TaxTMI 
TaxTMI 
2023 (7) TMI 673
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.... in law and the violation of rudimentary principle contemporary jurisprudence." Ground No. 1 3. Apropos ground No. 1, the ld counsel submitted that the AO as well as the ld CIT(A) has erred in on facts and in law in upholding the disallowances of cost of improvement of Rs. 4 lakh incurred by the assessee on the property which was sold during the financial period 1996- 97 despite the fact that the assessee successfully established the claim of cost of improvement by way of filing all possible evidence under his command. Therefore, cost of improvement may kindly be allowed to the assessee. 4. Replying to the above, the ld Sr. DR drawing our attention towards relevant part of the assessment as well as first appellate order submitted that the documentary evidences submitted by the assessee was not reliable and the AO has verified and examined the same in detailed in assessment order wherein, he rightly held that the bills/ vouchers submitted by the assessee are not acceptable and thus claim of incurring of such expenses was rightly disallowed. The ld Sr. DR submitted that the AO has enclosed bills/ vouchers submitted by the assessee to the assessment order which clearly reveal....
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.... the cost of improvement made in year 1996-1997 on the property sold. At the outset, the cost of improvement of Rs. 4,00,000/- in comparison to cost of purchase of Rs. 3,24,241/- is comparatively very high considering that the amounts pertains to F.Y. 1996-97. Without prejudice, the bills submitted by the assessee cannot be accepted because of following reasons: Labour - The assessee has merely submitted pages of note book mentioning the date and amount of expense. The authenticity of said document cannot be relied upon. Material- The assessee has submitted bills from "Indraj. The same cannot be relied upon due to following reasons: The serial numbers of all the bills are in sequence i.e. Bill no. 246 dt 02.08.1996, 247 dr. 04.10.1996 and 248 dt. 20.11.1996 despite the fact that same are issued on different dates and after a sufficient gap. Even from the different dates & serial chronology, it seems that the assessee was the only customer from August to November at that shop who had purchased materials from the said supplier. It is also worthwhile to mention here that address of the supplier namely 'Indraj' on the Bill M....
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....s of the assessee. 13. Before the Ld CIT(A) assessee also filed report of Registered valuer, certifying the factum of character of property that is residential house and also the construction of residential house at the land purchased. 14 The Ld CIT(A) after considering the entire gamut of facts has partly allowed the claim of assessee and observed as under-para-4.12 page number-9 of the CIT(A) order a. The assessee has constructed a very small residential house and land size was very big. The cost of construction is very small when compare to the price of land b. Assessee failed to prove that he small dwelling unit was intended to be used for residential purpose. Para(a) at page number-10 c. Considering the status of assessee (by seeing his returned income) it is not acceptable that assessee was intending to use the dwelling unit as his residential house. d. Ld CIT(A) has held that it has to be assumed from the marginal heading of section 54F that the intention of legislature was to extend the benefit of exemption u/s 54 only when the property purchased by the appellant was intended to be used as residential house( this is not ....
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....to the land appurtenant is also not tenable in law Reliance can be placed on the following judgments 1. ACIT Vs Kanwal Mohan Singh ITA No-500/D/2019 order dated 06.07.2022- ii. CIT vs. Shri Narendra Mohan Uniyali, the Delhi Bench of the Tribunal held in ITA No. 1624/Del/2009 dated 31.08.2009 c. It is next submitted that the new investment was in fact in a residential house has been proved by assessee with following documents i. Page number-6 site plan approved by Rajasthan State Govt Clearly mentioned character of land is residential - ii. Page Number- 26-A CLU granted in respect of land purchased by assessee from the previous owner Omprakash Chandel iii. Valuation report Page number,- 28 colum number-9, Page number-29 Colum number 15 iv Water and electricity bills - Colum number 29 page number-30" 9. Replying to the above, the ld Sr. DR supported the orders of the authorities below and submitted that the ld CIT(A) after considering the written submission of assessee dated 28.08.2019, rightly held that the appellant has not been able to explain the deficiencies pointed out by the AO, except filing a valuation report. The ld S....
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....d that the legislature accepts that exemption should only be allowed to the assessee who intended to use new residential house for residence purpose. Ld counsel placing reliance on the order of coordinate bench of the Tribunal Mahavir Vs. CIT (supra) submitted that even non residential use of residential house would not render a property ineligible for benefit/ deduction u/s 54F of the Act if it otherwise is a residential house and the assessee was found to have constructed a residential house whatever might be the use it had been put to. We are in agreement with the said contention of ld counsel of assessee based on order of coordinate bench of the Tribunal. 13. The ld CIT(A) also observed that the size of constructed portion is very small and the exemption benefit cannot be extended to the land appurtenant is not tenable in law. In the case of DCIT Vs. Kanwal Mohan Singh (supra) the Tribunal has relied on the order ITAT Jaipur in the case of Shyam Sunder Makhija Vs. ITO 38 ITR 125 wherein, it was held that the farmhouse is also a residential house and section 54F does not put any rider with direction in respect investment in acquisition of land appurtenant to the building will....