Non-Resident Indian's Deduction Disallowed for Non-Adjoining Properties; ALV Determination Upheld

The Tribunal upheld the Assessing Officer's decision to disallow deduction under Section 54F for one of the residential properties reinvested by the Non-Resident Indian, as the properties were not adjoining. Additionally, the Tribunal upheld the determination of Annual Letting Value (ALV) for vacant commercial premises based on expected rent in the open market, dismissing the appeal of the assessee. The judgment was pronounced on 15th March 2017 at Ahmedabad.

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Issues:
1. Claim of deduction under Section 54F instead of Section 54 for reinvestment in two residential properties.
2. Determination of Annual Letting Value (ALV) on vacant commercial premises compared to rented commercial premises with amenities.

Analysis:

*Issue 1: Claim of deduction under Section 54F instead of Section 54 for reinvestment in two residential properties*

The assessee, a Non-Resident Indian, sold commercial properties and reinvested the sale proceeds in two residential properties. The Assessing Officer disallowed the deduction under Section 54 but reconsidered it under Section 54F. The AO allowed deduction for one residential property and denied it for the other, as they were not adjoining. The CIT(A) upheld the AO's decision, stating that the properties were separate and not eligible under Section 54F. The Tribunal concurred, finding the properties distinct and supporting the AO's decision. The appeal on this issue was dismissed.

*Issue 2: Determination of Annual Letting Value (ALV) on vacant commercial premises*

The Assessing Officer determined ALV for vacant commercial premises based on expected rent in the open market. The CIT(A) upheld this decision, noting that the ALV was calculated based on actual rent received. The Tribunal found that all commercial spaces were adjacent, and without evidence of special amenities in rented premises affecting rent, upheld the ALV determination. The appeal on this issue was dismissed.

In conclusion, the Tribunal upheld the decisions of the Assessing Officer and CIT(A) on both issues, dismissing the appeal of the assessee. The judgment was pronounced on 15th March 2017 at Ahmedabad.

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