TaxTMI 
TaxTMI 
2022 (6) TMI 1156
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....ion 54F of the Income Tax Act, 1961 (hereinafter called 'the Act') claimed by the assessee, when the case of the assessee was selected for computer assisted scrutiny selection (CASS) under the limited scrutiny category. 3. The assessee in both these appeals are by father and son i.e., Shri. Desirazu Sundara Siva Rao and Shri. Nagaraj Desirazu. They together with owned property measuring to an extent of 68,868/- sq. ft. bearing municipal No.19, 9th Main Roa, Rajmahal Vilas, Sadashivanagar, Bengaluru (hereinafter referred to as 'the property'). They entered into a Joint Development Agreement (JDA) with M/s. Vista Spaces Estates LLP. As per the terms of the JDA dated 20.07.20214, the assessees Shri. Desirazu Sundara Siva Rao and Shri. Nagaraj Desirazu were entitled to the following build up area in the flats to be constructed by the developer. "2. The Second Party has furnished a set of sanction of Licence and Building Plan to the First Party. Based on the said sanctioned plan, the parties have agreed that the entire Ground, First and Second Floor along with the garden area shall be allotted to the share of the First Party in the following manner: a) 50% of the su....
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.... Schedule 1 Long term capital gain Immovable property other than residential Date of transfer 17-Oct-14 Sale consideration 1,92,85,000 Acquisition details Financial Year Cost Indexed Cost Cost of Land-1862*1024/161 1988-89 1,862 1,862 11,843 Capital Gain 1,92,73,157 Less: Exemptions Invested Date Amount Exemption 54 F Transfer of property other than house property 85,66,165 85,60,904 54 EC. Investment in bonds 50,00,000 50,00,000 Taxable Capital gain 57,12,253 6. As can be seen from the aforesaid computation of capital gain by both the assessees, they had claimed deduction while computing capital claim exemption under section 54F of the Act. The case of both the assessees were picked up for CASS. The reasons for selection of both the cases under limited scrutiny was for examination of : 'Deduction claimed under the head capital gains' It was the case of the AO in the assess....
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....sset." In the present scenario the assessee has within period of 3 years from date of transfer of original asset is constructing other two residential houses (as a result of joint Development agreement) with income chargeable under the head "Income from House Property" apart from new asset for which exemption under section 54F is claimed. The same is in violation of proviso to sub-section of section 54F. This is in violation of section 54F of Income tax act. 8. Also, the judicial pronouncements cited by assessee in case of Commissioner of Income Tax V/s. D Ananda Basappa (2009) 309 ITR 329, Commissioner of Income Tax V/s Gumanmal Jain, (2017) 394 ITR 666 (Madras) have been perused. However, facts of the above cited cases are different from the present one. The judicial pronouncements of Honourable High Court of Karnataka and Honourable High court of Madras pertain to assessment years earlier to A.Y 2015-16 wherein rationale for term 'a residential house' used in section 54 and 54F has been pronounced by the honourable courts, However, in the present year under consideration, the act has been amended wherein the word 'a residential house' has been s....
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.... CIT(A), assessee has preferred the appeal before the Tribunal raising the same plea that the case was selected for limited scrutiny and exemption under section 54F of the Act could not be subject matter of the limited scrutiny. In this regard, the assessee has relied on the following decisions. Income Tax Appellate Tribunal, Jaipur Bench dated 05-12-2019 in the case of Late Smt. Gurbachan Kaur Vs. DCIT, Circle-2, Jaipur and 27-02-2020 in the case of Sri. Sita Ram Swamy Vs. The Income Tax Officer, Ward 4(5), Jaipur wherein the Hon'ble I.T.A.T. quashed the orders passed by both the DCIT and the I.T.O. for expanding the Limited Scrutiny. 12. We have considered the submissions of the learned Counsel for the assessee who reiterated the stand of the assessee as was put forth before the CIT(A). The stand taken by the assessee is based on a very technical reading of the purpose for which the case of the assessee was picked up for limited scrutiny. It is no doubt true that the provisions of section 54F of the Act are exemption provision in the sense that the charge to tax on capital gain does not operate. However, in the computation of total income filed by the assessee, what was cl....
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....the Revenue authorities. 13. Learned Counsel for the assessee has filed an application seeking to raise the following additional grounds: 1. The authorities below are not justified in disallowing the claim of exemption u/s 54F of Rs. 85,60,899/-being the deduction claimed towards the residential unitsfalling to the share of the appellant in terms of the JDA dated 20/06/2014 under the facts and in the circumstances of the appellant's case. 2. The learned CIT[A] ought to have appreciated that the appellant had received 50% of the built-up area in the ground floor along the entire built-up area in the first floor, which constituted one residential house and therefore, the view adopted by the learned A.O. that the appellant had more than one residential house and was thus not entitled to the benefit of the deduction u/s 54F of the Act is completely opposed to the judicial position under the facts and in the circumstances of the appellant's case. 14. The additional grounds being a legal ground is admitted for adjudication keeping in mind the principle laid down by the Hon'ble Supreme Court in the case of NTPC Ltd., 229 ITR 283 (SC). As can be seen from th....