High Court affirms Tribunal decision on exemption for two houses under section 54F

The High Court dismissed the appeal concerning the interpretation of exemption under section 54F for two residential houses. The court found no substantial question of law and upheld the Tribunal's decision to remand the matter for verification by the Assessing Officer regarding the investment source and usage of the two flats as one residential house. If confirmed that both flats are used as one residential house and the investment was made by the Assessee, exemption under section 54F should be allowed for both flats.

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Issues involved: Interpretation of exemption u/s 54F for two residential houses; Verification of investment source and usage as one residential house.

Interpretation of exemption u/s 54F: The appellant sought clarification on whether the Tribunal was justified in directing the Assessing Officer to allow exemption u/s 54F for two residential houses if they are adjacent, interconnected, and used as one residential house, with investment made from the Assessee's own account.

Verification of investment source and usage: The Tribunal ordered verification by the Assessing Officer to confirm if the investment for both flats was made by the Assessee from his own funds and if the flats were being used as one residential house. The order of the CIT (A) was set aside for this purpose, and the matter was remanded for verification.

The Tribunal emphasized the need for verification by the Assessing Officer regarding the investment source and usage of the two flats as one residential house. The Tribunal directed that if it is confirmed that both flats are being used as one residential house and the investment was made by the Assessee, then exemption should be allowed for both flats u/s 54F.

The High Court, upon review, found no substantial question of law in the matter and consequently dismissed the appeal in light of the remand for verification by the Assessing Officer.

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