Exemption u/s 54F can be availed in respect of more than one flats if they are in same address: Madras HC [Read Judgment]

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In the recent case CIT v. Gumanmal Jain, the division bench of the Madras High Court ruled that the assessee is entitled to get benefit of section 54F of Income Tax Act if the Flats are indifferent blocksbut located in same address/location.

The assessee, along with his sons, entered into a Joint Development Agreement with a builder and developed flats in the plot. The assessee and his sons received 15 flats as consideration for the JDA. The Assessing Officer, while completing assessment, found that the assessee is in possession of more than one residential house. However, the assessee denied the same.

Before the High Court, the Revenue contended that all the flats cannot be deemed as one since they are in different blocks. The bench, however, noted that though the flats are located in different blocks, the location/address of the flats are the same.

Based on case laws, the bench noted that post amendment in Finance (No.2) Act, 2014, ‘a residential house’ now reads as ‘one residential house’. “We have noticed that this amendment is only with effect from 01.04.2015 and the case on hand pertains to assessment year 2012-2013. Therefore, this amendment does not in any manner impact the instant case. However, we make it clear that we have noticed this amendment. It is also to be borne in mind that the other coordinate Division Bench of this Court has also noticed this amendment in V.R.Karpagam’s case and thereafter laid down the principles/ratio.”

While dismissing the Revenue’s appeal, the division bench comprising of Justice Rajiv Shakdher and Justice M.Sunder observed that, the assessee having got 15 flats along with his two sons will not disentitle him from getting the benefit under Section 54-F of the Income Tax Act only on the ground that all the 15 flats are not in the same Block, particularly in the light of the admitted factual position that all the 15 flats are located at the same address”

Read the full text of the Judgment below.