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TMI Blog2024 (10) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... 1585 - KARNATAKA HIGH COURT ] considered similar situation wherein the significance of the expression held used by the legislature was analysed and explained in a great length. In the case of CIT vs Raman Kumar Suri [ 2012 (12) TMI 421 - BOMBAY HIGH COURT ] observed that, when two flats were joined together before the assessee became the owner of the two flats and certification from the society also establishes that the flats were joined together and were considered as one residential house, AO had to accept these facts and cannot disallow the claim merely because the flats were purchased by two separate agreements. So long as the house is used by the assessee as one single unit, though by conversion, in our view, the exemption cannot be denied to the assessee u/s 54F of the Act. There is nothing on record brought by the revenue other than arguing that, the assessee originally entered into two independent agreements for purchase of the flat. The impediment with the assessee at that stage was because, the builder originally got the plan approved as two separate units, plan was subsequently revised, in order to suit the requirement of the assessee to use it as one single unit. The re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong interpretation of law and therefore, is bad in law. 2. The learned CIT(A) has erred in directing the learned AO verify the additional evidence and grant relief instead of granting the full relief to the Appellant. Ground 2: Disallowance of exemption claimed under section 54F of the Act 3. The learned CIT(A)/AO have failed to appreciate that purchase of one residential house with modifications of two adjacent properties would amount to single residential house and therefore, the Appellant was eligible for exemption under section 54F of the Act. 4. The Ld. AO has erred in law and in facts, in stating that the Appellant had purchased two residential house properties instead of a single residential house without appreciating that merging of two adjacent properties to one residential house is not a violation of condition for claiming exemption under section 54F of the Act 5. The learned CIT(A)/AD has failed to appreciate the fact that the Appellant had always intended to purchase one residential unit and has in fact purchased one house for the purpose of his residence although the builder had registered it through two separate purchase deeds due to limitations at the end of the buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng additional interest under Section 234A and Section 2348 of the Act, having regard to the assessed income. Ground 6: Initiation of penalty proceedings under section Act 15. The learned CIT(A)/AO has erred in law in initiating penalty proceedings under section 2704 of the Act The Appellant submits that each of the above grounds is independent and without prejudice to one another. The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal, so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with law. Revenue s Appeal : I.T.A. No.2833/Mum/2024 1 (a) On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in directing the AO to allow the deduction u/s. 54F of the Act in respect of purchase of new asset when the assessee has purchased another residential house other than the new asset within one year after the transfer of original asset violating the Proviso to section 54F(1) of the Act. 2(b) On the facts and circumstances of the case and in law, Ld. CIT(A) has erred in holding that the assessee is entitled to deduction u/s. 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that, the assessee claimed deduction under section 54F and purchased two flats, one being 1402 the other being 1401 in Terra West C, Rustomjee Elements, New D.N. Nagar, Andheri (W), Mumbai. The Ld.AO was of the opinion that the assessee violated the provisions of section 54F by purchasing two flats as against one as required under section 54F. The Ld.AO thus recomputed the claim of assessee by disallowing the long term capital gain invested in both the flats. Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). 2.4. Before the Ld.CIT(A), the assessee filed various documents like the revised plan approved by MHADA , wherein, the two flats were considered to be one single unit adjacent to each other. The Ld.CIT(A), after considering the documents filed by the assessee allowed the claim in respect of one of the houses on pro-rata basis and directed the Ld.AO to re-compute the deduction under section 54F of the Act. Aggrieved by the order of the Ld.CIT(A), both assessee as well as the revenue are in appeal before this Tribunal. 3. The Ld.AR submitted that, the assessee purchased new residential house property and claimed exemption under provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the exemption to be granted in totality, based on the above facts. In support of the above, heavy reliance is placed on the following decisions passed by coordinate benches of this Tribunal, considering the amendment brought in with effect from 01/04/2015 to section 54F:- 1. Bhaskar Pratapari Shah vs DCIT - ITA No.3698/Mum/2023 2. Ms. Anita Mahindrakumar Oberoi vs Income Tax Officer ITA No.600/PUN/2020 3. Bhatkal Ramrao Prakash vs Income-tax Officer (2019) 102 taxmann.com 145 (Bangalore-Trib) 4. Suruchi Jena vs ACIT, Circle-3(1), Partyakha Bhawan, Bhubaneswar ITA No.207/CTK/2024) 5. Mohd. Hassan vs ACIT, Circle, Nagpur ITA No.74/Jodh/2020 6. Mohammad Anif. Sultanali Pradhan v The DICT, Circle 6, (ITA No.1797/Ahd/2018 3.3. On the contrary, the Ld.DR vehemently opposed the arguments and submissions made by the assessee. He submitted that there is nothing on record brought by the assessee to establish his intention to purchase one single unit. The Ld.DR submitted that the decisions relied on by the Ld.AR was prior to 01/04/2014 and the year under consideration is the assessment year to which the amendment brought in to section 54F clearly applies. He relied on the order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act is that assessee purchased two flats to be used as a single dwelling unit which is discernible from the plan reapproved by MHADA vide letter dated 24/11/2020. Admittedly, there is a change in the legal position with effect from 01/04/2015, wherein the assessee can claim exemption under section 54F only on acquisition of one residential house. In the present facts of the case, the revised plan dated 24/11/2020 clearly establish that the two flats though independently purchased by the assessee adjacent to each other was converted to be used as a single unit. 4.5. Hon ble Karnataka High Court in case of CIT vs Suresh Rao reported in (2014) 41 taxmann.com 475 considered similar situation wherein the significance of the expression held used by the legislature was analysed and explained in a great length. Further, Hon ble Bombay High Court in the case of CIT vs Raman Kumar Suri reported in 2012 (12 TMI 421) observed that, when two flats were joined together before the assessee became the owner of the two flats and certification from the society also establishes that the flats were joined together and were considered as one residential house, the Assessing Officer had to accept these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Bench in the above referred decision focused their discussion on the word a and held that exemption under section 54/54F would be available in respect of one house only. But where two houses joint together constitutes a single unit for residence, then exemption under section 54 would be available to such joint residential house. Hon ble Special Bench, also noted that, where two units are distantly situated, then it could not constitute to be a residential house and, therefore, exemption under section 54 will be available only to one residential house at the option of the assessee. 4.9. We, therefore, do not find any reason to dismiss the claim of the assessee based on surmises and conjectures of the authorities below. We direct the Ld.AO to grant complete deduction under section 54F as claimed by the assessee. Accordingly, ground 2 raised by the assessee stands allowed. 5. As we have allowed the deduction claimed by the assessee, Ground 3 raised by the assessee being the alternative plea becomes academic at this juncture and, therefore, not adjudicated. 6. Grounds 5 6 are consequential in nature and therefore do not require adjudication . Accordingly, ground raised by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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