ITO, CHENNAI vs. R.BHUVANESWARI, CHENNAI

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-4, Chennai, dated 25.03.2015 and pertains to assessment year 2009-10. The only issue arises for consideration is with regard to claim of deduction under Section 54F of the Income-tax Act, 1961 (in short 'the Act').

Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that during the year under consideration, the assessee sold immovable property and acquired three residential units in the same apartment. The assessee claimed deduction under Section 54F of the Act. However, the Assessing Officer restricted the claim of the assessee to one residential unit and found that the assessee is not eligible for deduction either under Section 54 or 54F of the Act in respect of the other two residential units. However, the CIT(Appeals), by following the order of this Tribunal in dated 28.07.2006, allowed the claim of the assessee under Section 54 in respect of the three residential units of the assessee. Referring to provisions of Section 54 of the Act, the Ld. D.R. submitted that the assessee cannot have more than one residential house for the purpose of claiming deduction under Section 54 of the Act. Therefore, the CIT(Appeals) may not be correct in allowing the claim of the assessee.

On the contrary, Shri V.S. Jayakumar, the Ld. counsel for the assessee, submitted that an identical issue came before the Madras High Court in CIT v. V.R. Karpagam (2014) 90 CCH 34 and submitted that the word “one residential house in India” was deleted by Finance Act, 2014 with effect from 01.04.2015 and the Parliament introduced “a residential house” instead of “one residential house”. The CIT(Appeals) by following the binding judgment of the Madras High Court in V.R. Karpagam (supra), allowed the claim of the assessee.

We have considered the rival submissions on either side and perused the relevant material available on record. The amendment made by Parliament by Finance Act, 2014 was considered by Madras High Court and it was found that “a residential house” would include multiple flats/residential units. Moreover, a co-ordinate Bench of this Tribunal in dated 28.07.2006 found that there was no bar in acquiring more than one residential unit for claiming deduction under Section 54 of the Act. In fact the CIT(Appeals) by following the order of the co-ordinate Bench of this Tribunal allowed the claim of the assessee, therefore, this Tribunal do not find any reason to interfere in the order of the lower authority and accordingly the same is confirmed.

In the result, the appeal filed by the Revenue is dismissed.