ACIT Vs Sri.N.S.Viswanathan (ITAT Cochin)
Section 54 / 54F of the I.T.Act was amended with effect from 01.04.2015 by the Finance Act, 2014 with the term “constructed one residential house”. Prior to the amendment, the term used in section 54 / 54F of the I.T.Act was “constructed a residential house”. Subsequent to the amendment of law, it is clear that the assessee is not entitled to the benefit of section 54 / 54F with regard to two residential units purchased by him. The co-ordinate Delhi Bench of the Tribunal in the case of Laxman Singh Rawat v. ACIT – ITA No.1668/Del/2013 dated 22.08.2014 and Smt.Rama Vohra v. ITO [(2017) 57 ITR (Trib.) 694 (ITAT-Delhi)] had categorically held the amendment is prospective and is applicable for and from Asst.Year 2015-2016 onwards. In the instant case, the assessment year concerned is 2013-2014 and going by the Co-ordinate Delhi Bench orders cited supra, the amendment does not have application to the facts of the instant case.
Prior to the amendment, there are various judicial pronouncements which have held the exemption u/s 54 / 54F was to be allowed in respect of investments in two adjacent or contiguous units converted into one residential house by having common passage / stair-case, common kitchen, etc. intended to be used as single house for the residence of the family. Undisputedly, the assessee in the instant case had purchased two flats in different locations. One at Warriam Road and the other at Layam Road. Therefore, these two flats cannot be converted to a single residential unit.
