TaxTMI 
TaxTMI 
2020 (8) TMI 355
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.... 4. The relevant facts related to these transactions are: (1) The land was purchased by the father of the appellant in 1965 - 66 per Rs. 3800/-and subsequently inherited by the appellant. (2) The land was sold on 02.12.11 to one Mr. Anuj Kumar for a sale consideration of Rs. 78.75 lakh as per the sale deed. (3) The minimum value as per the circle rate was Rs. 1,18,55,480/- (and the stamp duty of Rs. 7.2 lakh thereon was paid by the buyer), taken at Rs. 1.20 crore. (4) The appellant thereafter entered into an agreement for purchase of a flat with the builder M/s Ansal housing and construction, and the booking amount was paid on 20/1/2012. (5) The total consideration for purchase of this flat was Rs. 65,41,210/- (6) The appellant made payments from time to time and deposited Rs. 890760/- in Capital Gains Account Scheme for balance payment. (7) The appellant also is claimed to have constructed new residential house over and above the existing residential property of the appellant at JungPura extension, spending in the process Rs. 24.2 lakh for additional construction of area 40 m2. In this backdrop, the appellant has made the comp....
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....original asset, is chargeable under the head "Income from house property".]" 9. The ld. CIT (A) observed that the has made a claim u/s 54F for investment of residential property at Ansal for Rs. 64,28,424/- and also claimed deduction on account of construction of residential house for Rs. 24,20,000/-. The ld. CIT (A), invoked the Clause (b) mentioned above and denied the deduction completely. The ld. AR in relation to the sub-clause (iii) of the Clause (a) submitted that the assessee has added two rooms in his already existing residential property and the sub-clause (iii) is not applicable and hence the provision (a) to Section 54F is not applicable. 10. We find that the decision of the ld. CIT (A) denying the entire claim is not in consonance with the provisions of the Act. The assessee has to be allowed for at least one of the investment made. 11. Having said so, the issue of allowability of the deduction on the investment made in two different properties out of the capital gains is being examined. A. Claim U/s 54F for Investment for residential property for Rs. 64,28,424/- or B. Claim for Construction of residential house of Rs. 24,20,000/- or both. ....
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....ection 54/ 54F. It is neither expressly nor by necessary implication prohibited." 13. We have also examined the case of CIT Vs Syed Ali Adil 260 CTR 219 wherein it was held that expression "a residential house" in section. 54 (1) has to be understood in the sense that the building should be of residential nature and "a" should not be understood to indicate a singular number. Where an assessee had purchased two residential flats, he is entitle, exemption under section 54 in respect of capital gains on sale of its property on purchase both the flats, despite the fact that the flats, despite the fact that the flats were purchased by separate sale deeds. Deduction is allowable even if the flats are on different floors. On facts, as the two flats purchased by the assessee are adjacent to one another and have a common me point, the deduction cannot be denied. 14. In the case of Anand Basappa 91 ITD 53, the Co-ordinate Bench of ITAT at Bangalore observed as to whether 'a residential house' should be treated as 'one residential house' or whether 'more than one residential house' can be considered eligible for deduction under Section 54. The Tribunal observed a....
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....9; out of such proceeds, still the assessee is eligible for deduction under Section 54. This means that there is no bar in acquiring more than one residential house to claim deduction under Section 54 unlike Section 54F. If this be the case, then it can be held that if the assessee acquires even two adjacent houses to meet his needs out of the proceeds of only one residential house, he cannot be denied exemption under Section 54. What is to be examined is whether the conditions of Section 54 are satisfied at the time of investment in each property. In the present case, it can be seen that both the properties were acquired simultaneously i.e. within the period specified in Section 54. To put it in different words, when the assessee sold the original property and earned capital gain out of same, what is to be seen is whether the sale proceeds of original asset has been utilised in acquiring another house property. We find that both the apartments were acquired simultaneously and hence the conditions for acquiring 'a residential house' within the time specified are complied with. The assessee is therefore eligible for deduction under Section 54 in respect of both the apartment....