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Mumbai ITAT Grants Tax Relief on Two Flats Despite Separate Floors
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What Happened?
A taxpayer in Mumbai sold six commercial units, earning Rs 5 crore in capital gains. The ITAT ruled in his favor, allowing tax relief on both residential flats purchased.
Key points
- The taxpayer sold six commercial units in Mumbai, generating Rs 5 crore in long-term capital gains.
- He claimed a deduction under Section 54F after purchasing two residential flats on different floors.
- The Assessing Officer accepted the claim for one flat but rejected the second, leading to a disallowance of Rs 2.5 crore.
- The ITAT ruled that separate entrances and floors do not prevent the flats from qualifying as one residential house.
- The tribunal referenced previous judicial decisions supporting the notion that residential accommodation can consist of multiple units.
Key insights
- The ruling may influence future cases involving multiple residential units purchased together.
- Taxpayers could benefit from this precedent when claiming deductions for similar property purchases.
- The decision emphasizes the importance of the functional character of residential accommodation over physical layout.
Why it matters
This ruling clarifies the interpretation of tax relief for residential properties in similar cases.
Source
Times of India
