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TMI Blog2018 (4) TMI 1616X X X X Extracts X X X X X X X X Extracts X X X X ..... ly prospectively; this being a substantive piece of legislation can never be clarificatory in nature as misunderstood by the AO and hence, the claim of the appellant could never have been denied. 4. Without prejudice, the CIT(A) ought to have appreciated that the appellant having reinvested the entire sale consideration in acquiring new asset, appellant's claim for deduction under S.54F of the Act was in order. 5. The Appellant craves the leave of the Court to add, amend, alter, and/or withdraw any or all grounds before or during the hearing. PRAYER 6. For these and such other grounds that may be urged at the time of hearing, the Appellant prays that the appeal may be allowed by directing the AO to delete the denial of deduction under S.54F of the Act, in the interest of justice and equity". 3. The assessee is an individual. He owned residential site at Bangalore. The Assessee entered into Joint Venture Agreement (JDA) dated 24/6/2005 with M/S.Sai Vishwas Construction, (duly registered) for carrying out development over the land owned by her by construction of flats. As per the JDA with M/s Sai Vishwas Construction, the developer has to construct 16 residential flats o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When different interpretations were made to the section, amendment was made to section 54F in the Finance Act 2014. The intention of legislature is evident from the explanatory notes to the provisions of the Finance (no.2) Act, 2014. The amendment made to Section 54F is clarificatory in nature. According to him there was no jurisdictional High Court decision in favour of the assessee on the issue of deduction u/s 54F. He therefore held that each of the 6 units is considered as a separate house property for the purpose of assessment of property tax by the state administration. The AO therefore held that assessee does not fulfill the conditions laid down in section 54F in order to be eligible for deduction. Accordingly, claim of deduction u/s 54F amounting to Rs. 1,36,34,526/- was disallowed by the AO. 4. On appeal by the Assessee, the CIT(A) confirmed the order of the AO. The Assessee before CIT(A) relied on the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. K.G Rukminiamma - 331 ITR 221, wherein the Hon'ble Karnataka High Court held on the facts of the case which are identical to the case of the assessee (though in the context of sec. 54 of the Act which is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereto. It cannot be construed as one residential house in this context it is useful to refer to Section 13 of the General Clauses Act, 1987 which reads as under:- "13. Gender and number. - In all Central Acts and Regulations, unless there is anything repugnant in the subject or context- (1) Words importing the masculine gender shall be taken to include females; and (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 the 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, winch 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, he said ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He held that in the instant case the units are separate from each other and they do not have anything common which can give it the status of the part of a house. A flat can be a part of the house but cannot be independent of the house. He held that in the case of the Assessee the flats were separate from each other and do not form part of the house. Therefore, the Assessee cannot claim that all the 6 flats constitute on house. The CIT(A) therefore agreed with the view of the AO and held that the Assessee has violated the provisions of section 54F of the Act and hence cannot be eligible for deduction u/s 54F. 7. Aggrieved by the order of the CIT(A) the Assessee has preferred the present appeal before the Tribunal. We have heard the rival submissions. The learned DR relied on the order of the CIT(A). The learned cunsel for the Assessee reiterated stand of the Assessee as put forth before the lower authorities. 8. We have given careful consideration to the rival submissions. We find that the facts of the Assessee's case are similar to the case of Smt.K.G.Rukminiamma (supra) decided by the Hon'ble Karnataka High Court. In the case of K.G.Rukminiamma, the facts were on a site measuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of s 54F will be applicable to one residential house in India. However, prior to said amendment, a residential house would include multiple flats/residential units. 10. Similar decisions were rendered on identical facts by the Hon'ble Madras High Court in the case of CIT vs Gumanmal Jain [2017] 80 taxmann.com 21 (Mds). Therefore it cannot be said that the amendment to Sec.54F of the Act by the Finance (No.2) Act, 2014 which was applicable only w.e.f 1.4.2015 i.e., for AY 2015-16 onwards was curative and applicable retrospectively in the light of the decision of the Hon'ble Madras High Court in the case of V.R.Karpagam (supra). The fact that there was no jurisdictional High Court decision on the point is no ground for the AO not to follow the judgment of High Court though it is not jurisdictional. 11. As far as the decision of the Hon'ble Karnataka High Court in the case of Khubchand Makhija (supra) is concerned, as rightly pointed out by the learned counsel for the Assessee the facts of the aforesaid case are clearly distinguishable from the facts of the case of the Assessee and the facts of the case of K.G.Rukmaniamma (supra) decided by the Hon'ble Karnataka High Court. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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