TaxTMI 
TaxTMI 
2024 (7) TMI 79
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....of gift (hiba) which need not be registered and it is one of the modes of transfer of property as per Muslim Personal Law. 4. The learned Assessing Officer erred in assuming that just because the assessee could not get sanction from the Municipal Authorities, for the construction of the house property, the construction period from September 2012 to July 2013 is doubtful and assessee is not eligible for the deduction u/s 54F. 5. The learned Assessing Officer disallowed the claim u/s 54F, only on surmises and conjectures and not on any facts proved against the assessee during the course of assessment proceedings. 6. The learned Assessing Officer erred in disallowing business loss claimed at Rs. 36,10,070/- 7. The appellant craves to add to/alter amend/substitute/omit and modify all or any of these grounds." 2.1 The Revenue has raised the following additional grounds: "1. Whether the learned CIT (A) misinterpreted the concept of residential house as appearing in section 54F? 2. Whether the learned CIT (A) erred in permitting a proportionate disallowance u/s 54F which is not provided for in the statute?". 3. Facts of the case,....
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....ssing Officer, this contention of the assessee is also doubtful that a building with an area of 9692 sq ft of Ground plus three floors could be constructed in a period between September 2012 to July 2013 i.e 10 months. 4. The contention of the learned DR that the Assessing Officer vide order dated 31.3.2016 disallowed the deduction claimed u/s 54 of the I.T. Act for the reasons mentioned in his order vide para 5.1 to 5.1.3 which are to the following effect: 5. The learned DR drew the attention of the Bench to Paras 7.1 to 7.6 of the order of the learned CIT (A) which are to the following effect: 6. Feeling aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the learned CIT (A) who granted partial relief to the assessee. Hence the Revenue is in appeal before us. 7. The contention of the learned DR is that the assessee had claimed deduction u/s 54 of the Act in respect of the property which is in the nature of Mosque and therefore, the assessee is not entitled to the relief u/s 54 of the I.T. Act. The learned DR also drew the attention of the bench to the detailed written submissions filed in this regard which read as under: 8. The ....
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....equired to construct the residential house as per section 54F of the Act within the period stipulated in the Act. Though the definition of residential house has not been given under the Act, however, the judicial precedents with respect to the residential house and definition of the residential house as available in various dictionaries makes it abundantly clear that the residential house is a "house constructed for the purpose of residence having provision for kitchen and toilet etc.," Admittedly, the assessee had mentioned that the property is consisted of Mosque, Orphanage School and Staff Quarters in the application dated 29.12.2015. During the course of assessement proceedings, the assessee had not provided any evidence of raising any construction in the premises. In the assessment order in para 5.1 the Assessing Officer has doubted the raising construction within a period of 10 months with a constructed area of 9662 sq. ft with 9+3 floors in the building. 11. The learned CIT(A) in the appellate proceedings had directed the Assessing Officer to inspect the premises and in para 7.1 the learned CIT (A) mentioned that the Inspector had visited the premises. In this regard the ....
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.... case for the same year under consideration and wherein the AO disallowed the claim of 54F on the same ground that Mosque is not a residential house." 15. The learned CIT (A) had relied upon the report of the Inspector dated 20.07.2008, which in our view should be 20.07.2018. However, the said report cannot be relied upon by the learned CIT (A) as what is required to be seen is whether the assessee has constructed house within the period granted u/s 54F i.e. 3 years from the date of capital gain arose to him. In the present case the A.Y under consideration is 2013-14, therefore, the report of the Inspector dated 20.07.2018 cannot be the basis for grant of exemption u/s 54F of the Act. In our view, the closest report/document available on record is the application for regularization filed by the assessee on 31.12.2005 by virtue of which the property was used for Mosque, Orphanage School and Staff Quarters. 16. The sum and substances of the various inspections carried out by the officials of the Revenue leads to a conclusion that the property is predominantly being used for religious purposes namely Mosque, Orphanage School and Staff quarters and therefore, in our opinion, it d....
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....ontention of the assessee is also doubtful that a building with an area of 9692 sq ft of Ground plus three floors V. Var Document 2 could be constructed in a period between September 2012 to July 2013 ie 10 months. 5.1.1 The analysation of the bank account account No. 30082010087915 maintained by the assessee with syndicate bank somajiguda, Hyderabad for F.Y. 2012-13 and 13-14 till July, it is found that out of deposit of Demand Drafts worth of Rs. 1,95,00,000 as discussed above, the assessee has not utilised any fund towards the construction of the building as claimed by the assessee. The utilisation of the deposits are as under: 22.11.2012 Rs. 30,00,000 pay order favouring GHMC 22.11.2012 Rs. 10,00,000 Pay order favouring GHMC 22.11.2012 Rs. 10,00,000 Pay order favouring GHMC 29.12.2012 Rs. 8,00,000 DD sale against account 30.03.2012 Rs. 2,52,882 IT Collection 23.07.2013 Rs. 10,00,000 clearing 5.1.2 The above expenditure do not show that the assessee has incurred any expenditure towards construction of house. The assessee has also not filed any evidence on account of expenditure in the form of bills etc to substantiate th....
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.... of this office was directed to visit the premises and submit a factual report. 7.3 As directed, the Inspector of this office visited the premises at Sultan Shahi, Mughulpura, Hyderabad on 20.07.2008. The report of the inspector brings out the following salient points. Document 4 7.4 a) Ground floor consists of family graves, mass dining, preaching of Quran to children and prayer hall. b) First floor consists of infidel rooms and mostly unoccupied. c) Second floor is an open hall use for residence of children. d) Third floor consists of residence of the assessee. The Inspector of this office also reported that there are approximately 60-80 children who were provided accommodation on the second floor of the building. The Madarsa is being run by the assessee and under the supervision of one Sri Syed Aziz Hussain. There are no minarets or the requirements needed for the Mosque. The local public does not use the prayer hall and it is mainly used for the residents. There is no prayer hall or Mosque on the first floor as contended by the DIT (I&CI), Hyderabad. The enquiry or the inspection is carried out in the presence of the asses....
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....constructed property was not approved by the Municipal Authorities. The new property was GQ+3 consisting of 9692 sft was constructed within 10 months from September, 2012 to July, 2013. the assessee has received Rs.1.95 cr by way of DD and the balance was received. by way of cash. -out of the sum of Rs. 1.95 cr only Rs.70 lacs only was spent towards GHMC. - there was no evidence of spending the money by way of cash as no bills etc were submitted. Based on the above findings the AO disallowed the claim of deduction u/s 54F to the tune of Rs.5.47 cr. 2. The assessee filed appeal before the CIT(A). During the pendency of the appeal, a remand report was called for from the AO. in the remand report the AO reiterated his stand. Also a report from DITI&CI), Hyderabad was received by the CITIA) which stated that the constructed property was being used by the assessee for running a Madarasa on the ground floor and the prayer hall on the first floor. The Municipal plan approval was taken for Mosque and not for residential unit. However, the CITIA disregarded the report and deputed her Inspector for verifying the premises and submit a fact....
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....f such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue in the original return the claim of 54F was at Rs.5.47 cr. The assessee subsequently revised the claim at Rs.3.62 er based on the valuer's report which showed the value at Rs.3.44 cr. the CIT(A) could not have disregarded the report of the DIT(I&C) and carried out independent enquiries in the absence of the AO. 4. In view of the above submission, it is respectfully prayed that the order of AO may be restored. Document 8 Office of the Assistant Commissioner of Income Tax, Circle 6(1) 6th Floor, B-Block, I.T. Towers, A.C. Guards, Hyderabad - 500 004 Ph No: 040-23425427, Mail: [email protected] F.No.AHOPP77131/C.6(1)/Remand report/2017-18 To, The Commissioner of Income tax (Appeal)-6, Hyderabad. Madam, 2. (Through the Jt.CIT, Range-6, Hyderabad) Date: 26.07.2017 Sub: Calling for report u/s 250(4) of 1.T.Act in the case of Sri Iqbal Ali Khan - A.Y 2013-14-Submission of report-regarding. Ref: CIT's(A)-6, Hyderabad in F.No.CIT(A)-6/Hyd/2016-17, dt. 21.07.2017 Kind reference is invited to the abo....