TMI Blog2020 (8) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... ral interpretation of a residential unit . All the case laws relied by the counsel are found to be factually different from the instant case. Keeping in view, the provisions of Section 54F, the amendments, the ratio of judgments wherein two residential units are considered as a residential house and keeping view the facts of the instant case wherein the assessee has invested in two distinctly identifiable properties at separate locations, we hereby hold that the assessee is eligible to claim deduction on the investment of capital gains in the Ansal property invested in the capital gains bonds. The investment in the residential property at Jungpura is liable to be taxed under the head capital gains . Business Loss - The assessee was in the trading business of car seat covers. During the year, the loss computed at ₹ 3,13,826/- has been set off against the other income. AO observed that as against receipt of ₹ 10,522/-, the assessee has claimed expenses on account of depreciation on car, salary of employee, petrol and other expenses. The AO disallowed 50% of the salary expenses of the employees. We hold that the salary paid by the assessee to the employees cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gains and the claim of exemption under section 54F as under: Minimum Value as per Circle rates 1,18,55,480 Actual Sales Consideration 78,75,000 Purchase Cost Year 11.03.1966 3,800 Valuation on 01.04.1981 3,76,000 Indexed Cost of acquisition at CII 785 29,51,600 29,51,600 Capital Gain 89,03,880 Deduction u/s 54F 1,18,55,480 Investment in residential Property- Ansal 64,28,424 Construction of Residential House 24,20,000 Capital Gains FDR 8,90,000 97,38,424 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire claim is not in consonance with the provisions of the Act. The assessee has to be allowed for at least one of the investment made. 11. Having said so, the issue of allowability of the deduction on the investment made in two different properties out of the capital gains is being examined. A. Claim U/s 54F for Investment for residential property for ₹ 64,28,424/- or B. Claim for Construction of residential house of ₹ 24,20,000/- or both. 12. We have examined the case of Gita Duggal 257 CTR 208 wherein the Hon ble High Court held that the expression a residential house should be understood in a sense that building should be of residential nature and a should not be understood to indicate a singular number. Also, section 54/54F uses the expression a residential house and not a residential unit . Section 54/54F requires the assessee to acquire a residential house and so long as the assessee acquires building, which may be constructed, for the sake of convenience, in such a manner a consist of several units which can, if the need arises, be conveniently and independently used as an independent residence, the requirement of the Section should be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts, as the two flats purchased by the assessee are adjacent to one another and have a common me point, the deduction cannot be denied. 14. In the case of Anand Basappa 91 ITD 53, the Co-ordinate Bench of ITAT at Bangalore observed as to whether 'a residential house' should be treated as 'one residential house' or whether 'more than one residential house' can be considered eligible for deduction under Section 54. The Tribunal observed as under: Reading the provisions of Section 54-it can be held that there is no bar like Section 54F to claim deduction for more than one residential house. If the assessee is holding 'a residential house' called building-A and on sale of such house if the assessee acquires property-X, the assessee is eligible for deduction under Section 54. Similarly, in the same year, if the assessee sells residential house 'B' and acquires a house property 'Y' out of such proceeds, still the assessee is eligible for deduction under Section 54. This means that there is no bar in acquiring more than one residential house to claim deduction under Section 54 unlike Section 54F. If this be the case, then it can be h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee sold the original property and earned capital gain out of same, what is to be seen is whether the sale proceeds of original asset has been utilised in acquiring another house property. We find that both the apartments were acquired simultaneously and hence the conditions for acquiring 'a residential house' within the time specified are complied with. The assessee is therefore eligible for deduction under Section 54 in respect of both the apartments simultaneously acquired. 15. We have also examined the rationale enunciated in the case of Sardarmal Kothari 302 ITR 286 as to the liberal construction of the provisions of the Act. 16. The ld. DR argued that there has been an amendment in the provisions of the Act wherein a residential house has been amended as one residential house and argued that this amendment is clarificatory in nature, hence the case laws mentioned above are no more applicable to the instant case. Relying on the judgment of the Hon ble Jurisdictional High Court in the case of CIT Vs Rajendera Kumar in ITA No. 65/2013, the ld. DR argued that any amendment which was introduced to rationalized and clear the existing ambiguity and doubts are to be ..... 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