010 a. Marble Statue Rs.3,00,000 b. Glass and glass fittings (including Glasses, permets, curtain cloth, sheer blinds, honey comb blinds. Rs.3,20,889 c. Furniture Fittings (Bed, table sofa and cushion curtains and decorative items) Rs.15,99,376 Total Rs.22,20,265 Assessment Year 2010-2011 a. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tricted the claim of the assessee for deduction under section 54 only to the extent it is on account of expenditure incurred by the assessee to make the house habitable and the department has not raised any ground specifically in the present appeals disputing this aspect of the matter. 8. The grievance of the Revenue as projected in the common ground raised in these appeals is that the construction of house having been started way back in the year 2002-2003, the investment made by the assessee in the construction of the said house cannot be regarded as investment in construction of the new house eligible for deduction as envisaged in section 54. The provisions of section 54 to the extent relevant in this context are reproduced below : Profit on sale of property used for residence. 54. [(1)] [Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of a long-term capital asset [***], being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. As rightly held by the Ld. CIT(A), in this context, although there was an old structure on the plot of the assessee at Jubilee Hills which was demolished and the construction of new house had commenced way back in the year 2002-2003, the date of commencement of construction is not relevant for the purpose of deduction under section 54 and what is relevant is the date of completion of the construction as well as the period of investment made by the assessee in such construction. In this regard, there is no dispute that the amount in question spent by the assessee on construction of the residential house was within the specified period and that the construction of house was completed on 28.06.2010. As such, considering all the facts of the case, we are of the view that the assessee is eligible for deduction under section 54 to the extent allowed by the Ld. CIT(A) in both the years under consideration and we find no justifiable reason to interfere with the impugned orders of the Ld. CIT(A) on this issue. The same are therefore upheld and these appeals filed by the Revenue are dismissed. 9. In the result, appeals of the Revenue are dismissed. Order pronounced in the open Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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