TaxTMI 
TaxTMI 
2022 (1) TMI 236
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....54F of the Act by investing an amount of Rs. 95,95,960/- in a residential property - South City 1, Gurgaon, Haryana. 3. For the Assessment year 2015-16, assessee filed his return of income declaring total income of Rs. 26,63,820/- on 29.09.2015 which include business income of Rs. 25,35,505/-. Learned Assessing Officer opined that both of the above properties are residential properties and, therefore, assessee is not justified to claim of deduction u/s 54F of the Income Tax Act, 1961 (for short "the Act"). Assessee pleaded that he is the owner of two properties - one residential house situated at Deepali Enclave, Delhi and the other commercial property situated at Shastri Nagar, Delhi; that the commercial property situated at Shastri Nagar was originally acquired as residential property, but in the year 2008 the assessee got that property converted into commercial property as per the rules and regulations of Municipal Corporation of Delhi (MCD) and as per the Master Plan 2021 applicable to the properties of Delhi; that the conversion charges as per directives of the MCD were paid and the assessee started using the property as commercial property for the purpose of his business; ....
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....54F (1) of the Act defines residential property as the one, income from which is chargeable under the head house property; and that the entire building is claimed to be having only one electricity connection, and even if it is a commercial connection to 2 permitted 25% use of ground floor for the commercial purpose, it does not change the character of the remaining building. According to the Ld. CIT(A) the decisions of Hon'ble Jurisdictional Delhi High Court in the cases of Sanjeev Puri 160 ITR 213 (del) and Arjun Kapoor 70 ITD 161 (Delhi) have no obligation to the facts of the case. Holding so, Ld. CIT(A) confirmed the disallowance of exemption claimed by the assessee u/s 54F of the Act. Hence the assessee is now before us in this appeal. 6. Ld. AR submitted that it remains an undisputed fact by the learned Assessing Officer as well as the Ld. CIT(A) that the assessee is running his hosiery business from the same premises which is considered by learned Assessing Officer as the residential property. Further that, that the learned Assessing Officer during the course of assessment proceedings deputed the Inspector to visit the premises of the assessee, who found that the assessee ....
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....54F of the Act has held that provisions of Section 54F is a beneficial provision for promoting construction of residential houses and has to be construed liberally. Kerala, Delhi, Allahabad, Calcutta and Hyderabad High Courts have taken a view that usage of the property has to be considered in determining whether it is a residential property or a commercial property and Madras High Court in C.H.KESVA RAO supra has held that expression 'residence' implies some sought of permanency and cannot be equated to the expression 'temporary stay' as a lodger. 9. In the backdrop of aforesaid well settled legal principles, the facts of the case in hand may be examined. Learned counsel for the revenue have fairly submitted that out of nine apartments, seven flats have been sanctioned for commercial purposes. Therefore, the dispute only survives in respect of two apartments, which have been sanctioned for residential purposes and are being used for commercial purposes as serviced apartments. The usage of the property has to be considered for determining whether the property in question is a residential property or a commercial property. It is not in dispute that the aforesaid t....
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....uction under sec. 54F of the Act. The ground No.1 is accordingly allowed 8.3. In Rajeev Malhotra vs. ACIT-2, AGRA - 2018 (4) TMI 704 - ITAT AGRADated - April 9, 2018, the relevant observations of the Tribunal are that, - 21. We find that the observation of the CIT(A) in the case of the assessee that as per law, an individual should not own more than one residential house property other than the new asset on the date of transaction and since the assessee was holding two residential houses in his name, so he is not entitled for the deduction under section 54F of the Act., is not conformity with the facts of the case and the provisions of the law. The action of the CIT(A) cannot be justified in holding both these properties as residential houses merely on the basis of their location in Jaipur House residential colony, Agra without appreciating the material facts regarding the purpose for which the properties were used; the house no. 273 in particular which was used for business purpose as it was let out by the assessee to M/s Client Technology Ltd. Agra for godown purpose. It is clear that although on the day of transfer of original asset, assessee had in his possession tw....
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....ssessment under section 22 of the Act under the head "income from house property" subject to certain exceptions. We deem it necessary to extract the relevant observations for the sake of completeness. "5. ......The Income Tax Act does not create any distinction between rental income from house property and rental income from commercial building. Rental income from residential and/or commercial building has to be assessed under section 22 of the Act under the head "Income from House Property" subject to certain exceptions. 6. The provisions of section 22 relating to charging of income under the head "income from house property" are reproduced herein below:- "22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income13 tax, shall be chargeable to income-tax under the head "Income from house property". 7. A perusal of section 22 shows that the term used in section is 'building', it is not qualified by the word....