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2015 (11) TMI 1443 - ITAT HYDERABAD

2015 (11) TMI 1443 - ITAT HYDERABAD - TMI - Entitlement to deduction under S.54F - whether ‘a residential house’ stated in S.54/S.54F for allowing deduction means a single residential house or one consisting of multiple units - CIT(A) allowed claim - Held that:- Merely because a residential house consists of several independent residential units, deduction under S.54/S.54F could not disallowed. Respectfully following the decision of the Hon'ble jurisdictional High Court in the case of CIT V/s. S .....

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i Naidu For the Respondent : Shri K. A. Saiprasad ORDER Per Bench These seven appeals are by the Revenue against the separate orders of the Commissioner of Income-tax(Appeals) 6, Hyderabad dated 29.7.2015 in this group of seven assessees being co-sharers. The issue involved in these appeals is with reference to the claim of deduction under S.54F on the units allotted to the respective assessees, consequent to the development agreement. Common issues are involved and common grounds raised. Hence, .....

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ment proceedings, the following facts were admitted by the assessee- 1. The assessee and his 7 brothers had together acquired the property; 2. Each of the co-owners was entitled to receive five flats out of the total 40 flats to be received by the co-owners in lieu of surrendering 60% of the right/title interest in the land; 3. The capital gains arising from transaction were chargeable to tax in assessment year 2007-08; 4. The full value of consideration attributable to 60% of the plot area was .....

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, against which Revenue is in appeal before us. 4. Before the CIT(A), assessee claimed that he was entitled for deduction under S.54F on all the five flats received in lieu of his share in the area of the plot agreed to be transferred by him. It was submitted that exemption was available in respect of the gross quantum of investment in residential house property, irrespective of the number of units therein. In support of this contention, reliance was placed on the following decisions- (a) CIT V/ .....

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yderabad (ITA No.67/Hyd/2013 order dated 2.4.2014) (k) AP High Court in 169 ITR 564 The learned CIT(A) in her brief order allowed the contentions of the assessee stating as under- 05.2.2. The submission has been considered . In view of the ratio of the decisions cited above, it has to be held that entire investment in the new residential house property, irrespective of the number of units thereof, is eligible for computation of exemption u/s. 54F. The Assessing Officer is directed to recompute t .....

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van Arya V/s. CIT (ITA No. 613 of 2010 dated 13-12-2010, reported in 2011-TIOL-01-HC). He also relied on the decisions of the coordinate benches in the case of ACIT V/s. Shri D.Sudhakar Ram (2012) 49- SOT 90(Mum) and Bertha T. Almeida V/s. ITO (2012) Tax Pub. (DT) 831 (Mum-Trib). 6. The learned counsel for the assessee in reply, however, placed before us a paper book, bringing on record before us the letters and the declarations filed before the Assessing Officer to submit that the assessee has .....

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e also relied on the judgment of the Hon'ble Delhi High Court in the case of CIT V/s. Gita Duggal (357 ITR 153), in which the Hon'ble Supreme Court has not a admitted further appeal by the Revenue, as reported in 228 Taxman 62(SC). On this proposition, the learned counsel also relied on the jurisdictional High Court judgment in the case of CIT V/s. Syed Ali Adil (33 taxmann.com.212)(AP), and Vittal Krishna Conjeevaram, Secunderabad (ITTA No.588 of 2013 dated 6.1.2013). Learned counsel al .....

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g Officer restricted the deduction to one such unit/flat, whereas the assessee claimed deduction for all the flats received in terms of development agreement. Therefore, the question to be decided is whether a residential house would include multiple flats/residential units as well. This issue was decided by the Hon'ble High Court of Maras in its decision in CIT V/s. Smt. V.R.Karpagam (supra), wherein the amendment brought to S.54 and 54F was also considered and held as under- 8. We have hea .....

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tion (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section .....

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me proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where- (a) the assessee, (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset ; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset ; or (iii) constructs any residential .....

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.04.2015. The said amendment reads as follows: "32a. Words constructed, one residential house in India shall be substituted for constructed, a residential house by the Finance (No.2) Act, 2014, with effect from 01.04.2015." 10. The above-said amendment to Section 54F of the Income Tax Act, which will come into effect only from 01.04.2015, makes it very clear that the benefit of Section 54F of the Income Tax Act will be applicable to constructed, one residential house in India and that .....

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g Infrastructure Ltd., is that the assessee will receive 43.75% of the built-up area after development, which is construed as one block, which may be one or more flats. In that view of the matter what was before the Assessing Officer is only equivalent of 56.25% of land transferred, equivalent to 43.75% of built up area received by the assessee. This built up area got translated into five flats. Hence, we are of the opinion that the transaction in this case was not with regard to the number of f .....

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e said provision is available to the assessee." 12. In the decision reported in (2012) 75 DTR 56 (Dr.(Smt.) P.K.Vasanthi Rangarajan, this Court, while dealing with the benefit of exemption under Section 54F, followed the above-said decision of this Court in T.C.(A)No.656 of 2005 and granted the benefit to the assessee under Section 54F of the Income Tax Act on the investment made in the four flats. 13. Hence, the above-said decisions of this Court make it clear that the property should be a .....

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