TaxTMI 
TaxTMI 
2017 (4) TMI 119
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....al income was assessed at Rs. 1,21,77,445/-. 3. Aggrieved with the above order, the assessee preferred an appeal before the CIT(A) and the CIT(A) confirmed the order of AO. 4. Still aggrieved, the assessee is in appeal before us raising the following grounds of appeal. "1. The learned Commissioner of Income Tax-(Appeals)-IV, erred in holding that the assessee held more than one residential house other than the new asset on the date of transfer of the original asset. 2. The learned Commissioner of Income Tax-(Appeals)-IV, ought to have held that property at Ooty was not a residential house for the purpose of Capital gains. 3. The learned Commissioner of Income Tax-(Appeals)-IV, erred in not accepting the expenditure incurred by the assessee towards cost of improvement the property sold during the year." 5. As regards ground Nos. 1 & 2 relating to the disallowance of exemption u/s 54F of the Act, the assessee had sold 750 sq. yards of land at plot No. 250 III, Road No. 78, Jubilee Hills Hyderabad, owned jointly with her husband, Dr. Cheeti Sajjan Rao, for a sum of Rs. 1,38,75,000/- (being her share of sale consideration). The assessee claimed deduction u/s. 54F on a....
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....e of the appellate proceedings, the AR submitted that the structure at the land at Ooty was merely an outhouse in the nature of a security guard room, 130 years old, which could not be treated as a residential house though for the purpose of registration, stamp duty had been collected on the structure. The AR also submitted photographs of the Ooty property in support of the claim that the property was merely an outhouse. This was in the nature of additional evidence and it was submitted that the additional evidence could not be filed earlier during the assessment proceedings since the assessee, being a non resident, was out of the country. In view of this explanation, the additional evidence was admitted and referred to the Assessing Officer for his comments. 7.1 The Assessing Of ficer vide his letter dtd. 6.12.2012 has submitted as follows: " As seen from the photograph, the house appears to be in a livable condition, it is not clear whether the photograph was taken from an angle which completely covers the house or not. However, as per the sale deed the house comprises of ground floor of 1 ½ feet thick walls and the first floor comprises of tile roof of 1600 sft. As ....
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....connection from the storage tank 'for domestic purpose'. This right shows that water was being indeed used for domestic purpose which in turn would pre-suppose the habitation of the vendors or their authorised persons in a residential house located on the site. Page 12 of the sale deed refers to the existence of an electricity service connection. The existence of the electricity board service connection No. 296 is also evidenced in the schedule of the property. Page 12 of the sale deed also has the following narration: "The purchasers shall apply to the Revenue and Municipal Authorities for transfer of patta and house registry in their name in respect of the property hereby conveyed." This again confirms that there was a house in existence at the site. The reference to the building door number in the schedule of property and the detailed description of the building in annexure 1A to the sale deed go to establish that there was a 'residential house' in existence at the site. Even if the AR's plea that the reference to the first floor in the annexure 1A was merely a typographical error were to be accepted, the fact that the area of the building was 1600 sft.....
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....ea and the photo submitted by the assessee shows that it is habitable. In our considered view, assessee's house can be regarded as residential only when it is livable. Mere fact that there exists super structure, it cannot be considered as residential. We are also not in a position to adjudicate or give findings by merely looking at the photo submitted by the assessee. In our view, assessee should submit few more photos of the house from interior portion to substantiate that it cannot be used for residential purpose. Hence, we remit this case back to the AO to verify the claim of the assessee in the light of the additional evidence and complete the assessment. This ground is treated as allowed for statistical purposes. 11. As regards ground No. 3, relating to the disallowance of the expenditure on cost of improvement of the property sold, the assessee had claimed to have incurred expenses of Rs. 4. lakhs on construction of boundary wall and gate for the land sold. However, she was unable to furnish any evidence on the ground that the details have been given to her auditor who had passed away and his assistant had also left the organization. Therefore, the AO disallowed the said ....