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TMI Blog2018 (9) TMI 1019X X X X Extracts X X X X X X X X Extracts X X X X ..... im is not a capital asset u/s 2(14) of the Act. 2. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the action of AO in allowing deduction u/s 54F of the Act with reference to investment in one constructed residential property only at Rs. 14,67,670/- as against investment of Rs. 54,08,560/- in three properties made by the assessee. 2.1. The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in incorrectly taking the amount of investment in the said property at Rs. 14,67,670/- as against investment of Rs. 19,77,450/- made by the assessee, thereby reducing the claim of deduction u/s 54F to Rs. 12,05,554/- as against Rs. 16,24,290/-. 3. The assessee craves to amend, alter and modify any of the grounds of appeal. 4. The appropriate cost be awarded to the assessee. Ground No. 1 is regarding the claim of the assessee of agricultural land sold by him is not a capital asset under section 2(14) of the IT Act was rejected by the authorities below. 2. The assessee is an Individual and derives income from jewellery business. During the year under consideration, the assessee sold agricultural land situated at Bhankrota, Tehsi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, contention or claim are already on record. The ld. A/R has also relied upon the Third Member decision of Jabalpur Bench of the Tribunal in case of DCIT vs. Vishwanath Prasad Gupta, 57 DTR 89. Hence, the ld. A/R has submitted that the ld. CIT (A) ought to have decided the issue raised by the assessee instead of rejecting the same without entertaining. 4. On the other hand, the ld. D/R has submitted that this is not a question which can be decided on the basis of the facts and material on record but a proper investigation and enquiry is required regarding the fact whether the land is situated beyond the 8 KM limits from the Jaipur Municipality or within 8 KM of the Municipal limits. Thus the issue requires consideration of the fact to be ascertained through conduct of enquiry and, therefore, the case of the assessee does not fall in the category of a legal issue which can be decided on the basis of the facts and material already available on the assessment record. 5. We have considered the rival submissions as well as the relevant material on record. The issue raised by the assessee whether the agricultural land in question is capital asset or not involves both factual as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation.-For the purposes of this sub-clause, "population" means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year;]]" Thus it is clear from the clause (iii) and sub-clause (b) of section 2(14) of the Act that the agricultural land will be excluded from the definition of capital asset if the same is situated in an area which is beyond 8 KM from the local limits of the Municipal/Cantonment Board. Therefore, for determining the issue of the land in question is not falling in the definition of capital asset but falling in the exclusion clause of section 2(14) of the Act, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee vide his letter dated 17.12.2013 stated that the deduction under sec. 54F has been claimed wrongly instead of 54 of the I.T. Act, 1961 due to ignorance about the nature of deductions as permissible u/s 54 and 54F of the Act." The AO allowed the claim of the assessee only in respect of one residential constructed house i.e. at sl. No. 1 of the above details and rejected the claim in respect of other two residential plots. The assessee challenged the action of the AO before the ld. CIT (A). However, the ld. CIT (A) has upheld the order of the AO. 7. Before us, the ld. A/R of the assessee has submitted that prior to the amendment with effect from 01.04.2015 a residential house was considered as more than one house if the same constitute a single dwelling house as per the needs of the family members of the assessee. Further, the residential house consists of several independent units cannot be taken as an impediment to allow the exemption under section 54F of the Act. Hence, the ld. A/R has submitted that in view of the various decisions on this issue, more than one independent unit can be considered as a residential house in terms of section 54F of the Act. Thus the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idential house as these are not contiguous or can be conveniently used by treating the single residential house as per the needs of the assessee. Even otherwise, assessee has not claimed that separate properties were purchased as per the requirement of the family as the assessee has constructed only one structure of a house and the other two properties are only the plots of land. Though the assessee has erected a boundary wall on one of the plots but the same would not constitute the construction of a house. Therefore, when these three separate properties cannot be regarded as a single residential house in view of their locations at different parts of the city and two of which are only the plots of land, therefore, the decisions relied upon by the assessee will not help the case of the assessee so far as the treatment of three different properties as a single residential house. The ld. CIT (A) has considered this issue in para 3.3 as under :- "3.3. I have perused the facts of the case, the assessment order and the submissions of the appellant. As regards investments made under section 54F of the I.T. Act, 1961 the assessee has given a list of three properties in three different ..... X X X X Extracts X X X X X X X X Extracts X X X X
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