TaxTMI 
TaxTMI 
2017 (12) TMI 784
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....judice, in any case, the calculations are grossly erroneous and excessive." 3. From the above ground, it is gathered that main grievance of the assessee relates to the deduction u/s 54F of the Income-tax Act, 1961 (hereinafter referred to as the Act) for Rs. 36,65,714/- on account of capital gain earned on sale of Indrapuram plot. 4. Facts of the case in brief are that the assessee filed the original return of income on 18.10.2013 which was processed u/s 143(1) of Act. Subsequently, the case was selected for scrutiny. During the course of assessment proceedings, the AO asked the assessee to supply reasons for high investment as compared to the total income. The assessee submitted that investments were made out of income deductible u/s 54F of the Act. The AO observed that a residential Plot No. 76, Nitikhand-II, Indrapuram was sold by the assessee (sole owner) for Rs. 44,80,000/- on 05.07.2012 and on the same day Plot No. 300, Nitikhand-II, Indrapuram was purchased as co-owner. The assessee submitted that a sum of Rs. 1,14,60,000/- was invested jointly with his sister as equal contributor of Rs. 57,30,000/- in purchase of land at 300, Nitikhand-II, Indrapuram, Ghaziabad, U.P. and ....
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....tion of Rs. 36,65,714/- on account of long term capital gain. 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and filed additional evidences in the form of pictures of the completed house, copy of bank statement showing payments to contractor and a certificate of the building contractor regarding completion of the house. It was further stated that since the house was completed after the assessment, therefore, those evidences could not be produced at the time of assessment proceedings. It was contended that the pictures and the report of the Inspector had not been confronted to him, therefore, he was prevented by sufficient cause from rebutting the same. The ld. CIT(A) also asked the remand report from the AO who furnished the report vide letter dated 22.07.2016. The said report has been reproduced by the ld. CIT(A) in para 5 at page nos. 9 to 17 of the assessee's paper book (for the cost of repetition, the same is not reproduced herein). Thereafter, the ld. CIT(A) confronted the remand report to the assessee who in his rejoinder vide letter dated 31.08.2016 submitted that the property situated at Plot No. 76 at Niti Khand-II, Indirapuram was sold on 05.07.2012....
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....t that the steel gate on boundary wall of earlier photographs were different and that the assessee had filed completion certificate only on 30.06.2016 which would have been relevant date for completion of the house which shows that within three years the assessee had only created a temporary brick structure to hoodwink the Revenue. The ld. CIT(A) held that if the house was not in a habitable condition, the same could not be considered residential house. The reliance was placed on the following case laws: * Usha Rani Kalindi Vs ITO 37 Taxman 360 (ITAT Hyd.) * Saleem Fazelbhoy Vs DCIT (2007) 106 ITD 167 (Mum.) * Mrs. Sonia Gulati Vs ITO (2001) 115 Taxman 232 (Mum.) 8. The ld. CIT(A) was of the view that the case of the assessee did not fall within the clause of Section 54F of the Act because the assessee neither bought any new house nor purchased the constructed house and he had not deposited the amount in capital gains account which was not being utilized and that the net consideration was invested in a plot of land and not the house. He also observed that the so called construction plan (alleged to have been got approved by the assessee) was the same plan that was filed b....
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....room, bathroom and kitchen got constructed within the specified period of 3 years upto March 2015 which stood proved from the certificate of architect/Government approved valuer dated 12.03.2015 (copy of which is placed at page no. 6 of the assessee's paper book), Certificate of building contractor (copy of which is placed at page no. 14 of the assessee's paper book) and that the money withdrawn from bank, document showing the installation of electricity connection proved that the assessee constructed one habitable residential unit prior to expiry of three years period which expired on 05.07.2015. Therefore, the deduction u/s 54F of the Act was available to the assessee. It was stated that Section 54F of the Act is a beneficial section, the objective of the said section since fulfilled by constructing a residential house, the deduction u/s 54F of the Act should have been allowed. A reference was made to Circular No. 667 dated 18.10.1993 issued by the CBDT and reliance was placed on the following case laws: ØCIT & Anr. Vs Smt. B. S. Shanthikumari (2015) 126 DTR 436 (Kar.) * Sardarmal Kothari 302 ITR 286 (Mad.) * CIT Vs R. L. Sood 245 ITR 727 (Del.) * Smt. Shashi Verm....
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....I/300, Ghaziabad (U.P.). In the present case, it is also noticed that the AO deputed one Inspector to examine the site and give report of construction. Thereafter, the Inspector of the Income Tax Department vide his report dated 30.11.2015 states as under: "I was deputed to collect information u/s 133B (1) of the Income Tax Act 1961 on the above-mentioned person's address in connection with ongoing assessment proceedings for u/s 143(3) for A.Y. 2013- 14, to verify whether construction on this plot is complete for residential purpose. The assessee is claiming deduction u/s 54F of the Income Tax Act 1961. However, on visiting this address on 28.11.2015 at 1.15 P.M., it was notice that only boundary wall of the plot has been completed and a 15x15 Ft. (Approx.) room with a cement ceiling was erected on the plot. The room was locked and appears not in use. The single room appears to be a temporary structure with one door and is lying uncemented without whitewash. Further, it was also noted that the wild grass was growing on the plot and no water connection appears to have been installed in the plot. Report is accordingly submitted please. Please find attached copies of p-....