Smt. C. Anuradha Vs ITO (ITAT Chennai)
The assessee, an individual, filed a return of income for assessment year 2003–04 declaring ₹8,891 as long-term capital gains. The assessment was reopened under Section 148 of the Income Tax Act and completed under Section 143(3), wherein the Assessing Officer (AO) denied exemption under Section 54F. The assessee appealed, and the Commissioner of Income Tax (Appeals) [CIT(A)] granted relief. The Department appealed to the ITAT, which on 13-11-2009 remanded the matter to the AO for fresh consideration.
Pursuant to the Tribunal’s directions, the AO completed a fresh assessment under Section 143(3) read with Section 254, determining long-term capital gains at ₹2,69,338. During the reassessment, the AO examined the assessee’s claim for exemption under Section 54F relating to multiple flats received under a joint development agreement. He concluded that Section 54F permitted exemption only for one residential house and therefore allowed exemption for a single unit while disallowing the claim relating to the second flat.
The assessee appealed before the CIT(A), contending that the claim was supported by tribunal decisions involving her co-owners, wherein deductions under Section 54F were allowed, and also relied on the decision of the Karnataka High Court in CIT v. Smt. K.G. Rukminiamma (196 Taxman 87). She also cited the decision in Ms. Fulwanti C. Rathod. The CIT(A) noted that the AO had already allowed exemption for one flat and agreed with the AO’s view that Section 54F allowed exemption only for a single residential unit. He held that the Karnataka High Court’s ruling in Rukminiamma concerned Section 54, not Section 54F, and therefore did not apply. The CIT(A) also relied on the Bangalore Tribunal’s decision in Naresh Kumar J. Shah, which held that Section 54F benefits extend only to one residential unit. Accordingly, he upheld the AO’s order.
