Exemption u/s 54F allowed for two flats purchased for use as a single residential unit
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Case Details: |
Anita Mahindrakumar Oberoi vs. ITO |
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Appeal No.: |
ITA No. 600/PUN/2020 |
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Order pronounced by: |
ITAT Pune |
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Date of Order: |
01-02-2022 |
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Assessment Year: |
2015-16 |
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In Favour of: |
Assessee |
Brief Facts:
- The assessee transferred certain property resulting into long term capital gain of RS. 34,04,962/- and invested sale consideration into purchase of 2 adjacent flats with total consideration of Rs. 1.26 crore. Exemption u/s 54F was claimed for the said two flats.
- The A.O. held that the exemption was available only in respect of one flat and therefore, reduced the amount of exemption by Rs. 11,79,975/0 relating to the second flat. The CIT(A) upheld the view of the A.O. and thus, the assessee preferred an appeal before the Tribunal.
Observations of the Tribunal:
- Section 54F of the Act, prior to substitution by the Finance Act No. 2 of 2014 w.e.f. 01-4-2015 stated that the exemption will be available where the assessee has “constructed, a residential house”. However, the Finance Act, 2014 substituted the relevant part of the provision by inserting the words: “constructed, one residential house” in place of “constructed, a residential house”.
- The effect of the amendment is that now exemption is available only in respect of one residential house. We find that the assessee purchased 2 flats to be used as a single dwelling unit. Since, these 2 units are adjacent to each other and meant for use as a single property, mandate of the substituted provision, being one residential house, is still also satisfied.
- The view point of the ld. CIT(A) that the amendment carried out to section 54F w.e.f. 01-04-2015 has changed the legal position, is albeit factually correct, but, in the given fact, even the amended provision comes to the rescue of the assessee, in as much as the assessee acquired one residential house only comprising of 2 flats.
Ruling:
In view of the foregoing reasons, I am satisfied that the assessee deserves exemption u/s 54F on second unit as well. I order accordingly. The impugned order is set-aside to this extent. In the result, the appeal is allowed.
Read Detailed Order: Anita Mahindrakumar Oberoi vs. ITO
Disclaimer: The above article is based upon the judgement of the Hon’ble ITAT Pune and is meant for informative purposes only. Readers are requested to act diligently and under consultation with a professional before applying the information contained in this article.
