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TMI Blog2021 (9) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on the amendment carried out by Finance (No. 2) Act, 2014 is grossly misplaced. The interpretation rendered by the co-ordinate benches and the Hon'ble High Courts is on the point as to what constitutes a residential house. A residential house may comprise of several residential units if used and consummated collectively as residential house. The decisions quoted on behalf of the assessee squarely apply to the fact situation. The amendment in Section 54F of the Act has merely curtailed the holding of residential house at the sale of original asset. The interpretation of what constitutes 'residential house' has not been displaced by the amendment per se - no error in the action of the AO - Decided in favour of assessee. - I.T.A. No. 25/RPR/2021 - - - Dated:- 6-9-2021 - Pradip Kumar Kedia, Member (A) And N.K. Choudhry, Member (J) For the Appellant : R.B. Doshi, C.A. For the Respondents : R.K. Singh, CIT, DR ORDER Per Pradip Kumar Kedia AM The captioned appeal has been filed at the instance of the assessee against the order of the Principal Commissioner of Income Tax, Raipur ('PCIT' in short), dated 30.03.2021 passed under s. 263 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are enumerated as under:- 1. As per the information available on record, it is seen that the assessee had jointly sold an immovable property amounting to ₹ 11.90 Cr. during the F.Y. 2015-16. From the above sale the assessee had received consideration of ₹ 2,43,18,856/- (his share in the property) and claimed deduction u/s. 54F at ₹ 1,04,31,764/- on account investment in house property and Capital Gain Account Scheme. Further, the assessee has made investment of ₹ 50,00,000/- u/s. 54EC on specified bond (REC bond). Thus, after considering all the facts and relevant documents available on record the returned income at ₹ 89,40,440/- is accepted. 2. On perusal of the I CI report of the DIT (I CI), Bhopal received through your office, it is noticed that as per the verification done by the ADIT (I CI), Raipur, it is found that the assessee has invested ₹ 10431764/- for purchase of flat bearing No. B-501 and B-502, 5th floor, Block No. B, Golden Glory, Shreeram Nagar, Shankar Nagar, Raipur. On perusal of the purchase deed dated 01.09.2015 of the above said flats, it is seen that the assessee had purchased two residential flats and claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital gains arises from transfer of a long-term capital asset, not being a residential house, and the assessee within a period of one year before or two years after the date of transfer, purchases, or within a period of three years after the date of transfer constructs, a residential house then the portion of capital gains in the ratio of cost of new asset to the net consideration received on transfer is not chargeable to tax. The benefit was intended for investment in one residential house within India. Accordingly, it is proposed to amend the aforesaid sub-section (1) of section 54 so as to provide that the rollover relief under the said section is available if the investment is made in one residential house situated in India. It is further proposed to amend the aforesaid sub-section (1) of section 54F so as to provide that the exemption is available if the investment is made in one residential house situated in India. These amendments will take effect from 1st April, 2015 and will accordingly apply in relation to assessment year 2015-16 and subsequent assessment years. In view of the above facts, it is abundantly clear that assessee is eligible for deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versy raised by the PCIT under s. 263 of the Act is towards eligibility of deduction under s. 54F of the Act. It was submitted that the assessee had jointly sold an immovable property during F.Y. 2015-16. The sale proceeds were invested in two adjoining flats bearing No. B-501 B-502, Golden Glory, Shriram Nagar, Raipur. The PCIT invoked provisions of Section 263 of the Act on the ground that deduction under s. 54F of the Act ought to have been allowed only in respect of one residential unit/flat and thus, deduction under s. 54F of the Act has been excess claimed by taking into account two units as a residential house, which is not permissible in law. Thus, the assessment order passed in this case was alleged to be erroneous in so far as it is prejudicial to the interest of the Revenue. 5.1 In this backdrop, the learned counsel pointed out that the action of the PCIT is wholly wrong and does not meet requirements of Section 263 of the Act. The learned counsel submitted that the issue was specifically enquired by the AO by issuing notice under s. 142(1) of the Act dated 19.06.2018 and secondly, in the light of long line of judicial precedents, two or more residential units can c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order passed by the AO was erroneous in so far as prejudicial to the interest of the Revenue. 7. We have carefully considered the rival submissions. The jurisdiction assumed by the PCIT under s. 263 of the Act is under challenge having regard to the facts as noted above. It is the case of the assessee that while two adjoining flats can be regarded as two residential units constructed by the developer, but in effect, constitutes only one residential 'house' of the assessee. The view has been consistently taken in large number of judicial precedents and hence, the action of the AO is consistent with the plausible view as held by the Courts and Tribunals. 8. We straightway find merit in the plea of the assessee. It is trite that where the AO has taken a view which is possible and plausible, the action of the AO cannot be regarded as erroneous per se. Consequently, the twin conditions of order being (i) erroneous as well as (ii) prejudicial to the interest of the Revenue, does not co-exist. Hence, the jurisdiction usurped by the PCIT is not sustainable in law. The reliance placed on the amendment carried out by Finance (No. 2) Act, 2014 is grossly misplaced. The interp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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