Jyoti Jain Vs DCIT (ITAT Delhi)
Expression ‘residential house’ used in section 54F denotes one residential house & different floors of the one residential house cannot be considered as separate residential houses
Assessee, Jyoti Jain, owned an industrial plot which she sold through four registered sale deeds for a total consideration of Rs.2.62 crore. Out of the resultant capital gains, she invested Rs.2.10 crore in acquiring the remaining one-half shares in the first & second floors of a residential property at Delhi. The property had earlier been partly purchased in 2011 with her husband. She claimed exemption u/s 54F.
AO rejected the claim on the ground that each floor constituted an independent residential unit, thereby holding that Assessee owned more than one residential house. CIT(A) upheld this view.
Tribunal, however, observed that the expression ‘residential house’ used in section 54F denotes one residential house & different floors of the one residential house cannot be considered as separate residential houses. It relied upon Delhi HC in PCIT Vs. Lata Goyal, CIT Vs. Gita Duggal, Mrs. Kamla Ajmera Vs. Pr. CIT, as well as Madras HC in CIT Vs. Gumanmal Jain, which all affirmed that multiple floors in a single building constitute one residential house for the purpose of s.54/54F. Tribunal held that AO’s approach of treating each floor as separate house was flawed, & directed to allow exemption u/s 54F.
