Appeal allowed for deduction under section 54 for multiple flats. Residential house can include multiple units.

The Tribunal allowed the assessee's appeal, permitting the deduction under section 54 for multiple flats received. The decision was based on the interpretation that a residential house can encompass multiple units or flats, supported by previous court judgments and legal provisions. The Tribunal directed the Assessing Officer to allow the deduction, emphasizing that the property should be considered as one unit despite comprising multiple flats.

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Issues Involved:
Allowance of deduction under section 54 for multiple flats received by the assessee.

Analysis:

Issue 1: Allowance of deduction under section 54 for multiple flats
The appeal pertains to the allowance of deduction under section 54 of the Income Tax Act for multiple flats received by the assessee. The assessee claimed that the four flats received should be considered as invested in a house property, thus qualifying for the deduction under section 54. However, the revenue authorities rejected this claim, stating that the deduction under section 54 does not apply for all four flats. The CIT(A) upheld the decision of the Assessing Officer, allowing the exemption only for one flat and making an addition of the balance amount as capital gains. The assessee contended that the issue is covered by a decision of the coordinate bench of the Tribunal in a similar case. The Tribunal analyzed the relevant legal provisions and previous judgments, including the High Court decisions, to determine whether a residential house includes multiple flats or units. The Tribunal noted that post-amendment, the benefit of section 54F applies to one residential house in India. However, prior to the amendment, a residential house could include multiple flats or units. The Tribunal emphasized that the transaction was based on the percentage of built-up area rather than the number of flats. Citing previous court decisions, the Tribunal concluded that the property should be assessed as one unit, even if it consists of multiple flats. Consequently, the Tribunal directed the Assessing Officer to allow the assessee's claim for deduction under section 54, as the issue was materially identical to previous cases where similar deductions were allowed. The appeal of the assessee was therefore allowed by the Tribunal.

In conclusion, the Tribunal ruled in favor of the assessee, allowing the deduction under section 54 for the multiple flats received, based on the interpretation that a residential house can include multiple units or flats. The decision was supported by previous court judgments and legal provisions, leading to the allowance of the assessee's appeal.

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