TMI Blog2016 (8) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... is Ground of appeal raised by Revenue has also no force and the same is dismissed.- Decided in favour of assessee. - ITA No.7225/Mum/2014 - - - Dated:- 20-7-2016 - SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Revenue : Shri Maurya Pratap (DR) For The Assessee : Shri Haresh P. Khunadia (AR) ORDER PER PAWAN SINGH, JM: 1. The present appeal filed by the Revenue against the order of CIT(A)-I, Thane dated 18.08.2014 for AY 2010 -11. The Revenue has raised following Grounds of appeal: 1. Whether on the facts and in the circumstances of the case the ld. CIT(A)-I, Thane is correct in holding that the Long Term Capital Gain and exemption claimed u/s 54 thereon is allowable exemption under the I.T. Act, 1961 ? 2. Whether on the facts and in the circumstances of the case the ld. CIT(A)-I, Thane is correct in deleting the addition on account of cessation of liability of unsecured loan ? 2. The brief facts of the case are that the assessee filed its return of income for relevant AY on 06.07.2010 showing total income of ₹ 15,70,601/-. The return of income as selected for scrutiny. While framing assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrance. Ld. AR further argued that even as per the society record it is nothing but one residential house owned by assessee on 22nd floor. There is only one electricity meter in the said residential unit. Ld. AR of assessee further relied upon the decision of special bench of Mumbai Tribunal in case of ITO vs. Ms. Sushila M. Jhaveri [2000] 107 ITD 327 (Mum)(SB) and further in K.G.Vyas vs. Seventh Income Tax Officer. 4. We have considered the rival contentions of the parties and perused the material available on record. Section 54 of the Income-tax Act deals with the provisions for profit on sale of property used for residence which may be read as under: 54. [Subject to the provision of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family] the capital gain arises from the transfer of a long-term capital asset being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of [one year before or two years after the date on which the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. 5. Now we may examine the facts of the present appeal. The assessee purchased four flats on 09.08.2005 and was sold on 23.06.2009. Simultaneously, the assessee purchased three flats on 11.12.2009. As a result, sale of residential house consisting four flats and purchase of new residential house (consisting of three flats), the amount of ₹ 14,93,942/- was offered as LTCG and after claiming the exemption u/s 54 of the Act, however, the AO denied the exemption that four units sold through different agreements and all units were treated as separate unit contrary to the claim asserted by assessee. Further, the assessee has obtained the loan from purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricity bill placed at page no. 149 of the paper book, it is seen that the electricity bill is in the name of the appellant in the address 2203, Richmond Tower, Cliff Avenue, Hiranandani Gardens, Powai and not separately in the address of three different units of 2203A, 2203B 2203C. Thus both the units purchased and sold were on the same floor and were contiguous having one common electricity meter, one kitchen and one entrance as confirmed by the builder. Therefore, though there were different agreements/deeds of purchase and sale in respect of these units but they were being used by the appellant as one residential flat having one common electricity meter. Moreover, the Inspector of the Circle had also visited the spot and he did not bring on record any evidence to show that these units were not being used as one residential flat.The only evidence brought on record by the Inspector by his visit is a copy of month-wise maintenance bills in respect of unit No. 1201A, 1201B, 1201C 1201D, which was being charged by the building society separately. As there were different agreements/deeds for purchasing these units, the monthly maintenance bills were also in the separate name of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is used for a word, it is permissible to include the plural. The contention of the Revenue that the phrase a residential house would mean one residential house does not appear to the correct understanding. The expression a residential house should be understood in a sense that building should be of residential in nature and a should not be understood to indicate a singular number. When an HUF's residential house is sold, the capital gain should be invested for the purchase of only one residential house is an incorrect proposition. After all, the HUF property is held by the members as joint tenants. The members keeping in view the future needs in event of separation, purchase more than one residential building, it cannot be said that the benefit of exemption is to be denied under s. 54(1). On facts, it is shown by the assessee that the apartments are situated side by side. The builder has also stated that he has effected modification of the flats to make it as one unit by opening the door in between two apartments. The fact that at the time when the Inspector inspected the premises, the flats were occupied by two different tenants is not the ground to hold that the apartm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is close relative Mrs Manuben Rathod who was real sister of his father and she has expired on 22.11.2009 leaving behind no legal heir, thus the liability of the assessee ceased. Ld DR for revenue supported the order of AO. We have seen that during the assessment proceeding, the AO observed that confirmation of unsecured loan, was unsigned, the assessee was asked to explain to give the explanation about the unsecured loan from Mrs. Manuben Rathod. The assessee contended that Mrs. Manuben Rathod was her father s sister. She expired on 22.11.2009 leaving behind no legal heir and her income-tax records are not traceable, she has given a loan of ₹ 7,88,000/- on 14.12.2007. The same issue was raised during the assessment proceeding for AY-2008-09 and the same was accepted on the contention of assessee. The assessee further contended that she was unmarried and was stayed with assessee during last 2-3 years of her life and her intention was to give her savings to the assessee. As she has expired thus assessee is not required to be paid back and thus his liability has cessed. The contention of assessee was not accepted and it was concluded that the assessee is not required to pay unse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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