SHRI MADAN LAL SABOO,JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3, JAIPUR

“(iii) I have duly considered the submissions of the appellant, assessment order and the material placed on record. It is noted that the plot Nos. D-5 and D-6 were allotted by the Urban Improvement Trust, Jaipur to the appellant for construction of shops on which construction was made by the appellant on the ground mezzanine and first floor. It was claimed by the appellant that the first floor was a residential house and therefore, it is entitled for deduction u/s 54 of the Act. It may be mentioned that both the above properties were adjacent to each other and were sold by the appellant on the same date and having the similar construction. I have examined the maps of the properties enclosed with the sale deeds and it appears that the mezzanine floor was a part of the shop only and was not having any 7 Shri Madan Lal Saboo vs. DCIT independent existence. Further, it is noted from these maps that the rooms on the first floor were of very small size and there was no bathroom. It appears that the first floor was nothing but the extension of the shops on the ground floor as a part of these shops was of double height. It is further noted that these two properties were sold by the appellant to M/s Sun Stone Engineering Industries. Pvt. Ltd. in which Shri Chandra Shekhar Saboo, the son of the appellant was a director. Further, there is nothing in the sale deeds which may establish that the first floor of the property was treated as residential house by the sub- Registrar for the purposes of charging stamp duty. These facts establish that the properties under consideration were commercial properties only and were bought by the buyer for commercial purposes only. (iv) Therefore, in view of the above discussion and looking to the totality of facts and circumstances of the case, it is held that the AO was justified in not allowing deduction u/s 54 of the Act as claimed by the appellant and hence, I do not find any reason to interfere with the findings of the AO as recorded in the assessment order.” The facts as recorded by the ld. CIT(A) have not been disputed by the assessee but the only contention and grievance of the assessee in the present appeal is that the ld. CIT(A) has not appreciated the facts as well as law on the point. We find that the decision relied upon the ld. AR of the assessee are not on the question of the classification of asset being residential or commercial but those are only on the issue of term “a residential house” whether one or more than one or even undivided share in the residential house. Therefore, there was no dispute or Shri Madan Lal Saboo vs. DCIT question in those cases regarding the nature of the existing assest sold by the assessee. In the case in hand the assessee has not disputed that the plot of land were allotted to the assessee for commercial purpose and the assessee construction the shops on these plots as per allotment made by the Urban Improvement Trust, Jaipur. Hence, if any extra construction is made by the assessee above the shops the same will not be regarded as a different and independent unit being a residential house. In the facts and circumstances of the case, we do not find any error or illegality in the impugned order of the ld. CIT(A). The decisions relied upon the ld. AR of the assessee are not applicable in the facts of the present case as discussed above.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open court on 23/07/2019.

Sd/- Sd/- ¼ jes’k lh0 “kekZ ½ ¼fot; iky jko½ (Ramesh. C. Sharma) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:-23/07/2019. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Madan Lal Saboo, Jaipur. 2. izR;FkhZ@ The Respondent- DCIT, Circle-3, Jaipur. 9