Different floors of same house cannot be considered as multiple house for 54F deduction

PCIT Vs Lata Goel (Delhi High Court)

Delhi High Court held that different floors of a singular house cannot be considered as multiple residential houses. Accordingly, deduction under section 54F of the Income Tax Act cannot be denied. Thus, appeal of revenue dismissed.

Facts- During the year under consideration, 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. 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.

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

Conclusion- Held that the term ‘a residential house’ has been construed to mean ‘one residential house’. We find it difficult to accept that, in the given facts, different floors of a house are required to be considered as multiple residential houses. In view of the above, we find no infirmity with the decision of the learned ITAT in holding that the Assessee could not be denied the deduction under Section 54F of the Act on the ground that she holds more than one residential unit.