TMI Blog2015 (2) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... operty and the exemption u/s.54 allowable in case of investment in one residential flat only. In this regard, we found that the details of allocation of area of new residential property between co-owners is already on record of the AO as well as in the valuation report. Furthermore, the co-owner will get the area according to their ratio in the new residential property. Since flat no.301 & 302 are situated in the same floor and adjacent to each other and will be treated as one single residential unit for the purpose of claiming exemption u/s.54. Thus we do not find any merit in the action of the AO for decline of claim of deduction u/s.54 in respect of residential flats allotted by builder in consideration of sale of old house. - Decided in favour of assessee - ITA No.8797/Mum/2010. ITA No.8798/Mum/2010 - - - Dated:- 27-2-2015 - SHRI R.C.SHARMA, AM SHRI VIVEK VARMA, JM Appellant by : Shri K.Gopal Jitendra Singh Respondent by : Shri Pawan Kumar Beerla ORDER PER R.C.SHARMA (A.M.) : These two appeals have been filed by two assessees against the order of CIT(A), for the assessment year 2007-08, in the matter of order passed u/s.143(3) of the I.T.Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. In response, the A.R. of the appellant vide letter dated 23.10.2009 submitted as under :- The new flat and car parking is receivable in lieu of old residential place and old car parking place. Hence there is no additional amenities received from seller hence there should not be addition on account of market value of the said flat and amenities added to total consideration for sale of property during the year. Valuation done by Odilio Fernandes on 31.7.2006 as on 1.4.1981 at ₹ 35 lacs. Your honour may refer to departmental valuer for further verification. In case your honour is not satisfied without valuation report. 4. The aforesaid submission of the assessee was considered by the A.O. According to the A.O. the new flat and car parking are nothing but additional consideration. If the said new flat is receivable for old flat and old car parking place, how the assessee has claimed indexation on the value of the said properties as on 1.4.1981 against the consideration. If the new flat was to be given in lieu of the old area occupied by the assessee in the old structure, then the value of the said old structure should have been reduced from the value of the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.54, the assessee should have made the investment in a new residence either by way of purchase or construction of the same. In the instant case, as per AO, the assessee has not fulfilled this condition which is the requirement of the Act. In view of the above, the A.O. held that the assessee is not eligible for exemption u/s.54 of the l.T.Act and accordingly denied the same to the assessee. 7. By the impugned order, the CIT(A) confirmed the disallowance against which the assessees are in further appeals before us. 8. We have considered rival contentions, carefully gone through the orders of the authorities below and found from the record that during the course of appellate proceedings the assessee has submitted as under :- 1. During the year the assessee with her co owner i.e. her brother Mr.Peter Savio Pereira sold the ancestral residential property for consideration of ₹ 3,05,00,00/- and 3 flats admeesurinq 3150 sq. ft. with one open and two stilt parking in kind. 2. In the assessment order. the A.O. has valued the consideration received in kind for ₹ 3,32,70,540/- and additions were made in the assessment order under the head long term capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is plain the symmetry is simple, the language is plain. Thus the Hon. Supreme Court has defined the term 'purchase' as buying for a price / equivalent of price by payment in kind or adjustment towards an old debt or for other monetary consideration. The word 'purchase' in section 54 has to be given its common and wider meaning. It should include buying or adjustment towards old debt or for other monetary consideration. 6. In the present' case before your honour, the assessee has purchased/constructed the new residential property and paid the consideration equivalent of price by payment in kind. Therefore the assessee has purchased the residential property and is entitled for exemption u/s.54 of the I T.Act 1961. 9. It is clear from the above that residential house was given to the assessee in consideration of the sale of old house. The sale consideration was partly received in cash and partly in the form of new flats to be constructed on the plot of old house sold by assessee. The new flats agreed to be given to assessee amounts to investment by assessee in residential house. Therefore, the AO was not justified in adding back the additional consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement of the section should be taken to have been satisfied. There is nothing in these sections which require the residential house to be constructed in a particular manner. The only requirement is that it should be for the residential use and not for commercial use. If there is nothing in the section which requires that the residential house should be built in a particular manner, it seems that the IT authorities cannot insist upon that requirement. A person may construct a house according to his plans and requirements. Most of the houses are constructed according to the needs and requirements and even compulsions. For instance, a person may construct a residential house in such a manner that he may use the ground floor for his own residence and let out the first floor having an independent entry so that his income is augmented. It is quite common to find such arrangements, particularly post-retirement. One may build a house consisting of four bedrooms (all in the same or different floors) in such a manner that an independent residential unit consisting of two or three bedrooms may be carved out with an independent entrance so that it can be let out. He may even arrange for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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