2019 (3) TMI 1034

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....grounds of appeal: - "On the facts and under the circumstances of the case and in law, the Learned CIT(A) erred in confirming the action of AO that Section 54 of the Income Tax Act, 1961 provides for deduction for re-investment in only one residential property and restricted exemption u/s 54 to Rs. 56,00,000/- only to the extent of cost of one flat instead of Rs. 2,24,00,000/- total consolidated cost of four adjoining flats on the same floor in the same building which one house. On the facts and under the circumstances of the case and in law, the Learned CIT(A) erred in confirming the action of AO in disallowing expenses of Rs. 21,00,000/- and Rs. 12,00,000/- being transfer expenses paid to society incurred by the appellan....

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....d to the assessee for want of requisite explanation. 2.4 The Ld. AO opined that deduction u/s 54 would be restricted to investment made in one flat only as against 4 flats as claimed by the assessee. The assessee, vide reply dated 30/10/2014, inter-alia, submitted that the 4 flats were adjoining flats and the amendment made in Section 54(1) was applicable only from AY 2015-16 and therefore, the full deduction was allowable. The attention was drawn to the fact that all the flats were purchased vide single application and allotment letter and single combined payment was made to the builders and therefore. The intention was to use all the flats as single residential house / unit. Reliance was placed on certain judicial pronouncements to ....

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....e, single cheque of Rs. 224 Lacs has been issued as evident from Receipt No. 00105 dated 20/10/2011 issued by Saimar Realty Private Limited. The construction layout plan reveals that all the four flats were adjoining flats and were to be combined as a single unit. The revenue is unable to controvert all these documentary evidences. 4.2 So far as the statutory provisions are concerned, we find that in terms of Section 54 as applicable to impugned AY, deduction was allowable to the assessee against purchase / construction of 'a' residential house. The amendment to Section 54 substituting the word 'a' with 'one' has been brought in the statute only with effect from 01/04/2015 and therefore, the amendment was not applicable for the i....