TaxTMI 
TaxTMI 
2020 (12) TMI 348
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....the indexed cost of acquisition for the property sold by the appellant ought to have been determined and allowed while computing capital gains and in as much as the property sold by the appellant was held before 01/04/1981, the fair market value of the property on 01/04/1981 ought to have been adopted as the cost of acquisition and indexed cost thereon ought to have been allowed as a deduction under the facts and in the circumstances of the appellant's case. 3. Without prejudice to the above, the learned CIT[A] is not justified in upholding the rejection of the exemption claimed by the appellant u/s. 54F of the Act, under the facts and in the circumstances of the appellant's case. 3.1 The learned CIT[A] ought to have appreciated that the appellant had constructed a residential house from out of the sale proceeds and in support of the same, the appellant had produced evidence in the shape of a valuation report for cost of construction, Municipal tax paid, BESCOM and water supply connection evidence to show the completion of construction and therefore, the disallowance of exemption u/s. 54F of the Act was contrary to law and facts of the appellant's case. 3.2 The le....
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....esidential property. 4. The assessee has submitted during the course of asst. proceedings that has constructed a residential building worth Rs. 1,71,52,963/- on inherited land Sy.No.47/8, Doddabommasandra, Chamundeshwari Layout, Vidyaranyapura, Yelhanka Hobli and land measuring 93 * 25 sq.ft. Also, that the construction of residential building started in the month of June, 2014 and since he started construction on completion of sale proceedings of the original asset and utilized the entire sale proceedings before filing return (25-9-2015), he did not keep the sale consideration amount under capital gains scheme. However, the assessee did not furnish any proof by way of copy of sanctioned plan, date of commencement of construction, completion certificate or any other details. It is to be mentioned here that the due date for filing of the return for A.Y. 2015- 16 was 7-9-2015 , before which the net consideration not appropriated by the assessee had to be deposited into Capital Gains Deposit account with a Bank and not before filing of the return by the assessee. 5. During the course of appellate proceeding the assessee has submitted additional documents by way of copy of B Katha in....
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....er authorities rejected the claim of the deduction under section 54F on the reason that the assessee constructed the building having following constructions: "The building is having Ground, First & Second Floor. Ground floor consists of a parking area with 2 BHK of 2 units. First floor consists of a 2BHK of 3 units. Second floor consists of a 1BHK of 5 units. All the units are Rented out except first floor is fully occupied by the owner." 8. It was submitted that according to lower authorities, it is not one residential house but multiple residential units and w.e.f. 01.04.2015, the provisions of section 54F of the Act have been amended to allow exemptions of capital gains only to the extent of investment in purchase or construction of one residential house. Since is having more than 10 residential houses, the exemption under section 54F of the Act was denied. According to learned AR, for the corporation tax purpose, the entire building as a whole is assessed as single residential unit and there was a single BESCOM and BWSSB connection. The Revenue authorities have also issued single khata and there is single tax paid receipt also. He relied on the judgment of Karnataka ....
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....ts. The assessee is entitled for deduction in respect of only one residential unit. 10. We have gone through the case records. Actually, this was the single piece of property bearing Sy.No.47/8 (Eastern Portion), Doddabommasandra, Chamundeshwari Layout, Vidyaranyapura, Yelahanka Hobli. The area of land is East to West 25ft, North to South 93ft, totally 2,325 sq.ft. The assessee constructed residential building consisting of the following: "The building is having Ground, First & Second Floor. Ground floor consists of a parking area with 2 BHK of 2 units. First floor consists of a 2BHK of 3 units. Second floor consists of a 1BHK of 5 units. All the units are Rented out except first floor is fully occupied by the owner." 11. According to the DR, there are multiple residential units w.e.f. 01.04.2015, the assessee is entitled for deduction to the extent of value of only one residential unit. The claim of the assessee is that the assessee invested in single residential unit and is eligible for deduction under section 54F of the Act on the entire value of the building and relied on judgment on judicial High Court in the case of K. G. Rukminiamma 331 ITR 211 wherein it was hel....