2013 (10) TMI 1571 - AT - Income Tax

Summary

Issues Involved:
Cross-appeals filed by Revenue and Assessee against CIT(A)'s order for AY 2009-2010 regarding deduction u/s 54 for multiple residential flats.

Summary:
The assessee filed a return declaring NIL income and claimed deduction u/s 54 against capital gains from a development agreement. The Assessing Officer recomputed the gains, restricting the deduction to one flat. The CIT(A) allowed the claim for four flats based on Karnataka High Court decisions. The Revenue appealed, but ITAT upheld the CIT(A)'s decision, citing the binding precedent of the High Court. The ITAT emphasized that the term "a residential house" in section 54 should not be interpreted as singular, allowing exemption for multiple flats in the same building. The ITAT dismissed the Revenue's appeal and the assessee's cross-objection, confirming the CIT(A)'s order. As a result, both appeals were dismissed, and the assessee's additional appeal was also treated as dismissed.

This judgment clarifies the interpretation of "a residential house" u/s 54, emphasizing that the term does not restrict exemption to a single unit but can include multiple flats in the same building. The decision is based on the precedent set by the Karnataka High Court, which has been consistently followed in similar cases. The ITAT's ruling highlights the importance of judicial decisions in determining tax exemptions and upholds the principle that High Court decisions take precedence over Tribunal decisions in the absence of contradictory judgments.