Assessee denied tax exemption under Section 54F for owning multiple houses.

The Tribunal allowed the Revenue's appeal, denying the assessee exemption under Section 54F of the Income Tax Act due to owning multiple residential houses, making them ineligible for the exemption. The Tribunal upheld that if the assessee owns more than one residential house at the time of the asset transfer, the deduction under Section 54F cannot be availed, ultimately ruling in favor of the Revenue.

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Issues involved:
The appeal filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-10, Hyderabad in ITA No. 0042/CIT(A)-10/2016-17/CIT(A), Hyd- 10/10040/2017-18, dated 23/01/2019 arising out of the order passed U/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 [the Act] for the AY 2011-12.

Issue 1 - Claim of Exemption U/s. 54F of the Act:
The assessee, a resident of USA, sold certain immovable properties during the assessment year 2011-12 and claimed exemption U/s. 54F of the Act. The Ld. AO made additions including disallowance of exemption U/s. 54F. The assessee appealed before the Ld. CIT(A) who allowed the appeal. The Revenue appealed before the Tribunal challenging the allowance of exemption U/s. 54F.

Details: The Revenue contended that the assessee owns a residential house in USA, making them ineligible for exemption U/s. 54F. The Ld. Authorized Representative argued that the property owned is a Farm House, not a residential house, and substantial investment was made for the property under exemption U/s. 54F. The Tribunal noted the provisions of section 54F, stating that if the assessee owns more than one residential house at the time of transfer of the original asset, the benefit of deduction U/s. 54F cannot be availed. Considering evidence presented by the Revenue, the Tribunal upheld the Revenue's appeal, denying the exemption U/s. 54F to the assessee.

Issue 2 & 3 - Investment Period for Exemption U/s. 54F:
The Revenue raised grounds questioning the investment period for exemption U/s. 54F, arguing that the investment should be made within the stipulated time frame. However, as the Tribunal denied the exemption based on the ownership of multiple residential houses, the adjudication of these grounds became irrelevant and were dismissed.

Details: The Tribunal dismissed grounds 2 & 3 raised by the Revenue, as the denial of exemption U/s. 54F based on the ownership of more than one residential house made the discussion on the investment period inconsequential. The Tribunal allowed the appeal of the Revenue based on the ineligibility of the assessee to claim exemption U/s. 54F.

In conclusion, the Tribunal allowed the appeal of the Revenue, denying the exemption U/s. 54F to the assessee due to the ownership of multiple residential houses, as per the provisions of the Income Tax Act, 1961.

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