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TMI Blog2021 (11) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... of the documents, it has been observed that the assessee has entered into agreement-cum- general power of attorney with M/s Prakruthi Infrastructure and Developers vide registered document no. 6174 of 2013 executed on 6.11.2013 for development of open land admeasuring 7254 sq.yards situated in survey no. 104, 161, Manchirevula village, Rajendra Nagar Mandal, R.R.Dt., united Andhra Pradesh into residential apartments and duplex houses. 2.1. As per the development agreement the developed area is agreed to be shared by the assessee and the developer as under: - Sharing of duplex houses 47.53; and - Sharing of residential apartments 365 : 63.5 On the date of executing the assessee has received only 2 flats and 1 duplex, therefore the AO construed that sec. 2(47) will apply. Accordingly the capital gain shall be computed as per sec.45 of the Income Tax Act, 1961. The AO after analysis of the documents computed capital gain of ₹ 6,16,52,201/- and disallowed the claim made by the assessee u/s 54 of the Act. Being aggrieved assessee went in appeal before the CIT(A) who granted partial relief to the assessee. 3. Aggrieved by the order of CIT(A), the Revenue is in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Asst. Year 2014-15 only not in the A.Y.2016-17. Hence, the deduction claimed by assessee u/s 54 of the Act, is not allowable, as held by the jurisdictional high court decision in the case of Potla Nageswara Rao (2013) 365 ITR 249. This has been brought out in the submissions of the appellant. The appellant also placed reliance on the decisions of the Hon ble AP High Court in the case of CIT vs Syed Ali Adil (352 ITR 418)(AP), CIT Vs Anand Basappa (309 ITR 329)(Karnataka), CIT Vs K.G. Rukminiamma (196 taxmann 87)(Karnataka). As brought out in the appellant's submissions earlier, the land owned by the appellant was 7254 Sq.Yds. This was given for development to My s. Prakruti Infra Structure and Developers for construction of 22 apartments and 8 duplex houses with total constructed area of 63417 sq. ft. Out of this the appellant's share was 47% for duplex houses and 36.5% for residential apartments. The Hon'ble High Court of Karnataka in the case of CIT Vs Anand Basappa [2009] 309 ITR 329 1180 Taxman 4(Kar.), held that Section 54 makes it apparent that the proceeds should be invested in a residential house. However, it being a beneficial provision, it shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consistently taken the view that even though flats are located at different floors, when they could be combined, it should be construed as a single residential accommodation only; that the said view is supported by the decisions of the Tribunal reported in K. G. Vyas v. Seventh ITO [1986] 16 ITD 195 (Bom.), ITO v. P. C. Ramakrishna, (HUF) [2007] 108 ITD 251 (Chennai) and Prem Prakash Bhutani v. Asstt. CIT [2009] 31 SOT 38 (Delhi) (URO) 7. Challenging the same, the Revenue has filed the present appeal. 8. Heard Sri B. Narasimha Sarma, learned Standing Counsel for the Income Tax Department at the stage of admission. 9. He contended that the deduction under section 54 of the Act is allowable only for one residential house and not for more than one residential house and that the Tribunal erred in holding that the deduction under section 54 of the Act is allowable for two independent residential flats in the same complex. He also placed reliance on the decision of the Special Bench of the Tribunal in ITO v. Ms. Sushila M. Jhaveri [2007] 107 ITD 327 (Mum.) 10. We see no force in the said contention. As held in D. Ananda Basappa's case (supra) by the Karnataka Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. We hold that no substantial question of law arises for consideration in this appeal and the same is accordingly dismissed. No costs. d) Further, the Hon'ble Madras High Court in the case of CIT vs Gumanmal Jain [2017](394 ITR 666)(Madras) had reviewed various judgements related to Section 54 and 54F of various Courts including subsequent amendments brought to section 54 and 54F and the non-applicability to the pre-amendment scenario. It is also noted that thee facts and circumstances of the issue in the appellant's case are similar to those in the case of Syed Ali Adil which had been decided by the jurisdictional High Court. Considering the various facts and circumstances of the instant case, it is held that the addition made in the assessment for A.Y.2016-17 is not warranted and hence deleted and the issues relate to A.Y.2014-15 as has been brought to note by the Assessing Officer on page 4 of the assessment order. Accordingly, the Assessing Officer is directed to take suitable remedial action for A.Y.2014-15. Ground nos. 2, 3, 4 and 5 are partly allowed. In the context of the judicial decisions of the AP High Court which have been respectfully follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of judicial discipline. Para 16 of the judgement reads as follows: At this juncture, we cannot resist from observing that the judgement delivered by the Tribunal was very much binding on the assessing officer. The assessing officer was bound to follow the judgments in its letter and spirit. It was necessary for the judicial unity and discipline that all the authorities below the Tribunal must accept as binding the judgement of the Tribunal. The Assessing Officer being inferior officer vis-a-vis the Tribunal; was bound by the judgment of the Tribunal and the assessing officer should not have tried to distinguish the same on untenable grounds. In this behalf, it will not be out of place to mention that in the hierarchical system of courts which exists in our country, it is necessary for each lower tiers including the High Court, to accept loyally the decisions of the higher tiers. It is inevitable in hierarchical system of courts that there are decisions of the Supreme Appellate Tribunals which do not attract the unanimous approval of all members of the judiciary. But the judicial system only works if someone is allotted to have the last word, and that last word once spoken is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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