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2021 (1) TMI 960 - ITAT MUMBAIEligible to claim deduction u/s 54 on account of investment made - exemption of reinvestment of capital gain to one residential house property by taking view of phrase "a residential property" in Section 54(1) as only one house property ignoring the explanations and submissions made before him - HELD THAT:- We find that the provisions of Sec. 54 as it stood during AY 2011-12, provides for a deduction against certain Long-Term Capital Gains earned by an individual assessee on account of investment made by way of purchase / construction of ‘a residential house property’ within specified time period. The Finance Act, 2014 substituted the expression ‘a residential house property’ with the words ‘one residential house’ with effect from 01/04/2015. The Finance Act, 2019 has further amended the said provision with effect from 01/04/2020 to provide that in case of capital gain not exceeding ₹ 2 Crores, deduction shall be available even against investment in two residential houses in India. Interpreting the provisions of Section 54, Hon’ble Madras High Court in recent decision titled as Tilokchand & Sons V/s ITO Once it is held that the word 'a' employed can include plural residential houses also within the meaning of Section 54 prior to its amendment, then such interpretation will not change merely because the purchase of new assets in the form of residential houses is at different addresses. So long as the same Assessee purchased one or more residential houses out of the sale consideration for which the capital gain tax liability is in question, in its own name, the same Assessee should be held entitled to the benefit of deduction u/s 54 of the Act, subject to the purchase or construction being within the stipulated time limit in respect of the plural number of residential houses also. It was also held that the amendment made by The Finance Act, 2014 was intended to be specifically applied only prospectively with effect from AY 2015-16 since it took note of the judicial precedents for period prior to 01/04/2015. In view of the foregoing & accepting the interpretation of word ‘a’ as occurring in Section 54 as made by Hon’ble Madras High Court in Tilokchand & Sons V/s ITO [2019 (4) TMI 713 - MADRAS HIGH COURT] we hold that on the facts and circumstances, the assessee would be eligible to claim deduction u/s 54 on account of investment made in both the flats. We order so. The Ld. AO is directed to re-compute assessee’s income in terms of our above order. AO is directed to re-compute assessee’s income in terms of our above order.
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