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Before: Shri Laliet Kumar & Dr. Mitha Lal Meena
In the Income-Tax Appellate Tribunal, Agra Bench, Agra
Before : Shri Laliet Kumar, Judicial Member And Dr. Mitha Lal Meena, Accountant Member
ITA No. 786/Agr/2018 Assessment year: 2015-16
Mr. Dinesh Chandra Dutta Bhargava vs. DCIT, Circle 4(1)(1), C/o N.A. Siddiqi, Advocate, Aligarh. 7, Anon House, Civil Lines, Aligarh. PAN: ABMPB3271D (Appellant) (Respondent)
Appellant by Sh. I.A. Siddiqi, Advocate Smt. Sita Srivastava, Sr. DR Respondent by
Date of Hearing 05.03.2021 Date of Pronouncement 08.03.2021
ORDER Per Laliet Kumar, J.M.: This appeal by the assessee for the assessment year 2915-16 is directed
against the order dated 18.09.2018 passed by ld. CIT(A), Aligarh, challenging the
impugned order on the ground that the ld. CIT(A) while sustaining the disallowance
of assessee’s claim made u/s. 54/54F of the Act by Assessing Officer on the ground
that the Long term capital gains earned by the assessee was invested in purchase of
two houses/flats instead of one residential unit.
Brief facts of the case are that the assessee sold a residential house in Agra on
21.04.2014 for Rs.1,20,00,000/- having the value for the purpose of stamps at
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Rs.1,22,78,000/-. Out of the long term capital gains, the assessee invested
Rs.15,00,000/- in specified bonds u/s. 54EC and also invested a sum of
Rs.43,85,000/- in purchase of a flat in JNC Princes Park, Khasra No. 519,
Mohiuddinpur, Kanawani, Noida and Rs. 48,90,000/- in another flat in Desire
Residency, Khasra No. 520, Mohiuddinpur, Kanawani, Noida. The Assessing Officer
observed that deduction u/s. 54 could be allowed only in respect of one flat.
The assessee preferred appeal before the ld. CIT(A) who sustained the
disallowance on the premise that the legal position has changed w.e.f. 01.04.2015
and in section 54, phrase “a residential house” has been substituted by “one
residential house in India”. Aggrieved by the impugned order, the assessee is in
appeal before us.
The ld. Counsel for the assessee submitted that the ld. CIT(A) while sustaining
the disallowance failed to appreciate that the changed legal position in section 54 by
Finance Act (Bill No. 2) 2014 was not applicable in the year under consideration, as
the amendment was made effective from 01.04.2015 with prospective effect. The
two units purchased by assessee are adjacent to each other, as is evident by Khasra
No. 519 and 520 and therefore, the same should be considered for deduction u/s. 54
as per law applicable in the year under consideration.
Per contra, the ld. DR relying upon the impugned order submitted that both
the units of residential flats purchased by the assessee situate in different societies
ITA No. 786/Agr/2018 3
and the legislative intent has never been to invest the capital gains in multiple
residential houses. Therefore, the impugned order does not call for any interference.
We have heard the rival contentions and have gone through the material
available on record. The only question to be adjudicated in the instant case is
whether the assessee is entitled for deduction u/s. 54/54F of the Act in the
attending circumstances of the case or not and whether the changed legal position
of section 54, as noted by ld. CIT(A), is applicable in the assessment year under
consideration or not. It is not in dispute that the amendment in section 54 was made
w.e.f. 01.04.2015, which does not fall within the assessment year under
consideration. There is nothing on record from the side of Revenue to justify that
the said amendment was made applicable with retrospective effect. In such
circumstances. As regards the disallowance on the premise of investment in two
residential flats, we find that in the case of V.R. Karpaam (Smt.) v. ITO (2013) 143
ITD 126 (Chennai)(Trib.), Tribunal held that ‘a residential house’ in the context
could not be construed as a singular and the meaning given in section 54 would
apply to section 54F also. New asset defined in section 54F as ‘a residential house’
has to be understood in plural. It is not necessary that all residential units should be
single door number allotted. In this decision, the Tribunal, following the ratio in CIT
v. K.G. Rukminiamma (2011) 331 ITR 211 (Karn.)(HC), allowed the claim of
assessee. In view of these decisions, we find no justification to discard the claim
ITA No. 786/Agr/2018 4
made by the assessee u/s. 54 of the Act in the present case. We are, therefore, not
inclined to sustain the impugned order.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 08/03/2021.
Sd/- Sd/- (Dr. Mitha Lal Meena) (Laliet Kumar) Accountant Member Judicial member
Dated: March, 2021 *aks*