2020 (9) TMI 1014

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....nd for builders against cost of construction of flats for 40% share of your Appellant. The CIT(A)-2 has held that appellant is not entitled to exemption u/s 54F of the IT Act on the multiple number of flats received by him. 4. The CIT(A)-2 has held that the decision of the Hon'ble High Court of Karnataka in the case of CIT Vs. K.G. Rukminiyamma (2011) 331 ITR 211 is not applicable to the facts of the appellant's case, as in the said case, a residential house was demolished and flats were constructed through joint development agreement. In the case of your appellant, the vacant land was given for joint development for construction of flats and hence the said decision is not applicable in your appellant's case as per CIT(A)-2, which is not ....

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....n 54F of the Act in respect of the 3 flats, which assessee will receive as per the joint development agreement. The CIT(A) held that assessee is liable for long term capital gains in the year of entering into joint development agreement. As regards the claim of deduction u/s 54F of the Act, the contention raised by the assessee was rejected. The relevant finding of the CIT(A) with regard to rejection of claim of deduction u/s 54F of the Act reads as follows: 5.5 As regards the ground taken by the appellant that deduction u/s 54F to be allowed relying on jurisdictional High Court decision is concerned, I have compared the facts of the case with that of Rukamaniamma. In the case of Rukamaniyamma an existing house was demolished and construc....

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....he Act. The order of the CIT(A) was upheld by the Tribunal. On further appeal by the revenue before the Hon'ble High Court, it was contended that assessee was entitled to only exemption/deduction u/s 54 of the Act in respect of one flat and in respect of the remaining 3 flats, assessee was not entitled to the benefit. The Hon'ble High Court rejected the contentions raised by the revenue. The Hon'ble High Court held all the flats were situated in a residential building and the four residential flats constitute "a residential house". Accordingly, the view taken by the Tribunal was confirmed by the Hon'ble High Court. 7. The Bangalore bench of the Tribunal in the case of Sri B.J. Badrinath Vs. ITO in ITA No.2938/Bang/2018 (order dated 16.11.2....