TMI Blog2022 (5) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 therefore, as per the provisions of section 54 of the Act, the assessee is entitled to claim the deduction. Before amendment in section 54 of the Act, even though section 54 mentions that proceeds should be invested in a residential house , it being a beneficial provision, it should be construed liberally and the deduction cannot be restricted to only one residential house and it should be extended to the purchase of two adjacent residential flats. Therefore, the term a residential house used to interpret prior to assessment year 2015-16, as more than one residential house . In the assessee`s case under consideration we note that assessee purchased two flats (house) in A.Y. 2014-15 when the amendment was not in force, therefore as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), dated 29.12.2017. 2. The grounds of appeal raised by the Assessee are as follows:- 1. The Income Tax Department valuation Cell has denied the available photograph and the documents and taken the valuation at lower rate. Considering the available fact and as per the Government approved Valuation report (given by Shri Ramesh Jain) the value of property as on 01.04.1981 to be considered at 10.09 lacs. In IT Department Valuation report itself the Officer shown that the assessee has taken lower value of plot land however the instance of value of plot land is more than the value taken by the assessee. Considering the available fact and construction done by assessee before 01.04.1981 the value of property as on 01.04.1981 to be ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal. 3. We note that assessee has raised multiple grounds of appeal, however, at the time of hearing, the solitary grievance of the assessee, has been confined to the issue that whether exemption under section 54 of the Act is available for two flats (houses) in case registration of sale deed is done in AY 2015-16, whereas the amendment in section 54 of the Act was announced in July, 2015 and the sale deed of the property purchased was done in Month of May, 2015, before amendment in section 54 of the Act. The assessee has claimed purchases of two flats for exemption under section 54 of the Income Tax Act,1961. 4. Brief facts as discernable from the orders of lower authorities are that assessee filed return of income on 18.03.2016, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r held that amended provisions were applicable from assessment year 2015-16 onward. In view of the matter, exemption with regard to one flat of higher value amounting to Rs.89,85,600/- was allowed and as regards other flat valued at Rs.58,07,300/-, the same was disallowed and added to the capital gain derived by the assessee. 7. On appeal, ld CIT(A) confirmed the action of the assessing officer. Aggrieved, the assessee is in further appeal before us. 8. Shri Rasesh Shah, Learned Counsel for the assessee, pleads that assessee is eligible for deduction u/s 54 of the Act, when a residential property is purchased one year before or two years after the date of transfer, so the amendment in section 54 of the Act is not applicable to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,300/-. The Assessing Officer held that assessee is not eligible for deduction u/s 54 for two houses/flats. The assessee can claim deduction under section 54 of the Act in respect of one house/flat. The assessing officer observed that amendment in section 54 of the Act was made by Parliament with effect from assessment year 2015-16 by substituting the words One residential house in lieu of A residential house . 11. We note that flats were purchased by the assessee in assessment year 2014-15 however the sale deed was executed in assessment year 2015-16. Since the assessee has purchased these two flats in assessment year 2014-15 therefore, as per the provisions of section 54 of the Act, the assessee is entitled to claim the deduction. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a beneficial provision, it should be construed liberally and the deduction cannot be restricted to only one residential house and it should be extended to the purchase of two adjacent residential flats. Therefore, the term a residential house used to interpret prior to assessment year 2015-16, as more than one residential house . In the assessee`s case under consideration we note that assessee purchased two flats (house) in A.Y. 2014-15 when the amendment was not in force, therefore assessee is eligible for deduction under section 54 of the Act, for second house also. We note that above section 54 clearly says: the assessee has within a period of one year before can purchase the house. In the instant case the amendment in section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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