TaxTMI 
TaxTMI 
2017 (11) TMI 173
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....r of Income-Tax (Appeals)-XV, Ahmedabad may be set-a-side and that of the order of the Assessing Officer be restored." 3. In this case, return of income declaring income of Rs. 1,23,74,797/- was filed on 28th September, 2010. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the case on 25th August, 2011. During the course of assessment proceedings, the assessing officer noticed that assessee has shown long term capital gain in respect of sale of land at Sola, Survey No. 98. The sale consideration of the land was shown at Rs. 67,50,000/- and the cost of acquisition was worked out at Rs. 13,84,012/- .The net gain was shown at Rs. 53,65,988/- which was claimed as exempt u/s. 54F of the act. Regarding the claim of the assessee for exemption u/s 54 F the assessing officer stated that exemption u/s. 54F of the act is available in respect of capital gain arising from transfer of long term capital assets not being residential house and the assessee has, within a period of one year before or two years after the date on which the transfer took place purchased or within a period of three years after the date of sale construct a residential house. The e....
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....f Section 54F of the Act it is clear that the condition to be fulfilled is that the assessee has, within the period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house and the assessee is not hit by the proviso to Section 54F (I). The claim of the assessee is that he has constructed a residential house within a period of three years after the date of transfer. The Assessing Officer has denied on the ground that what is constructed is not a "residential house" and even otherwise the genuineness of amounts spent on construction is not established. The phrase "a residential house" is not defined under the Act. Therefore, under a common parlance meaning, the construction should answer the quality of a "residential house". In the present case it is seen that, for construction of the residential house the appellant first of all leveled the land so as to raise it from the ground level and to make it even. He has also constructed compound wall around the plot to guard the property. In my opinion the same will qualify as expenditure on construction of residential hou....
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....54 prior to amendment by Finance Act, 1982 with effect from 1st April, 1983. Therefore the condition now being only to purchase or construct a residential house and not necessarily for his own residence cannot be - imported into. Therefore the factor which has weighed in the mind of Assessing Officer are de horse the provision of Section 54F of the Act and hence not tenable on the facts of the ease. The appellant can construct a residential house and may still lease it out for the purpose of residence of other person or it can be used by any person but that will not disentitle from being called a "residential house". It is a fact of life, particularly under Indian condition, that majority of the populations are living in a house without facilities like separate kitchen or even bathroom with other modem facilities but still they are living answers the quality of 'a residential house". The decision of Hon'ble Punjab and Hariyana High Courts in the case of Ashok Sval relied by Assessing Officer is not applicable to the facts of the case it is seen that and even as admitted by the Assessing Officer himself there is a toilet, electricity connection, water tank and the connecting....
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....nity of such labour. In case the labour is known to appellant then he should have produce at least some before A.O. to evidence that. It is in this regard the expenses from 01/02/2010 to 02/08/2010 are of Rs. 22,88,433/- which appears to be doubtful being not substantiated by those labour and its payment were delayed. Surprisingly no such labours name is repeated in subsequent labour & its payment. In my view it will be appropriate to treat 50% of such expense as not evidenced i.e. Rs. 11,44,216/- say 11,50,000/- expenses claimed u/s 54F of the Act are required to be disallowed. It is therefore out of the claim u/s 54F of the Act for expenses of Rs. 66,00,000/- incurred by appellant for construction of residential property, only Rs. 54,50,000/- (66,00,000 - 11,50,000) is considered as allowable. The A.O. is directed to give deduction u/s 54F of the Act for expenses of Rs. 54,50,000/-. 3.8 In reference to incorrect figure adopted by A.O. for cost of acquisition for sale of land at sola, survey No. 98 (para 5.13 of impunged order), I am inclined with A.O. who vide letter dt. 18/09/2012 (page 16 of P.B) called for details of purchase & sale deed of this land which were submit....
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....ity connection in the house with meter near the entry of constructed house. We have also observed that existence of these facts were not disproved by the assessing officer as he has not referred the matter to the valuation officer. After taking into consideration the specific facts of this case we are of the view that for lack of some facilities it is not appropriate to categorized the aforesaid house as non-residential house. Inter alia we are inclined with the decision of the Ld.CIT(A) that the assesse has failed to fully substantiate the claim of labour expenses by not furnishing the relevant evidences as elaborated in the findings of the Ld.CIT(A).Therefore, we do not find any error in the findings of the Ld.CIT(A) of disallowing 50% of labour expense(Rs 11,50,000/- ) which resulted in reducing the construction value of the residential property to Rs. 54,50,000/- and restricting the deduction u/s 54F of the Act to Rs. 52,63,756/- on the basis of 1/6th share of the assessee. Therefore, the appeal of the revenue is dismissed. CO No. 308/Ahd/2014 6. The assessee has raised following grounds in the cross objection:- "1. Ld. CIT (A) erred in law and on facts in partly....