Case Law Details
DCIT Vs Ashok Santu Bhavnani (ITAT Mumbai)
ITAT Mumbai held that exemption provisions of section 54F of the Income Tax Act are beneficial provisions and are to be construed liberally. Accordingly, as assesse invested in one residential property, exemption u/s 54F duly available.
Facts- A.O. is of the opinion that the assessee has utilized the capital gains for purchase of two residential properties for a consideration of Rs. 10,16,19,000/- and issued show cause notice on 13.12.2018. Assessee filed detailed letter dated 15-12-2018 explaining that the assessee has purchased only one residential property and furnished the documents and clarifications. Further, due to amendment in Sec. 54F of the Act applicable from 01.04.2015 where the definition of a residential house is replaced by one residential house in India. Finally the A.O. has observed that the assessee has purchased two adjacent houses and treated as one residential house and cannot be accepted as per the amendment 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.
Aggrieved by the order the assessee has filed an appeal before the CIT(A). CITIA) allowed the appeal. Aggrieved by the CIT(A)order, the revenue has filed an appeal before the Tribunal.
Conclusion- CIT(A) has held that the whole residential unit is required to be treated as one residential house because it has one common entrance, one kitchen, one electricity meter, one piped gas connection, one property tax bill and one Society bill. Even though, the property was purchased by way of two agreements, the appellant has received the same as one single unit. The appellant has also pointed out that the whole building has been constructed similarly. There is one residential flat on each floor and two separate agreements have been entered into by the builder for each residential flat on each floor.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
