TMI Blog2018 (1) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... rk carried out by the assessee ? - Held that:- To ascertain whether the assessee has constructed a new house or only renovated the existing house a proper investigation and enquiry is required to be conducted by physical verification of the property as well as the experts opinion may also be taken in this respect because the alleged demolition and reconstruction is without any permission from the Municipal Corporation.In the absence of sanctioned site plan or completion certificate the evidence produce by the assessee cannot be considered as conclusive proof to establish the nature of construction carried out by the assessee at the property in question. According, in the facts and circumstances of the case, we set aside this issue to the record of the Assessing officer for proper verification and investigation - Decided partly in favour of assessee. - ITA No. 452/JP/2017 - - - Dated:- 25-1-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri S.L. Podar (Adv.) For The Revenue : Smt. Roshanta Meena ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 27.03.2017 of ld. CIT(Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his own name. The ld. AR as contended that there is no dispute that the assessee has construacted the house at C-105 Taneja Block, Adarsh Nagar, Jaipur within a period of 2 years from the date of transfer of long term capital asset making investment of ₹ 60,63,980/. The assessee was residing at the same place for last 20 years although the house property stood in the name of his mother Smt. Thakri Devi but for all practical purpose the assessee was having usufructuary ownership over the house property. The ld. AR has explained that this property bearing No. C-105 Taneja Block, Adarsh Nagar, Jaipur was measuring 600 square yards and the mother of the assessee had already gifted1/2 share of the property to her daughter-in-law Smt. Vibha Chawla who was widow of the elder brother of the assessee. The remaining 300 square yards was in the possession of the assessee and the assessee was living with his family and enjoying all the rights as an owner. The ld. AR has further submitted that the assessee were only two brothers and assessee has constructed the new house on the shares of the property belonging to the assessee as the mother of the assessee gave a declaration of her no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then referred to the lease deed in respect of Flat No. 101 which was taken by the assessee on rent for his residential purpose during the period of construction of new house from 01.04.2011 to 28.02.2012. The ld. AR then referred to the agreement under which the assessee received ₹ 60,000/- from the contractor who demolished the existing structure and submitted that all these evidences make it clear that new construction was carried out after demolition of old structure. The copies of the cite plan of new house are placed at page 175 to 179 of the P.B. Thus, the ld. AR has contended that the once the assessee established that a new house was constructed then the deduction u/s 54F is allowable. In support of his contention he has relied upon the following decision as under:- CIT anr. Vs. P.R. Seshadri 329 ITR 377 CIT vs. P.V. Narasimhan 181 ITR 101 CIT vs. V. Natarajan 287 ITR 271 CIT vs. Kamal Wahal 351 ITR 0004 Shri Laxmi Narayan vs. CIT in ITA No. 20/2016 Thus, the ld. AR has submitted that the Hon ble Delhi High Court in case of CIT vs. Kamal Wahal (supra) has held that there is nothing in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for ₹ 18,00,000/- of the expenditure claim for construction of house. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as relevant material on record. The claim of deduction u/s 54F of the Act was denied by the authorities below on primarily on two grounds that the work carried out by the assessee is not a reconstruction of the house and secondly on the ground that the property on which the assessee claimed to have constructed house is owned by the mother of the assessee and not by the assessee. As regards the property is owned by the mother of the assessee we are of the view that if the assessee has constructed a new on the plot of land which is owned by the mother of the assessee then, the investment made by the assessee in construction of new house is eligible for deduction u/s 54F of the Act. A residential house is not a personal effects but it is meant for residential purpose of the family. Therefore, the investment made by the assessee for purchase or construction of house even in the name of the mother is eligible for deduction u/s 54F as held by the Hon ble Delhi High Court in case of CIT vs. Kamal Wahal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased it only in the name of his wife. There is also no dispute that the entire investment has come out of the sale proceeds and that there was no contribution from the assessee's wife. 10. Having regard to the rule of purposive construction and the object which Section 54F seeks to achieve and respectfully agreeing with the judgment of this Court, we answer the substantial question of law framed by us in the affirmative, in favour of the assessee and against the revenue. Further, the Hon ble jurisdiction High Court in case of Laxmi Narayan vs. CIT(supra) while considering this issue of investment made by the assessee in the name of his wife has held in para 7 to 7.5 as under:- 7. We have heard counsel for the parties. 7.1 on the first issue of sec. 263 in view of the decision of Malabar Industrial company Ltd. (Supra) Sec. 263 provisions are taken only on the ground of prejudicial and interest loss of the revenue to the Government. Merely change of opinion will not give anyright u/s 263 hence, the issue regarding Sec. 263 is required to be answered in favour of the assessee and against the department. 7.2 On the ground of investment made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in the alternative accommodation. On examination the detail of the nature of expenditure incurred by the assessee we find that the assessee has installed elevator in the property and the other expenditure incurred prima facie reveals that construction of the property may not be entirely a residential house and some commercial construction or conversion of the property into commercial cannot be ruled out. However, before into the controversy and expressing any view on this issue it requires a proper verification of the facts at the ground. Accordingly, to ascertain whether the assessee has constructed a new house or only renovated the existing house a proper investigation and enquiry is required to be conducted by physical verification of the property as well as the experts opinion may also be taken in this respect because the alleged demolition and reconstruction is without any permission from the Municipal Corporation. Therefore, in the absence of sanctioned site plan or completion certificate the evidence produce by the assessee cannot be considered as conclusive proof to establish the nature of construction carried out by the assessee at the property in question. According, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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