TMI Blog2008 (8) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... of a house on the said land. On perusal of the records for the assessment year 1997-98, he found that as against the income under the head Capital gains , the assessee has taken nil income in the computation statement. He observed that the assessee has shown sale proceeds of flat No. 201, Ramakrishna Sadan, Plot No. 63, Sir Pochkanwala Road, Worli, Mumbai-18 jointly held with his three brothers where assessee s share is 25 per cent. He observed that no income from house property was ever shown by the assessee in its return of income for any of the earlier assessment years. He further observed that in the Wealth-tax returns of the assessee of previous years, the cost of one residential house property only has been claimed as fully exempt under section 5(1)( iv ) of the Wealth-tax Act. 3. The Assessing Officer asked the assessee to substantiate the claim for income under the head Capital gains since in assessment year 1997-98 property at Ramkrishna Sadan was sold and in assessment year 1998-99 the property at Vishnu Vila Co-op. Hsg. Soc. Ltd. was sold. According to the Assessing Officer as per provisions of section 54 of the Income-tax Act, deduction has to be allowed in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s approach road, then go to the approach road of the other and only then one can enter the other property. Under these circumstances, it cannot be said that the two properties form a part and parcel of one unit which was used by the assessee as such. Just because of the fact that both the properties are situated at Worli, it cannot be said that the properties constitute one unit which was claimed as exempt under section 5(1)( iv ) of the Wealth-tax Act and under section 23(1)( a ) of the Income-tax Act. The decision relied upon by the assessee do not in any way apply to the facts of the case. If the contention of the assessee is to be accepted, then a person can own any number of properties in Mumbai or for that matter in India which he can claim as one unit. This is neither the letter of the law nor the spirit of the law. Accordingly, no deduction under section 54 is allowed to the assessee for the purposes of this order. Further since it is held that the asset is a business asset the said asset would form a part of Block of assets and would be liable to be taxed as STCG and not LTCG as per provisions of section 50 of the Income-tax Act. The same is considered accordingly." 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head Income from house property from one of the two self-occupied properties. 2. On the facts and circumstances of the case and in law, the learned CIT(A) erred in ignoring the fact that the assessee has sold both the units on two different dates within a gap of one year and concluding that both the flats were part of one and same residential unit. 3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in deciding that two non-contiguous houses can be treated as one house if they have common kitchen and common prayer area. 4. On the facts and circumstances of the case and in law, the learned CIT(A) erred in deciding two separate flats in separate buildings as one residential unit. 5. Without prejudice to the above, on the facts and circumstances of the case and in law, the learned CIT(A) erred in not deciding the vital point that what will be cut off date for calculating the period of investment for allowing deduction under section 54 without appreciating the fact that these flats have been sold within a gap for two years." 10. The learned DR strongly relied on the order of the Assessing Officer. He submitted that both the houses are situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 5(1A) of the Wealth-tax Act. Although the buildings were different, due to the common kitchen and common prayer hall, they should be treated as one unit and the assessee is entitled to exemption under section 54 of the Income-tax Act. 12. We have considered the rival submissions made by both the sides, perused the orders of the Assessing Officer and CIT(A) and the Paper Book filed on behalf of the assessee. There is no dispute to the fact that the assessee along with his other brothers was the owner of two flats situated at Vishnu Vila Co-op. Hsg. Soc. Ltd. and Ramakrishna Sadan. There is also no dispute to the fact that the assessee has sold the flat bearing No. 201 situated at Ramakrishna Sadan and the share of capital gain of the assessee on such transfer was determined at Rs. 42,43,197 by the assessee and the same was claimed as exempt under section 54 of the Act towards investment in house property at Bangalore, a fact brought on record by the Assessing Officer and not controverted by the assessee. In the impugned assessment year, the assessee along with his brothers sold the house property at Vishnu Vila Co-op. Hsg. Soc. Ltd. and the capital gain on sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Appellate Assistant Commissioner and the Tribunal : Held, that the building bearing Municipal door Nos. 92 and 92A and the building situate in a different locality could not be regarded as one house. Therefore, the building bearing Municipal door No. 17/33, Mahatma Gandhi Marg, was not exempt under section 5(1)( iv ). Though a Hindu undivided family is ordinarily joint not only in estate but also in food and worship, the members of the family need not have a common residence. The residential units in the building bearing door Nos. 92 and 92A, Darbhanga Castle, were connected by a common passage and had unit of structure. This building was exempt under section 5(1)( iv ). The fact that different portions of the building were built in different years is not relevant in determining whether the different portions constitute one house. The fact that different portions bear different municipal numbers is relevant but not conclusive." 15. From a reading of the above decision of the Hon ble Allahabad High Court, we find the Hon ble Court has categorically held that two separate buildings situated in two different localities cannot be regarded as one house even if the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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