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TMI Blog2022 (4) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of purchase of the new house - HELD THAT:- As we note the word used in section 54(1) of the Act reads as investment in a residential property which ought to be interpreted as property in which investment should be of residential in nature in nature. As the word a residential property should not understood in singular number or one residential property. In holding so, we find support and guidance from the judgment of Hon ble Karnatka High Court in case of CIT vs. D. Ananda Basappa [ 2008 (10) TMI 99 - KARNATAKA HIGH COURT] The assessee cannot be denied the benefit of the deduction provided under section 54 of the Act if he has a house at the time of transfer of the property and makes the investment in another residential pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act declaring at ₹ 1,37,680.00 only. The case of the assessee was selected under scrutiny and accordingly the assessment was framed under section 143(3) of the Act dated 20th February 2014 after making certain additions at ₹ 1,83,180.00. Subsequently, the assessment was revised under section 263 of the Act by the learned Principal CIT vide order dated 12 January 2016. 2.1 The AO in consequence to the direction of the learned Principal CIT under section 263 of the Act further revised the assessment by making necessary changes in the cost of construction which was also accepted by the assessee. 2.2 The assessee has also claimed deduction under section 54 of the Act for ₹ 12,50,000.00 which was reduced by the AO to 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment in another residential. 6. On the other hand, the learned DR before us vehemently supported the order of the authorities below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, there was nobody appeared before the learned CIT-A and therefore, the learned Principal CIT dismissed the appeal of the assessee. Undeniably, the present proceedings are arising in consequence to the direction of the learned Principal CIT under section 263 of the Act. Thus it is seen that the assessee has already suffered from different proceedings before the income tax authorities. The first time the proceedings under section 143(3) of the Act. The 2nd proceedings were initiated u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ₹ 2,77,600/- 7.3 In view of the above, we do not find any reason to interfere in the finding of the AO. Thus, the ground of appeal of the assessee for claiming the deduction on account of the expenditure of ₹ 2,50,000.00 is dismissed. 7.4 The assessee has also claimed the deduction of ₹ 12,50,000.00 under the provisions of section 54 of the Act. However, this deduction of ₹ 12,50,000.00 was denied by the AO on the reasoning that that the assessee was already having in his possession a residential house at the time of purchase of a new residential house at Shivam Apartment. Therefore, the same should not be allowed as deduction. The relevant finding of the AO reads as under: The assessee was already in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gain arises from the transfer of a long-term capital asset 65 [***], being buildings or 66 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 67 [one year before or two years after the date on which the transfer took place purchased 68 ], 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 year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefit of the deduction provided under section 54 of the Act if he has a house at the time of transfer of the property and makes the investment in another residential property. Accordingly, the finding of the authorities below is devoid of any merit. 7.10 Likewise, the amount of capital gain is less than the amount of the investment made by the assessee in another residential house. Therefore, we are of the view that the assessee is eligible for deduction of ₹ 12,50,000 under the provisions of section 54 of the Act. Accordingly, we set aside the finding of the learned CIT-A and direct the AO to allow the benefit of deduction for making the investment in another residential unit of ₹ 12,50,000.00 only. Accordingly, there ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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