Late Shri Ram Kishore Seth Vs ITO (ITAT Delhi)
Residential Units vs Residential House: ITAT Draws the Line- Multiple Kitchens, No 54F: Tribunal Says Assessee Owned More Than One House
1. Background
- Appeal filed by Legal Heir of Late Shri Ram Kishore Seth against NFAC order dated 16.01.2024.
- Scrutiny under CASS for cash deposits during demonetisation & capital gains / deduction u/s 54F.
2. Issue 1 – Deduction u/s 54F on JDA Property
Assessee’s Claim
- Original house at ND-63, Pitampura demolished & reconstructed under JDA (3 floors).
- Builder retained 2nd floor + 25% parking; Assessee retained 1st & 3rd floors.
- Claimed ₹1,22,45,121 exemption u/s 54F relying on CIT vs Geeta Duggal.
AO’s Findings
- Assessee owned multiple independent house properties (Karol Bagh units + Pitampura units).
- After amendment to s.54F, phrase used is “a residential house”; ownership of multiple houses disqualifies the claim.
CIT(A) & ITAT Findings
- Assessee was earning rental income from:
- Karol Bagh UGF
- Karol Bagh 1st Floor
- Karol Bagh 4th Floor
- Pitampura 1st Floor
- Pitampura 3rd Floor
- These are independent residential units, each having separate kitchens.
- Therefore assessee owned more than one residential house on the date of transfer → basic eligibility u/s 54F fails.
- Geeta Duggal ratio applies only where multiple units constitute one house; not applicable when assessee already owns several independent properties.
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