TMI Blog2017 (8) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi dated 21.03.2016 for the Assessment Year 2013-14. 2. The assessee has raised the following grounds of appeal:- 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) (CIT(A)} is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of AO in restricting the exemption under Section 54 of the Act to the extent of ₹ 9,65,227/- as against ₹ 75,47,650/- claimed by the assessee. 3.(i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the action of the AO in relation to exemption under Section 54 to be granted on one house property as against two properties claimed by the assessee. ( ii) That the learned CIT(A) has erred, both on facts and in law, tn confirming the same despite the fact that amendment under Section 54 restricting the exemption to the extent of one house property has come into effect from A Y 2015-16 and hence the same is not applicable during the relevant assessment year. ( iii) That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. In view of the decision of the Hon ble Delhi High Court in case of Commissioner of income tax versus Geeta Duggal dated 21/02/2013 against which the Hon ble Supreme Court has dismissed the special leave petition wide order dated 29/08/2014. He further referred to the amendment made under section 54 by finance act No. 2 (2014), wherein the words were substituted ‗one residential house for ‗a residential house w.e.f. 01/04/2015. He therefore submitted that prior to that even if the investment is made in more than one residential house property, the deduction under section 54 was available. 6. The Ld. departmental representative relied upon the orders of the lower authorities and submitted that the deduction under section 54 was available only with respect to one residential house property and cannot be availed for multiple houses. 7. We have carefully considered the rival contentions. It is apparent that assessee has purchased more than one house property and claimed deduction under section 54 of the income tax act with respect to 2 house properties. The Hon ble Delhi High Court in case of CIT versus Geeta Dugal has already held that deduction under section 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6] 74 taxmann.com 227 (Madras) , Hon HIGH COURT OF MADRAS in G.Chinnadurai v. Income-tax Officer, Income-tax Department Non-Corporate Ward 13(2), Chennai has considered a situation where the facts before the court were that assessee investment in five flats does not satisfy the parameters of Section 54F, has initiated proceedings for reassessment. That being a beneficial provision, without taking note of the provision, as it stood at the relevant point of time, investment in residential property is allowable, even though spread over multiple flats. In support of such contention, reliance was placed on the decision of the Hon'ble Division Bench of this Court in Smt. V.R. Karpagam v. ITO[2013] 34 taxmann.com 98/143 ITD 126 (Chennai-Trib.), and the decision in the case of Dr. Smt. P.K. Vasanthi Rangarajan v. CIT[2012] 23 taxmann.com 299/204 Taxman 628, and the decision of the Hon'ble Division Bench in the case of CIT v. G. Saroja [TC (Appeal) No. 656 of 2015, dated 4-1-2012]. The learned counsel referred to the circular of the CBDT, in circular No. 1 of 2015, dated 21.01.2015, to submit that the amendments to Section 54F(1), will take effect from 1st, April, 2014 and will acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been completed [see CIT v. Praveen Kumar[2007] 290 ITR 90/[2006] 153 Taxman 138 (Mad.)]. However, the onus is on the assessee to produce sufficient material to establish the claim for exemption. In the instant case, the petitioner claimed exemption by stating that they have purchased flats with the built up area of 8050 sq.ft., along with an extent of 1807 sq.ft of undivided share in land by a document, dated 29.10.2010. The reason for reopening the assessment is that the petitioner has invested an amount of ₹ 2,62,50,000/-, into five flats and the construction of the flats were completed only upto 70% at the relevant point of time and therefore, the petitioner is eligible to claim exemption under Section 54F only for a residential property, apart from the fact that the only 70% of the construction has been completed. Thus, the question would be whether the petitioner can be denied exemption on the ground that he has invested in five flats and what would be the effect of the construction having been only partially completed. 8. The legal issue has been considered by the Hon'ble Division Benches of this Court as well as by the ITAT. As factual matrix in Smt. V.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma(2010) 48 DTR (Kar) 377; (2011) 239 CTR (Kar) 435; (2011) 331 ITR 211 (Kar). Relying on Section 13 of the General Clauses Act, 1897, it was held as under by their Lordships at para 10 of the judgment: ( 2) words in the singular shall include the plural, and vice versa 10. 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 legislation to convey the meaning that it refers to a single residential house. If that was the intention, they would have used the word 'one'. As in earlier part, the words used are buildings or lands which are plural in number and that is referred to as 'a residential house', the original asset. An asset newly acquired after the sale of the original asset also can be buildings or lands appurtenant thereto, which also should be 'a residential house'. Therefore, the letter 'a' in the context it is used should not be construed as meaning 'singular'. But being an indefinite article, the said expression should be read in consonance with the other words 'buildings and lands' and therefore, the singular 'a reside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 10 lakhs payable by the developer. The claim for exemption under Section 54, was rejected, affirmed in appeal and further affirmed by the Tribunal and the correctness of these orders were tested by the Hon'ble Division Bench. The assessee contended before the Hon'ble Division Bench that investing in four flats would not disentitle the claim for exemption placing reliance on the decision in the case of G. Saroja (supra) which in turn followed the decision of the Karnataka High Court in the case of CIT v. Smt. K.G. Rukminiamma[2011] 331 ITR 211/196 Taxman 87/[2010] 8 taxmann.com 121 and CIT v. D. Ananda Basappa[2009] 309 ITR 329/180 Taxman 4 (Kar.) and the Special Leave Petition filed against the decision in the case of Ananda Basappa (supra) having been dismissed, the assessee was entitled to claim exemption. The Hon'ble Division Bench agreed with the view expressed in the decision in the case of G. Saroja (supra) and held that the purchase of four flats would not disentitle the assessee for exemption. 10. The learned counsel for the revenue relied on the decision of the Punjab and Haryana High Court in the case of Pawan Arya (supra) to sustain the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dential unit. The Bombay High Court in Devdas Naik (supra), considered two flats purchased from two different owners with two different door numbers to be one because on purchase, it was converted into a single dwelling unit with one kitchen. Therefore, sans facts a decision cannot be taken. Therefore, we have to look into the type of transaction which had been entered into between the parties. The petitioner and other partners M/s. Karpagam Studio, entered into an agreement to execute a deed of an absolute sale dated 29.10.2010, in respect of the property in Saligramam and Virugambakkam villages and a separate agreement was entered into by the partners individually and the petitioner entered into such an agreement on 29.10.2010. 13. In terms of the said agreement, the developer has offered 9500sq.ft., of built up area along with proportionate undivided share of land in the proposed building complex. Therefore, the agreement is a composite agreement and it mentions that the petitioner is entitled to a total built up area of 9500 sq.ft. Therefore, it would be immaterial, if whether 9500sq.ft., of built up area given to the petitioner is separate over in the same floor or i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
