Property which constitutes one single house with two different door nos, still counts as one property, says ITAT

Last updated: 09 March 2021

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The Income Tax Appellate Tribunal (ITAT) has ruled that a property, even if it has two different door numbers, is to be treated as a single house for tax purposes. The Assessing Officer had rejected the assessee's claim for deduction under Section 54F of the Income-tax Act, viewing the property as multiple units. However, the ITAT overturned this decision, clarifying that the property's classification as a single house allows for the deduction.

Court :
ITAT Bangalore

Brief :
The appeal filed by the assessee is directed against the order dated 29-11-2019 passed by Ld CIT(A)-7, Bengaluru and it relates to the assessment year 2015-16. The solitary issue urged in this appeal is whether the Ld CIT(A) was justified in rejecting the claim for deduction u/s 54F of the Income-tax Act,1961 ['the Act' for short].

Citation :
ITA 523/BANG/2019

IN THE INCOME TAX APPELLATE TRIBUNAL
“B’’ BENCH: BANGALORE

BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER
AND
SMT. BEENA PILLAI, JUDICIAL MEMBER

ITA No.194/Bang/2020
Assessment Year: 2016-17

Halesh K.C.
No.948, 28th Main,
Jayanagar, 9th Block
Bangalore-560 069
PAN NO : AVHPK3392F
APPELLANT

Vs.

ITO Ward-7(2)(1)
Bangalore
RESPONDENT

Appellant by : Shri H. Guruswamy &
Shri M. Ravi Kumar, A.Rs
Respondent by : Shri Priyadarshi Mishra, D.R.

Date of Hearing : 24.02.2021
Date of Pronouncement : 24.02.2021

O R D E R

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

The appeal filed by the assessee is directed against the order dated 29-11-2019 passed by Ld CIT(A)-7, Bengaluru and it relates to the assessment year 2015-16. The solitary issue urged in this appeal is whether the Ld CIT(A) was justified in rejecting the claim for deduction u/s 54F of the Income-tax Act,1961 ['the Act' for short].

2. We heard the parties and perused the record. The assessee along with other family members had sold an immovable propertylocated at Bommanahalli, Bangalore on 20-08-2015. The assesseeworked out long term capital gain of Rs.1,50,20,000/- and claimeddeduction of entire amount u/s 54F of the Act. The AO noticed that the assessee had received a building by way of gift on 13.8.2015 andthe said building consisted of ground floor, first floor and second floor. The AO also deputed his inspector to physically inspect theproperty. The Inspector reported that the Ground floor is having a garage and one residential unit; first floor is having two 1BHK flats and second floor is having 2 single (with bath) units. The AO, accordingly, took the view that each of the unit is separate house. Since deduction u/s 54F of the Act is not permitted, if the assessee is having more than one house property, the AO rejected the claim for deduction u/s 54F of the Act. The Ld CIT(A) also confirmed the same and took support of decision rendered by Bangalore bench of Tribunal in the case of Ramaiah Harish (ITA No.789/Bang/2019 dated 04-09-2019).

To know more in details find the attachment file

FAQ :

The ruling addresses whether a property with two different door numbers should be considered a single house for the purpose of claiming a deduction under Section 54F of the Income-tax Act.

The AO viewed the property as consisting of multiple separate units (ground floor garage and residential unit, first floor two 1BHK flats, and second floor two single units) and therefore rejected the Section 54F deduction claim.

The assessee claimed a deduction for the entire long-term capital gain from the sale of an immovable property under Section 54F of the Income-tax Act.

The ITAT ruled in favour of the assessee, stating that the property, despite having two door numbers, still constitutes a single house, allowing for the Section 54F deduction.

The AO rejected the deduction based on the belief that the assessee owned more than one house property, which disqualifies them from the Section 54F deduction.