TaxTMI 
TaxTMI 
2015 (11) TMI 1850
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....s 54 since the assessee has purchased plots of land from 6 different persons as land appurtenant to the residential building situated on the first plot of land (purchased from Shri Y.J.Alex) and the first plot of land itself possess a large area of land appurtenant to the residential house. 4. It is submitted that A.O. has allowed exemption u/s 54F to the extent of one plot of land with residential building. The subsequent purchase of plots by the assessee from six different persons has rightly not been considered for deduction u/s 54F. 5. The Id. CIT(A) ought to have appreciated the fact narrated by the A.O. in the assessment order that each transaction on purchase of land is independent and payments are also made separately. Hence, the reason that the family members sellers family) insistence for buying land is not a valid ground. 6. The Id. CIT(A) ought not to have considered assessee's submission that the different pieces of land are contiguous whereas the AO has clearly found the assessee has not purchased a single plot but a huge tract of land and the reason for non allowability of claim on this ground has been mentioned in para. No.16 of the as....
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....tial house in the property purchased from Mr. Y.J.Alex and other parts of the land has no residential building and there were only two sheds in some other properties which cannot be treated as residential buildings and therefore, assessee is entitled for exemption under section 54F of the Act as she has purchased all the properties belonging to one family though under separate deeds and there is only one residential house in such property and the land is contiguous though there are ponds in the lands purchased. However, the Assessing Officer restricted the deduction under section 54F of the Act only to the plot purchased by the assessee from Mr. Y.J.Alex and the building thereon and did not consider the sale consideration paid in respect of the property purchased from other six family members holding that residential house is situated at the land bearing survey numbers 98/9, 98/10, 98/11, 98/2-3 purchased from Mr. Y.J.Alex. As per the assessee, there is no property to be called as residential house in any other part of the land. Section is inserted in the Act to encourage construction of residential houses and meant for those who owns only one house as on the date of transfer of ca....
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....ing that a perusal of the map shows that lands are part of two main survey numbers 98 and 99 though there are some sub-divisions. Therefore, according to the Commissioner of Income Tax (Appeals) it cannot be said that different pieces of land are not contiguous. The Commissioner of Income Tax (Appeals) observed that existence of water bodies on the plots of land cannot be a reason to conclude that assessee had acquired more than one residential house because such water bodies like swimming pool or well are required to be maintained for daily necessities of occupants in Kerala. The Commissioner of Income Tax (Appeals) held that cost of vacant land appurtenant to and forming part of residential unit has to be considered for claim under section 54F of the Act, even if no construction has been done for residential house on the appurtenant land. The new residential house is not debarred from having a land appurtenant to any size for claiming exemption under section 54F of the Act when especially land was purchased from one family though consisting of seven members. Thus he allowed the claim of the assessee without any restriction. Against this order, the Revenue is in appeal before us. ....
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.... four properties which did not contain any buildings cannot be considered for the purpose of claim of exemption under section 54F of the Act since the investment has to be made in a residential property and not on land. He submits that three properties purchased by the assessee from Mr. Y.J. Alex, Mr. Y.M. Alexander and Mariamma Alex are only the properties which contain buildings. Referring to the sale deed in respect of Mr.Y.J. Alex and the description of property mentioned therein Departmental Representative submits that it is clear from the narration of the sale deed that the extent of land which is contiguous with the building is 2 acres 18.500 cents of land equivalent to 88.30 acres and nothing more. Therefore, he submits that assessee's claim that entire extent of land of 5.61 acres is contiguous to the residential property purchased is factually incorrect. He submits that since the land appurtenant to 2.18.500 cents the Assessing Officer has rightly considered only this property as eligible for claim of exemption under section 54F of the Act. 8. He further submits that Commissioner of Income Tax (Appeals) erred in holding that different pieces of land are contiguous thou....
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....ed for Y.J.Alex, is 2 Acre 18.500 cents of land equivalent to 88.30 ares only and the claim of the assessee to this extent has been allowed by the Assessing Officer. Once the extent of land appurtenant to the building has been considered and exemption to that extent allowed by the Assessing Officer, the question of allowing exemption in respect of lands appurtenant to other residential properties does not arise and consequently, the Assessing Officer was justified in denying exemption in respect of the other six properties which the assessee has purchased. In this context, it may be relevant to note that though Courts/Tribunals have held that in the context of the expression 'a residential property' mentioned in Section 54F, the use of the singular 'a' used in the section includes 'plural', it has also been held that even in such cases, where there are more than one property, they should be adjacent, attached and not disparately placed( Hon'ble ITAT, Chennai in the case of Shri A. Kodanda Rami Reddy in I.T.A. No. 1865/Mds/2012 dated 04.07.2013) wherein it was observed as under: No doubt, the plethora of decisions relied on by the learne....
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....ee from Y.J.Alex is 2 Acre 18.500 cents of land equivalent to 88.30 ares only. Consequently, the assessee is not entitled to claim exemption in respect of the entire land of 5.61 acres." 10. Counsel for the assessee furnished typed set of documents containing 1 to 3, map of property with topography, invoice of M/s. Apex Topomappers Pvt. Ltd. for boundary, topography and contour survey of the site and written submissions. In the written submissions, counsel for the assessee submits as under:- "Brief facts are that (i) property comprising 5.61 acres of land housing 1 Residential Unit, was purchased by the Assessee on 3.4.2009 vide 7 Sale Deeds executed with 7 members of one family. (ii) The family members are:- Mrs. Mariyamma Alex (mother) and her 6 children Mr. Y.J. Alex, Mr. Alexander, Mr. Alex Mathew, Mr. T.G. Paul, Mr. T.G. Sebastian and Mr. Baiju. (iii) All the vendors, being family members, were insistent upon selling the property as a whole. (iv). Property in Survey now. 98/9, 98/11 and 98/10 sold by Shri Y.J. Alex, comprised land of 88.30 ares along with a residential unit thereupon. (v). Property in Survey ....
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..... Alex. The presumption that the intention of the assessee was to purchase property for commercial exploitation is objected to and is wholly un-substantiated. Reference to the agreement entered into with Mis. Arun Excello is extraneous to the issue, since such agreement construction is beyond a period of 3 years stipulated under Section 54F. We are unaware of any oral direction that has been issued by the Vice President of the Income Tax Appellate Tribunal. The departmental contention is to the effect that Survey Nos. 98/2/1 A, 99/5-3, 99/5-2 and 99/5-1 purchased from Alex Mathew, T.G. Paul, T.G. Sebastian and Baiju respectively do not qualify for the purpose of exemption in so far as the said properties do not contain any building. The nature of the property being vacant is admitted. Prima facie, however, this contention is incorrect in so far as the aforesaid four pieces of land are appurtenant to Survey No. 98 19, purchased from Y.J. Alex which is admittedly a residential property. The department relies on the description of the property purchased from Y.J. Alex to contend that only 2 acres and 18.5 cents is contiguous to the residential house comprised therein....
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....n arriving at the value of the residential building. We find no illegality committed by the Tribunal.' (Emphasis by underling and highlighting in bold, ours) Thereafter, the High Court on a factual differentiation of the matter finds that the area of 1.92 acres is not land appurtenant to the residential house. In the present case, the legal principle as decided by the Kerala High Court, in the portion emphasised, would support the case of the assessee herein. Alternatively and without prejudice to the main submission, it is submitted that even assuming that Survey Nos. 98/2/1 A, 99/5-3, 99/52 and 99/5-1 are taken to be independent properties, the land in Survey No. 98/2-2 and 98 / 2-1 are indeed contiguous to Survey No. 98/9, housing the residential property and relief u/s 54F is liable to be granted in connection therewith. At this juncture, it is necessary that this Hon'ble Tribunal appreciates that the certified copy of the Plan furnished indicates clearly that access to the residential house is possible only through the land in Survey No. 99/5-1, 99/5-2,99/5-3 and 98/2-2. Thus, the acquisition of the land in Survey No. /5-1, 99/5-2,99/5-....
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....tire land of 5.61 acres is contiguous. The undeniable fact of the matter is that, as I had demonstrated during the course of arguments form the documents available in the paper book furnished by the assessee that, the property under consideration consists of not one residential property but three residential properties. Section 54F, as per the Income Tax Act, is available in respect of only one property. However, certain judicial authorities have held that 54F is available even in respect of more than one property. I had countered that by referring to the decision of this Hon'ble Tribunal in the case of Kodanda Rami Reddy in ITA No 1865/ Mds/2012 dated 04.07.2013, that even in such cases where there are more than one properties, the benefit will not be available in case of disparately placed properties. Incidentally, in the case of the assessee the three residential properties are disparately placed. The Map: At the outset, it is seen that the map furnished by the learned counsel is not prepared by any Government agency or authority. Therefore no reliance can be placed or credence can be given for the contents of the same since it cannot be c....
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....age 7 of the Typed Set of Documents dated 10th April 2013. Therefore, the exemption uls 54F would be available only to that extent. In this connection it has already been submitted in my earlier written submission that the question of the extent of land which can be considered as contiguous or appurtenant to a residential property came up for consideration before the Hon'ble High Court, Kerala in the case of Smt. Asha George reported in 351 ITR 123, and the Hon'ble Court held that held as under: Section 54F is intended to encourage construction of or acquisition of residential house with the aid of the proceeds from the transfer of any long term capital asset, which is not a residential house. The provision contemplates computing the cost of the residential building, but the value of the plot on which the farm house stands and the land appurtenant could also be considered. The tribunal has categorically found that the appellant has not produced material to show that the entire area of 1.92 acres should be considered as land appurtenant to it. It is in such circumstances, the Tribunal made estimation and directed that the value of the plot on which the farm house is....
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....these pieces of land and there is only one residential house in that property and therefore such residential house having land appurtenant to it is eligible for deduction under section 54F of the Act. The Assessing Officer however restricted deduction only to that portion of land where the building is situated which is purchased from Mr. Y.J.Alex and ignored the other plots of land purchased from other family members under separate sale deeds for the purpose of allowing deduction under section 54F of the Act. The question before us is whether the assessee is entitled for deduction under section 54F on the seven plots of land or is entitled to deduction only in respect of land purchased from Mr. Y.J.Alex in survey numbers 98/9, 98/10, 98/11 and 98/2-3. The assessee purchased 5.61acres of land from seven persons of a family and the details are as under:- Date of purchase Doc. No Vendor Extent Acres Extent cents Survey No Land value Bldg. value Door No of Bldg 03.04.09 523/09 Y.J.Alex 2 18.500 98/9 14700000 300000 II/391 & 392 98/11 ....
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....construction for storing grains and the shed was utilizing for running business of a shell crushing unit. Referring to the certified copy of the plan furnished, it is the submission of the assessee that access to the residential house is possible only through the land in survey numbers 99/5-1, 99/5-2, 99/5-3, 98/2-2, therefore acquisition of land in survey numbers 99/5-1, 99/5-2, 99/5-3, 98/2-2 are necessity for the assessee in order to approach the house. It is the submission of the assessee that this situation applies equally with respect to properties in survey numbers 98/10 and 98/11. Therefore, it is submitted that land acquired is not merely appurtenant to it but necessity in the present circumstances. On a perusal of the map furnished by the assessee, we find that this map is not prepared by any government agency or any government recognized agency, so no much credence can be given to the map furnished. The Assessing Officer made clear in the assessment order that huge land is adjacent to the Vambanadu lake which joins Arabian sea, in and around this lake there are several resorts and tourism is a major activity in the surroundings. The land purchased by the assessee is surr....
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....ith JCB. He told me that the owner of the property Smt. Janaki Mohan intends to construct a resort there and for which Chennai based company namely M/s. Arun Expello had been engaged for the construction work. I could observe two old house properties in the said land. One is used by Mr. Amesh as office the area of the house is about 1000 sq.ft. The other one having about 300 sq.ft area is almost in a dilapidated condition. Mr. Amesh informed that there were three houses about 15 to 20 years old in the land all of which were in dilapidated condition. One of unused building was demolished recently for carrying out ground development leveling work. About 3 ½ acre land is being under leveling work. Most of the area of the land is marshy with bushes, plants, ponds unyielding coconut trees. The nearby inhabitants informed that the property had been kept idle by the purchaser after it was purchased till one month back. The property have large commercial or business importance in the area because of emergence of ecobackwater tourism in Alappuzha. Muhamma is lying in western side of the Vembanad lake in Alappuzha Dist. Many resorts are functioning succes....
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....essee purchased lands to the extent of 5.61 acres, though from a single family by way of several sale deeds on 03.04.2009 and applied for construction of a resort on 28.09.2010. Muhamma Grama Panchayat vide order dated 07.01.2011 granted building permission to construct a resort subject to the conditions stated in KMBR Act and section 220(b) of KPR Act. It is further stated that as per approval from town planning order no.C3-11600/2010 dated 22.12.2010, the construction should be according to the instructions mentioned in item number 1 to 4. It is the assessee's version that she had entered into an agreement on 29.08.2012 with M/s. Arun Excello Constructions for developing the property and at the same time, it is the assertion of the assessee that possession has been handed over and general power of attorney was issued to M/s. Arun Excello Constructions. The developmental activities, if any on the property are at the instance of M/s. Arun Excello Construction and the assessee has no connection therewith. All these things go to clearly show that assessee's intention was to purchase land and develop a resort rather than a residential house for residing purpose. If the version of the ....