ASST CIT 19(3), MUMBAI V. MUSHTAQ I. MACCHIWALA, MUMBAI

ITA 1563/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1749 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 12-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2014
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTTAM KUMARDR
• Keywords: Capital asset; Earning of tax free income; Additional evidence; Benefit of exemption
• Section: 54F; 54

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.1563/MUM/2014 ASSESSMENT YEAR: 2008-09 ACIT - 19(3), ROOM NO.305, 3 RD FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012 / VS. SHRI MUSHTAQ I. MACCHIWALA, 101, SHREE PRASAD, PLOT NO.517, 35 TH ROAD, TPS-II, BANDRA (WEST), MUMBAI-400050 ( ' / REVENUE) ( #$ % /ASSESSEE) P.A. NO. AAKPM5715C ' / REVENUE BY SHRI PURUSHOTTAM KUMAR-DR #$ % / ASSESSEE BY SHRI PRAKASH PANDIT & '' ( % ) / DATE OF HEARING : 17/11/2016 ( % ) / DATE OF ORDER: 18/11/2016 MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 10/12/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, ON THE GROUND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN ALLOWING THE CLAIM OF DEDUCTION U/S 54 OF THE ACT THOUGH THE ASSESSEE HAS INVESTED THE SALE PROCEEDS IN A COMMERCIAL PROPERTY. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI PRAKASH PANDIT, EXPLAINED THAT, THE ASSESSEE, AN INDIVIDUAL, CLAIMED EXEMPT INCOME TO THE EXTENT OF RS.6,24,96,156/-, OUT OF WHICH RS.6,09,93,158/- WAS INVESTED IN PURCHASE OF FLATS NO. 101 TO 106 ON THE FIRST FL OOR OF THE BUILDING KNOWN AS SHREE PRASAD HOUSE AND RS.15,03 ,000/- WAS DEPOSITED IN THE CAPITAL GAINS ACCOUNTS. THE L D. ASSESSING OFFICER RESTRICTED THE CLAIM TO ONE FLAT ONLY AND M ADE THE ADDITION TO THE TOTAL INCOME. 2.1. ON APPEAL BEFORE THE FIRST APPELLATE AUTHORIT Y, REMAND REPORT FROM THE ASSESSING OFFICER, REPLY OF THE ASSESSEE, REPORT FROM THE BMC WERE CONSIDERED AND F OLLOWING THE DECISION IN THE CASE OF ACIT VS SUDHA GURTOO 4 8 SOT 393 AND ALSO HON'BLE KARNATAKA HIGH COURT IN CIT VS D. ANANDA BASAPPA (2009) 180 TAXMAN 4 (KARN.) HELD THAT EXEMP TION U/S 54 IS AVAILABLE TO THE ASSESSEE. THE REVENUE IS AGG RIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 3 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE CO MING TO ANY CONCLUSION, UNDER THE FACTS, NARRATED HEREINABOVE, THE BENCH QUESTIONED THE LD. COUNSEL FOR THE ASSESSEE , WITH RESPECT TO TOTAL AREA OF THE FLATS ( SIX FLATS) SITUATED ON TH E FIRST FLOOR OF THE BUILDING. THE LD. COUNSEL EXPLAINED THAT THE TOTAL AREA IS LESS THAN 2000 SQ. FT. (PRECISELY 1935 SQ. FT.). WE FI ND THAT WHILE COMING TO A PARTICULAR CONCLUSION, THE LD. COMMISSI ONER OF INCOME TAX (APPEAL) SOUGHT REMAND REPORT DATED 30/1 0/2013, AS PER WHICH, THE ASSESSING OFFICER, CLAIMED THAT I T WAS NON- RESIDENTIAL PROPERTY FOR FINANCIAL YEAR 2007-08. WH EREAS, THE ASSESSEE PRODUCED THE EVIDENCE THAT THE STATUS OF T HE PROPERTY WAS RESIDENTIAL. BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEAL), THE ASSESSEE FILED A PAPER BOOK DATED 26/ 07/2011, WHICH WAS ALSO CONTAINING ADDITIONAL EVIDENCE IN TH E FORM OF METER, INSPECTORS REPORT, REPORT FROM THE WATER DE PARTMENT, LETTER FROM THE ASSISTANT ENGINEER, LETTER FROM THE ASSESSEE FOR ASSESSMENT OF UNITS BEARING NUMBER 101 TO 106, AS R ESIDENTIAL UNIT (WRONGLY ASSESSED AS COMMERCIAL). THE ASSESSE E ALSO FILED THE REPLY TAKEN THROUGH RTI APPLICATION DATED 11/12 /2010, INTERNAL NOTE FROM THE ASSESSMENT DEPARTMENT INSPEC TOR TO SUPERINTENDENT, BUILDING PLAN, SANCTIONED AS RESIDE NTIAL. SALE OF THE PROPERTY AS RESIDENTIAL BUNGALOW PROPERTY, R EPORT FROM THE BUILDING DEPARTMENT AND THE FACTUAL MATRIX THAT ALL THE SMALL UNITS WERE CONVERTED INTO ONE SINGLE UNIT, HA VING ONE KITCHEN, ETC. IN VIEW OF THIS FACTUAL MATRIX, THE LD. COMMISSIONER OF INCOME TAX (APPEAL) TOOK A STAND TH AT IT WAS MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 4 A SINGLE UNIT AND GRANTED RELIEF TO THE ASSESSEE. I T IS ALSO NOTED THAT THE PAPER BOOK FILED BY THE ASSESSEE WAS FORWA RDED TO THE ASSESSING OFFICER VIDE LETTER DATED 23/01/2012 FOR CARRYING OUT NECESSARY VERIFICATION DURING REMAND PROCEEDING S, TO WHICH, NO ADVERSE COMMENT WERE FURNISHED BY THE ASS ESSING OFFICER. THE BUILDING WAS CONSTRUCTED AS A RESIDE NTIAL UNIT AND EVEN THE REPORT OF THE INSPECTOR CLARIFIED THAT IT WAS A RESIDENTIAL VACANT FLOOR. THE OCCUPATION CERTIFI CATE DATED 19/09/2009, ISSUED BY THE BMC ALSO CLARIFIED THAT I T WAS A RESIDENTIAL BUILDING. EVEN THE REPORT OF SE DATED 2 4/12/2010 AND INTERNAL NOTE/REPORT DATED 05/01/2010 CLARIFIED THAT THE FIRST FLOOR WAS OCCUPIED BY THE ASSESSEE AND THERE WAS NO OFFICE THEREIN AND THESE DOCUMENTS ARE PRIOR TO PAS SING THE ASSESSMENT ORDER, THEREFORE, CANNOT BE SAID TO BE C REATED DOCUMENT. EVEN, ON 13/01/2011, THE ASSESSEE GOT A S INGLE WATER CONNECTION FOR THE RESIDENTIAL UNIT. THE ASSE SSEE ALSO PAID THE PROPERTY TAX OF RS.1 LAKH TO THE BMC AS A RESIDENTIAL PROPERTY AND VIDE LETTER DATED 11/04/2011, THE ASSE SSEE WROTE A LETTER TO THE ASSESSOR AND COLLECTOR, BMC WITH A REQUEST TO ASSESS THE PROPERTY AS A RESIDENTIAL FROM WRONGLY A SSESSED AS COMMERCIAL. IN RESPONSE TO AN RTI APPLICATION DATED 21/11/2011, THE BMC FURNISHED THE INTER NOTE DATED 11/01/2011 AND 21/04/2011, WHEREIN, IT WAS MENTIONE D THAT THE PLOT WAS ASSESSED AS RESIDENTIAL RATEABLE VALUE FROM 01/01/2008 AND THE BUILDING PLAN WAS SANCTIONED AS RESIDENTIAL BUILDING VIDE NOTE DATED 29/09/2009. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THE ASSESS EE ALSO MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 5 ENCLOSED COPY OF RECEIPT DATED 27/04/2011 FOR TRANS FER OF RESIDENTIAL GAS CYLINDER AT THE NEW ADDRESS. ALL T HESE DOCUMENTS WERE MADE PART OF THE PAPER BOOK BEFORE T HE FIRST APPELLATE AUTHORITY AND ALSO BEFORE US. THE SMALL U NITS WERE CONVERTED IN A SINGLE UNIT (AS MENTIONED EARLIER TH E TOTAL AREA OF ALL UNITS IS 1935 SQ. FT.), THEREFORE, IN OUR CO NSIDERED OPINION, IT IS A SINGLE UNIT. IT IS NOT THE CASE T HAT ALL THE SIX FLATS ARE HAVING ABNORMALLY BIGGER AREAS AND SIMPLY TO GET THE BENEFIT U/S 54 OF THE ACT, A STORY WAS CONCOCTED BY THE ASSESSEE. THE EVIDENCES FILED BY THE ASSESSEE CLEA RLY INDICATES THAT SMALL UNITS ON THE SAME FLOOR WERE CONVERTED I NTO ONE HABITABLE UNIT FOR A PEACEFUL/COMFORTABLE LIVING, T HUS, THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF EXEMPTION. 2.3. IT IS ALSO NOTED THAT THE ASSESSEE SOLD ITS L ONG TERM CAPITAL ASSET AND MADE THE INVESTMENT OF THE SALE P ROCEEDS, WITHIN SPECIFIED TIME, IN THE FIRST FLOOR PROPERTIE S OF THE SAME BUILDING. THE STAND OF THE REVENUE IS THAT THE ASSE SSEE HAS PURCHASED SIX HOUSES, WHEREAS, AS PER THE ACT ONLY ONE HOUSE IS ALLOWED, FOR WHICH THE BENEFIT OF SECTION 54 CAN BE AVAILED. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER SECTION 54 OF THE ACT FOR READY REFERENCE AND ANALYSIS:- 54. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), WHERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIV IDED FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG-TER M CAPITAL ASSET, BEING BUILDINGS OR LANDS APPURTENANT THERETO, AND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD 'I NCOME FROM HOUSE PROPERTY' (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 6 AND THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BE FORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE PUR CHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE 39 [CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA], THEN, INSTEAD OF THE C APITAL GAIN BEING CHARGED TO INCOME-TAX AS INCOME OF THE PREVIOUS YEA R IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WITH IN ACCO RDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SA Y, ( I ) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER THA N THE COST OF THE RESIDENTIAL HOUSE SO PURCHASED OR CONSTRUCTED (HERE AFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE DIFFERENCE BETWE EN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR ; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET AN Y CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE NIL ; OR ( II ) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET, THE CAPITAL GAIN SHALL NOT BE CHARGED UN DER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF T HREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE C OST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. (2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APP ROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGIN AL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LAT ER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHI NG THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTI LISED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, FRAME IN THIS BEHALF AND S UCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT; AND, FOR THE PURPOSES OF SUB- SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILISED B Y THE ASSESSEE FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET : PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONST RUCTION OF THE NEW ASSET WITHIN THE PERIOD SPECIFIED IN SUB-SECTION (1 ), THEN, ( I ) THE AMOUNT NOT SO UTILISED SHALL BE CHARGED UNDE R SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DATE OF THE TRANSFER OF THE ORIGINAL ASSET EXPI RES; AND MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 7 ( II ) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUCH AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. A PLAIN READING OF THE PROVISION OF SECTION 54(1) OF THE INCOME-TAX ACT DISCLOSES THAT WHEN AN INDIVIDUAL-AS SESSEE OR HINDU UNDIVIDED FAMILY-ASSESSEE SELLS A LONG TERM C APITAL ASSETS AND WITHIN A SPECIFIED PERIOD CONSTRUCT RESI DENTIAL UNIT (NEW ASSET), THE CAPITAL GAIN ARISES FROM THE ORIGI NAL ASSET, SHALL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIO NS OF THIS SECTION. SUCH ASSESSEE CAN INVEST CAPITAL GAINS FOR PURCHASE OF RESIDENTIAL BUILDING/HOUSE TO SEEK EXEMPTION OF THE CAPITAL GAINS TAX. SECTION 13 OF THE GENERAL CLAUSES ACT DE CLARES THAT WHENEVER THE SINGULAR IS USED FOR A WORD, IT IS PER MISSIBLE TO INCLUDE THE PLURAL. THE CONTENTION OF THE REVENUE I S THAT THE PHRASE 'A' RESIDENTIAL HOUSE WOULD MEAN ONE RESIDEN TIAL HOUSE AND IT DOES NOT APPEAR TO THE CORRECT UNDERSTANDING . THE EXPRESSION 'A' RESIDENTIAL HOUSE SHOULD BE UNDERSTO OD IN A SENSE THAT BUILDING SHOULD BE OF RESIDENTIAL IN NAT URE AND 'A' SHOULD NOT BE UNDERSTOOD TO INDICATE A SINGULAR NUM BER. THE COMBINED READING OF SECTIONS 54(1) AND 54F OF THE I NCOME- TAX ACT DISCLOSES THAT, A NON RESIDENTIAL BUILDING CAN BE SOLD, THE CAPITAL GAIN OF WHICH CAN BE INVESTED IN A RESIDENT IAL BUILDING TO SEEK EXEMPTION OF CAPITAL GAIN TAX. HOWEVER, THE PROVISO TO SECTION 54 OF THE INCOME-TAX ACT, LAYS DOWN THAT IF THE ASSESSEE HAS ALREADY ONE RESIDENTIAL BUILDING, HE I S NOT ENTITLED TO EXEMPTION OF CAPITAL GAINS TAX, WHEN HE INVESTS THE CAPITAL GAIN IN PURCHASE OF ADDITIONAL RESIDENTIAL BUILDING. THE CONTEXT IN WHICH THE EXPRESSION, A RESIDENTIAL HOUS E IS USED MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 8 IN SECTION 54 MAKES IT CLEAR THAT, IT WAS NOT THE I NTENTION OF THE LEGISLATION TO CONVEY THE MEANING THAT: IT REFE RS TO A SINGLE RESIDENTIAL HOUSE, IF, THAT WAS THE INTENTION, THEY WOULD HAVE USED THE WORD 'ONE.' AS IN THE EARLIER PART, THE WO RDS USED ARE BUILDINGS OR LANDS WHICH ARE PLURAL IN NUMBER AND T HAT: IS REFERRED TO AS 'A RESIDENTIAL HOUSE', THE ORIGINAL ASSET. AN ASSET NEWLY ACQUIRED AFTER THE SALE OF THE ORIGINAL ASSET ALSO CAN BE BUILDINGS OR LANDS APPURTENANT THERETO, WHICH ALSO SHOULD BE 'A RESIDENTIAL HOUSE.' THEREFORE THE LETTER A IN THE CONTEXT IT IS USED SHOULD NOT BE CONSTRUED AS MEANING 'SINGULA R.' BUT, BEING AN INDEFINITE ARTICLE, THE SAID EXPRESSION SH OULD BE READ IN CONSONANCE WITH THE OTHER WORDS BUILDINGS AND LANDS AND, THEREFORE, THE SINGULAR A RESIDENTIAL HOUSE ALSO PERMITS USE OF PLURAL BY VIRTUE OF SECTION 13(2) OF THE GEN ERAL CLAUSES ACT. CIT V. D. ANANDA BASSAPPA (2009) 223 (KAR) 1 86: (2009) 20 DTR (KAR) 266 CAN BE FOLLOWED. 2.4. THERE COULD ALSO BE ANOTHER ANGLE. SECTION 54 /54F USES THE EXPRESSION 'A RESIDENTIAL HOUSE'. THE EXPR ESSION USED IS NOT 'A RESIDENTIAL UNIT'. THIS IS A NEW CONCEPT INTRODUCED BY THE ASSESSING OFFICER INTO THE SECTION. SECTION 54/ 54F REQUIRES THE ASSESSEE TO ACQUIRE A 'RESIDENTIAL HOUSE' AND S O LONG AS THE ASSESSEE ACQUIRES A BUILDING, WHICH MAY BE CONS TRUCTED, FOR THE SAKE OF CONVENIENCE, IN SUCH A MANNER AS TO CONSIST OF SEVERAL UNITS WHICH CAN, IF THE NEED ARISES, BE CON VENIENTLY AND INDEPENDENTLY USED AS AN INDEPENDENT RESIDENCE, THE REQUIREMENT OF THE SECTION SHOULD BE TAKEN TO HAVE BEEN SATISFIED. THERE IS NOTHING IN THESE SECTIONS WHICH REQUIRE THE MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 9 RESIDENTIAL HOUSE TO BE CONSTRUCTED IN A PARTICULAR MANNER. THE ONLY REQUIREMENT IS THAT IT SHOULD BE FOR THE R ESIDENTIAL USE AND NOT FOR COMMERCIAL USE. IF THERE IS NOTHING IN THE SECTION WHICH REQUIRES THAT THE RESIDENTIAL HOUSE S HOULD BE BUILT IN A PARTICULAR MANNER, IT SEEMS TO US THAT T HE INCOME TAX AUTHORITIES CANNOT INSIST UPON THAT REQUIREMENT . A PERSON MAY CONSTRUCT A HOUSE ACCORDING TO HIS PLANS AND REQUIREMENTS. MOST OF THE HOUSES ARE CONSTRUCTED AC CORDING TO THE NEEDS AND REQUIREMENTS AND EVEN COMPULSIONS. FO R INSTANCE, A PERSON MAY CONSTRUCT A RESIDENTIAL HOUS E IN SUCH A MANNER THAT HE MAY USE THE GROUND FLOOR FOR HIS OWN RESIDENCE AND LET OUT THE FIRST FLOOR HAVING AN IND EPENDENT ENTRY SO THAT HIS INCOME IS AUGMENTED. IT IS QUITE COMMON TO FIND SUCH ARRANGEMENTS, PARTICULARLY POST-RETIREMEN T. ONE MAY BUILD A HOUSE CONSISTING OF FOUR BEDROOMS (ALL IN THE SAME OR DIFFERENT FLOORS) IN SUCH A MANNER THAT AN INDEP ENDENT RESIDENTIAL UNIT CONSISTING OF TWO OR THREE BEDROOM S MAY BE CARVED OUT WITH AN INDEPENDENT ENTRANCE SO THAT IT CAN BE LET OUT. HE MAY EVEN ARRANGE FOR HIS CHILDREN AND FAMIL Y TO STAY THERE, SO THAT THEY ARE NEARBY, AN ARRANGEMENT WHIC H CAN BE MUTUALLY SUPPORTIVE. HE MAY CONSTRUCT HIS RESIDENCE IN SUCH A MANNER THAT IN CASE OF A FUTURE NEED HE MAY BE ABLE TO DISPOSE OF A PART THEREOF AS AN INDEPENDENT HOUSE. THERE MA Y BE SEVERAL SUCH CONSIDERATIONS FOR A PERSON WHILE CONS TRUCTING A RESIDENTIAL HOUSE. WE ARE THEREFORE, UNABLE TO SEE HOW OR WHY THE PHYSICAL STRUCTURING OF THE NEW RESIDENTIAL HOU SE, WHETHER IT IS LATERAL OR VERTICAL, SHOULD COME IN THE WAY O F CONSIDERING MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 10 THE BUILDING AS A RESIDENTIAL HOUSE. WE DO NOT THIN K THAT THE FACT THAT THE RESIDENTIAL HOUSE CONSISTS OF SEVERAL INDEPENDENT UNITS CAN BE PERMITTED TO ACT AS AN IMPEDIMENT TO T HE ALLOWANCE OF THE DEDUCTION UNDER SECTION 54/54F. IT IS NEITHER EXPRESSLY NOR BY NECESSARY IMPLICATION PROHIBITED. THE RATIO LAID DOWN BY HON'BLE DELHI HIGH COURT IN CIT VS GIT A DUGGAL (2013) 357 ITR 153 (DEL.), CIT VS D. ANANDA BASAPPA (2009) 309 ITR 329 (KARN.)(PARA-3 & 6) AND CIT VS SMT. K.G . RUKMINIAMMA (2011) 331 ITR 211(KARN.)(PARA 6 & 10) SUPPORTS THE CASE OF THE ASSESSEE. HON'BLE DELHI HI GH COURT IN THE CASE OF CIT VS GITA DUGGAL (SUPRA) AFFIRMED THE STAND OF THE TRIBUNAL TAKEN IN ITA NO.3613/DEL./2010, ORDER DATED 07/06/2011. THUS, THE APPEAL OF THE REVENUE IS HAVI NG NO MERIT, CONSEQUENTLY, WE AFFIRM THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL). FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED.. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 17/11/2016. SD/- SD/- ( N.K. PRADHAN ) (JOGINDER SINGH) #$ / ACCOUNTANT MEMBER %$ / JUDICIAL MEMBER & ' MUMBAI; * DATED : 18/11/2016 F{X~{T? P.S / +' MUSHTAQ I. MACCHIWALA ITA NO.1563/MUM/2014 11 &%'()*)+' / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 0./ / THE RESPONDENT. 3. 1 1 & 2% ( ,- ) / THE CIT, MUMBAI. 4. 1 1 & 2% / CIT(A)- , MUMBAI 5. 4'5 % , 1 ,-) , 6 , & ' / DR, ITAT, MUMBAI 6. 7# 8' / GUARD FILE. / BY ORDER, 04-% % //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI,