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2022 (7) TMI 632 - AT - Income TaxDenial of deduction u/s 54F - allegation of investment in more than one house by assessee - as per ao assessee has made three independent floors and the stilt parking has three car parking - HELD THAT:- As the factual matrix would reveal that the assessee has made investment in one residential building which consist of three floors. For all the three floors, the land tax is paid as a single unit. All the three floors have the same door number - AO has denied the claim merely on the ground that the assessee has made three independent floors and the stilt parking has three car parking. Further, the assessee has taken 6 electricity connections. However, in the light of the fact that units have been constructed on a single piece of land, these factors would not be of much relevance to determine the eligibility to claim deduction u/s 54F. The ground floor has been occupied by the assessee himself whereas each of the other two floors are occupied by two tenants each. The same is one of the factors as considered by AO to deny the deduction. The conclusion of Ld. AO would necessarily mean that the assessee was debarred from making separate units on a single piece of land and secondly, it raises a presumption that complete building should have been used by the assessee for its own residential purposes as a single unit. However, the same is not the intention of the legislature. The only requirement is that the assessee should make investment in one residential house. The conclusion of Ld. AO overlooks the fact that the multi-storied building was subjected to one property tax assessment and pertinently, it has one door number only. In our considered opinion, there is nothing in the statutory provisions which debar the assessee to make separate independent livable units on a single piece of land or obtain more than one electricity connection to claim the deduction. There is also not a condition that the property should be, at all times, used exclusively by the owner himself for his own residential purposes and the same could not be let out. As long as the property is one residential house, the fragmentation of the same into different livable units and to let them in part would not make the assessee ineligible to claim the deduction. Accordingly, the lower authorities, in our considered opinion, has misconstrued the statutory provisions. We would hold that the assessee is eligible to claim the deduction on investment of Rs.249.98 Lacs which shall proportionately stand reduced to Rs.244.30 Lacs as held by Ld. AO in para-14 of assessment order in view of the fact that full sale consideration was not invested in the new house. As per the provisions, the assessee is eligible to claim proportionate deduction only. We order so. AO is directed to re-compute the assessee’s income. - Decided partly in favour of assessee.
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