TMI Blog2014 (12) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... that High Court. In the instant case, the flats purchased by the assessee were located at two different places. It was not a case of combining of two contiguous flats. Hence, we are unable to follow the decisions rendered by the Hon’ble Karnataka High Court, which was relied upon by the assessee, since the said decisions are contrary to the decision rendered by the Hon’ble jurisdictional Bombay High Court in CIT Vs. Khoobchand M Makhija [2013 (12) TMI 1525 - KARNATAKA HIGH COURT] . Accordingly we uphold the order of the ld. CIT(A) on this issue, since it is in accordance with the decision rendered by the Hon’ble Bombay High Court. Accordingly, we hold that the assessee shall be entitled for deduction u/s 54 of the Act only in respect of one residential flat. Assessment of value of two garages for the purpose of computation of capital gains - Held that:- We notice from the assessment order that the AO has computed the sale consideration relating to garages purely on surmises and conjuncture without bringing any material on record to show that the assessee had received any money separately for garages over and above the amount declared in the agreement. Hence, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in. In the alternative, the AO said that the cost of garages has to be excluded, if it is contended that the garages have not been sold. 3. The assessee challenged the assessment order by filing appeal before Ld CIT(A), but did not get favourable order on both the issues cited above. Hence, the assessee has filed this appeal before us. 4. The Ld A.R submitted that the assessee had purchased two small residential flats, instead of buying one big residential house, in order to accommodate the needs of his family. He submitted that the assessee had two sons and hence, in the better interest of his family unity and peaceful enjoyment, he was constrained to buy two residential flats. He further submitted that the object of giving deduction u/s 54 of the Act is to induce the people to buy/construct a new residential house, when they sell their existing residential house. The Ld A.R submitted that the assessee has complied with the provisions of sec. 54 by acquiring two residential flats, since it had suited his family requirements. He submitted that the provisions of sec. 54 use the expression a residential house . The meaning of the word a was analyzed by the Hon ble Karnataka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Clauses Act. 18. Therefore, we are of the view, in the facts and circumstances of this case, the acquisition of two residential houses by the assessee out of the capital gains falls within the phrase residential house and accordingly , the assessee is entitled to the benefit conferred under Section 54(1) of the Act. However, we make it clear that while interpreting this word, the Court or the Tribunal or the authorities have to keep in mind the facts of the particular case. When we have held a cannot be read as singular, it also cannot be read as multiples and so as to avoid paying tax under Section 45 of the Act. Therefore, in the facts and circumstances of this case, we answer the first substantial question of law raised in favour of the assessee and against the revenue. 5. The Ld A.R submitted that the facts prevailing in the instant case are also identical with the facts prevailing in the case of Khoobchand M Makhija (supra). To substantial this submission, the Ld A.R invited our attention to the letter dated 26.11.2010 filed by the assessee before Ld CIT(A), wherein the assessee had submitted about the family exigencies in purchasing two flats. 6. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of sec. 54 of the Act. 7.1 The Ld D.R further submitted that, in all the case laws, on which the assessee had placed reliance, the multiple flats were located in the same apartment complex and hence the deduction u/s 54 of the Act was allowed by the Hon ble High courts under the reasoning that they constitute different residential units within same residential house. The Ld D.R submitted that the assessee, in the instant case, has purchased two flats at different locations and hence the assessee could not take support of any of the case laws. 8. We have heard the rival contentions and perused the record. Admittedly, the Special Bench of the Tribunal in the case of Sushila M Jhaveri (supra) has examined the issue - Whether an assessee is entitled to claim deduction u/s 54, or 54F of the Act in respect of more than one residential house acquired by him. The Special Bench held that the assessee could avail exemption only in respect of one of the properties. It is pertinent to note that the said decision of Special Bench of the Tribunal has since been approved by the Jurisdictional High Court in the case of CIT v/s Raman Kumar Suri (Income Tax Appeal No.6962 of 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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