TMI Blog2018 (6) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... mbai (hereinafter called the CIT(A) ), for assessment year 2012-13 , the appellate proceedings had arisen before learned CIT(A) from assessment order dated 27-03-2015 passed by learned Assessing Officer (hereinafter called the AO ) u/s 143(3) of the Income-tax Act, 1961 (hereinafter called the Act ) for AY 2012-13. 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the tribunal ) read as under:- 1. The Ld. CIT (Appeals) erred in restricting exemption u/s 54F of the Act in respect of the sale of second flat against the investment in new flat to ₹ 58,83,891/- as against ₹ 94,34,978/- claimed u/s 54 of the Act on the facts and circumstances of the case. 1.1 In doing so the Ld. CIT (Appeals) did not consider the submissions of the appellant in their proper perspective. Your appellant, submits that due relief be allowed. Your appellant craves leave to add to, alter, delete or amend the grounds of appeal at or before the date of hearing. 3. The brief facts are that the assessee sold property bearing flat no. 502, 5th floor, C/1, Vastu Park, Malad (W), Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are as under:- (i) Whether exemption u/s 54 can be claimed for investment in two properties ? (ii) Whether the assessee is entitled to invest in one property as against sale of two properties if the condition of Section 54 for time limit is fulfilled ? With reference to the first issue , the assessee claimed benefit for having invested in two residential flats located at altogether different locations . The assessee relied upon following decisions and amendment to Section 54 of the Act by Finance Act, 2014 which restricted investment in one residential house which came into effect from 01-04-2015 and contended that for impugned AY the exemption cannot be restricted to one residential house. The assessee relied upon following decisions: (a) Hon ble Karnataka High Court decision in the case of CIT v. Smt. Rukminiamma (2011) 196 Taxman 87(Kar. HC). (b) Hon ble Madras High Court in the case of Dr.(Smt.) P K Vasanthi Rangarajan v. CIT (2012) 23 taxmann.com 299(Mad. HC). The learned CIT(A) relied upon decision of Hon ble Bombay High Court in the case of CIT v. Devdas Naik ,366 ITR 12 wherein decision of Special Bench of Mumbai Tribunal in the case of ITO v. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquired flats were adjacent flats in the same society having one entrance and one kitchen and converted into one duplex flat. He drew our attention to the decision of the Hon ble Karnataka High Court in the case of CIT v. Khoobchand M. Makhija (2014) 223 Taxmann 189 (Kar)(Mag.) and submitted that in view of decision of Hon ble Karnataka High Court , the investment in two different flats at separate locations as were made by the assessee should be allowed. Further our attention was drawn to the decision of Mumbai-tribunal in the case of DCIT v. Ranjit Vithaldas (2012) 23 Taxmann.com 226(Mum). The Ld. DR on the other hand submitted that the decision of the Special Bench of the Mumbai-tribunal in Sushila M Jhaveri(supra) has categorically held that investment can be made in one residential house property and deduction should be allowed restricted to one residential house property provided other conditions are fulfilled. The learned DR relied upon the decision in the case of Sushila M. Jhaveri(supra) which has been upheld by Hon ble Bombay High Court. The Ld. Counsel for the assessee in rejoinder submitted that amendment has been made in the 1961 Act by Finance Act, 2014 w.e.f. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification brought on record by the assessee for making investments in two different flats located at different locations. The case laws relied upon by the assessee in the case of Raman Kumar Suri(supra) and also in the case of Devdas Nayak(supra) , the residential flats being new assets were interconnected flats and hence under those circumstances, were treated as one single unit. Further in the case of Hon ble Karnataka High Court decision in the case of Smt K G Rukminiamma(supra) , the flats were located in the same building while in the instant case before us these two flats are at separate locations. Further in the case of Hon ble Karnataka High Court decision in the case of Khoobchand M. Makhija(supra), there were a finding of fact that these two flats were required by the taxpayer for settling his two sons and hence instead of buying one big house to accommodate both the sons, the tax-payer bought two different small flats at separate locations. The relevant extract of the decision of Hon ble Karnataka High Court is as under:- 5..... The assessee had two sons, who were living with the assessee on the date of selling of that property. As both the sons were grown up, marr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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