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TMI Blog2021 (12) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... s raised the following grounds :- "1. That assessment order passed by ITO Ward 63 (1), New Delhi dated 04.03.2016 on basis of purported order u/s 127 dated 03.09.2015 passed by Pr.CIT 21, Delhi is void ab initio as neither assessee has been served with copy of that order nor the reasons for that order etc. which makes the entire proceedings as nullity including orders passed by Ld CIT-A. 2. That Ld CIT-A erred in sustaining the disallowance made by Ld AO of deduction u/s 54 of Rs. 49,62,490 on faulty reasoning that assessee has invested in three residential house properties at three different places without appreciating that assessee has admittedly sold three separate units/houses which makes the claim of assessee u/s 54 as completely c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of deduction u/s 54 to only one flat having higher value of Rs. 1,04,86,714/- and accordingly, he worked out the disallowance of Rs. 49,62,490/-. 5. We have heard the rival submissions and gone through the impugned order as well as material placed on record. The case of the assessee is that the expression "a residential house" is to be understood in a sense that the building should be residential one and the word "a residential" should not be construed as a singular number. Before us, ld. counsel has relied upon various judgments which we shall discuss hereinafter. 6. On the other hand, the case of the Revenue is that "a residential house" should be treated as one residential house and the amendment brought in the statute w.e.f. 01.04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under s. 54. * CIT vs. GITA DUGGAL ITA -1237/2011 (Delhi) HC (21.02.2013) Expression "a" residential house should be understood in a sense that building should be of residential in nature and "a" should not be understood to indicate a singular number; Residential house consisting of several independent units cannot be permitted to act as an impediment to the allowance of the deduction under section 54/54F, it is neither expressly nor by necessary implication prohibited * CIT & ANR. vs. SMT. K.G. RUKMINIAMMA - 331 ITR 211 (Karnataka High Court) Capital gains-Exemption under s. 54-Investment in more than one residential houses/flats Assessee entered into a joint development agreement with builder to develop her property unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 373 ITR 127 (Mad), it was clearly held that the amendment to provision of section 54F is effective from 1- 4-2015, which makes it clear that benefit of section 54F will be applicable to one residential house in India. Prior to the amendment, it was clear that a residential house would include multiple residential units. Thus, assessee was entitled to claim deduction under section 54. * BRIJ BHUSHAN TAYAL VS. ACIT, CIRCLE 19(1), ITA NO. 3272/DEL/2014 DTD 13.10.2016, [DELHI ITAT] That the intention of legislature before 1.4.2015 was not to restrict the exemption to one residential property only and therefore investment could be made in multiple residential properties before 1.4.2015. This issue came up before ITAT Mumbai in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had purchased two residential flats. he is entitled to exemption under section 54 in respect of capital gains 011 sale of its property on purchase of both the flats, despite the fact that the flats were purchased by separate sale deeds. Deduction is allowable even if the flats are on different floors. On facts, as the two flats purchased by the assessee are adjacent to one another and have a common meeting point, the deduction cannot be denied. The final conclusion drawn after studying the above mentioned judgements of various authorities is that the expression "a" residential house should be understood in a sense that building should be of residential in nature and "a" should not be understood to indicate a singular number. Also, se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reasonably inferred that even after the amendment of Section 54 and 54F, providing for exemption from long-term capital gains tax, only if the investment is made in one residential house property, one can still invest in more than one house and claim the lax: exemption, provided the taxpayer can prove that all such flats are used as a single residential nit by the family, In the abovementioned case, two residential units were purchased, which were separated by a strong wall and were purchased from two different vendors under two separate Sale deeds, The exemption was still granted to the tax payer, because both the flats were capable of being used as a single residential unit. Therefore the letter 'a' in the context it is used ..... X X X X Extracts X X X X X X X X Extracts X X X X
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