2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT

Exemption u/s 54 - Purchase of two residential flats - AO observed that two units separated by a strong wall; that they were purchased from two different vendors under two separate sale deeds and as such the deduction under section 54 has to be restricted to only one flat. - Held that:- As held in D. Ananda Basappa's case [2008 (10) TMI 99 - KARNATAKA HIGH COURT] by the Karnataka High Court, the expression "a residential house" in section 54(1) of the Act has to be understood in a sense that the building should be of residential nature and "a" should not be understood to indicate a singular number and where an assessee had purchased two residential flats, he is entitled to exemption under section 54 in respect of capital gains on sale of its property on purchase of both the flats, more so, when the flats are situated side by side and the builder has effected modification of the flats to make it as one unit, despite the fact that the flats were purchased by separate sale deeds. - Exemption to be allowed - Decided against the revenue.