TaxTMI 
TaxTMI 
2017 (12) TMI 1332
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....st claim of deduction under section 54 of the Act. 4. Briefly, in the facts of the case, the assessee had furnished the return of income declaring total income of Rs. 1,47,44,376/-. During the year under consideration, the assessee had sold property for Rs. 9.29 crores, against which it had paid brokerage of Rs. 9,29,000/-. The assessee was asked to furnish the details in this regard, which were found to be satisfactory by the Assessing Officer. After considering indexation of cost of acquisition, the long term capital gains worked out to Rs. 8,79,63,807/-, the assessee in turn, had purchased one residential leasehold flat for Rs. 5,77,86,965/- (including stamp duty) and invested Rs. 1 crore in NHAI Bonds. The assessee subsequently purchased another flat in Marvel, Hadapsar for Rs. 68,35,750/- and claimed second deduction under section 54 of the Act. The claim of assessee of deduction under section 54 of the Act in respect of second property was denied and amount was added in the hands of assessee. 5. The CIT(A) after considering various case laws relied upon by the assessee for the proposition that expression of "a residential house" does not mean one residential house observed ....
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....DCIT Vs. Ranjit Vithaldas Lokupavan (2008) 25 SOT 420 (Mum) iv) ITO Vs. Smt. Rohini Reddy (2010) 122 ITD 1 (Hyderabad) 9. He further pointed out that the Hon'ble Punjab & Haryana High Court in Pawan Arya Vs. CIT (2011) 11 taxmann.com 312 (P&H) has referred to the ratio laid down by the Hon'ble High Court of Karnataka D. Ananda Basappa Vs. ITO (2009) 309 ITR 329 (Kar) and pointed out that deduction against purchase of two flats was allowed since both the flats were combined to make one residential unit. However, the claim of deduction under section 54F of the Act in respect of acquisition of two houses was denied by the Hon'ble High Court of Punjab & Haryana. In respect of reliance placed on the ratio laid down by the Hon'ble High Court of Karnataka in CIT Vs. Khoobchand M. Makhija (supra), it was pointed out that the same was decided on its peculiar facts and the said ratio cannot be applied to decide the present issue. 10. We have heard the rival contentions and perused the record. The limited issue which arises in the present appeal is interpretation of provisions of section 54 of the Act. The assessee during the year under consideration had sold her residential bungalow 24....
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....of long term capital asset being building or land appurtenant thereto, which was being used as residential house. The assessee has fulfilled these conditions and there is no dispute about the same. The second aspect of provisions is the investment within stipulated period in "a residential house", on which investments capital gains would not be charged to tax. The first investment which has been made by the assessee is in the flat in Padma Vilas building, Pune for Rs. 5.77 crores which has been found to be within the scope of said section and the deduction on this count has been allowed in the hands of assessee. The question which arises for adjudication is whether for claiming deduction under section 54 of the Act can the assessee claim the same in respect of second property which has been purchased independent of first property. The assessee in this regard has relied on series of decisions including the decision of the Hon'ble High Court of Karnataka (supra) and the Hon'ble High Court of Delhi (supra). 12. The first decision on the issue is by the Hon'ble High Court of Karnataka in D. Ananda Basappa Vs. ITO (2009) 180 taxman 4 (Kar) and thereafter in CIT Vs. Smt. K.G. Rukminiamm....
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.... the Act, where the assessee had acquired two residential houses, the Hon'ble High Court held that the same falls within the phrase 'a residential house'. It was further held by the Hon'ble High Court that However, we make it clear that while interpreting this word, the Court or the Tribunal or the authorities have to keep in mind the facts of the particular case. When we have held "a" cannot be read as singular, it also cannot be read as multiples and so as to avoid paying tax under section 45 of the Act. 15. In the facts of the case before the Hon'ble High Court of Delhi in CIT Vs. Gita Duggal (supra) also, the assessee had made investment in another residential house with flats on different floors and the Hon'ble High Court held the same to be eligible for deduction under section 54 of the Act. 16. In the facts of the case before the Hon'ble High Court of Andhra Pradesh in CIT Vs. Syed Ali Adil (2013) 33 taxmann.com 212 (AP) also, investment was made in two residential units, which though were purchased from two vendors but had adjacent kitchens and toilets and had common meeting point and hence, deduction was held to be allowable to the assessee. 17. The learned Departmenta....