TaxTMI 
TaxTMI 
TaxTMI 
2015 (2) TMI 313
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....ed in not allowing deduction of Rs. 60,95,000/- under provision of section 54F of the Act. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal and in ignoring the fact that the Appellant had rightfully claimed that it acquired one half share of the residential house owned by Mrs.Indrani Chandrakant Choksi and thus becoming the owner of the entire residential house in its own capacity and such acquisition of the one half share is entitled for deduction under provision of section 54F of the Act." 2. Brief facts of the case are that the assessee earned long term capital gain on account of sale of shares of Hindustan Platinum Private Limited for an amount of Rs. 5,07,86,320. Out o....
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....see has claimed deduction u/s 54F for buying the one half share, that is, the right in the property from Smt.Indrani C.Choksi, who was one of the members of the HUF. Thus, the entire arrangement was made to avoid tax on long term capital gain and to get benefit u/s 54F. Thereafter he discussed the intention and purpose of section 54F and also referred to the decision of the Hon'ble Madras High Court in the case of CIT v. V.Pradeepkumar, reported in 290 ITR page 90. After detailed discussion he denied benefit of deduction u/s 54F for Rs. 60,25,000. 2.1 Before the CIT(A), the assessee submitted that it had fulfilled all the requirements for being eligible to claim deduction u/s 54F, inasmuch as the assessee has used the net consideration fro....
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....handra Rao [236 ITR 1 (Mad.)] (iii) CIT v. Citibank N.A. [261 ITR 570 (Bom.)] (iv) CIT v. M/s.I.K.International Pvt.Ltd. [ITA No.791 of 2011) (Delhi High Court) dated 29.03.2012] 3.1 He further submitted that the issue, whether purchase of a fractional interest is permissible for the purpose of claiming deduction u/s 54 or 54F or not, has been settled long time back by the Hon'ble Supreme Court in the case of CIT v. T.N.Aravinda Reddy reported in 120 ITR 46. This proposition has been reiterated by the Delhi High Court and Gujarat High Court in the case of Addl.CIT v. Vidya Prakash Talwar 132 ITR 661 (Del) and CIT v. Chandanaben Maganlal 245 ITR 182 (Guj.). Thus, on both the counts for which the A.O. and CIT(A) have rejected the assessee....
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....discussed by the A.O. and CIT(A) are not very relevant for the purpose of deciding this issue. Therefore, the same are not being discussed. 4.1 A residential house, or any house for that matter, cannot exist without or independent of land beneath, so that it (house) would include land or rights therein. The issue, however, before us, is if the owner of the superstructure has necessarily to be also the owner of the land, for his investment therein to qualify for deduction u/s 54 / 54F. In the present case, the co-owner of the land, being family members, holding 4/5th share therein, have given their consent for construction of the house. The assessee and his wife, who constructed the house in the first instance, can thus only be considered a....
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.... in the aforesaid decisions, it is amply evident that the land is an independent and identifiable capital asset, which can be separate from superstructure built up on it. A person can be the owner of a superstructure and can earn income separately from such a superstructure, either in the form of rent or by gain on selling it. It is not necessary that the assessee should hold the exclusive right on the land while purchasing the house or vice versa. Such kind of arrangement always happen in the case of lease land. Therefore, we are unable to agree with the contention of the department that, simply because the property has been sold without the transferring the right in the land, the same cannot be held to be sale of property. 4.2 So far as ....