2022 (2) TMI 860 - AT - Income Tax

Claim of deduction u/s 54/54F - AO denied the claim of the assessee on the ground that the said property was not completed even as on 04.03.2016 - HELD THAT - We find that the ld. CIT(A) has rightly followed the decision of the Hon ble Jurisdictional High Court in the case of CIT v. V.R. Karpagam 2014 (8) TMI 899 - MADRAS HIGH COURT wherein as referred to the decision taken by case of CIT v. Smt. K.G. Rukminiamma 2010 (8) TMI 482 - KARNATAKA HIGH COURT to hold that the assessee is eligible for the deduction claimed under section 54F of the Act. The ld. DR could not controvert the above decisions of various High Courts - Decided against revenue.

Summary

Issues:
1. Eligibility for deduction under section 54F of the Income Tax Act due to delay in completion of construction of residential units.
2. Eligibility for deduction under section 54F despite claiming it on multiple properties.

Issue 1:
The appeal before the Tribunal concerned the denial of benefit claimed under section 54F of the Income Tax Act due to delay in completing the construction of residential units and claiming deduction on multiple properties. The Assessing Officer had denied the claim based on the property not being completed by a certain date. However, the ld. CIT(A) ruled in favor of the assessee, citing decisions of the Hon'ble Jurisdictional High Courts in similar cases. The Hon'ble High Courts emphasized that the intention of the Legislature was to encourage investments in residential properties and that completion within a specific timeframe was not a prerequisite for claiming the deduction under section 54F. The Tribunal upheld the decision of the ld. CIT(A) based on the precedents and dismissed the appeal by the Revenue.

Issue 2:
Regarding the deduction claimed on multiple properties under section 54F, the ld. CIT(A) referred to the decision of the Hon'ble High Court of Madras, which clarified that post-amendment, the benefit of section 54F would apply to one residential house in India. Prior to the amendment, a residential house could include multiple flats or units. The ld. CIT(A) relied on the decisions of the Hon'ble Jurisdictional High Courts to hold that the appellant was eligible for the deduction despite claiming it on multiple properties. The Tribunal supported this decision, noting that the ld. CIT(A) correctly followed the precedents and dismissed the Revenue's appeal as lacking merit.

In conclusion, the Tribunal upheld the eligibility of the assessee for claiming deductions under section 54F of the Income Tax Act, both in cases of delay in construction completion and claiming deductions on multiple properties, based on the decisions of the Hon'ble Jurisdictional High Courts. The appeal filed by the Revenue was dismissed, and the order was pronounced on 24th January 2022 at Chennai.