Section 54F relief available on purchase of two adjacent flats if same were converted into single unit

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Section 54F relief available on purchase of two adjacent flats if same were converted into single unit

Section 54F relief available on purchase of two adjacent flats if same were converted into single unit
PCIT v. Abhijit Bhandari – [2019] 108 taxmann.com 120 (Madras)
Assessee had earned long-term capital gain from sale of shares. For the purpose of claiming section 54F exemption, he decided to invest the sale proceeds in two residential flats adjacent to each other. He also commenced the modification and renovation of adjoining two flats in a single unit. He claimed exemption by treating the flats as single residential property.
Assessing Officer (AO) allowed the exemption claimed by the assessee. However, the Commissioner passed a revisional order rejecting assessee’s claim for deduction.
Aggrieved-assessee filed writ petition against the order of the Commissioner. The High court held that the AO had examined all the relevant documents produced by the assessee. The said documents convincingly pointed that the flats in the question were turned in a single residential unit. The housing society had recognised the assessee as an owner of a single residential unit and had also provided the facility of only one vote in matters relating to the society.
Thus, the view taken by the AO in his order was a possible view and, therefore, the impugned order was to be set aside.

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