TMI Blog2018 (2) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/-. The assessee has filed affidavit of tenant as additional evidence for the first time before Tribunal. Under such circumstances we deem it appropriate to remit ground No. 2 to Assessing Officer for verification of facts. The Assessing Officer shall decide this issue de-novo - ITA No. 146/PUN/2015, ITA No. 147/PUN/2015 And ITA No. 148/PUN/2015 - - - Dated:- 29-1-2018 - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Sunil Ganoo For The Revenue : Shri Achal Sharma ORDER PER VIKAS AWASTHY, JM : These three appeals by three different assessees are taken up together for adjudication as they are emanating from same set of facts. All the three assessees are closely related to each other. These appeals are directed against the order of Commissioner of Income Tax (Appeals)-I, Pune dated 31-10-2014 for the assessment year 2010-11 in the case of each assessee. 2. The common facts in all the appeals as emanating from records are: The assessees are co-owners of ancestral bungalow with land situated at CTS No. 851/1, Final Plot No. 187 of T.P. Scheme No. 1 Bhamburda Shivajinagar, Pune. The assessees jointly sold the above ance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case and in law, the learned C.LT.[A] has erred in holding that the appellant was entitled to claim deduction u/s. 54 of the I. T. Act 1961 in respect of only one flat purchased by him in Madhuvishwa residency at Karvenagar Hingne Khurd Pune and consequently has erred in restricting the deduction to ₹ 50,89,950.00.00 as against the deduction of ₹ 98,81,200.00 claimed by the appellant u/s. 54 of the I. T. Act 1961 for purchase of two flats one in Madhuvishwa residency and other at Treasure Park Society Santnagar Pune. The deduction as claimed by the appellant u/s. 54 of the I. T. Act 1961 in his return of income in respect of purchase of two flats referred above may please be allowed to the appellant. 2. The appellant may please be allowed deduction of ₹ 4,00,000.00 being the compensation paid to the tenant while computing the Long Term Capital Gains in respect of 1/4th share of the appellant in the property situated at Final Plot No.187, C.T.S. No.851/1 Bhamburda Shivajinagar Pune 411004. 3. The brokerage of ₹ 1,00,000.00 and advocate fees of ₹ 50,000.00 paid by the appellant in connection with the transfer of his proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the premises. The ld. AR submitted that such expenditure is allowable. The ld. AR filed affidavit of Shri Vaman Shriniwas Kulkarni who was stated to be occupant of ancestral house sold by assessee as tenant admitting receipt of ₹ 12,00,000/- as consideration for relinquishing his tenancy rights in the demised bungalow. 6. On the other hand Shri Achal Sharma representing the Department vehemently defended the findings of Commissioner of Income Tax (Appeals) in restricting assessee‟s claim of deduction u/s. 54 in respect of only one flat. The ld. DR submitted that as per provisions of section 54 the assessee can claim benefit of deduction in respect of a residential house. The expression a residential house‟ means one house. The meaning of expression a residential house‟ has been clarified by the Finance (No. 2) Act. 2014. The expression a residential house‟ has been replaced with one residential house‟ to bring in more clarity and to remove ambiguity. The ld. DR submitted that in any case benefit of deduction u/s. 54 cannot be extended to second flat purchased by assessee in a different locality. 7. We have heard the submissions made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3;s eligibility of claiming deduction u/s. 54 of the Act where the assessee had made investment in two residential flats located at different locations. The Special Bench held that the assessee is entitled to exemption in respect of investment in only one flat. The Special Bench further clarified that where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc., then it would be a case of investment in one residential house. The Special Bench further held that where the investment is made in two flats located at different localities, the assessee would be entitled to exemption in respect of investment in one house only. 9. In view of judicial precedents relied upon by ld. AR of assessee vis- vis the facts of present case, we are of considered view that the assessee is eligible to claim deduction u/s. 54 in respect of only one flat of his choice. We do not find any infirmity in the findings of authorities below in restricting deduction to ₹ 50,89,950/- i.e. the cost of one flat. Accordingly, ground No. 1 raised in appeal by assessee is dismissed. 10. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease be allowed to the appellant. 2. Without prejudice to Ground of appeal No. 1 above and by way of an alternate claim, the appellant submits that he may please be allowed the deduction u/s. 54 of the I.T. Act 1961 in respect of two adjoining Flats bearing Nos. 1103 and 1104 situated on 11th Floor of Treasure Park Society Santnagar Pune. 3. The appellant may please be allowed deduction of ₹ 4,00,000.00 being the compensation paid to the tenant while computing the Long Term Capital Gains in respect of share of the appellant in the property situated at Final Plot No. 187, C.T.S. No. 851/1 Bhamburda Shivajinagar Pune 411004. 4. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal. 15. The ld. AR of assessee submitted that the assessee has made investment in three flats i.e. Flat No. 1103, Flat No. 1104 and Flat No. 202 at Treasure Park, Saint Nagar, Pune and had claimed benefit of deduction u/s. 54 in respect of all the three flats. Two flats are adjacent to each other on 11th floor and the third flat is on second floor of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has invested amount received from sale of ancestral property towards purchase of three flats in the same building. Two adjacent flats have been purchased by assessee on 11th floor and third flat has been purchased on second floor of the same building. The assessee is claiming benefit of deduction in respect of all the three flats. The Assessing Officer has restricted assessee‟s claim on deduction u/s. 54 of the Act in respect of investment in only one flat. 19. As per provisions of section 54 the assessee is eligible to claim benefit of investment in a residential house‟. This aspect we have dealt in detail in paras 7 to 9 above while deciding appeal in ITA No.146/PUN/2015. In the light of discussion made in above paragraphs we hold that the assessee can claim deduction u/s. 54 in respect of two adjacent flats bearing Nos. 1103 and 1104 on 11th floor at Treasure Park, Saintnagar, Pune provided the two flats have been combined to make it one residential unit. The fact that the two flats bearing Nos. 1103 and 1104 have been joined together to make it one single unit is not emanating from documents on record. The assessee has also not claimed anywhere before the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is partly allowed for statistical purpose in the terms aforesaid. ITA No. 148/PUN/2015 (A.Y. 2010-11) 24. The assessee has assailed the findings of Commissioner of Income Tax (Appeals) by raising following grounds of appeal : 1. The appellant may please be allowed deduction of ₹ 4,00,000.00 being the compensation paid to the tenant while computing the Long Term Capital Gains in respect of 1/4th share of the appellant in the property situated at Final Plot No. 187, C.T.S. No. 851/1 Bhamburda Shivajinagar Pune 411004. 2. The brokerage of ₹ 30,000.00 paid by the appellant in connection with the transfer of his property be allowed as deduction while calculating the Capital Gains on transfer of 1/4th share of the appellant in the property situated at Final Plot No.187, C.T.S. No.851/1 Bhamburda Shivainagar Pune 411004. 3. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal. 25. The ground No. 1 raised in appeal is identical to ground No. 2 in ITA No. 146/PUN/2015. The findings given by us in respect of ground N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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