TMI Blog1984 (5) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is an individual who sold his house in 1/6, Ramanan Road, Madras-1, on 17-12-1975 for Rs. 1,50,000. He then purchased a flat in No. 401, 'B' Block, 'Shivalaya', C-In-C Road, Madras-8, on 2-3-1976. Section 54 states that where the assessee sells a residential house being used by him mainly for the purpose of his own residence and purchased within a period of one year a house property for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be denied only because the assessee was using one room of 250 sq. ft. as office for the purpose of conducting his own money-lending business. We are unable to comprehend this objection of the revenue because it is totally at variance with the object of section 54 which is to ignore capital gains arising from the sale of residential houses where the object of the sale is only to substitute o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended to apply where one residential unit is substituted by another residential unit and whatever capital gains enures from the sale of the residential house is reinvested in the purchase of another residential house. In the circumstances, we accept the claim of the assessee and direct the ITO to grant the relief under section 54 and recompute the capital gains exigible to tax. The appeal is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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