TaxTMI 
TaxTMI 
2018 (9) TMI 2158
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....red in confirming the action of the Assessing Officer in not allowing deduction u/s.54/54F of the Income Tax Act, 1961 on account of Long Term Gains on sale of property and thereby making an addition of Rs.77,21,957/-. The order being arbitrary, erroneous and unlawful must be quashed with directions for appropriate relief." 2. The facts in brief qua the issue are that, assessee is an individual and has claimed Long Term Capital Gain of Rs.77,21,957/- as exempt u/s.54 of the Act. The assessee had sold one residential plot situated at Jaipur for a consideration of Rs.77,75,000/-, against which the assessee has claimed cost of acquisition at Rs.53,043/-, resulting into Long Term Capital Gain of Rs.77,21,957/-. The Assessing Officer noted tha....
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....rchaser; * the assessee has not furnished any evidence to prove that any construction activity was carried out on the said plot; * the only expenditure incurred in FY 2001-02 is in relation to the conversion of the property in free-hold; * the assessee acquired two flats vide two different allotment letters from M/s. Prateek Buildtech (India) Pvt. Ltd.; * the builder in compliance to notice issued u/s.133(6) has affirmed that the two flats cannot be converted into one unit, as claimed by the assessee in reply dated 26.10.2015 reproduced above. 2.1 Income Tax Inspector was also deputed by the Assessing Officer to make inquiry with regard to two properties purchased, who in his report submitted that both the flats are located in....
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....er after detailed reasoning. Sum and substance of his reason can be summarized in the following manner:- * Firstly, the benefit of Section 54F with respect to one house property is though applicable w.e.f. 1st April, 2015 (Assessment Year 2015-16), however, he held that such an amendment is clarificatory in nature and will apply retrospectively, because the intention of the legislature was to provide benefit of one residential house in India and amendment has been brought only with the intention to clarify the controversy going on in the judicial forum. While coming to this conclusion, he has referred to various judgments of Hon'ble Supreme Court including that of the Special Bench judgment in the case of ITO vs. Sushila M. Jhaveri, r....
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....e construction of the tower was not completed within the period of 3 years. Ld. CIT (A) has denied the exemption u/s.54F even with respect to one flat also on the ground that construction of the tower has not been completed within the prescribed period of three years and assessee has not purchased one residential house but two, therefore, the entire exemption cannot be given. In the detailed order of the ld. CIT (A), he has observed that earlier the phrase use in Section 54F was that assessee has purchased or has constructed "a residential house" and the amendment brought in the statute amending 'a residential house' to "one residential house" has been brought w.e.f. 1st April, 2014, and therefore, such an amendment being clarificatory in n....
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.... to hold that two different residential flats which are not adjacent and separated with space and on two different storeys so as to constitute "a residential house". Under these facts and circumstances, exemption if at all which can be claimed by the assessee in terms of Section 54F would be only with respect to one of the flat only. This is also duly supported by the judgment of Hon'ble Punjab & Haryana High Court in the case of Pavan Arya vs. CIT, reported in (2011) 11 taxmann.com 312. 5. Now coming to the issue, whether exemption can be denied on the ground that tower on which the flats were purchased were not found to be completed within the period of three years. On the perusal of the impugned assessment order, it is seen that ITI....