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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S. SUNDER SINGH
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – 14, Chennai, dated 23.03.2015 and pertains to assessment year 2011-12.
The only issue arises for consideration is with regard to claim of exemption under Section 54F of the Income-tax Act, 1961 (in short "the Act").
Shri N. Sabapathy, the Ld. counsel for the assessee, submitted that the Assessing Officer disallowed the claim of the assessee under Section 54F of the Act on the ground that the assessee is owning more than one property other than the new asset on the date of transfer of original asset, therefore, she is not entitled for claim of exemption under Section 54F of the Act. Thus, the CIT(Appeals) has confirmed the order of the Assessing Officer.
Referring to Section 54F of the Act, the Ld. counsel submitted that the amendment came into effect only with effect from 01.04.2015, therefore, during the year under consideration, there cannot be any disallowance.
We have heard Shri Shiva Srinivas, the Ld. Departmental Representative also. According to the Ld. D.R., as per the rental receipt filed before the Assessing Officer, the assessee was owning more than one house as on the date of investment in the new house, therefore, the assessee is not eligible for exemption under Section 54F of the Act.
We have considered the rival submissions on either side and perused the relevant material available on record. The requirement of more than one house was interpreted by the Madras High Court in the case of CIT v. V.R. Karpagam in Tax case (Appeal) No.301 of 2014. The Madras High Court found that this amendment is applicable prospectively and based on that the assessee is eligible for exemption even though the assessee invested in multiple residential units. In this case, the year under consideration is 2011-
Therefore, in view of the judgment of Madras High Court in V.R.
Karpagam (supra), this Tribunal is of the considered opinion that the assessee is eligible for exemption even though the capital gain was invested in multiple residential units. We are unable to uphold the orders of the lower authorities. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to grant deduction under Section 54F of the Act in the light of the judgement of Madras High Court in V.R. Karpagam (supra).
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 23rd March, 2017 at Chennai.