TaxTMI 
TaxTMI 
TaxTMI 
2013 (8) TMI 757
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....f dwelling units. The order of Urban land ceiling authority clearly confirms the fact of existence of 'dwelling units' . No plausible reasons were given by the appellate Commissioner for not accepting the factual evidence. 2. The assumption that the property that was given for development is only plot of land, is based on the premise that the deed of conveyance executed by the estate officer to convert leasehold land to freehold land in favour of the appellant does not mention the existence of the residential property. The residential structures on the lease hold land belongs to the appellant, whereas the land belongs to the government. The government could not have transferred what it did not own, and therefore sale deed was executed in favour of the appellant only for land. 3. The appellant is entitled for exemption u/s. 54 .Plurality of the flats (received as consideration) should be construed as a residential house for the purpose of exemption u/s. 54, following the honourable Karnataka High Court in the case of Rukminiyamma 331 ITR 221. The Hon'ble court considered all the available decisions of ITAT. Its decision is to be followed. 4. The assumption of the values of 'flat....
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....e Act is concerned, the Assessing Officer rejected the assessee's claim by holding that since long term asset transferred by the assessee is an open land without any building, no exemption under section 54 can be granted to the assessee. The Assessing Officer, however, held that the assessee is entitled to exemption under section 54F of the Act only in respect of one flat out of the seven flats and thereby, restricted the exemption under section 54F of the Act to an amount of Rs.14,84,665/- being cost of one flat. Accordingly, the Assessing Officer completed the assessment by determining the long term capital gain at Rs.82,32,155/-. The assessee being aggrieved of the assessment order passed, preferred appeal before the CIT(A). 4. The CIT(A) also concurred with the finding of the Assessing Officer by holding that the assessee is entitled for exemption under section 54F of the Act and that too only in respect of one residential flat. 5. The learned AR has filed written submissions before us contending as under : 1. The assessing officer has restricted the exemption to ' one residential flat' u/s. 54F holding that the residential property that was given for development is only 'la....
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....ndependent units were on different floors. The decision in Ms. Sushila M. Jhaveri's case [2007] 292 ITR (A T) 1 (Mumbai) [SB} holding that only one residential house should be given the relief under section 54 does not appear to be correct and we disapprave of it. We agree with the interpretation placed on section 54 by the High Court of Karnataka in D.Ananda Bassappa's case (2009) 309 ITR 329 (Karn) and Smt. K.G.Rukminiamma's case (2011) 331 ITR 211 (Karn.) and the decisions of the Mumbai, Chennai and Delhi Benches of the Tribunal in K.G.Vyas (supra), P.C.Ramakrishna, HUF (supra) and Prem Prakash Bhutani (supra). We, therefore, hold that the Commissioner of Income-tax (Appeals) was correct in setting aside the order of the Assessing Officer and the Tribunal rightly confirmed the decision of the Commissioner of Income-tax (Appeals) ..... " 4) The expression residential house u/s 54 and 54F was further explained by the hon'ble High Court of Delhi in the case of CIT V. GITADUGGAL: [Paper book contains the judgment copy] ". . . . . . Section 54/54F uses the expression "a residential house". The expression used is not "a residential unit". This is a new concept introduced by the asse....
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....pellant submits that the exemption of total gain in his case, is to be given u/s. 54 or 54F in the light of the above verdicts. 6. The learned D.R. on the other hand, submitted that the language employed in sections 54 and 54F of the Act refers to "a residential house" which in otherwords, mean that the assessee is entitled for exemption in respect of one residential unit. In support of such contention, the learned D.R. relied upon the decision of the ITAT, Mumbai, Special Bench in the case of ITO vs. Suseela M. Zhaveri 107 ITD 327. So far as the nature of the asset transferred is concerned, the learned D.R. submitted that there is nothing on record to suggest that the assessee has transferred a residential house so as to entitle him to exemption under section 54 of the Act. He further submitted that residential house would mean a place fit for human habitation. In this context, the learned D.R. relied upon a decision of ITAT, Hyderabad Bench in case of ITO vs. Smt. Rohini Reddy 122 ITD 01. 7. We have considered the submissions of the assessee and perused the materials on record. We have also applied our mind to the decisions relied upon by the parties. As can be seen from the wr....
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.... residential house" as appears in section 54 of the Act, cannot be interpreted in a manner to suggest that the exemption would be restricted to a single residential unit. The Hon'ble Karnataka High Court held that "a residential house" as mentioned in section 54(1) of the Act, has to be understood in a sense that the building should be of a residential nature and the word "a" should not be understood to indicate a singular number. The Hon'ble jurisdictional High Court in the case of CIT vs. V.Syed Ali Adil (2013) 352 ITR 418, while agreeing with the aforesaid view of the Hon'ble Karnataka High Court held as under : ". . . . As held in D. Ananda Basappa's case [2009} 309 ITR 329 (Karn) by the Karnataka High Court, the expression "a residential house" in section 54(1} of the Act has to be understood in a sense that the building should be of residential nature and "a" should not be understood to indicate a singular 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....
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....decision of the ITAT, Special Bench does reveal the fact that the Special Bench has held that the expression 'a residential house' appearing in sections 54 and 54F of the Act, would mean that exemption would be allowable in respect of investment in a single residential house only. However, it is to be seen that the aforesaid decision of the ITAT, Mumbai Special Bench has been disapproved by the jurisdictional High Court in case of CIT vs. Syed Ali (supra). Hence, the decision of the ITAT, Mumbai Special Bench no longer can be considered to be a good law. Therefore, considering the totality of the facts and circumstances in the light of consistent view of different High Courts including the jurisdictional High Court, we are of the view that the lower authorities were not correct in restricting the exemption under section 54F of the Act to only one flat by interpreting the words "a residential house" in a manner which has been held to be an incorrect interpretation in various judicial precedents as referred to hereinabove. In the aforesaid view of the matter, in our considered opinion, the assessee is entitled for exemption under section 54F of the Act in respect of all the seven fla....