TaxTMI 
TaxTMI 
2016 (9) TMI 155
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....ransaction of the property owned by a partnership firm M/s.Karpagam Studios (hereinafter referred to as the 'firm') in which the petitioner was one of the partners and the petitioner had invested Rs. 2,62,50,000/- in five flats at No.134, Arcot Road, Saligramam, Chennai, (subject property), out of the sale consideration of Rs. 3,12,50,000/- was undertaken. 3. The firm and its partners (including the petitioner) entered into a deed of sale dated 29.10.2010, in terms of which the petitioner sold his share in the subject property for a sum of Rs. 3,12,50,000/- and the consideration was invested towards purchase of constructed area of 9500 sq.ft., along with undivided share of land of an extent of 1807sq.ft., vide agreement dated 29.10.2010. Pursuant to a supplementary agreement, dated 05.09.2013, the allotable built up area was reduced to 8050 sq.ft. The sale proceeds having been fully utilised for the purchase of residential property, the petitioner claimed exemption under Section 54F of the Act. While so, the petitioner received a notice dated 27.03.2015, under Section 148 of the Act, stating that the respondent has reasons to believe that the income chargeable to tax had e....
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....ly relevant for grant of exemption under Section 54F of the Act. Reliance was placed on the decisions of the ITAT in the case of Narasimha Raju Rudra Raju, vs. Asst., Commissioner of Income Tax, Hyderabad in ITA No.234/Hyd/12, dated 26.04.2013. 5. The learned Senior Standing counsel for the respondent Department submitted that the petitioner has invested in five different flats in different blocks, out of which one is under joint ownership and therefore, the petitioner has not fulfilled the condition for claiming exemption under Section 54F of the Act, which states that within a period of three years, the assessee should have constructed a residential house, which has to be interpreted as one residential house and not more than one and this position was so even prior to the amendment of Section 54F(1) of the Act. The learned counsel sought to factually distinguish the decisions in the case of Smt.V.R.Karpagam, and Dr.Smt.P.K.Vasanthi Rangarajan. Further, it is submitted that as per the principles laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd Vs. Income Tax Officer, 259 [ITR] 19, the petitioner has to participate in the reassessment pro....
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....tricting the claim for exemption under Section 54F to a single flat. The assessee Smt.V.R.Karpagam entered into an agreement for development of a piece of land owned by her and as per the agreement, she was entitled to receive 43.75% of the built up area, which translated to five flats. The claim for exemption was restricted only to one flat. It was contended by the Revenue that the reliance placed on the decision in the case of Commissioner of Income Tax-IX, vs. G.Saroja, T.C.(A).No.656 of 2005, is distinguishable, since in the said case, High Court had granted relief to the assessee for four flats received by the assessee in exchange of ownership over part of the land with building and four flats, were assessed, as one unit with one door number, whereas in the case of Smt.V.R.Karpagam, it was five flats with different residential units with different door numbers. While considering the said factual issue, the Tribunal was called upon to examine as to whether a residential house should be treated as one residential house or whether more than one residential house can be considered eligible for deduction under Section 54 of the Act. After referring to the said provision, the Tribun....
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....Act. This is the view which is taken by this Court in the aforesaid CIT vs. D.Ananda Basappa case in IT Appeal No.113 of 2004, disposed of on 20th Sept., 2008 (reported at (2009) 223 CTR (Kar) 186; (2009) 20 DTR (Kar) 266-Ed.]" 8. Their Lordships have clearly held in the above judgement that 'a residential house' in the context could not be construed as a singular. In the said case also, claim for exemption was with regard to four flats in lieu of share in land, but the claim was under Section 54 of the Act and not under Section 54F of the Act. However, in our opinion the meaning given to the expression 'a residential house' will apply pari passu to Section 54F also, since the expression used here is also 'a residential house'. New asset defined in Section 54F, as 'a residential house' has also to be understood in the plural. It is not necessary that all residential units should have a single door number allotted to it as argued by the learned Departmental Representative No doubt Hon'ble jurisdictional High court in the case of G.Saroja (supra), did consider the fact that different flats were having one door number. However, this also was not th....
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.... in the case of D.Anand Basappa (supra), it was distinguished by the High Court stating that in the said case, two flats could be treated to be one house as both had been combined to make one residential unit. 11. In the decision of the Tribunal in the case of Shri Narender Khubchandani (supra), the assessee had purchased two residential flats under two different agreements from different sellers, they were adjacent units and they were combined into one unit having a common kitchen. In the said case, the property sold by the assessee consisted of two garages. However, the sale agreement did not refer to any garages. The Assessing Officer estimated the sale consideration of the garages and assessed the same as long term capital gain. While deciding the correctness of said order, the Tribunal took note of the other decisions and pointed out that in the case of CIT vs. Devdas Naik in ITA No.2483 of 2011, dated 10.06.2014, (Bombay High Court), wherein it was held that exemption under Section 54F will be applicable only when house purchased is a single unit and in the said case (Devdas Naik), the assessee purchased two residential flats under two different door numbers, from two differ....