TMI Blog2021 (7) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... the above observations, we observe that the arguments advanced by the ld. AR are wrong and not proper that on the date of allotment the villas allotted were inhabitable conditions. The case laws relied on by the ld. AR are not applicable to the case of the assessee. Also, even before us, the assessee failed to substantiate its claim that the developer has handed over semi-finished villas with documentary evidence in this connection, we are of the view that merely writing/ mentioning that the developer has allotted semi-finished villas is not sufficient to claim as the assessee has to substantiate the same by way of documentary evidence that upto what extent the works were completed in the villas and what works are pending to get fully furnished villas - Decided against assessee. - ITA No. 173/H/2018 - - - Dated:- 20-7-2021 - Shri Satbeer Singh Godara, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Assessee : Shri PVSS Prasad For the Revenue : Shri Sunil Kumar Pandey ORDER PER L.P. SAHU, A.M.: This appeal filed by the assessee is directed against CIT(A) - 2, Hyderabad s order dated 8th November, 2017 for AY 2013-14 involving pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's share is 55% of the Built up Area (BUA). He further observe that during the AY 2012-13, the developer handed over the possession of 5 villas to the assessee. It was stated by the assessee that the said villas are in semi-finished stage and the assessee having incurred expenses to semi-finished Villa No.22, offered Long Term Capital Gains (LTCG) of ₹ 81,52,584/- and claimed the value of the same as deduction u/s.54F. and the computation of capital gains for the deduction was given in Para-3 of the assessment order. Further, he observed that during the current year, the assessee sold two villas Nos.25 26 and claimed deduction u/s.54F on the land portion of the transferred villas to the extent of ₹ 1,80,34,472/- and offered LTCG and STCG of ₹ 11,35,604/- out of total sale consideration of ₹ 2,84,8,740/-. The AO noted that the assessee invested the capital gains in the Capital Gains Account Scheme and claimed deduction ujs.54F. The computation of capital gains was produced at Page 45 of the assessment order. 2.2 The Assessing Officer (AO) held that as on the date of transfer of villas Nos.25 26 during the year under consideration, the appellant was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guishable on facts(they were discussed in the impugned order) 2.5 In view of the above, the AO held that the assessee is not eligible for deduction u/s.54F since she was owning 5 residential houses on the date of transfer of villa Nos.24 and 25 and therefore, computed the LTCC at Rs.l,86,17,496/-. 3. Aggrieved, the assessee preferred an appeal before the CIT(A). 4. Before the CIT(A), the assessee submitted that she could not invest in the acquisition of residential property within three years from the date of transfer, out of the amount parked in Capital Gains Account Scheme. Accordingly, the amount claimed was declared as income in the AY 2016-17 and paid appropriate tax on the same. The computation of total income and the challan of tax payments were enclosed at Page 56 60 of paper book. 5. After considering the submissions of the assessee, the CIT(A) upheld the action of the AO by observing as under: 6. I have carefully considered the issue and submissions made by the AR. The factual findings from the case are as under: (i) The JDA entered by the appellant with developer states that the appellant shall be entitled for 5 villas as per the terms of the JDA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dismissed. 6. Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT, and filed written submissions, which are as under: 1.1. During the year the appellant claimed exemption u/s 54F of ₹ 1,80,34,472/- and the Ld. AO. has not allowed the deduction u/s 54F and made an addition to the Computation of Income for AY 2013-14. Aggrieved by the decision of the Assessing Officer, the appellant had filed an appeal before the Ld. CIT(A). The Ld. CIT(A), in his order, opined with the Assessing officer and dismissed the appeal of the appellant. In this regard, we wish to submit that the Appellant does not own more than one residential house, on the date of transfer of the original asset and is therefore eligible to claim exemption u/s 54F of the Act. 1.2 Section 54F provides an exemption on the capital gains on sale of any long term capital asset in proportionate to the amount of sale consideration invested in a residential house. Also, the proviso to section 54F in sub proviso (a}(i) mentions that the exemption under section 54F is not available if the assessee owns more than one residential house, other than the new asset, on the date of transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious dispute between appellant and developer. It went into legal litigation and finally the matter was amicably settled as per arbitration done by the Hon'ble Justice T.N.C RangaRajan (Retired AP High Court Judge). The settlement agreement at Para 6 clearly indicates as under :- An amount of ₹ 50,00,000/- (Rupees fifty lakhs only) paid by the land owners towards extra works carried out by the developer for the bunglows of land owner share will be adjusted against the cost of the same and there will not be further claim of the developer for the same. Refer para 1 of our submission before AO dated 18.01.2016. 1.8. It was also held in few decided cases that, an inhabitable house cannot be equated with a residential house as given under; (a) Smt. Usharanikalidindi v. Income tax officer [2013] 37 taxman.com 360 (Hyd - Trib) (b) Jagdishchander Malhotra v. Income tax officer [1998] 64 ITO 251 (Delhi) 1.9. In addition to above and without prejudice to the above submissions, we wish to respectfully submit that the amount of Capital Gains parked in Capital Gains Account Scheme should have been invested by appellant in a residential house property withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year as well. Ld. ClT(A) was justified in directing the Assessing Officer to grant the assessee deduction under section 54F of the Act for impugned Assessment Year. No interference is required in the order of CIT(A). 1.11. In view of what has been stated above we pray the Hon'ble Bench to grant relief as per the grounds of appeal and submissions made as above. 7. The ld. DR, on the other hand, relied on the orders of revenue authorities. 8. Considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. The contention of the assessee is that at the time of sale of the property, assessee was not in possession of more than one residential house as the villas handed over to assessee by Ambience Properties Limited are not in habitable condition and that they are semi-finished villas. The revenue authorities held that the assessee, failed to demonstrate with any evidence that the said villas were not in inhabitable condition when they were handed over by the developer. Further, no evidence with documentary proof has been given regarding the amounts spent and nature of works carried out for makin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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