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TMI Blog2019 (1) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. Claim of Exemption u/s 54/54F - multiple units/ flats i.e., the 2 flats in the same apartment building received by him in lieu of entering into the JDA dated 03.12.2007 with M/s. Sai Deep Estates - Held that:- There was a structure/building on the said property before the JDA was entered into on 03.12.2007, it is of the considered opinion that the issue for consideration in this ground i.e., the assessee’s claim for exemption u/s 54/54F of the Act in respect of 2 flats in the same residential building complex; is squarely covered in favour of the assessee by the decision of the Hon’ble Karnataka High Court in the case of CIT Vs. Smt. K. G. Rukminiamma [2010 (8) TMI 482 - KARNATAKA HIGH COURT]. As decided in COMMISSIONER OF INCOME TAX VERSUS SMT. VR. KARPAGAM [2014 (8) TMI 899 - MADRAS HIGH COURT] Amendment to section 54F of the Act being para materia to section 54 of the Act with regard to substitution of “a” residential unit by Finance (No.2) Act, 2014 was operative only w.e.f. 01.04.2015, whereby exemption for more than one unit/flat (residential house) is to be withdrawn. However, prior to the aforesaid Amendment (supra), a residential house would include multiple f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for reasons recorded by the Assessing Officer vide letter dt.22.2.2012. We find that the order of the Assessing Officer as well as the CIT (Appeals) are silent on this issue and therefore it is not possible to give a concluding finding without referring to the assessment record on this point. Further it is well settled proposition of law that in case the assessee demands the reasons recorded for reopening of assessment the Assessing Officer is duty bound to supply the reasons and then decide the objections if any filed by the assessee against the Notice issued under Section 148 prior to the framing of reassessment. Thus in the facts and circumstances of the case, when this issue has not been raised and considered by the authorities below, we remit this issue to the record of the CIT (Appeals) for adjudication as per law. Since the issue of validity of the reopening has been remitted to the record of the CIT (Appeals) therefore the other grounds raised on merit are also remitted to the record of the CIT (Appeals) for consideration and adjudication on merit. 2.3.1 Pursuant to the aforesaid order of the Tribunal dated 05.05.2017 (supra), the CIT(A) called for the show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same was requested vide letter dated 22/02/2012, consequently the assessment order founded on an invalid reopening deserves to be cancelled on the facts and circumstances of the case. [ii] The learned Commissioner of Income-tax [Appeals] erred in holding that the show cause notice dated 20/01/2012 stating merely the details of transaction entered by the Appellant during the impugned assessment year is sufficient compliance of the principles laid down by the Hon'ble Apex Court in GKN Driveshaft [India] Ltd., v. ITO 259 ITR 19 [SC] with regards to communication of reasons recorded for issue of notice u/s. 148 of the Act on the facts and circumstances of the case. [iii] The learned Commissioner of Income -Tax [Appeals] below erred in law in not holding that the order of assessment passed by the learned assessing officer under Section 143[3] r.w.s 147 of the Act is bad in law since the mandatory conditions as envisaged in the Act to assume jurisdiction did not exist or having not been complied with and consequently, the reassessment requires to be cancelled on the facts and circumstances of the case. [iv] The learned Commissioner of Income -Tax [Appeals] erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the authorities below ought to have taken the guideline value of the land for the purpose of computation of capital gains on the facts and circumstances of the case. 5. Without Prejudice, grounds on non-granting of correct cost of acquisition of the land on the facts and circumstances of the case. i) The learned CIT [A] erred in not considering the cost of acquisition for the full portion of land in the computation of capital gains on the facts and circumstances of the case. ii) The learned CIT [A] erred in considering the cost of consideration only to the extent of land measuring 1452.5 Sq. Ft. as against the total land measuring 7871.5 Sq. Ft on the facts and circumstances of the case. iii) The learned CIT [A] erred in not giving the proportionate indexation benefit on the facts and circumstances of the case. 6. Without Prejudice. rounds of non-QrantinQ of Section 54/54F exemption on the facts and circumstances of the case. i) The learned CIT [A] was not justified in not granting deduction under Section 54 of the Act on the flats received by the Appellant in lieu of Development Agreement entered into by the Appellant on the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the developer after entering into the JDA and therefore there was no question of capital gains arising to the assessee. 6.2 We have heard and considered the rival contentions / submissions and carefully perused the material on record. As per the details that emanate from the record, the assessee along with his mother and siblings entered into a JDA on 03.12.2007 with M/s. Sai Deep Estates, which, I find, is a registered document. The Hon ble Karnataka High Court in the case of Dr. T. K. Dayalu (202 Taxman 531) (Kar) has held that on entering into a JDA, there is a transfer as per the provisions of section 2(47) of the Act and consequently capital gains is attracted. In that view of the matter, this issue is covered in favour of the Revenue and against the assessee. Respectfully following the aforesaid decision of the Hon ble Karnataka High Court in the aforesaid case of Dr. T. K. Dayalu (supra), ground No. 3 of the assessee s appeal is dismissed. 7. Ground No. 6 : Claim of Exemption u/s 54/54F of the Act 7.1 The learned AR of the assessee was heard in support of the assessee s claim for grant of exemption. It was submitted that the assessee along with his mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the JDA. In this regard, reliance was also placed on the decision of the co-ordinate bench of this Tribunal in the case of Smt. Netravathi Vs. ITO in ITA No. 2630/Bang/2017 dated 25.04.2018; copy of which has been placed on record. 7.2 Per contra, the learned DR for Revenue supported the orders of the authorities below. According to the learned DR, the Amendment to Section 54F of the Act by Finance (No.2) Act, 2014 w.e.f. 01.04.2015 where one residential house has been substituted in place of a residential house makes it abundantly clear that the intention of the Legislature was that exemption u/s 54F of the Act was to be allowed only in respect of one unit and not multiple units, therefore, if exemption u/s 54/54F is allowed, it should be restricted to one unit only. 7.3.1 I have heard the rival contentions and perused and carefully considered the facts of the case and the material on record; including the judicial pronouncements cited. After taking into account, the factual and legal matrix of the case as emanate from the record before me and the corroborating evidence to show that there was a building/structure on the said property before the JDA was entered into on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f sec 54. It has to be construed as a residential house and the assessee is entitled to the benefit accordingly. In that view of the matter, the Court held that the Tribunal as well as the appellate authority were justified in holding that there is no liability to pay Capital Gains tax as the case squarely falls under sec. 54 of the Income Tax Act, 1961. As far as the decision of the Hon'ble Madras High Court in the case of V.R. Karpagam (supra) is concerned the facts were similar to the case of the assessee. The assessee in the case of V.R.Karpagam entered into an agreement with M for development of a piece of land owned by it-As per agreement, assessee was to receive 43.75% of built up area after development, which was translated into five flats. The Assessee claimed exemption u/s 54F on the value of five flats. The AO granted benefit of capital gains in respect of one flat and the CIT( A) affirmed findings of AO holding that claim of assessee u/s 54F for all five flats could not be admitted, but however, he took the view that the assessee would be entitled to benefit of s 54F in respect of one single flat with largest area. In appeal, tribunal held that assessee was eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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