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TMI Blog2022 (10) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... of A.O in rejecting the claim of exemption u/s. 54F of the Act pertaining to multiple units obtained under the JDA in the said computation under the head "Long Term Capital Gains". 2. For this, the assessee has raised various grounds, but the issue is interconnected and classified into above two issues. Hence, we need not to reproduce the various grounds, which are argumentative and exhaustive. 3. The brief facts of the case are that the assessee sold plot of land i.e., schedule property measuring a total extent of 14805 Sq.ft., bearing Plot No. "C", S. No.276, situated at Sasthiri Street as per Document (Annai Indira Nagar 1st Main Road as per Patta), Velachery, Chennai - 600 042 to a builder by entering into an agreement of sale dated 11.02.2013 by entrusting by way of GPA to sale 10832 Sq.ft. of land fully developed on her behalf and in return, the assessee withheld fully developed land of 3973 Sq.ft. The assessee also entered into construction agreement dated 12.08.2013 with builder for a total sale consideration of Rs.1,43,97,600/- and builder in turn to give constructed four Flats No.1A, 1B, 2A & 2B at first floor and second floor, respectfully of Block C-1. The A.O on pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Order, in the case of of Smt V.R, Karpagam Vs. CIT Coimbattore (Tax case [Appeal] No.301 of 2014), submitted by the assessee are different in this regard. In the cited case, the house property had a single address though 4 units held by the assessee in. this case are clearly distinct. 4 different electricity bills are paid as its evidenced from the records available, which were called for and submitted by the assessee. (il) "Section 54F states that assessee can have only one house property on the date of sale other than the House Property bought, However, in this case, assessee had 4 different house properties as she bought 4 flats- together. Hence, even if the income was assessed as income from House Property, the claims of 54F would not have been allowed. This addition is being made for as protective in nature if the appellate authorities decide to treat the income earned by the assessee as LTCG and not business income". 5. It means that the A.O on one hand assessed the income earned by the assessee from sale of land and further, conversion into four different flats by collaborated with the builder as business income from business or profession by way of adventure in na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rving consequent to the various clauses in the agreement that there is a joint business effort and therefore, the surplus rising out of the sale of above ancestral land becomes income from business or profession. The Ld. counsel for the assessee stated that the assessee's income in the above transaction for development is limited to the monetary consideration of Rs. 2.85 Crores and four flats for her residence valued at Rs. 1,44,31,642/-. He drew our attention to the agreement of sale dated 11.02.2013 and filed a quantification of the entire transaction, which reads as under: Total consideration as per Agreement of Sale dated 11.2.2013 14,772sft 5,85,00,000 Rate per sft. Rs. 3,951 Value for 73.33% of land sold 10,832 sft A 4,28,94,730 Value adopted for Transaction Monetary Consideration 2,85,00,000 Value of 4 Flats 1,44,31,642q B 4,29,31,642 Difference-Marginal A-B 36,932 9. The Ld. Counsel for the assessee stated that the ancestral land held by the assessee through attorney and now this is sold to the builder, but in turn received monetary consideration of Rs. 2.85 Crores and four flats for her re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... many residential units with 26.67% retained by the assessee. The builder has allowed 73.33% and sold the flats to other buyers. In term of agreement to sale dated 11.02.2013, the builder agreed to construct four flats with a total build up area of 5120 Sq.ft. and also paid a sum of Rs. 2.85 Crore as monetary consideration in lieu of assessee agreeing to sale 7.33% of land to the nominees of the builder and accordingly, builder cum construction agreement dated 18.08.2013 was entered into. From the above GPA's supplementary agreement and construction agreement entered into between the assessee and the developer company, it shows only the intent of the assessee and purpose of the assessee in all the above to get the new residential house in lieu of old without any outflow of money. According to us, as per records assessee neither had any knowledge or capability about the business or property development nor had any intention to do so as the assessee gave a general power of attorney in favour of the builder accordingly. All the activities were done by builder through GPA dated 10.07.2013, whereby builder was authorized to do all such things as is necessary to enable construction of fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y include more than one or plural residential houses, as held by Karnataka High Court, with which we respectfully agree. The location of the newly purchased houses by the same assessee viz., HUF out of sale consideration received on the sale of original capital Asset or a residential house in the given circumstances of availability of such residential houses as per the requirement of the HUF will not alter the position of interpretation. 21. In our understanding, if the word 'a' as employed under Section 54 prior to its amendment and substitution by the words 'one' with effect from 01.04.2015 could not include plural units of residential houses, there was no need to amend the said provisions by Finance Act No.2 of 2014 with effect from 01.04.2015 which the Legislature specifically made it clear to operate only prospectively from A.Y.2015-2016. Once we can hold that the word 'a' employed can include plural residential houses also in Section 54 prior to its amendment such interpretations will not change merely because the purchase of new assets in the form of residential houses is at different addresses which would depend upon the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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