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of <h1>Doctor denied deductions for property sale; interest charges confirmed, appeal dismissed.</h1> <h3>Dr. Harsha N Billangady Versus Deputy Commissioner of Income-tax, Circle-5 (1), Bangalore</h3> Dr. Harsha N Billangady Versus Deputy Commissioner of Income-tax, Circle-5 (1), Bangalore - TMI Issues Involved:1. Deduction u/s 54 of the Act.2. Alternative claim of deduction u/s 54F of the Act.3. Charging of interest u/s 234B, 234C, and 234D of the Act.Summary:1. Deduction u/s 54 of the Act:The assessee, a doctor, sold a property located in a commercial area and claimed a deduction u/s 54 of the Act, asserting it was a residential property. The CIT (A) upheld the denial of this deduction, noting that the property was used and taxed as a commercial property at the time of sale. The Tribunal agreed, emphasizing that the property's commercial use and description in the sale deed as a commercial building disqualified it from the deduction u/s 54, which applies only to residential properties.2. Alternative Claim of Deduction u/s 54F of the Act:The assessee alternatively claimed a deduction u/s 54F, arguing that the proceeds were invested in a new residential house. However, the Tribunal found that the newly purchased property was demolished and intended for hospital construction, not residential use. The Tribunal cited the requirement that the new asset must be a residential house and concluded that the assessee did not fulfill this condition, thus denying the deduction u/s 54F.3. Charging of Interest u/s 234B, 234C, and 234D of the Act:The Tribunal noted that the levy of interest u/s 234B and 234C is mandatory and consequential, thus dismissing this ground. However, the charging of interest u/s 234D was upheld based on the findings of the Hon'ble ITAT, Delhi, Special Bench in the case of ITO v. Ekta Promoters (P) Ltd.Conclusion:The Tribunal dismissed the appeal, affirming the CIT (A)'s decision to deny the deductions u/s 54 and 54F and upholding the mandatory interest charges u/s 234B and 234C, while confirming the interest u/s 234D. The order was pronounced on July 20, 2012, in Bangalore.
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