TaxTMI 
TaxTMI 
2016 (3) TMI 1015
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....2010-11 on 24.5.2011 declaring a total income of Rs. 4,77,330/-. A survey u/s 133A of the Income-Tax Act, 1961 (hereinafter called as 'the Act') was conducted in the business premises of the assessee on 16.8.2012. During the course of survey operation, the assessee agreed to file revised return by admitting the additional income of 6% on sales made on order book basis, that are not recorded in the books of accounts maintained in the regular books of business. During the course of survey, it was noticed that the assessee had entered into a joint development agreement-cum- General Power of Attorney along with 3 other co-owners with M/s. SNK Builders for development of a piece of land. As per the JD agreement, the assessee was received 3 flats....
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.... by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee submitted that the A.O. was not correct in rejecting exemption u/s 54F of the Act, as he has reinvested sale consideration for acquiring 3 flats by virtue of joint development agreement. The assessee, further, submitted that though he owned two flats at Soubhagya Nilayam, those are used for commercial purposes and also let out to two corporate entities i.e. one for Reliance General Insurance Company Limited and another for KAL Radio. The two flats owned by him are commercial in nature and used for commercial purposes. The municipal authorities after noticing the usage of the flats for commercial purpose issued a notice demanding mun....
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....these observations, confirmed the assessment order and rejected the appeal filed by the assessee. Aggrieved by the CIT(A) order, the assessee is in appeal before us. 4. The Ld. A.R. of the assesee submitted that the CIT(A) was not justified in sustaining disallowance of exemption u/s 54F of the Act, as the assessee does not own any other residential house other than the new flats as on the date of transfer of asset. The Ld. A.R. further submitted that the two flats already owned by the assessee are commercial flats and let out for commercial purposes. Therefore, the appellant cannot be denied exemption u/s 54F of the Act on the ground that the assessee owned more than one residential house other than the new house. In this regard, relied....
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....no doubt that the assessee owned two residential properties as on the date of transfer of asset other than new house. Though, the properties are let out for commercial purposes, the basic fact that these flats are meant for residential purposes cannot be ignored. The mere fact that the properties are let out for commercial purposes would not alter the nature and characteristics of the flats. 6. Section 54F of the Act provides for exemption from capital gain, in the cases where the assessee transfer any capital asset, other than residential house and reinvested sale consideration for purchase of residential house subject to certain conditions. The one such condition is that as on the date of transfer of original asset, the assessee should....
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....lan sanction was for residential purpose. The bench held that once property purchased was a commercial and put to use for commercial purposes, though the plan sanction was residential purpose, it cannot be held that the property was residential property and eligible for exemption u/s 54F of the Act. 8. In the present case on hand, the records show that the assessee along with family members purchased incomplete residential apartment consisting of 8 flats. The assessee has taken housing loan from bank. The plan sanction was also for the purpose of residential purpose. The revenue records show that properties are residential in nature. Just because, the flats are let out for commercial purposes for financial viability, it cannot be said th....