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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI ANIL CHATURVEDI
आदेश / ORDER PER ANIL CHATURVEDI, AM :
This appeal filed by the assessee is emanating out of the order of Commissioner of Income Tax (Appeals) – 9, Pune dated 30.07.2019 for A.Y. 2013-14.
The relevant facts as culled out from the material on record are as under :-
Assessee is an individual who is stated to be having income from profession, other sources and capital gains. Assessee electronically filed her return of income for A.Y. 2013-14 on 30.12.2013 declaring total income of Rs.1,88,210/-. The case was selected for scrutiny and thereafter, assessment was framed u/s 143(3) of the Act vide order dated 09.03.2016 and the total taxable income was determined at Rs.22,00,990/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who vide order dated 30.07.2019 dismissed the appeal of the assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in appeal and has raised the following effective ground :
“On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in not allowing the claim u/s 54F of Rs.20,12,785/-.”
During the course of assessment proceedings, AO noticed that assessee had sold a plot of land situated at Khata No.220, Khasara No.115B at Village Artoni Tahasil, Dist. Agra for Rs.1,60,00,000/- on 25.03.2013. The aforesaid land was purchased on 24.02.2003 for Rs.5,95,205/-. Out of the sale consideration received, assessee had invested Rs.50 lakhs in Capital Gain Bonds of Rural Electrification Corporation Ltd., on which she had claimed deduction u/s 54EC of the Act. The claim of deduction u/s 54EC allowed by the AO. AO also noted that assessee had claimed deduction u/s 54F of the Act of Rs.98,65,515/- being the investment made for purchase of the residential houses. AO noted that the claim was for three flats purchased by assessee in building known as Nisarga Meadows at Wakad, Pune and Akruti Properties. He noted that all the three flats were in the same building but on different floors. The assessee was therefore asked as to how the assessee was eligible for claim of deduction u/s 54F of the Act as assessee had purchased three flats. The submissions made by the assessee were not fully accepted by the AO. AO allowed the claim of deduction only on the purchase of two flats namely, 507 & 508 which were combined but denied the claim of deduction u/s 54F of the Act in respect of the flat No.107on first floor and thus disallowed the claim of deduction of long term capital gain u/s 54F of Rs.20,12,785/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who upheld the order of AO.
Aggrieved by the order of Ld.CIT(A), assessee is now in appeal.
Before me, Ld.A.R. reiterated the submissions made before AO and Ld.CIT(A) and further submitted that while denying the claim of deduction u/s 54F of the Act, reliance has been placed by the authorities on the amendment made u/s 54F of the Act by the Finance Act (No.2) Act, 2014.
He submitted that the amendment u/s 54F of the Act is w.e.f. 01.04.2015 i.e., from A.Y. 2015-16 onwards and that since the year under consideration in the present case A.Y. 2013-14, the amendment does not apply. He submitted that prior to the amendment even on purchase of more than one residential house, assessee was eligible to claim deduction. He also placed reliance on the decision of Hon’ble Karnataka High Court in the case of CIT and another Vs. D. Ananda Basappa reported in (2009) 309 ITR 329 and the decision of Pune Tribunal in the cases of ITO Vs. Shri Narshivha Amrutrao Dhere and ITO Vs. Shri Chandrasen Amrutrao Dhere in and 1945/PN/2013 order dated 18.03.2015. He also placed on record the copy of the aforesaid decisions. He therefore submitted that in view of the aforesaid decisions, the claim of the assessee be allowed. Ld. D.R. on the other hand, supported the order of AO and Ld.CIT(A).
I have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to the denial of claim of deduction of Rs.20,12,785/- u/s 54F of the Act. It is an undisputed fact that assessee had sold a plot of land for a consideration of Rs.1.60 crores and a part of it had been re-invested in purchasing three flats in the same building. On the purchase of three flats, assessee had claimed deduction u/s 54F of the Act. Out of the three flats purchased, two flats were adjacent flat and the 3rd flat was in the same building. It is also a fact that on the two adjacent flats which were purchased by the assessee, deduction u/s 54F of the Act was granted by the AO. I find that Hon’ble Madras High Court in the case of CIT Vs. Gumanmal Jain reported in (2017) 394 ITR 666 after considering the amendment made to Sec.54F of the Act by the Finance (No.2) Act, of 2014 held that prior to the amendment made by the Finance Act (No.2) Act, 2014 w.e.f. 01.04.2015 (from A.Y. 2015-16 onwards), the residential house would include multiple flats / residential units. It has further held that even if the flats/apartments were in different blocks/buildings and so long as they are at the same location/address, assessee was eligible for deduction u/s 54F of the Act prior to 01.04.2015. Before me, Revenue has not pointed out any contrary binding decision in its support. I therefore considering the fact that the impugned year being A.Y. 2013-14 wherein the amendment made by Finance (No.2) of Act, 2014 would not apply and relying on the aforesaid decision of the Hon’ble Madras High Court in the case of Gumanmal Jain (supra), am of the view that assessee is eligible for deduction u/s 54F of the Act and therefore assessee is eligible for deduction on all the three flats purchased by her. I therefore direct the AO to grant the deduction u/s 54F of the Act. Thus, the grounds of assessee are allowed.
In the result, the appeal of assessee is allowed.
Order pronounced on 27th day of January, 2020.