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2023 (11) TMI 741 - AT - Income TaxLTCG - Deduction u/s 54 on investment made in five house properties - partial deduction allowed as two flats purchased on the same floor cannot be considered as one unit as another flat is located between these two flats - investment in multiple houses - scope of amendment - HELD THAT:- In this case, the assessee had entered into an agreement with the builder and as per the development agreement, the assessee (land owner) parted from land and she was to receive 43.75 per cent of built up area, which was translated to 5 flats. The Hon’ble High Court in Smt. V.R. Karpagam [2014 (8) TMI 899 - MADRAS HIGH COURT] held that the said five flats in the same building can be construed as a single unit and therefore, exemption u/s 54F can be allowed in respect of these multiple units. Amendment to section 54/54F whereby the words “a residential house” has been replaced with the words ‘one residential house in India’ is applicable with effect from 01.04.2015 and prior to the amendment, the earlier legal position will continue to hold. It is also inferred that post amendment, i.e. after 01.04.2015, the exemption u/s 54 will be available only in respect of one residential house in India and not in respect of multiple houses. Amendment made available on the statute, vide the Finance (No. 2) Act, 2014 w.e.f. 01.04.2015 pursuant whereto the term “a residential house” had been substituted by “one residential house in India”, rather supports the fact that the restriction of making the investment in only one residential house had been made available on the statute only with effect from A.Y. 2015-16, and as such cannot be extended to the years prior to that. We find that our aforesaid view is fortified by the judgment of Hon’ble High Court of Karnataka in the case of CIT Vs. Khoobchand M. Makjija [2013 (12) TMI 1525 - KARNATAKA HIGH COURT] Since the issue pertains to assessment year 2013-14 i.e. before the amendment in the statute the appeal of the assessee is hereby allowed.
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