TMI Blog2022 (11) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... admission, was to build a residential house thereon, with the super-structure thereon being only incidental. It is for this reason that the assessee intended to pay stamp duty only on the value of the plot and not the super-structure thereon which, unless being acquired for user, is valued at nil/nominal value; the scrap also entailing demolition cost, while striking a bargain for purchase and sale of IP, which also explains the non-mention thereof in the sale deed. No wonder, the dismantling thereof followed immediately after purchase, and it is admittedly only per chance that the dismantling was not complete at the time of spot inspection, resulting in stamp duty being also levied on the super-structure part. The whole premise of allowing exemption on acquisition of a residential house, whether by purchase or through construction, is an addition to the stock of inventory of residential house property of the Nation, so that capital gain to that extent is not subject to tax. Legislative intent is the foundational basis of any interpretive exercise and, therefore, the Courts are to keep the object in view while interpreting a provision (CIT v. Baby Marine Exports [ 2007 (3) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal) before the Tribunal, adopting the same grounds as per the original Form 36, as under:- 1. The learned CIT (Appeals) has not appreciated that order has been passed by DCIT, Circle-1(1) by violating rule of natural justice. 2. The learned Commissioner of Income Tax (Appeals) failed to appreciate that benefit of section 54C cannot given in parts. 3. The learned Commissioner of Income Tax (Appeals) failed to appreciate the relevant material or evidence on record regarding house property, and partly disallowed exemption u/s. 54F of the I.T. Act which is arbitrary and unjustified. 4. The learned Commissioner of Income Tax (Appeals) erred in law in giving relief only to the extent of constructed area of the house whereas as per section 54F cost of complete house including garden open space and parking space other etc. are exempted. 5. The learned Commissioner of Income Tax (Appeals) erred in law in not appreciating the documents produced before him as copy of agreement property tax payment receipt, receipt of municipal corporation, Nagar Nigam lease deed, electricity bill, certified copy of lease deed, copy of diversion Khasra, which clearly shows that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before whom the sale-deed dated 26/03/2012 was presented for registration, and, therefore, levied stamp duty on the super-structure as well. The ld. CIT(A) allowed part relief to the assessee on that basis. That is, the part of the land on which the house stood was regarded by him as purchased by him as a residential house, while treating the balance land as a plot of land, on which, therefore, no exemption u/s. 54F could be allowed, and which the assessee agitates before us, as apparent from the GoA, on the basis that the said, balance land is the land appurtenant to the residential house and, thus, forming part thereof. 4.2 Before us, at the very outset, with reference to the detail of the assets sold (refer table at para 4.1 above), Shri Shrivastava, the ld. counsel for the assessee, was questioned by the Bench as to how could the assessee, irrespective of the merits of the issue raised, be allowed exemption u/s. 54F in view of the fact that the assessee admittedly had, at the time of sale of the agricultural land, the only capital asset sold qualifying for deduction u/s. 54F on the capital gain arising on its sale, more than one residential house, income of which is charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the given facts and circumstances of the case. The permission for withdrawal of the appeal, which was also objected to, and only rightly so, by Shri Mehrotra, the ld. Sr. DR, was accordingly denied and Shri Shrivastava requested to argue the matter, placing on record the documents for which he had sought time to address the issue raised, i.e., the non-satisfaction of the primary condition for deduction u/s. 54F. He, however, instead of arguing the matter, would reiterate the plea of withdrawal, emphasizing that this fact be duly recorded in the ensuing order. We were, accordingly, left with no option but to proceed in the matter, and decide on the basis of the material on record. 4.3 We may, however, before we do so, clarify that the Tribunal is not, in deciding an appeal before it, confined to the grounds set forth in the memorandum of appeal or even that taken with its leave. The only caveat is that the party which may be affected is to be allowed sufficient opportunity of being heard, i.e., observing the principles of natural justice (rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963). The reason is not far to seek: there is no estoppel against law and, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, resulting in stamp duty being also levied on the super-structure part. The whole premise of allowing exemption on acquisition of a residential house, whether by purchase or through construction, is an addition to the stock of inventory of residential house property of the Nation, so that capital gain to that extent is not subject to tax. Legislative intent is the foundational basis of any interpretive exercise and, therefore, the Courts are to keep the object in view while interpreting a provision ( CIT v. Baby Marine Exports [2007] 290 ITR 323 (SC)). What has been in effect and substance purchased in the instant case, as also evidenced by the sale deed, is only a plot of land for construction of a residential house thereon. Rather, but for the demolition having been completed by the date of inspection, no stamp duty would have been paid on the structure part. No case for construction of a residential house has been preferred or pressed at any stage, including before us. The assessee is, accordingly, not entitled to any exemption u/s. 54F on the purchase of plot. Further still, the very fact of returning nil capital gain, determined at Rs. 46.93 lacs, implies the claim of exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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