TaxTMI 
TaxTMI 
TaxTMI 
2020 (12) TMI 1364
X X X X Extracts X X X X
X X X X Extracts X X X X
....CIT (Appeals) failed to appreciate that the misconstruction of section 54F of the Act would vitiate the decision rendered in para 4.3 of the impugned order and ought to have appreciated that the reinvestment in two units should not be considered independent of each other, thereby vitiating the decision rendered in para 4.3 of the impugned order. 4. The CIT (Appeals) failed to appreciate that the misreading of the decision of the Madras High Court would vitiate the decision rendered in para 4.3 of the impugned order and ought to have appreciated that the reinvestment in multiple units would be eligible for tax exemption u/s 54F of the Act. 5. The CIT (Appeals) erred in sustaining the depreciation to the extent of Rs.64,350/- in the computation of taxable total income without assigning proper reasons and justification. 6. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 7. The Appellant craves leave to file additional grounds/arguments at the time of hearing." 3. Brief facts of the case are that the assessee i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... V.R. Karpagam reported in (2014) 50 taxmann.com and the decision of ITAT., Chennai in the case of ITO Vs .P.A. Sarala reported in (2015) 58 taxmann.com 290 (Chennai). The learned CIT(A), after considering the relevant submissions of the assessee and also by taking note of the judgement of Hon'ble Madras High Court in the case of CIT vs. V.R.Karpagam (supra) observed that relevance of ratio laid down by the Hon'ble Madras High Court in the above said case by the assessee is misplaced on facts and in circumstances, because the Hon'ble High Court has rendered the judgement in the context of joint development agreement where the assessee in pursuance to transfer of land gets multiple units of residential apartments in the project and at the same time. The Hon'ble Court under those circumstances held that a residential house referred to in section 54F means multiple units of a residential house constructed on a project. In this case, facts are altogether different, where the assessee has purchased two distinct properties on different dates and hence, investments in two distinct properties cannot be construed as one residential unit or plot, which is eligible for exemption u/s. 54F of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see'. It is of relevance to note that Hon'ble Madras High Court in this case construed the property as one block, which may be one or more flats in the same project, and it was only in that context that exemption under section 54F was allowed to mulltiple units. Similarly, in the case of PA Sarala (supra),the Issue before the Id. Chennai Tribunal was the assesee receiving eight flats I residential units from the builder. The Id. Tribunal followed the ratio of V.R.Karpagam case (supra). The facts in the case of appellant are clearly distinct. The investment is not in multiple units of the same project and at the same time,but in two distinct properties on different dates. Hence, I am of he view that the ratio of Karpagam case (supra) cannot be applied to the fact of the appellant's case. Investments in two distinct properties cannot be construed to be one residential unit or block, and hence I am in agreement with the view of the Assessing Officer that the appellant is not eligible for exemption under Section 54F of the Act, because he has purchased another residential house, other than the new asset within a period of one year after the date of the transfer of the original asset....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e date of transfer purchased or has within the period of three years after the date of transfer constructed a residential house, then capital gain shall be exempted from tax, provided the assessee shall not own more than one residential house other than the new asset on the date of transfer of the original asset or purchases any residential house, other than the new asset within a period of one year after the date of transfer of original asset. In this case, the assessee has fulfilled the conditions prescribed u/s.54F of the Act except clause (ii) of the proviso i.e., purchases any residential house other than the new asset within the period of one year after the date of transfer of original asset. As per the facts borne out from records indicate that the assessee has purchased a residential house property on 23.01.2013 for a total consideration of Rs.83,00,000/-. The assessee has also purchased another residential property on 12.04.2013 for a total consideration of Rs.69,00,000/-. Thus, as per the provisions of the section 54F of the Act, the assessee has violated clause (ii) provided in sub-section (a) of section 54F of the Act, where it is stated that if the assessee purchases a....