TMI Blog2017 (2) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... lly constructed a new residential house for the purpose of the exemption under section 54F. Section 54F emphasizes construction of residential house. The construction must be a real one. It should not be a symbolic construction. Mere construction by way of extension of the old existing house would not mean constructing a residential house as contemplated under section 54F.” In view of intentions of the Act, decisions of the Hon’ble Jurisdictional High Court and the facts and circumstances of the case, we do not find it necessary to interfere with the order of the learned Commissioner of Income Tax (Appeals) on this issue wherein he has held that in the case of the assessee exemption under section 54F cannot be granted since he has demolished the newly acquired residential house instantly for the purpose of construction of a six floored shopping complex.- Decided against assessee Unexplained investment u/s.69 - Held that:- As before us, at this stage, the assessee has not produced any evidence or advanced any argument justifying his stand and could not substantiate the reason for the discrepancy. Therefore, we do not have any option but to confirm the order of the learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lized bank as per the provisions of the Act. During the period February 2004 to May 2004, the assessee withdrew this amount and purchased a residential property plot no.25, Dr. Nair Road, Chennai-600 017 at a purchase concession of ₹ 1,17,53,000/- and claimed the benefit of section 54Fof the Act. However, it was revealed that the assessee had demolished the residential building that was purchased after obtaining demolition permission from the Corporation of Chennai dated 28.09.2004. Thereafter the assessee had obtained permission on 16.08.2005 from Chennai Metropolitan Development Authority for construction of a new shopping complex. Subsequently, the assessee also entered into an agreement for construction of the shopping mall with M/s. T.Subbarayalu Co., vide agreement dated 5.9.2005. Since the new asset purchased was demolished by the assessee and had proceeded to construct a commercial complex, the learned Assessing Officer disallowed the benefit of section 54 to the assessee. The learned Commissioner of Income Tax (Appeals) also confirmed the order of the learned Assessing Officer by observing as under:- 5.2.2 The sequence of events show that the appellant's i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Silk Mills (P) Ltd v. CIT (1991) (191 ITR 647/59 Taxman 3 as well as later decision of Madras High Court in the case of Neelamalai Agro Industries Ltd v. CIT (2003) 259 ITR 651/(2002) 125 Taxman 582 it can be seen that any extinguishment on account of act of the assessee would amount transfer and the only exception provided therein was the extinguishment on account of act of God such as destruction of the capital asset in a fire, complete loss in the case of sinking of a vessel of the assessee etc. In the instant case, it is not in dispute that the demolition of the building took place at the behest of the assessee and it is not an act of God in which event, it has to be said that demolition of house would fall within the definition of 'Transfer . It was further held in the above referred case by Mumbai ITAT that deduction u/s.54F is available for purchase of residential house and such house should be real and not symbolic. In this context it is held by the Tribunal as under: 14. No doubt the assessee raised the ground, by way of cross objection, that subsequent transfer would not effect the eligibility to claim deduction u/s 54F of the Act because the disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, relied on the orders of the Revenue and also the decisions cited by the Ld.CIT (A) in his order. 7. We have heard the rival submission and carefully perused the materials on record. The moot question before us is whether the assessee will be entitled for the benefit of deduction U/s. 54F of the Act if he demolished the new asset being the residential house purchased by him within the period of three years from the date of purchase in violation to Section 54F(3) of the Act. The prime argument advanced by the Ld.A.R before us is that the provisions of Section 54F(3) of the Act only provides that the new asset should not be transferred in terms of Section 2(47) of the Act within the period of three years from the date of purchase and does not specify a situation where the new asset is demolished. He relied on the case laws cited by him supra in support of his arguments. It is pertinent to mention here that the Hon ble Bench of the Mumbai Tribunal in the case of Manhar Parikh, cited by the learned Authorized Representative, had remitted back the matter to the file of the learned Commissioner of Income Tax (Appeals) to decide the identical issue in the light of the decision ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdictional Madras High Court in the case CIT Vs. V.Pradeep Kumar another cited supra, it has been categorically held that the burden is on the assessee to prove that he had actually constructed a new residential house for the purpose of the exemption under section 54F. Section 54F emphasizes construction of residential house. The construction must be a real one. It should not be a symbolic construction. Mere construction by way of extension of the old existing house would not mean constructing a residential house as contemplated under section 54F. In view of intentions of the Act, decisions of the Hon ble Jurisdictional High Court and the facts and circumstances of the case, we do not find it necessary to interfere with the order of the learned Commissioner of Income Tax (Appeals) on this issue wherein he has held that in the case of the assessee exemption under section 54F cannot be granted since he has demolished the newly acquired residential house instantly for the purpose of construction of a six floored shopping complex. ITA No.456/Mds/2014 (A.Y.2005-06): Ground : Unexplained investment u/s.69 of the Act of ₹ 7,34,750/-. 8. The assessee had e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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