ITO, CHENNAI vs. M.MANI, CHENNAI

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER

Commissioner of Income Tax (Appeals) allowed relief u/s.54F of the Income Tax Act, 1961 (in short ‘’the Act’’) to the assessee despite one of the properties which were sold, on which such relief was claimed, being held in the name of his spouse.

ITA No. 3457/Mds/2016 :- 2 -:

Facts apropos are that assessee had filed return of income 2. for the impugned assessment income declaring income of �6,68,660/-.

Assessee alongwith had sold a vacant land at plot No.23 and his wife one at plot no. 24, Venus Nagar, Kolathur, Chennai for a total consideration of �1,40,00,000/-. Assessee purchased four separate dwelling units of an apartment complex and as per assessee total investment on these four flats came to �1,14,63,531/-. Assessee claimed exemption u/s.54F of the Act on the above investments.

However, ld. Assessing Officer was of the opinion that assessee had purchased four different dwelling units through four different documents and hence exemption claimed u/s.54F of the Act could not be allowed. He disallowed the claim and completed assessment.

Argument of the assessee, in his appeal before ld. 3.

Commissioner of Income Tax (Appeals) was that ‘’residential house’’ could not be considered in singular. Reliance was placed on the decision of Co-ordinate Bench in the case of V.R. Karpagam vs. ITO (2013) 143 ITD 126. Ld. Commissioner of Income Tax (Appeals) was of the opinion that by virtue of the decision of the Co-ordinate bench in the case of V.R. Karpagam (supra) deduction u/s.54F of the Act could not be denied even were multiple flats were acquired by an assessee.

ITA No. 3457/Mds/2016 :- 3 -:

Now before us, the ld. Departmental Representative strongly 4. assailing the order of the ld. Commissioner of Income Tax (Appeals) submitted that assessee has sold two properties, and only one was in his name whereas the other was in his wife’s name. According to him, exemption u/s.54F of the Act could not be given on the capital gains arising on the property which was sold by his wife’s name. According to ld. Departmental Representative this aspect was never looked into by ld. Commissioner of Income Tax (Appeals) or the ld. Assessing Officer.

We have considered the submissions of ld. Departmental 6.

Representative and perused the orders of the authorities below. It might be true that out of the two plots sold, one was held by assessee’s wife Smt. Pooniammal. However, ld. Assessing Officer had denied exemption claimed by the assessee u/s.54F of the Act not for this reason but for a reason that assessee had acquired four dwelling units on which such exemption was claimed and Sec. 54F of the Act could be applied only for one dwelling unit. Thus there was no case for the ld. Assessing Officer that one of the plot sold by assessee’s wife on which capital gains was computed was in the name of assessee’s wife. On the other hand, he had considered both properties as sold by the assessee and computed the capital gains.

ITA No. 3457/Mds/2016 :- 4 -:

Coming to the question, whether exemption u/s.54F of the 7.

Act could be availed even where such claim was for more than one flat, we find that decision of the Co-ordinate Bench in the case of V.R. Karpagam (supra), relied on by the ld. Commissioner of Income Tax (Appeals) stands confirmed by the Jurisdictional High Court in 373 ITR 127. We are of the opinion that therefore ld. Commissioner of Income Tax (Appeals) was justified in giving relief u/s.54F of the Act on the four flats acquired by the assessee. We do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals).

In the result, the appeal of the Revenue stands dismissed. 8.

Order pronounced on Tuesday, the 28th day of February, 2017, at Chennai.