Sections 54 & 54F Apply to One Residential House Unless Adjacent Units Form a Single Unit

Neville J Pereira Vs ITO (ITAT Mumbai) The case of Neville J Pereira vs. ITO before ITAT Mumbai focused on the disallowance of exemption under Section 54 of the Income Tax Act, 1961. The assessee had sold a residential property and reinvested in four new flats in the same building, claiming exemption under Section 54. The Assessing Officer (AO) disallowed the exemption for three of the four flats, arguing that Section 54 permits exemption only for investment in a single residential house. The assessee contended that the flats were intended to form a single unit for his family’s residence, ci...