SHRI ASHOK KUKREJA,BHOPAL vs. THE ACIT 3(1), BHOPAL

Brief facts as culled out from the records are that the assessee is an individual running business of grinding of spices, whole sale trading of spices, kirana items under the whole proprietorship concern of M/s. Kukreja Brothers. E-return of income for A.Y. 2010-11 filed on 20.10.2010 declaring income of Rs.3,38,160/-. Case selected for scrutiny through CASS followed by serving of notices u/s 143(2) & 142(1) of the Act. During the course of assessment proceedings Ld. AO observed that the assessee had claimed exemption u/s 54F of the Act for purchasing property at first floor of 208 situated at Major Shopping Central Scheme No.13, M.P. Nagar Zone-II Bhopal. 2 Assessee claimed it to be residential property but Ld. AO considered it to be of commercial nature which cannot be used for residential purposes. The exemption u/s 54F was denied and sum of Rs.18,98,561/- added to the income along with other minor additions. Income assessed at Rs.28,73,871/-.

Aggrieved assessee preferred an appeal before the ld. CIT(A) and partly succeeded.

Now the assessee is in appeal before Tribunal challenging the finding of Ld. CIT(A) confirming the addition of Rs.18,98,561/- claimed by the assessee u/s 54F of the Act.

Ld. counsel for the assessee reiterated the submissions made before the Ld. CIT(A) placed at pages 1 to 6 of the paper book are also referred other documents placed at pages 7 to 43 of the paper book dated 14.02.2020, claiming that the alleged property situated at first floor is residential property and claim of 54F of the Act should have been allowed.

Per contra ld. DR vehemently argued supporting the orders of both the lower authorities.

We have heard rival contentions and perused the records placed before us. Sole grievance of the assessee is against the finding of Ld. CIT(A) confirming the addition of Rs.18,98,561/- claimed by the assessee for deduction u/s 54F of the Act which was denied by the Ld. AO. We notice that the property in question is situated at first floor of building No.208 situated at Major Shopping Central Scheme No.13, M.P. Nagar Zone-II Bhopal.

As per the permission granted by the Municipal Corporation, Bhopal, the ground floor is to be utilized for commercial activities and thus shops are constructed on ground floor and first floor to be utilized for residential purpose. We also find that the assessee has purchased a property as a residential property and registering authority have also registered the said purchase after charging expenses valuing the said property for stamp duty value as a residential property. Copy of registration papers and guidelines for stamp duty valuation are placed on record. It is noteworthy that Electricity Department had also considered the use of the said premises as a residential use and has charged the electricity rates accordingly. Perusal of record also shows that the assessee has submitted the copy of the Municipal receipt and return during the course of assessment proceedings itself.

We, therefore, in the given facts and circumstances of the case and various documentary evidences filed before us, are satisfied with the contention made by the Ld. counsel for the assessee and Ld. DR being unable to place any contrary material to prove otherwise, are of the considered view that the assessee has rightly claimed exemption u/s 54F of the Act for Rs.18,98,561/- for purchase of residential house property located at first floor of a complex having shops constructed on ground floor. We, accordingly set aside the finding of ld. CIT(A) and allow the sole ground raised by the assessee. 5

In the result, Assessee’s appeal in ITANo.519/Ind/2019 is allowed. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 07.09.2021.