Section 54F : Booking of bare shell of a flat is a construction of house property and not purchase

Section 54F : Booking of bare shell of a flat is a construction of house property and not purchase

Relevant Extract of Order is given below:

6.2. After going through the facts and circumstances of the case, we find that the judgement of the Hon’ble Madras High Court is applicable on the facts of the present case. Therefore, following the decision of Hon’ble High Court, Ld. CIT(A) has rightly allowed the ground of the, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue.

6.3. As regards ground no. 3 which relates to deletion of addition fo Rs. 14,07,474/- made on account of rental income received from D.T. Cinemas is concerned. We find that the Assessing Officer had made addition in the rental income on the ground that the assessee had received 20,10,672/- from the tenant M/S D.T. Cinema Ltd. as per the calculation given in the impugned assessment orders dated 04.02.2015 and allowing deduction there from of 30% on account of statutory deduction under section 24(a) of the Income-tax Act resulting into the net addition of Rs. 14,07,474/-, however, the assessee submitted that the Assessing officer has miserably failed to arriving at any Annual value of the property under section 23(1)(a) and 23(1)(a) of the Income tax Act. The Assessing Officer has erred in treating the clubbed up Income as composite rent under the head ‘Income from House Property’ and in the process has failed to segregate composite rent into the rent of the premises taxable under the head ‘Income from House Property’ and taxable income of maintenance/ service charges received by the appellant for provisioning of services under the head ‘Income from business & Profession’. The Assessing Officer has misplaced reliance on the judgment of Honorable Delhi High Court in the case of CIT vs. H.G. Gupta & Sons [19841 149 ITR 253 (Delhi) and Honorable High Court at Calcutta in the case of Indian City Properties vs. CIT [1965] 55 ITR 262 (Cal). The facts and rationale of both the Honorable high Courts in the respective judgment are totally different footings and facts, which are not relevant to the instant appeal. The cases pertain to the allowablity of certain deductions on income from House property. Whereas, in the instant case, the Assessing Officer as presumed that the assessee is in receipt of certain amount towards the provisioning of certain services which have not been disclosed which is patently false and based on his own conjecture and surmises, and without fully appreciating records and explanations placed before him. Further, the Assessing Officer has not made any inquiry or undertaken any exercise to prove the evidences / confirmations placed before him to be incorrect or false.

He had in his written submissions dated 29.01.2015 stated that he had only received the monthly rental of the premises as per details attached with the bank statement and had further supported, by means of a confirmation from the tenants namely DLF Utilities Limited which reads as under;

“This is confirmed that We, M/S DLF utilities Limited, have made payment of rent under the lease agreement to the owners (i.e. Akshay Sobti, Pradeep Sobti and Seema Sobti) as per TDS certificates already issued to them and no other payment has been made to them on any account whatsoever under the above mentioned lease agreement. Further this is clarify that during the FY 2011-12. Maintenance of the said property are done by ourselves ana not paid any charges to M/S Akshay Sobti, Pradeep Sobti and Seema Sobti on account of that”.

The reconciliation of rent received with the entries in the bank accounts have already been placed on the file of the department, which has been ignored by the Assessing officer. The Assessing officer has not placed on record even an iota of evidence as to receipt of any amount on account of maintenance by the appellant despite having examined the books of account and other details to support his assertion that the appellant has received any maintenance charges from the tenant despite having placed a confirmation from the tenant to the effect that no maintenance charges have been paid by them. The observation of the Assessing Officer in paragraph 4 is contrary as to the fact that the :

“The appellant has not shown any proof that the charge is not received by him. As per the para 1(c) of the said deed nowhere mentions that the maintenance charge is not taken by the lessor (assessee). It is case of receiving the maintenance charges from the M/S D T Cinema and then paying to mall Management Company of the maintenance work. Even the appellant has not shown any proof with regard to this that he has not been receiving any maintenance charge. While in the said deed at para no. 8 (v) it is clearly mentioned that the assessee is receiving maintenance charge along with the rent in advance.”

6.3.1. Keeping in view of the facts and circumstances of the case as explained above, we find that no maintenance charges were received by the assessee as confirmed by the tenant. This fact also gets confirmed from perusal of the bank statement, TDS certificate and details reflected in Form 26AS. Since, no maintenance charges were received or receivable by the assessee, hence, Ld. CIT(A) has rightly directed the AO to delete the addition in dispute, which does not need any interference on our part, therefore, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the ground raised by the Revenue.

7. In the result, both the 02 appeals filed by the Revenue stand dismissed.

Order pronounced on 10-05-2019.

Click here to Download the Order

For Regular Updates Join : https://t.me/Studycafe

Tags : Judgement, Appellant Tribunal

The post Section 54F : Booking of bare shell of a flat is a construction of house property and not purchase appeared first on Studycafe.

from Studycafe https://ift.tt/2MOvCrH