INCOME TAX ACT, 1961

Section 54 Section 54F

Capital gains - Exemption under section 54/54F - Exemption in respect of two flats in the same residential building complex received in lieu of entering into JDA -

Assessee claimed exemption under section 54F in respect of multiple units/flats, i.e., 2 flats in the same apartment building rectified by him in lieu of entering into JDA with M/s. SD Estates. AO held that by virtue of amendment to section 54F by Finance (No. 2) Act, 2014 with effect from 1-4-2015, exemption under section 54F could be allowed only in respect of one unit and not multiple units, therefore, exemption under section 54/54F had to be restricted to one unit only.Held: Amendment to section 54F being para materia to section 54 with regard to substitution of 'a' residential unit by Finance ( No. 2) Act, 2014 was operative only with effect from 1-4-2015, whereby exemption for more than one unit/flat (residential house) is to be withdrawn. However, prior to the amendment, a residential house would include multiple flats/residential units in the same apartment building accordingly assessee was entitled to exemption under section 54/54F in respect of 2 flats in the same residential building complex.

Followed:CIT v. Smt. K.G. Rukminiamma 92011) 331 ITR 211 (Karn) : 2011 TaxPub(DT) 429 (Karn-HC) and CIT v. V.R. Karpagam ITA No. 301 of 2014, dt. 18-8-2014 (Mad-HC).

REFERRED : Smt. Nethravathi v. ITO ITA No. 2630/Bang/2017, dt. 25-4-2018.

FAVOUR : In assessee's favour.

A.Y. : 2009-09

INCOME TAX ACT, 1961

Section 234A Section 234B

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