Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2007 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (4) TMI 289 - AT - Income TaxComputation of Capital gain - investment made in two independent residential houses - Whether, the phrase "a residential house" used in of sections 54(1) and 54F means one residential house or more than one residential house independently located in the same building/compound/city? - HELD THAT:- If the investment is made in two independent residential houses, even located in the same complex, then, in our opinion, exemption cannot be allowed for investment in both the houses. However, the choice would be with assessee to avail exemption in respect of anyone house as held in the case of K.C. Kaushik[1990 (4) TMI 38 - BOMBAY HIGH COURT]. The view taken by us in this para is also justified by the decision in the case of B.B. Sarkar v. CIT[1981 (5) TMI 21 - CALCUTTA HIGH COURT], wherein purchase of ground floor of a house and thereafter construction of first floor was held to be an investment in one house only. "If a floor is constructed to the new house or if it is renovated it remains a house and this will not be two houses." Thus, it is held that exemption under sections 54 and 54F of the Act would be allowable in respect of one residential house only. If the assessee has purchased more than one residential house, then the choice would be with assessee to avail the exemption in respect of either of the houses provided the other conditions are fulfilled. However, where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc., then, it would be a case of investment in one residential house and consequently, the assessee would be entitled to exemption. Hence, we find that investment was made in two flats located at different localities in Mumbai. Accordingly, the assessee was entitled to exemption in respect of investment in one house only of her choice. The Assessing Officer has already allowed exemption in respect of house which permitted higher deduction. Therefore, on the basis of opinion expressed by us, we reverse the order of the learned CIT(A) on this issue and restore the order of Assessing Officer. Disallowance on brokerage payment - HELD THAT:- We don't find any infirmity in the order of the learned CIT (A). The Assessing Officer has not disputed the allow ability of the claim of assessee. The claim had been disallowed on the ground that assessee failed to produce the proof of payment. The learned CIT (A) has allowed the claim after considering the proof of payment. It is also not the case of revenue that provisions of rule 46A had been violated by the learned CIT (A). Thus no interference is called for. In the result, appeal is partly allowed.
|