Case Law Details
Navin Jolly Vs ITO (Karnataka High Court)
Multiple independent residential units in same building can be treated as one residential unit for section 54F Exemption and usage of the property has to be considered in determining whether it is a residential property or a commercial property
A bench of this court in while interpreting Section 54F of the Act has held that provisions of Section 54F is a beneficial provision for promoting construction of residential houses and has to be construed liberally. Kerala, Delhi, Allahabad, Calcutta and Hyderabad High Courts have taken a view that usage of the property has to be considered in determining whether it is a residential property or a commercial property and Madras High Court in supra has held that expression ‘residence’ implies some sought of permanency and cannot be equated to the expression ‘temporary stay’ as a lodger.
Learned counsel for the revenue have fairly submitted that out of nine apartments, seven flats have been sanctioned for commercial purposes. Therefore, the dispute only survives in respect of two apartments, which have been sanctioned for residential purposes and are being used for commercial purposes as serviced apartments. The usage of the property has to be considered for determining whether the property in question is a residential property or a commercial property. It is not in dispute that the aforesaid two apartments are being put to commercial use and therefore, the aforesaid apartments cannot be treated as residential apartments. The contention of the revenue that the apartments cannot be taxed on the basis of the usage does not deserve acceptance in view of decisions of Kerala, Delhi, Allahabad, Calcutta and Hyderabad High Courts with which we respectfully concur.
Alternatively, we hold that assessee even otherwise is entitled to the benefit of exemption under Section 54F(1) of the Act as the assessee owns two apartments of 500 square feet in same building and therefore, it has to be treated as one residential unit. The aforesaid fact cannot be permitted to act as impediment to allowance of exemption under Section 54F(1) of the Act. Similar view was taken by Delhi High Court in case of Geeta Duggal wherein the issue whether a residential house which consists of several independent residential units would be entitled to exemption under Section 54F(1) of the Act was dealt with and the same was answered in the affirmative.
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if an assessee purchase one unit of flat 3A in the year 2012 and thereafter he purchased another flat 3B on the same floor and adjacent to old one in 2021 and started residing there after merging with the old one creating it as a single unit. whether these merging will be treated single unit used for residential purpose for I.T. purpose. Please provide your opinion.
IF my two flats are considered as one unit in BMC property tax or assessement. Can society charge one maintenance
Raul
Rider (to supplement ) :
wrt – “11. Alternatively, we hold that assessee even otherwise is entitled to the benefit of exemption under Section 54F(1) of the Act “……As the assessee OWNS TWO APARTMENTS of 500 square feet IN SAME BUILDING AND THEREFORE, IT HAS TO BE TREATED AS ONE RESIDENTIAL UNIT…………………….”
FONT< There is an apparent incongruity / incoherent thinking behind the reasoning given, on the ground of which the view taken by the HC has turned out to be in favour of the assessee / adverse to the Revenue. So much so, in the possible further proceedings the Revenue might be expected to accordingly address its arguments and additionally stress why the line of reasoning so adopted is logically faulty and apparently unsound.
INSTANT
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