Section 54F exemption granted for different floors of single residential house

PCIT-Central -1 Vs Lata Goel (Delhi High Court)

Delhi High Court held that exemption under section 54F of the Income Tax Act is allowed towards different floors of a house considering it as single residential house. Accordingly, appeal of the revenue dismissed.

Facts- During the year, the Assessee had claimed a deduction of ₹90 crores u/s. 54F of the Act asserting that the consideration received from the sale of shares of FIITJEE Ltd. — an unlisted company, the gains from which would otherwise be chargeable to tax as capital gains — was invested in acquiring a residential house property.

Post examination, AO passed an assessment order dated 27.03.2015 u/s. 153A r.w.s. 143(3) of the Act restricting the deduction u/s. 54F to ₹30 crores, as against ₹90 crores claimed by the Assessee. AO reasoned that the amount received from the sale of shares was not directly invested in acquiring the new asset as the amount of ₹60 Crores continued to be reflected as outstanding.

CIT(A) allowed the appeal. ITAT disposed of the appeal of the revenue. Being aggrieved, revenue has preferred the present appeal.

Conclusion- This court in Mrs. Kamla Ajmera v. Pr. Commissioner of Income Tax held that in certain circumstances, multiple residential units may be considered as a single residential house for the purposes of exemption under Section 54F of the Act.