2013 (6) TMI 278

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....bad. The respondent is an individual assessee. He filed his return of income for the assessment year 2007-08 on August 31, 2007, with the Assistant Commissioner of Income-tax, Circle-VI (1), Hyderabad, admitting therein a net income of Rs. 43,97,840. The said return was processed under section 143(1) of the Act on February 24, 2009. Meanwhile, the case was taken up for scrutiny by issuing notice dated August 25, 2008, under section 143(2) of the Act. A notice dated June 15, 2009, under section 142(1) was issued calling for various details. 2. Before the Assessing Officer, the assessee offered under the head "Long term capital gains", a sum of Rs. 41 lakhs contending that he had inherited an ancestral house property which was sold during ....

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....under section 54 has to be restricted to only one flat. 4. Aggrieved thereby, the assessee filed an appeal to the Commissioner of Income-tax (Appeals), Guntur. He allowed the appeal by order dated October 13, 2010, holding that the Assessing Officer had acted too technically and had erroneously denied the assessee the deduction to the extent of 50 per cent. and that since the assessee had purchased two flats having adjacent kitchens and toilets which have a common meeting point, he is entitled to 100 per cent. deduction under section 54 for both the flats purchased by him. 5. Challenging the same, the Revenue filed I. T. A. No. 284/Hyd/2011 to the Income-tax Appellate Tribunal. By order dated September 9, 2011, the Tribunal dismissed ....

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....lar number and where an assessee had purchased two residential flats, he is entitled to exemption under section 54 in respect of capital gains on sale of its property on purchase of both the flats, more so, when the flats are situated side by side and the builder has effected modification of the flats to make it as one unit, despite the fact that the flats were purchased by separate sale deeds. This decision was followed by the Karnataka High Court in CIT v. Smt. K. G. Rukminiamma [2011] 331 ITR 211 (Karn) where a residential house was transferred and four flats in a single residential complex were purchased by the assessee, it was held that all the four residential flats constituted "a residential house" for the purpose of section 54 and t....