TaxTMI 
TaxTMI 
2003 (4) TMI 249
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.... Act. 5. The learned Commissioner of Income-tax is not justified in holding that the appellant has purchased two houses and that she will forfeit the claim for exemption under section 54F of the Income-tax Act. 7. The learned Commissioner of Income-tax erred in not following the case law brought to the notice and is not justified in holding that cases sited are distinguishable." Thus, the grievance of the assessee in this appeal relates to denial of exemption in respect of capital gains under section 54F of the Act. 3. The assessee filed a return of income for the assessment year 1999-2000 on 30-6-1998, admitting an income of Rs. 57,390. The same was processed under the provisions of section 143(1)(a) of the Act, on 3-12-1999. Subsequently, it was noticed that the assessee had understated her income, and so, a notice under section 148 was issued, and the assessment was reopened. The assessee filed a return disclosing the same income as was disclosed earlier. The reason for having given the notice under section 148 was that the assessee had wrongly claimed the relief under section 54F of the Income-tax Act, ignoring the provisions of section 54F(2). This issue requires s....
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....n the sale of plot of land at Yellareddyguda, granted for the assessment year 1998-99 had to be withdrawn. His comments in this regard are as under- "The provisions of section 54F(2) of the Income-tax Act, 1961 says that if the assessee purchases within two years after the date of transfer of the original asset, or constructs, within the period of three years after such date, any residential house other than the New Asset, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as per 54F(1)(a)/54(1)(b) shall be deemed to be income chargeable under the head 'Capital gains' relating to long-term assets of the previous year in which such residential house is purchased or constructed. In this case, the assessee has sold the original asset on 6-2-1998 and purchased a new asset on 1-7-1998. However, she has purchased on 15-7-1998, a residential house other than the New Asset which was purchased on 1-7-1998. This act of the assessee has squarely made the assessee ineligible to claim the exemption under section 54F of the Income-tax Act. The contention of the assessee is that the claim of the ....
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....e herself liable for withdrawal of deduction under section 54F granted to her for the assessment year 1998-99. Accordingly, the contention of the assessee is not accepted and rejected as not tenable and the deduction claimed and granted to her under section 54F for the assessment year 1998-99 is withdrawn now and the Long Term Capital Gains are included in the total income of the assessee for the assessment year 1999-2000" The Assessing Officer then proceeded to compute the capital gains at Rs. 9,06,652 in the following manner- "Long Term Capital Gains Sale proceeds received Rs. 9,40,000 Cost of acquisition on 26-10-1978 @ Rs. 15 per sq.yd. Total cost of acquisition as per Deed: Rs. 6,000 The rate as on 1-1-1981 as ascertained from the sub- registrar's office is Rs.25 per sq.yard. Adopting this rate the total cost comes to Rs. 10,075 Cost of acquisition as per cost Inflation Index Rs. 10,075 X 331/100 &n....
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.... was neither any restriction or any compulsion on his part to sell the first floor to the appellant. Therefore, the transfer of the ground floor was a totally free and unqualified act which had nothing to do with the subsequent sale of the first floor. The fact that the appellant, like any other person, also purchased the first floor with the remaining 50% undivided share in the land subsequently on 15.7.1998 in an entirely independent transaction, would not mean that the second transfer on 15-7-1998 was nothing but culmination of the first transfer on 1-7-1998. Had the property been registered with the entire land and only the ground floor in the first instance, perhaps, the appellant could have claimed that single property was registered on different occasions part by part. But, the facts of the case are otherwise. Therefore, the decisions cited by the learned Authorised Representative have no application in the present case. 4.5 Thus, the appellant was the full-fledged owner of the new asset (the ground floor) as on 15-7-1998 when she purchased the first floor as an entirely independent property for which there was no bar for anyone else to buy the same. Accordingly, the prop....
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....eceived from the A.P. Housing Board was parted by the vendor. He placed reliance on the decision of the Allahabad High Court in the case of Shiv Narain Chaudhari v. CWT [1977] 108 ITR 104 in which it was held that several self-contained dwelling units which are continuous and situate in the same compound and within common boundaries and having unity of the structure could be regarded as one house. He also relied upon the decision of the Bombay Bench of the Tribunal in Smt. Kalwanti D. Alreja v. ITO [1996] 54 TTJ (Bom.) 593 and also the decision of the Ahmedabad Bench of the Tribunal in Balvantram U. Chimna v. ITO [2001] 72 TTJ (Ahd.) 451, in support of the propositions. 10. The learned Departmental Representative, on the other hand, strongly supported the orders of the Revenue authorities. He argued that the assessee had acquired a complete title for a residential house, when the ground floor was bought, and that when she bought the portion on the first floor, she bought an additional self-contained house, entailing the withdrawal of the exemption under section 54F, and the inclusion of the said capital gains in the assessment year under appeal. He posed the question whether the....
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....e access to it was only through the ground floor. This is evident from the plan of the ground floor, which may be seen at page 31 of the assessee's paper-book. It is altogether a different matter that the vendor would have put up a separate stair-case, had he not sold the first floor to the assessee, as was done. Similarly, the first floor did not have a separate kitchen as on the date of purchase by the assessee. This is evident from the sketch attached to the sale deed dated 15th July, 1998, which can be seen at page 49 of the paper-book. The first floor had only three rooms, a hall and a verandah, and it had no kitchen. It is again a different matter that but for the sale of the first floor to the assessee, the vendor would have converted one of the rooms into a kitchen or constructed a separate kitchen, but as on the date of purchase of the first floor, it did not have a kitchen. In the circumstances, the first floor cannot be regarded as a separate residential house. It is only the convenience of the vendor that prompted the purchase of the ground and first floor by the assessee through two separate sale deeds. The proximity of the dates of the two sale deeds, viz. 1-7-1998 an....