TaxTMI 
TaxTMI 
2006 (4) TMI 197
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....and and building owned by him in N-136, Panchshila Park, New Delhi. The AO noticed that the assessee had entered into an arrangement with a builder in respect of the property under which he was to receive five flats for himself and some cash consideration for giving the builder the right to develop the property, and that out of the five flats received the assessee had disposed of two flats and retained three flats for himself. According to the AO the benefit of s. 54 can be given only in respect of one residential house acquired by the assessee and not "for a spate of residential houses which he constructs out of the consideration received", and accordingly granted deduction only in respect of one residential flat which came to Rs. 5,27,710....
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....of two flats having been accepted by the Department and no appeal having been filed by it, the only question is whether the CIT(A) was right in substituting his opinion or assessment about the requirement of the family members of the assessee with regard to the residential house to restrict the exemption to two flats as against three flats claimed by the assessee. This line of reasoning appeals to us and the matter can possibly be disposed of in favour of the assessee on the short ground that the CIT(A) cannot substitute his opinion as to the requirements of the assessee for his residence. However, in deference to the arguments addressed before us, the wider canvass has got to be appreciated. 4. The assessee acquired the land (1200 sq. y....
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....shall be "buildings or land appurtenant thereto" and that so long as the assessee acquires a building, which incidentally may be constructed, for the sake of convenience, in such a manner as to consist of several units which can be independently used as residence, the requirement of the section is satisfied. He contrasts the provisions of s. 23 as it stood at the relevant time to show that the words "residential units" were used therein but only to provide an incentive to housing projects. We find a good deal of sense in what Mr. Kapila says. A residential house has to be a building. But we see nothing in s. 54 which requires the building to be constructed in a particular manner. The only requirement is that it should be for the residential....
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.... whether it is lateral or vertical, should come in the way of considering the building as a residential house. The fact that the residential house consists of several independent units should not be an impediment to the allowance of the exemption under s. 54. That is neither expressly nor by necessary implication prohibited. 5. In the case before us, there is evidence in the form of a ration card where all the residents of the new house built by the assessee have been shown as family members. The CIT(A) has himself adverted to this evidence while accepting the assessee's case in principle. In our view, having accepted the case of the assessee in principle, he was not justified in examining the question as to who can be considered as ....