ITO Vs. Smt. Saroj Devi Agarwal (ITAT Jaipur)
Revenue has not brought any material on record suggesting that on commercial land no residential house can be constructed. Even there is no material suggesting that any unauthorized construction by the assessee would debar it from claiming exemption under sections 54F. In the absence of such material, in our considered view benefit of section 54F cannot be denied. Another objection of the assessing officer is with regard to the fact that construction of residential house was started prior to transfer of original asset. This objection is also misplaced when the assessee is entitled to exemption under sections 54F if the residential house is purchased one year before the transfer of the original asset. Therefore, in our considered view merely because the construction was started prior to transfer of original asset, if same is completed within three years of transfer of original asset, would not come into way of entitlement of exemption. Another objection of the assessing officer is that the assessee is having 1/8th share in the commercial land on which the new asset has been constructed. The explanation of the assessee is that by way of settlement the assessee was given absolute rights on the new asset. We are of the view that this claim of the assessee requires verification at the end of the assessing officer. Therefore, we modify the finding of learned Commissioner (Appeals) to the extent that assessing officer would verify from other co-owners about the factum of relinquishment of their rights into new asset. If the assessing officer finds correctness into the claim of the assessee, he would allow the entire claim lest he would restrict the same to the extent of 1/8th of the cost of construction of new asset. Ground No. 1 of the revenue’s appeal is partly allowed for statistical purpose in the terms indicated herein before.
