TMI Blog2023 (2) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... ires is not coming out of the assessment order but in any case as it is noticed that the assessee has provided the details of the expenditure, we are of the view that the expenditure is allowable expenditure. Consequently, the AO is directed to allow the expenditure claimed onwards cost of improvement of the land sold by the assessee. Deduction u/s.54F in respect of the four-storied house building including basement purchased by the assessee - AO has denied the assessee the benefit of the deduction u/s.54F of the Act on the ground that the assessee has purchased a commercial property - HELD THAT:- Clearly the property is being used for residential purpose and the remand report is providing the present scenario in respect of the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 - Shri George Mathan, Judicial Member And Shri Arun Khodpia, Accountant Member For the Assessee : Shri B.Panda, Senior Advocate with Shri B.R.Panda, Advocate For the Revenue : Shri S.C.Mohanty, Sr. DR ORDER PER BENCH : These two appeals are filed by the assessee against the separate orders of the ld.CIT(A)-2, Bhubaneswar, both dated 30.11.2018, passed in I.T.Appeal Nos.0138/2017-18 0352/2017-18 for the assessment years 2015-2016 2016-2017. 2. Shri Basudev Panda, Senior Advocate assisted with Shri B.R.Panda, Advocate represented on behalf of the assessee and Shri Shri S.C.Mohanty, Sr. DR represented on behalf of the revenue. 3. It was submitted by the ld. Sr. Advocate that the assessee owned 5.586 deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. CIT(A). 5. We have considered the rival submissions. A perusal of the paper book filed by the assessee clearly shows that the assessee has provided ledger extract of the expenses incurred towards the development of the land at pages 24 to 28 of the paper book. The expenses are mainly the cost of the sand transported through Hywa and labour charges and dozer charges and roller charges. The assessee having produced the details of the expenditure, the same could not be blindly rejected without examining the said claim. It is noticed that the ld. AO has rejected the assessee s claim demanding more concrete evidence. What is the nature of the evidence that the AO desires is not coming out of the assessment order but in any case as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit the deduction u/s.54F of the Act to the extent of Rs.1,52,50,600/- representing the cost of the land and building purchased and the for the assessment year 2016-2017. Further the construction cost of Rs.36,61,432/- is also allowable u/s.54F of the Act. It was the submission by the ld. Sr. Advocate that the assessee had purchased a land and building consisting of 2178 sq.ft. (approximately 0.005 decimal) along with building of four floors being basement, ground floor, first floor, second floor and third floor, totaling to 6704 sq.ft. It was the submission that the said building was used as a residence of the assessee though the seller had been using the property as a guest house. It was the submission that as the assessee has been u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n reply, ld. Sr. DR submitted that the statute being the provision of Section 54F of the Act specifies that the assessee has within a period of one year before or two years after the date on which the transfer took place purchased or within a period of three years after that date has constructed one residential house . It was the submission that what was required under the statute was the purchase of one residential house . The guest house which has been purchased by the assessee was not a residential house but was a commercial building and consequently the assessee was not entitled to claim of deduction u/s.54F of the Act. It was the submission that the order of the AO and that of the ld. CIT(A) is liable to be upheld. 8. We have cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 54F of the Act in respect of the portion being used by the assessee as his residential house i.e. the area in relation to the first floor of the said building with the portion of the land apportioned thereto. The total area of the building as per the sale deed is 6704 sq.ft. The area of the first floor is 1626 sq.ft., therefore, the assessee would be entitled the benefit of deduction u/s.54F of the Act in respect of (Rs.1,05,00,000 + 7,60,000 + 3,04,542) = Rs.1,15,64,542/- / 6074 x 1626 = Rs.30,95,809/-. This represents about 26.75% of the total investment. Consequently, the AO is directed to grant the assessee the benefit of deduction u/s.54F of the Act in respect of the first floor of the said commercial-cum-residential building purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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