Saroj Rani Vs ITO (ITAT Delhi)
ITAT Delhi held that multiple residential units on same floor is construed as single residential house for purpose of exemption under section 54 of the Income Tax Act. Accordingly, exemption u/s. 54 allowed and addition deleted.
Facts- The assessee is an individual and has declared income from salary, rental income and also income from long term capital gain on sale of immovable properties. Notably, AO completed assessment after allowing deduction of Rs. 36,54,821/- being cost of only one adjacent unit and denied exemption of Rs. 1,86,36,599/- claimed by the assessee u/s 54 of the Act and added back to the returned income of the assessee.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Hon’ble Delhi Court in the Lata Goel had held that multiple residential units may be construed as a single residential house for the purposes of exemption u/s 54F of the Act and that the term ‘a residential house’ can be construed as ‘one residential house’.
Held that “one residential house” in section 54/54F of the Act would encompass within its fold seven residential units on the same floor. Accordingly, we set aside the findings of the ld. CIT(A) and direct the Assessing Officer to delete the addition of Rs. 1,86,36,599-and allow exemption u/s 54 of the Act on the seven residential units as claimed by the assessee. Grounds raised by the assessee are allowed.
