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Two bungalows adjacented to each other to be treated as one for sec. 54F relief though two diff. registries were done |
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| During relevant year, assessee claimed exemption under section 54F on long-term capital gain invested in two bungalows which were adjacent to each other and used as one residential unit. |
| Assessing Officer (AO) disallowed same on ground that assessee could have claimed exemption under section 54F with respect to investment in one bungalow only. On appeal, the CIT(A) also upheld the order of AO. Aggrieved-assessee filed the appeal before the Tribunal. |
| The Tribunal held that under provisions of section 54F, there is no definition/clarification provided about the area of the residential property. It means, one assessee can buy huge bungalow/property, say thousand square meters and can claim the deduction subject to the conditions. |
| There can be a situation that the family of the assessee is quite large, comprising of several members in the family and, therefore, he needs two properties adjacent to each other to accommodate his family members. So from the point of view of the assessee, it is single property but he got two different properties registered as per the requirement of the builder. |
| Thus, the assessee couldn’t be deprived of the benefit conferred under the statute merely on the reasoning that there were two different registries of the buildings/properties. It was not a case that both the properties purchased by the assessee were located in different graphical areas. Therefore, assessee was entitled to the exemption provided under section 54F. |
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AO couldn't initiate reassessment on pretext that binding decision of Supreme Court was overlooked; SLP dismissed |
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| In course of assessment, AO allowed assessee's claim for deduction under section 37(1) in respect of royalty paid for acquiring technical knowledge. However, later on, reassessment proceedings were initiated on premise that scrutiny assessment originally completed was in ignorance of a binding decision of Supreme Court. |
| The Apex Court had dismissed the special leave petition (SLP) filed against the order of High Court wherein tribunal took a view that since in scrutiny assessment AO had gone into taxability of royalty payment, he could not initiate reassessment proceedings on pretext that a binding decision of Supreme Court was overlooked at time of assessment. |
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