The Income Tax Appellate Tribunal (ITAT), Agra Bench permits the deduction held that the change in limiting the Section 54 deduction to only one residential house can be considered.
The taxpayer, Mr. Dinesh Chandra Dutta Bhargava on April 21, 2014, sold a residential house in Agra for Rs.1,20,00,000/- owning the value for the intention of stamps at Rs.1,22,78,000/-. Out of the long-term capital gains, the taxpayer invested Rs.15,00,000/- in designated bonds under section 54EC and also invested a sum of Rs.43,85,000/- in the purchase of a flat and Rs. 48,90,000/- in another flat.
Under section 54 the Assessing Officer saw that deduction can be permitted towards one flat.
The taxpayer has chosen to appeal to CIT(A) who has a hold on the premise that the legal position has amended with effect from 1st April 2015 under section 54, the phrase “a residential house” has been substituted by “one residential house in India”.
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The taxpayer has furnished that CIT(A) while posing the disallowance canceled to appreciate that the amendment legal position under section 54 through the Finance act (Bill No.2) 2014 is not applied for the year beneath the consideration as the change was effected from 1st April 2015 through proposed effect. The 2 units purchased through the taxpayer has next to each other, as is evident by Khasra No. 519 and 520 and thus it must be recognized for the deduction beneath section 54 according to the law relevant in the year under consideration.
The council has furnished that both the units of the residential flats purchased through the taxpayers are located in different societies and the legislative purpose has not to invest in the capital gains in various residential homes. Thus the challenged order shall not ask for any involvement.
The 2 judges Dr. Mitha Lal Meena and Laliet Kumar held that there is nothing on record from the side of the revenue to clarify that the stated change was made applied through the retrospective effect. Income Tax Appellate Tribunal (ITAT) stated that in the case of V.R. Karpaam (Smt.) v. ITO, Tribunal with respect to the disallowance on the premise of property in residential flats, concerning can not be interpreted as a singular and the purpose given in section 54 shall apply to section 54F.
Beneath section 54 of the act, the tribunal reveals that there is no justification to dismiss the claim furnished through the taxpayer.
