TMI Blog2012 (7) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... Denial of the benefit claimed u/s 54F - Out of the total capital gain of Rs. 3.40 crores arising from sale of ancestral property, the assessee invested Rs. 2.60-crores for the purchase of 4 flats - AO allowed the exemption only in respect of one flat as cannot be said as adjacent flats - Held that:- The agreement by which the assessee has purchased these flats clearly stipulates that the building in question consisting of duplex houses on top two floors of 9th and 10th floors of the building. The flat number 9A, 9B, 10 A and 10 B are so situated that the flat number 9A and 9B at 9th floor are just below the flat number 10A and 10B at 10th floor. The agreement clearly mentions that one duplex flat was converted from 4 units. Thus, if the requirement of the assessee family is met-out only by enlarging the residential unit by merging of 4 flats originally planed into one unit and that too prior to handing over of the possession of the said residential unit, then the said converted residential unit will be treated as a residential house as stipulated u/s 54F - in favour of assessee. - IT APPEAL NO. 5011 (MUM.) 2010 - - - Dated:- 15-6-2012 - G.E. VEERABHADRAPPA, VIJAY PAL RAO, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 54F, the assessee also claimed exemption under section 54 EC on account of investment in REC bonds. 3.2 The Assessing Officer denied the claim of the assessee on the ground that when the assessee availed the exemption under section 54F, the balance amount can only be invested in the banks or financial institutions as notified in the capital gain account scheme 1988 and not for any investment made under section 54 EC. In support of his decision, the Assessing Officer referred sub. section 4 of section 54F and viewed that the amount can not appropriate to towards purchase of residential house on sale of flat will not be eligible for exemption. 3.3 On appeal the Commissioner of Income Tax (Appeals) allowed the claim of the assessee. 4. Before us the ld DR has submitted that in view of sub section (1) and sub. section (4) of section 54F, the exemption is available only to the extent of amount of capital gain which has been invested in purchase of residential house and the balance amount which is not appropriated by the assessee towards purchase of new asset within the period as prescribed under section 54F and also not deposited by the assessee prior to the due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption on the same amount. For ready reference be quoted section 54 EC as under: "54EC. (1) Where the capital gain arises from the transfer of a long-term capital asset (the capital asset so transferred being hereafter in this section referred to as the original asset) and the assessee has, at any time within a period of six months after the date of such transfer, invested the whole or any part of capital gains in the long-term specified asset, the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- ( a ) if the cost of the long-term specified asset is not less than the capital gain arising from the transfer of the original asset, the whole of such capital gain shall not be charged under section 45; ( b ) if the cost of the long-term specified asset is less than the capital gain arising from the transfer of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of acquisition of the long-term specified asset bears to the whole of the capital gain, shall not be charged under section 45 : [ Provided that the investment made on or after the 1st day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of India constituted under section 3 of the National Highways Authority of India Act, 1988 (68 of 1988); or ( ii ) by the Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956 (1 of 1956), and notified 14 by the Central Government in the Official Gazette for the purposes of this section with such conditions (including the condition for providing a limit on the amount of investment by an assessee in such bond) as it thinks fit:] [Provided that where any bond has been notified before the 1st day of April, 2007, subject to the conditions specified in the notification, by the Central Government in the Official Gazette under the provisions of clause (b) as they stood immediately before their amendment by the Finance Act, 2007, such bond shall be deemed to be a bond notified under this clause;] [(ba) "long-term specified asset" for making any investment under this section on or after the 1st day of April, 2007 means any bond, redeemable after three years and issued on or after the 1st day of April, 2007 by the National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order. Even, the Assessing Officer has not disputed the fact of purchase of 4 flats in question within the stipulated period and also allowed the exemption in respect of one flat instead of 4 flats as claimed by the assessee. Therefore, the ground number 2 (1) to 2 (iii) do not arise from the impugned order and even are contrary to the accepted factual proposition by the Assessing Officer. Accordingly these grounds of the revenue's appeal are rejected as not arising from the orders of the authorities below. 10. Even otherwise, the proposition advanced by the revenue under ground number 2 would amount to seek enhancement of assessment, which is not permissible under the proceedings before this Tribunal as this Tribunal has no jurisdiction to do so. 11. However, irrespective of the grounds raised by the revenue, if we go to the real dispute of disallowance of exemption under section 54F, the question arises for our consideration and adjudication is whether these 4 flats purchased by the assessee can be treated as one residential unit as held by the Special Bench of this Tribunal in case of Ms Sushila M Jhaver ( supra ). 11.1 The agreement by which the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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