TaxTMI 
TaxTMI 
2018 (6) TMI 152
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....tment in new flat to Rs. 58,83,891/- as against Rs. 94,34,978/- claimed u/s 54 of the Act on the facts and circumstances of the case. 1.1 In doing so the Ld. CIT (Appeals) did not consider the submissions of the appellant in their proper perspective. Your appellant, submits that due relief be allowed. Your appellant craves leave to add to, alter, delete or amend the grounds of appeal at or before the date of hearing." 3. The brief facts are that the assessee sold property bearing flat no. 502, 5th floor, C/1, Vastu Park, Malad (W), Mumbai-400064 on 05-07-2011 for Rs. 1,30,00,000/-. The assessee computed long term capital gains to the tune of Rs. 94,34,978/- .The assessee claimed exemption u/s.54 of the Act to the tune of Rs. 94,34,978/- and hence taxable long term capital gains were computed by the assessee at 'Nil' which were offered for taxation in the return of income filed with the Revenue. On verification by the AO during the course of assessment proceedings u/s 143(3) r.w.s. 143(2), it was observed by the AO that the said amount comprised of investment made in new Flat at 501, Victory Aura, Ulwe, Panvel, Navi Mumbai during the financial year 2011-12 amounting to Rs. 40....
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....tricted to 'one' residential house. The assessee relied upon following decisions: (a) Hon'ble Karnataka High Court decision in the case of CIT v. Smt. Rukminiamma (2011) 196 Taxman 87(Kar. HC). (b) Hon'ble Madras High Court in the case of Dr.(Smt.) P K Vasanthi Rangarajan v. CIT (2012) 23 taxmann.com 299(Mad. HC). The learned CIT(A) relied upon decision of Hon'ble Bombay High Court in the case of CIT v. Devdas Naik ,366 ITR 12 wherein decision of Special Bench of Mumbai Tribunal in the case of ITO v. Sushila Jhaveri in ITA no. 2865/Mum/2002 ( reported in (2007) 107 ITD 327(Mum-SB) ) stood approved by Hon'ble Bombay High Court by holding that the benefit can be claimed only for one house but however if the assessee has adjoining units used as one , the claim can be allowed for two adjacent units. The Ld. CIT(A) also relied upon the decision of Hon'ble Bombay High Court in the case of CIT v. Raman Kumar Suri in ITA no. 6962 of 2010 reported in (2013) 29 taxmann.com 231(Bom.) wherein the decision of Special Bench of tribunal in Sushila M Jhaveri(supra) stood approved. Further reliance was placed by Ld. CIT(A) on the decision of Mumbai Tribunal in the case of Shri Narender Khubcha....
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....nal in Sushila M Jhaveri(supra) has categorically held that investment can be made in one residential house property and deduction should be allowed restricted to one residential house property provided other conditions are fulfilled. The learned DR relied upon the decision in the case of Sushila M. Jhaveri(supra) which has been upheld by Hon'ble Bombay High Court. The Ld. Counsel for the assessee in rejoinder submitted that amendment has been made in the 1961 Act by Finance Act, 2014 w.e.f. 01-04-2015 in section 54 wherein the word 'a' is now being substituted by the word 'one'. 6. We have considered rival contentions and have perused the material on record including case laws relied upon by both the rival parties. We have observed that the assessee sold one flat at Jaipur in financial year 2010-11 for Rs. 1,15,00,000/- . The assessee had invested Rs. 1,39,05,974/- in residential flat at Interface , Malad, Mumbai on 14-09-2010 in financial year 2010-11 . The assessee claimed exemption of Rs. 80,22,083/- u/s 54 from long term capital gains arising from sale of Jaipur residential flat. The investments made in flat at Malad, Mumbai at Interface was to the tune of Rs. 1,39,05,974/- ....
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.... that these two flats were required by the taxpayer for settling his two sons and hence instead of buying one big house to accommodate both the sons, the tax-payer bought two different small flats at separate locations. The relevant extract of the decision of Hon'ble Karnataka High Court is as under:- "5..... The assessee had two sons, who were living with the assessee on the date of selling of that property. As both the sons were grown up, married, having children, assessee wanted to invest the said capital gains in purchasing two independent residential houses for the benefit of his two sons. Accordingly, he purchased the property No.623 for a consideration of Rs. 76,91,660/- on 27.5.1996. Prior to that, he also entered into an agreement of sale in respect of property No.739 for a consideration of Rs. 75,00,000/- and paid a sum of Rs. 44,00,606/- on the date of agreement of sale. He paid the balance sale consideration on 28.9.1996 and purchased the said property under a registered sale deed dated 28.9.1996. **** *** 16. In the instant case, one residential house is sold, Out of the sale consideration, it was open to the assessee to purchase a big residential house as to a....