TMI Blog2015 (12) TMI 1665X X X X Extracts X X X X X X X X Extracts X X X X ..... flat are not to be treated as separate investment for allowing deduction u/s 54 of the Act, hence, ground no.2 has become infructuous. Addition of amount received on account of alternate accommodation - Held that:- CIT(A) while dealing with this addition has held that the assessee has not been able to prove any nexus between the rent received of ₹ 15,50,000/- and expenses claimed of ₹ 6,36,280/- and further held that in absence of such nexus, the expenses so claimed cannot be allowed, however, the same was sustained to the extent of ₹ 6,36,280/-. Assessee drawn our attention to page 11 of the development agreement wherein it has been clearly mentioned that the assessee is entitled to ₹ 15,50,000/- in temporary al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of set off against the long term capital gain u/s. 54 of the Income-tax Act,1961 3. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) was not justified in not granting deduction of rent paid, brokerage, etc. of ₹ 6,36,280/- against the rent received towards the alternative accommodation. 4. WITHOUT PREJUDICE - The appellant submits that the cash compensation received from the Developer for alternative accommodation cannot be considered as revenue receipt and not liable to tax as the same is outside the ambit of income u/s 2(24) of the Act. 5. The appellant craves leave to, add to, alter or vary the grounds of appeal at or before the hearing of the appeal. 2. The b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential flat vide flat no. 101 admeasuring 819 Sq. Ft. on the 1st floor and flat no. 801 admeasuring 1460 sq. ft. on 8th floor with 2 stilt parking and 2 open parking in lieu of granting development right to the developer M/s Elite Corporation and further compensated the assessee of ₹ 15,50,000/- in respect of alternate accommodation. 5. By AO the confirmation was sought from M/s Elite Corporation about the development agreement, wherein the developer vide its reply dated 25.11.2011 has confirmed about the monetary compensation paid to the owners (including the assessee) and compensation of ₹ 15,50,000/- for alternate accommodation and also confirmed that assessee is entitled for 2 flats bearing no. 101 and 801 total admeasuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d: Whether letter a in expression a residential house , used in section 54 should not be construed as meaning singular, but being an indefinite article, said expression should be read in consonance with other words buildings and lands , therefore, a residential house also permits use of plural by virtue of section 13(2) of General Clauses Act 17. It is clear that the assessee was not attempting to evade tax. In fact, after purchasing two residential houses, still there remained unutilized capital gain, which he has offered for tax. Therefore, as held in the aforesaid Rukminiamma's case, the context in which the expression a residential house is used in Section 54 makes it clear that it was not the intention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial house property 20.1 The provisions contained in sub-section (1) of section 54 of the Income-tax Act, before its amendment by the Act, inter alia, provided that where capital gain arises from the transfer of a long term capital asset, being buildings or lands appurtenant thereto, and being a residential house, and the assessee within a period of one year before or two years after the date of transfer, purchases, or within a period of three years after the date of transfer constructs, a residential house, then, the amount of capital gains to the extent invested in the new residential house is not chargeable to tax under section 45 of the Income-tax Act. 20.2 The provisions contained in sub-section (1) of section 54F of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above discussion, judgment of Karnataka High Court and circular 1 of 2015 of CBDT, the assessee was not liable for LTCG against flat no.101 and the addition made by the AO which was sustained by the CIT(A) is deleted. 11. Since ground no.1 of appeal has been allowed by us and holding of 2 flat are not to be treated as separate investment for allowing deduction u/s 54 of the Act, hence, ground no.2 has become infructuous. 12. Next ground of appeal for our consideration is addition of ₹ 15,50,000/- which was sustained to the extent of ₹ 6,36,280/- against the amount received on account of alternate accommodation, the ld. CIT(A) while dealing with this addition has held that the assessee has not been able to prove any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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