TaxTMI 
TaxTMI 
2018 (2) TMI 172
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..... Ltd. for total consideration of Rs. 5,32,00,000/-. The assessees in their return of income disclosed their respective share of Long Term Capital Gain arising from sale of ancestral property and also claimed deduction u/s. 54 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). ITA No. 146/PUN/2015 (A.Y. 2010-11) 3. The assessee‟s share in total consideration from sale of ancestral bungalow was Rs. 1,60,00,000/-. The assessee offered Long Term Capital Gain of Rs. 28,76,100/- after claiming deduction of Rs. 88,54,650/- u/s. 54 of the Act. The assessee had invested gain arising from sale of ancestral property in two residential flats. Both the flats were located in different localities. The assessee purchased Flat No. 1201 in Treasure Park Society, Hingane Khurd, Karvenagar, Pune for Rs. 47,91,250/- inclusive of registration and stamp duty charges. Another flat was purchased by assessee at Madhuvishwa Residency at S. No. 1/28, Saint Nagar, Pune for Rs. 50,89,950/-. The Assessing Officer allowed assessee‟s claim of deduction u/s. 54 in respect of one flat situated at Madhuvishwa Residency, Saint Nagar, Pune and disallowed assessee‟s claim of deduct....
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.... appeal, if deemed necessary at the time of hearing of the appeal." 5. Shri Sunil Ganoo appearing on behalf of the assessee submitted at the outset that the assessee wishes to withdraw ground No. 3 raised in the appeal. The ld. AR of assessee has also filed letter from assessee dated 03- 10-2017 in this regard. 5.1 The ld. AR submitted that after receipt of consideration from sale of ancestral property the assessee purchased two flats in two different localities. The assessee had two unmarried aunts who had taken care of assessee since his childhood. Both the aunts were financially dependent on the assessee. Due to some family issues between the parents of assessee and his aunts, it was not possible to accommodate them in the same house where the parents of assessee were staying. The assessee purchased first flat in Madhuvishwa Residency, Saint Nagar, Pune. Since, the flat in the said locality was costly the assessee could not afford to buy second flat in the same vicinity for his aunts. The assessee purchased another flat for his aunts in nearby locality. The assessee was constrained to purchase second flat in another locality under compelling circumstances. The ld. AR submitte....
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....that the assessee in return of income has disclosed Long Term Capital Gain after claiming deduction u/s. 54 in respect of two flats purchased in two different localities. The assessee has tried to justify the purchase of two flats in different localities on account of family compulsions. We find that apart from bald assertions the assessee has not filed any cogent evidence to support his contentions. Be that as it may, the deduction under the provisions of section 54 is available in respect of „a residential house‟. Various Courts have interpreted the expression „a residential house‟ to include within its fold two adjacent flats joined together or a complete building comprising of different residential units. The benefit of deduction u/s. 54 cannot be extended to two residential units/houses located at two different locations. In such circumstances, the assessee is eligible to claim deduction u/s. 54 of the Act in respect of only one of the two flats of his choice. 8. The assessee in support of his contentions have placed reliance on the decision of Hon‟ble Karnataka High Court in the case of Shri B. Srinivas Vs. ITO (supra). We find that the facts in....
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....ffidavit has admitted to have received Rs. 12,00,000/- for relinquishing his tenancy rights. The ld. AR submitted that since, the ancestral house was jointly owned by assessee and Jayant Dattatraya Bhalerao and Ashok Dattatraya Bhalerao, all the three co-owners equally contributed towards the payment of compensation to Shri Vaman Shriniwas Kulkarni. Thus, 1/3rd share of assessee comes to Rs. 4,00,000/-. The assessee has filed affidavit of tenant as additional evidence for the first time before Tribunal. Under such circumstances we deem it appropriate to remit ground No. 2 to Assessing Officer for verification of facts. The Assessing Officer shall decide this issue de-novo after granting opportunity of hearing to the assessee and considering additional evidence filed before us. Accordingly, ground No. 2 raised in appeal by assessee is allowed for statistical purpose. 11. In respect of ground No. 3 the ld. AR of assessee has filed an application from assessee to withdraw the ground. Accordingly, the same is dismissed as withdrawn. 12. The ground No. 4 is general in nature, hence, requires no adjudication. 13. In the result, appeal of assessee is partly allowed for statistical purp....
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..../- in respect of one flat only. The ld. AR submitted that since all the three flats were in the same building the assessee is eligible to claim deduction u/s. 54 in respect of all the three flats. In support of his submissions, the ld. AR of assessee placed reliance on the following decisions : i. Commissioner of Income Tax Vs. Gita Duggal, 357 ITR 153 (Delhi); ii. Shri Narsing Gopal Patil & Ors. Vs. ACIT in ITA No. 1544/PUN/2012 for assessment year 2008-09 decided on 31-05- 2013. 15.1 The ld. AR made an alternate prayer that without prejudice to his first prayer, if the assessee is not found eligible for claiming deduction in respect of all the three flats, the deduction u/s. 54 may be granted in respect of two adjoining flats purchased on 11th floor. In support of his alternate prayer the ld. AR placed reliance on following decisions : i. Commissioner of Income Tax Vs. Syed Ali Adil, 352 ITR 418 (AP); ii. Commissioner of Income Tax Vs. D. Ananda Basappa, 309 ITR 329 (Kar.) 16. In respect of ground No. 3 of appeal the ld. AR submitted that the assessee had contributed towards payment of compensation for vacating ancestral property. The total compensation paid to tena....
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....such circumstances the Hon‟ble High Court held that the fact that the residential house consists of several independent units cannot be permitted to Act as impediment to the allowance of deduction u/s. 54 or 54F of the Act. The facts in the present case are at variance. The assessee had purchased three independent flats in a building. It is not a case where the assessee has purchased entire building. Therefore, the ratio laid down by Hon‟ble Delhi High Court in the case of Commissioner of Income Tax Vs. Gita Duggal (supra) does not support the cause of assessee. Similarly, in the case of Shri Narsing Gopal Patil & Ors. Vs. ACIT (supra), the Co-ordinate Bench of Tribunal held that the assessee is eligible for deduction u/s. 54 where the assessee has acquired a residential house with independent units. Thus, ground No. 1 raised in appeal by assessee is dismissed. However, we find merit in the alternate submission of the assessee. As we have pointed earlier, the fact that flats bearing Nos. 1103 and 1104 on 11th floor of Treasure Park, Saintnagar, Pune whether have been joined together or not to make it single unit has not been verified. We deem it appropriate to remit th....