TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 1072
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.... deduction from capital gains has been claimed correctly. The AR of the assessee attended and furnish requisite information, before the AO in respect of receipt of the 1/3rd share of the sale consideration from the land sold at Dahisar and investment of the said amount in flats to claim deduction u/s 54F of the Act on capital gains income. However, the AO being not satisfied with reply of the AR for the appellant made addition of Rs. 1,58,53,600/- by rejecting claim of exemption u/s 54F and Rs. 18,71,692/- the expenditure incurred on registration and stamp duty. 3. In appeal the Ld. CIT(A) confirmed the addition by observing that the appellant invested the amount out of sale consideration and claimed capital gain deduction of Rs. 2,68,71,692/- u/s 54F of the Act. The AO found that the assessee had purchased three flats amounting to Rs. 2,50,04,000/-. Thus, the deduction u/s 54F of the Income Tax Act, 1961 on the purchase of three flats amounting to Rs. 2,50,04,000/- as restricted to only one flat i.e. flat no. 105 whose cost was Rs. 91,50,400/- (Highest of the three) and the cost incurred of Rs. 1,58,53,600/- for the purchase of rest two flats were disallowed considering it as the....
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....te and therefore needed a big house so that all can live together. To accommodate such a large family the assessee needed a big flat that was not available in the choice locality and therefore, assessee has to book three flats in one building on the same floor located side by side and that the assessee was running under time constraint to make the investment otherwise he would have altogether lost the deduction. He contended that since all three flats comprising of two flats 1BHK and the third one was2 BHK are located on same floor side by side and can be joined to make a joint living. These flats are small in size and cannot accommodate assessee's family fully and completely because the assessee has a large family, so all such members cannot be accommodated in one flat only. 4.1 The Ld. AR submitted that the builder was instructed to carry out suitable modifications in the flats so much so that flats have a single entrance and are joined inside so that the entire family can live together and enjoy fruits of joint living. He referred to the Delhi High Court in the case of CIT v. Gita Duggal (2013) 357 ITR 153 (Del-HC) [SLP dismissed, SLP (C) 23824 of 2014] has explained the ve....
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....al, should come in the way of considering the building as a residential house. We do not think that the fact that the residential house consists of several independent units can act as an impediment to the allowance of the deduction under section 54/54F. It is neither expressly nor by necessary implication prohibited. He accordingly submitted that the assessee acquired three residential units to be used as a single house as per the needs of his family. He placed reliance on various decisions of higher judicial forums and the relevant citations are as per written synopsis filed on record as follows: 1. The ITAT Ahmedabad Bench, in the case of Mohammad Anif. Sultanali Pradhan v. The DCIT, Circle- 6, Ahmedabad- 380006 (ITA No. 1797/Ahd/2018): 2020 Tax Pub(DT) 1477 (Ahd-Trib) on similar facts considering post amendment provisions has held as under: "7. We have heard the rival contentions of both the parties and perused the materials available on records. There is no dispute to the facts of the case as discussed above. Therefore, we are not inclined to repeat the same for the sake of brevity. The issue in the present case relates whether the assessee is eligible for exemption under ....
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....e courts cannot be just brushed aside on the aspect of defining the one residential unit. In this regard we find support and guidance from the judgment of Hon'ble High Court of Karnataka in the case of CIT v. Shri D. Ananda Basappa reported in (2009) 180 Taxman 4 (Kam-HC): 2009 TaxPub(DT) 0955 (KarnHC) wherein it was held that the contention of the revenue is that the phrase "a" residential house would mean one residential house and it does not appear to the correct understanding. The expression "a" residential house should be understood in a sense that building should be of residential in nature and "a" should not be understood to indicate a singular number. 7.4. In view of the above and after considering the facts in totality, we are of the view that the assessee is entitled for the exemption provided under section 54F of the Act in the present facts of circumstances. Hence, we set aside the finding of the learned Commissioner (Appeals) and direct the assessing officer to delete the addition made by him. Thus, the ground of appeal of the assessee is allowed." 4.5 On the issue of the investment in more than one house/flat, the AR further placed reliance on various judgeme....
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....of the Act and thus, the Ld. CIT(A) has been wrong in relying on these judgements which are distinguishable on the peculiar facts of the present case. 8. The Hon'ble Delhi High Court in the case of "CIT v. Gita Duggal", (2013) 357 ITR 153 (Del-HC) [SLP dismissed, SLP (C) 23824 of 2014] held that the expression "a" residential house should be understood in a sense that building should be of residential in nature and a should not be understood to indicate a singular number. Also, section 54/54F uses the expression "a residential house" and not "a residential unit". Section 54/54F requires the assessee to acquire a "residential house" and so long as the assessee acquires a building, which may be constructed, for the sake of convenience, in such a manner as to consist of several units which can, if the need arises, be conveniently and independently used as an independent residence, the requirement of the Section should be taken to have been satisfied. There is nothing in these sections which require the residential house to be constructed in a particular manner. The only requirement is that it should be for the residential use and not for commercial use. 9. From the above, it is appa....