ACIT 23(1), MUMBAI V. T.K. VENKATESHWARAN, MUMBAI

ITA 8538/MUM/2011

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0203 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 22-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V JUSTIN
• Keywords: Benefit of exemption
• Section: 142(1); 54; 6

Judgement Text

1 ITA 8538/MUM/2011 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.8538/MUM/2011 (ASSESSMENT YEAR: 2008-09) ACIT-23(1), MUMBAI VS JWALANT HASMUKH BUCH LEGAL HEIR OF SHRI T.K. VENKATESHWARAN, 902, HERITAGE CLIFF AVENUE, HIRANANDANI GARDEN, POWAI, MUMBAI-76 PAN:ACDPT4909J APPELLANT BY SHRI V JUSTIN REVENUE BY SHRI MANDAR VAIDYA DATE OF HEARING 25-01-2018 DATE OF PRONOUNCEMENT -02-2018 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-33, MUMBAI DATED 29-09-2011 AND IT PERTAINS TO AY 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 'ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A) ERRED IN DELETING THE LONG TERM CAPITAL GAIN OF ?. 1.12 CRORES.' '2.ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED CONSIDERING THE DATE OF PURCHASE OF FLATS 1804 A, B, C OF GLEN DALE PROPERTIES ON 10.07.2008 WHICH SHOULD HAV E BEEN 04.08.2006 AS PER THE AGREEMENT ALLOTMENT.' 3.'ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED ALLOWING EXEMPTION U/S.54 OF THE I. T.ACT AGAINST THE PURCHASES OF THREE FLATS 18.04A, B & C OF GLEN DATE AS PER THE AGREEMENT.' 2 ITA 8538/MUM/2011 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 29-09-200 8 DECLARING TOTAL INCOME OF RS.32,48,456. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE U/S 143(2) AND 142(1) OF THE ACT AL ONGWITH QUESTIONNAIRE WERE ISSUED. IN RESPONSE TO NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME T O TIME AND FURNISHED THE DETAILS, AS CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS S OLD TWO RESIDENTIAL FLATS FOR A CONSIDERATION OF RS.1.51 CRORES AND COM PUTED LONG TERM CAPITAL GAIN AT NIL, AFTER CLAIMING EXEMPTION U/S 5 4 IN RESPECT OF PURCHASE OF 3 RESIDENTIAL FLATS. THEREFORE, HE CALLED UPON THE ASSESSEE TO FURNISH DETAILS OF SALE OF PROPERTY AND COMPUTATION OF LONG TERM CAPITAL GAIN ALONG WITH NECESSARY EVIDENCES FOR CLAIMING EXEMPTI ON U/S 54 OF THE INCOME-TAX ACT, 1961. IN RESPONSE TO NOTICE, THE A SSESSEE, VIDE HIS SUBMISSION DATED 14-12-2010 SUBMITTED THAT HE HAD S OLD 2 RESIDENTIAL FLATS FOR A CONSIDERATION OF RS.1.51 CRORES VIDE TW O DIFFERENT AGREEMENTS DATED 31-12-2007. THE ASSESSEE FURTHER SUBMITTED T HAT HE HAD PURCHASED 3 RESIDENTIAL FLATS BEARING NO.1802/A, 18 02/B AND 1802/B FOR A CONSIDERATION OF RS.1,24,90,730 VIDE AGREEMENT DA TED 10-07-2008. THE ASSESSEE FURTHER SUBMITTED THAT HE HAD ENTERED INTO A SEPARATE AGREEMENTS WITH THE BUILDER FOR ADDITIONAL AMENITIE S TO BE PROVIDED IN THE SAID FLATS AND TOTAL COST OF PURCHASE OF 3 FLATS IN CLUDING ADDITIONAL 3 ITA 8538/MUM/2011 AMENITIES WAS RS.2,22,78,583. ALL THE THREE FLATS ARE SITUATED SIDE BY SIDE AND ADJACENT TO EACH OTHER AND ALSO CONVERTED INTO A SINGLE RESIDENTIAL UNIT, THEREFORE, HE HAD CLAIMED EXEMPTI ON U/S 54 IN RESPECT OF 3 FLATS AND HIS CLAIM IS IN ACCORDANCE WITH LAW. T HE AO, AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSEE AN D ALSO ON ANALYSIS OF PROVISIONS OF SECTION 54 OBSERVED THAT THE ASSES SEE IS NOT ELIGIBLE FOR EXEMPTION U/S 54 IN RESPECT OF 3 FLATS AS THE WORD A USED IN SECTION 54 DENOTES A SINGLE RESIDENTIAL UNIT. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS PURCHASED 3 DIFFERENT FLATS HAVING SEP ARATE ENTRANCES, THEREFORE, CANNOT BE CONSIDERED AS SINGLE RESIDENTI AL ACCOMMODATION FOR THE PURPOSE OF EXEMPTION U/S 54. THE AO FURTHER RE FERRING TO THE DATE OF SALE OF ASSET AND DATE OF ALLOTMENT LETTER ISSUED B Y THE BUILDER AND DATE OF AGREEMENT OBSERVED THAT THE ASSESSEE HAS MADE IN VESTMENT IN PURCHASE OF NEW RESIDENTIAL FLATS FROM 04-08-2006 W HICH IS BEYOND THE SPECIFIED DATE FOR INVESTMENTS IN RESIDENTIAL HOUSE TO BE QUALIFIED FOR EXEMPTION U/S 54. THE ASSESSEE HAS SOLD HIS TWO RE SIDENTIAL FLATS ON 31- 12-2007 AND AS PER THE PROVISIONS OF SECTION 54, HE SHOULD HAVE INVESTED IN PURCHASE OF NEW RESIDENTIAL HOUSE BETWE EN 31-12-2006 TO 31-12-2009. SINCE THE ASSESSEE HAS MADE INVESTMENT PRIOR TO 31-12- 2006, THE INVESTMENTS MADE IN PURCHASE OF RESIDENTI AL HOUSE PROPERTY WILL NOT QUALIFY FOR EXEMPTION U/S 54 OF THE INCOME -TAX ACT, 1961. ACCORDINGLY DENIED THE EXEMPTION CLAIMED U/S 54 AND RE-COMPUTED LONG 4 ITA 8538/MUM/2011 TERM CAPITAL GAIN OF RS.1,12,90,753. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE CIT(A), ASSESSEE HAS REITERATED HIS SUBMISSIONS MADE BEFORE THE AO. THE ASSESSEE ALSO RELIED UPON CERTAIN JUDICIAL PRECEDEN TS INCLUDING THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF ITO V S SUSHILA M JHAVERI IN ITA NO.2865/MUM/2002 TO ARGUE THAT IF ASSESSEE P URCHASED MORE THAN ONE RESIDENTIAL UNITS AND CONVERTED THE RESIDE NTIAL UNITS INTO A SINGLE HABITABLE UNIT, THEN THE RESIDENTIAL UNITS W ILL QUALIFY FOR EXEMPTION U/S 54 OF THE INCOME-TAX ACT, 1961. THE ASSESSEE A LSO RELIED UPON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CAS E OF CIT VS K.G. RUGMINI AMMA 331 ITR 211 (KARN) AND CIT VS ANAND D BASAPPA 309 ITR 329 (KARN). THE CIT(A), AFTER CONSIDERING SUBM ISSIONS OF THE ASSESSEE AND ALSO BY FOLLOWING CERTAIN JUDICIAL PRE CEDENTS OBSERVED THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 54 IN RE SPECT OF RE-INVESTMENT OF SALE CONSIDERATION FOR PURCHASE OF 3 RESIDENTIAL APARTMENTS AS ALL THE 3 UNITS HAVE BEEN CONVERTED INTO A SINGLE HABITABLE R ESIDENTIAL ACCOMMODATION. THE CIT(A) FURTHER OBSERVED THAT ON CONSIDERATION OF DATE OF SALE OF ORIGINAL ASSET AND DATE OF AGREEMEN T FOR PURCHASE OF NEW RESIDENTIAL UNIT, INVESTMENTS MADE BY THE ASSESSEE IN PURCHASE OF NEW RESIDENTIAL UNITS IS WELL WITHIN THE TIME ALLOWED U NDER THE ACT. IF THE ASSESSEE MADE PAYMENT AND ENTERED INTO AN AGREEMENT FOR PURCHASE OF PROPERTY EVEN THOUGH POSSESSION IS DELAYED, THE ASS ESSEE WOULD BE 5 ITA 8538/MUM/2011 ENTITLED FOR EXEMPTION. THE RELEVANT PORTION OF TH E ORDER OF THE CIT(A) IS EXTRACTED BELOW:- 4.5 HE HAS ALSO CITED CERTAIN CASE LAWS I.E. SMT. SHASHI VARMA VS. CIT [1997J 224 ITR 106 (MP), CIT VS. R.L. SCOD (2000) 227 (DEL HI), BALRAJ VS. CIT (2002] 254 ITR 22 (DELHI), SAUSH CHANDRA GUPTA VS. A.O. [1995J 54 1TD 508 AND CIT VS. HILLA J.B. WADIA [1995] 216 ITR 376 [BOM]. THE APPELLANT HAS ALSO ARGUED THAT ENTIRE SALE PROCEEDS WERE PAID FOR ALL THESE THREE UNITS MERGED INTO ONE REMDENTIAL HOUSE, THE EXEMPTION 54 HAS TO BE ALLOWED EVEN .WHEN POSSESSION IS DELAYED BY A MONTH FROM THE END OF THREE YEARS FROM THE DATE OF AGREEMENT OF SALE OF OLD PROPERTY. ? 4.6 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A PPELLANT. THE FACT THAT TOTAL SALE PROCEEDS RECEIVED BY THE APPELLANT ARE R S. 1.51.00,000 WHEREAS THE PAYMENTS OF RS. 2,22,78,583 /- HAVE BEEN MADE TOWAR DS PURCHASE OF ONE HABITABLE HOUSE BY MERGING THREE UNITS INTO ONE BET WEEN THE PERIOD STARTING FROM 13.03.2007 TO 02.09.2008 WHICH IS WELL WITHIN THE PERIOD FOR CLAIM U/S 54 LOOKING INTO THE DATE OF AGREEMENT FOR SALE OF OLD PROPERTY ON 31.12.2007, THE APPELLANT IS ENTITLED FOR REBATE CLAIMED. THIS PAYM ENT IS FOR THE HOUSE , AN AMOUNT OF RS. 1,06,25,000/-) TOGETHER WITH PART OF THE AMOUNT FOR THE AMENITIES TO BE GIVEN IN UNIT NO. 1802A, 1802B, 1802C GLEN DA LE PROPERTIES WHICH COST RS.L,24,90,730/-.AS THE OLD PROPERTY HAS BEEN SOLD ON 30.12.2007, THE THREE YEAR PERIOD ENDED ON 31.12.2007 WHEREAS THE APPELLA NT HAS TAKEN POSSESSION IN THE MONTH OF JANUARY. 2011, WHICH IS SUBSEQUENT TO OCCUPATION CERTIFICATE DATED 15.01.2011 RECEIVED BY THE BUILDER. IN VIEW O F THE VARIOUS CASE LAWS CITED BY THE APPELLANT, THE CLAIM OF THE APPELLANT IS ACCEPTED. GROUND NO 1 IS ALLOWED. 3. THE LD.DR SUBMITTED THAT THE LD.CIT(A) ERRED IN ALL OWING THE BENEFIT OF EXEMPTION CLAIMED U/S 54 IN RESPECT OF PURCHASE OF 3 FLATS EVEN THOUGH THE ASSESSEE IS NOT ELIGIBLE FOR SUCH EXEMPT ION. THE LD.DR FURTHER SUBMITTED THAT THE LAW IS VERY CLEAR INASMU CH AS PROVISIONS OF SECTION 54 TO BE STRICTLY INTERPRETED SO AS TO GIVE A MEANING TO THAT WORD A TO BE CONSTRUED AS A SINGLE RESIDENTIAL UNIT. THE ASSESSEE HAS PURCHASED MORE THAN ONE RESIDENTIAL UNIT AND THIS F ACT HAS NOT BEEN DISPUTED BY THE ASSESSEE. THEREFORE, HE IS NOT ELI GIBLE FOR EXEMPTION U/S 6 ITA 8538/MUM/2011 54 OF THE ACT. IN THIS REGARD RELIED UPON THE DECI SION OF ITAT, DELHI BENCH IN THE CASE OF PAWAN ARYA ITA 2416/DEL/2008 A ND ALSO THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PAWAN ARYA VS CIT (2011) TIOL-01-HC-P&H. THE LD.DR ALSO RELIED UPON THE CIRCULAR NO.471 DATED 125-10-1986 ISSUED BY THE CBD T TO ARGUE THAT FOR THE PURPOSE OF DETERMINATION OF PERIOD OF INVESTMEN T, THE DATE OF ALLOTMENT SHOULD BE CONSIDERED BUT NOT THE DATE OF AGREEMENT. 4. ON THE OTHER HAND, THE LD.AR STRONGLY SUPPORTING TH E ORDER OF THE CIT(A) SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF RUGMINI AMMA (SUPRA) AND CIT VS ANAND D BASAPPA 309 ITR 329 (SUPRA) WHEREIN THE HONBLE KARNATAKA HIGH COURT HA S GIVEN A CATEGORICAL FINDING IN RESPECT OF THE WORD A USE D IN SECTION 54 TO MEAN A RESIDENTIAL HOUSE. THE LD.AR FURTHER SUBMITTED T HAT IF MORE THAN ONE RESIDENTIAL FLATS IS PURCHASED AND CONVERTED INTO A SINGLE HABITABLE UNIT, THEN THE SAME WOULD BE CONSIDERED AS A SINGLE RESID ENTIAL UNIT ELIGIBLE FOR EXEMPTION U/S 54 OF THE INCOME-TAX ACT, 1961. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIA L AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. THE FACTS WITH REGARD TO THE SALE OF A RESIDENTIAL HOUSE AND PURCH ASE OF 3 NEW RESIDENTIAL FLATS IN A SINGLE RESIDENTIAL COMPLEX I S NOT DISPUTED BY BOTH THE PARTIES. THE ASSESSEE HAS ALSO SOLD 2 RESIDENTIAL FLATS AND PURCHASED 3 7 ITA 8538/MUM/2011 NEW RESIDENTIAL APARTMENTS TO BE USED FOR HIS OWN R ESIDENTIAL ACCOMMODATION. THE AO DENIED EXEMPTION U/S 54 ON T HE GROUND THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION BECAUSE HE HAD PURCHASED MORE THAN ONE RESIDENTIAL HOUSE IN CONTRAVENTION OF PROVISIONS OF SECTION 54 OF THE INCOME-TAX ACT, 1961. ACCORDING TO THE A O, THE ASSESSEE IS ELIGIBLE FOR ONLY ONE RESIDENTIAL HOUSE. IF MORE T HAN ONE RESIDENTIAL HOUSE IS PURCHASED, THEN THE BENEFIT OF EXEMPTION U /S 54 CANNOT BE GIVEN. THE AO FURTHER OBSERVED THAT THE ASSESSEE I S ALSO DISQUALIFIED FOR EXEMPTION U/S 54 AS HIS INVESTMENT IN NEW RESIDENTI AL HOUSE IS BEYOND THE STIPULATED TIME PROVIDED FOR MAKING INVESTMENT WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSEE HAS MADE INVESTMENT FROM 4 TH AUGUST, 2006 AS PER THE ALLOTMENT LETTER DATED 04 TH AUGUST, 2006 ISSUED BY THE BUILDER. ACCORDING TO THE AO, THE ASSESSEE HAS SOLD HIS RES IDENTIAL PROPERTY ON 31-12-2007 AND AS PER THE PROVISIONS OF SECTION 54 HE SHOULD HAVE MADE INVESTMENT IN NEW HOUSE BETWEEN 31-11-2006 TO 31-12 -2009 WHEREAS HIS INVESTMENT IN NEW HOUSE IS PRIOR TO 31-12-2006. THEREFORE, INVESTMENT IN NEW HOUSE IS QUALIFIED FOR EXEMPTION U/S 54. 6. IT IS THE CONTENTION OF THE ASSESSEE THAT HE IS ELI GIBLE FOR EXEMPTION U/S 54 IN VIEW OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS K.G. RUGMINI AMMA (SUPRA) WHEREIN TH E LAW HAS BEEN CLEARLY DISCUSSED WITH REFERENCE TO PROVISIONS OF S ECTION 54 IN THE LIGHT OF THE WORD A SO AS TO MEAN THAT A RESIDENTIAL HOUSE SHOULD BE 8 ITA 8538/MUM/2011 UNDERSTOOD IN A SENSE THAT BUILDING SHOULD BE OF RE SIDENTIAL IN NATURE AND A SHOULD NOT BE UNDERSTOOD TO INDICATE A SINGULAR NUMBER. THE ASSESSEE FURTHER CONTENDED THAT THE HONBLE HIGH CO URT FURTHER CLARIFIED THAT IF ASSESSEE PURCHASED MORE THAN ONE RESIDENTIA L FLATS, WHICH ARE ADJACENT TO EACH OTHER AND MERGED INTO A SINGLE RES IDENTIAL UNIT, THEN, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 54 IN RESPEC T OF ALL UNITS. WE FIND MERIT IN THE ARGUMENT OF THE ASSESSEE FOR THE REASO N THAT IF ASSESSEE PURCHASED MORE THAN ONE RESIDENTIAL UNIT, IN A SING LE RESIDENTIAL COMPLEX, WHICH ARE ADJACENT TO EACH OTHER AND ALL THE UNITS ARE MERGED INTO ONE HABITABLE UNIT THEN, THE ASSESSEE IS ELIGIBLE FOR E XEMPTION U/S 54 IN RESPECT OF ALL THE 3 UNITS. THIS LEGAL PROPOSITION IS SUPPORTED BY THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CAS E OF CIT VS K.G. RUGMINI AMMA (SUPRA). IN THIS CASE, ON PERUSAL OF THE FACTS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS PURCHASED 3 R ESIDENTIAL APARTMENTS BEARING NO.1802/A, 1802/B AND 1802/C WHI CH ARE ADJACENT TO EACH OTHER. THE ASSESSEE ALSO FILED CERTAIN EVI DENCES TO PROVE THAT ALL THREE APARTMENTS HAVE BEEN CONVERTED INTO A SINGLE RESIDENTIAL UNIT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN DENYING THE BENEFIT OF EXEMPTION U/S 54 IN RESPECT OF REIMBURSEMENT OF SALE CONSIDERATION FOR PURCHASE OF 3 RESIDENTIAL UN ITS. 7. COMING TO THE SECOND OBJECTION OF THE AO, THE AO OB SERVED THAT INVESTMENTS MADE BY THE ASSESSEE FOR PURCHASE OF 3 NEW RESIDENTIAL 9 ITA 8538/MUM/2011 APARTMENTS IS OUTSIDE THE SCOPE OF SECTION 54 AS TH E ASSESSEE HAS MADE INVESTMENT IN PURCHASE OF HOUSE PROPERTY BEYOND THE STIPULATED PERIOD PROVIDED U/S 54 WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSEE OUGHT TO HAVE INVESTED BETWEEN31-12-2006 TO 31-12-2009 WHERE AS THE ASSESSEE HAS MADE INVESTMENT RIGHT FROM 04-08-2006. THE AO FURTHER OBSERVED THAT THE BUILDER HAS ISSUED ALLOTMENT LETTER ON 04- 08-2006 ALLOTTING 3 FLATS SPECIFYING THE TERMS AND CONDITIONS OF ALLOTMENT, T HEREFORE, THE DATE OF INVESTMENT SHOULD BE CONSIDERED FROM THE DATE OF AL LOTMENT LETTER ISSUED BY THE BUILDER BUT NOT FROM THE DATE OF AGREEMENT T O SELL. WE DO NOT AGREE WITH THE FINDINGS OF THE AO FOR THE REASON TH AT FOR THE PURPOSE OF DETERMINATION OF HOLDING PERIOD OR INVESTMENT, ONE HAS TO GO BY THE DATE OF AGREEMENT BUT NOT FROM THE DATE OF ALLOTMENT LET TER ISSUED BY THE BUILDER. IN THIS CASE, THE ASSESSEE HAS NOT ENTERE D INTO AGREEMENT FOR PURCHASE OF PROPERTY ON 10-07-2008 AND ALSO MADE PA YMENT BETWEEN MARCH, 20067 TO SEPTEMBER, 2008. IF ONE HAS TO CON SIDER THE DATE OF AGREEMENT AND PAYMENT MADE FOR PURCHASE OF FLATS, T HE INVESTMENT MADE BY THE ASSESSEE IN PURCHASE OF NEW RESIDENTIAL HOUSE IS WELL WITHIN THE TIME LIMIT PRESCRIBED U/S 54 AND HENCE, THE AO WAS ERRED IN DENYING THE BENEFIT OF EXEMPTION U/S 54 OF THE ACT. 8. COMING TO THE CASE LAWS RELIED UPON BY THE LD.DR, T HE LD.DR RELIED UPON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PAWAN ARYA VS CIT (SUPRA) AND SUBMITTED THAT THE AS SESSEE PURCHASED 10 ITA 8538/MUM/2011 MORE THAN ONE RESIDENTIAL HOUSE, THEN HE WILL NOT Q UALIFY FOR EXEMPTION U/S 54 OF THE INCOME-TAX ACT, 1961. WE HAVE GONE T HROUGH THE CASE LAW RELIED UPON BY THE LD.DR IN THE LIGHT OF THE FACTS OF THE PRESENT CASE AND FIND THAT THE CASE LAW RELIED UPON BY THE LD.DR IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE HONBLE PUNJAB & HA RYANA HIGH COURT THAT THE CASE LAW RELIED UPON BY THE LD.DR IS NOT A PPLICABLE TO THE FACTS OF THE PRESENT CASE. THE HONBLE P&H HIGH COURT IN THE CASE HAS DISCUSSED THE ISSUE OF EXEMPTION U/S 54 IN THE LIGH T OF THE JUDGEMENT RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS ANAND BASAPPA (SUPRA) AND OBSERVED THAT IF MORE THA N ONE HOUSE IS PURCHASED, WHICH ARE ADJACENT TO EACH OTHER AND MER GED INTO ONE RESIDENTIAL UNIT, THEN THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 54. THE HONBLE HIGH COURT FURTHER OBSERVED THAT THE ASSESS EE HAS PURCHASED TWO DIFFERENT HOUSES WHICH ARE LOCATED IN DIFFERENT PLACES. THEREFORE, NOT COVERED BY THE DECISION OF HONBLE KARNATAKA HIGH C OURT IN THE CASE OF CIT VS ANAND BASAPPA, THEREFORE, DENIED THE BENEFIT OF EXEMPTION. IN THIS CASE, THE ASSESSEE HAS PROVED BEYOND DOUBT THA T ALL 3 FLATS ARE LOCATED ON THE SAME FLOOR AND ADJACENT TO EACH OTHE R AND ALSO MERGED INTO A SINGLE RESIDENTIAL UNIT. 9. IN THIS VIEW OF THE MATTER AND CONSIDERING THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WA S ERRED IN DENYING THE BENEFIT OF EXEMPTION U/S 54 IN RESPECT OF PURCH ASE OF 3 NEW 11 ITA 8538/MUM/2011 RESIDENTIAL FLATS. THE CIT(A), AFTER CONSIDERING RELEVANT FACTS HAS RIGHTLY DELETED ADDITION MADE BY THE AO. WE DO NOT FIND AN Y ERROR OR INFIRMITY IN THE ORDER OF THE CIT(A). HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVE NUE. 10. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST FEBRUARY, 2018. SD/- SD/- (SAKTIJIT DEY) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 21 ST FEBRUARY, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER SR.PS, ITAT, MUMBAI