TaxTMI 
TaxTMI 
2014 (4) TMI 867
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....s earned capital gains, which were not disclosed, and consequently, within the meaning of S.147 of the Act, the Assessing Officer, held the view that there was escapement of income chargeable to tax, to the extent of such capital gains. Accordingly a notice under S.148 of the Act was issued on the assessee. In response thereto, assessee filed return declaring 'nil' income. During the course of assessment proceedings, it was submitted that the assessee, alongwith his father Shri Pannalal Tandon, purchased a piece of land on 17.3.1978 admeasuring 1040 sq. yards, Plot No.6/A in Old Survey No.129/35/D2 at Road No.12, Banjara Hills, Hyderabad for Rs.34,320. The assessee and his son had demolished the house bearing No.8-2-682/3 standing on the above plot and gave the property for development. They have entered into development Agreement-cum-irrevocable General Power of Attorney on 12.7.2000 with M/s. Palace Constructions, Hyderabad. As per clause (4) of the development agreement, both the father and son were entitled to share the built up area on 50:50 basis in exchange of transfer of the land of 1040 Sq. yards. As M/s. Palace Constructions could not commence the construction work as ....
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....the Assessing Officer should have given due cognizance to the cost of acquisition of the land; cost of construction; cost of improvement and exemption under S.54 of the Act. The CIT(A) referred the various submissions of the assessee on these aspects to the Assessing Officer and called for a remand report. The Assessing Officer submitted his remand report on the above aspects, vide remand dated 24.3.2010. On consideration of the matter in the light of the contentions of the assessee and his Authorised Representative, remand report of the Assessing Officer and the further submissions of the Authorised Representative for the assessee on the said remand report, the CIT(A) upheld the Assessing Officer's action in not taking into cognizance the cost of the property demolished or the contentions with regard to cost of improvement as part of the cost of acquisition, on the ground that what was handed over by the assessee to the developer in terms of the development agreement was mere vacant land and nothing else; and also held that the assessee is not entitled to relief under S.54F, though he gave certain relief in the matter of rate to be adopted for estimation of the cost of the land....
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....en land for development and got in return constructed residential property, which is eligible for relief under S.54F of the Act. He further submitted that the land was given by the assessee to the developer for construction of a residential building. In this behalf, he furnished before us a copy of the approved plan of the building. He also placed reliance on the decision of the Tribunal dated 27.12.2011 in ITA No.1014/Hyd/2009 and others in the case of Shri M.V. Subramanyeswara Reddy (HUF), Hyderabad and others and submitted that subsequent change in the usage of the property does not disentitle the assessee to the relief under S.54F, if what was acquired was originally a residential property. He further submitted that the CIT(A) is not justified in relying on the information gathered from the internet, such as 'Google Earth' which not an authentic proof to hold that the property in question is a commercial property. 6. The Learned Departmental Representative, on the other hand, strongly supported the orders of the lower authorities and submitted that the property acquired, has clerly been demonstrated by the CIT(A) in the impugned order to be a commercial property and as such ....
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....e property as residential complex f) The memorandum of understanding dated 14.01.2001 entered for the joint development and construction of the said property also refers to the construction of residential complex. We find no infirmity in the view taken by the CIT(A) as to the residential nature of the property purchased by the assessees, considering the factual aspects noted above. Even though the property was subsequently leased out to M/s.APP Lab Technology P Ltd, and it has been used for nonresidential purposes, on that ground, the deduction u/s.54F cannot be denied. Mere non residential use subsequently would not render the property ineligible for benefit u/s.54F, if it is otherwise a residential property, as held by the Delhi Bench of the Tribunal in the case of Mahavir Prasad Gupta Vs JCIT (5 SOT 353). Respectfully following the said decision of the Tribunal, we are of the opinion that the CIT(A) had rightly allowed deduction u/s.54F." 8. Facts and circumstances in the present case being similar to those considered by the Tribunal in the above case, consistent with the view taken in the above order, to which one of us, viz. the author m....