SHRI RAJESH DAYARAMANI, Nagpur V. ACIT, CIR-8, Nagpur

ITA 449/NAG/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9659 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 20-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Deduction for capital gain; Capital asset
• Section: 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P.K. BANSAL, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO. 449/NAG./2013 ( ASSESSMENT YEAR : 200910 ) SHRI RAJESH DAYARAMANI HITESH PLACE, RING ROAD JARIPATKA, NAGPUR 440 014 PAN ABOPD3501A APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE8, NAGPUR .... RESPONDENT ASSESSEE BY : SHRI K.P. DEWANI REVENUE BY : SHRI A.R. NINAWE DATE OF HEARING 21.06.2017 DATE OF ORDER 29.06 .2017 O R D E R PER AMARJIT SINGH, J.M. THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE IMPUGNED ORDER DATED 13 TH SEPTEMBER 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS)II, NAGPUR, FOR ASSESSMENT Y EAR 200910. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED B ELOW: (1) THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF CLAIM OF ` 42,44,840 U/S 54F OF THE ACT; AND (2) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION S OF ` 48,000 AND ` 30,000 AS THE ANNUAL LETTING OUT VALUE OF 2 RESIDE NTIAL FLATS. 2 SHRI RAJESH MOOLCHAND DAYARAMANI 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 30 TH SEPTEMBER 2009, DECLARING TOTAL INCOME TO THE TUNE OF ` 67,76,981. THE RETURN OF INCOME WAS PROCESSED UNDE R SECTION 143(1) OF THE ACT. THEREAFTER, THE CASE WAS SELECTE D FOR SCRUTINY UNDER CASS. NOTICE UNDER SECTION 143(2) OF THE ACT WAS IS SUED ON 20 TH AUGUST 2010. THEREAFTER, NOTICE UNDER SECTION 142(1 ) OF THE ACT WAS ALSO ISSUED AND SERVED UPON THE ASSESSEE. THE ASSES SEE IS ENGAGED IN THE BUSINESS OF CONTRACTORSHIP AND EXECUTES CONSTRU CTION OF ROADS FOR VARIOUS STATE GOVERNMENT AUTHORITIES SUCH AS PUBLIC WORKS DEPARTMENT, MADHYA PRADESH RURAL ROAD DEVELOPMENT A UTHORITY AND LOCAL AUTHORITIES SUCH AS NAGPUR IMPROVEMENT TRUST AND NAGPUR MUNICIPAL CORPORATION. THE BOOKS OF ACCOUNT WERE MA INTAINED AND WERE AUDITED IN VIEW OF THE PROVISIONS OF SECTION 4 4AB OF THE ACT. A COPY OF AUDITED REPORT ALONG WITH BALANCE SHEET AND PROFIT & LOSS ACCOUNT AND OTHER DETAILS WERE FILED. AT THE TIME O F ASSESSMENT, IT WAS NOTICED THAT THE ASSESSEE RAISED THE CLAIM OF DEDUC TION UNDER SECTION 54F OF THE ACT AMOUNTING TO ` 42,44,846. THE ASSESSEE SOLD THE PROPERTY LOCATED AT BHANDARA ROAD IN FINANCIAL YEAR 200809, WHICH WAS PURCHASED ON FINANCIAL YEAR 200506. A PART OF THE SAID SALE CONSIDERATION WAS CLAIMED TO BE INVESTED IN RESIDEN TIAL FLAT AND CLAIMED EXEMPTION UNDER SECTION 54F OF THE ACT. THE REMAINI NG PART OF THE CONSIDERATION WAS OFFERED TO TAX AS CAPITAL GAIN. A CCORDING TO THE PROVISIONS OF SECTION 54F, THE ASSESSEE SHOULD PURC HASE THE PROPERTY 3 SHRI RAJESH MOOLCHAND DAYARAMANI EARLIER TO ONE YEAR AND TO COMPLETE THE CONSTRUCTIO N WITHIN THE THREE YEARS OF THE SALE OF THE PROPERTY. IN THE INSTANT C ASE, THE ASSESSEE PURCHASED THE PROPERTY ON 29 TH MAY 2006, EARLIER TO TWO YEARS, THEREFORE, THE CLAIM WAS DECLINED. ALTERNATIVELY, T HE ASSESSEE WAS CLAIMING A GODOWN BEARING CORPORATION NO.706, SURVE Y NO.451, PLOT NO.29, JARIPATKA COLONY, NAGPUR. HOWEVER, THE SAID GODOWN WAS FOUND AS RESIDENCE IN THE RECORD, THEREFORE, THE CLAIM OF THE ASSESSE E WAS DECLINED. THE ASSESSEE WAS HAVING SEVEN PROPERTIES. BY LEAVING THE PROPERTY OF BUSINESS, THE ANNUAL LETTING VALUE (ALV ) OF FOUR PROPERTIES WAS ASSESSED TO THE EXTENT OF ` 1,55,400, AFTER THE DEDUCTION OF 30% AND INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF ` 1,21,94,027. THE ASSESSEE WAS NOT SATISFIED, THEREF ORE, FILED AN APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS) WHO DISMI SSED THE APPEAL OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE HAS F ILED THE PRESENT APPEAL BEFORE US. ISSUE NO.1 3. THIS ISSUE RELATES TO DISALLOWANCE OF CLAIM OF ` 42,44,840 UNDER SECTION 54F OF THE ACT. 4. THE ASSESSEE HAS SOLD THE PROPERTY LOCATED AT KAMPT EE AND SURPLUS ARISING ON SALE WAS SHOWN AS LONG TERM CAPI TAL GAIN. THE ASSESSEE HAS CONSTRUCTED THE RESIDENTIAL HOUSE AND CLAIMED EXEMPTION 4 SHRI RAJESH MOOLCHAND DAYARAMANI IN RESPECT OF LONG TERM CAPITAL GAIN UNDER SECTION 54F OF THE ACT. THE ASSESSEE SOLD THE PROPERTY ON 9 TH JUNE 2008, AND THE CONSTRUCTION OF THE RESIDENTIAL HOUSE WAS CONSTRUCTED ON 29 TH DECEMBER 2008. THE CLAIM OF THE ASSESSEE WAS DECLINED ON THE GROUND TH AT THE ASSESSEE HAS TO PURCHASE A RESIDENTIAL HOUSE WITHIN A PERIOD OF ONE YEAR BEFORE TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE OR CONSTRUCTING THE HOUSE WITHIN A PERIOD OF THREE YEA RS AFTER THE DATE OF TRANSFER. THE ASSESSEE PURCHASED A HOUSE ON 29 TH MAY 2006 EARLIER TO TWO YEARS. THEREFORE, THE CLAIM OF THE ASSESSEE WAS DECLINED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS OFFERED THE L ONG TERM CAPITAL GAIN IN THE RETURN OF INCOME AT ` 38,06,834 FOR SALE OF HOUSE PROPERTY LOCATED AT KAMPTEE ROAD ON 9 TH JUNE 2008. THE ASSESSEE HAS CONSTRUCTED RESIDENTIAL HOUSE WHICH HAS BEEN COMPLE TED ON 29 TH DECEMBER 2008. THE INVESTMENT IN CONSTRUCTION OF RE SIDENTIAL HOUSE IS TO THE TUNE OF ` 62,73,423. THE ASSESSEE HAS CLAIMED EXEMPTION UNDE R SECTION 54F OF THE ACT, IN RESPECT TO INVESTMENT IN RESIDENTIAL HOUSE. THE AFORESAID FACTUAL POSITION IS EVIDENT FROM THE WORKING OF CAPITAL GAIN DECLARED IN THE RETURN AS REPRODUCED AT PAGE2 OF ASSESSMENT ORDER. THE ASSESSING OFFICER HAS HELD THAT THE CONS TRUCTION OF RESIDENTIAL HOUSE WAS COMMENCED PRIOR TO TRANSFER O F PROPERTY ON WHICH CAPITAL GAIN HAS ARISEN AND, THEREFORE, NO BE NEFIT CAN BE GRANTED 5 SHRI RAJESH MOOLCHAND DAYARAMANI TO ASSESSEE IN RESPECT TO INVESTMENT IN CONSTRUCTIO N OF HOUSE PROPERTY CLAIMED IN THE RETURN AT ` 62,73,423. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT ANOTHER RESIDENTIAL HOUSE PROPERTY HA S BEEN PURCHASED BY ASSESSEE ON 12 TH SEPTEMBER 2008 AND, THEREFORE, CAPITAL GAIN EXEMPTION CANNOT BE GRANTED CONSIDERING THE PROVISO TO SECTION 54F(1) OF THE ACT REPRODUCED AT PARA3.3 OF ASSESSMENT ORD ER, THE ASSESSING OFFICER HAS, ACCORDINGLY, DENIED THE DEDUCTION CLAI MED UNDER SECTION 54F OF THE ACT IN ASSESSMENT FRAMED. BEFORE US, IT I S SUBMITTED THAT THE CONSTRUCTION OF RESIDENTIAL HOUSE IS COMPETED O N 29 TH DECEMBER 2008 AND THUS THE CONSTRUCTION OF RESIDENTIAL HOUSE WAS COMPLETED WITHIN 3 YEARS OF TRANSFER OF CAPITAL ASSET. THE CO NSTRUCTION IS COMPLETED WITHIN THE PRESCRIBED LIMIT AND THUS ASSE SSEE IS ELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT. TH E DATE OF COMMENCEMENT OF CONSTRUCTION PRIOR TO TRANSFER OF A SSETS IS NO IMPEDIMENT FOR ALLOWING EXEMPTION UNDER SECTION 54F OF THE ACT. FOR THIS PROPOSITION, THE LEARNED COUNSEL PLACED RELIAN CE ON THE FOLLOWING DECISIONS: I) SHRI SUBHASH SEVARAM BHAVNANI, ITA NO.928/AHD./2012 , ORDER DATED 29.06.2012. II) CIT V/S H.K. KAPOOR (DECD.) THROUGH L/H, 234 I TR 0753 (ALL.) III) CIT V/S J.R. SUBRAMANYA BHAT, 165 ITR 0571 ( KAR.) IV) SHRI SANDEEP KHOSLA, ITA NO.509/BANG./2013 ORDE R DATED 08.08.2014. 6 SHRI RAJESH MOOLCHAND DAYARAMANI 6. IT IS SEEN THAT ASSESSEE HAD ACQUIRED SEMI CONSTRUC TED PROPERTY IN JAYSHREE PLAZA ON 29 TH MAY 2006 AT A COST OF ` 22,19,561 AND HAS MADE INVESTMENT IN CONSTRUCTION OF HOUSE AT ` 40,53,862. THE DETAILED LEDGER ACCOUNT IN RESPECT TO INVESTMENT MADE IS PLA CED ON RECORD. THE COORDINATE BENCH OF THE TRIBUNAL, AHMEDABAD BENCH, IN THE CASE OF ACIT V/S SHRI SHUBHASH SEVARAM BHAVNANIIN, ITA NO.92 8/AHD./2012 ORDER DATED 29 TH JUNE 2012, HAS HELD AS UNDER: THE RESIDENTIAL PLOT WAS PURCHASED BY THE ASSESSEE FOR A CONSIDERATION OF RS.9,23,687/- ON 29/10/2005. THIS IS 23 MONTHS BEFORE THE DATE OF TRANSFER OF CAPITAL ASSETS. THE ASSESSEE HAD ALSO STARTED CONSTRUCTION OF RESIDENTIAL HOUSE BEFO RE THE TRANSFER OF THE CAPITAL ASSET. IT WAS NOTICED BY THE A.O. T HAT THE ASSESSEE HAD INVESTED A SUM OF RS.16,96,008/- IN THE CONSTRU CTION OF HOUSE PROPERTY BEFORE THE TRANSFER OF THE CAPITAL ASSET A ND RS.4,25,000/- IN THE CONSTRUCTION OF RESIDENTIAL HOUSE AFTER THE TRANSFER OF CAPITAL ASSETS. THE A.O. WAS OF THE VIEW THAT THE DEDUCTIO N U/S 54 IS AVAILABLE TO THE ASSESSEE AGAINST CONSTRUCTION OF H OUSE PROPERTY, IF THE SAME IS CONSTRUCTED AFTER THE TRANSFER OF CA PITAL ASSET AND THE SAME SHOULD BE COMPLETED WITHIN THREE YEARS FRO M THE DATE OF TRANSFER OF THE CAPITAL ASSETS. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT THERE IS NO DISPUTE ABOVE THE FACT THAT A SSESSEE SOLD HIS RESIDENTIAL HOUSE ON CONSIDERATION OF SUM OF RS.35, 00,000/- ON 03/11/2007 AND HAS SPENT A SUM OF RS.30,44,695/- ON PURCHASE OF PLOT AND ON CONSTRUCTION OF A RESIDENTIAL HOUSE THEREON. THE CONSTRUCTION OF THIS RESIDENTIAL HOUSE WAS COMPLETE D IN THE MONTH OF MARCH, 2008. SINCE THE CONSTRUCTION WAS COMPLET ED WITHIN THREE YEARS OF TRANSFER OF CAPITAL ASSET, THE RATIO AS LAID DOWN IN THE CASE OF SUBRAMANIYABHAT (SUPRA) IS APPLICABLE T O THE FACTS OF THIS CASE AS IT HAS BEEN CLEARLY HELD IN THAT CASE THAT FOR CLAIMING DEDUCTION U/S 54, THE CONSTRUCTION OF THE HOUSE SHO ULD BE COMPLETED WITHIN THE PRESCRIBED TIME LIMIT AND DATE OF COMMENCEMENT OF CONSTRUCTION IS NOT MATERIAL FOR CL AIMING DEDUCTION. 7. THE RATIO LAID DOWN BY THE AFORESAID DECISION SQUAR ELY APPLIES TO THE FACTS IN CASE OF ASSESSEE AND RESPECTFULLY FOLL OWING THE SAME WE 7 SHRI RAJESH MOOLCHAND DAYARAMANI HOLD THAT THE COMMENCEMENT OF CONSTRUCTION OF RESID ENTIAL HOUSE PRIOR TO TRANSFER OF PROPERTY WILL BE NO IMPEDIMENT FOR G RANTING EXEMPTION U/S 54F OF THE ACT. 8. ANOTHER OBJECTION OF THE ASSESSING OFFICER IS THAT CONSIDERING THE PROVISO TO SECTION 54F(1) OF THE ACT, THE ASSESSEE HAS PURCHASED RESIDENTIAL HOUSE WITHIN ONE YEAR AFTER THE DATE O F TRANSFER OF ORIGINAL ASSET OTHER THAN THE NEW ASSET AND HENCE EXEMPTION UNDER SECTION 54F CANNOT BE GIVEN IN THE CASE OF ASSESSEE. THE LE ARNED COUNSEL INVITING OUR ATTENTION TO THE FINANCIAL STATEMENT S UBMITTED ALONG WITH THE RETURN OF INCOME SUBMITTED THAT PROPERTY PURCHA SED ON 12 TH SEPTEMBER 2008 IS NOT RESIDENTIAL HOUSE BUT IT IS PURCHASE OF GODOWN FOR THE PURPOSE OF BUSINESS. THE FINANCIAL STATEMEN T CLEARLY DEPICT THAT PROPERTY PURCHASED BY ASSESSEE IS SHOWN IN THE FINA NCIAL STATEMENT AS GODOWN. THE AFORESAID GODOWN SHOWN IN THE BALANCE S HEET WAS SOLD BY ASSESSEE IN THE ASSESSMENT YEAR 2011-12 AND SURP LUS ARISING FROM SALE OF SUCH GODOWN HAS BEEN SHOWN AS GAIN ON SALE OF GODOWN AT JARIPATKA IN PROFIT & LOSS ACCOUNT OF THE FINANCIAL STATEMENT SUBMITTED ALONG WITH RETURN OF INCOME. THE INCOME AS SHOWN IN THE ASSESSMENT YEAR 2011-12 UNDER THE HEAD INCOME FROM BUSINESS HA S BEEN ACCEPTED AS SHOWN. THE FINANCIAL STATEMENT FOR THE ASSESSMEN T YEAR 2011-12 CLEARLY INDICATES THAT THE PROPERTY SOLD IS SALE OF GODOWN AT JARIPATKA. THE COORDINATE BENCH OF THE TRIBUNAL, DELHI BENCH, IN THE CASE OF SHRI 8 SHRI RAJESH MOOLCHAND DAYARAMANI SANJEEV PURI, IN ITA NO.5474/DEL./2014 VIDE ORDER D ATED 11 TH JULY 2016, WHILE CONSIDERING THE PROVISION OF SECTION 54 F OF THE ACT, HAD CONCLUDED THAT THE NATURE OF PROPERTY DEPENDS UPON THE ACTUAL USE OF THE PROPERTY AND NOT ON MERE DESCRIPTION IN THE PRO PERTY DOCUMENTS. IT WAS CONCLUDED THAT DESCRIPTION IN PROPERTY DOCUM ENTS AS TO RESIDENTIAL HOUSE IS NOT DETERMINATE TO DENY EXEMPT ION. IN THE FACTS OF SAID CASE THE RESIDENTIAL FLAT WAS FOUND TO HAVE BE EN USED AS OFFICE AND, THEREFORE, IT WAS CONCLUDED THAT IT IS NOT RES IDENTIAL HOUSE IN ORDER TO DISENTITLE THE ASSESSEE AS REGARD TO CLAIM OF EX EMPTION U/S 54F THE ACT. IN THE CASE OF ASSESSEE SUBSEQUENT VERIFICATIO N BY THE ASSESSING OFFICER AFTER THE SALE OF PROPERTY BY ASSESSEE IN T HE YEAR 2010 AND USE BY SUCCESSIVE OWNER AS RESIDENTIAL HOUSE AT THE TIM E OF VERIFICATION IN THE YEAR 2011, CANNOT BE VIEWED ADVERSELY TO DENY T HE CLAIM OF DEDUCTION U/S 54F OF THE ACT. THE FINANCIAL STATEME NT CLEARLY DEPICTS THAT THE PROPERTY PURCHASED BY ASSESSEE ON 12THE SE PTEMBER 2008, AND SOLD ON 23 RD AUGUST 2010 WAS IN THE NATURE OF GODOWN USED FOR PURPOSE OF BUSINESS BY ASSESSEE. THE SUBMISSION MAD E BY ASSESSEE STANDS CORROBORATED FROM THE FINANCIAL STATEMENT ON RECORD. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDIN ATE BENCH OF THE IN THE CASE OF SHRI SANJEEV PURI (SUPRA), IT IS HELD T HAT THE PROPERTY PURCHASED ON 12 TH SEPTEMBER 2008 BEING PURCHASE OF GODOWN AND NOT THE RESIDENTIAL HOUSE PROVISO TO SECTION 54F(1) OF THE ACT CANNOT BE APPLIED TO THE FACTS IN CASE OF ASSESSEE. THE ASSES SEE HAS PURCHASED 9 SHRI RAJESH MOOLCHAND DAYARAMANI SEMI CONSTRUCTED PROPERTY AND EXPENDITURE HAS BEEN INCURRED FOR MAKING HOUSE HABITABLE. THE COORDINATE BENCH OF T HE TRIBUNAL, MUMBAI BENCH, IN THE CASE OF MEHAR R. SURTI, 27 ITR 340 (MUM.) HAS HELD THAT THE RESIDENTIAL HOUSE FOR THE PURPOSE OF SECTIONS 54 AND 54F MEANS A HABITABLE HOUSE AND INVESTMENT MADE UPTO TH E STAGE OF MAKING HOUSE AS HABITABLE SHOULD BE CONSIDERED AS I NVESTMENT IN PURCHASE OF HOUSE. THE RATIO LAID BY THE AFORESAID DECISION SQUARELY APPLIES TO THE FACTS IN THE CASE OF ASSESSEE AND RE SPECTFULLY FOLLOWING THE SAME WE HOLD THAT EXPENDITURE INCURRED BY ASSES SEE IS ELIGIBLE FOR CLAIM OF DEDUCTION U/S 54F OF THE ACT. 9. ANOTHER OBJECTION OF THE ASSESSING OFFICER IS THAT ASSESSEE HAS BORROWED MONEY FROM BANK AND ASSESSEE HAS NOT INVES TED SALE PROCEEDS FROM THE SALE OF ORIGINAL ASSETS. IT IS S EEN THAT ASSESSEE HAS CONSTRUCTED THE HOUSE WITHIN PRESCRIBED LIMIT AND S OURCE OF FUND IS NOT RELEVANT FOR CLAIMING EXEMPTION U/S 54F OF THE ACT. THE COORDINATE BENCH OF THE TRIBUNAL, MUMBAI BENCH, IN THE CASE OF DR. P.S. PASRICHA, 20 SOT 468 (MUM.) HAS HELD THAT IT IS NOT NECESSARY THAT SAME FUNDS MUST BE UTILIZED FOR THE PURCHASE OF THE ANOTHER RE SIDENTIAL HOUSE. THE DECISION OF TRIBUNAL HAS BEEN UPHELD BY THE HON BLE JURISDICTIONAL HIGH COURT IN ITA NO.1825 OF 2009 VIDE JUDGMENT DAT ED 7 TH OCTOBER 2009. THE RATIO LAID BY HONBLE JURISDICTIONAL HIGH COURT SQUARELY APPLIES TO THE FACTS IN THE CASE OF ASSESSEE AND RE SPECTFULLY FOLLOWING 10 SHRI RAJESH MOOLCHAND DAYARAMANI THE SAME WE HOLD THAT EVEN IF BORROWED FUNDS HAVE U TILIZED FOR MAKING INVESTMENT IN RESIDENTIAL HOUSE ASSESSEE IS ELIGIBL E FOR CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. THE REASONS FOR DISALLOWANCE OF EXEMPTION UNDER SECTION 54F OF THE ACT ARE HELD TO BE NOT JUSTIFIED. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES IN CASE OF ASSESSEE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT AS MADE IN THE RETURN IS ALLOWABLE DEDUCTION AT THE HANDS OF ASSESSEE. T HE DISALLOWANCE OF SAME IN ASSESSMENT FRAMED IS HELD TO BE UNJUSTIFIED . THE ADDITION MADE BY THE ASSESSING OFFICER AT ` 42,44,846 IS HEREBY DIRECTED TO BE DELETED. THE GROUND OF APPEAL OF ASSESSEE IS ALLOWE D. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ISSUE NO.2 11. THIS ISSUE RELATES TO ASSESSING OF ALV OF THE FOLLO WING FOUR PROPERTIES OF THE ASSESSEE: 1. SHOP AT SUGAT NAGAR 2. SHOP AT GULMOHAR 3. HOUSE AT K.T. NAGAR 4. HOUSE AT JARIPATKA 12. WE HAVE CONSIDERED THE SUBMISSION MADE BY COUNSEL O F APPELLANT AND PERUSED THE EVIDENCE ON RECORD. THE ASSESSING O FFICER HAS NOT ACCEPTED THE SUBMISSION OF ASSESSEE THAT THE PROPER TY AT JARIPATKA AND 11 SHRI RAJESH MOOLCHAND DAYARAMANI K.T. NAGAR WERE BEING USED FOR THE PURPOSE OF BUSIN ESS. THE ASSESSING OFFICER HAS ACCORDINGLY ASSESSED ALV IN RESPECT TO SAID PROPERTIES AT ` 48,000 FOR PROPERTY AT K.T. NAGAR AND ` 30,000 FOR HOUSE AT JARIPATKAAFTER GRANTING 30% STATUTORY DEDUCTION UND ER SECTION 23 OF THE ACT. THE ASSESSING OFFICER HAS THUS MADE ADDIT ION OF ` 54,600 TO THE INCOME RETURNED. THE AFORESAID PROPERTIES ARE R EFLECTED IN THE BALANCE SHEET AS GODOWN AT JARIPATKA AND GODOWN AT K.T. NAGAR. THE AFORESAID PROPERTIES ARE EXPLAINED TO HAVE BEEN USE D FOR THE PURPOSE OF BUSINESS AND ARE REFLECTED IN BALANCE SHEET OF S UBSEQUENT YEAR AS BUSINESS ASSETS. THE AFORESAID PROPERTY HAS BEEN US ED AS GODOWN AT JARIPATKA AND K.T. NAGAR. THE FINANCIAL STATEMENT H AS BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE ASSESSMENT FRAMED. THE ASSESSING OFFICER HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO S HOW THAT THE AFORESAID PROPERTIES USED BY ASSESSEE AS GODOWN WER E BEING USED FOR ANYTHING ELSE THAN FOR THE PURPOSE OF BUSINESS. THE PROVISIONS OF SECTION 22 OF THE ACT, PROVIDES THAT ALV IS ASSESSA BLE AT THE HANDS OF ASSESSEE IN RESPECT TO PROPERTIES OTHER THAN PORTI ON OF SUCH PROPERTY AS MADE TO OCCUPY FOR THE PURPOSE OF BUSINESS AND P ROFESSION CARRIED OUT BY HIM PROFIT OF WHICH IS CHARGEABLE TO INCOME TAX UNDER THE HEAD INCOME FROM BUSINESS. THE INVESTMENT IS MADE FROM T HE BUSINESS FUND AND PROPERTY IS ALSO REFLECTED IN THE BUSINESS BOOK S AS BUSINESS ASSET. THE PROPERTY HAVING BEEN USED FOR THE PURPOSE OF BU SINESS CONSIDERING THE PROVISIONS OF SECTION 22 OF THE ACT, NO ALV OF SUCH PROPERTY CAN BE 12 SHRI RAJESH MOOLCHAND DAYARAMANI ASSESSED TO TAX UNDER THE HEAD INCOME FROM HOUSE PR OPERTY. THE ADDITION MADE BY THE ASSESSING OFFICER AT ` 54,600 IS HELD TO BE UNJUSTIFIED AND SAME IS THEREFORE DIRECTED TO BE DE LETED. THE GROUND OF APPEAL OF APPELLANT IS ALLOWED. 13. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.06.2017 SD/ - P.K. BANSAL VICE PRESIDENT SD/ - AMARJIT SINGH JUDICIAL MEMBER NAGPUR, DATED: 29.06.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR