TaxTMI 
TaxTMI 
2014 (10) TMI 932
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....he Assessee obtained the site on settlement and constructed a three storied building i.e., ground plus two floors. The first and second floors of the building together with the proportionate share in the land on which the building stands is the subject matter of transaction in question. There is no dispute that the building as such was held by the assessee for a period of less than 36 months prior to the date of transfer. However the land was a long term capital asset. The computation of capital gains as is attributable to the building and the land as set out in the assessment order is not disputed. The land has been treated a s long term capital asset and the capital gains treated accordingly. There is no dispute about the cost of construc....
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....e reasoning is that section does not contemplate two separate sales of building and appurtenant land. If appurtenant land can be sold independently, it ceases to be appurtenant which goes with the building. Hence the deduction under Section 54 will be admissible in case the capital asset is a residential house. Such capital asset must be a long term capital asset. A house consists of building and land appurtenant thereto. Hence building as well a s appurtenant land should be long term capital asset. In the instant case, land is long term capital asset while the building constructed on it is a short term capital asset. Hence, the house, which was transferred, is not a long term capital asset because part of it is short term. Section 54 does ....
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....indu Undivided Family in respect of the buildings or lands appurtenant there to. The said provision being a beneficiary provision, should be liberally and harmoniously interpreted so as to give the benefit even in respect of land which is appurtenant to residential house. If a land appurtenant to a residential land is entitled to the said benefit, the land on which the residential house is put up is also should be gaining benefit. Otherwise section looks absurd . 9. Per contra, learned counsel appearing for the Revenue submitted the word "or" should be read as "and" as held by the Tribunal. The benefit is not available to sale of lands independent of the buildings, and therefore, he submits no cause for interference with the impugned ord....
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....tial house. Understood in that manner we think the authorities below and the Tribunal were not justified in the view taken by them. We are fortified in our view by the decision of the Andhra Pradesh High Court in CIT Vs. Zaibunniasa Begum (151 ITR 320). The land appurtenant thereto has not been defined under the Act and it is understood in popular non-technical sense. The definition given to the same either under the Wealth Tax Act or Urban Land (Ceiling & Regulation) Act are not relevant. In that decision, however, certain tests were laid down to find out whether the vast extent of land sold therein was part of the residential unit so that it may be treated as land appurtenant thereto. Indeed, it was noticed there that in deciding as to wh....
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....ng in a residential house and the land pertinent thereto. That house he may be using it for his benefit. As long as the said land is not used for any commercial or non-residential purpose, the user of the land by the resident is for residential purpose only. If such a person chooses to sell only the land which he was using for residential purpose, the legislature has conferred the benefit in respect of/to the capital gains arising there from under Section 54(1) of the Act. If a land appurtenant to a residential house is entitled to the said benefit, we find it difficult to accept that the land on which the residential building is constructed is not entitled to the said benefit. 12. When a property, residential house is sold, the sale ....