2015 (10) TMI 85

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....ther under the facts and circumstances of the case, the Appellate Tribunal was justified in allowing the exemption in respect of both the residential unit under section 54A of the Income Tax Act relying on the decision of the Special Bench of the ITAT in the case of Ms.Sushila M.Jhaveri 292 ITR (AT1) ignoring the facts that in the instant case the facts and circumstances are entirely different from the case of Sushila M.Jhaveri ?" 3. The respondent-assesee had in assessment year 2008-09 sold her tenancy rights of the property for a consideration of Rs. 5.49 crores. An amount of Rs. 3.09 crores out of the sale consideration of Rs. 5.49 crores was utilised in purchasing two adjoining residential flats being flat Nos.701 and 702 in Lido Tow....

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....iety. 5. On further appeal, the Tribunal by the impugned order placed reliance on the decision of the Special bench of the Tribunal in ITO vs. Ms.Sushila M.Jhaveri (2007) 292 ITR (AT) wherein it was inter alia held that where an assessee purchased more than one residential house which are adjacent to each other and thereafter converted into one house, then it would be a case of investment in one residential house and not two. Therefore, in such a case the assessee would be entitled to exemption on consideration paid for the two flats. The Tribunal on consideration of the Ward Inspector's report dated 16th December, 2010 concluded that as both flats purchased were adjacent and converted into one single residential unit, and exemption ....

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....fore we deal with the rival contentions, it may be useful to reproduce the relevant portion of the Ward Inspector's report dated 16th December, 2010 made after visit to the respondent-assessee's premises: 1. "The assessee is having 2 flats no.701 and 702 on the 7th floor of the building. 2. There are only 2 flats on every floor of the building having common passage and both the above flats are registered in the name of the assessee. 3. Both the above flats was having different entry doors however the same are interconnected by breaking the adjacent wall in between them. 4. Flat no.701 consisting of1100 sq.ft having kitchen with the platform sink with tap, refrigerator and Gas Cylinder (not connected) was placed there. ....