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TMI Blog2024 (10) TMI 1558X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, which contravened the provisions of section 54F the said amendment of one house is implemented with effect from 01/04/2015, so the relevant section 54F is not application for the A.Y. 2014-15. AR placed purchase deeds of two flats, wherefrom it is clear that both the flats are adjacent flats and not in the open sky. So, both the units are taken as a single unit which is not contrary to section 54F of the Act. We respectfully relied on the order of D. Ananda Basappa [ 2008 (10) TMI 99 - KARNATAKA HIGH COURT] We find that the assessee is eligible for deduction u/s 54F for purchasing two new flats in the name of his wife. We note that the sale and purchase of the flats are executed in the name of assessee s wife. DR has not pointed out any contrary decision against the proposition laid down above. We find no justification in rejection of claim u/s 54F - addition amount is deleted. Assessee appeal allowed. - Shri Anikesh Banerjee, Judicial Member And Miss Padmavathy S., Accountant Member For the Assessee : Shri Anil Sathe For the Respondent : Ms. Rajeshwari Menon, SR-DR ORDER PER ANIKESH BANERJEE, J.M: Instant appeal of the assessee was filed against the order of the Learned Nati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant craves leave to add, alter or amend any of the grounds of the appeal, at any time before or at the time of hearing. 3. The brief facts of the case are that the assessee, by profession, is a salaried person and is working in merchant navy. The assessee purchased a flat in the financial year 1991-92 on 14/06/1991 by investing amount to Rs. 5,11,750/- in the name of his wife, Mrs. Pooja Mehendale. The assessee sold the property on dated 02/05/2013 and purchased two new flats bearing address, Flat No.501 502, Sandhya CHS Ltd, Ramnagar Colony, Bavdhan, Pune, in the name of his wife. During filing of the return, the assessee declared the capital gain by transfer of property in his own return of income filed under section 139(1) of the Act and claimed exemption under section 54F of the Act for purchasing the new flats by exploiting the sale consideration. The notice under section 148 of the Act was issued and assessment was framed under section 143(3) / 147 of the Act. As the assessee is not holding any property in his own name, so the claim u/s 54F of the Act was rejected by the ld. AO and entire capital gain amount to Rs. 1,08,45,142/- was added back with the total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be purchased in the name of the assessee only. Section 54F/54 of the Act are the beneficial provisions which should be interpreted liberally in favour of the Simran Bagga exemption/deduction to the taxpayer and deduction should not be denied. He further relied on the order of Hon ble High Court of Karnataka in the case of CIT vs D. Ananda Basappa (2009) 180 Taxman 4 (Karnataka); relevant paragraphs 6 to 8 on pages 14 are as below: - 6. The contention of the revenue is that the phrase a residential house would mean one residential house and it does not appear to the correct understanding. The contention a residential house should be understood in a sense that building should be residential in nature and a should not be understood to indicate a singular number. The combined reading of sections 54(1) and 54F of the Income-tax Act discloses that, a non-residential building can be sold, the capital gain of which can be invested in a residential building to seek exemption of capital gain tax. However, the proviso to section 54 of the Income-tax Act, lays down that if the assessee has already one residential building, he is not entitled to exemption of capital gain tax, when he inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the reinvestments should be made by the assessee. For the sake of ready reference, the provisions of section 54 are reproduced hereby as under- 54 [1] Subject to the provisions of sub-section(2), where, in the case of an assessee being an individual or Hindu Undivided Family, the capital gain arises from the transfer of a long term capital asset, being buildings or 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 assesses has within a period of one year before or two years after the date on which the transfer took place purchases), or has within a period of three years after that date (constructed one residential house in India), then), instead of the capital gain being charged to income tax as income of the previous year in which the transfer took place.. 6. We heard the rival submissions and considered the documents available in the record. The two issues agitated by the assessee are (i) The transaction of the flat related to sale and purchase was done in his wife s name and assessee was not holding any property, so there is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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