ITA 1237/2011. Case: Commissioner of Income Tax Vs Gita Duggal. High Court of Delhi (India)
| Case Number | ITA 1237/2011 |
| Counsel | For Appellant: Mr. Kamal Sawhney, Sr. Standing Counsel and For Respondents: Mr. P. C. Yadav, Adv. |
| Judges | Badar Durrez Ahmed and R. V. Easwar, JJ. |
| Issue | General Clauses Act 1897 - Sections 13, 13(2); Income Tax Act, 1961 - Sections 260A, 54, 54(1), 54F |
| Citation | 2013 (257) CTR 208 (Del) |
| Judgement Date | February 21, 2013 |
| Court | High Court of Delhi (India) |
Judgment:
R. V. Easwar, J.
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The revenue has filed the appeal under Section 260A of the Income Tax Act, 1961 against the order dated 07.06.2001 passed by the Income Tax Appellate Tribunal in ITA 3613/Del./2010 for the assessment year 2007-08. The assessee which is the respondent in the appeal is an individual. In the computation of income filed along with the return of income, she declared long term capital gains of ` 2,68,25,750/- in the following manner:-
While completing the assessment the assessing officer took the view that on the terms of the agreement entered into with M/s. Thapar Homes Ltd. on 08.05.2006, the cost of construction of the building incurred by the aforesaid company which was the developer of the property would also be included in the total sale consideration. The assessee responded by submitting that the entire cost of construction was incurred by the builder and even if it is considered as part of the sale consideration, since it has been fully invested in the residential house itself, the same would be exempt under Section 54 of the Act. The assessing officer did not accept the assessee's submission. He therefore, added an amount of ` 3,43,72,529/- which was the cost of construction incurred by the developer to the sale consideration of ` four crores received by the assessee and computed the total sale consideration at ` 7,43,72,529/-.
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Dealing with the assessee's contention that in any case the sale consideration should be taken as having been invested in the new residential house and thus exempt under Section 54, which was supported by a judgment of the Karnataka High Court in CIT Vs. B. Ananda Basappa, (2009) 309 ITR 329, the assessing officer held that the two floors which were given to the assessee by the developer and on which the developer had incurred construction cost were independent of each other and self-contained and therefore they cannot be considered as one unit of residence. Accordingly, he held that the assessee was not eligible for the exemption under Section 54. Dealing with the claim for relief under Section 54F, the assessing officer held that the exemption would be available only in respect of one unit, since the two residential units were independent of each other and the assessee cannot therefore claim exemption on the footing that both constituted a single residence. In this view of the matter he recomputed the capital gains by making an addition of ` 98,20,722/-.
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On appeal, the CIT(Appeals) agreed with the assessee's contention and following the judgment of the Karnataka High Court cited above, held that the assessee was eligible for the deduction under Section 54 in respect of the basement, ground floor, first floor and the second floor. He accordingly, allowed the appeal.
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The revenue carried the matter in appeal before the Tribunal and raised the following ground:-
On the facts and on the circumstances of the case Ld. Commissioner of Income Tax (Appeals) has erred in law and on the facts in deleting the addition of ` 8,20,722/- u/s. 54F of the IT Act, 1961 which the Assessing officer had allowed in respect of only one unit by treating...
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