TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 1617
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....eclared Long Term Capital Gain (LTCG) of Rs. 1,41,08,787/- and claimed deduction u/s 54F of the Income Tax Act, 1961 (Act) on the ground that she acquired property by utilizing the LTCG viz., the 13 residential flats which she got as her share of built up area under the JDA. '54F. Profit on sale of property used for residence:- (1) Subject to the provisions of sub-section (4) where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, not being a residential house,(hereinafter referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereinafter in this section referred to as the new asset), the cpital gain shall be dealt with in accordance with the following provisions of this section that is to say,- ........." "Provided 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 ....
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....f the Act) as follows:- "8. For a proper appreciation of the aforesaid contention, it is necessary to have a careful look at Section 54 of the income Tax Act, which reads as under: '54. Profit on sale of property used for residence:- (1) Subject to the provisions of sub-section where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being. buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date air which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions 01 this section, that is to say- (i) ........." 9. A reading of the aforesaid provision makes it very clear that the property....
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....nance 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 Anand Basappa's case in IT.A.No. 113/2004, disposed of on 20.9.2008. 11. We, therefore, do not see any merit in the submission of the learned counsel for the revenue. 12. In the instant case, the facts are not in dispute. On a site measuring 30' x 110', the assessee had residential premises. Under a joint development agreement, she gave that property to a builder for putting iii. flats. Under the agreement eight flats are to be put up in that property and four flats representing 48% is the share of the assessee and the remaining 52% representing another four flats was the share of the builder. So the consideration for selling 52% of the site is four flats representing 48°/o. All the four flats are situate in a residential building. These four residential flats constitute a residential house" for the purpose of Section 54. Pro-it on sale of property is used for residence. The four residential flats can....
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....e cannot claim that all the 13 flats constitute on house. The CIT(A) therefore agreed with the view of the AO and held that the Assessee has violated the provisions of section 54F of the Act and hence cannot be eligible for deduction u/s 54F. Therefore, he uphold the addition of Rs. 1,41,08,787/- made by the AO. 7. Aggrieved by the order of the CIT(A), the assessee has preferred present appeal before the Tribunal. 8. The ld counsel for assessee apart from relying on the decision relied upon before the CIT(A) also placed reliance on the decision of Hon'ble Madras High Court in the case of CIT Vs. Smt. V.R Karpagam Tax Appeal No.301 of 2014 judgment dated 18/8/2014, wherein the Hon'ble Madras High Court has also taken a similar view. 9. The ld DR submitted that very same Hon'ble Karnataka High Court in the latter judgment in the case of CIT Vs. Late Khhbchand M Makhija in ITA No. 496/Bang/2007 judgment dated 18/12/2013 took the view contrary to the view taken by the Hon'ble High Court in the case of K.G Rukminiamma (Supra). 10. The ld counsel for the assessee pointed out that the case of the Late Khubchand M Makhija (Supra), the facts were different in as much as one residential ....
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....enefit of capital gains in respect of one flat and the CIT( A) affirmed findings of AO holding that claim of assessee u/s 54F for all five flats could not be admitted, but however, he took the view that the assessee would be entitled to benefit of s 54F in respect of one single flat with largest area. In appeal, tribunal held that assessee was eligible for exemption u/s 54F on all five flats received by her in lieu of land she had parted with and word 'a' appearing in s 54F should not be construed in singular, but should be understood in plural. The Madras High Court upheld the order of the Tribunal. It was also held that amendment was made to s 54F with regard to word 'a' by Finance (No.2) Act, 2014 w.e.f only from 01.04.2015 withdrawing deduction for more than one flat (residential house). Post amendment, viz., from 01.04.2015, benefit of s 54F will be applicable to one residential house in India. However, prior to said amendment, a residential house would include multiple flats/residential units. Similar decisions were rendered on identical facts by the Hon'ble Madras High Court in the case of CIT vs Gumanmal Jain [2017] 80 taxmann.com 21 (Mds). As far as the dec....