KARNATAKA HIGH COURT

 

 

SHRI. NAVIN JOLLY C/O NAVIN ARCHITECT PRIVATE LIMITED VERSUS THE INCOME-TAX OFFICER, WARD 11 (1)

 

 

I.T.A. NO. 320 OF 2011

 

 

Interpreting the meaning of the word residential house used in Section 54F(1)

 

 

– assessee even otherwise is entitled to the benefit of exemption u/s 54F(1) of the Act as the assessee owns two apartments in same building and therefore, it has to be treated as one residential unit.

 

 

 

– HELD THAT:- A bench of this court in SAMBANDAM UDAY KUMAR SUPRA [2012 (3) TMI 80 – KARNATAKA HIGH COURT] while interpreting Section 54F has held that provisions of Section 54F is a beneficial provision for promoting construction of residential houses and has to be construed liberally.

 

 

 

 

Kerala, Delhi, Allahabad, Calcutta and Hyderabad High Courts have taken a view that usage of the property has to be considered in determining whether it is a residential property or a commercial property and Madras High Court in C.H.KESVA RAO [1983 (1) TMI 5 – MADRAS HIGH COURT] has held that expression ‘residence’ implies some sought of permanency and cannot be equated to the expression ‘temporary stay’ as a lodger.

 

 

 

 

Revenue have fairly submitted that out of nine apartments, seven flats have been sanctioned for commercial purposes.

 

 

 

 

Therefore, the dispute only survives in respect of two apartments, which have been sanctioned for residential purposes and are being used for commercial purposes as serviced apartments.

 

 

 

The usage of the property has to be considered for determining whether the property in question is a residential property or a commercial property.

 

 

It is not in dispute that the aforesaid two apartments are being put to commercial use and therefore, the aforesaid apartments cannot be treated as residential apartments.