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2017 (8) TMI 22
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....in relation to exemption under Section 54 to be granted on one house property as against two properties claimed by the assessee. (ii) That the learned CIT(A) has erred, both on facts and in law, tn confirming the same despite the fact that amendment under Section 54 restricting the exemption to the extent of one house property has come into effect from A Y 2015-16 and hence the same is not applicable during the relevant assessment year. (iii) That the learned CIT(A) has erred, both on facts and in law, in confirming the above said disallowance misinterpreting the case laws relied on by the assessee. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in levying interest under Section 234B and 234C of the Act,‖ 3. Ground No. 1, 4 are general in nature and therefore they are dismissed. 4. The brief facts of the cases that assessee is an individual who filed his return of income on 05/07/2013 showing income of Rs. 7648330/- deriving income from business, long-term capital gain and income from other sources. During the year, assessee has sold a property for Rs. 2.60 crores as per colla....
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.... one residential house property and cannot be availed for multiple houses. 7. We have carefully considered the rival contentions. It is apparent that assessee has purchased more than one house property and claimed deduction under section 54 of the income tax act with respect to 2 house properties. The Hon'ble Delhi High Court in case of CIT versus Geeta Dugal has already held that deduction under section 54 is available with respect to more than one properties and decided the issue wherein the properties were purchased by the assessee at two different places on in Jhor Bag and another at Sonipat. The Hon'ble high court held as under :- 8. It is the correctness of the above view that is questioned by the revenue and it is contended that the interpretation placed by the Tribunal gives rise to a substantial question of law. The assessee strongly relies upon the judgment of the Karnataka High Court (supra) which, it is stated, has become final, the special leave petition filed by the revenue against the said decision having been dismissed by the Supreme Court as reported in the annual digest of Taxman publication. The judgment of the Karnataka High Court supports the contention of t....
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....ngarajan v. CIT[2012] 23 taxmann.com 299/204 Taxman 628, and the decision of the Hon'ble Division Bench in the case of CIT v. G. Saroja [TC (Appeal) No. 656 of 2015, dated 4-1-2012]. The learned counsel referred to the circular of the CBDT, in circular No. 1 of 2015, dated 21.01.2015, to submit that the amendments to Section 54F(1), will take effect from 1st, April, 2014 and will accordingly, apply in relation to assessment year 2015-16 and subsequent assessment years and would not apply to the petitioner's case pertaining to the assessment year 2011-12. Further, it is submitted that delay in handing over of the property by the seller to the petitioner is not materially 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 v. Asstt. CIT[2013] 35 taxmann.com 90/143 ITD 586 (Hyd. - Trib.). The contention of the revenue was that 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 per....
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.... been completed. Thus, the question would be whether the petitioner can be denied exemption on the ground that he has invested in five flats and what would be the effect of the construction having been only partially completed. 8. The legal issue has been considered by the Hon'ble Division Benches of this Court as well as by the ITAT. As factual matrix in Smt. V.R. Karpagam (supra) is more or less similar to the case on hand, the same is referred at the first instance. In Smt. V.R. Karpagam (supra), (ITAT), the assessee challenged the order restricting 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 G. Saroja (supra), 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 buildin....
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.... appurtenant thereto, which also should be 'a residential house'. Therefore, the letter 'a' in the context it is used should not be construed as meaning 'singular'. But being an 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. This is the view which is taken by this Court in the aforesaid CIT v. 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 res....
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....;ble Division Bench agreed with the view expressed in the decision in the case of G. Saroja (supra) and held that the purchase of four flats would not disentitle the assessee for exemption. 10. The learned counsel for the revenue relied on the decision of the Punjab and Haryana High Court in the case of Pawan Arya (supra) to sustain the impugned order. In the said case, the assessee claimed exemption on capital gains on sale of flat on the ground of acquisition of two houses. When the assessee placed reliance on the decision of the Tribunal in the case of D.Ananda 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 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 estima....
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....re of land in the proposed building complex. Therefore, the agreement is a composite agreement and it mentions that the petitioner is entitled to a total built up area of 9500 sq.ft. Therefore, it would be immaterial, if whether 9500sq.ft., of built up area given to the petitioner is separate over in the same floor or in a different floor or in different blocks in the apartment complex, since the consideration which has passed on, was for agreeing to offer 9500 sq.ft., of built up area along with proportionate undivided share. This agreement was followed by a supplementary agreement, dated 5th September 2013, where except for a small reduction in the super built up area by reducing it to 8050 sq.ft., and giving the details of the flat numbers, there are no other changes to the principal agreement dated 29.10.2010. 14. Thus, by applying the legal principles enunciated in the case of Smt. V.R. Karpagam (supra), Dr. Smt. P.K. Vasanthi Rangarajan (supra), and G. Saroja (supra), it is to be pointed out that the expression "a residential house" used in Section 54, should not be taken to convey the meaning that it refers to a 'single residential' house and if that was the inten....