TMI Blog2005 (10) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. The assessee had acquired the domain, substantial interest and possession of flat. In view of the above noted judgments, as relied by the assessee, it cannot be said that the assessee had not purchased the Unit No. 1202 within the meaning of section 54(1). As such, we hold that the assessee had purchased Unit No. 1202 within the time prescribed u/s 54. Flat Nos. 1201 and 1202 were adjacent flats which were converted into a single residence by the assessee and were being used for the sell-residence of the assessee and family members. It has been held by Hon'ble Allahabad High Court in the case of Shiv Narain Chaudhari v. CWT (Lucknow) [ 1977 (4) TMI 34 - ALLAHABAD HIGH COURT] while explaining the meaning of house for exemption u/s 51(iv) of WT Act, that self-contained dwelling unit which are contiguous and situated in same compound and within common Boundaries and having unity of structure could be treated as one house. In our view two contiguous flats converted into a single residential premise should be treated as a residential house for the purpose of section 54. As there is no dispute that the purchase of Flat Nos. 1201 and 1202 has been made within the prescribed ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d flat. On 25-10-1990 Shri Rajiv Nanda also entered into an agreement for purchase of second Flat No. 1202 at Green Acre, Lokhandwala Complex and assessee joined as second name holder. To acquire second property a loan of Rs. 7,25,000/- was given by the assessee to her son Rajiv Nanda. He was unable to arrange for repayment of the loan so the assessee agreed to purchase the second flat and absolve him of the loan and entered into an agreement dated 3-5-1991. Original documents and possession was also handed over to the assessee of Unit No. 1202 and the entire beneficial interest was transferred to her. It was mentioned in the agreement that due to the close relationship between the parties the premises No. 1202 shall continue to stand in the joint names of the parties. 5. The Unit Nos. 1201 and 1202 were adjacent flats and were purchased by the assessee for self-residence as she had a big family and had been converted into a single residence. It was with regard to purchase of second Flat No. 1202 that the exemption under section 54 was refused to the assessee by the Assessing Officer. The ld. CIT(A) allowed the deduction to the lessee and held as under:- 2.1 Reading of section 2(47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of Bombay Tribunal in the case of Gulshanbanoo Mukhi v. Joint CIT [2002] 83 ITD 649. 7. Mrs. Shobha H. Jagtiani, ld. Counsel for the assessee stated that the assessee had domain and possession both the units, which constitute one residential house. She further stated that the agreement dated 3-5-1991 for purchase of Unit No. 1202 was not required to be registered. The payment was made as an adjustment towards the debt. The said transaction constitute purchase within the meaning of section 54 of the Income-tax Act. She relied on the decision of Bombay High Court in the case of CIT v. Hilla J.B. Wadia [1995] 216 ITR 376 and on the decision of CIT v. T.N. Aravinda Reddy [1979] 120 ITR 462 (SC). 8. With regard to the second objection of the Revenue that the assessee is not entitled to exemption under section 54 on the purchase of second residential house, the counsel stated that both the Units i.e., Flat Nos. 1201 and 1202 constitute one single residential house as they were adjacent flats which had been converted into a single residence by the assessee and as such the same should be considered for exemption under section 54. 9. The counsel for the assessee also relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absolved him of the loan. It was also agreed between them that due to the close relationship between the two parties, the premises shall continue to stand in both the names. The original documents and the possession of Unit No. 1202 was handed over to the assessee. The assessee had acquired the domain, substantial interest and possession of flat. In view of the above noted judgments, as relied by the assessee, it cannot be said that the assessee had not purchased the Unit No. 1202 within the meaning of section 54(1). As such, we hold that the assessee had purchased Unit No. 1202 within the time prescribed under section 54. 13. Coming to the second issue of the matter, the Flat Nos. 1201 and 1202 were adjacent flats which were converted into a single residence by the assessee and were being used for the sell-residence of the assessee and family members. It has been held by Hon'ble Allahabad High Court in the case of Shiv Narain Chaudhari v. CWT (Lucknow) while explaining the meaning of house for exemption under section 51(iv) of WT Act, that self-contained dwelling unit which are contiguous and situated in same compound and within common Boundaries and having unity of structure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground that the payment was made for specific services, which were rendered by them. He held that brokerage was paid for services rendered, even though such services did not resulted into sale, the same is to be allowed as these were meant for the purpose of sale of the flat. 20. We have heard both the parties. We are of the view that the said payment made to the brokers was an expenditure incurred wholly and exclusively in connection with transfer of the asset as provided under section 48(1). Hence the same was deductible while working out the capital gain. The expenditure was for the services of the brokers, which resulted in arranging the sale of the flat to Parikh family. The assessee was not able to sell the flat to Parikh family because it was acquired by the appropriate authority but the brokerage had become due and was paid by the assessee. The expenditure on brokerage was incurred by the assessee in connection with the sale of the flat. We uphold the finding of the CIT(A) and decline to interfere the same. The third ground is dismissed. 21. The appeal of the Revenue is dismissed. This order is pronounced at Mumbai in the open court on this day of 7th October two thousand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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