TMI Blog2010 (8) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... n the result appeal of the assessee is partly allowed - ITA No. 6661/M/2009 - - - Dated:- 13-8-2010 - D. Manmohan, Vice-President J. And Rajendra Singh, Accountant Member J. S.E. Dastur and H.S. Raheja for the Appellant. R.N. Jha for the Respondent. ORDER PER RAJENDRA SINGH (AM) This appeal by the assessee is directed against the order dated 30.10.2009 for the assessment year 2006-07. Though the assessee has raised several grounds in the memorandum of appeal, effectively there is only one issue which relates to claim of exemption under section 54 in respect of income from sale of two flats. 2. Briefly stated the facts of the case are that the assessee owned two flats being the Flat No.41 and 51 in Shikha Build ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer took place purchased, or has within a period of three years after that date constructed, a residential house, then]. Instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of [the residential house so purchased or constructed (hereafter in this section referred to as the new asset) the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e specified assets and therefore the word used was any and not a . But in case of section 54 and 54F the word used was a and not any which shows that the legislature intended to allow expenditure only in respect of one residential house. The tribunal therefore concluded that the investment has to be in only one residential house for getting exemption in respect of sale of an asset. The AO also observed that when a statutory provision was plain and unambiguous, literal interpretation has to be adopted. Reliance was placed on the judgment of Hon ble Supreme Court in case of Polestar Electric Pvt.Ltd. (41 STC 409) and the judgment of Hon ble Supreme Court in case of Prakash Nath Khanna (266 ITR 1) AO therefore held that the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was more than the aggregate capital gain from sale of flats. Alternatively it was also submitted that in case exemption was considered in respect of each set of purchase and sale taking separately, then investment in Girnar flat should be considered against the gain in respect of flat No.41 which was fully exempt as the investment was more. 3.1 The Learned DR on the other hand strongly supported the orders of authorities below and placed reliance on the findings given in the respective orders. 4. We have perused the records and considered the rival contentions carefully. The dispute is regarding computation of exemption under section 54 which is available in case the long term capital gain arising from sale of a residential house is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sale of one residential house. Therefore in case the assessee has sold two residential houses, being long term assets, the capital gain arising from the second residential house is also capital gain arising from the transfer of a long term assets being a residential house. The provisions of section therefore will also be applicable to the sale of second residential house and similarly to a third residential house and so on. Whenever the exemption available to restricted to one asset, a suitable provision is incorporated in the relevant section itself. For instance section 23(2) exempts income from a property consisting of a house or a part of house which is in occupation of the assessee or which could not be occupied by the assessee beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the language used in section 54(1), in our view exemption will be available in respect of transfer of any number of long term capital assets being residential houses if other conditions are fulfilled. 4.2 The revenue has placed reliance on the decision of special bench of the tribunal in case of ITO Vs. Sushila M. Jhaveri (supra) but the said case is distinguishable as in that case nowhere it was held that exemption will be available only in respect of sale of one residential house. In fact issue in that case was different. The issue was whether exemption was available in case the gain from sale of a house is invested in more than one residential houses. It was held by the special bench that exemption will be available only when the inve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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