TMI Blog2013 (1) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 54 and 54F or any other provision of the Act prohibiting allowance of exemption under both the sections in case the conditions of the provisions are fulfilled. In the facts of the present case, since long term capital gain arises from sale of two distinct and separate assets viz., residential house and plot of land and the assessee has invested the entire capital gain in purchase of a new residential house, in our view, he is entitled to claim exemption both u/s 54 and 54F of the Act. We therefore direct the AO to delete the addition of ₹ 44,05,302/-. - Decided in favour of assessee. - ITA No.552/Hyd/2012 - - - Dated:- 18-1-2013 - SHRI CHANDRA POOJARI AND SHRI SAKTIJIT DEY, JJ. Roopanjali J (AR) for the Appellant M.H. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banjara Hills, Hyderabad which was purchased for a total price of ₹ 1,43,26,665. The AO on interpreting sec. 54 and 54F came to a conclusion that for claiming exemptions under both the sections i.e., 54 and 54F, the assessee has to invest in two houses. On the aforesaid basis the AO disallowed exemption claimed u/s 54 of the Act and added back an amount of ₹ 44,05,302/- to the total income. 4. The assessee being aggrieved of the addition made filed an appeal before the CIT(A). In course of hearing of appeal before the CIT(A), the assessee contended that section 54 and 54F are independent provisions and are not mutually exclusive. It was submitted that sec. 54 provides for exemption when the asset transferred is a residential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case and the submissions of the appellant. From the provisions f sections 54 and 54F it is clear that the incentive intent. While the purpose of both these sections is to give a fillip to the Housing Sector, evidently, different sources for investment in a residential house have been envisaged there under. Under the circumstances, it is clear that both these sections are not only independent, but mutely exclusive too. In fact, the conditions regarding ownership of another residential house at the time of investment in new asset clearly show that the two are meant to operate in a exclusive manner and cannot be clubbed together for getting a bigger advantage of exemption on account of bigger investments. Under the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, sec. 54F provides for exemption of capital gain arising out of transfer of other assets if invested in residential house. The learned AR submitted that both these sections are independent and operate in isolation. Though these sections deal with different scenarios and call for investment in a residential house while operating in that particular scenario. The learned AR submitted that the interpretation of the lower authorities that as these two sections are separate and call for investment in one residential house and therefore the assessee should have invested in two different house is not a correct interpretation. The learned AR submitted that no double deduction is claimed as the entire capital gain arising out of sale of residentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. Section 54 provides exemption of capital gain in case of transfer of a long term capital asset being a residential house, the income of which is chargeable under the head income from house property and the assessee within the prescribed time has purchased or constructed a new residential house. Sec. 54F provides exemption of capital gain in case of transfer of any long term capital asset, not being a residential house and assessee within the prescribed time has purchased or constructed new residential house. A reading of section 54 and 54F makes it clear that they are independent of each other and operate in respect of long term capital gain arising out of transfer of distinct and separate long term capital assets. However, both the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the sections is purchase or construction of a new residential house within the stipulated period. There is also no specific bar either u/s 54 and 54F or any other provision of the Act prohibiting allowance of exemption under both the sections in case the conditions of the provisions are fulfilled. In the facts of the present case, since long term capital gain arises from sale of two distinct and separate assets viz., residential house and plot of land and the assessee has invested the entire capital gain in purchase of a new residential house, in our view, he is entitled to claim exemption both u/s 54 and 54F of the Act. We therefore direct the AO to delete the addition of ₹ 44,05,302/-. Hence, these grounds are allowed. 10. Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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