Lata Goel Vs ACIT (ITAT Delhi)
ITAT Delhi held that different floors of a property cannot be construed as independent residential unit and instead had to be construed only as a single residential unit for purpose of claiming deduction u/s. 54F. Accordingly, grounds raised by revenue dismissed.
Facts- During the year under consideration, the assessee claimed deduction u/s 54F of the Act to the tune of ₹90 crores on the account of reinvestment made in another residential house property. The assessee during the year sold shares of FIITJEE Ltd for ₹90 crores and reinvested in new residential house property within the stipulated time and claimed deduction u/s 54F of the Act. Accordingly, long-term capital gain was reported Rs. Nil by the assessee.
An order was passed by the ld AO u/s 153A of the Act on 27.03.2015, wherein the claim of deduction u/s 54F of the Act was restricted to ₹30 crores and difference of ₹60 crores was added by AO.
CIT(A) allowed the appeal and deleted the disallowance made in the sum of ₹60 crores towards denial of deduction u/s 54F of the Act. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the basement area cannot be by any stretch of imagination be considered as an independent property in the facts and circumstances of the instant case as it is common to all the residents staying in ground floor, first floor and second floor. It is not the case of the revenue that basement area had been allowed by the assessee to be used by other family members on rental basis. Neither any rent was received/ assessed in the hands of the assessee either on deemed rent on fair market value under the head “income from house property”. Hence, the basement area cannot be considered as a separate residential property. In view of this decision, it could be safely concluded that the assessee was owning only one house property on the date of transfer of shares of FIITJEE Ltd. Hence, there was no prohibition for the assessee to claim deduction u/s 54F of the Act for re-investment made in another residential house property.
