Section 45, 54, 54F of Income Tax Act, 1961—Exemption u/s 54 and 54F—Joint development agreement— In the present case, the assessee’s residential house, with respect to which the assessee is claiming deduction u/s 54/54F of the Act, comprises of two adjacent units, on the first and second floor of the same building. Both units constitute one residential house for the purpose of section 54/54F of the Act.

the A.O. declined claim of deduction U/s 54/54F of the Act in respect of second flat as the assessee has purchased two units, whereas as per the A.O. the Section states that “a” residential house should be purchased/constructed.

Held that— By the Finance Act, 2014, an amendment was brought in Section 54/54F of the Act which is effective from 01/04/2015 i.e. from A.Y. 2015-16 whereby the phrase “a residential house” was replaced by “one residential house”.

The relevant assessment year under consideration is 2010-11 which is prior to the A.Y. 2015-16 wherein an amendment has been brought by the Finance Act, 2014. Accordingly, the Assessing Officer was not justified in declining the claim of exemption to the assessee in respect to two units of the house property allotted by the developer to the assessee.

In this appeal, the assessee is also aggrieved by the action of the ld. CIT(A) for referring the matter back to the DVO for determination of fair market value as on 01/4/1981.

subsequent to the amendment made vide finance act 2012 under section 55A, wherein the word “is less than its fair market value” is substituted by the word “is at variance with fair market value”, now AO can refer the valuation to DVO for both the instances but that too only for the assessment year 2012-13 and thereafter as the said amendment applies prospectively.

In the Assessee’s case neither the FMV as per the registered valuer’s valuation report was less that the FMV estimated by the DVO, nor is it a case where the FMV of the asset claimed by the Assessee is not supported by a registered valuer’s valuation report. Accordingly reference to the DVO was bad in law.[SMT. DELILAH RAJ MANSUKHANI VERSUS I.T.O., 26 (2) (3) , MUMBAI (PRESENTLY 35 (1) (3).] [2019] 11 ITCD Online (11) [ITAT MUMBAI]