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2016 (5) TMI 64 - ITAT MUMBAI

2016 (5) TMI 64 - ITAT MUMBAI - [2016] 45 ITR (Trib) 228 - Exemption u/s 54F - whether the appellant had purchased two flats in two different buildings and location and only one flat is eligible for exemption under section 54F? - Held that:- The equivalent of 56.25 per cent of land transferred, equivalent to 43.75 per cent. of the built-up area received by the assessee. This built-up area can be translated into five flats. Hence, the transaction in this case was not with regard to the number of .....

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s clearly held that the amendment to provision of section 54F is effective from April 1, 2015, which makes it clear that benefit of section 54F will be applicable to one residential house in India. Prior to the amendment it was clear that a residential house would include multiple residential units. Assessing Officer is directed to allow the claim of the assessee with respect to two flats purchased by the assessee as discussed above. Assessing Officer is directed to allow the claim of the assess .....

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2. The following grounds were urged by the assessee : "(1) The learned Commissioner of Income-tax (Appeals) (CIT (A)) has erred in disallowing exemption under section 54 of the Income- tax Act, 1961, of ₹ 21,03,800. The appellant prays that disallowance of exemption under section 54 of the Income-tax Act of ₹ 21,03,800 shall be deleted. (2) The learned Commissioner of Income-tax (Appeals) has further erred in this connection in holding that the appellant had purchased two flats .....

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considering the judgment of the Karnataka High Court of CIT v. D. Ananda Basappa [2009] 309 ITR 329 (Karn) ; [2009] 223 CTR (Karn) 186 and relying upon judgment of lower authority, i.e., the Income-tax Appellate Tribunal, Mumbai of Sushila Jhaveri. (5) The Commissioner of Income-tax (Appeals) further erred in this connection in making the foregoing addition in contravention of the principles of natural justice. (6) The learned Assessing Officer has erred in inflicting interest under section 234 .....

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in respect of purchase of two flats totalling to ₹ 61,79,900. The above two flats were purchased by the assessee in two different co-operative societies on two different dates. In the course of assessment proceedings the Assessing Officer asked as to why exemption under section 54 in respect of one house may not be withdrawn as deduction is available in respect of only one house. The assessee has submitted that both flats were taken in the same Vile Parle (E), Mumbai for residential purpo .....

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eld the order of the Assessing Officer by observing that the action of the Assessing Officer in allowing deduction in respect of only one flat is justified and same was confirmed. The Commissioner of Income-tax (Appeals) observed that the assessee has sold the tenancy right in flat at Room No. 1, Ground Floor, Ganga Niwas, Vile Parle(e), Mumbai- 57 for a consideration of ₹ 65,00,000 and purchased two flats, one at ground floor of Gangotri Prathana CJS Ltd., Prathana Samaj Road, Vile Parle .....

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n in respect of two flats located at different places, the Commissioner of Income-tax (Appeals) observed. Accordingly he upheld the order of the Assessing Officer. The Commissioner of Income-tax (Appeals) while dismissing the appeal has drawn strength from the amendment of the provisions of section 54F of the Act. 5. The learned Departmental representative supported the orders of the authorities below. On the other hand, the learned authorised representative for the assessee drew our attention t .....

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7; 1,09,75,620. According to the assessee, this was the value of the flats, which were to be received by her and was equivalent to 56.25 per cent. of the undivided share of the land given by her to the developer. The assessee claimed exemption under section 54F of the Income-tax Act, 1961, on the value of the five flats in the assessment year 2007-08. The Assessing Officer granted the benefit of exemption in respect of one flat and that too with regard to the floor space vis-a-vis 2413.36 sq. ft .....

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ving that amendments to section 54F effective from April 1, 2015, makes it clear that the benefit of section 54F will be applicable to one residential house in India. Prior to the amendment, it was clear that a residential house would include multiple residential units. All the authorities below have clearly understood that the agreement signed by the assessee with the developer was that the assessee will receive 43.75 per cent. of the built-up area after development, which was constructed as on .....

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