2014 (4) TMI 387

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.... AR submitted that he does not want to press ground No.2. Hence, this ground is dismissed as not pressed. 4. The only issue in ground Nos. 3 to 7 is with regard to the denial of claim of exemption u/s 54F of the Act. 5. Briefly the facts are, the assessee an individual originally filed her return of income for the impugned assessment year on 30-7-2007 declaring total income of Rs.3,34,215/-. In the said return of income, the assessee declared long term capital gain from sale of two properties but at the same time claimed exemption u/s 54 of the Act at Rs.1,09,78,307 and Rs.16,24,370/- in respect of both the properties sold. However, subsequently, the assessee filed revised return of income on 31-3-2009 withdrawing her claim of exempti....

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....e therefore deputed the Inspector of Income-tax to make a spot enquiry for verifying the assessee's claim. The Inspector of Income-tax after visiting the premises submitted his report on 23-12-2009 wherein he stated that the structure existing is not a residential house but a commercial building being used for a school by name 'Sanskriti'. He stated that the school is a semi residential one and the assessee and her friend are running the school in the said premises and the Inspector observed that the building is having class rooms, big hall and a play area for children in the cellar of the premises. 7. The Assessing Officer on the basis of the report of the Inspector concluded that the building constructed by the assessee against which e....

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....the conduct of the registered valuer and send a report to his senior officer for action." 8. The learned AR strongly contesting the finding of the Assessing Officer as well as the CIT (A) contended that there cannot be any dispute to the fact that the building constructed is a residential building. Referring to the valuation report of the registered valuer a copy of which is at page-2 of the paper book, the learned AR submitted that the registered valuer has clearly mentioned that the property is situated in a residential area. Further, referring to the same valuation report of the registered valuer, it was contended that the registered valuer at page-20 of his report has clearly described the property as a residential building. The lear....

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....ssment order the Assessing Officer has come to a conclusion that the building is not a residential building basically for the reason that the building is used for a school. However, only because the building is used as a school cannot change the nature and character of the building from residential to commercial. Even a residential building can be used as a school or for any other commercial purpose but the relevant factor to judge is whether the construction made is for residential house or for commercial purpose. If the building has been constructed for residential use with all amenities like kitchen, bath room etc., which are necessary for residential accommodation then even if it is used as a school or for any other commercial purpose, ....