TMI Blog2018 (5) TMI 1537X X X X Extracts X X X X X X X X Extracts X X X X ..... Per Saktijit Dey, JM This appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-32, Mumbai, dated 17.06.2016, for Assessment Year 2011-12. 2. The dispute in this appeal is confined to part disallowance of deduction claimed under Section 54 of the Income Tax Act (hereinafter the Act ). 3. The brief facts of the case are that the assessee, an individual, filed his return of income for the assessment year under dispute on 04.03.2012 declaring total income of ₹ 16,60,958/-. In the course assessment proceedings the AO, while verifying the return of income and computation of income filed by the assessee, found that in the relevant previous year assessee has sold a duplex flat located at Charishma Co-operative Housing Society, Guru Nanak Road, Bandra (W) along with open car parking spaces on 29.12.2010 for a total consideration of ₹ 8.21 crores. After reducing the indexed cost of acquisition of ₹ 68,78,480/- the long term capital gain from the sale of flat was shown at ₹ 7,52,21,520/-. However, the assessee claimed deduction under Section 54 of the Act on the total amount of long term capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m deduction in respect of one residential flat. The CIT(A) observed that three flats purchased by the assessee, though are in the same building, but are situated in different floors of the building and are purchased from different persons vide separate agreements. Thus, he called upon the assessee to explain as to why the deduction claimed under Section 54 of the Act should not be restricted to investment made in one residential flat. In this regard the CIT(A) also issued a notice of enhancement under Section 251(2) of the Act. Though, the assessee objected to the disallowance proposed by the CIT(A), however, rejecting the objections of the assessee he restricted the deduction claimed under Section 54 of the Act to the cost incurred by assessee towards purchase of a single flat. While doing so the learned CIT(A) observed that the three flats purchased by the assessee are located in different floors of the same building and have separate entrance and separate kitchens. Therefore, they cannot be considered as a single residential unit. Further, he observed that the assessee did not furnish approved plan of the Municipal authorities to demonstrate that the three flats are single resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion he relied upon the following decisions: - i) CIT vs. Gita Duggal (2013) 357 ITR 153 (Del.) ii) CIT vs. DevedasNaik (2014) 366 ITR 12(Bom.) iii) CIT vs. D. Ananda Basappa (2009) 309 ITR 329 (Kar.) iv) CIT vs. K.G. Rukminiamma (2011) 331 ITR 211 (Kar.) As regards the issue relating to claim of deduction under Section 54 of the Act in respect of garages, the learned counsel for the assessee submitted that as per the condition imposed by the House Society the assessee could have purchased the residential flats only if it had parking space. Therefore, the assessee was compelled to purchase the garages, otherwise, the assessee would not have been allowed to purchase the residential flats. He submitted, in the given facts and circumstances the garages should be considered as part of the residential unit, hence, eligible for deduction under Section 54 of the Act. In support of such contention learned counsel for the assessee relied upon the following decisions: - i) M/s. Penelope Ann Dos Remedios vs. ITO ITA No. 7928/Mum/2010 dated 06.09.2013 ii) ACIT vs. Smt. Usha B. Madan ITA No. 4258/Mum/2011 dated 13.06.2012 Finally, learned Counsel submitted, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned counsel for the assessee with regard to the exercise of powers under Section 251(2) of the Act. On perusal of facts on record we are of the view that the learned CIT(A) has exercised his powers under Section 251(2) of the Act by following the statutory mandate. Therefore, the ground raised by the assessee in this regard is dismissed. 9. As regards assessee s claim of deduction under Section 54 of the Act in respect of three flats claimed to have been converted into a single residential unit, going through the facts on record we find that the observation of the AO and learned CIT(A) are contradictory on facts. While the AO has accepted assessee s claim that the three residential flats are a single residential unit, the CIT(A) has held that since the three residential flats are located on different floors of the same building and nothing has been brought on record to show that they have been converted into a single residential unit, assessee s claim of deduction under Section 54 of the Act in respect of all the three flats cannot be allowed. In this context, though, learned counsel for the assessee has submitted before us that during assessment proceedings the AO has con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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