Deduction u/s 54F on more than one residential flats received by virtue of a development agreement is allowable

Learned Counsel for the assessee submitted that by virtue of various decisions of the Tribunal and also the jurisdictional High Court in the case of Shri Syed Ali Adil (352 ITR 0418) and also the decision of the Hon’ble Madras High Court in the case of CIT vs.V.R. Karpagam (373 ITR 0127) and the Hon’ble Karnataka High Court in the case of CIT vs.Smt. K.G. Rukminiamma (331 ITR 0211), the assessee was entitled to deduction u/s 54F of the Act in respect of more than one residential flats received by virtue of a development agreement. We find that this issue is now fairly covered by the decision of various High Courts in favour of the assessee. The relevant paragraphs are reproduced here under for ready reference:

i) CIT vs. Smt. K.G. Rukminiamma:

“12. In the instant case, the facts are not in dispute. On a site measuring 30’ x 110’, the assessee had a residential premises. Under a joint development agreement, she gave that property to a builder for putting up flats. Under the agreement eight flats are to be put up in that property and four flats representing 48% is the share of die assessee and the remaining 52% representing another four flats is the share of the builder. So, the consideration for selling 52% of the site is four flats representing 48%. AH the four fiats are situate in a residential building. These four residential flats constitute ‘a residential house’ for the ‘purpose of Section 54. Profit on sale of property is used for residence. The four residential flats cannot be construed as four residential houses for the purpose of Section 54F It. has to be construed only as “a residential house” and the assesses is entitled to the benefit accordingly.

ii) CIT vs. V.R. Karpagam

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