TaxTMI 
TaxTMI 
2026 (8) TMI 1411
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....e Appellant's claim of exemption u/s. 54F of the Act and that it is trite that an order in exercise of its quasi-judicial function, must record reasons in support of the order it makes. 3. The Ld. CIT(A) erred in confirming the denial of exemption by the Assessing Officer by invoking the First Proviso to Section 54F of the Act which is inapplicable to the facts and circumstances of the Appellant's case. 4. The Ld. CIT(A) failed to note that the Appellant was in possession of only one residential property and one Tannery, other than the new asset, at the date of transfer of the original asset thereby not warranting the applicability of the First Proviso to Section 54F of the Act. 5. The Ld. CIT(A) ought to have appreciated that the Appellant had duly produced lease agreements, electivity bills and corporation tax receipts before the Assessing Officer to establish that they were only in possession of a commercial property in the nature of a tannery and not a residential property thereby rendering the trigger of the First Proviso to Section 54F of the Act invalid and baseless. 6. For the aforesaid grounds and for other grounds to be raised a....
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....adjudicated as under: 5.1 Grounds of appeal No 2 to 6 for A.Y. 2017-18 and grounds of appeal no 1 to 3 for A. Y. 2018-19 are common and interlinked related to Long Term Capital Gain on sale of sale of land and therefore adjudicated together. 5.1.1 : The issue involved is Long Term Capital Gain from sale of land at New Door No.43, KamarajarSalai, Kodungaiyur, Chennai-600118. The appellant offered the amount of Long Term Capital Gain as under: - 5.1.2. Α.Υ. 2017-18 Gross Long Term Capital Gain Rs. 3,38,07,046/- less Investment in new Property Rs. 2,17,22,000 Deduction u/s. 54F Taxable Long Term Capital Gain Rs. 1,34,08,701/- 5.1.3 Α.Υ. 2018-19 Taxable Long Term Capital Gain Rs. 3,18,60,714/- 5.1.4 : The A.O. taxed the complete Capital gain in A.Y. 2017-18 at Rs. 7,94,56,250/-after denying the deduction u/s. 54F of Rs. 2,17,22,000/-. The A.O. treated Long Term Capital Gain in A.Y. 2018-19 of the same amount i.e. Rs. 7,94,56,250/- on protective basis Though the A.O. did not write protective basis but stayed the recovery proceedings as the same issue was pending....
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....e. Hence, no change is made to the income declared in AY 2017-18, However, the Capital gain in A.Y. 2018-19 would be charged after reducing the income already offered in A.Y. 2017-18. Hence, the AO is directed to tax the Long Term Capital Gain in A.Y. 2017-18 as offered by the appellant subject to allowability of deduction u/s. 54F which is discussed below. The A.O. is also directed to tax the remaining Capital gain in A.Y. 2018-19. 5.2 Deduction u/s. 54F: - Grounds of appeal no 7 of A.Y. 2017-18 and no 4 of A.Y. 2018-19 are common and interlinked and decided together. The appellant offered income from house property as under: - The appellant stated that the other property was tannery and therefore she is entitled to deduction u/s. 54F in respect of another property. It is seen that the appellant had offered the income from this other property under the head income from house property and claimed deduction of 30% from annual property. Therefore, the appellant's contention that this property cannot be considered under Proviso to Section 54F is not acceptable. Since the appellant held two properties on the date of transfer of land, the appellan....
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....tingency stipulated in clause (a)(iii) together with clause (b) should be satisfied. 14. It is not a case of the Department that the case of the assessee would fall under any one of the three sub-clauses of clause (a) together with clause (b). The case of the Department is that the assessee had income from a commercial property that was treated as income from house property. To be precise, the assessee had one residential house in Chennai, one commercial flat in Chennai, from out of both of which, he was deriving a total income of Rs. 4,25,131/-. He also had a land in Neelankarai which was sold and a house property was purchased in Kodaikanal. 15. Under Section 22 of the Act, any income from any buildings, irrespective of which the use which has to be treated under the head "income from house property". Therefore, the Revenue cannot take above all the terminology use in clause (b) under the proviso. This is a mistake into which the Revenue has fallen to treat the case of the assessee as falling within the purview of the proviso. 16. The facts of the case as narrated in the order of assessment would show that the assessee did not own more than one resident....