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Income Tax Appellate Tribunal, AGRA (SMC
Before: SHRI A. D. JAIN
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH: AGRA
BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER
I.T.A No. 284/Agra/2016 (ASSESSMENT YEAR-2012-13)
Sunil Agarwal C/o M/s Vandna ITO, -6 (3), Jhansi. Motors, Old Bus Stand, Jhansi. PAN No.AFOPA6437J (Assessee) (Revenue)
Assessee by Shri Navin Gargh, AR Revenue by Shri Waseem Arshad, Sr.DR.
Date of Hearing 16.01.2018 Date of Pronouncement 21.02.2018
ORDER This is assessee’s appeal for assessment year 2012-13, taking the following effective grounds: “1.1- Because in any view, the Id. CIT (A) has grossly erred in confirming the addition of Rs.36,54,820/- made by the A.O. by converting/disallowing deduction claimed u/s 54F to. Section 54 of the I.T. Act by invoking provision of section 50C of the I.T. Act on sale of dilapidated / ruined house property which was not in a livable state is which is highly perverse, wrong, illegal, and bad in law.
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1.2- Because in any view, the provision u/s 50C is not applicable on sale of property, claiming deduction u/s 54F of the I.T. Act, as the definition of “net consideration” is specifically defined in section 54F of the I.T. Act.
2- Because in any view, the interest charged u/s 234B and 234C as per Notice of Demand dt.04.02.2015 is wrong, illegal & excessive.”
Apropos Ground No.1.1 and 1.2, the assessee claimed exemption under section 54F of the IT Act on sale of a residential house which was in a dilapidated condition and was not in a habitable state, i.e., in ruins (khandharnuma). The AO, however, denied the claim on the basis that exemption under section 54F of the Act is available only on the sale of a plot. He observed that the purchase deed showed the property purchased to be a bungalow and not a plot; and that in the sale deed, the description of the property was as residential (Aavasiya), i.e., a constructed building with land appurtenant thereto. Long term capital gain was assessed by the AO under section 54F of the Act. 3. The ld. CIT(A) confirmed the assessment order.
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A copy of the sale deed dated 29.03.2012 (APB 15 to 32), by way of which the assessee sold the property, has been filed before this Bench. In this deed, the property sold has been described as ‘Ek Quita Aavasiya Makan (Khandharnuma) ‘Bungalow No. 82 Ka Juz Bhag Jo Vartaman Samay Mein Khandhar Ke Roop Mein Hai’, meaning ‘part of one residential house (in ruins) Bungalow No. 82, which is presently in a ruined condition’. 5. It is seen that the above recital in the sale deed has not been taken into consideration by either of the Authorities below. This recital makes its amply clear that what the assessee sold was a khandhar, i.e., a building which was not habitable and was in ruins. This sale deed has not been disputed. The same has been taken into consideration by both the AO as well as the ld. CIT(A). However, the aforesaid recital contained therein has not been taken into account by both the taxing Authorities, rendering both their orders to be a result of complete mis- reading and non-reading of material documentary evidence brought on record by the assessee. 6. In view of the above, the claim of the assessee under section 54F of the Act is entirely justified in the Authorities below have clearly erred in converting the same to one under section 54 of the Act. Accordingly, the grievance of the assessee
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by way of Ground Nos. 1.1 and 1.2 is found to be justified and it is accepted as
such.
Therefore, the order under appeal on this issue is reversed and the claim of
the assessee under section 54F of the Act is directed to be allowed.
Ground No. 2 is consequential.
In the result, the appeal is allowed.
Order pronounced in the open court on 21/02/2018.
Sd/-
(A.D. JAIN) JUDICIAL MEMBER Dated 21/02/2018 *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR