2015 (9) TMI 271

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.... have upheld the decision of the Assessing Officer of restricting the exemption claimed u/s 54 to the amount invested @ Rs. 3000/- per sq.ft. in Flat No.301 (1325sq.ft.). 3. Although the learned CIT(A) has relied on the decision of the jurisdictional High Court in the case of CIT Vs. Ananda Basappa(2009) 309 ITR 329(Kar), he has erred in holding that the assessee is entitled to deduction u/s 54 in respect of Flat No.301 and 302 on the basis of mere proximity although the two flats were sold as separate units and are divided by a stair case whereas in the afore cited case, the Hon'ble High Court of Karnataka while allowing exemption in respect of two adjacent flats had observed that the apartments are situated side by side and the builder....

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....ght over the land, over which the developer has to develop and construct flats in accordance with the scheme sanctioned by the competent authority. As and by way of assessee's share, the assessee received built-up area of 3300 sq.ft. which was received by him as follows:- Sl.No. Flat No. Area in Sq.ft. 1. 301 1325 2. 302 1175 3. 102 800 out of total area of 1175 sq.ft. of the flat   The assessee valued the built-up area at 3000/- sq.ft and considered a sum of 99,00,000/- as full value of consideration received on transfer and computed capital gains from the transfer of said property to the builder. Out of the above, after deducting the indexed cost, the assessee determined total long term capit....

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....lows:- "6. The assessee has got built up area of 3300 sq.ft. out of total built up area of 10000 sq.ft. The assessee has adopted Rs. 3000/sq.ft. while determining the consideration received for the purpose of capital gains. By adopting the same rate LTCG in this case has been worked out as under: Sale consideration in Rs. (by adopting Rs. 3000/sq.ft. built up area)     99,00,000 Less: Cost of acquisition FMV taken at 3000 as on 1.4.1981 per cent for 15 cents x 67% share transferred: 30150X711/100 for FY Cost Indexed   30,150 2,14,367   Cost of improvement 1981-82       40000X711/100X2/3 26,667 1,89,603   Capital gains     ....

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....sion, the CIT(A) has followed the decision of the Hon'ble High Court of Karnataka in the case of CIT v. D. Ananda Basappa, 309 ITR 329 (Karn), wherein a view was taken that if the two units are adjacent to each other, then they could be regarded as a residential unit. 9. Aggrieved by the order of CIT(Appeals), the Revenue has preferred the present appeal before the Tribunal. 10. We have heard the rival submissions. In CIT & Anr. vs. D. Ananda Basappa (2009) 223 CTR (Kar) 186 : (2009) 309 ITR 329 (Kar) High Court of Karnataka has observed that expression "a residential house" should not be understood to indicate a singular number; assessee having purchased two residential flats, exemption under s. 54 was available, more so as these fla....