TaxTMI 
TaxTMI 
TaxTMI 
2022 (6) TMI 1156
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....ter 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 super built-up area of the Ground Floor - Mr. NAGARAJ DESIRAZU ....
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.... 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 assessment proceedings that as per the terms of the JDA, the assessee was entitled to built up area which consisted of more than one residential house and he invoked the provisions of the first proviso to section 54F(1) of the Act, which reads thus: ....
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....part 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 substituted by 'one residential house'. The assessee has claimed one residential house as a result of joint development agreement as new asset under section 54F. It also irrefutable fact that by virtue of Joint Development agreement, assessee is in possession of other residential....
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....ns. 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 claimed was deduction while computing capital gain was deduction u/s.54F of the Act and this is the reason why the same expression has been used in the notice issued while taking up the case for limited scrutiny. The notice issued while taking up a case for scrutiny cannot be read as a piece of l....
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....tial 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 the aforesaid additional ground, the plea of the assessee is that whatever area it got from the developer under the JDA has to be regarded as one residential unit and exemption under section 54 of the Act should be allowed to the assessee. In this regard, learned Counsel for the assessee drew our attention to the ....