TaxTMI 
TaxTMI 
2013 (10) TMI 776
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....re us and has raised the following grounds. 1. The CIT(A) erred in rejecting the claim of deduction u/s. 54F of the appellant of Rs. 58,87,176/- despite the fact that the appellant has invested in residential house Long Term Capital Gain arisen on sale of land. 2. The CIT(A) erred in confirming the addition of Rs. 2,00,000/- as unexplained expenditure ignoring the explanation of the appellant in toto and offer to inspect the premises to verify use of old timber etc. in four own residential flats. 3. The CIT(A) erred in making addition of Rs. 1,00,000/- as undisclosed income for sale of steel, timber, copper etc. ignoring the explanation of the appellant. 4. In the cross appeal, the ground raised by the Revenue reads as under: 1. The ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.64,34,143/- made by the A.O. treating the same as the business income accrued to the assessee from business activity and/or adventure in the nature of trade, without appreciating the facts of the case and the findings brought out by the A.O. 5. Since the grounds of Assessee and Revenue are interconnected, all the grounds are considered together. 6. During the co....
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....for her own use were on two different floors, independent units and not interconnected and municipal taxes were also levied for each unit separately and therefore according to him the 4 flats cannot be considered to be a single unit for the purpose of claiming exemption u/s 54F and therefore held that Assessee is not eligible for deduction u/s 54F. AO also noted that on the demolition of bungalow, Assessee would have incurred expenses. Since expenses on demolition was not accounted by the Assessee in her books and in the absence of details, he made an addition of Rs 2 lacs considering the same to be unexplained expenditure made out of income from undisclosed sources. He also noted that the demolition of bungalow would have resulted into generation of timber, steel, copper from electric wires, doors, windows etc. Since no income was reported by Assessee on account of sale of the aforesaid items, he estimated its sale to be of Rs 1 lacs and added it to the income. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) after considering the submissions of the Assessee held that the income from sale is not be considered as business income by holding as under:....
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.... of trade" postulates the existence of certain elements in the adventure, which in law would invest it with the character of trade or business. Further, the question whether the transaction is an adventure in the nature of trade has necessarily to be determined in the light of cumulative effect of the entire set off of facts to be gathered from material on records. In this case, the assessee had entered into an agreement with the builder to get the multi storied unit constructed on the plot of land where originally a single storied house existed and which was in occupation of the assessee since 1973. The Hon'ble Court held that the intention at the time of purchase of the house, contemporaneous conduct and the circumstances peculiar to the assesses case left no room for doubt that the transaction resulted only in capital gains. It is pertinent to note that the SLP filed by the Department, against the order of the Hon'ble Delhi High Court, was not entertained by the Hon'ble Apex Court. Further, in the case of CIT vs Dr D L Ramachandra Rao, Hon'ble Madras High Court was also ceased with a matter identical to facts of the present case. In this case, the assessee had constructed a buil....
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....ld have been completed within three years from the date on which the transfer takes place. The appellant incidentally does not satisfies this condition also for several reasons. To begin with the transfer of property i.e. the sale of four flats took place on the date on which the sale deed was executed. As per the details filed by the appellant, the sale deeds for all the four flats sold were executed between the appellant and flat buyers as per following :- No. Name of the buyer Date of sale deed 1 Kankuben Mansingbhai Patel & Vipulbhai Mansingbhai Patel 10.09.2008 2 Naishadh Rajendra Diwanji & Toral Naishadh Rajendra Diwanji 15.12.2008 3 Pavni Naishadh Diwanji 15.12.2008 4 Equipment & Space Engineering India Ltd 09.01.2009 2.11 A perusal of the above shows that transfer of asset took place in F Y 2008-09 relevant to A Y 2009-10. It will be seen from the definition of the transfer in relation to a capital asset that the capital gain will be chargeable to tax only on account of sale or any transaction involved allowing of the possession of any immovable property to be taken or in part performance of an contract of the a nature referre....
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....rposes of transfers. In the instant case, the ownership and possession of the property i.e. the flat has been given by the appellant to the flat owners only from the date of saledeed. Naturally speaking on the date of banakhat, no possession of flat could have been given as the same was not in existence. Without prejudice to the above, the Id A O has brought on records, the evidence that the flats in possession of the appellant, are being used as registered offices of the company owned and operated by sons of the appellant. Sub section 4 of section 54F further provides that the amount of LTCG received at the time of transfer of asset which could not be utilized for purchase / construction of another asset is required to be deposited in a specified account of a nationalize bank before the due date of filing of return of income u/s. 139(1). There is no evidence on record that the same was done in this case. 2.13 In this regard, it is noted that in the case of Pankaj Wadhwani vs CIT 18 Taxman.com.33 (2012) Hon'ble ITAT, Indore has dismissing assesses appeal for grant of deduction u/s. 54F, held as under :-.......................... Accordingly, in view of the discussions made in....
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....the course of current appellate proceedings also the appellant has not been able to bring forth any cogent evidence that could have indicated that the additions were unwarranted. The appellant has merely repeated the arguments taken before the Id A O. As discussed above, the arguments forwarded by the A O as also the estimations made by him for making this additions have been found to be fair and reasonable, it is held that no interference is required to be made in the additions made by the Id A O to the returned income of the appellant. Consequently, the addition of Rs. 2.00,000/- on account of undisclosed demolition expenses and Rs. 1,00.000/- on account of undisclosed income earned from sale of scrap items aggregating to Rs. 3,00,000/- made by the Id A O is confirmed and the ground of appeal raised is dismissed. 9. Aggrieved by the aforesaid order of CIT(A), the Revenue and Assessee are now in appeal before us. 10. Before us, the Ld .A. R. reiterated the submissions made before AO and CIT(A). He further placed reliance on decisions in the case of ITO vs Chimanlal Thakordas (1991) 41 TTJ (Ahd) 526, CIT vs Gita Duggal (2013) 84 DTR 346 and other cases. He further submitted t....