TaxTMI 
TaxTMI 
2019 (4) TMI 1016
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....rein by way of the fol lowing grounds: - (1) That the ld. CIT(Appeals) has fai led to appreciate that the assessee has fai led to comply the provision of section 54F of the Income Tax Act, 1961. Hence, CIT(A) has erred in al lowing exemption u/s 54F of the Act to the assessee. (2) Whether, the phrase "a residential house" used in sub-sect ion (1) of section 54F means one resident ial house or more than one residential house independently located in the same bui lding? (3) Whether for purchase of two residential house is al lowable to claim exemption u/s 54F. (4) That the ld. CIT(A) has not given any counterargument against the f indings of the AO made in the assessment order. 2. The assessee in the present case is an individual....
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....the purchase of the f lat beyond of period of two years was not relevant. I t was also submitted by the assessee that the two units of f lats purchased by her on the same f loor of the bui lding were adjacent to each other and the same were capable of being used as one residence. These submissions made by the assessee were not found acceptable by the Assessing Of f icer. He held that the assessee having not purchased the new f lat within the period of two years as prescribed in section 54F was not ent itled for exemption under section 54F. He further held by relying on the decision of Special Bench of ITAT, Mumbai in the case of Sushi la M. Jhaveri [107 ITD 327] that the two f lats purchased by the assessee having separate entrance and in c....
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....l lant has made investment , was not complete even af ter expiry of st ipulated t ime and the appel lant could not produce regi stered sale deed for the same during assessment . The Ld. A/R of the appel lant made submi ssion that the condi t ion precedent for claiming benef i t u/s 54F i s that the capi tal gain should be parted by the asses see and invested ei ther in purchas ing or construct ion of a resident ial house and merely because the sale deed not been executed or the construct ion i s not completed does not disent i t le the assessee to claim rel ief u/s 54F of the Act . The Ld. A/R also made ci tat ion of a number of judicial pronouncement s in support of hi s submission. In CIT v. Sardarmal Kothari (2008) 302 ITR 286 (Mad) , i ....
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....xempt ion under section 54F on account of long- term capital gain. He submitted that even the f lats claimed to be purchased by the assessee were two di f ferent f lats having di f ferent access and since the same were incapable of joining together, i t was not a case of purchase of a new residential house by the assessee as required by the provisions of section 54F. He contended that these adverse f indings recorded by the Assessing Of f icer whi le disal lowing the claim of the assessee for exemption under section 54F, however, were not properly appreciated by the ld. CIT(Appeals) in the proper perspective and the claim of the assessee for exemption under section 54F was al lowed by him merely going by the submissions made on behal f of t....
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....a Pradesh High Court in the case of CIT -vs. - Syed Al i Adi l [352 ITR 418], wherein it was held that the expression "a resident ial house" used in section 54 necessari ly has to include bui ldings or land appurtenant thereto and it cannot be construed as one residential house. I t was also held that section 54 only requires that property purchased by the assessee out of sale proceeds should be of residential nature and the fact that residential house consisted of several independent uni ts could not be an impediment for granting rel ief under the said section, even i f such independent units were situated side by side on di f ferent f loors and were purchased under separate sale deeds. 6. We have considered the rival submissions and also....
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....sidential house within the stipulated period and there is no requirement that the construction of new house should be completed within that period and the assessee gets possession of the said f lat. 7. Secondly the reason given by the Assessing Of f icer for denying the claim of the assessee for benef it under section 54F was that two separate f lats were purchased by the assessee having separate entrance and the same being incapable of joining together could not be treated as one resident ial house for claiming exemption under section 54F. In support of this conclusion, the Assessing Of f icer rel ied on the decision of Special Bench of ITAT, Mumbai in the case of Sushi la M. Jhaveri (supra). As right ly contended by the ld. Counsel for t....