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2016 (4) TMI 1098 - ITAT JAIPUR

2016 (4) TMI 1098 - ITAT JAIPUR - TMI - Disallowance of the deduction claimed u/s 54 - two flats situated on different storey - Held that:- There is nothing in these sections, which require the residential house to be constructed in a particular manner. The only requirement is that it should be for the residential use and not for commercial use.We do not think that the fact that the residential house consists of several independent units can be permitted to act as an impediment to the allowance .....

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quisition from the total sale consideration on the ground that the evidence filed by the assessee are not reliable but neither the Assessing Officer nor the ld CIT(A) has verified the evidence, when the burden has been shifted by the assessee on the revenue on the basis of exemption claimed by the assessee where the particulars of civil engineer as well as name and address of the labourer have been given. The Assessing Officer has not issued any query letter to confirm the expenses as genuine. H .....

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Assessee : Shri O.P. Agarwal and Shri Tarun Mittal (CA) For The Revenue : Smt. Neena Jeph (JCIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 11/04/2013 of the learned CIT(A)-II, Jaipur for A.Y. 2008-09. The effective grounds of appeal are as under:- 1. On the facts and circumstance of the case, the CIT(A) has grossly erred in sustaining the addition of ₹ 19,33,831/- made on account of disallowance of the deduction claimed u/s 54 of the Income .....

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course of assessment proceedings, thus observation of the Ld. CIT(A) deserves to be ignored and excluded. 1.3 That the Ld. CIT(A) has erred in ignoring the binding decision of Hon ble Karnataka High Court given in case of CIT Vs. D Ananda Basappa reported in 309 ITR 329 wherein it was held that the exemption under section 54 is available in respect of two flats and the expression a residential house should be understood in a sense that the building should be of residential in nature and a shoul .....

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of the indexed cost of improvement amounting to ? 1,07,907/- incurred by the assessee during the financial year 2004-05 without appreciating the facts and evidence adduced by the appellant, therefore addition sustained deserves to be deleted. 2. The assessee derived income from salary and house property. He filed return for the year under consideration on 28/7/2008 declaring total income of ₹ 2,29,920/-. The case was scrutinized U/s 143(3) of the Income Tax Act, 1961 (in short the Act). T .....

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tunity of being heard on this issue. It was claimed by the assessee before the Assessing Officer that he purchased this house on 02/3/2003 for ₹ 6,26,000/-, which was paid through bank account. The assessee paid conversion charges of ₹ 55,000/- on 01/10/2004 to JDA and also claimed cost of development at ₹ 94,000/- on the basis of self serving paper signed by one Shri Anil Shukla claiming him as Civil Engineer. There is no identity and address of the person making calculation o .....

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deed in respect of property bought from M/s Shree Salasar Balaji Colonisers Pvt. Ltd., Jaipur i.e. flat No. 514, fifth floor, Balaji Tower-III, plot No. 4, Jawahar Circle, Jagatpura, Bye-pass Road, Jaipur, which was purchased for ₹ 22,07,707/- including registration charges of ₹ 1,34,750/-. The assessee further submitted that cost of improving on the flat of ₹ 19,66,500/- on self serving document. The paper has not signed by Shri Anil Shukla claiming him as Civil Engineer, on .....

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s yatra. In this context, the assessee has gain filed a letter sustain as under:- In the aforesaid context, it may be submitted that the details of expenses of ₹ 19,66,500/- was actually an estimate furnished by the Architect in respect of the entire work to be executed. Inadvertently, the same was attached with the other papers submitted the same deserves to be ignored. The assessee filed contradictory reply before the Assessing Officer. The assessee could not produce any cogent evidence .....

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136(6) of the Act to M/s Shree Salasar Balaji Colonisers Pvt. Ltd., Jaipur to verify the genuineness of the payment. It is submitted by M/s Shree Salasar Balaji Colonisers Pvt. Ltd., Jaipur that the assessee had purchased two properties i.e. flat No. 514, fifth floor, Balaji Tower-III, for ₹ 20,72,957/- and flat No. 208, Second Floor, Balaji Tower-III for ₹ 19,61,294 and total payment has been received by it at ₹ 40,34,251/-. The assessee again asked before the Assessing Offic .....

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as been declared in his return of income. Therefore, he allowed deduction U/s 54 of the ct on flat No. 514, Fifth Floor, Balaji Tower-III, Jawahar Circle, Jaipur for ₹ 22,07,707/-. Accordingly, he calculated capital gain at ₹ 19,33,831/-. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal partly by observing that the benefit U/s 54 of the Act is allowable to the extent of one residential house. Mo .....

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able. Regarding indexed cost, it has been held that the assessee s claim made on simple paper, there is no address of Shri Anil Shukla, Civil Engineer. Therefore, he not allowed indexed cost against the capital gain claimed by the assessee. 4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that the appellant sold upon a plot of land for ₹ 50 lacs and purchased two flats i.e. flats No. 514 and 208 in Balaji Tower-III, Jawahar Circle, Jaipur and calculated c .....

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rt also considered this issue in the case of CIT Vs Gita Duggal order dated 21/2/2013 wherein it has been held that the assessee s residential house can be several units as per need of the assessee, which cannot be constructed the residential house in a particular manner. The only requirement is that it should be for residential house not for commercial use. He further relied on the following decisions:_ (i) 16 ITD 195 K.G. Vyas Vs ITO (Bom). (ii) 110 TTJ 440 R.V. Prem Prakash Bhutani Vs. ACIT ( .....

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purchased in computation of total income by the assessee. Further whatever evidence given by the assessee are on simple paper for cost of boundary/improvement, which are not verifiable. Therefore, order of the ld CIT(A) may please be confirmed. 6. We have heard the rival contentions of both the parties and perused the material available on the record. As per Assessing Officer s order, the case was selected under the CASS. The total capital gain as per working of assessee before the Assessing Of .....

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This issue has been considered by the various Hon'ble High Courts particularly a recent decision passed by the Hon'ble Delhi High Court in the case of CIT Vs. Gita Duggal order dated 21/2/2013 wherein it has been held that a residential house concept introduced by Section 54 is applied so long as the assessee acquired a building, which may be constructed, for sake for convenience, in such a manner as to consist of several units which can, if the need arises, be conveniently and independ .....

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tical, should come in the way of considering the building as a residential house. We do not think that the fact that the residential house consists of several independent units can be permitted to act as an impediment to the allowance of the deduction under section 54/54F. It is neither expressly nor by necessary implication prohibited. BY respectfully following the decision of Hon'ble Delhi High Court, we reverse the order of the ld CIT(A) and allow deduction claimed U/s 54 of the Act by th .....

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