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2016 (1) TMI 564 - ITAT PATNA

2016 (1) TMI 564 - ITAT PATNA - TMI - Denial of deduction being interest on a housing loan, in the computation of his income u/s.22 - Held that:- A.R. during hearing, would take us through the interest certificate issued by the concerned bank, which clearly reflects the assessee’s name as among the names of the borrowers and, in fact, in the first place (PB pg. 5), i.e., along with that of his spouse as the second borrower. Further, in first appeal, the ld. CIT(A) specifically asked the assessee .....

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es. In fact, apart from nonspecification of the work, so that the very basis of the assessee’s claim remains unknown, the certificate speaks of the renovation work having been carried out during the years 1997-98 and 2001-02, implying the relevant financial years. How could renovation be carried out in f.y. 1997-98, whereat the house was, by own admission, purchased? The additional loan of ₹ 2 lacs from the bank was sanctioned on 06/9/2001 (PB pg. 8), which is claimed to be the source of t .....

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imary condition of acquisition of house property within the time period stipulated u/s.54(1). The investment of the capital gains therein, naturally, is to be within this time period, for which a mechanism is provided. This represents the second limb of the provision; the return of income for the relevant year being, it may be appreciated, required by law to be filed by the due date u/s. 139(1). The assessee’s claim for deduction u/s. 54, which extends up to the entire LTCG, accordingly, fails. .....

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or the assessment year (A.Y.) 2009-10 vide order dated 30.12.2011. 2. The appeal raises the following grounds, which we shall take up in seriatim: 1. That the order passed by Ld. CIT(Appeals)-II is unjust, unwarranted and bad in law. 2. That the ld. CIT(Appeals) II failed to appreciate and/or overlooked and/or did not consider the submissions made by the appellant as also the other facts of the case. 3. On the facts and circumstances of the case, the ld. CIT(Appeals)-II erred in confirming the a .....

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on to the extent of ₹ 4,112/-, being interest on a housing loan, in the computation of his income u/s.22 of the Act, i.e., under the head of income income from house property . The ld. Authorized Representative (A.R.), during hearing, would take us through the interest certificate issued by the concerned bank, which clearly reflects the assessee s name as among the names of the borrowers and, in fact, in the first place (PB pg. 5), i.e., along with that of his spouse as the second borrower .....

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d vide registered sale deed dated 20.06.2007 and sold on 15.01.2009. The A.O. was, therefore, of the view that the gain was short term capital gain (STCG). The ld. CIT(A), however, on the basis of the material adduced by the assessee, found that though the sale-deed was registered subsequently, the flat was acquired by the assessee much earlier, with the assessee having obtained a home loan of ₹ 5 lacs, from Punjab National Bank (PNB) vide sanction letter dated 13.06.1997 (PB pg. 6), so th .....

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ings, stating of the work having been carried out at the assessee s flat for a sum ranging between ₹ 2 - 2.5 lacs. The same was not in the form of bills for work nor did it bear the details of the work carried out and, accordingly, did not find favour with the first appellate authority. 5. We have heard the parties, and perused the material on record. 5.1 The only disputes that survive, and for which the assessee is in appeal, as gathered from the reading of the impugned order as well as t .....

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ction, as shall be apparent, is based on a clear finding of fact, i.e., of the assessee being unable to establish its claim of renovation being carried out with any cogent or reliable evidence. Toward this, we observe the principal evidence led by the assessee as the undated certificate from the said Munna Furniture Makers (PB pg. 15). It, however, does not specify the nature of the work carried out, nor does the assessee, so that the same remains unspecified. Even if therefore payments were mad .....

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ators , so that it may be that some interior designing work was carried out by the said firm, which may again not necessarily be in the nature of an addition or improvement to the existing house. Any addition and/or alteration to the house, enhancing its functional utility, so as to qualify as an improvement, would also require being notified to the housing society or even approval of the relevant authorities. In fact, apart from nonspecification of the work, so that the very basis of the assess .....

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the year 2001, contradicting the said certificate. For the reasons afore-stated, we are inclined to be in agreement with the Revenue of the assessee as having been unable to establish its claim of having undertaken improvement of its house in 2001. 5.3 The ld. CIT(A) has disallowed the assessee s claim for deduction u/s. 54 for the following reasons (refer paragraph 9 of the impugned order): (a) that the new residential house (flat) at Noida was not completed by 15.01.2012, i.e., the date marki .....

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hire Development Pvt. Ltd., on the execution of the agreement on 02.11.2009; and (d) that the new flat is in joint names of the assessee and his wife, Sunita Sinha. 5.4 The assessee has before us relied on the following decisions: - CIT vs. Jagtar Singh Chawla [2013] 215 Taxman 154 (P&H); - Fathima Bai vs. ITO [2009] 32 DTR (Kar) 243; and - CIT vs. Rajesh Kumar Jalan (2006) 286 ITR 274 (Gau). Per the said decisions the hon ble courts have expressed a view that being a beneficial provision, s .....

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e of any assistance to the assessee in the undisputed facts of the case. This is as the primary condition of the purchase of a house within a year before, or within two years after, the date of transfer, or its construction within three years thereof, is not satisfied. There is no ambiguity about the time limit specified for the two modes of acquisition envisaged by the provision. The first appellate authority has given a categorical finding of the construction of the Noida flat being not comple .....

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denied. The hon ble court, in view of the extended definition of the term transfer u/s. 2(47) of the Act, held in the assessee s favour in view of the agreement to sell entered into for the sale of the original asset on 27.12.2002, creating substantial rights in personam in favour of the purchaser. The delay in executing the sale-deed was for the reason of litigation with one, Ranjeet Lal, challenging the validity of the Will whereby the original asset had devolved on the assessee. The matter wa .....

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the acquisition of the flats/residential houses under the self-financing schemes by the local authorities or cooperative societies, as akin to and, thus, liable to be considered as a mode of construction, so that the extended date for acquisition of new house property shall apply. The arrangement in the instant case is not shown to be a self-financing arrangement, being with a private developer, working for a profit, nor is there any finding by the Revenue to that effect. The said circulars wou .....

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ble for construction. It is the satisfaction of this condition alone which entitles the assessee to relief u/s. 54 from the charge of long term capital gains to tax. That is, triggers the provision, the balance part of which is procedural, with which the cited decisions concern themselves. In each of the cited decisions, this primary condition stands satisfied, i.e., its non-satisfaction is not in issue. Further still, even going by the assessee s stand, it is only the sum deposited in the capit .....

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d be considered as being subject to exemption from tax on capital gains. Due regard is to be made for the scheme of the Act, or even the relevant provision/s, even as explained by the apex court in Bhavnagar University vs. Palitana Sugar Mill Pvt. Ltd. [2003] 2 SCC 111, relied upon, extracting a part (paras 24 & 25) thereof in Rajesh Kumar Jalan (supra). We may though clarify that this is stated in addition and without prejudice to our principal objection of the assessee being not eligible f .....

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