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TMI Blog2022 (12) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant, before him, is opposed to law and unsustainable in the facts and the circumstances of the case. ...... 6) The Ld. CIT(A) ought to have appreciated the fact that the appellant is eligible for claiming capital gains on the entire 7 flats and not merely on one flat. 2.1 The Ld. AR submitted that the property was acquired under will and the sale consideration was invested in 7 flats. The Ld. AR submitted that the assessee would be eligible to claim deduction for all the flats as held by Hon'ble High Court of Madras in CIT vs. Gumanmal Jain (80 Taxmann.com 21). The copy of the order has been placed on record. The Ld. AR also submitted that the objections raised by the assessee opposing reopening was not disposed-off by Ld. AO by way of speaking order and therefore, the reassessment proceedings would not be valid in the eyes of law. 2.2 The Ld. Sr. DR controverted the argument of Ld. AR and submitted that the reasons were sought by the assessee at fag-end of the year and no time was left with Ld. AO to pass a speaking order. The Ld. Sr. DR also submitted that the 7 flats could not be considered as single unit and each unit is separate unit. 2.3 Having heard rival su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us is in narrow compass i.e., validity of reassessment proceedings and deduction u/s 54. The correct provision under which the deduction would be available to the assessee is Sec.54F and not Sec.54 since the assessee has parted with land and invested the same in residential properties. Therefore, the claim of the assessee would be ascertained at the threshold of provisions of Sec.54F. 6. We find that the original return of income was never scrutinized. In fact, no capital gain was declared in the original return of income. Based on assessment proceedings of subsequent year, it transpired that certain capital gain would accrue to the assessee in this year. Accordingly, the case was reopened. The assessee sought reasons for reopening at fag- end. The reasons were also supplied to the assessee. Therefore, in our considered opinion, Ld. AO had rightly assumed jurisdiction u/s 147 and no infirmity could be found in the same from this angle. The adjudication in the impugned order, to that extent, does not require any interference on our part. The corresponding grounds urged by the assessee stand dismissed. 7. On the issue of deduction u/s 54F, it could be seen that the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee will receive 43.75% of the built-up area after development, which is construed as one block, which may be one or more flats. In that view of the matter what was before the Assessing Officer is only equivalent of 56.25% of land transferred, equivalent to 43.75% of built up area received by the assessee. This built up area got translated into five flats. Hence, we are of the opinion that the transaction in this case was not with regard to the number of flats but with regard to the percentage of the built up area, vis-a-vis, the Undivided Share of Land. 11. In similar circumstances, this Court, by order dated 04.01.2012 in T.C. (A) No. 656 of 2005 held as follows: "The above provision refers to a residential house meaning thereby that even if there are four different flats and if it is considered for the property assessed as one unit and one door number is given, it should be construed as a residential unit, namely, one unit. In that sense, the said provision is available to the assessee." 12. In the decision reported in (2012) 75 DTR 56 (Dr. (Smt.) P.K. Vasanthi Rangarajan, this Court, while dealing with the benefit of exemption under Section 54F, followed the abovesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, as Smt. K.G. Rukminiamma's case (supra) has been cited before us, we discuss the same. Smt. K.G. Rukminiamma's case (supra) has been relied upon by the Madras High Court in Smt. V.R. Karpagam's case (supra), though Smt. K.G. Rukminiamma's case (supra) arose under Section 54 of IT Act while Smt. V.R. Karpagam's case (supra) is under Section 54-F of the IT Act akin to the instant case. We are also of the considered opinion that the principles/ratio in Smt. K.G. Rukminiamma's case (supra) would certainly apply to a case under Section 54-F also because a bare reading of Sections 54 and 54-F of the IT Act would reveal that the two provisions are in parimateria with regard to those aspects of provisions of law which we are concerned with in the instant case. While Section 54 deals with capital gain arising out of transfer of buildings or lands appurtenant thereto and being residential house, 54-F deals with capital gain arising out of transfer of any long term capital asset not being a residential house. Otherwise, in all other aspects of the matter the two provisions namely Section 54 and 54-F are in parimateria. Therefore, the interpretation of 'a res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d does not help the Revenue in any manner in the instant case. (xi) In G. Chinnadurai's case (supra), the matter arises under Section 54-F of IT Act. In this case also, the assessee had entered into a joint development agreement with the builder and had got more than one flat towards his share in the same location/address. Learned Single Judge of this Court had applied the principles in V.R.Karpagam's case and held in favour of the assessee. (xii) As mentioned supra, it was submitted before us that V.R. Karpagam's case was not carried to the Supreme Court by the Revenue. It is now not in dispute that Smt. K.G. Rukminiamma's case (supra) was also not carried to the Supreme Court by the Revenue. We notice that Pawan Arya's case (supra) also has not been carried to the Supreme Court by the assessee. (xiii) Therefore, we find ourselves persuaded to follow V.R.Karpagam's case for two reasons and they are as follows: (a) Smt. V.R. Karpagam's case (supra) has been rendered by a coordinate Division Bench of this Court. (b) Smt. V.R. Karpagam's case (supra) has not been carried by Revenue to the Supreme Court and therefore is holding the field as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the question of whether it is in the same block or in different blocks does not arise for consideration. To our mind, as long as all the flats are in the same address/location even if they are located in separate blocks or towers it does not alter the position. In the instant case, after all, all the flats are a product of one development agreement of the same piece of land being said land. Therefore, we make it abundantly clear that even if flats/apartments are in different blocks and different towers as long as they are in same address/location it does not disentitle the assessee from getting the benefit of Section 54-F of IT Act. (v) Therefore, the sole and sheet anchor submission of counsel for Revenue that the 15 flats in the instant case are located in the different blocks does not impress us. We are unable to persuade ourselves that this will disentitle the assessee from getting the benefit of Section 54-F as all the flats are in the same location/address and all flats are by products of one development agreement with the same builder. (vi) The logic behind our view is that the assessee, irrespective of whether it is one flat or many flats, gets proportionate undivide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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