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TMI Blog2022 (8) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the Ld. CIT(A) has erred in allowing deduction u/s 54 of the IT Act amounting to Rs. 3,55,40,000/-. 2. The Ld. CIT(A) erred in holding that the expression 'a house' mentioned in section 54 of the IT Act 1961, may mean several contiguous houses. 3. The Ld. CIT(A) failed to appreciate that in the present case the assessee had purchased three independent residential plots and had constructed three independent houses each having all facilities like kitchen, living rooms, toilets etc. Three separate plans were approved by municipal authorities for these houses. In fact three separate purchase deeds were signed for purchase of three residential plots which were next to each other." 3. The facts in brief are that the assessee was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree independent residential houses. It cannot, therefore be said that three houses are 'one residential house' as each of them is independent house consisting of separate kitchen, bathroom, drawing room and bed room. He referred to the amendment in section 54(1) of the Act brought by Finance Act, 2014. He also observed that the decisions relied upon by the assessee were distinguishable on facts. Accordingly, in the assessment framed by him on 29.12.2017 under section 147 r.w. 143(3) of the Act, the Ld. AO restricted the deduction under section 54 of the Act to only one house which amounted to Rs.3,14,78,037/- resulting in addition of Rs. 3,55,40,000/- to the income of the assessee. 4. The assesee carried the matter in appeal before the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses are situated in a common compound wall, it is still a case of investment in purchase/construction of 3 independent houses bearing distinct number 195,196 and 197. 6.4 In this case, the assessee has relied on the Hon'ble Delhi High Court judgment in the case of Gita Duggal. As discussed above, Hon'ble Delhi High Court in the case of Gita Duggal held that Word "a" may represent the multiple residential units so long as the same are in the same building and contiguous to each other & used as single residential house. In the present case, the claim of deduction u/s 54 of I.T. Act is for a residential house built-up on three adjacent contiguous plots. The principle of multiple residential houses/units holds good till these units a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxation) (ITA No. 977/Del/2017 dated 03.03.2021) (iii) Saroj Arora vs. ITO (ITA No. 7557/Del/2017 dated 13.01.2022) 5.2 In rebuttal of Ld. AO's reliance on the amendment in Section 54(1) introduced by the Finance Act, 2014 the Ld. AR derived support from the decision of Hon'ble Madras High Court in the case of M/s. Tilokchand & Sons. vs. ITO, Madurai in T.C.(A) No. 771 of 2009 dated 14.03.2019. 6. We have considered the rival submissions of the parties, perused the orders of the Ld. AO/CIT(A) as also the material available in the records. The case of the assessee all along has been that he sold his house in Delhi which was falling short of his needs and constructed a house on three separate plots adjoining each other to enable him to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses are constructed according to the needs and requirements and even compulsions. For instance, a person may construct a residential house in such a manner that he may use the ground floor for his own residence and let out the first floor having an independent entry so that his income is augmented. It is quite common to find such arrangements, particularly post-retirement. One may build a house consisting of four bedrooms (all in the same or different floors) in such a manner that an independent residential unit consisting of two or three bedrooms may be carved out with an independent entrance so that it can be let out. He may even arrange for his children and family to stay there so that they are nearby, an arrangement which can be mutuall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Madras High Court in the case of Tilokchand & Sons (supra) held that the dislocation of newly purchased residential houses will not alter the position for interpretation of the word "a residential house" to the effect that it may include more than one residential houses. 7.1 In the decision (supra) the Hon'ble Madras High Court also considered the impact of the amendment by Finance (No.2) Act of 2014 w.e.f. 01.04.2015 which could operate only prospectively from AY 2015-16. The present case before us is prior to that. In this view of the matter, reliance upon the amended law w.e.f. 01.04.2015 by the Ld. AO is misplaced. 7.2 The Hon'ble Madras High Court in the decision (supra) also held that in the first part of section 54(1) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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