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2022 (1) TMI 485 - AT - Income TaxExemption u/s. 54F denied - amount invested in purchase of two adjacent flats - AO denied the exemption claimed by noting both the said flats are independent and separate executed through different Sale Deeds - Assessee argued that amount invested in purchase of two adjacent flats bearing Flat Nos. 701 and 702 as single unit - HELD THAT:- We find force in the arguments of the AR that the two adjacent flats are being used as single residential unit by opening the common wall between the two living and dining areas. Coming to the decision in the case of Devdas Naik [2014 (7) TMI 173 - BOMBAY HIGH COURT] we note that the Hon’ble High Court was pleased to observe that the decision in the case of Ms. Sushila M. Jhaveri [2007 (4) TMI 289 - ITAT BOMBAY-I] has been confirmed by this Court in the case of CIT Vs. Raman Kumar Suri [2012 (12) TMI 421 - BOMBAY HIGH COURT]. Therefore, as discussed above the Special Bench in the case of Ms. Sushila M. Jhaveri [2007 (4) TMI 289 - ITAT BOMBAY-I] held exemption is allowable u/s. 54F of the Act if the two adjacent or contiguous untis converted into one residential house by having common passage/stair case, common kitchen etc. intended to be used as single house for the residence of the family. In the present case, as we noted above that two adjacent flats converted into one unit by opening a common wall between two living and dining area and being used as single unit for residential purpose of the assessee, therefore, in our opinion, the ratio of Hon’ble High Court of Bombay is applicable to the case on hand. Thus, we hold that the assessee is entitled to claim deduction u/s. 54F of the Act for entire amount which was invested in purchase of two adjacent flats bearing Flat Nos. 701 and 702 as single unit. The order of CIT(A) is not justified and it is set aside. The grounds raised by the assessee are allowed.
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