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

2016 (3) TMI 1015 - ITAT VISAKHAPATNAM

2016 (3) TMI 1015 - ITAT VISAKHAPATNAM - TMI - Exemption u/s 54F - whether two flats owned by the assessee are commercial and assessee is eligible for exemption under sec. 54F for acquiring 3 flats in lieu of development agreement - Held that:- In the present case on hand, the records show that the assessee along with family members purchased incomplete residential apartment consisting of 8 flats. The assessee has taken housing loan from bank. The plan sanction was also for the purpose of reside .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

received in lieu of joint development agreement. The CIT(A) has rightly confirmed the order of the assessing officer denial of claim - Decided against assessee. - I.T.A.No.134/Vizag/2015 - Dated:- 19-2-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant by : Shri I. Sarish Kumar, DR For The Respondent : Shri G.V.N. Hari, AR ORDER PER G. MANJUNATHA, Accountant Member: This appeal filed by the assessee is directed against the order of CIT(A), Rajah .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing the additional income of 6% on sales made on order book basis, that are not recorded in the books of accounts maintained in the regular books of business. During the course of survey, it was noticed that the assessee had entered into a joint development agreement-cum- General Power of Attorney along with 3 other co-owners with M/s. SNK Builders for development of a piece of land. As per the JD agreement, the assessee was received 3 flats and whose market value was determined at ₹ 30,87 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment agreement. In response to the show cause notice, the assessee filed a revised statement of total income to arrive at a capital gain of ₹ 30,65,236/- and claimed exemption u/s 54F of the Act on the total capital gain for reinvesting the sale consideration in 3 flats. The A.O., however, after considering the explanations furnished by the assessee denied the benefit of exemption u/s 54F of the Act. While doing so, the A.O. held that as per the information available on record, the assesse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

appeal before the CIT(A). Before the CIT(A), the assessee submitted that the A.O. was not correct in rejecting exemption u/s 54F of the Act, as he has reinvested sale consideration for acquiring 3 flats by virtue of joint development agreement. The assessee, further, submitted that though he owned two flats at Soubhagya Nilayam, those are used for commercial purposes and also let out to two corporate entities i.e. one for Reliance General Insurance Company Limited and another for KAL Radio. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ommercial rate of tax. Alternatively, the assessee submitted that though it received three flats, all the flats are located in a single residential complex. In view of the judgement of the Hon ble Andhra Pradesh High Court in the case of CIT Vs. Syed Ali Adil 352 ITR 418, he is eligible for exemption for all the three flats as a single residential unit. The CIT(A), however after considering the explanations of the assessee held that the information available in the file clearly show that the bui .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion 54F is untenable. The mere reason that the residential flats are being let out for commercial purpose would not alter the nature and characteristics of these two flats as residential house. With these observations, confirmed the assessment order and rejected the appeal filed by the assessee. Aggrieved by the CIT(A) order, the assessee is in appeal before us. 4. The Ld. A.R. of the assesee submitted that the CIT(A) was not justified in sustaining disallowance of exemption u/s 54F of the Act, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

TO Vs. Shri M. Venkatesan in ITA No.2055/Mds/2008. On the other hand, the Ld. D.R. strongly supported the order of the CIT(A). 5. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The only issue arises for our consideration is whether two flats owned by the assessee are commercial and assessee is eligible for exemption under sec. 54F for acquiring 3 flats in lieu of development agreement. The A.O. disallowed the claim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t records. Though, the records clearly shows that the flats are let out for commercial purposes and also electricity consumption was charged on commercial basis, the fact that the plan sanction was for the purpose of residential building cannot be ignored. The facts clearly indicate that the assessee initially purchased the residential flats and later converted into commercial purposes because it is financially viable. Therefore, there is no doubt that the assessee owned two residential properti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

einvested sale consideration for purchase of residential house subject to certain conditions. The one such condition is that as on the date of transfer of original asset, the assessee should not own more than one residential house other than the new house. A careful study of section 54F of the Act made it clear that the objective of enacting this provision was to encourage the housing activity by giving exemption from tax. The basic idea of putting a cap on number of units is to discourage this .....

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 of transfer of asset and hence, not eligible for exemption u/s 54F of the Act. 7. Coming to the case laws relied upon by the assessee. The assessee relied upon ITAT, Chennai Bench decision in the case of ITO Vs. M. Venkatesan (supra). We have considered the case law relied upon by the assessee in the light of the facts of the present case and find that the decision is not applicable to the facts of the present case. The case before ITAT, Chennai bench was, whether the property purchased was re .....

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