ORDER
PER AMIT SHUKLA, J.M.:
The aforesaid appeal and Cross Objection has been filed by the Revenue and the assessee against impugned order dated 22.02.2012 passed by CIT(A)-30, Mumbai for the quantum of assessment passed u/s 143(3) for the assessment year 2008-09. The Revenue in the grounds of appeal has raised following grounds:
1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing to allow the exemption u/s 54 of the IT Act claimed by the assessee for two flats ignoring the facts that the assessee has purchased two
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different residential units vide separate agreements which were registered separately and as such violated the conditions specified under provision of section 54(1) of the Act which provides for deductions in respect of one residential house.
2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in deleting the disallowance u/s 54 of the I.T. Act after relying on the decision of ITAT, Mumbai Bench in the case of Sushila M Jhaveri (107 ITD
321) which has not been accepted by the Department.".
2. The main controversy involved is whether the exemption u/s 54 is available to the assessee when she had invested the long- term-capital-gain in purchasing of two adjoining flats having one passage and common kitchen. The AO has restricted the claim of exemption u/s 54 at Rs. 1,36,33,100/- in respect of one flat, as against claim of Rs. 2,45,96,000/- claimed by the assessee for the two flats, which were joined together having common passage and kitchen.
3. At the Appellate stage, the matter was remanded to the AO for making a spot enquiry to verify the claim of the assessee whether the two adjoining flats are being used as one unit or not. The AO vide letter dated 23.01.2012 submitted the following report:
"As per your honour's direction, I had appointed ward Inspector, Smt. Bindu Sajiven to make enquiry of the flats bearing No. 601 and 602, Gitanjali Building, Khar (W), Mumbai 52 along with stilt car parking No. 4 & 5 in the case of above said assessee and ward Inspector, Smt. Bindu Sajiven has submitted report vide dated 11.01.2012 stating that flat is a single unit with one entrance, one kitchen, four bedrooms, one puja room,
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one hall and one servants room with attached bathroom along with stilt parking Nos. 4 & 5 and as per Inspector's report the said flats should be treated as single unit. The Inspector's report has already been forwarded vide this office letter dated 19.01.2012". Thus, on the basis of the remand report, the CIT(A) observed that the two flats have been treated as a single unit by the assessee and as per the enquiry of the AO done through ITI. Thereafter, the Ld. CIT(A) referred and relied upon the decision of ITAT, Special Bench in the case of ITO vs Sushila M Jhaveri reported in 107 ITD 32 and directed the AO to grant exemption u/s 54 for both the flats.
4. Before us, the Ld. Counsel of the assessee relied upon the decision of Hon'ble Karnataka High Court in the case of CIT vs Smt. K G Rukminimma reported in [2011] 331 ITR 021 and catena of other decisions of the Tribunal whereas, the Ld. DR, strongly relied upon order of the AO.
5. After considering the rival submissions and on perusal of the impugned order, we find that it is not in dispute that the assessee had purchased two adjoining flats, which has been treated as a single unit having four bedrooms, one common entrance and one common kitchen. This has been reported by the ITI before the AO, who has admitted in the remand report dated 23.01.2012. The Hon'ble Karnataka High Court in the case of CIT vs. Ananda Basappa reported in [2009] 223 CTR (KR 186) and later on the decision of CIT vs Smt. K G Rukminimma (supra) has held that the phrase "residential house in section 54" cannot be construed as a
"singular". In that case, four residential flats joined together were held to construe a residential house. The relevant observation of the Hon'ble High Court is as under:
The context in which the expression 'a residential house' is used in s. 54 makes it clear that it was not the intention of the
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legislation to convey the meaning that it refers to a single residential house. If that was the intention, they would have used the word "one". As in the earlier part, the words used are buildings or lands which are plural in number and that is referred to as "a residential house", the original asset. An asset newly acquired after the sale of the original asset also can be buildings or lands appurtenant thereto, which also should be "a residential house". Therefore the letter 'a' in the context it/s used should not be construed as meaning
"singular". But, being an indefinite article, the said express/el should be read in consonance with the other words 'buildings' and 'lands' and, therefore, the singular 'a residential house' also permits use of plural by virtue of s. 13(2) of the General Clauses Act.—CIT vs. D. Ananda Basappa (2009) 223 CTR (Kar) 186
6. Similarly, in various other decisions of the Co-ordinate Benches of the ITAT, this principle has been consistently accepted. Therefore, we do not find any reason to deviate from the conclusion drawn by the CIT(A) that exemption u/s 54 should be granted to the assessee for both the flats being Flat 601 and 602 as they have been joined together and treated as a single unit with common entrance and one kitchen.
7. Accordingly the Revenue's appeal is treated as dismissed.
8. In the Cross Objection, the assessee has raised following grounds:
"The Ld. CIT(A) erred in not allowing the deduction of sum of Rs. 2,50,000/- being paid for brokerage on account of acquiring new property"
9. The assessee has claimed a payment of Rs. 2,50,000/- from the broker as brokerage on account of acquiring new property. Both the authorities have given categorical finding that the
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assessee could not furnish any evidence of payment of brokerage and even before us no such document or evidence have been filed to rebut such a finding of fact. Accordingly, the claim as well as the ground raised in the Cross Objection is dismissed.
10. In the result, the appeal of the Revenue as well as Cross Objection of the assessee are dismissed.
Order pronounced in the open court on 8thJuly, 2015.
Sd/- Sd/-
(जी.एस. प )ू (अिमत श ुला) लखेा सद य याईक सद य
(G S PANNU) (AMIT SHUKLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Date: 8th July, 2015
त/Copy to:-
1) अपीलाथ /The Appellant.
2) यथ /The Respondent.
3) The CIT(A) -30, Mumbai
4) The CIT-City -19, Mumbai.
5) िवभागीय ितिनिध " "बी" , आयकर अपीलीय अिधकरण, मुंबई/ The D.R. "B" Bench, Mumbai.
6) गाड फाईल Copy to Guard File. आदेशानसुार/By Order / / True Copy / / उप/सहायक पजंीकार आयकर अपील य अ धकरण, मबंु ई Dy./Asstt. Registrar I.T.A.T., Mumbai
*च हान व.िन.स
*Chavan, Sr.PS