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2010 (10) TMI 351 - AT - Income TaxExemption u/s 54 - assessee has shown long term capital gain of Rs. 106,66,162 on sale of residential flats on which exemption u/s 54 amounting to Rs. 70,30,600/was claimed being investment in four new residential flats to be used as one single unit - The assessee was asked to show cause as to why the excess exemption u/s 54 claimed in respect of additional three houses should not be disallowed and added to his total income as “Income From Capital Gain” - Held that: - exemption u/s 54F of the Act would be allowable in respect of one residential unit only. In the case where more than one units are purchased which are adjacent to each other and are converted into one unit for the purposes of residential unit by having common passage, common kitchen and intended to be used as a single house for residence of the family, then, the investment in such more than one contiguous unit is eligible for exemption. In the case in hand, there is no ambiguity or doubt that these four flats were full-fledged residential unit having separate kitchen and separate entrance and located at different floor. Therefore these four flats cannot be said to be contiguous units converted into one residential house. - Benefit of exempted u/s 54 not available to assessee.
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