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2021 (9) TMI 531 - AT - Income TaxRevision u/s 263 by CIT - eligibility of deduction u/s 54F - CIT concluded that the assessee is eligible for deduction under s. 54F of the Act in respect of only one residential unit and two adjoining flats cannot be regarded as one residential house - AO has failed to initiate penalty u/s 271(c) - HELD THAT:- It is the case of the assessee that while two adjoining flats can be regarded as two residential units constructed by the developer, but in effect, constitutes only one residential 'house' of the assessee. The view has been consistently taken in large number of judicial precedents and hence, the action of the AO is consistent with the plausible view as held by the Courts and Tribunals. Where the AO has taken a view which is possible and plausible, the action of the AO cannot be regarded as erroneous per se. Consequently, the twin conditions of order being (i) erroneous as well as (ii) prejudicial to the interest of the Revenue, does not co-exist. Hence, the jurisdiction usurped by the PCIT is not sustainable in law. The reliance placed on the amendment carried out by Finance (No. 2) Act, 2014 is grossly misplaced. The interpretation rendered by the co-ordinate benches and the Hon'ble High Courts is on the point as to what constitutes a residential house. A residential house may comprise of several residential units if used and consummated collectively as residential house. The decisions quoted on behalf of the assessee squarely apply to the fact situation. The amendment in Section 54F of the Act has merely curtailed the holding of residential house at the sale of original asset. The interpretation of what constitutes 'residential house' has not been displaced by the amendment per se - no error in the action of the AO - Decided in favour of assessee.
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