Case Law Details
Sri Ramaiah Harish Vs ITO (ITAT Bangalore)
Independent Building With More Than One Residential Units Eligible For Capital Gain Exemption, Rules ITAT
Sri Ramaiah Harish (the Appellant) has filed this appeal challenging the order dated March 01, 2019 passed by Commissioner of Income tax (Appeals), Bengaluru (the CIT(A)) for the assessment year 2015-16. The Appellant is aggrieved by the decision of Ld. CIT(A) in confirming the rejection of claim for deduction under Section 54(F) of the Income-tax Act,1961 (the IT Act).
Factually, the Appellant has sold a property jointly held by him along with his brother. Further, the Appellant stated that he has invested a sum of Rs.2.06 crores in the capital gains account scheme. Besides the above the Appellant claimed that he has spent a sum of Rs.50 lakhs towards construction of a house. Accordingly, the Appellant claimed exemption under Section 54(F) of the IT Act in respect of above said investments.
During the assessment proceedings, the Assessing Officer (“AO”) noticed that the house property constructed by the Appellant consisted of the ground floor and 4 floors above it and concluded that the Appellant has constructed more than one residential house and hence he would be entitled to deduction under Section 54(F) of the IT Act for construction of one residential house only. Accordingly, the AO allowed a deduction under Section 54(F) of the IT Act for one residential unit only. The Ld. CIT(A) also confirmed the same.
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