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TMI Blog2019 (6) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of JDA. In such circumstances, the 14 flats on which rights were given up in favour of the developer by the assessee were held by assessee for a period of less than 36 months and therefore, those flats assume the character of Short Term Capital Asset . The act of giving of rights over those 14 flats would amount to a transfer and since such transfer is of a Short Term Capital Asset, the gain on such transfer was rightly assessed by the Revenue authorities as STCG. Fair Market Value (FMV) as on 01-04-1981 of the 14 flats that were given up in favour of the developer - HELD THAT:- It is no doubt true that the Revenue authorities claim for adopting FMV as on 01-04-1981 at ₹ 1/- per Sq. Ft., has the backing of the sale instance. We are however, of the view that in such matters, it is not possible to identify identical property as that of assessee for determination of FMV as on 01-04-1981, giving the benefit of doubt to assessee, We are of the view that it would be just appropriate in the given facts and circumstances of the case to adopt the FMV as on 0104-1981 at ₹ 50/- per Sq. Ft. AO is accordingly directed to compute STCG on sale of 14 flats by the assessee to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, the learned counsel for the Assessee submitted before us that the Assessee is entitled to claim deduction u/s.54F of the Income Tax Act, 1961 (Act) and no part of the LTCG is taxable. In ground No.2 raised by the Assessee before the Tribunal, the Assessee has only questioned the manner of determination of LTCG and not a ground regarding deduction u/s.54F of the Act. However in Gr.No.6 a specific ground seeking deduction u/s.54F of the Act has been raised. Since the said claim for deduction u/s.54F of the Act is a legal claim and can be adjudicated on the basis facts already on record, the same is taken up for consideration. The relevant provisions of Sec.54F of the Act, reads thus: '54F. Profit on sale of property used for residence:- (1) Subject to the provisions of sub-section (4) where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, not being a residential house,(hereinafter referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so observed that the enquiries revealed that the Assessee has sold two flats out of her share of built up area in AY 2015-16. He held that the condition that the new asset should not be sold within the period mentioned in Sec.54F(3) of the Act has also been contravened. The assessee placed reliance on the decision of the Hon ble Karnataka High Court in the case of CIT Vs. K.G Rukminiamma [331 ITR 221], wherein the Hon ble Karnataka High Court held on the facts of the case which are identical to the case of the assessee (though in the context of sec. 54 of the Act which is pari materia the same as sec. 54F of the Act) as follows:- 8. For a proper appreciation of the aforesaid contention, it is necessary to have a careful look at Section 54 of the income Tax Act, which reads as under: '54. Profit on sale of property used for residence:- (1) Subject to the provisions of sub-section where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being. buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not the intention of the legislation to convey the meaning that it refers to a single residential house, if that was the intention, they would have used the word one. As in the earlier part, the words used are buildings or lands which are plural in number and that is referred to as a residential house , the original asset. An asset newly acquired after the sale of the original asset also can be buildings or lands appurtenant thereto, winch also should be a residential house. Therefore the letter 'a' in the context it is used should not be construed as meaning singular. But, being an indefinite article, he said expression should be read iii consonance with the other words 'buildings' and 'lands' and, therefore, the singular 'a residential house also permits use of plural by virtue of Section 13(2) of the General Clauses Act. This is the view which is taken by this court in the aforesaid Anand Basappa's case in IT.A.No. 113/2004, disposed of on 20.9.2008. 11. We, therefore, do not see any merit in the submission of the learned counsel for the revenue. 12. In the instant case, the facts are not in dispute. On a site mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as follows: 11. We have given careful consideration to the rival submissions. We find that the facts of the Assessee s case are similar to the case of Smt.K.G.Rukminiamma (supra) decided by the Hon ble Karnataka High Court. In the case of K.G.Rukminiamma, the facts were on a site measuring 30 x 110' the assessee had a residential premises. Under a joint development agreement she gave that property to a builder for putting up flats. Under the agreement 8 flats are to be put up in that property and 4 flats representing 48% is the share of the assessee and the remaining 52% representing another 4 flats is the share of the builder. So the consideration for selling 52% of the site was 4 flats representing 48% of built up area and the 4 flats are situated in a residential building. The Court held that the 4 flats constitute 'a residential house' for the purpose of sec 54. The 4 residential flats cannot be construed as 4 residential houses for the purpose of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect has been noticed by the Hon ble Court in paragraph 15 16 of the judgment in the case of Khubchand M.Makhija (supra) wherein the distinguishing facts between the facts of K.G.Rukminiammal(supra) and the facts of the case Khubchand M.Makhija (supra) were brought out by the Hon ble Karnataka High Court. In the present case all the 13 flats were situate in the same premises and, therefore, the decision rendered in the case of Smt. K.G Rukminiamma (Supra) will apply. In the light of above judicial pronouncements on identical facts and circumstances of the case of the assessee we are of the view that the Assessee is entitled to deduction u/s.54F of the Act on all the 13 flats and there was no capital gain chargeable to tax in the hands of the assessee. We hold and direct accordingly and allow the appeal of the Assessee. 9. We are of the view that the facts of the Assessee s case are identical to the case decided by the Tribunal in the case of Smt.Netravati (supra). Respectfully following the same, we hold that the Assessee is entitled to benefit of deduction u/s.54F of the Act, on the 13 flats which he got as his share of built up area from the developer under the JDA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as dt. 29-06-1981. The value as per the said sale deed was ₹ 0.33 per Sq. Ft. The CIT(A) gave a benefit of higher value at ₹ 1/- per Sq. Ft., and computed the FMV as on 01-04-1981 to arrive at the cost of acquisition of the property by the assessee. 11.2. Aggrieved by the aforesaid order of CIT(A), assessee raised Ground No. 4 before the Tribunal. 11.3. The dispute is with regard to rate to be adopted as FMV as on 01-04-1981. It is no doubt true that the Revenue authorities claim for adopting FMV as on 01-04-1981 at ₹ 1/- per Sq. Ft., has the backing of the sale instance. We are however, of the view that in such matters, it is not possible to identify identical property as that of assessee for determination of FMV as on 01-04-1981, giving the benefit of doubt to assessee, We are of the view that it would be just appropriate in the given facts and circumstances of the case to adopt the FMV as on 0104-1981 at ₹ 50/- per Sq. Ft. AO is accordingly directed to compute STCG on sale of 14 flats by the assessee to the developer. Ground No. 4 is accordingly partly allowed. 12. As far as Ground No. 5 is concerned, the claim by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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