2014 (6) TMI 811

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....fter, the assessee filed revised return of income on 04-02-2011 declaring income of Rs. 12,59,760/-. Notice u/s. 143(2) r.w.s. 129 of the Income Tax Act, 1961 (herein after referred to as 'the Act') was issued to the assessee. During the course of scrutiny assessment, the Assessing Officer observed that the assessee had admitted the receipt of sale consideration of Rs. 3.00 Crores on account of sale of land and building at Sholinganallur and Rs. 40.00 Lakhs on account of sale of flat. Long Term Capital Gain on the aforesaid properties was determined as Rs. 2,36,75,084/- and Rs. 15,19,367/- respectively. The assessee claimed entire capital gain as exempt u/s.54 of the Act. The Assessing Officer after verification came to the conclusion that ....

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....wards the construction of residential flat within the period of three years as envisaged in the provisions of section 54 of the Act. Thus, the assessee is entitled to claim exemption u/s.54. 4. On the other hand, Shri T.N.Betgeri, appearing on behalf of the Department vehemently supporting the order of CIT(Appeals) submitted that the property sold is an agricultural land. The built up area on the property is only 600 sq. ft., whereas total area of the land is 12,000 sq. ft. The ld.DR vehemently opposed the grounds raised in appeal and prayed for the dismissal of same. 5. We have heard the submissions made by the representatives of both the sides. We have also perused the orders of the authorities below and the documents referred to by....

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.... the Long Term Capital Asset to be transferred should be a residential house. A close reading of the impugned order shows that the reasons for not treating the property as residential is, the built up area viz-a-viz total land and description of land given in purchase deed. The authorities below are carried away by proportion of covered area (600 sq. ft.,) to total area of land (12000 sq. ft). In Section 54, the term used is residential house, there is no minimum specification of covered area to consider the property as residential building. The property is situated within the municipal limits of Sholinganallur, door number has been allotted to the property by Municipal Authorities. Once a door number is allotted to the premises, this itsel....