TMI Blog1996 (7) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... 878 sq. ft. not treated as appurtenant to the building, from the assessment of the assessee for the assessment year 1975-76 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding and had valid materials to hold that the entire 10 grounds and 29 sq. ft. should be taken as the land appurtenant to the building and, therefore, the entire capital gains is exempt under section 54 of the Act for the assessment year 1975-76 ? " The assessee is an individual. The assessee sold a plot of land measuring 10 grounds and 29 sq. ft. for a sum of Rs. 2,70,000 in the assessment year 1975-76. With the proceeds, the assessee constructed a new house and claimed relief under section 54 of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The driveway from the road to the building alone occupied 6,750 sq. ft. The building is situated in an area of 4,500 sq. ft. The balance of 7 1/2 grounds is situated in between the sit-outs, cowshed, gardens, etc., and could be considered as part of the court-yard. The building was an old one situated far away from the city. Therefore, the Tribunal came to the conclusion that the vacant land surrounding the main building would form part of and appurtenant to the main building and accordingly it was held that the first appellate authority was correct in holding that no part of the land could be separated and treated as a separate asset and the entire property sold should be treated as one unit of land and building. Before us, learned stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hy Rao Bahadur Calavala Cunnan Chetty's Charities [1988] 4 SCC 260. While considering the word " appurtenant " the Supreme Court held that whether a particular piece of land is appurtenant to the main building or not depends upon the facts and circumstances of each case. Therefore, according to learned standing counsel, the Tribunal was not correct in coming to the conclusion that the entire extent of the land of 10 grounds 29 sq. ft. would form one unit and, therefore, there is no separate appurtenant land to be assessed as a separate asset. On the other hand, learned counsel appearing for the assessee while supporting the order passed by the Tribunal submitted that the Tribunal after looking into the plan of the premises concerned came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rters and cowsheds, etc., there is vacant land. The abovesaid constructions are scattered over the area of 10 grounds and 29 sq. ft. Therefore, it cannot be said that apart from the main building in which the assessee is residing, the assessee is not using or utilising the rest of the open ground. The Income-tax Officer relied upon the Urban Land Ceiling Act and considered that two grounds and 580 sq. ft. would form the land appurtenant to the main building and the rest of the land would be considered as a separate unit. Accordingly, he bifurcated the sale consideration of Rs. 2,70,000 into Rs. 1,10,000 for the value of the building and appurtenant land and the balance of Rs. 1,69,000 was taken as the sale price relating to the value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsive lands appurtenant thereto and even if the building and the land have been treated as one single unit and enjoyed as such by the occupiers, an enquiry could be made to find out whether any part of the land contiguous to the building can be put to independent user without causing any detriment to the enjoyment of the building as such. Such an enquiry should be conducted not based on any artificial considerations but from the point of view of the persons occupying the building. The number of persons or different branches of families residing in the building, the requirements of the persons occupying the building, consistent with their social standing, etc., are relevant for the purpose. If any surplus is arrived at on such enquiry, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tty's Charities [1988] 4 SCC 260. After taking into consideration the various provisions of the Tamil Nadu City Tenants Protection Act, the Supreme Court held as under : " The question, therefore, whether certain land is appurtenant or not is one of fact. The High Court has applied its mind to the nature of the building as well as to the terms of the lease deed. It has kept in mind that the lease relates to a period about 35 years ago, a time when residential houses occupied large extents of land. There used to be a building in the middle surrounded by a vast area covered by garden, arbor, trees and the like. The lease also describes the building as " Club Chambers " with a municipal door number. The building is itself a substantial one o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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