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| The Tax Publishers2021 TaxPub(DT) 1119 (Bang-Trib) INCOME TAX ACT, 1961
Section 54F
When an independent building can have a number of residential units and it will not lose the character of 'one residential house' and view taken by the tax authorities could not be accepted that each floor of the individual house/each portion in a floor was separate house property and order passed by CIT(A) on this issue was set aside and hold that house property received by assessee was 'one residential house' only within the meaning of section 54F, thus, deduction under section 54F could not be disallowed.
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Capital gains - Exemption under section 54F - Allegation that assessee having more than one house property -
Assessee along with other family members had sold an immovable property and claimed deduction of entire amount under section 54F. AO noticed that assessee had received a building by way of gift and the said building consisted of ground floor, first floor and second floor. AO also deputed his inspector to physically inspect the property. Inspector reported that the Ground floor was having a garage and one residential unit; first floor was having two 1BHK flats and second floor is having 2 single units. AO, accordingly, took the view that each of the unit was separate house. Since deduction under section 54F was not permitted, if assessee was having more than one house property, AO rejected claim for deduction under section 54F. Held: An independent building can have a number of residential units and it will not lose the character of 'one residential house'. Identical view was expressed by another Co-ordinate Bench in the case of Chandrashekar Veerabhadraiah v. ITO, ITA No.2293/Bang/2019 dt. 7-12-2020 : 2020 TaxPub(DT) 5195 (Bang-Trib) relating to assessment year 2015-16. Accordingly, view taken by the tax authorities could not be accepted that each floor of the individual house/each portion in a floor was separate house property. Order passed by CIT(A) on this issue' was set aside and hold that house property received by assessee was 'one residential house' only within the meaning of section 54F and reasoning given by AO to reject the claim for deduction under section 54F was not justified.
Followed:CIT v. Gita Duggal (2013) 30 taxmann.com 230 (Del) : 2013 TaxPub(DT) 960 (Del-HC), CIT v. KG. Rukminiamma (2011) 331 ITR 211 (Kar) : 2011 TaxPub(DT) 429 (Karn-HC), CIT & Anr. v. D. Ananda Basappa (2009) 309 ITR 329 (Kar) : 2009 TaxPub(DT) 955 (Karn-HC) and Chandrashekar Veerabhadraiah v. ITO ITA No.2293/Bang/2019 dt. 7-12-2020 : 2020 TaxPub(DT) 5195 (Bang-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, BANGALORE BENCH
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