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TMI Blog2020 (11) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 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. Post amendment, viz., from 01.04.2015, benefit of s 54F will be applicable to one residential house in India. However, prior to said amendment, a residential house would include multiple flats/residential units. Similar decisions were rendered on identical facts by the Hon'ble Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Konappa. 4. There was another partition deed dated 02.04.2013 between the assessee and the other 2 co-owners of the property whereby the share of built up area that would be allotted to the assessee s share, was identified as follows: Flat Nos BLOCK FLOORS AREA sq.ft C-102 Congo First 2350 C-1203 Congo Twelfth 3300 C-1501 Congo Fifteenth 2300 H-203 Huron Second 3200 H-1401 Huron Fourteenth 2250 H-902 Huron Ninth 2300 H-706 Huron Seventh 2250 H-1602 /1702 Huron Sixteenth Seventeenth 5225 H-504 Huron Fifth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment and sale in favour of the prospective Purchaser/s, in terms of this agreement. Provided nothing contained herein shall be deemed to mean that the Owners have handed over the possession of the Schedule Property in part performance of any contract as stipulated in Sec. 53-A of the Transfer of Properties Act, 1882 and or under section 2(47) of Income Tax Act, 1961. 4. REGARDING POSSESSION The legal possession of the Schedule Property shall be with the OWNERS and the DEVELOPERS (in the capacity of licensee) have been duly authorised by the OWNERS to commence the development and construction work in the Schedule Property, getting the Schedule Property duly surveyed, arranging for spot inspection by competent Authorities, for construction and development, for fixing Hoardings and Advertisement Boards and to carry on such other activities for developing and sale of the Schedule Property in terms of this agreement. 7. The AO also made a reference to the decision of the Hon ble Karnataka High Court in the case of CIT Vs. T. K. Dayalu 202 taxman 531 (Karn) wherein it was held that the date of transfer would be the date on which possession is handed over to the dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal sought to be raised by the assessee is a legal issue and can be decided on the basis of the facts already available on record. Keeping in view the decision of Hon ble Supreme Court in the case of NTPC Ltd., Vs. CIT 229 ITR 383 (SC) wherein it was held that any question of law which can be decided on the basis of the facts already available on record should be permitted to be raised at any point of time, we admit the additional grounds of appeal for adjudication. 13. As far as the adjudication of additional grounds raised by the assessee is concerned, the material facts has already been noticed by us in the earlier paragraph. The assessee received 10 flats as his share of built up area under the JDA. The assessee claimed deduction only in respect of 1 of the 10 flats so received. By way of the additional ground of appeal, the Assessee seeks to claim deduction u/s.54F of the Act on all the 10 flats. The question whether the assessee can claim deduction in respect of the entire 10 flats under section 54F of the Act has been subject matter of several judicial pronouncements. These decisions have been considered by this Tribunal in the case of Smt. Nethravathi Vs. ITO in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid provision was examined by the Hon ble Karnataka High Court in the case of CIT Vs. K. G. Rukminiamma 331 ITR 221 (Karn). In the context of section 54F which is in para materia under section 54F of the Act, the Hon ble High Court held 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 Income from house property (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date air which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then, instead of the capital gain being charged to income-tax as income of the previous yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purtenant 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 measuring 30' x 110', the assessee had residential premises. Under a joint development agreement, she gave that property to a builder for putting iii. flats. Under the agreement eight flats are to be put up in that property and four flats representing 48% is the share of the assessee and the remaining 52% representing another four flats was the share of the builder. So the consideration for selling 52% of the site is four flats re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew 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. The Hon'ble Madras High Court in the case of CIT Vs. Smt. V.R Karpagam Tax Appeal No.301 of 2014 judgment dated 18/8/2014 in a case where the facts were similar to the case of the assessee also took similar view. 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 eligible for exemption u/s 54F on all five flats received by her in lieu of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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