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Income Tax Officer -19(1)(1), Room No. 319, Piramal Chambers, Parel, Mumbai -400 012 Vs. Ms Manju D Jethwani, 501, Moru Milap Building, 15th Road, Khar (West), Mumbai -400 052
July, 10th 2015
                                                                     Ms Manju D Jethwani
                                                                     ITA No.3356/M/2012
                                                                       CO 115/Mum/2013

                MUMBAI BENCH "B", MUMBAI
                        ..  ,

                    ITA No. : 3356/Mum/2012
                     (Assessment year: 2008-09)
Income Tax Officer -19(1)(1),       Vs      Ms Manju D Jethwani,
Room No. 319, Piramal Chambers,             501, Moru Milap Building,
Parel,                                      15th Road, Khar (West),
Mumbai -400 012                             Mumbai -400 052
                                               .:PAN: ABRPM 4292 N
 (Appellant)                                   (Respondent)
                     Appellant by       :   Shri Yogesh Kamat
                    Respondent by       :   Shri Bhpendra Shah
                       CO 116/Mum/2013
      Arising out of ITA No. : 3356/Mum/2012, AY 2008-09
Ms Manju D Jethwani,                Vs      Income Tax Officer -19(1)(1),
Mumbai -400 052                             Mumbai -400 012

 (Appellant)Cross Objector                     (Respondent)
  Appellant Cross Objector by           :   Shri Bhpendra Shah
               Respondent by            :   Shri Yogesh Kamat

         /Date of Hearing                        : 14-05-2015
         /Date of Pronouncement                  : 08-07-2015


            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
            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
                                                        Ms Manju D Jethwani
                                                        ITA No.3356/M/2012
                                                          CO 115/Mum/2013
           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

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

              "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,
                                                       Ms Manju D Jethwani
                                                       ITA No.3356/M/2012
                                                         CO 115/Mum/2013
            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
                                                       Ms Manju D Jethwani
                                                       ITA No.3356/M/2012
                                                         CO 115/Mum/2013
      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
            "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
                                                           Ms Manju D Jethwani
                                                           ITA No.3356/M/2012
                                                             CO 115/Mum/2013
     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 8th July, 2015.

              Sd/-                                          Sd/-
       (..  )
                                                        (  )
     (G S PANNU)                                     (AMIT SHUKLA)
  ACCOUNTANT MEMBER                                JUDICIAL MEMBER

Mumbai, Date: 8th July, 2015

 /Copy to:-

     1)  /The Appellant.
     2)    /The Respondent.
     3) The CIT(A) -30, Mumbai
     4) The CIT­City -19, Mumbai.
     5)   """,   , /
        The D.R. "B" Bench,   Mumbai.
        Copy to Guard File.
                                             /By Order
       / / True Copy / /

                                        Dy./Asstt. Registrar
                                         I.T.A.T., Mumbai
*  ..
*Chavan, Sr.PS
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