Appellant's Claim for Deduction Denied Under Section 54

The Tribunal upheld the findings of the Assessing Officer and Commissioner of Income Tax (Appeals), ruling that the appellant was eligible for deduction under Section 54 of the Income Tax Act for only one residential property. The Tribunal dismissed the appellant's arguments, clarifying that the term "a residential house" does not encompass multiple houses in different locations. Consequently, the appeal was dismissed, and the order was pronounced on 08th July 2022.

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Issues Involved:
1. Legality of the order passed by the CIT(A) under Section 250(6) of the Income Tax Act.
2. Eligibility for deduction under Section 54 of the Income Tax Act with respect to investment in two different residential properties.
3. Consideration of payment amounts and costs related to the new residential properties.
4. Interpretation of the term "a residential house" under Section 54 of the Income Tax Act.

Detailed Analysis:

1. Legality of the Order Passed by CIT(A):
The appellant challenged the order dated 13/02/2018 passed by the CIT(A)-1, Gurgaon, asserting that it was "bad in law and on the facts and circumstances of the case." The appellant argued that the CIT(A) and the Assessing Officer (AO) failed to consider several crucial facts, including litigation issues affecting the execution of the sale deed and the Supreme Court's stay on further construction of the flat.

2. Eligibility for Deduction Under Section 54:
The primary issue was whether the assessee was eligible for deduction under Section 54 of the Income Tax Act for investments made in two different residential properties. The appellant sold a residential property and earned a capital gain of Rs. 76,64,058/-. The appellant claimed deductions under Section 54 for investments in two properties: one for the purchase of a new residential house and another for the repayment of a housing loan borrowed for a different property. The AO limited the deduction to Rs. 49,14,447/-, contending that the assessee was eligible for deduction concerning only one property, thereby taxing the balance capital gain of Rs. 27,49,611/-.

3. Consideration of Payment Amounts and Costs:
The appellant argued that the payment made to the builder AKME Projects Ltd. was Rs. 52,07,616/- and not Rs. 49,14,447/- as stated in the assessment order. Additionally, the appellant contended that the cost of the flat in AKME Projects Ltd. was Rs. 68,24,852/- excluding additional charges like electricity connection, common service charges, stamp duty, and registration costs. The appellant also claimed that the AO failed to consider the repayment of a home loan amounting to Rs. 60 lakh as reinvestment.

4. Interpretation of "A Residential House":
The appellant argued that the term "a residential house" should not be limited to a single unit, citing various judicial precedents. However, the Tribunal referred to the specific wording in Section 54, emphasizing that the deduction applies to the investment in "a residential house," which implies a single house. The Tribunal noted that the appellant's case involved investments in two separate properties located in different areas, thus not meeting the criteria for deduction under Section 54.

Conclusion:
The Tribunal upheld the findings of the AO and CIT(A), stating that the appellant was eligible for deduction under Section 54 only for one residential property. The Tribunal dismissed the appellant's grounds, affirming that the term "a residential house" cannot be interpreted to mean multiple houses situated in different buildings and areas. Consequently, the appeal filed by the assessee was dismissed.

Order:
The appeal filed by the assessee is dismissed. The order was pronounced in the Open Court on 08th July 2022.

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