2016 (8) TMI 819

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....iny. While framing assessment order, the Assessing Officer (AO) disallowed exemption holding that assessee sold four flats bearing Nos. 1201A, 1201B, 1201C and 1201D in building known as "Evita" at Hiranandani Garden, Powai, Mumbai, on 23/06/2009 and purchased residential flats i.e. 2203A, 2203B & 2203C in "Richmond" Hiranandani Garden, Powai, Mumbai on 11/12/2009. After denying exemption u/s 54 of the Act, the AO assessed the income of assessee at Rs. 3,71,60,094/-. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A) wherein the assessee was granted exemption u/s. 54 of the Act in the impugned order dated 18.08.2014. Aggrieved by which the Revenue has filed the present appeal before us. 3. We have heard Ld DR for revenue and Ld AR for assessee and perused the material available on record. Departmental Representative (DR) for Revenue argued that the assessee was not entitled for the exemption u/s 54 of the Act. The assessee during the year under consideration sold four residential flat which were four different units in "Evita" at Hiranandani Garden, Powai, Mumbai. There were four electricity meter and after sale of the flats assessee purchased three reside....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... date on which the transfer took place purchased], or has within a period of three years after that date [constructed, a residential house], then], instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain [is greater than the cost of [the residential house] so purchased or constructed (hereafter in this section referred to as the new asset)], the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three ye....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....(4) in the year 2005 and at the time of sale of these units the outstanding amount on account of repayment of loan, the loan was paid through four different cheques, thus the AO treated the amount of consideration as taxable LTCG. Before the First Appellate Authority (FAA), the assessee made the similar argument as advanced before us and after considering the case of assessee, the Ld. CIT(A) passed the following order: "14. I have carefully considered the appellant's submissions, the observations of the AO in the assessment order and the facts of the case. The appellant during the year under consideration had sold four units i.e. Flat No. 1201A, 1201B, 1201C & 1201D. These units had been sold through four different Sale-deeds and had been purchased from the builder through four different agreements. The appellant has submitted that though these units had been purchased and sold through four different agreements / Deeds but these being on the same floor and being contiguous, were used as one residential flat by the appellant having common kitchen, one common entrance and one electricity bill. The appellant has also purchased three different units No. 2201B, 2203C & 2203D in &....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... However, these maintenance bills alone do not in any way establish that the four units were not used by the appellant as one residential flat. 15. With regard to AO's observation that the repayment of loan to Citibank had been made through four different cheques, as mentioned in four different sale-deeds of the units, it is seen that the loan account is bearing a common Account No. i.e. 216931. The appellant has placed on record a copy of loan sanction letter at page no. 150 of the paper book, according to which one common loan of Rs. 1,94,50,000/- was sanctioned to the appellant in respect of the property bearing Flat No. 1201, 12th floor, 'Evita', Hiranandani Garden, Powai, Mumbai. The AO has made an observation in the assessment order that the flats were sold to different persons and therefore, could not have been used as one residential flat. In this regard, from the copies of Sale-deeds placed on record, it is seen that Unit No. 1201A & 1201B have been sold to Mr. Rajaish Bajpaee and units No. 1201C & 1201D have been sold to Mrs. Vandana Bajpaee. Thus, the units have not been sold not to two different persons but to husband and wife. The price of the property ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ntial unit. The fact that the assessee could have purchased both the flats in one single sale deed or could have narrated the purchase of two premises as one unit in the sale deed is not the ground to hold that the assessee had no intention to purchase the two flats as one unit. Thus, deduction in respect of both these flats is allowable in accordance with s. 54 r/w s. 54F." Further, the Hon'ble jurisdictional High Court in case of CIT vs. Ramankumar Suri held that exemption can be claimed for different flats joined together treating one flat only and held as under: "We find no fault with the order of the Tribunal which has upheld the finding of fact of the Commissioner of Income Tax (Appeals) to the effect though the respondent- assessee had purchased flat Nos. 416A and 516A it was only purchase of one residential house. Further, the Tribunal held that two flats were joined together before the respondent assessee became the owner of the two flats. The Certificate from the society also established the fact that two flat Nos. 416A and 516A were joined together and were considered as one residential house. These concurrent findings of fact by the Commissioner of Income Tax (App....