Multiple Flats in same building received under Joint Development Agreement eligible for Sec. 54F deduction
SMT. Roopa Vs. ITO (ITAT Banglore)
The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the multiple flats in the same building received by the assessee under a Joint Development Agreement are eligible for income tax exemption under section 54F of the Income Tax Act, 1961.
Assessee entered into a Joint Development Agreement with a builder along with her mother and her brothers for transfer of 50% of undivided share in property bearing Katha No. 18 at 1st M Main Road, New Thippasandra, Bangalore, in lieu of receipt of 50% of super built-up area to be developed on the above property.
As per the terms of the JDA, the assessee was to receive 2 flats in lieu of the transfer of his portion of an undivided share of the land to the developer and was entitled to exemption u/s 54 / 54F of the Act.
While completing the assessment proceedings, the Assessing Officer denied the exemption to the assessee. On appeal, the first appellate authority held that the assessee was not eligible for exemption u/s 54/54F of the Act.
Aggrieved by the order, the assessee approached the Tribunal contending that the order was passed without appreciating that there was a building/structure existing on the said property even prior to the JDA, which is evidenced by copy of official Memorandum relating to surrender of electricity Meter issued by BESCOM (copies at pages 53 to 60 of Paper Book) and Municipal tax challans for payments.
Based on a plethora of judicial decisions, the Tribunal held that the assessee in the case on hand is eligible to be allowed exemption u/s 54F of the Act in respect of multiple units/ flats i.e., the 2 flats in the same apartment building received by him in lieu of entering into the JDA dated 03.12.2007 with M/s. Sai Deep Estates.