SG S 54 F for house property abroad; S 54 B and/vs 54 F - A debate !

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18th June

SMT. NIMMAGADDA SRIDEVI V. DY.CIT [2013] 33 taxmann.com 306 (Hyderabad - Trib.)

No tax exemption u/s 54F of such amount as invested/utilised prior to date of old asset

Demolishes the belief thus far holding the field tht One-To- One correlation is a MUST!

Update (13th Mar 13)
SG
S. 54F Exemption not available for addition / Modification / Extension made to existing house

Assessee can claim exemption u/s 54F & 54EC simultaneously

S. 54F Amount withdrawn from CGAS taxable in the year of withdrawal

Section 54F- A Fundamental Study

Sec. 54F - House owned by wife not to be considered

Section 54F available even if borrowed funds used for

1. S. 54F Exemption can be claimed for residential house purchased outside India

2. S. 54F Value of entire land apartment to building purchased cannot be considered for exemption

<><>February 26, 2013 at 5:44 PM
Add-on (to share more thoughts):

The media lately reported (February 2013), – “Modified DTC bill likely to come out soon, says Shome”. It was over 3 weeks ago that he said so, but the fate or timing of its enactment still remains shrouded in suspicion.
In the last seen text, one remembers to have made a note of the following changes in relation to the areas of controversy spoken of above.

Briefly stating:

1.The derivative expression “agricultural purposes” is slated to undergo a significant change, through simplifying the definition of the term “agricultural land”.

2.“Farm house’” is to be specially defined, seemingly aimed at clarity.

3.“House property’is to be specially defined;  however, quite  disappointingly, leaving the controversy over the concept of “appurtenant” intact and untouched, as until now.

Pending enactment of the DTC, had these, so also at least some of the other like imperative changes, been identified and were to have been introduced, -in the interim, but retrospectively,- in the forthcoming Budget itself, that would hopefully have helped in crying a halt to the otherwise attendant but avoidable litigation.

At this late hour, of course, one may have no choice, except to wait and watch!


<> February 26, 2013 at 8:07 AM

1. It is observed that, the assessee (appellant)’s pleadings for supporting the claim for tax exemption under section 54B have been rejected mainly on, besides others, the ground that “we are not inclined to think that the finding of fact rendered under section 54B is perverse”. The finding is that the subject farm land had not been proved to meet with requirement of user for ‘agricultural purposes’.
On this aspect, attention may be drawn to the expert commentary in Palkhivala’s leading text book on income-tax and case law cited- ref. page 109 of the ninth edition, vol.1; also briefly dealt with in page 127 of published article – 153 Taxman 126 (Mag).
It calls for a special noting, -the controversies with differing hues and shades have been repeatedly taken to courts, but judicial views are mutually varying, hence left with no scope for a definitive conclusion.

2. As to the dispute stemmed on the concept of ‘appurtenant’ as embodied in the enactment, in the absence of any special definition n the Act, one has to necessarily look for guidance in the material galore in public domain
@links e.g. –
>What is APPURTENANCE? – Black’s Law Dictionary ;
>appurtenances legal definition of appurtenances. appurtenances …

So much so, litigation of this kind can only be expected to go on and on, forever.

Even so, as always, over to the enlightened readers, at best for a further academic study.

CA Sandeep Kanoi says: