TaxTMI 
TaxTMI 
2008 (4) TMI 363
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.... claimed exemption under s. 54F of the Act. It may be noticed that exemption under s. 54F cannot be allowed to an assessee who owns more than one residential house before purchasing a new asset. Since the assessee owns residential houses, she changed the stand during the course of assessment proceedings and claimed exemption under s. 54 of the Act contending inter alia that the property sold as well as purchased were residential units and thus upon investment of sale proceeds in purchase of new asset, she is entitled to the benefits provided under s. 54 of the Act. The AO personally inspected the impugned properties to find that the Banjara Hills property as well as Jubilee Hills property can properly be classified as 'plots of vacant land'. but shown as houses to obtain municipal number, electricity connection etc. He also noticed that temporary sheds were erected in a corner of the, respective plots in order to obtain municipal number, water connection etc., and they are not meant for habitation of the assessee. In fact, there is nothing on record to suggest that assessee ever used it for self-occupation or let out to tenants. The AO has captured the plots in photos to drive home....
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....f the house and the land appurtenant thereto; the land appurtenant to the Jubilee Hills house cannot be bifurcated for construction without the approval of the Jubilee Hills Co-operative Housing Society. He has gone by the description in the sale deed wherein it is described as "house under municipal ward and block numbers.....", to conclude that the property that was sold as well as purchased were residential houses within the meaning of the Act. With regard to the decision of the Hon'ble Andhra Pradesh High Court in the case of Zaibunnisa Begam he observed that the Court has not laid down strict guidelines to determine the extent of land appurtenant to a building inasmuch as determination of the extent of the land appurtenant to a building takes into consideration variety of situations for which no infallible guidelines can be laid down. In the absence of any evidence that the appurtenant land can be put to any other independent use, the learned CIT(A) concluded that the assessee cannot be denied the benefit provided under s. 54 of the Act. 6. Aggrieved, the Revenue is in appeal before us. The learned Departmental Representative strongly relied upon the order passed by the AO to....
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....igh Court in the case of Zaibunnisa Begam. The learned Departmental Representative adverted our attention to the relevant observations to submit that though no infallible test can be prescribed, the Court prescribed certain guidelines which help in ascertaining the purpose of use of the property; they should not be based on artificial consideration but from the point of view of the persons occupying the property. Learned Departmental Representative submitted that the intention of the legislature was to provide tax benefit to those persons who own and use the residential house for self-occupation and upon sale of the same, purchases another accommodation. Since some assessees experienced difficulties in fulfilling this condition of 'user' on account of transferable jobs etc., the expression 'used' was omitted. Thus, the underlying object of granting exemption under s. 54 of the Act was to encourage citizens to acquire residential houses mainly meant for their use. In the instant case, neither the property sold nor the property purchased was intended to be used as residential house as such, since only temporary structures were erected in a corner of each plot so as to obtain municipa....
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....ependent user from the point of view of the assessee and in fact there is no evidence to indicate that any portion of the land contiguous to the building was applied to the user other than the enjoyment of the building. Thus, even by applying tests laid down by the Hon'ble Andhra Pradesh High Court, the impugned properties cannot be said to be having excess land, i.e., land not appurtenant to the building. He thus strongly supported the order passed by the first appellate authority. 9. We have carefully considered the rival submissions and perused the record. Marginal heading of s. 54 of the Act, which is relevant in this context, refers to "profit on sale of property used for residence", Main section speaks of transfer of a capital asset being building or lands appurtenant thereto and being a residential house-the income of which is chargeable under the head income from house property, It is not the case of the assessee that the roofed structure built on the Banjara Hills land was either self-occupied or let out and there is nothing on record to suggest that it was intended to be used as residence. Considering the market value of the property, the so-called "house" constructed on....