TMI Blog2019 (1) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... im of Exemption u/s 54/54F - multiple units/ flats i.e., the 2 flats in the same apartment building received by him in lieu of entering into the JDA dated 03.12.2007 with M/s. Sai Deep Estates - Held that:- There was a structure/building on the said property before the JDA was entered into on 03.12.2007, it is of the considered opinion that the issue for consideration in this ground i.e., the assessee’s claim for exemption u/s 54/54F of the Act in respect of 2 flats in the same residential building complex; is squarely covered in favour of the assessee by the decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Smt. K. G. Rukminiamma [2010 (8) TMI 482 - KARNATAKA HIGH COURT]. As decided in COMMISSIONER OF INCOME TAX VERSUS SMT. VR. KARPAGAM [2014 (8) TMI 899 - MADRAS HIGH COURT] Amendment to section 54F of the Act being para materia to section 54 of the Act with regard to substitution of “a” residential unit by Finance (No.2) Act, 2014 was operative only w.e.f. 01.04.2015, whereby exemption for more than one unit/flat (residential house) is to be withdrawn. However, prior to the aforesaid Amendment (supra), a residential house would include multiple flats/resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 23/9/2017 wherein she has stated that she had requested the AO for being supplied with reasons recorded vide letter dated 22/2/2012. We find that the orders of both the AO as well as the impugned order of the ld CIT(A) are silent on this issue and therefore it is not possible to render a conclusive finding without referring to the records of assessment on this issue. It is well settled proposition of law that in case the assessee requests for being supplied with the reasons recorded for re-opening the assessment, the AO is duty bound to supply the reasons and thereafter to decide upon the objections, if any, raised by the assessee against the notice issued u/s 148 of the Act, prior to the framing of the order of assessment. In the facts and circumstances of the case on hand, as discussed above, it is clear that when this issue raised by the assessee has not been considered by the authorities below, it is only in the fitness of things that we remit this issue to the file of the ld AO for consideration. In respect of the additional ground No.2(i) to (iii) raised (Supra), on the issue of non granting of correct cost of acquisition of land while computing the LTCG, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to be corrected. 4. In these circumstances, as discussed above, we amend our order in ITA No.75/Bang/2017 dt.6.10.2017 to the extent that, instead of the Assessing Officer as mentioned in para 4.4.1 thereof; the issues of validity of reopening the assessment as-well as other grounds, modified / additional grounds of appeal raised on merits are remitted to the file of the learned CIT (Appeals) for consideration and adjudication thereon after affording the assessee adequate opportunity of being heard. We hold and direct accordingly as this view of ours is in consonance with the view taken by the co-ordinate bench of this Tribunal in the case of Damodar Reddy (supra) which was followed by us. 2.3.1 Pursuant to the aforesaid order of the Tribunal dated 10.04.2018 (supra), the CIT(A) called for the show cause notice and order sheet notings along with assessment records from the AO for verification as to whether the reasons have been provided/communicated to the assessee during assessment proceedings. Based on his examination thereof, the CIT(A), at para 5 of the impugned order, held that the AO had provided / communicated the reasons to the assessee in the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Appellant during the impugned assessment year is sufficient compliance of the principles laid down by the Hon'ble Apex Court in GKN Driveshaft [India] Ltd., v. ITO 259 ITR 19 [SC] with regards to communication of reasons recorded for issue of notice u/s. 148 of the Act on the facts and circumstances of the case. [ iii] The learned Commissioner of Income -Tax [Appeals] below erred in law in not holding that the order of assessment passed by the learned assessing officer under Section 143[3] r.w.s 147 of the Act is bad in law since the mandatory conditions as envisaged in the Act to assume jurisdiction did not exist or having not been complied with and consequently, the reassessment requires to be cancelled on the facts and circumstances of the case. [ iv] The learned Commissioner of Income -Tax [Appeals] erred in law in not holding that the notice issued by the learned assessing officer u/s 148 of the Act is in itself bad in law in as much as the notice proposes to 'reassess' the income of the Appellant for the assessment year 2008-09 when there was no assessment order passed earlier in respect of this assessment year and consequently the order pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not considering the cost of acquisition for the full portion of land in the computation of capital gains on the facts and circumstances of the case. ii) The learned CIT [A] erred in considering the cost of consideration only to the extent of land measuring 1452.5 Sq. Ft. as against the total land measuring 7871.5 Sq. Ft on the facts and circumstances of the case. iii) The learned CIT [A] erred in not giving the proportionate indexation benefit on the facts and circumstances of the case. 6. Without Prejudice. rounds of non-QrantinQ of Section 54/54F exemption on the facts and circumstances of the case. i) The learned CIT [A] was not justified in not granting deduction under Section 54 of the Act on the flats received by the Appellant in lieu of Development Agreement entered into by the Appellant on the facts and circumstances of the case. ii) The learned CIT [A] failed to appreciate that there was a residential property on the land which was a subject matter of the development prior to the development. iii) The learned CIT [A] failed to appreciate the evidences on record like confirmation from the developer, surrender of electricity meter acknow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a JDA on 03.12.2007 with M/s. Sai Deep Estates, which, I find, is a registered document. The Hon ble Karnataka High Court in the case of Dr. T. K. Dayalu (202 Taxman 531) (Kar) has held that on entering into a JDA, there is a transfer as per the provisions of section 2(47) of the Act and consequently capital gains is attracted. In that view of the matter, this issue is covered in favour of the Revenue and against the assessee. Respectfully following the aforesaid decision of the Hon ble Karnataka High Court in the aforesaid case of Dr. T. K. Dayalu (supra), ground No. 3 of the assessee s appeal is dismissed. 7. Ground No. 6 : Claim of Exemption u/s 54/54F of the Act 7.1 The learned AR of the assessee was heard in support of the assessee s claim for grant of exemption. It was submitted that the assessee along with her mother Smt. Jayalakshmamma, her brothers Shri Damodar Reddy and Shri. Srinivasa Reddy, entered into a JDA with M/s. Sai Deep Estates on 03.12.2007 for transfer of 50% of undivided share in property bearing Katha No. 18 at 1st M Main Road, New Thippasandra, Bangalore, in lieu of receipt of 50% of super built up area to be developed on the above property. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities below. According to the learned DR, the Amendment to Section 54F of the Act by Finance (No.2) Act, 2014 w.e.f. 01.04.2015 where one residential house has been substituted in place of a residential house makes it abundantly clear that the intention of the Legislature was that exemption u/s 54F of the Act was to be allowed only in respect of one unit and not multiple units, therefore, if exemption u/s 54/54F is allowed, it is to be restricted to one unit only. 7.3.1 I have heard the rival contentions and perused and carefully considered the facts of the case and the material on record; including the judicial pronouncements cited. After taking into account, the factual and legal matrix of the case as emanate from the record before me and the corroborating evidence to show that there was a structure/building on the said property before the JDA was entered into on 03.12.2007, I am of the considered opinion that the issue for consideration in this ground i.e., the assessee s claim for exemption u/s 54/54F of the Act in respect of 2 flats in the same residential building complex; is squarely covered in favour of the assessee by the decision of the Hon ble Karnataka High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly falls under sec. 54 of the Income Tax Act, 1961. As far as the decision of the Hon'ble Madras High Court in the case of V.R. Karpagam (supra) is concerned the facts were similar to the case of the assessee. The assessee in the case of V.R.Karpagam entered into an agreement with M for development of a piece of land owned by it-As per agreement, assessee was to receive 43.75% of built up area after development, which was translated into five flats. The Assessee claimed exemption u/s 54F on the value of five flats. The AO granted benefit of capital gains in respect of one flat and the CIT( A) affirmed findings of AO holding that claim of assessee u/s 54F for all five flats could not be admitted, but however, he took the view that the assessee would be entitled to benefit of s 54F in respect of one single flat with largest area. In appeal, tribunal held that assessee was eligible for exemption u/s 54F on all five flats received by her in lieu of land she had parted with and word 'a' appearing in s 54F should not be construed in singular, but should be understood in plural. The Madras High Court upheld the order of the Tribunal. It was also held that amendment was made to ..... 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