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TMI Blog2019 (6) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... and sold the remaining 14 flats to the Developer for a consideration of Rs. 1,46,15,100/-. The sale of 14 flats to the developer by the Assessee admittedly gave raise to Short term Capital Gain (STCG). On acquiring 13 flats under JDA the gain was admittedly Long Term Capital Gain (LTCG). The dispute raised in the various grounds of appeal before the Tribunal is with regard to computation of STCG and LTCG. 3. As far as the LTCG on acquiring 13 flats by the Assessee under the JDA is concerned, the learned counsel for the Assessee submitted before us that the Assessee is entitled to claim deduction u/s.54F of the Income Tax Act, 1961 (Act) and no part of the LTCG is taxable. In ground No.2 raised by the Assessee before the Tribunal, the Assessee has only questioned the manner of determination of LTCG and not a ground regarding deduction u/s.54F of the Act. However in Gr.No.6 a specific ground seeking deduction u/s.54F of the Act has been raised. Since the said claim for deduction u/s.54F of the Act is a legal claim and can be adjudicated on the basis facts already on record, the same is taken up for consideration. The relevant provisions of Sec.54F of the Act, reads thus: '54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. He held that as per the proviso (a)(i) to Sec.54F(1), deduction u/s.54F of the Act is allowed only for a residential house. Since the Assessee purchased 13 flats the same cannot be one residential house. Moreover as per proviso (a)(ii) if the Assessee purchases more than on residential house within the time specified in the proviso the claim made in respect of one residential unit also has to be disallowed. He also observed that the enquiries revealed that the Assessee has sold two flats out of her share of built up area in AY 2015-16. He held that the condition that the new asset should not be sold within the period mentioned in Sec.54F(3) of the Act has also been contravened. The assessee placed reliance 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 pari materia the same as sec. 54F of the Act) as follows:- "8. For a proper appreciation of the aforesaid contention, it is necessary to have a careful look at Section 54 of the income Tax Act, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber. - 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 expression should be read iii consonance with the other words 'buildings' and 'lands' and, therefore, the singular 'a residential house also permits use of plural b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Makhija in ITA No. 496/Bang/2007 judgment dated 18-12-2013 took the view contrary to the view taken by the Hon'ble High Court in the case of K.G Rukminiamma (Supra). 8. Similar arguments raised were considered and decided by the ITAT in the case of Smt.Netravati (supra). The tribunal after hearing the rival contentions held as follows: "11. 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 measuring 30' x 110' the assessee had a residential premises. Under a joint development agreement she gave that property to a builder for putting up flats. Under the agreement 8 flats are to be put up in that property and 4 flats representing 48% is the share of the assessee and the remaining 52% representing another 4 flats is the share of the builder. So the consideration for selling 52% of the site was 4 flats representing 48% of built up area and the 4 flats are situated in a residential building. The Court held that the 4 flats constitute 'a residential house' fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessee and the facts of the case of K.G.Rukmaniamma (supra) decided by the Hon'ble Karnataka High Court. In the case of the Late Khubchand M Makhija (Supra), the facts were that one residential house was sold and the Long Term Capital Gain on such sale was used to buy two independent residential houses. This aspect has been noticed by the Hon'ble Court in paragraph 15 & 16 of the judgment in the case of Khubchand M.Makhija (supra) wherein the distinguishing facts between the facts of K.G.Rukminiammal(supra) and the facts of the case Khubchand M.Makhija (supra) were brought out by the Hon'ble Karnataka High Court. In the present case all the 13 flats were situate in the same premises and, therefore, the decision rendered in the case of Smt. K.G Rukminiamma (Supra) will apply. In the light of above judicial pronouncements on identical facts and circumstances of the case of the assessee we are of the view that the Assessee is entitled to deduction u/s.54F of the Act on all the 13 flats and there was no capital gain chargeable to tax in the hands of the assessee. We hold and direct accordingly and allow the appeal of the Assessee." 9. We are of the view that the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gain. The assessee claimed FMV as on 01-04-1981 at Rs. 300/- but had no evidence in support of his claim. 11.1. On the other hand, the AO was able to identify a sale instance of a property in Survey No. 160/2 in Vibuthipura Varthur Hobli, which sale instance was dt. 29-06-1981. The value as per the said sale deed was Rs. 0.33 per Sq. Ft. The CIT(A) gave a benefit of higher value at Rs. 1/- per Sq. Ft., and computed the FMV as on 01-04-1981 to arrive at the cost of acquisition of the property by the assessee. 11.2. Aggrieved by the aforesaid order of CIT(A), assessee raised Ground No. 4 before the Tribunal. 11.3. The dispute is with regard to rate to be adopted as FMV as on 01-04-1981. It is no doubt true that the Revenue authorities claim for adopting FMV as on 01-04-1981 at Rs. 1/- per Sq. Ft., has the backing of the sale instance. We are however, of the view that in such matters, it is not possible to identify identical property as that of assessee for determination of FMV as on 01-04-1981, giving the benefit of doubt to assessee, We are of the view that it would be just appropriate in the given facts and circumstances of the case to adopt the FMV as on 0104-1981 at Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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