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TMI Blog2023 (4) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... t : Mr.Mehul Jain.Sr.DR For the Respondent : Mr.Ajit Jain. AR ORDER PER PAVAN KUMAR GADALE JM: The revenue has filed the appeal against the order of the Commissioner of Income Tax (Appeals) 14, Mumbai passed u/s 143(3) r.w.s 250 of the Act. The revenue has raised the following grounds of appeal: 1. Whether, on the facts and in the circumstances of the case, and in the law the learned CIT(A) has erred in allowing deduction u1s.54F in relation to the LTCG invested into two different residential flats despite of the fact that the said section stood amended w.e.f. 01.04.20 15 making it mandatory that deduction under the section is to be allowed for LTCG, to the extent of, utilized for purchase of one residential House. 2. Whether, on the facts and in the circumstances of the case, and in the law the learned CIT(A) has erred in not considering the intent and purpose of legislation behind the amendment brought to section 54F by virtue of which the expression a residential house has been replaced by the words one residential house in India 3. Whether, on the facts and in the circumstances of the case, and in the law the learned CIT(A) has erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as per the amendmend made after 01.04.2015 and exemption u/s 54F of the Act is restricted to one residential house only and determined the long term capital gains of Rs. 2,48,85,866/- and assessed the total income of Rs. 3,16,24,870/- and passed the order u/s 143(3) of the Act dated 20.12.2018. 3. Aggrieved by the order the assessee has filed an appeal before the CIT(A). The CIT(A) considered the grounds of appeal, submissions of the assessee, findings of the AO and dealt on the provisions and observed at Para 4 of the order and granted the relief considering the judicial decisions. The CIT(A) has observed that the residential property is one residential house and the assessee is entitled for exemption u/s 54F of the Act for investment made in residential house and allowed the assessee s appeal. Aggrieved by the CIT(A)order, the revenue has filed an appeal before the Tribunal. 4. At the time of hearing, the Ld. DR submitted that the CIT(A) has erred in allowing the deduction u/s 54F of the Act in respect of investment of long term capital gains invested in two residential houses. And the post amended applicable from 01.04.2015, the deduction u/s 54F of the Act is restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferor in respect of the premises, (the payment and receipt whereof the transferor hereby admits and acknowledges and of and from the payment of the same and every part thereof acquits, releases and discharges the transferees (and each of them forever) 4. It is clarified that the said consideration payable by the transferees to the transferor for the purchase of the premises has been bone and paid by the transferees in the following portion Parties Amount % of share in the premises Transferee No. 1 Rs. 3,89,40,000 69.54% Transferee No. 2 Rs. 1,70,60,000 30.46% 7. The main contentions of the Ld.DR that the flat No. 801 and 802 are two separate flats and as per the amendment only one flat is granted exemption u/s 54F of the Act and the A.O. has granted exemption to flat No. 801. Whereas, the Ld. AR referred to the plan at page No. 194 of the paper book which shows the 8th floor plan and page No. 185 to 187 clearly display the entrance and the lobby. The Ld. AR emphasizes that it is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts of the case of the appellant because in that case the property was not in the name of the assessee rather it was in the names of assessees wife and adult daughter whereas the property under consideration is in the name of the assessee and his wife. For this reason, the decision of jurisdictional High Court in the case of Prakash Vs ITO 173 taxman 311 (2008) is also not applicable to the facts of the case of the appellant. In the case of the appellant, the property is in the name of the appellant and his wife and out of total purchase consideration of Rs. 11,87,50,000/- the purchase consideration paid by the appellant is Rs.10,16,90,000. Even if the fact of property being held in joint names is considered and the appellant is allowed benefit of 50% of the total purchase cost of the property, there would be no long-term capital gains taxable in the hands of the appellant. However, in view of the following decisions, I'm of the opinion that the appellant is entitled for deduction under section 54F of the IT Act to the extent of investment made by it in the jointly held residential house: - The decision in the case of Ravinder Kumar Arora vs CIT 15 taxma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of V. Natarajan vs CIT 154 TAXMAN 399 (2006) wherein the Honourable High Court has held that It was admitted by the assessee that he sold a house property at Bangalore. Therefore, it was clear that the assessee owned a house property and sold the same. He also admitted that he purchased a property at Madras in the name of his wife out of the money obtained by the sale of the property at Bangalore. Section 54 clearly says that if the assessee is the owner of the property, he is entitled to exemption. In the instant case, the assessee purchased a house property at Madras, in the name of his wife after selling the property at Bangalore, but the same was assessed in the hands of the assessee. Hence, as correctly held by the Commissioner (Appeals) as well as the Tribunal, the assessee was entitled to exemption under section 54. The decision of ITAT, Bangalore in the case of Bhatkal Ramarao Prakash Vs ITO[2019] 102 taxmann.com 145 (Bangalore - Trib.)l[2019] 175 lTD 144 (Bangalore - Trib.), the head note of which reads as under: - I. Section 2(47), read with sections 2(42A), 54 and 54F, of the Income-tax Act, 1961 - Capital gains - Transfer (Immovable property) - Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entitled to claim deduction under section 54F in respect of investment - Held, yes [Paras 20 and 21][In favour of assessee] III. Section 54F of the Income-tax Act, 1961 - Capital gains - Exemption of in case of investment in a residential house (Purchase) - Assessment year 2015-16 - Whether to claim deduction under section 54F it is not necessary that new asset should be purchased in name of assessee only - Held, yes - Whether thus, where assessee purchased new asset in joint names of himself, IV. Accordingly, it is held that the subject property is one residential house and the appellant is entitled to deduction under section 54F of the IT Act to the extent of investment made by it in the residential property. The AO is directed to recalculate the total income of the appellant accordingly. For statistical purposes, the third ground of appeal is treated as allowed. V. 4.3 The fourth ground of appeal challenging the levy of interest under section 234B of the IT Act is consequential in nature and the AO is directed to recalculate the interest chargeable under this section after giving effect to this appellate order. For statistical purposes, this ground of appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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