Tribunal allows deduction claim under section 54F for reinvestment in multiple units

The Tribunal condoned the Revenue's appeal delay and admitted it for adjudication. The appeal focused on the disallowance of the deduction claimed under section 54F of the Income Tax Act by the CIT(A). The Tribunal interpreted "one residential house" in favor of the assessee, allowing for reinvestment exemption from multiple units. Consequently, the Tribunal dismissed the Revenue's appeal, upheld the deduction claim under section 54F, and dismissed the cross objection by the assessee, providing a favorable decision for the assessee.

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Issues Involved:
1. Condonation of delay in filing the appeal by Revenue.
2. Disallowance of claim of deduction u/s. 54F of the Income Tax Act by CIT(A).
3. Interpretation of the term "one residential house" in relation to reinvestment exemption.

Condonation of Delay:
The appeal by Revenue was initially barred by a 6-day limitation. However, the Revenue filed an affidavit requesting condonation of delay, citing reasonable causes. The Tribunal observed that the delay was minimal, uncontested by the assessee, and thus, decided to condone the delay and admit the appeal for adjudication.

Disallowance of Deduction u/s. 54F:
The main issue in the appeal was the CIT(A)'s deletion of the disallowance of the deduction claimed under section 54F of the Income Tax Act. The Revenue contended that the assessee was not entitled to the deduction as they owned more than one residential house. The Revenue raised specific grounds challenging the CIT(A)'s decision, arguing that the property in question was a residential house and not a vacant land as claimed by the assessee.

Interpretation of "One Residential House":
The Tribunal analyzed the interpretation of the term "one residential house" in the context of reinvestment exemption under section 54F. The assessee argued that an amendment in the Act allowed for reinvestment exemption from multiple units, citing a relevant judgment. The Tribunal agreed with the assessee, stating that the amendment replacing "a residential house" with "one residential house" was applicable from a later assessment year and hence, the assessee was eligible for the deduction under section 54F for the relevant assessment year.

Conclusion:
Ultimately, the Tribunal dismissed the Revenue's appeal, upholding the assessee's claim for deduction under section 54F. As a result, the cross objection by the assessee was considered infructuous and also dismissed. The judgment clarified the interpretation of the term "one residential house" and its application to reinvestment exemptions, providing a favorable decision for the assessee in this case.

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