Case Law Details
DCIT Vs Sh. Kanwal Mohan Singh Sehgal (ITAT Delhi)
Ld. AR submitted that the solitary ground on which the Ld. AO disallowed the claim of the assessee is that the residential house is constructed on agricultural land. The impugned disallowance is not valid on this ground alone as ITAT Jaipur Bench has held in Shyam Sunder Makhija vs. ITO 38 ITD 125 that the Farm House is also a residential house. The Ld. AR submitted that section 54 does not put any rider that deduction in respect of investment in acquisition of land appurtenant to the building will not quality for exemption.
We have given our careful thought to the submissions of the parties and perused the orders of the Ld. AO/CIT(A) as also the material on records. It is not in dispute that the assessee has purchased agricultural land and constructed in the said land residential house, guest house, staff quarters, swimming pool & shed for parking etc. The Ld. CIT(A) has observed and rightly so that the assessee has made investment in the residential house and land appurtenant thereto and that the Act does not limit the size of appurtenant land.
In Addl. CIT vs. Shri Narendra Mohan Uniyali, the Delhi Bench of the Tribunal held in ITA No. 1624/Del/2009 dated 31.08.2009 in para 10 as under:
“10. It is crystal clear from the plain reading of Section 54 & 54F that exemption is allowable in respect of amount invested in the construction of a residential house. There is no any rider u/s 54F that no deduction would be allowed in respect of investment of capital gains made on acquisition of land appurtenant to 5 ITA-1624/D/2009 & CO-157/D/2009 the building or on the investment on land on which building is being constructed. When the land is purchased and building is constructed thereon, it is not necessary that such construction should be on the entire plot of land, meaning thereby a part of the land which is appurtenant to the building and on which no construction is made, there is no denial of exemption on such investment.”
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