TaxTMI 
TaxTMI 
2018 (1) TMI 794
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....nd accordingly re-worked out the capital gains. 4. On an appeal filed by the assessee, Ld. CIT(A) allowed the claim of assessee by following the ratio laid down by the Hon'ble jurisdictional High Court in the case of CIT vs. Syed Ali Adil (260 CTR 219) and also took note of the amendment to section 54 of the Act by Finance Bill 2014-15 w.e.f 01.04.2015, to conclude that the emphasis on restriction of deduction to 'one independent residential unit' at the time of reinvestment cannot be extended to 'different flats' though they are meant for residential use, was only prospective in nature and it is not applicable to the year under consideration. 5. Aggrieved by the order of Ld. CIT(A), Revenue is in appeal before the Tribunal. 6. Ld Counsel for the assessee placed reliance upon the decision of Hon'ble jurisdictional High Court (supra) and also relied upon the latest decision of the ITAT, Hyderabad "B" Bench in the case of Smt. Manjula L/R of Jaipal (ITA Nos. 1188/Hyd/2015 and batch, dated 20.11.2015) wherein the Bench considered an identical issue and observed as under:- 7. We have considered the issue and perused the various ordersplaced on record. The dispute is whether 'a res....
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....that nothing contained in this sub-section shall apply where- (a) the assessee, (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset ; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset ; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head 'income from house property' 9. It is relevant to note herein that an amendment was made to the above-said provision with regard to the word 'a' by the Finance (No.2) Act, 2014, which will come into effect from 01.04.2015. The said amendment reads as follows: "32a. Words "constructed, one residential house in India" shall be substituted for "constructed, a residential house" by the Finance (No.2) Act, 2014, with effect from 01.04.2015." 10. The above-said amendment to Section 54F of the Income Tax Act, w....
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....e of CIT V/s. Syed Ali Adil (supra) and the decision of the Delhi High Court in the case of CIT V/s.Gita Duggal (supra) dismissed the appeal of the Revenue, confirming the order of the ITAT. The above judgments lay down a principle that merely because a residential house consists of several independent residential units, deduction under S.54/S.54F could not disallowed. Respectfully following the decision of the Hon'ble jurisdictional High Court in the case of CIT V/s. Syed Ali Adil (supra) as approved in the case of CIT V/s. Vittal Krishna Conjeevaram (supra) and the principles laid down by the Hon'ble High Court of Delhi and Madras discussed above, we have no option than to confirm the order of the CIT(A), which is in consonance with the principles laid down on the issue in dispute. 9. We are also aware that the Hon'ble Punjab and Haryana High Court in the case of Pawan Arya V/s.CIT (supra) has not approved the above proposition, but the binding decisions of the jurisdictional High Court in the cases discussed above are in favour of the assessee, and therefore, the contentions raised by the Revenue in this appeal cannot be accepted." 7. Learned Departmental Repres....
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....ount deposited under sub-section 2 is not utilized wholly or partly for the purpose of construction of the New Asset within the periods specified in sub-section (1), then the amount not so utilized shall be charged u/s 45 as the income of the previous year in which the period of three years from the date of transfer of the original asset expires. The use of the expression 'the new asset' clearly indicates that the new asset should be one indivisible unit and had the legislature intended to provided deduction u/s 54 to more than one unit holding them to be within the umbrella of 'a residential house' it would have used the expression 'new assets' before the word purchase or construction. (ii) The case law cited by the CIT (A) are not applicable to the assessee's case for the reason that in those cases two flats are adjacent to each other and can be combined or merged into one unit with a common meeting point etc. For instance, in the case of Syed Ali Adil (352 ITR 418), the flats are situated side by side and the builder has affected modification of the flats to make it as one unit, despite the fact that the flats were purchased by separate sale deeds and in that context Hon'ble ....