Shri Harshad M. Thakkar (Gandhi), Ahmedabad V. DCIT, Central Circle-2(1), Ahmedabad

ITA 784/AHD/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6590 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 02-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Assessee Lawyers: S N SOPARKAR
• Keywords: Capital asset; Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 54F

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 784/AHD/2018 ( ASSESSMENT YEAR : 2014-15) SHRI HARSHAD M THAKKAR (GANDHI) 13, LAXMI NIVAS SOCIETY, PALDI, AHMEDABAD 380 007 / VS. DY CIT CENTRAL CIRCLE 2(1), AHMEDABAD ./ ./ PAN/GIR NO. : ABAPG9768N ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. SOPARKAR, A.R. / RESPONDENT BY : SHRI S. K. DEV, SR.D.R. DATE OF HEARING 25/10/2018 '# / DATE OF PRONOUNCEMENT 21/01/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-12, AHMEDA BAD (CIT(A) IN SHORT), DATED 26.02.2018 ARISING IN THE ASSESSMENT ORDER DATED 28.11.2016 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 20 14-15. ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. LD. CIT(A) ERRED IN LAW AND ON FACTS CONFIRMING ACTION OF AO REJECTING EXEMPTION U/S 54F OF THE ACT THOUGH ALL T HE CONDITIONS LAID DOWN UNDER THE SECTION ARE SATISFIE D BY THE APPELLANT TO AVAIL EXEMPTION. 2. LD. CIT(A) ERRED IN LAW AND ON FACTS CONFIRMING ACTION OF AO TO HOLD CONSTRUCTED STRUCTURE NOT A RESIDENTIAL HOU SE WITHIN THE MEANING OF SEC. 54F IN ABSENCE OF THE BASIC AMENITI ES SUCH AS A TOILET, WATER & ELECTRICITY CONNECTION & KITCHEN. 3. LD. CIT(A) ERRED IN LAW AND ON FACTS TO HOLD CON STRUCTED HOUSE INHABITABLE IGNORING MUNICIPAL TAX BILLS CLASSIFYIN G STRUCTURE AS RESIDENTIAL PROPERTY OCCUPIED BY APPELLANTS EMP LOYEE & THE FACT CONFIRMED BY THE INSPECTOR. 4. LD. CIT(A) FURTHER ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT COST OF LAND PURCHASED FORMS PART OF COST OF RESIDENTIAL HOUSE AND LAW DOES NOT LAY DOWN ANY STI PULATION AS TO SIZE OF THE HOUSE OR SIZE OF PLOT OF LAND. 5. LD. CIT(A) ERRED IN LAW AND ON FACTS HOLDING THA T ENTIRE LAND APPURTENANT TO THE HOUSE NOT ELIGIBLE FOR EXEMPTION U/S54F OF THE ACT OVERLOOKING CBDT CIRCULAR & JUDICIAL DECISI ONS SUBMITTED BY THE APPELLANT. 6. LD. CIT(A) ERRED IN LAW AND ON FACTS TREATING GE NUINE CLAIM AS SHAM & A PLOY TO DEFRAUD GOVERNMENT. LD. CIT(A) OU GHT TO HAVE REFRAINED MAKING SUCH UNCALLED FOR COMMENTS. 7. WITHOUT PREJUDICE TO THE ABOVE, SINCE THE PURCHA SE OF LAND IS UNDISPUTED DURING THE YEAR WITHDRAWAL OF EXEMPTION IF ANY CAN BE MADE ONLY AFTER EXPIRY OF 3 YEARS FROM DATE OF T RANSFER & THE EXEMPTION CLAIMED OUGHT TO BE ALLOWED IN THE YE AR UNDER CONSIDERATION. 8. LD. CIT(A) ERRED IN LAW AND ON FACTS CONFIRMING ADDITION MADE BY AO OF RS.5,65,520/- REJECTING COST OF IMPROVEMEN T OF CAPITAL ASSET SOLD CLAIMED U/S 48 OF THE ACT REJECT ING EVIDENCE OF LEDGER A/C OF CONTRACTOR ALONGWITH BILLS AND PH YSICALLY SEEN BY THE INSPECTOR ON SPOT VISIT. 9. LEVY OF INTEREST U/S234A/234B & 234C OF THE ACT IS NOT JUSTIFIED. 10. INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IS NOT JUSTIFIED. ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 3 3. BRIEFLY STATED, THE ASSESSEE FILED HIS RETURN OF INCOME FOR AY 2014-15 DECLARING TOTAL INCOME AT RS.59,99,030/-. THE RETURN WAS SUBJECTED TO SCRUTINY ASSESSMENT. IN THE COURSE OF SCRUTINY ASSESSMENT, IT WAS INTER ALIA NOTICED BY THE AO THAT ASSESSEE H AS SOLD A CO-OWNED LAND SITUATED AT SANAND, AHMEDABAD AND RECEIVED SAL E CONSIDERATION TO THE TUNE OF RS.1,28,48,933/- BEING HIS SHARE IN THE CO-OWNERSHIP LAND. THE CAPITAL GAIN ON SALE OF THE AFORESAID LAND WAS COMPUTED BY THE ASSESSEE AT RS.1,21,41,360/- AFTER TAKING INDEX COS T OF ACQUISITION OF LAND AT RS.7.07,573/-. THE ASSESSEE WAS FOUND TO H AVE CLAIMED EXEMPTION OF RS.1,17,83,494/- UNDER S. 54F OF THE A CT AGAINST THE AFORESAID CAPITAL GAINS. FOR THE PURPOSES OF EXEMP TION CLAIMED UNDER S.54F OF THE ACT, THE ASSESSEE MADE OUT A CASE BEFO RE THE AO THAT HE HAS PURCHASED CERTAIN PARCEL OF LAND AT VATVA, AHME DABAD BEARING SURVEY NO. 448 (2610 SQ.MTRS. OF FINAL PLOT) FOR RS .1,60,00,000/- ON 07.01.2014 AND LAND AT SURVEY NO. 447/2 (1700 SQ.MT RS. OF FINAL PLOT) FOR RS.75,30,000/- ON 07.01.2014. THE ABOVE LAND W AS STATEDLY PURCHASED JOINTLY WITH ONE SHRI PRAVINKUMAR MOHANLA L GANDHI WHO WAS ALSO THE CO-OWNER OF THE ORIGINAL LAND. IT WAS CLAIMED THAT PLOT WAS PURCHASED ALONGWITH BOUNDARY WALL AROUND IT. T HE ASSESSEE CARRIED OUT SOME CONSTRUCTION OF SUPERSTRUCTURE ON THE PLOT AND CLAIMED EXEMPTION UNDER THE ACT. IT WAS CLAIMED BY THE ASSESSEE BEFORE THE AO THAT IT HAS INVESTED THE SALE CONSIDE RATION ARISING ON SALE OF LAND TOWARDS PURCHASE OF CO-OWNED LAND ON W HICH CONSTRUCTION OF RESIDENTIAL HOUSE HAS BEEN CARRIED OUT UNDER SEL F SUPERVISION AND THEREFORE, THE SALE CONSIDERATION HAS BEEN APPROPRI ATED TOWARDS CONSTRUCTION OF RESIDENTIAL HOUSE WHICH INCLUDES BO TH COSTS OF CONSTRUCTION AS WELL AS COST OF LAND IN SYNC WITH C BDT CIRCULAR NO.667 DATED 18.10.1993. NOT SATISFIED, THE AO COND UCTED SPOT VERIFICATION OF THE NEWLY PURCHASED LAND THROUGH IT S INSPECTOR AT THE SITE AND PHOTOGRAPHS OF THE SITE AS WELL AS THE REP ORT OF THE INSPECTOR ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 4 WERE OBTAINED. THE REPORT (REPRODUCED IN ASSESSMEN T ORDER) CONTAINED VARIOUS ADVERSE REMARKS AND THEREFORE, WAS CONFRONT ED TO THE ASSESSEE. 4. THE SALIENT FEATURES EMERGE FROM THE SPOT VERIFI CATION REPORT ARE THAT THE SITE HAS BOUNDARY WALL ON FOUR SIDES WITH AN IRON GATE INSTALLED AT ONE OF THE CORNERS OF THE PLOTS. FURT HER, TWO ROOMS (COVERING A VERY SMALL AREA OF THE PLOT) ALONGWITH A SMALL STORE ROOM HAVING COMMON WALLS WITH TIN-SHED ROOFING WERE CONS TRUCTED AT ONE OF THE CORNERS NEAR THE ENTRY GATE OF THE ABOVE SAID P REMISES. IT WAS POINTED OUT IN THE REPORT THAT ROOMS WERE DEVOID OF ANY WINDOWS OR VENTILATION EXCEPT FOR A BULB AND SOME LOOSE WIRES HANGING ON THE SIDE WALLS OF THE ROOM. THE PATH FROM ENTRANCE GATE TO THE ROOMS WAS KUCCHA WITH NO PAVEMENT OR WALK-WAY CONSTRUCTED FRO M THE ENTRY GATE TO THE ROOMS. AN ELECTRICITY METER WAS FURTHER FOU ND INSTALLED AT THE PREMISES WHICH WAS CLAIMED TO BE THERE FOR APPROXIM ATELY TWO YEARS. HOWEVER, NO PERMANENT SOURCE OF WATER VIZ; WATER TA NK OR WATER PIPELINE COULD BE FOUND BY THE INSPECTOR AT THE PRE MISES EXCEPT FOR A BORE WELL WHICH WAS NOT FOUND TO BE IN WORKING COND ITION. AS PER THE REPORT, THE PREMISES NEITHER HAD ANY FACILITY FOR A WASHROOM/BATHROOM NOR HAD ANY KITCHEN OR OTHERWISE ANY PERMANENT ARRA NGEMENT FOR COOKING FOOD. THE REMAINING PORTION OF THE PLOT WA S LEFT VACANT AND FILLED WITH THICK GRASS GROWN WHERE ANIMALS WERE SE EN GRAZING IN THE GRASS GROWN. ON INQUIRY, IT WAS FOUND THAT THE WAT CHMAN / SECURITY GUARD NAMED PUNABHAI RESIDES AT THE SAID PREMISE S AND IT WAS INFORMED BY THE WATCHMAN THAT FOUR WALLS AT THE PER IPHERY WERE ALREADY CONSTRUCTED WHEN THE LAND WAS PURCHASED. T HE PHOTOGRAPHS OF THE PLOT/LAND WITH CONSTRUCTION AREA WERE ALSO TAKE N AND FORMS PART OF THE ASSESSMENT ORDER TOGETHER WITH FORMAL REPORT. 5. ARMED WITH THE AFORESAID REPORT TOGETHER WITH PH OTOGRAPHS OF THE SITE, THE AO MADE FURTHER INQUIRIES WITH THE AS SESSEE AND ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 5 CONFRONTED THE AFORESAID FACTS. IN RESPONSE, THE A SSESSEE ASSERTED THAT AS PER THE REPORT ALSO, THERE WAS A CONSTRUCTION OF HOUSE (TWO ROOMS) ALONGWITH STORE ROOM. THE ELECTRICITY METER WAS AL SO FOUND TO BE INSTALLED AND LIGHT FACILITY WAS ALSO AVAILABLE. I T WAS THUS CONTENDED THAT THE RESIDENTIAL HOUSE LIGHTING WITH TWO ROOMS AND STORE ROOM WAS HABITABLE AND FOUND OCCUPIED ALBEIT BY WATCHMAN/EMP LOYEE. IN RESPONSE TO THE QUERY REGARDING APPROVAL TAKEN FROM THE LOCAL AUTHORITY FOR THE PURPOSES OF CARRYING OUT SO CALLE D CONSTRUCTION FOR RESIDENTIAL PURPOSE AND COPY OF APPROVED MAP, IF AN Y, IT WAS CONTENDED THAT THERE IS NO REQUIREMENT IN LAW THAT THE RESIDENTIAL HOUSE CONSTRUCTED NEED TO BE APPROVED BY MUNICIPAL CORPORATION OR THE LOCAL AUTHORITY FOR THE PURPOSES OF AVAILING EX EMPTION. THE ASSESSEE ALSO ASSERTED THAT THERE IS A BORE WELL AN D THE PERSON OCCUPYING THE HOUSE IS ALSO RESIDING AND IS GETTING ALL SENATORY NEEDS, COOKING FOOD WITH CHULA. IT WAS SUBMITTED THAT REQ UIREMENT OF WASHROOM AND BATH ROOM IS MET BY HIM ON OPEN SPACE. AS REGARDS, NONFUNCTIONING OF BORE WELL, IT WAS SUBMITTED THAT BORE WELL MOTOR WAS STOLEN DURING THE DIWALI TIME WHEN THE WATCHMAN WAS STAYING AWAY AT HIS NATIVE PLACE. THE ASSESSEE, IN ESSENCE , SUBMITTED THAT THE RESIDENTIAL HOUSE WAS DULY CONSTRUCTED AFTER PURCHA SE OF PLOT. COUPLED WITH THIS, IT WAS SUBMITTED THAT THE LAW DO ES NOT REQUIRE THE RESIDENTIAL HOUSE TO BE OF PARTICULAR SIZE OR SHAPE OR SPECIFICATIONS AND THE SIZE OF OPEN VAST LAND IS ALSO NOT RELEVANT. I T WAS CONTENDED THAT ONCE, A RESIDENTIAL HOUSE IS FOUND TO HAVE BEEN CON STRUCTED AND OCCUPIED, THERE IS SUFFICIENT COMPLIANCE. 6. THE AO HOWEVER FOUND THE SUBMISSIONS OF THE ASSE SSEE TO BE BEREFT OF ANY MERIT. THE AO OBSERVED THAT THE COST OF CONSTRUCTION OF THE ROOMS (TIN-SHED ROOFING) WAS MEAGER RS.90,003/ -. HAVING REGARD TO THE TIN-SHED ROOFING, ABSENCE OF WINDOW, VENTILA TORS, ABSENCE OF ANY PERMANENT SOURCE OF WATER EXCEPT A NONFUNCTIONING B ORE WELL, NO ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 6 FACILITY FOR ANY WASHROOM/BATHROOM OR TOILET OF ANY KIND OR NATURE, NO KITCHEN OR ANY PERMANENT ARRANGEMENT FOR COOKING, C ONSTRUCTION ARE BARELY 300-350 SQ.FT. (30-35 SQ.METER) VIS-A-VIS 43 10 SQ.MTRS OF LAND AND ABSENCE OF ANY APPROVAL OR APPROPRIATE AUTHORIZ ATION FOR SUCH RESIDENTIAL CONSTRUCTION. THE AO THUS DISCARDED TH E CONTENTION OF THE ASSESSEE THAT SALE CONSIDERATION HAS BEEN APPROPRIA TED / INVESTED ESSENTIALLY FOR PURCHASE OF RESIDENTIAL HOUSE AND N OT MERE PURCHASE OF LAND/PLOT SIMPLICITOR. THE AO ACCORDINGLY OBSERVED THAT THE CONDITIONS PRESCRIBED FOR AVAILING EXEMPTION UNDER S.54F OF THE ACT ARE CLEARLY NOT MET AND CONSEQUENTLY DENIED THE EXE MPTION OF RS.1,17,83,494/- CLAIMED BY THE ASSESSEE UNDER S.54 F OF THE ACT AGAINST CAPITAL GAINS ARISING ON SALE OF ORIGINAL A SSET (LAND PARCELS AT SANAND). 7. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 8. THE CIT(A) HOWEVER DID NOT FIND ANY MERIT IN THE PLEA OF THE ASSESSEE EITHER THAT THE SALE CONSIDERATION HAS BEE N APPROPRIATED TOWARDS RESIDENTIAL HOUSE CONTEMPLATED UNDER S. 54F OF THE ACT AND NOT TOWARDS ACQUISITION OF LAND PER SE. THE RELEVA NT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREUNDER: 5. I HAVE PERUSED THE ASSESSMENT ORDER AND CAREFUL LY CONSIDERED THE APPELLANT'S SUBMISSION MADE DURING THE APPELLATE PR OCEEDINGS. I NOTE THAT THERE IS NO DISPUTE AS TO THE FACTS RELATED TO RECEIPT OF CONSIDERATION AND THE DESCRIPTION OF THE CONSTRUCTE D STRUCTURE WHICH IS AT THE HEART OF ELIGIBILITY OF EXEMPTION U/S 54F OF THE ACT. 5.1 AS PER SECTION 54F THE EXEMPTION PROVIDED IS AV AILABLE TO AN ASSESSEE BEING AN INDIVIDUAL OR HUF WHO HAS THE CAP ITAL GAIN ARISING FROM TRANSFER OF ANY LONG TERM CAPITAL ASSE TS, NOT BEING A RESIDENTIAL HOUSE IF THE ASSESSEE HAS, WITHIN A PER IOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TRANSFE R TOOK PLACE, PURCHASED OR HAS WITHIN A PERIOD OF THREE YEARS AFT ER THAT DATE CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA. THE EX EMPTION U/S 54F FROM CAPITAL GAIN U/S 45 IS TO THE EXTENT OF THE NE T CONSIDERATION FROM THE ORIGINAL ASSET OR THE COST OF THE NEW ASSET WHI CHEVER IS LESS. AS ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 7 PER THE PROVISO THE EXEMPTION U/S 54F IS NOT AVAILA BLE TO THE ASSESSEE IF HE OWNS MORE THAN ONE RESIDENTIAL HOUSE OTHER TH AN THE NEW -ASSET ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET OR PU RCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE NEW ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET OR CONSTRUCTS ANY RESIDENTIAL HOUSE OTHER THAN THE NEW ASSET WITH IN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER OF ORIGINAL ASSET AND THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RES IDENTIAL HOUSE OWNED ON THE DATE OF THE TRANSFER OF THE ORIGINAL A SSET IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY'. FURTHER UNDER SUB- SECTION (4) OF SECTION 54F THE AMOUNT OF NET CONSID ERATION, WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHA SE OF THE NEW ASSETS OR THE CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME U/S 139, SHALL BE D EPOSITED BY HIM BEFORE FURNISHING SUCH RETURN IN AN ACCOUNT IN A SP ECIFIED BANK OR INSTITUTION IN A SPECIFIED SCHEME, WHICH HAS TO BE UTILIZED, WHOLLY OR PARTLY, FOR PURCHASE OR CONSTRUCTION OF NEW ASSET W ITHIN THE PERIOD SPECIFIED IN SUB-SECTION(L). 5.2 THUS IN THE CONTEXT OF THE FACTS OF THE APPELLA NT THE CONSTRUCTION OF NEW ASSET I.E. RESIDENTIAL HOUSE SH OULD HAVE BEEN COMPLETED ON OR BEFORE 17/06/2016 WHICH HAS ELAPSED AND TAKEN NOTE BY THE AO. THE TRANSFER OF OLD ASSET ON 17/06/2013 AND PURCHASE OF TWO PLOTS ON 07/01/2014 ARE NOT IN DISPUTE. THE APP ELLANT HAS CLAIMED THAT THE TWO PLOTS ARE ADJOINING TO EACH OT HER AND THEY FORM PART OF THE EXEMPTION CLAIMED U/S 54F. 5.3 DURING THE COURSE OF THE APPELLATE PROCEEDINGS THE APPELLANT HAS FILED TWO PHOTOGRAPHS CONTAINING THE FRONT VIEW OF THE CONSTRUCTED STRUCTURE AND THE GATE (OF THE PLOT) AND HAS SUBMIT TED A DRAWING SHOWING THE PLOT AND THE PLAN AND ELEVATION OF THE CONSTRUCTED STRUCTURE. DESCRIPTION IS 'FARM PLAN FOR S.NO. 447/ 2 & 448 VATVA' AND TOTAL PLINTH AREA OF THREE ROOMS TAKEN TOGETHER AS 34FT BY 10FT 9 IN I.E. 365,5 SQ. FT. OR 35 SQ. MTRS. (APPROX). THE FACTS OF THE CONSTRUCTED STRUCTURE GATHERED BY THE AO ARE NOT DI SPUTED BY THE APPELLANT BUT THE APPELLANT ASSERTS THAT THE CONSTR UCTED STRUCTURE IS A 'RESIDENTIAL HOUSE' AND RELIES IN PARTICULAR UPON J UDGMENTS IN THE CASE OF ANIL GUPTA VS DCIT 6 SOT 403 (ITAT DELHI) AND ADDL CIT VS NARENDRA MOHAN UNIYAL 34 SOT 152 (ITAT DELHI) TO CONTEND THAT THE CONSTRUCTED STRUCTURE AND THE BOTH PLOTS O F LAND TOGETHER CONSTITUTE RESIDENTIAL HOUSE AND COST OF ALL THESE WILL HAVE TO BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF COMPUTATION O F EXEMPTION U/S 54F. COPIES OF TWO MUNICIPAL TAX BILLS DATED 24.01. 2018 FOR THE YEAR 2017-18 FOR SURVEY NO. 44,8 HAS ALSO BEEN SUBMITTED IN OF THE STRUCTURE BEING RESIDENTIAL, AGE OF STRUCTURE AS 5 YEARS, (COVERED) AREA OF STRUCTURE AS 35 SQ. METERS IN ONE BILL AND AREA OF VACANT PLOT AS 2580 SQ. METERS IN OTHER BILL. THE USE HAS BEEN SHOWN AS SELF RESIDENTIAL IN THE BILL. ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 8 5.4 FURTHER SOME OF THE CASE LAWS WHICH PRIMA FACIE APPEAR IN FAVOUR OF THE APPELLANT ARE THAT 'WHETHER ASSESSEE HAD INVESTED MONEY IN CONSTRUCTION OF A RESIDENTIAL HOUSE, MEREL Y BECAUSE CONSTRUCTION IS NOT COMPLETE IN ALL RESPECT AND IT WAS NOT A FIT CONDITION TO BE OCCUPIED WITHIN A PERIOD STIPULATED , THAT WOULD NOT DISENTITLE ASSESSEE FROM CLAIMING BENEFIT U/S 54F [ (CIT VS SAMBANDAM UDAYKUMAR (2012) 19 TAXMANN.COM 17 (KAR)] , 'EXEMPTION U/S 54F SHOULD NOT BE DISALLOWED ON MERE GROUND THAT NEW RESIDENTIAL PROPERTY WAS PURCHASED JOINTLY IN N AMES OF ASSESSEE AND HIS WIFE' [(CIT VS RAVINDRA KUMAR ARORA (2011) 203 TAXMAN 289 (DELHI)]; 'JOINT OWNERSHIP OF PROPERTY WOULD NO T STAND IN WAY OF CLAIMING EXEMPTION U/S 54F' [(DR. SMT. P. K. VASANT HI RANGRAJAN VS CIT (2012) 23 TAXMANN.COM 299 (MAD)]. 5.5 HOWEVER, WITH DUE RESPECT TO ALL THESE CASE LAW S, THE ISSUES IN THE CONTEXT OF THE PRESENT CASE OF THE APPELLANT DO NOT GET OVER. ACCORDING TO ME THE FOLLOWING ISSUES ARE REQUIRED T O BE EXAMINED FOR SECTION 54F: 1. WHETHER THE ORIGINAL PROPERTY, LAND ACQUIRED BY DEDICATED FREIGHT CORRIDOR CORPORATION OF INDIA LTD ., A PSU UNDER MINISTRY OF RAILWAY WAS HELD AS ASSET AND NOT AS STOCK IN TRADE SO AS THE CONSIDERATION THERE FROM WAS CAPITAL GAIN; 2. WHETHER THE APPE11ANT IS HIT AND PRECLUDED BY TH E PROVISO TO SUB-SECTION(1) OF SECTION 54F; 3. WHETHER THE NEW LAND ACQUIRED OUT OF THE CONSID ERATION OF THE ORIGINAL PROPERTY FALLS IN RESIDENTIAL ZONE IN THE LATEST MASTER PLAN, IF ANY; 4. WHETHER THE NEW CONSTRUCTED STRUCTURE QUALIFIES AS A RESIDENTIAL HOUSE; 5. IF THE CONSTRUCTED STRUCTURE QUALIFIES AS A RE SIDENTIAL HOUSE, WHAT SHOULD BE AREA OF THE LAND APPURTENANT THERETO FOR THE PURPOSE OF SECTION 54F; AND 6. IF THE ENTIRE PLOT OF LAND CAN BE THE LAND APPUR TENANT TO THE RESIDENTIAL HOUSE WHETHER THE SECOND PLOT OF LA ND IN THE CASE OF THE APPELLANT IF IT IS ADJOINING THE FI RST PLOT ON WHICH CONSTRUCTION WAS MADE CAN ALSO BE TREATED AS LAND APPURTENANT TO THE RESIDENTIAL HOUSE. 5.6 IT IS NOTED FROM THE ASSESSMENT ORDER THAT THER E IS NO DISCUSSION BY THE AO OF THE PROVISO OF SUB-SECTION (1) OF SECT ION 54F WHICH EXCLUDES A PERSON HAVING MORE THAN ONE RESIDENTIAL HOUSE ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET FROM THE BEN EFIT OF EXEMPTION UNDER THE SECTION. SIMILARLY, THERE IS NO MENTION W HETHER THE NEW LAND(S) ACQUIRED OUT OF THE CONSIDERATION OF THE OR IGINAL PROPERTY IS SUCH THAT A RESIDENTIAL HOUSE COULD BE CONSTRUCTED THERE. ASSUMING THAT THERE IS NO ISSUE RELATED, TO FIRST THREE ISSU ES ENUMERATED ABOVE, THE ISSUE THAT IS REQUIRED TO BE EXAMINED IS WHETHE R THE NEW ASSET IS A RESIDENTIAL HOUSE AND IF SO WHAT AREA OF LAND CAN BE TREATED AS PART ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 9 OF OR APPURTENANT TO THAT RESIDENTIAL HOUSE. THE AO HAS DENIED THE CLAIMED EXEMPTION AS HE DID NOT FIND THE CONSTRUCTE D STRUCTURE TO BE A RESIDENTIAL HOUSE. 5.7 IN THIS REGARD IT IS SEEN THAT THERE IS NO DEFI NITION AND SPECIFIC MENTION OF 'RESIDENTIAL HOUSE' AND LAND APPURTENANT THERETO IN THE INCOME TAX ACT. IN THIS CONTEXT IT APPEARS NATURAL TO FALL BACK UPON THE LAWS AND THE RULES OF THE AREA DEVELOPMENT AUTH ORITY AND OF THE URBAN LOCAL BODY (MUNICIPAL CORPORATION OR MUNICIPA LITY) FOR DETERMINING THESE ASPECTS. IT IS AN AREA DEVELOPMEN T AUTHORITY WHICH NORMALLY DOES THE TOWN PLANNING WHERE BOUNDAR IES OF COLONIES ARE MARKED AND APPROVED AS PER THE MASTER PLAN WHER E VARIOUS TYPES OF ZONES - GREEN, RESIDENTIAL, COMMERCIAL, INDUSTRI AL, RECREATIONAL, RELIGIOUS, EDUCATIONAL ETC. ARE MARKED FOR THOSE SP ECIFIC USES AND IT IS AN URBAN LOCAL BODY (ULB) WHICH APPROVES THE PLA N OF CONSTRUCTION AND COMPLETION OF CONSTRUCTION OF A BU ILDING AS PER THE RELEVANT BUILDING BYE LAWS AND ALSO COLLECTS PROPER TY TAX THERE FROM AS PER THE RELEVANT PROPERTY TAX BYE LAWS. THE PROPERTY TAX IS ON ALL PROPERTIES WITHIN THE MUNICIPAL LIMITS AND C OMPRISES OF A BUILDING TAX AND A VACANT LAND TAX. BUILDING TAX IS LEVIED ON THE VALUE OF COVERED SPACE OF BUILDING AS PRESCRIBED IN THE ACT AND THE BYE LAWS RELATED THERETO AND VACANT LAND TAX IS CHA RGED ON THE VALUE OF VACANT LAND AS PRESCRIBED IN THAT ACT AND BYE LA WS. NORMALLY (IN MOST OF THE MUNICIPAL CORPORATION ACTS AND PROPERTY TAX BYE LAWS) TAX ON VACANT LAND IS APPLICABLE IF THE CONSTRUCTIO N ON THE GROUND FLOOR IS LESS THAN 25% OF THE PLOT AREA. IT IS ALSO TO BE NOTED THAT IN BUILDING BYE LAWS (RULES GOVERNING CONSTRUCTION OF BUILDINGS WITHIN THE MUNICIPAL LIMITS) WHILE A FSI/FAR FOR ANY CONST RUCTION IS PRESCRIBED, THE CONSTRUCTION ON THE GROUND FLOOR CA NNOT COVER THE ENTIRE PLOT (EXCEPTION AND WAIVER IS AVAILABLE TO V ERY SMALL PLOTS ONLY) AND APPROXIMATELY 1/3 RD AREA OF THE PLOT HAS TO BE LEFT VACANT AND CONSTRUCTION HAS TO BE CONFINED TO 2/3 RD AREA OF THE PLOT AREA AND THE NUMBER OF FLOORS CAN BE CONSTRUCTED WITHIN THE LIMITS OF FSI/FAR AND HEIGHT PERMISSIBLE. ALSO IN THE CONTEXT OF FARM HOUSES THERE ARE SEPARATE SPECIFIC PROVISIONS AND A TYPICAL PROVISIO N IS THAT IT HAS FSI/FAR OF 5% ONLY AND COVERAGE (PLINTH) ON THE GRO UND FLOOR HAS TO BE CONFINED TO 100 SQ.FT. THE GROUND FLOOR HAS TO B E CONFINED TO 100 SQ. METERS AND CONSTRUCTION UP TO TWO FLOORS ONLY A ND IT IS STIPULATED THAT NO VACANT LAND APPURTENANT TO HOUSE IS CONSTRU ED AS AGRICULTURAL LAND AND SUCH LAND IS LIABLE TO PROPERTY THE RESTRI CTION IS IRRESPECTIVE OF THE SIZE OF THE FARM. FARM HOUSES ARE ALLOWED IN GREEN ZONES ONLY. THIS IS IN THE CONTEXT THAT PROPERTY TAX IS NOT LIV EABLE ON VACANT LAND AND BUILDINGS (OTHER THAN DWELLING HOUSES) EXCLUSIV ELY USED FOR AGRICULTURE PURPOSES. A 'BUILDING' IS DEFINED TO ME AN A HOUSE, OUT HOUSE, STABLE, LATRINE, URINAL, SHED, HUT, WALL (OT HER THAN A BOUNDARY WALL) OR ANY OTHER STRUCTURE, WHETHER OF MASONRY, B RICKS, WOOD, MUD, METAL OR OTHER MATERIAL BUT DOES NOT INCLUDE ANY P OTABLE SHELTER. FOR THE PURPOSE OF PROPERTY TAX BUILDINGS ARE CLASS IFIED USE WISE AND A 'RESIDENTIAL BUILDING' MEANS ANY BUILDING USED FO R DWELLING PURPOSES BY A FAMILY/ FAMILIES/INDIVIDUAL BUT EXCLU DES ANY PREMISES ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 10 FOR COMMERCIAL USE INCLUDING LODGING, GUEST HOUSE, HOTEL OR SIMILAR PURPOSES. THE BUILDING CANNOT BE HABITABLE AND WOR THY OF DWELLING UNLESS THERE ARE MINIMUM BASIC AMENITIES SUCH AS A TOILET, A PROVISION FOR WATER AND ELECTRICITY AND A KITCHEN. THESE MINIMUM FEATURES HAVE TO BE THERE IRRESPECTIVE OF THE FACT THAT TP IS THERE OR NOT AND WHETHER THE BUILDING PLANS ARE SANCTIONED O R NOT. THE BROAD RULES ENUMERATED ARE TYPICAL OF AN ULB AND WILL APP LY TO EVEN UNAUTHORIZED AREA WHERE CONSTRUCTION IS NOT ALLOWED MEANING THEREBY THAT THE BUILDING PLANS ARE NOT APPROVED BY THE ULB. HOWEVER ANY CONSTRUCTION WHERE TP IS NOT THERE , IS UNAUTHORISED AS THE BUILDING PLANS ARE NOT APPROVED AND AS NO CO NSTRUCTION CAN BE MAC E WITHOUT THE APPROVAL OF THE COMMISSIONER OF T HE ULB, SUCH CONSTRUCTION IS ILLEGAL ALSO LIABLE TO BE TORN/BROU GHT DOWN BY THE ENFORCING AUTHORITIES. HOWEVER, THE PURPOSE OF LEV Y AND COLLECTION OF PROPERTY TAX, NO DISTINCTION OF APPROVED/UNAPPR OVED/ UNAUTHORIZED /ILLEGAL CONSTRUCTION AND OF REGULARI ZED/ UNAUTHORISED COLONIES IS RECOGNISED. IN THE MUNICIPAL ACT S THERE ARE STRICT STIPULATIONS FOR SUBDIVISION(S) OF A PLOT AND MERGE R/AMALGAMATION OF PLOTS FOR WHICH LOCATIONS ARE REQUIRED TO BE MADE A ND THE PLAN APPROVED BY THE COMMISSIONER ULB AND INVARIABLY SUC H PROPOSAL OF SUBDIVISION OF AMALGAMATION HAVE TO BE ROVED BY THE MUNICIPALITY /MUNICIPAL CORPORATION (I.E. THE LEGISLATIVE WING). TILL SUCH TIME TWO PLOTS CANNOT BECOME ONE PROPERTY. (NOTE: THE FIGURES AND THE SCHEMES OF THINGS ARE VE RY BROADLY NARRATED AND ROWED FROM THE DELHI MUNICIPAL CORPORA TION ACT, 1957 AND THE RELEVANT LAWS MADE THERE UNDER FOR THE PURPOSE OF APPRECIATING THE PRINCIPLES AND RE MAY BE MINOR VARIATIONS/DIFFERENCES FROM THE ACTS AND THE RULES GOVERNING THE AUDA AND AMC IN AHMEDABAD). 5.7 FROM THE FINDING OF THE AO ABOUT NEWLY CONSTRUC TED STRUCTURE WHICH IS NOT DISPUTED BY THE APPELLANT IT IS CLEAR THAT THE STRUCTURE DOES NOT HAVE THE BASIC AMENITIES AND THUS NOT FIT FOR HABITATION OF PEOPLE AND IT IS EVIDENT THAT THE APPELLANT AID NOT INTEND TO USE THE SAME FOR HIS RESIDENCE OR TO LET IT OUT AND IT IS T HE 'RESIDENTIALITY' OF THE BUILDING WHICH IS THE ESSENCE FOR THE ALLOWABIL ITY OF EXEMPTION B/S 54F. THERE BEING A CHOWKIDAR HERE DOES NOT MAKE THE STRUCTURE HABITABLE AND THUS RESIDENTIAL. COURTS HAVE HELD TH AT A GARAGE AND A SERVANT ROOM DO NOT MAKE A RESIDENTIAL BUILDING. AC CORDING TO ME THE PURPOSE OF LEGISLATION IN PROVIDING TOE EXEMPTION U /S 54F IS TO ENCOURAGE BUILDING OF RESIDENTIAL HOUSES IN THE COU NTRY, IT MAY BE TRUE THAT FOR THE PURPOSE OF BENEFIT OF SECTION 54F THE OWNER/APPELLANT ANT IS NOT REQUIRED TO RESIDE, EVEN IN SOME CASE THE CONSTRUCTION MAY NOT BE COMPLETE BUT THE BUILDING M UST BE HABITABLE. I AM ALSO OF THE CONSIDERED VIEW THAT THE STRUCTURE CONSTRUCTED BY THE APPELLANT IS NOT FIT FOR HABITATION AND THE APPELLA NT DOES NOT INTEND TO USE THE SAME FOR HIS RESIDENCE OR TO LET IT OUT. THE PRACTICAL TEST OF A BUILDING BEING HABITABLE IS THAT WHETHER THE OWNE R AND HIS FAMILY ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 11 CAN RESIDE THERE. IT IS NOT SO IN THE CASE. THUS TH E AO IS HELD TO BE JUSTIFIED IN HOLDING THAT HE CONSTRUCTED STRUCTURE IS NOT A RESIDENTIAL HOUSE AND ACCORDINGLY THE APPELLANT IS NOT ELIGIBLE FOR EXEMPTION U/S 54F. TO BUTTRESS THE STAND OF THE AO, I MAY MENTION CIT VS SAMBANDAM UDAYKUMAR (2012) 19 TAXMANN.COM 17 (KAR) WHEREIN IT IS HELD THAT WHETHER ASSESSEE HAD INVESTED MONEY IN CONSTRUCTION OF A RESIDENTIAL HOUSE, MERELY BECAUSE CONSTRUCTION IS N OT COMPLETE IN ALL RESPECTS AND IT WAS NOT A FIT CONDITION TO BE OCCUP IED WITHIN A PERIOD STIPULATED, THAT WOULD NOT DISENTITLE ASSESSEE FROM CLAIMING BENEFIT U/S 54F BECAUSE THIS JUDGMENT IS APPLICABLE WHERE A N ASSESSEE HAS UNDER TAKEN THE CONSTRUCTION BUT THE CONSTRUCTION C OULD NOT BE COMPLETED WITHIN THE PRESCRIBED TIME OF THREE YEARS BECAUSE OF CONDITIONS BEYOND HIS CONTROL AND FOR WHICH HE MAY NOT BE RESPONSIBLE. IN THE CASE OF THE APPELLANT THE DRAWI NG PLAN SUBMITTED BEFORE ME IS ONLY OF THREE ROOMS WITH NARROW STRIPS OF GRASS/FLOWER BED. THE DRAWING PLAN IS SUCH THAT THE CONSTRUCTION EVEN LATER MADE CANNOT QUALIFY TO BE A 'FARM HOUSE' LET ALONE A 'RE SIDENTIAL BUILDING/HOUSE' AND I DOUBT WHETHER THE LEGISLATION INTENDS THE EXEMPTION U/S IN 54F IN CASE OF A FARM HOUSE, IF TH E APPELLANT SO CLAIMS LATER BEFORE THE HIGHER APPELLATE BODIES. FU RTHER IN SMT. USHARANI KALIDINDI VS ITO 2013 37 TAXMANN.COM 360 ( ITAT HYDERABAD) IN THE CONTEXT OF EXEMPTION-U/S 54F IT H AS BEEN HELD THAT \A CONSTRUCTION OF INHABITABLE HOUSE CANNOT BE EQUA TED WITH A RESIDENTIAL HOUSE, INVESTMENT IN CONSTRUCTION COULD BE COMPLETE AS A HOUSE ONLY WHEN SUCH HOUSE BECOME HABITABLE. IN THI S CITED CASE THE ASSESSEE CLAIMED DEDUCTION U/S 54F ON THE GROUND TH AT SHE HAD PURCHASED A HOUSE OUT OF CAPITAL GAINS BUT THE AO H AVING FOUND THAT THERE WAS NO CONSTRUCTION OF A HOUSE AS CLAIMED BY THE ASSESSEE AND INSTEAD THERE WAS A SMALL CONSTRUCTION CONSISTING O F TWO ROOMS MADE OF HOLLOW BRICKS WITHOUT ANY BASIC AMENITIES DISALL OWED CLAIM OF DEDUCTION IN REFERENCE TO THE QUESTION WHETHER SINC E PROPERTY PURCHASED BY THE ASSESSEE WOULD NOT FALL WITHIN DES CRIPTION OF RESIDENTIAL HOUSE, CLAIM OF ASSESSEE U/S 54F CANNOT BE ALLOWED, THE TRIBUNAL HELD YES IN FAVOUR OF THE REVENUE. I AM OF THE CONSIDERED OPINION THAT THE CASE OF THE APPELLANT IS SQUARELY COVERED BY THIS JUDGMENT OF HONBLE TRIBUNAL OF HYDERABAD. FURTHER IN D P MEHTA VS CIT 116 TAXMAN 611 (DELHI) THE HONBLE HIGH COURT O VERTURNED THE DECISION OF THE TRIBUNAL HOLDING THAT THE PROPERTY WAS NOT WORTH OCCUPYING AND INHABITABLE AND THEREFORE THE DENIAL FOR THE EXEMPTION TO THE ASSESSEE BY THE AO WAS IN ORDER. 5.8 THE CASE OF THE APPELLANT IS NOT EVEN SAVED BY THE CASE OF AMITA GUPTA VS DCJT (SUPRA) RELIED UPON BY HIM. NO DOUBT 'THE REQUIREMENT OF LAW IS THAT THE PROPERTY SHOULD BE A RESIDENTIAL HOUSE. ...... THE POPULAR MEANING OF THE WORD IS A PLACE O R BUILDING USED FOR HABITATION OF PEOPLE. IT IS USED IN CONTRADISTINCTI ON TO A PLACE WHICH IS USED FOR THE PURPOSE OF BUSINESS, OFFICE, SHOP, ETC., IT IS NOT NECESSARY THAT A PERSON SHOULD RESIDE IN THE HOUSE TO CALL IT A RESIDENTIAL HOUSE' BUT THE SAME CASE CATEGORICALLY LAYS DOWN THAT ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 12 THAT 'IT SHOULD BE CAPABLE OF BEING USED FOR THE PU RPOSE OF RESIDENCE THEN ONLY THE REQUIREMENT OF SECTION IS SATISFIED.. .'. HERE IN THE CASE OF THE APPELLANT THE STRUCTURE CONSTRUCTED DOES NOT MEET THE CRITERIA OF BEING USED FOR THE PURPOSE OF RESIDENCE AS LAID DOWN IN THE CASE OF AMITA GUPTA VS DCIT. 5.9 ACCORDINGLY UNDER THE CIRCUMSTANCES OF F ACTS AND LAW THE DENIAL OF EXEMPTION U/S54F TO THE APPELLANT APPEARS JUSTIFIED. 6. THOUGH HAVING HELD THAT THE CONSTRUCTED STRUCTUR E IS NOT A RESIDENTIAL BUT DING IT MAY NOT BE REQUIRED NOW BUT IT MAY BE APPROPRIATE, IN CASE THE APPELLANT GOES BEFORE THE HIGHER APPELLATE BODIES, TO DEAL WITH THE CLAIM OF THE APPELLANT THA T ENTIRE AREA OF THE PLOT (COMBINATION OF TWO PLOTS - SURVEY NO. 448 OF 2610 SQ. MTR. AND SURVEY HO. 447/2 OF 1700 SQ. MTR.) WHICH IS VACANT AFTER TEMPORARY MAKESHIFT CONSTRUCTION OF ABOUT 35 SQ. MTR. OF PLIN TH AREA SHOULD BE CONSIDERED FOR THE PURPOSE OF EXEMPTION U/S 54F. FO R THIS CLAIM RELIANCE HAS BEEN BY THE APPELLANT ON ADDL.CIT VS N ARENDRA MOHAN UNYAL (SUPRA) WHEREIN IT HAS BEEN HELD THAT THERE I S NO RIDER THAT NO DEDUCTION COULD BE ALLOWED IN RESPECT OF INVESTMENT OF CAPITAL GAINS MADE ON ACQUISITION OF LAND APPURTENANT TO THE BUIL DING OR ON THE INVESTMENT ON LAND ON WHICH THE BUILDING IS CONSTRU CTED WHEN THE LAND IS PURCHASED AND BUILDING IS CONSTRUCTED THERE ON IT IS NOT NECESSARY THAT SUCH CONSTRUCTION SHOULD BE ON THE E NTIRE PLOT. THE CBDT CIRCULAR (SUPRA) ALSO SAYS SO. IN THE CITED CA SE THE ASSESSEE APPEARS TO HAVE PURCHASED TWO PLOTS AGGREGATING TO 2000 SQ. METER - BOTH THESE PLOTS WERE HAVING 1000 SQ. METERS OF LAN D EACH AND THE CONSTRUCTION WAS MADE ON THE FIRST PLOT AND THE SEC OND PLOT WAS SOUGHT TO BE TREATED AS LAND APPURTENANT TO THE BUI LDING CONTENDING THAT BOTH THE PLOTS FORMED PART OF SAME ONE RESIDEN TIAL UNIT BEING CONTIGUOUS AND ADJOINING TO EACH OTHER. THE HONBLE ITAT DELHI CONCLUDED THAT THE PROPERTY PURCHASED BY THE ASSESS EEWAS A SINGLE UNIT AND WAS BEING USED FOR RESIDENTIAL PURPOSES AN D THEREFORE HELD THAT INVESTMENT MADE IN RESPECT OF BOTH THE PLOTS W AS ELIGIBLE FOR CLAIM OF EXEMPTION U/S 54F (IN FAVOUR OF THE ASSESS EE). 6.1 FIRST I FIND THE CASE OF THE APPELLANT DISTINCT AND DISTINGUISHABLE AS IN THE CASE OF THE APPELLANT THE LAND IS 4310 SQ. MTR. AND PLINTH IS OF 35 SQ. MTR AND A TOTAL KIND O F 4275 SQ. MTR. (4310 - 35) CANNOT BE HELD TO BE LAND APPURTENANT T O THE BUILDING OF 35 SQ. MTR. THERE ARE JUDGMENTS UNDER THE MUNICIPAL ACTS IN CONTEXT OF PROPERTY TAX (BUILDING TAX AND VACANT LAND TAX) SPECIALLY IN CONTEXT OF FARM HOUSES WHEREBY THE LAND APPURTENANT TO THE BUILDING IS ONLY TO THE EXTENT OF THAT CAN BE NORMALLY ENJOY ED FOR LIVING IN THE HOUSE AND IN VARIOUS SUCH CASE LAWS A REASONABLE LI MIT (THOUGH TO BE DECIDED IN THE OWN FACTS OF EACH CASE) OF LAND APPU RTENANT TO A HOUSE HAS BEEN HELD TO BE ABOUT 15% TO 25 % OF THE LAND, MEANING THEREBY THAT 75% OF THE LAND SHOULD BE COVERED BY THE PLINT H OF THE CONSTRUCTION AND 25% OF LAND CAN REMAIN VACANT. (VA CANT LAND TAX IS ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 13 TYPICALLY LEVIABLE ONLY IF THE VACANT LAND IS MORE THAN 25% OF THE PLOT AREA). IT IS NARRATED BEFORE THAT FOR THE PURPOSE O F CHARGING PROPERTY TAX, NO DISTINCTION OF APPROVED/UNAPPROVED/ILLEGAL CONSTRUCTION AND OF APPROVED/UNAPPROVED SUBDIVISION/MERGER OF PLOTS IS RECOGNISED AS PROPERTY TAX IS ON ACTUAL MEASUREMENTS (VALUE AS PR ESCRIBED IN THE BYE LAW) OF THE PROPERTY AND DOES NOT MAKE THE PROP ERTY AND THE CONSTRUCTION LEGAL AND ALSO DOES NOT STAND AS EVIDE NCE OF OWNERSHIP OF THE PROPERTY. IT CAN BE SEEN THAT EVEN THE PROPE RTY TAX BILLS (DATED 24.01.2018 FOR THE YEAR 2017-18) FURNISHED BY THE A PPELLANT IS FOR SURVEY NO. 448 ONLY AND ONE BILL FOR AREA OF STRUCT URE AS 35 SQ. METERS AND OTHER BILL FOR AREA OF VACANT PLOT AS 25 80 SQ. METERS. THE SAID BILL VERY RIGHTLY DOES NOT INCLUDE SURVEY NO. 447/2 FOR WHICH THE AMC MAY HAVE TO RAISE A SEPARATE BILL FOR VACANT LA ND TAX. 6.2 SECOND IT APPEARS THAT THE PROVISIONS OF THE AR EA DEVELOPMENT AUTHORITY AND THE ULB WERE NOT PLACED BEFORE THE HO NTDLE TRIBUNAL/COURT IN THE CASE OF ADDL.CIT VS NARENDRA MOHAN UNYAL. HAD THEY BEEN BROUGHT TO THE ATTENTION OF THE HON'B LE [TRIBUNAL/COURT BY THE COUNSEL OF THE REVENUE IT MI GHT HAVE EXAMINED THEM AND HARMONISED THOSE PROVISIONS WITH THE PROVISIONS OF THE SECTION 54F OF THE INCOME TAX AT AND THE CBD T CIRCULAR RELIED UPON BY THE APPELLANT. AND IN MY CONSIDERED VIEW THE HARMONIOUS READING WOULD BE THAT THE SECOND PLOT SH OULD NOT HAVE BEEN ALLOWED AS LAND APPURTENANT TO THE BUILDING CO NSTRUCTED ON FIRST PLOT IN ABSENCE OF ANY ORDER OF THE ULB ALLOWING ME RGER OF TWO PLOTS. WHILE ONE PLOT CANNOT BE TREATED AS LAND APP URTENANT TO A BUILDING IN ANOTHER ADJOINING PLOT, THERE IS EQUALL Y A STRONG CASE THAT ENTIRE AREA OF A VERY BIG PLOT CAN ALSO NOT BE TREA TED AS LAND APPURTENANT TO THE BUILDING ON THAT PLOT. THAT IS W HY THE PROPERTY TAX OF A PROPERTY IS COMBINATION OF BUILDING TAX AND VA CANT LAND TAX ON THAT PROPERTY. 6.3 THUS THE CONTENTION OF THE APPELLANT THAT THE E NTIRE LAND (OF TWO PLOTS) HAS TO BE TREATED AS LAND APPURTENANT TO A T EMPORARY MAKESHIFT STRUCTURE IS NOT WITHIN THE INTENT OF SECTION 54F A ND THE JUDGMENTS RELIED UPON BY THE APPELLANT AND IS VIOLATION OF TH E LAWS AND BYE LAWS GOVERNING THE LOCAL DEVELOPMENT AUTHORITY AND LOCAL URBAN BODY. THE JUDGEMENTS AND THE CBDT CIRCULARS ARE IN CONTEXT OF A NORMAL COMMON SCENARIO THAT THERE IS A PLOT PURCHAS ED AND A RESIDENTIAL HOUSE CONSTRUCTED THERE ON OUT OF THE S ALE PROCEED OF A CAPITAL ASSET AND THE JUDGEMENTS AND THE CBDT CIRCU LARS ARE NOT FOR A PREPOSTEROUS AND UNACCEPTABLE SCENARIO WHERE AN E XEMPTION OF RS.1,17,83,494/- IS BEING SOUGHT WITH MERE MAKE SHI FT CONSTRUCTION AT THE COST OF RS.90,003/- ONLY. IN FACT THE TEMPORARY MAKESHIFT INHABITABLE STRUCTURE IS A MERE PLOY OF THE APPELLA NT TO CLEARLY AVOID TAX DUE ON THE CAPITAL GAIN AND BENEFIT OF 54F CANN OT BE ALLOWED TO THE APPELLANT. IT IS FURTHER CLEAR FROM, THE FACT T HAT INITIALLY THE APPELLANT HAD SOUGHT EXEMPTION U/S 54D AND ONLY LAT ER CHANGED TO EXEMPTION U/S 54F. THUS EVEN IF THE TEMPORARY MAKES HIFT -STRUCTURE ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 14 WAS TO BE CONCEDED HAS RESIDENTIAL HOUSE, THE COST OF ONLY REASONABLE LAND APPURTENANT TO THAT STRUCTURE CAN QUALIFY AS T HE INVESTMENT IN NEW ASSET FOR EXEMPTION U/S 54F. 7. TO SUM UP, THE STRUCTURE CONSTRUCTED ON THE PURC HASED PLOT OF LAND CLAIMED BY THE APPELLANT IS NOT FOUND TO BE A RESIDENTIAL HOUSE WITHIN THE MEANING OF AS THE OWNER AND HIS FAMILY C ANNOT LIVE THERE. A BUILDING (OR HOUSE) WITHOUT A TOILET CANNOT BE HE LD TO BE HABITABLE FOR HUMAN, MORE SO WHEN THE GOVERNMENT HAS UNDERTAK EN SWACHH BHARAT ABHIYAN AND TO MAKE THE COUNTRY TOTAL OPEN-D EFECATION FREE. THE CLAIM OF DEDUCTION U/S 54F BY THE APPELLANT IS HELD TO BE SHAM TO DEFRAUD THE GOVERNMENT OF THE REVENUE BY WAY OF NOT PAYING THE TAX DUE. THE ASSESSMENT ORDER DENYING THE CLAIM OF EXEM PTION U/S 54F TO THE APPELLANT IS CONFIRMED AND THE APPEAL IS DISMISSED . CIT(A) ACCORDINGLY DISMISSED THE PLEA OF THE ASSESS EE AND SUSTAINED THE DENIAL OF EXEMPTION CLAIMED UNDER S.54F OF THE ACT. 9. FURTHER AGGRIEVED, THE ASSESSEE KNOCKED THE DOOR OF THE TRIBUNAL. 10. THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE MR. SOPARKAR BROADLY REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES ON FACTS. THE LEARNED SENIOR COUNSEL OBSERVED THAT FROM THE SITE INSPECTION REPORT ITSELF, IT IS CLEAR THAT TWO ROOM S WERE FOUND TOGETHER WITH STORE ROOM. A CHULA WAS ALSO FOUND FOR COOKIN G FOOD. THE ELECTRICITY CONNECTION HAS ALSO BEEN ADMITTED IN TH E INSPECTION REPORT. IN THE CIRCUMSTANCES, ONE CANNOT SAY THAT THE RESID ENTIAL HOUSE OF HABITABLE NATURE WAS NOT CONSTRUCTED ON THE PLOT OF LAND. THE LEARNED SENIOR COUNSEL NEXT CONTENDED THAT THE EXTENT OF LA ND ON WHICH SUPER- STRUCTURE OF RESIDENTIAL NATURE WAS REQUIRED TO BE CONSTRUCTED IS NOT DEFINED OR PRESCRIBED. IT WAS CONTENDED THAT WHAT IS REQUIRED TO BE ADJUSTED OR SET OFF AGAINST THE CAPITAL GAIN IS THE COST OF RESIDENTIAL HOUSE AS A WHOLE I.E. PURCHASED OR CONSTRUCTED AND NOT JUST THE COST OF CONSTRUCTION OF NEW RESIDENTIAL HOUSE. IT WAS ASSE RTED THAT THE COST OF NEW RESIDENTIAL HOUSE WOULD NECESSARILY INCLUDE THE COST OF LAND, THE ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 15 COST OF MATERIAL USED IN THE CONSTRUCTION AND ALL O THER COSTS RELATABLE TO THE ACQUISITION AND/OR CONSTRUCTION OF THE RESID ENTIAL HOUSE AS HELD IN SEVERAL JUDICIAL PRECEDENTS AS WELL AS THE CBDT CIRCULAR. THE LEARNED SENIOR COUNSEL THEREAFTER REFERRED TO THE L AYOUT PLAN (PAGE NO. 172 & 173 OF THE PAPER BOOK) FOR THE AFORESAID LAND AS ISSUED BY THE AHMEDABAD MUNICIPAL CORPORATION AND SUBMITTED THAT SUCH LAYOUT PLAN ALSO ADMITS THE FACT THAT THE RESIDENTIAL PROP ERTY WAS USED FOR SELF USE. THE LEARNED SENIOR COUNSEL THEREAFTER REFERRE D TO THE SEVERAL JUDICIAL PRECEDENTS NAMELY SEEMA SINGH BENIWAL VS. DCIT ITA NO. 135/JP/2012 ORDER DATED 09/10/2015; ACIT VS. OM PRA KASH GOYAL ITA NO.647/JP/2011 ORDER DATED 02.02.2012; CIT VS. ASHO K KUMAR RAHLAN (DELHI) INCOME TAX APPEAL NO. 505/2013 JUDGMENT DAT ED 22ND NOVEMBER, 2013; B. SIVASUBRAMANIAN VS. ITO ITA NO.0 1/MDS/2013 ORDER DATED 12/03/2014 AND ACIT VS. PARESHKUMAR RAM ANLAL JANI ITA NO. 3022/AHD/2014 & ORS. ORDER DATED 10.10.2017 TO SUPPORT ITS CASE ON FACTS AND LAW. 11. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AO AND CIT(A). IN FURTHERANCE, THE LEARNED DR FOR THE REVENUE CONTENDED THAT IT WAS FOUND AS A MATTER OF FACT THA T NO RESIDENTIAL HOUSE OF HABITABLE NATURE WAS CONSTRUCTED BY THE AS SESSEE. A MEAGER COST OF CONSTRUCTION OF RS.90,000/- ODD AGAINST THE COST OF TWO PLOTS OF LAND AGGREGATING TO RS.235.30 LAKHS SAYS IT ALL THA T THE INTENT AND PURPOSE OF INVESTMENT OF SALE CONSIDERATION WAS ONL Y TO ACQUIRE ANOTHER PARCEL OF LAND. A TEMPORARY CONSTRUCTION M ADE ON THE CO- OWNED PLOT OF LAND FOR THE SOLE USE OF THE WATCHMAN TO SAFEGUARD THE LAND FROM POSSIBLE ENCROACHMENTS DOES NOT TANTAMOUN T TO RESIDENTIAL HOUSE BY THE CO-OWNER ASSESSEE AND ONE CANNOT PERFU NCTORILY ACCEPT SUCH GROSS FACTS STARING THE TRUTH. THE LEARNED DR SUBMITTED THAT THE ASSESSEE COULD NOT FURNISH ANY CONCRETE EVIDENCE OF CONSTRUCTION AND THE CONSTRUCTION OCCUPYING MINUSCULE AREA OF TOTAL PLOT/LAND WAS ALSO ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 16 WITHOUT ANY HABITABLE FACILITY. IT WAS POINTED OUT THAT THE AREA OCCUPYING THE SO-CALLED CONSTRUCTION IS MEAGER AND IS BARE 35 SQ.MTRS. QUA THE TOTAL PLOT / LAND AREA OF 4310 SQ.MTRS. IT WAS CONTENDED THAT THE SO-CALLED CONSTRUCTION COSTS IS OSTENSIBLY DISP ROPORTIONATE TO THE LAND COSTS INVESTED AND THE LAND AREA OCCUPIED. TH E OPEN LAND IS FILLED WITH GRASS WITHOUT ANY MAINTENANCE AS THE INHERENT IDEA WAS TO ACQUIRE THE LAND AND NOT THE RESIDENTIAL HOUSE PER SE . IT WAS THUS CONTENDED THAT THE TEMPORARY MAKE-SHIFT AND INHABITABLE STRUC TURE CANNOT BE REGARDED AS A RESIDENTIAL HOUSE IN THE CONTEXT OF T HE CASE AS RIGHTLY HELD BY THE REVENUE AUTHORITIES. THE LEARNED DR SU BMITTED THAT THE RELIANCE PLACED ON VARIOUS JUDICIAL PRONOUNCEMENTS ON BEHALF OF THE ASSESSEE ARE TOTALLY MISCONCEIVED AS THE QUESTION I NVOLVED IS ENTIRELY FACTUAL IN NATURE WITH TOTALLY DISSIMILAR FACTS. T HE ASSESSEE HAS SOUGHT EXEMPTION OF WHOPPING OF RS.1.17 CRORES AGAINST WHI CH THE COST OF CONSTRUCTION IS LESS THAN RS.1 LAKH AND WITH INSIGN IFICANT USE OF LAND FOR CONSTRUCTION. THE LEARNED DR THUS SUBMITTED TH AT NO INTERFERENCE WITH THE ORDER OF THE REVENUE AUTHORITIES IS CALLED FOR HAVING REGARD TO THE AIM AND OBJECT OF SECTION 54F OF THE ACT. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE SUBSTANTIVE ISSUE IN THE PRESENT CASE IS MAINTAINAB ILITY OF DEDUCTION / EXEMPTION UNDER S.54F OF THE ACT IN THE PECULIAR SE T OF FACTS WHERE THE SUBSTANTIAL PORTION OF THE SALE CONSIDERATION IS AP PROPRIATED TOWARDS PURCHASE OF LAND AND THE CONSTRUCTION COST OF SUPER STRUCTURE CONSTRUCTED ON THE LAND IS VERY MARGINAL. AN INTEG RALLY CONNECTED ISSUE ALSO ARISES AS TO WHETHER THE CO-OWNED SUPERS TRUCTURE ON A COMBINED ADJOINING PLOTS OF LAND CAN BE REGARDED AS RESIDENTIAL HOUSE FOR THE PURPOSES OF SECTION 54F OF THE ACT O R NOT. 12.1 TO REITERATE, THE RELEVANT FACTS AS EMERGED OU T FROM THE ORDER OF THE REVENUE AUTHORITIES ARE THAT THE ASSESSEE SOLD CERTAIN PARCELS OF ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 17 LAND IN CO-OWNERSHIP AND RECEIVED SALE CONSIDERATIO N OF RS.1,28,48,933/- TOWARDS HIS SHARE OF SALE CONSIDER ATION. THE CAPITAL GAINS THEREON WAS COMPUTED BY THE ASSESSEE AT RS.1, 21,41,360/-. IT IS THE CASE OF THE ASSESSEE THAT IT HAS APPROPRIATED T HE SALE CONSIDERATION TOWARDS THE PURCHASE OF CERTAIN PARCEL OF ADJOINING LAND/PLOT JOINTLY WITH OTHER CO-OWNER. THE SALE CONSIDERATION INVEST ED BY THE ASSESSEE TOWARDS AGGREGATE PURCHASE OF PARCELS OF LAND STAND S AT RS.1,17,65,000/- OR NEAR THERETO. THE ASSESSEE IS FURTHER CLAIMED TO HAVE CONSTRUCTED A SUPERSTRUCTURE ON THE LAND OCCUP YING NEARLY 35 SQ.MTRS. ON THE TOTAL LAND SIZE OF 4310 SQ.MTRS. AT A COST OF ABOUT RS.90,000/- OR NEAR THERETO. IT IS ESSENTIALLY THE CASE OF THE ASSESSEE THAT SUPERSTRUCTURE IS A RESIDENTIAL HOUSE CONSTRUC TED ON AFORESAID PLOT AND THEREFORE, IT WOULD INEVITABLY MEAN THAT THE SA LE CONSIDERATION HAS BEEN APPROPRIATED TOWARDS CONSTRUCTION OF RESIDENTI AL HOUSE AS CONTEMPLATED UNDER S.54F OF THE ACT. IT IS THUS CL AIMED THAT THE ASSESSEE IS RIGHTLY ENTITLED TO EXEMPTION/DEDUCTION UNDER S.54F OF THE ACT AGAINST THE CAPITAL GAINS ARISING ON THE SALE O F ORIGINAL ASSET. 12.2. THE CASE OF THE ASSESSEE IS ESSENTIALLY TWO F OLD; FIRSTLY, THE COST OF THE LAND IS TO BE RECKONED AS PART OF THE COST O F THE NEW RESIDENTIAL HOUSE AS VINDICATED BY CBDT CIRCULAR NO.667 OF 1993 AND SECONDLY, THE LAW DOES NOT REQUIRE THAT THE RESIDENTIAL HOUSE CONSTRUCTED ON THE LAND TO BE OF PARTICULAR SIZE, SHAPE OR SPECIFICATI ON AND CONSEQUENTLY THE SIZE OF THE OPEN VAST LAND VIS--VIS CONSTRUCTED AREA IS NOT A RELEVANT CONSIDERATION AT ALL. TO SUPPORT ITS CASE , THE ASSESSEE HAS RELIED UPON SEVERAL JUDICIAL PRECEDENTS. 12.3 THE REVENUE, ON THE OTHER HAND, CONTENDS THAT IT IS FARFETCHED TO SAY THAT AN ASSESSEE WILL QUALIFY FOR EXEMPTION IN TERMS OF THE PROVISIONS OF SECTION 54F OF THE ACT BY CONSTRUCTIN G A TEMPORARY AND MAKESHIFT SUPERSTRUCTURE DEVOID OF BASIC AMENITIES AND OCCUPYING A ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 18 SMALL FRACTION OF THE LARGE PARCEL OF THE LAND IN T OTAL DISREGARD OF THE AIM AND OBJECT OF SECTION 54F OF THE ACT. 12.4 AS CAN BE OSTENSIBLY SEEN, THE ISSUE IS INHERE NTLY FACTUAL IN NATURE AND THUS IT IS DIFFICULT TO APPLY A GENERAL PROPOSITION GATHERED ON A VARIED SET OF FACTS IN OTHER JUDICIAL PRONOUNC EMENTS. NEEDLESS TO SAY, JUDICIAL UTTERANCES ARE MADE IN THE SETTING OF THE FACTS OF A PARTICULAR CASE. IN CIRCUMSTANTIAL FLEXIBILITY, ON E ADDITIONAL OR DIFFERENT FACT MAY MAKE A WORLD OF DIFFERENCE BETWE EN CONCLUSIONS IN TWO CASES AS HELD BY THE HONBLE SUPREME COURT IN T HE CASE OF PADMASUNDARA RAO (DECED.) VS. STATE OF TAMILNADU & ORS. [2002] 255 ITR 147 (SC). 12.5 ADVERTING TO THE FACTS, WE NOTICE THAT THE SHA RE OF SALE CONSIDERATION OF THE ASSESSEE FROM SALE OF ORIGINAL ASSET STANDS AT RS.1,28,48,933/-. OUT OF THIS, ASSESSEE CLAIMS TO HAVE APPROPRIATED RS.1,17,65,000/- TOWARDS PURCHASE OF LAND AND STATE DLY INVESTED RS.90,003/- TOWARDS CONSTRUCTION OF SUPERSTRUCTURE. AGAINST SUCH DEPLOYMENT OF SALE CONSIDERATION IN LAND AND SUPERS TRUCTURE, THE ASSESSEE SEEKS EXEMPTION OF RS.1,17,83,494/- UNDER S.54F OF THE ACT ON THE PREMISES THAT THE SALE CONSIDERATION ARISING FROM TRANSFER OF ORIGINAL ASSET HAS BEEN APPROPRIATED TOWARDS PURCHA SE OF RESIDENCE HOUSE (INCLUDING COST OF LAND). AT THIS JUNCTURE, WE AFFIRMATIVELY APPRECIATE THE CONTENTIONS RAISED ON BEHALF OF THE ASSESSEE THAT THE COST OF NEW RESIDENTIAL HOUSE IS NOT JUST THE COST OF CONSTRUCTION OF NEW RESIDENTIAL HOUSE BUT ENCOMPASSES BOTH THE COST OF LAND AS WELL AS THE COST OF CONSTRUCTION. THIS IS SO IN VIEW OF TH E JUDICIAL FIAT AVAILABLE IN THIS REGARD AND THUS DESERVES TO BE AC CEPTED WITHOUT ANY DEMUR. HOWEVER, THE MOOT QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER WHEN NEARLY ENTIRE AMOUNT (>99%) HAS BEEN D EPLOYED FOR ACQUISITION OF LAND ALONE, CAN A REASONABLE PERSON INSTRUCTED IN LAW ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 19 SAY THAT THE SALE CONSIDERATION HAS BEEN APPROPRIAT ED TOWARDS RESIDENTIAL HOUSE WHICH REPRESENTS CONSTRUCTION COS T OF LESS THAN 1%. IN SUCH PECULIAR FACT SITUATION, THE ANSWER TO OUR MIND WOULD BE OBVIOUSLY AND UNFLINCHINGLY NO. THE EXPRESSION C OST OF NEW ASSET BEING RESIDENTIAL HOUSE HAS TO BE UNDOUBTEDLY REA D IN THE CONTEXT OF THE GIVEN FACTS AND HAVING REGARD TO THE AIM AND SA LUTARY OBJECT FOR WHICH THE EXEMPTION PROVISION WAS PROVIDED. HOWSOE VER LIBERALLY WE MAY CONSTRUE THE EXEMPTION PROVISION, WE CANNOT TRA VEL BEYOND THE DOMAIN OF THE RELIEF PROVISION. THE FACTS NARRATED ABOVE GLARINGLY DEMONSTRATE THAT IT IS AN OBVIOUS CASE OF DEPLOYMEN T OF FUND TOWARDS PURCHASE OF ANOTHER PARCEL OF LAND. THE REVENUE IN OUR VIEW HAS SUCCESSFULLY DEMONSTRATED THAT SUPERSTRUCTURE SO CO NSTRUCTED IS FOR TEMPORARY PURPOSES AND IS DEVOID OF VERY BASIC AMEN ITIES. THE SUPERSTRUCTURE HAS BEEN CREATED WITHOUT ANY TANGIBL E STAKE WITH A SOLE PURPOSE OF PROVIDING SOME SHELTER TO THE WATCHMAN T O SAFEGUARD THE LAND FROM POSSIBLE ENCROACHMENTS. THE CONSTRUCTION COSTS INVOLVED (LESS THAN 1%) AND THE POINTERS INDICATED TOWARDS L ACK OF AMENITY WOULD CLEARLY REFLECT THAT THE TEMPORARY SUPERSTRUC TURE WAS NOT CONSTRUCTED FOR THE HABITATIONS/RESIDENTIAL USE OF THE ASSESSEE INDEED, MORE SO, HAVING REGARD TO HIS FINANCIAL STATUS. IT IS VERY DIFFICULT TO PUT BLINKERS ON SUCH GROSS FACTS AND ACCEPT THE PRO POSITION WHICH MAY SHOCK THE JUDICIAL CONSCIENCE. 12.6 WE HAVE CAREFULLY PERUSED THE JUDICIAL PRONOUN CEMENTS SITED ON BEHALF OF THE ASSESSEE BUT HOWEVER DID NOT CONSIDER IT NECESSARY TO DEAL WITH THE DYNAMICS OF ALL THE DECISIONS SEPARAT ELY. THE BROAD PROPOSITION WHICH EMERGES FROM THE PERUSAL OF THE V ARIOUS DECISIONS ARE THAT THE ASSESSEE IS ORDINARILY ENTITLED TO DED UCTION UNDER S.54F OF THE ACT WHERE THE CONSIDERATION IS INVESTED IN CONS TRUCTION OF RESIDENTIAL HOUSE INCLUDING PURCHASE OF PLOT AND AL SO THE UNAUTHORIZED CONSTRUCTION PER SE IS NOT NECESSARILY A HANDICAP FOR CLAIM OF ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 20 DEDUCTION UNDER S.54F OF THE ACT. HOWEVER, NONE OF THESE JUDGMENTS DEAL WITH SUCH OVERWHELMING SITUATION AS IN THE INS TANT CASE WHERE THE DOMINANT OBJECT OF THE DEPLOYMENT OF CONSIDERATION IS TO ACQUIRE LAND PARCEL AND NOT TO ENJOY THE RESIDENTIAL HOUSE PER SE. WE ARE AT LOSS TO UNDERSTAND AS TO HOW THE FACTUAL ASPECTS LIKE LACK OF BASIC AMENITY AND A NON-DESCRIPT TEMPORARY MAKESHIFT SHELTER/SUPERSTR UCTURE OF INSIGNIFICANT WORTH CAN CONVERT A LAND INTO A RESID ENTIAL HOUSE. THE VAST OPEN LAND WITH NATURALLY GROWN GRASS, A GROSSL Y ASYMMETRIC CONSUMPTION OF LAND FOR CONSTRUCTION OF SUPERSTRUCT URE (COST LESS THAN 1% OF TOTAL COSTS), THE OCCUPATION OF THE SUPERSTRU CTURE BY A WATCHMAN/CARETAKER CLEARLY INDICATES THAT SUCH SUPE RSTRUCTURE CANNOT BE MECHANICALLY RECKONED AS A RESIDENTIAL HOUSE. T HE EXISTENCE OF VAST PARCEL OF OPEN LAND IS A REALITY. WE THUS FIN D IT UTTERLY DIFFICULT TO PUT BLINKERS ON TELL-TALE FACTS. THE SUPERSTRUC TURE CLAIMED TO BE A RESIDENTIAL HOUSE IS CLEARLY SUPERFICIAL AND DOES N OT GO HAND IN HAND WITH GROUND REALITIES. IT IS TOTALLY UNCONCEIVABLE THAT A TOKEN AND SYMBOLIC SUPERSTRUCTURE OF TEMPORARY NATURE INVOLVI NG INSIGNIFICANT CONSTRUCTION COSTS OR LAND OCCUPYING NEGLIGIBLE SPA CE (CREATED WITH AN OBJECT TO TYPICALLY ACCOMMODATE A WATCHMAN TO SAFEG UARD THE LAND) WOULD CONVERT HUGE PARCEL OF LAND INTO A RESIDENTIA L HOUSE. AS WE SEE IN NUTSHELL, COST OF LAND EXCEEDS 99% OF THE TOTAL COST OF NEW INVESTMENT IN SO CALLED RESIDENTIAL HOUSE. LIKEWIS E, LAND USED FOR CONSTRUCTION OF SUPERSTRUCTURE IS LESS THAN 1% OF T OTAL AREA. THE SUPERSTRUCTURE IS JOINTLY OWNED AND DEVOID OF BASIC AMENITIES AND ACTUALLY USED BY THE CARETAKER OF LANDS. THE UNFLA PPABLE FACTS NARRATED ABOVE WHEN SEEN CUMULATIVELY SEALS THE NAR RATIVE AGAINST THE ASSESSEE. THE SALE CONSIDERATION IS THUS ESSENTIAL LY APPROPRIATED TOWARDS PURCHASE OF LAND PER SE AND NOT TOWARDS CONSTRUCTION OF RESIDENTIAL HOUSE AS ENJOINED BY S. 54F OF THE ACT. WE THUS FIND NO PLAUSIBLE REASON TO INTERFERE WITH THE CONCLUSION D RAWN BY THE REVENUE AUTHORITIES. ITA NO. 784/AHD/18 [SHRI HARSHAD M THAKKAR (GANDHI) VS. DCIT] A.Y. 2014-15 - 21 13. IN THE RESULT, THE GRIEVANCE OF THE ASSESSEE TO WARDS DISALLOWANCE OF DEDUCTION UNDER S.54F AS PER GROUND NOS. 1 TO 7 OF ASSESSEES APPEAL IS DISMISSED. 14. GROUND NO.8 OF THE ASSESSEES APPEAL IS DISMISS ED AS NOT PRESSED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 21/01/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 21/01/20 19