ROHAN AGARWAL,JAIPUR vs. ACIT, AJMER

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,o Jh HkkxpUn] ys[kk lnL; lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM vk;dj vihy la-@ITA No. 51/JP/2016 fu/kZkj.k o"kZ@Assessment Year: 2009-10 cuke Shri Rohan Agarwal The ACIT Vs. M-79, Ana Sagar Link Road Circle-1 Ajmer Ajmer LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFCPA 5095 A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by: Shri Mahendra Gargieya, Advocate jktLo dh vksj ls@ Revenue by:Shri P.P. Meena, JCIT - DR lquokbZ dh rkjh[k@ Date of Hearing : 05/02/2018 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 13 /02/2018 vkns'k@ ORDER PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A) Ajmer dated 04-11-2015 for the Assessment Year 2009-10 raising amended grounds of appeal as under:- ‘’1 The ld. CIT(A) erred in law as well as on the facts of the case in confirming the allowance of the deduction claimed u/s 54F upto Rs. 17,18,127/- only as against the deduction claimed by the appellant of Rs. 46,93,353/- and thus thereby confirming the denial of deduction of Rs. 29,13,226/-. The confirmation of the part denial of the deduction made by the AO, being contrary to the provisions of law and facts, the rest amount of deduction also kindly be allowed.

2.1 Apropos Ground No. 1 and 2 of the assessee, the facts as emerges

from the order of the ld. CIT(A) are as under:-

‘’4.3 I have gone through the assessment order, statement of facts, grounds of appeal, written submission carefully. It is seen that the assessee had transferred a propert for Rs. 1,92,25,000/- on11-04-2008 which he had purchased on 22-12-2011. Thus the assessee earned a capital gain of Rs. 1,75,37,856/- on transfer of capital asset. The assessee purchased residential plots number 1,2,3 and 4 for Rs. 10,64,000/-, Rs. 10,50,000/-, 10,38,000/- and 7,04,000/- respectively vide registered deed Sr. No. 136, 135, 137 and 134 respectively, registered in the Sub-Registrar, Ajmer-1 office on 19-05-2008 and constructed a residential house in Plot No. 4. The construction expenses incurred were 12,22,000/-. The AO allowed the deduction u/s 54 in respect of investment made in Plot No. 4 (Rs. 7,04,000/-) and construction expenses incurred for the house built in Plot No. 4 (Rs. 12,22,000/-). The AO did not allow any deduction in respect of investment made in purchase of Plot No. 1,2, and 3.

I have gone through the provisions of Sec 54F carefully. The deduction u/s 54F(1) is admissible in respect of a residential house constructed within the specified period. From the assessment order itself, it is clear that the assessee has constructed the house only on Plot No.4. No construction has been made on Plot No. 1,2 and 3. The contention of the appellant that all the four plots constitute a single unit is not acceptable because the assessee himself has not utilized these plots for construction of any common house property. Only Plot No.4, has been utilized for construction of property. All the four plots are separate units. I have gone through the various decisions relied by the appellant. In none of the case, it has been held that if the assessee purchases four plot and the construction is made only at one plot, the deduction u/s 54 shall be allowed in respect of investment made in other 3 plots also. After going through all the facts of the case, I am of the considered view that the four plots purchase by the appellant do not constitute a single unit. All the plots are separate units. The assessee has constructed the house only at one plot i.e. Plot No. 4.Therefore, in my view the AO is fully justified in allowing deduction u/s 54F only in respect of investment made in Plot No. 4 (Rs. 7,04,000/-) and the construction carried out on Plot No.4 (Rs. 12,22,000/-). Hence, the deduction computed and allowed by AO u/s 54F is in accordance with provision of law. Accordingly, these grounds of appeal are dismissed.

2.2 During the course of hearing, the ld.AR of the assessee prayed for

deletion of addition confirmed by the ld. CIT(A). The ld.AR of the

assessee filed the written submission which has been taken into consideration while adjudicating upon the above grounds raised by the

assessee.

2.3 On the other hand, the ld. DR supported the order of the ld.

CIT(A).

2.4 We have heard the rival contentions and perused the materials

available on record. Brief facts of the case are that the assessee had

purchased four adjoining residential plots bearing different numbers (Nos.

1,2,3 and 4) spending different amount separately Rs. 10,64,000/- Rs.

10,50,000/- Rs. 10,38,000/- and Rs. 7,04,000/-respectively vide different

deeds (S.N. 136, 135, 137 and 134 respectively) which are registered in

the office of Sub-Registrar, Ajmer-1 on 19-05-2008 from the one seller

and constructed a house in Plot No. 4 covering all the four plots by a

boundary wall. The contention of the assessee is that he has not purchased

more than one residential units but has purchased four pieces of land of

same khasra No. 923 from one seller. It is noted that all the plots are

appurtenant to each other and are in continuation. The AO in the

assessment order observed that the assessee had constructed one unit of

residential house after utilizing the whole land and there is only one

boundary wall and only one gate of the entire house. The AO has taken into consideration this fact at page 10 in para 11 (i) of the assessment

order as under:-

‘’(i) After selling one property the assessee purchased one separate adjacent residential house bearing No. 1,2,3, and 4 measuring 492.75 sq. yards, 486 sq. yards, 480.33 sq. yards and 325.91 sq. yards respectively in Moti Vihar Colony, Ajmer for Rs. 10,64,000/-, Rs. 10,50,000/-m Rs. 10,38,000/- and Rs. 7,04,000/-respectively8 vide registered deeds S.No. 136, 135, 137 and 134 respectively, registered in the office of Sub-Registrar, Ajmer-1 on dated 19-05-2008. The assessee has accepted by this submission dated 27-06-2014 (as mentioned in para 7 above) that he has constructed a residential house only on plot out of these, that is plot no. 4 and covered all other plots without boundary wall with this plot.’’

In this case, the AO has taken into consideration valuation report filed by

the assessee. The AO has also taken into consideration Inspector report

which indicates that the assessee had constructed a new building at Plot

No. 4. The other three separate adjacent plots No. 1,2 and 3 measuring

492.75 sq. yards, 486 sq. yards and 480.33. sq. yards (totaling to 1459.08

sq. yards) respectively are vacant and these are not being used by the

assessee. The AO thus noted that the total area of 1459.08 sq. yards of

other three plots cannot be considered to be a part of land appurtenant to

the small building constructed in Plot No. 4 which has been constructed

only on 18% part of its plot itself. The AO further noted that assessee has

covered all the four plots by a common boundary wall having one

common gate but it does not seem to be the expediency of the ground position and ground reality and the same is done by the assessee to

protect his land only. The AO himself visited the site on 3-07-2014 and

clicked a few pictures of the site which are available at page 12 of the

assessment order. The AO looking into the above facts and circumstances

of the case did not allow deduction claimed by the assessee for the

investment in purchase of Plot No. 1, 2 and 3 u/s 54F of the Act. The AO

only allowed the deduction as to the investment made by the assessee at

Plot No. 4 by observing as under:-

‘’12. Disallowance of investment made in purchase of separate three plots:- On the basis of the above analysis the deduction claimed by the assessee for the investment to purchase Plot No. 1,2, and 3 is disallowed u/s 54F of the Act and only the investment made in Plot No. 4 to purchase it and construct a building (i.e. Rs. 7,04,000+Rs. 12,22,000/- = Rs. 19,26,000/-) in it is allowed to compute the amount of allowable deduction in reference to sec 54F of the Act. Calculation of Long Term Capital Gain is as under:- Sale consideration as per value taken by Sub-Registrar Rs. 1,92,25,000/- Less: Transfer expenses Rs. 2,50,000- Net consideration Rs. 1,89,75,000/- Less: Indexed Cost As per computation of total income given by the assessee Rs. 14,37,144/- Long term capital gain Rs. 1,75,37,856/-

Allowable deduction u/s 54F(1)(b)= Cost of New Asset*Long Term Capital Gain Net consideration = 19,26,000*1,75,37,856 = Rs. 17,80,127/- 1,89,75,000 The deduction allowed earlier u/s 54F was Rs. 46,93,353/-. So the difference amount of Rs. 29,13,226/- (4693353 – 1718127)will be disallowed and added back to the earlier assessed income of the assessee. Computation of total Income Assessed income u/s 143(3) Rs. 1,33,23,278/- Add: Disallowance u/s 54F Rs. 29,13,226/- Assessed income Rs. 1,62,36,504/- Assessed at income Rs. 1,62,36,504/-. Calculation of tax and interest charged are given in Form No. ITNS-150 appended with the order and the same forms part of this assessment order.’’

In first appeal, the ld. CIT(A) has confirmed the action of the AO by

observing as under:-

‘’…..In none of the case, it has been held that if the assessee purchases four plot and the construction is made only at one plot, the deduction u/s 54 shall be allowed in respect of investment made in other 3 plots also. After going through all the facts of the case, I am of the considered view that the four plots purchase by the appellant do not constitute a single unit. All the plots are separate units. The assessee has constructed the house only at one plot i.e. Plot No. 4.Therefore, in my view the AO is fully justified in allowing deduction u/s 54F only in respect of investment made in Plot No. 4 (Rs. 7,04,000/-) and the construction carried out on Plot No.4 (Rs. 12,22,000/-). Hence, the deduction computed and allowed by AO u/s 54F is in accordance with provision of law. Accordingly, these grounds of appeal are dismissed.’’

Taking into consideration the above facts and circumstances of the case

and also the written submissions filed by the assessee, we find that ld.AR

of the assessee could not controvert the findings of the ld. CIT(A) as in

this case it does not transpire that all the four plots purchased by the

assessee constitute a single unit. All the plots are separate units and the

assessee has constructed the house only at one Plot No. 4. In this view of 7 the matter, we decline to interfere with the order of the ld. CIT(A). Thus Ground No. 1 and 2 of the assessee are dismissed. 3.1 The Ground No.3 of the assessee are regarding charging of interest 234B, 234C and 234D of the Act which are mandatory and consequential in nature. 4.0 In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 13-02-2018. Sd/- Sd/- ¼ fot; iky jko ½ ¼HkkxpUn½ (Vijay Pal Rao) (Bhagchand) U;kf;d lnL; /Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 13 /02/ 2018 *Mishra आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Rohan Agarwal,Ajmer 1. 2. izR;FkhZ@ The Respondent- ACIT, Circle – 1, ajmer vk;dj vk;qDr¼vihy½@ CIT(A). 3. vk;dj vk;qDr@ CIT, 4. 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZ QkbZy@ Guard File (ITA No. 51/JP/2016) 6. vkns'kkuqlkj@ By order, सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत