TMI Blog2020 (12) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... way of considering the building as a residential house. The fact that the residential house consists of several independent units cannot be permitted to act as an impediment to the allowance of the deduction u/s 54/54F. It is neither expressly nor by necessary implication prohibited. Assessee in principle, is entitled for deduction under section 54F in respect of investment made in impugned property subject to production of other relevant evidence by the assessee before the A.O. In the present case, the assessee has not filed relevant evidences for incurring the cost on new residential house before the A.O. Hence, we inclined to restore the issue to the file of A.O. for quantification purpose the deduction u/s 54F of the Act. The assessee is directed to produce all relevant evidences in support of the claim of deduction u/s 54F of the Act. Appeal of the assessee is allowed for statistical purposes. - ITA No.2293/Bang/2019 - - - Dated:- 7-12-2020 - Shri Chandra Poojari, Accountant Member And Smt. Beena Pillai, Judicial Member For the Appellant : Shri. V. Srinivasan, Advocate For the Respondent : Shri. Priyadarshi Mishra, JCIT(DR)(ITAT) ORDER PER CHANDRA P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant had constructed more than one house was contrary to law and facts of the appellant's case. 4. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s.234-A and 234B of the Act, which under the facts and in the circumstances of the appellant's case and the levy deserves to be cancelled. 5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 2. At the time of hearing, learned AR argued only on the issue with regard to granting of deduction under section 54F of the Income Tax act, 1961 (hereafter called the Act ). As such, we are adjudicating only ground relating to disallowance under section 54F of the Act. 3. The facts of the case are that the assessee along with his brother sold a property for RS.3,47,80,925/- on 12-12-2014. The assessee's share of 50% in the sale consideration was ₹ 1,73,90,462/-. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval from BESCOM and BWSSB for giving electricity and water connections which require BBMP approved plan. It is further noticed that except for making submission that the construction of residential building started in the month of June,2014, the assessee did not furnish any proof in support of this claim such as vouchers and bills for purchase of construction materials, payment of labour charges, house construction account. He has furnished before the AO a valuation report wherein the value of the residential building is mentioned as ₹ 1,70,00,000/-. 6. It is seen from the valuation report that except for no. of units (Area of the unit or the building not mentioned) in the building, the constructed super built up area is not mentioned. From this it appears that the valuation report is made to enable claim exemption u/s.54F. It is also noticed from the Valuation Report that under Accommodation of the Building 10 units, i.e., multiple houses, have been built. This also makes the assessee ineligible to claim exemption under section 54F as the words used in Section 54F are constructed a residential house As regards copies of bills submitted for construction expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 54F of the Act. The learned AR relied on the following decisions:- (i) CIT v. K.G.Rukmniamma [ITA No.283/2008 dated 27.08.2010 - Hon ble High Court of Karnataka] (ii) Sri.M.Nagesh Suvarma v. Sri.Narayana, reported in Indian Law Reports 2016 Karnataka Series ILR 2016 KAR 4252 Hon ble High Court of Karnataka. (iii) Sri.Bhatkal Ramarao Prakash v. ITO [ITA No.2692/Bang/2018 order dated 04.01.2019 ITAT Bangalore Benches] On the other hand, learned DR relied on the order of CIT(A) and drew our attention to the amended provision of section 54F of the Act which is applicable to the assessee s case since the Assessment Year involved is 2015- 16. 9. We have heard both the parties and perused the material on record. Section 54F of the Act reads as follows: 54F. (1) [Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family], the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or 74[two years] after the date on which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al house and not a residential unit . Section 54F requires the assessee to acquire a residential house and so long as the assessee acquires the building, it may be constructed, for the sake of convenience, in such a manner as to consist of several units which can, if the need arises, be conveniently and independently, used as an independent residence, the requirement of Section should be taken to have been satisfied. There is nothing in these Sections which requires a 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. If there is nothing in this Section which requires that the residential house should be in built in a particular manner, it seems to us that the Income Tax Authorities cannot insist upon that requirement. A person may construct a house according to his plans, requirements and compulsions. A person may construct a residential house in such a manner that he may use the ground floor for his own residence and let out the first floor having an independent entry so that his income is augmented. It is quite common to find such arrangements, particularly post retireme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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