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2018 (4) TMI 712

'ble High Court of Bombay in the case of CIT-21, Mumbai vs. Devdas Naik (2014 (7) TMI 173 - BOMBAY HIGH COURT) had concluded that that where acquisition of two flats had been done independently by the assessee, but however, the said flats were constructed in such a way that the adjacent units or flats could be combined into one, and eventually had been merged into a single unit and were used for the purpose of residence by the assessee, the latters claim of exemption under section 54 could not be denied. - Decided in favour of assessee. - ITA No. 6884/MUM/2014 - 11-4-2018 - Shri Shamim Yahya, AM And Shri Ravish Sood, JM Assessee by : Shri Sandeep Shridhar, CA. Department by : Shri M.C. Omi Ningshen,D.R ORDER Per Ravish Sood, Judicial Member .....

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#8377; 3,00,00,000/-and had purchased four flats vide four separate agreements for flat Nos. 1901, 1902, 1903 & 1904 in A wing, Sahyadri Tower, Upper Govind Nagar, Near Western Express Highway, Malad (E), Mumbai, each of which had a separate kitchen and separate entrance. The Assessing Officer observed that the assessee had claimed exemption under section 54F of the Act in respect of the investment made in the aforesaid four flats purchased by her. The Assessing Officer being of the view that as per Sec. 54F the assessee was entitled for purchase of one flat against the long term capital gain on transfer of certain capital asset, therefore, called upon the assessee to justify the exemption claimed by her in the return of income. The ass .....

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of the Act. The Assessing Officer in the backdrop of his aforesaid conviction, restricted the entitlement of the assessee towards claim of exemption under section 54F in respect of investment of ₹ 1,04,53,894/- made by her in the residential unit comprising of flat Nos. 1903/1904, and brought the balance Long term Capital gain (for short LTCG‟) of ₹ 88,57,355/- to tax. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The assessee, in the course of the appellate proceedings reiterated the submissions which he had made before the Assessing Officer. The assessee further in order to impress upon the CIT(A) that the aforesaid four flats constituted a single residential unit, placed on record the photo .....

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tly raised by her. The CIT(A) while observing as hereinabove, took a support of the order of the Special Bench of the Tribunal in the case of ITO-19(3)-4, Mumbai vs. Sushila M. Jhaveri (2007) 107 ITD 327 (Mum.)(SB). 5. The revenue, being aggrieved with the order of the CIT(A), had carried the matter in appeal before us. At the very outset of the hearing of the appeal, the ld. Authorised Representative (for short, 'A.R') for the assessee submitted that the issue involved in the present appeal was squarely covered by the judgment of the Hon'ble High Court of Bombay in the case of CIT-21, Mumbai vs. Devdas Naik (2014) 366 ITR 12 (Bom), wherein the Hon'ble High Court had held that where acquisition of two flats had been done ind .....

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ss. We have given a thoughtful consideration to the facts of the case and find that the controversy on the fact as to whether the assessee had acquired four independent residential units or a composite residential unit, stands resolved on a perusal of the report dated 22/08/2013 filed by the Income Tax Inspector, who pursuant to the directions of the CIT(A), after carrying out a spot verification of the property under consideration had reported that the Flats /units nos. 1901, 1902, 1903 and 1904 were merged/constituted into one flat having common entrance door. The relevant extract of the report of the Income Tax Inspector is reproduced as under:- As directed , I visited the formal residence of Smt. Kavita Krishna Gupta on 22/8/2013 at Sah .....

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tion under section 54 in respect of total investment made towards acquisition of the said flats cannot be denied, stands settled as on date by the judgment of the Hon'ble High Court of Bombay in the case of CIT-21, Mumbai vs. Devdas Naik (2014) 366 ITR 12 (Bom). We find that the Hon‟ble High Court in the aforesaid judgment had concluded that that where acquisition of two flats had been done independently by the assessee, but however, the said flats were constructed in such a way that the adjacent units or flats could be combined into one, and eventually had been merged into a single unit and were used for the purpose of residence by the assessee, the latters claim of exemption under section 54 could not be denied. Still further, w .....

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