TaxTMI 
TaxTMI 
2018 (4) TMI 1728
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....ct as he owned more than one residential house other than the new asset on the date of transfer of the original asset. (3) Based on the facts and circumstances of the case, the Ld.CIT(A) has failed to appreciate that the assessee owned the following properties on the date of transfer of original asset which were residential in nature. a. a residential property at Chilimbi b. property situated at "Palemar" Bejai, Mangalore, survey No.117-A, 142/2A, Kodialbail, Mangalore c. property at Katipalla Village, Mangalore d. an Apartment of 1112 sq.ft. at 1st floor with one covered Car Parking Space at Basement Floor, marked as No.10, situated at 1st Main Road, Kalidas Lane, Gandhi Nagar, Bangalore e. a residential property at 90B, Boloor Village, Mangalore (4) Based on the facts and circumstances of the case, the Ld. CIT(A) ought to have appreciated that all the above properties are residential in nature as per the purchase deed of the property. These properties are owned by the assessee on the date of transfer of the original asset. (5) Based on the facts and circumstances of the case, the Ld.CIT(A) has failed to appreciate that the properties s....
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....tal gain on this transaction and the property is shown in the Balance Sheet of the assessee for AY 2010-11 as his asset. Hence the assessee has not recognized the transaction on 06.01.2009. Hence he is the owner of the flat which is a residential unit. (11)Based on the facts and circumstances of the case, the Ld. CIT (A) has erred in allowing the assessee's claim that the unoccupied residential properties are not residential properties and should not be treated as residential units for the purpose of allowance of deduction U/s 54F of the IT Act. (12)Based on the facts and circumstances of the case, the Ld. CIT(A) ought to have appreciated that the completed, unsold flat in the construction project of the assessee, are also residential properties, which are owned by the assessee, hence may be included for the purpose of disallowance of deduction U/s 54F of the IT Act. (13)Based on the facts and circumstances of the case, the Ld.CIT(A) has failed to appreciate that the assessee's claim for deduction U/s 54F is totally not admissible as he owned more than one residential house other than the new asset on the date of transfer of the original asset.....
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....t that the AO considered the assessee's explanation that this property is part of Chilimbi property owned by the assessee but the AO has noted that as per the purchase deed of the property. it is a separate property situated on the land of 9.5 cent with residential building bearing D.No. 2-1-42&2-1-42/1. The AO has noted that this might be adjacent to the Chilimbi property, which is shown in the Fixed Assets Schedule of the Balance Sheet of the assessee and the assessee might have clubbed all the land in the properties, which is called as Chilimbi property in the Balance sheet for the purpose of development of residential complex but it does not take out the individual status of this property, which shows that it was a residential property at the time of sale of original asset during the F.Y. 2010-11. Hence for the purpose of this assessment order, this property is also treated as residential house in the ownership of the assessee. Thereafter the Id. DR of revenue pointed out that in Para 5 of the assessment order, the AO has noted that the assessee is also having a property at Katipalla Village, Mangalore described in the gift deed dated 12.01.2009 as a property consisting of ....
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....y also and therefore, the assessee himself is accepting that Chilimbi property is self occupied house property in addition to self occupied house property at `Palemar at Bejai Church Road, Mangalore which has been considered as self occupied property by AO in Para no. 1 on page 17 of the assessment order and therefore, it is clear that on 30.11.2010, the assessee was owning more than one residential house. Learned AR of the assessee supported the order of CIT (A). Regarding the wealth tax return for AY 2011 - 12 brought on record by the DR of the revenue, she submitted that this property at Chilimbi is exempt from wealth tax for some other reason but by mistake, it is stated in the wealth tax return that it is self occupied house property and therefore, because of a mistake in wealth tax return, the issue in income tax cannot be decided against the assessee. 5. We have considered the rival submissions. First, for the sake of ready reference, we reproduce various relevant paras from pages 17 to 19 of assessment order. The same read as under. "1) Assessee has a house property, which is self occupied, called 'Palemar' at Bejai Church Road, Mangalor....
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....jacent to the Chilimbi property, which is shown in the Fixed Schedule of the Balance Sheet of the assessee. The assessee might have clubbed all the land in the properties, which is called as Chilimbi property in the Balance-sheet for the purpose of development of residential complex. But, it does not take out the individually status of the property, which shows that it was a residential property at the time of sale of original asset during the F.Y.2010-11. Hence, for the purpose of this order, this property is also treated as a residential house in the owner ship of the assessee. 5) The property at Katipalla Village, Mangalore is described in the Gift Deed dt. 121-2009 as a property consisting of 10.2 acre of land with a building bearing No. Katipalla 9-27A, 27A-1 & 27B. The assessee has explained it as an Agricultural Property in the Balance-sheet. It does not change the character of the property that the agricultural land was having a building inside, which was fit to be used for residential purposes. 6) In addition to this, the assessee also has one unsold flat of 955 sq.ft. in 5H Project which is also a residential flat and agreement for sale was entered only ....
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....ntained in this sub-section shall apply where the assessee owns on the date of the transfer of the original asset, or purchases, within the period of one year after such date, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset. Explanation.-For the purposes of this section,- (i) "long-term capital asset" means a capital asset which is not a short-term capital asset; (ii) "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer." 7. Now we reproduce the relevant paras from the order of CIT(A) as per which the issue was decided by CIT(A). These paras are paras 6,6.1 to 6.4 on pages 4 to 7 of the order of CIT(A). These paras are as under. "6. Ground No. 1 - Disallowance of exemption claimed u/s.54F: The first grounds of appeal of the appellant is disallowance of exemption claimed u/s....
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....of the disallowance of said expenditure, since additions made in the cost of improvement to the land has been done in the various years from 2003-2004 onwards, appellant is not sure, if the department makes any further investigation, then the contractors will confirm the transactions at a particular point of time. Accordingly, on the basis of the admissions done by the appellant, 40% of the cost of improvement claimed in the return of income is disallowed and cost of improvement is allowed only to the extent of 60% of Rs. 1,00,06,853/-, which is equal to Rs. 60,04,112/-. 6.2 The AR has argued that, the property at Chilimbi and property situated at survey No.90B Boloor Village are adjoining properties and is used for storing building construction materials. The same is later converted for development purposes and necessary licence has been obtained from the Mangalore City Corporation. A copy of the licence obtained from Mangalore City Corporation is produced before me. Hence, he has argued that, it is not at all residential house property. He further argued that, apartment at Bangalore, which has been transferred to Mr.ManojKalya vide sale agreement dated 6.1.2009.....
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....he issue in favour of the assessee and it means that he has accepted those contentions and therefore, we have to examine the acceptability of those arguments and decide the present appeal of the revenue. One more new relevant fact has been brought on record before us by the learned DR of the revenue i.e. Wealth Tax return filed by the assessee for Assessment Year 2011-12 as per which, the assessee himself has claimed that Chilimbi property is a self occupied house property and the same is in addition to residential house property at Mangalore considered by the AO as per Para 1 on page 17 of his order as reproduced above. Regarding this, the argument of the learned AR of the assessee is this that this property at Chilimbi is exempt from wealth tax for some other reasons but by mistake, it is stated in the wealth tax return that it is self occupied house property and therefore, only because of a mistake in wealth tax return, the issue in income tax cannot be decided against the assessee. This may be true that there is a mistake in Wealth tax return but this aspect has to be examined as to what is correct position. Hence, we feel it proper that this matter should be restored back to C....
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.... facts, it was held by the co ordinate bench that this property cannot be considered as a residential house for determining eligibility of the assessee to claim deduction u/s 54F. As per the assessee in the present case, this property is being used for storing construction material. About this claim of the assessee that this property is being used for the purpose of storing construction material, the AO has stated on page 17 of the assessment order as reproduced above that the assessee has not produced any evidence to prove this claim. The AO has also noted that this property is demolished by the assessee and a multi storied complex is coming up on the land of this property and hence, it is not possible to verify the use of this property at the relevant point of time. Under these facts, we feel it proper to restore this aspect of the matter also to CIT (A) for fresh decision with the direction that the assessee should produce evidence in support of this claim that this property is being used for storing construction material during relevant period and if the assessee is able to do so than this property should not be considered as a residential house property owned by the assessee o....
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....property also cannot be considered as a residential house property owned by the assessee on the relevant date. 13. Regarding the remaining property i.e. Flat at Ashoka Majestic, we find that about this property, the AO says on pages 18 & 19 of the assessment order that this flat is a residential flat and it is in the ownership of the assessee on the relevant date because it was sold by the assessee only on 28.04,2011 and therefore, on the relevant date, it was owned by the assessee. As against this, it is noted by CIT (A) on page 6 of his order that it was pleaded by the assessee before him that this flat was agreed to be sold vide agreement dated 23.02.2010 and sale deed was executed on 28.04.2011. This was also pleaded that the unsold flats were kept as stock in trade in the balance sheet as business asset. We find that about this flat, there is no finding of the AO that this was actually used as a residential house and in spite of this finding of CIT (A) that this property is not used for residential purposes, the learned DR of the revenue did not bring any evidence before us in this regard to dislodge the claim of the assessee and finding of CIT (A) that this property i....