TaxTMI 
TaxTMI 
2014 (12) TMI 1255
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....value of garage on notional basis. 2. The facts relating to the above said issues are stated in brief. The assessee sold a residential property located at No.10, New Gautam, Dr. Ambedkar Road, Khar, Mumbak for a consideration of Rs. 1.52 crores. He invested the capital gains on acquisition of following two residential properties:- (a) Flat at Paradise Building, Khar, Mumbai jointly with Shri S.D.Khubchandani for Rs. 45.00 lakhs (b) Flat No.602, Grace Residency, Bandra (W), Mumbai jointly with Mrs. Pushpa D Khubchandani for Rs. 80 lakhs. The assessee claimed deduction u/s 54 of the Act in respect of value of both the flats stated above. The AO, however, restricted the claim in respect of one property, having higher value. In this regard,....
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....he provisions of sec. 54 by acquiring two residential flats, since it had suited his family requirements. He submitted that the provisions of sec. 54 use the expression "a residential house". The meaning of the word "a" was analyzed by the Hon'ble Karnataka High Court in the case of CIT Vs. Khoobchand M Makhija (2014)(223 Taxman 189) and also in the case of CIT Vs. K.G.Rukminiamma (2011)(331 ITR 211) and the Hon'ble Karnataka High Court has expressed the view that the expression "a residential house" should not be construed as "One residential house". The assessee before the Hon'ble Karanataka High Court in the case of Khoobchand M Makhija (supra) had purchased two residential houses. The Karnataka High Court noticed that sec. 54 uses the e....
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....nvey the meaning that it refers to a single residential house. The letter "a" in the context, which is used, should not be construed as meaning singular, but being a indefinite article, the said expression should be read in consonance with the other words "buildings and lands" and therefore, the singular "a residential house" also permits use of plural by virtue of Section 13(2) of the General Clauses Act. 18. Therefore, we are of the view, in the facts and circumstances of this case, the acquisition of two residential houses by the assessee out of the capital gains falls within the phrase "residential house" and accordingly , the assessee is entitled to the benefit conferred under Section 54(1) of the Act. However, we make it clear that w....
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.... will be applicable to constructed, one residential house in India and that clarifies the situation in the present case, i.e., post amendment, viz., from 01.04.2015, the benefit of Section 54F will be applicable to one residential house in India. Prior to the said amendment, it is clear that a residential house would include multiple flats/residential units as in the present case where the assessee has got five residential flats..." Accordingly, the Ld A.R submitted that the amendment brought in by the Finance (No.2) Act, 2014 makes it clear that the residential house would include multiple flats/residential units prior to the said amendment. Accordingly, the Ld A.R submitted that the assessee should be given benefit of sec.54 of the Act i....
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....of the case laws. 8. We have heard the rival contentions and perused the record. Admittedly, the Special Bench of the Tribunal in the case of Sushila M Jhaveri (supra) has examined the issue - Whether an assessee is entitled to claim deduction u/s 54, or 54F of the Act in respect of more than one residential house acquired by him. The Special Bench held that the assessee could avail exemption only in respect of one of the properties. It is pertinent to note that the said decision of Special Bench of the Tribunal has since been approved by the Jurisdictional High Court in the case of CIT v/s Raman Kumar Suri (Income Tax Appeal No.6962 of 2010, decided on 27.11. 2012). The Hon'ble Jurisdictional Bombay High Court again considered the identi....
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....y the Hon'ble Karnataka High Court, which was relied upon by the assessee, since the said decisions are contrary to the decision rendered by the Hon'ble jurisdictional Bombay High Court. Accordingly we uphold the order of the ld. CIT(A) on this issue, since it is in accordance with the decision rendered by the Hon'ble Bombay High Court. Accordingly, we hold that the assessee shall be entitled for deduction u/s 54 of the Act only in respect of one residential flat. 10. The next issue relates to the assessment of value of two garages for the purpose of computation of capital gains. We notice from the assessment order that the AO has computed the sale consideration relating to garages purely on surmises and conjuncture without bringing any m....