TaxTMI 
TaxTMI 
2018 (1) TMI 1303
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....terest. During the year under consideration the assessee sold a piece of land and disclosed long term capital gain of Rs. 89,07,273/- in the return of income. The assessee while computing the capital gain has claimed deduction u/s 54F of the Act of Rs. 60,63,980/- on account of construction of house property on plot No. C-105, Taneja Block, Adarsh Nagar, Jaipur. The Assessing Officer disallowed the claim of deduction u/s 54F on the ground that the assessee did not construct any house property but had done only renovation of the existing house. The assessee challenged the action of the AO before the ld. CIT(A) and contended that the assessee has constructed a new house after demolition of old house. However, the ld. CIT(A) did not accept the contention of the assessee as well as claim of deduction u/s 54F of the Act and confirmed the action of the AO. The ld. CIT(A) further held that the house property where the construction was stated to have made belongs to the mother of the assessee Smt. Thakri Devi Chawla. Aggrieved by the impugned order of the ld. CIT(A) the assessee filed the present appeal. 3. Before us the ld. AR of the assessee has referred to the provisions of section 5....
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....property during the period of 3 years from the date of transfer of the capital asset, therefore, the investment made in construction of the house after the date of transfer i.e. 30.05.2012 has been claimed by the assessee and the same is in order and deserved to be allowed. The ld. AR of the assessee has submitted that the asseee in possession and living at the same place for last about 20 years and the mother of the assessee gave no objection of demolition and reconstruction of the house and to substantiate this fact the mother of the assessee has also executed a gift deed dated 26.07.2013 at page 146 to 154 of the P.B. He pointed out that the assessee submitted all documentary evidence of construction of new house but the authorities below have disregarded the evidence produced by the assessee while deciding this issue and denied the claim of the assessee only on conjectures and surmises. The ld. AR has further submitted that during the course of construction work a labour died on account of accident and the police case was registered vide FIR dated 01.02.2011 a copy of which filed at page 155 of the P.B. Further, the notice was issued by the Commissioner of Municipal Corporation....
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....hawla and was gifted by the mother vide gift deed dated 26.07.2013 whereas the assessee has claimed to have constructed house in the year 2011-12 which is contrary to the facts. The ld. Dr has further submitted that the bills produce by the assessee for incurring expenditure are in the name of Chawla Sweets or unnamed whereas the bills to the labour contracture payment was self made vouchers which are not verifiable. The ld. DR has pointed out that the labour bills which has been paid by the assessee on daily basis of Rs. 19,500/- to avoid the provisions of section 14A(3) of the Act because all the payments were in cash and bill amount is less than Rs. 20,000/-.Thus in the absence of the complete details the self made vouchers cannot be verified. He has further contended that all the nature of entire expenditure incurred by the assesse show that the assessee has done renovation work of the premises and not construction a new house as claimed by the assessee. The assessee has failed to produce the bills of the entire expenditure claim as investment for construction of the house u/s 54F of the Act. In the ledger the assessee has claimed to have incurred Rs. 57,53,799/- for renovation....
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....s in the name of the assessee's wife. This view was disapproved by this Court. It noted that the entire purchase consideration was paid only by the assessee and not a single penny was contributed by the assessee's wife. It also noted that a purposive construction is to be preferred as against a literal construction, more so when even applying the literal construction, there is nothing in the section to show that the house should be purchased in the name of the assessee only. As a matter of fact, Section 54F in terms does not require that the new residential property shall be purchased in the name of the assessee; it merely says that the assessee should have purchased/constructed "a residential house". 8. This Court in the decision cited alone also noticed the judgment of the Madras High Court (supra) and agreed with the same, observing that though the Madras case was decided in relation to Section 54 of the Act, that Section was in pari materia with Section 54F. The judgment of the Punjab and Haryana High Court in the case of CIT v. Gurnam Singh [2010] 327 ITR 278/[2008] 170 Taxman 160 in which the same view was taken with reference to Section 54F was also noticed ....
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....Section 54B regarding investment in tubewell and others. In our considered opinion, for the purpose of carrying on the agricultural activity, tubewel and other expenses are for betterment of land and therefore, it will be considered a part of investment in the land and same is required to be accepted. 7.4 In view of the above, all the issues are answered in favour of the assesee and against the department." Accordingly, in view of the binding precedent we hold that merely because the new house is constructed on a plot of land owned by the mother of the assessee will not disentitle the assesee for claim of deduction u/s 54F of the Income Tax Act. 6. As regards the issue whether it is a construction of new house after demolition of the existing house or it is only a renovation work carried out by the assessee the same is purely factual matter and can be ascertain from the proper physical enquiry conducted at the site itself. The assessee in support of his claim has produced the copies of vouchers, copies of FIR, copy of notice issued by the Municipal Corporation, Jaipur regarding unauthorized construction. So far as the copies of FIR and notice issued by the Municipal ....