(2012) 268 KLR 322

IN THE HIGH COURT OF KERALA AT ERNAKULAM 

PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN 

WEDNESDAY, THE 22ND DAY OF AUGUST 2012/31ST SRAVANA 1934 

ITA.No. 30 of 2012 () 

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ITA.NO.41/COCH/2010 OF INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN 

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APPELLANT/APPELLANT/ASSESSEE : 

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PUSHPA, W/O. LATE A.J.BENEVENTURE, T.C NO.27/1421, OLD MINT ROAD, RISHIMANGALAM, VANCHIYOOR POST-695 501 THIRUVANANTHAPURAM DISTRICT. 

BY ADVS.SRI.O.RAMACHANDRAN NAMBIAR SRI.GEEN T.MATHEW 

RESPONDENT(S)/RESPONDENT/REVENUE : 

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THE INCOME TAX OFFICER, WARD NO.2(2), THIRUVANANTHAPURAM. 

BY SRI.P.K.R.MENON,SENIOR ADVOCATE ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX 

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 13-08-2012, ALONG WITH ITA.NO. 32 OF 2012, THE COURT ON 22-08-2012 DELIVERED THE FOLLOWING: sts ITA.NO.30/2012 

APPENDIX 

PETITIONER'S ANNEXURES: 

• ANNEX A1 COPY OF THE ORDER DATED 30/03/2004 
• ANNEX A2 COPY OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. 
• ANNEX A3 COPY OF THE ORDER DATED 27/12/2006 PASSED BY THE INCOME TAX OFFICER 
• ANNEX A4 COPY OF THE ORDER DATED 12/10/2009 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1 
• ANNEX A5 COPY OF THE BUILDING PERMIT DATED 28/06/2000 ISSUED BY THE SECRETARY,CORPORATION OF THIRUVANANTHAPURAM 
• ANNEX A6 COPY OF THE FORM FOR THE COMPLETION CERTIFICATE ISSUED BY THE AUTHORISED BUILDING DESIGNER DATED 25/05/2001 TO THE CORPORATION OF THIRUVANANTHAPURAM 
• ANNEX A7 COPY OF THE ORDER DATED 31/10/2011 IN I.T.A.NO.41/COCH/2010 BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN. 

RESPONDENT'S ANNEXURES: NIL /TRUE COPY/ P.A.TO.JUDGE sts 

Thottathil B.Radhakrishnan & K.Vinod Chandran, JJ. 

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I.T.Appeal Nos.30 & 32 of 2012 

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Dated this the 22nd day of August, 2012. 

Head Note:-

Income Tax Act, 1961 - Section 54F - the exemption is available only when the investment is in the construction of a house and not for investment in modification or renovation.

J U D G M E N T 

Thottathil B.Radhakrishnan, J. 

1.The short issue raised by the assessee in these two appeals is as to whether the refusal of claim for exemption under Section 54F of the Income Tax Act is sustainable. The learned counsel appearing for the appellant making reference to P.Ramanatha Aiyar's The Law Lexicon points out that the word 'building' has to be understood depending upon the circumstances. What is a 'building' must always be a question, of degree, and circumstances. Its ordinary and usual meaning is, a block of brick or stone work, covered in by a roof. That entry in the Law Lexicon is made with reference to M.R., Moir v. Williams, (1892) 1 QB 264. Referring to the Law Lexicon, we find that the term 'building' has been considered in the context of different statutes in relation to different types of structures. With that, reference is made to the decision of this Court in Mrs.Meera Jacob v. ITO[(2009) 313 ITR 411(Ker)]. The learned counsel for the Revenue also pointed out CIT v. Pradeep Kumar[(2007) 290 ITR 90(Ker)]. 

2. In the case in hand, in our view, no substantial question of law arises calling for interference at the instance of the assessee. Section 54F provides that capital gains on transfer of capital assets shall not be charged in cases of investment in residential house. The section pointedly says that such eligibility would be available if the assessee has, within the period prescribed, constructed, a residential house. For the purpose of that section, the residential house so constructed is referred to as new asset. The object sought to be achieved by that provision is to exclude capital gains on transfers of certain capital assets from being charged provided the new asset is a residential house. Obviously, a new house is not something which is either an extension or addition made to an existing structure. As noted by this Court in Mrs.Meera Jacob(supra), the exemption is available only when the investment is in the construction of a house and not for investment in modification or renovation. The Bench also held that it is the conceded position that the assessee has not constructed any separate apartment or house. Section 54F does not provide for exemption on investment in renovation or modification of an existing house and what gains exemption is only construction of a house. Of course, the observation in that judgment that even addition of a floor of a self-contained type to the existing house would have qualified for exemption, is not a statement as to law, to be noted as a precedent because that case was not one such. 3.Reverting to the case in hand, the Tribunal adverted to the entire materials and has categorically found that there is nothing on record to show that the capital gains was actually utilized for the construction of a new house. The copy of the approved plan dated 28.6.2000 from the Trivandrum Corporation placed before the Tribunal pertains only to roof changing (sunshade projection) and for construction/extension of/to the first floor. The sanction bears a condition to the effect that the house shall consist of a single residential unit. On the said set of facts and materials, we do not find any question of law arising for decision. The provisions of Section 54F of the Income Tax Act have been appropriately applied. With these, we do not find any legal infirmity in the decision of the Tribunal. 

In the result, these appeals fail. They are accordingly dismissed. No costs. 

Thottathil B.Radhakrishnan, Judge. 

K.Vinod Chandran, Judge. 

Sha/200812