Case Law Details
Dattatreya Varma Penmatsa Vs ITO (ITAT Visakhapatnam)
It is not disputed by the Revenue that the new residential house has been constructed within the time stipulated in section 54(1) of the said Act. It is the cost of the new residential house and not just the cost of construction of the new residential house which is to be allowed as deduction. In view of the above by respectfully following the ratio laid down in the case of C. Aryama Sundaram vs. CIT (supra) where the cost of new residential house which should necessarily include the cost of land, cost of materials used in the construction, the cost of labour and other relatable cost of construction of the residential house has to be considered for the purpose of deduction U/s. 54 of the Act. We therefore direct the Ld. AO to consider the cost of land purchased by the assessee while computing the deduction U/s. 54 of the Act and we allow the appeal of the assessee.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
This appeal filed by the assessee is against the order of the Ld. CIT(A)- 1, Visakhapatnam in ITA No. 10177 / 2017- 18/ CIT(A)- 1/VSP/2020-21, dated 17/09/2020 arising out of the order U/s. 143(3) of the Act passed by the Ld. AO for the AY 2015-16.
2. Brief facts of the case are that the assessee is a civil contractor filed his return of income for the AY 20 15-16 declaring total income of Rs. 62,08,350/-. Subsequently, the case was selected for scrutiny through CASS and notice U/s. 143(2) was issued on 20/09/2016. The AO concluded the assessment U/s. 143(3) of the Act assessing the total income of Rs. 1,32,02,792/- by disallowing the deduction u/s 54 of the Act. Aggrieved by the order of the Ld. AO, assessee filed an appeal before the Ld. CIT(A)-1, Visakhapatnam. The Ld. CIT(A) confirmed the addition made by the AO and dismissed the appeal. Aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us.
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