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TMI Blog2013 (12) TMI 1525X X X X Extracts X X X X X X X X Extracts X X X X ..... his notice, the assessee filed a return of income for the assessment year 1996-97 on 28.8.2002 declaring a total income of Rs. 3,46,557/-. Subsequently, notices under Section 142(1) and 143(2) were issued. By that time, the assessee had died. His legal representatives - sons appeared through an authorized representative and furnished all the requisite particulars. The said particulars furnished disclosed that the assessee has sold his self-occupied house during the year for a sum of Rs. 3,73,00,550/-. The cost of the acquisition of the said house was shown as Rs. 88,40,867/-. Therefore, the net capital gain was Rs. 2,84,59,683/-. The assessee invested a sum of Rs. 1,21,38,530/- in acquiring two residential houses. The balance amount unutilized was Rs. 1,63,21,153/-. The assessee deposited a sum of Rs. 1,70,00,000/- before 31.7.1996 in the nationalized banks for investment. The Assessing Authority was of the view that the assessee was entitled to the benefit of Section 54(1) of the Act only to the extent of acquiring one residential house of the value of Rs. 76,91,660/-. He adopted Rs. 200/- per square feet as the basis for calculating the indexed cost and as against the claim of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... houses for the benefit of his two sons. Accordingly, he purchased the property No.623 for a consideration of Rs. 76,91,660/- on 27.5.1996. Prior to that, he also entered into an agreement of sale in respect of property No.739 for a consideration of Rs. 75,00,000/- and paid a sum of Rs. 44,00,606/- on the date of agreement of sale. He paid the balance sale consideration on 28.9.1996 and purchased the said property under a registered sale deed dated 28.9.1996. However, as the capital gains to be eligible for the benefit under Section 54(1) and (2) of the Act had to be deposited on or before the due date prescribed for filing the income tax return under Section 139(1) of the Act, which was 31.7.1996, he deposited a sum of Rs. 1,70,00,000/- within the said due date, though he had to actually deposit only Rs. 1,63,67,417/-. After deposit, he withdrew this balance sale consideration payable and obtained the sale deed on 28.9.1996 after paying the amount to the seller. After purchasing these two houses, deducting the commission rate, a sum of Rs. 82,75,206/- remained as unutilized capital gain. In terms of Section 54(2) of the Act, the said amount was offered for taxation for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Principles of Statutory Interpretation by Justice G.P.Singh - pages 279 and 280). It is in this background, it is necessary to understand the meaning of the word 'a' in the context in which it is used in the said Section. 10. The words "a" or "an" and "the" are called Articles. They come before nouns. There are two Articles - a (or an) and the "a" or "an" is called the Indefinite Article, because it usually leaves indefinite the person or thing spoken of. "The" is called the Definite Article, because it normally points out some particular person or thing. The indefinite article is used before singular countable nouns. The definite article is used before singular countable nouns, plural countable nouns and uncountable nouns. The indefinite Article is used in two contexts, firstly, in its original numerical sense of one. Secondly, in the vague sense of a certain. It is also used in the sense of any, to single out an individual as the representative of a class. It is also used to make a common noun of a proper noun. 11. In the Strouds Judicial Dictionary of Words and Phrases dealing with this letter 'a', it is said 'a' is sometimes read as 'the' ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or lands appurtenant there to. The stress is on the use to which the property is put to. Only when that asset was used as a residential house, which may consist of buildings or lands appurtenant thereto, the income derived from the sale of such a residential house is chargeable under the head "Income from house property." If the assessee has within a period of one year before or two years after the date on which 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 aforesaid provisions. In this part of the section also, the words "a residential house" is again used. The said residential house necessarily has to include buildings or lands appurtenant thereto. It cannot be construed as one residential house. In this context, it is useful to refer- to Section 13 of the General Clauses Act, 1897, which reads as under: "13. Gender and number. - In all Central Acts and Regulations, unless there is anything repugnant in the subject or context - (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential houses to accommodate both his sons. 17. It is clear that the assessee was not attempting to evade tax. In fact, after purchasing two residential houses, still there remained unutilized capital gain, which he has offered for tax. Therefore, as held in the aforesaid Rukminiamma's case, the context in which the expression "a residential house" is used in Section 54 makes it clear that it was not the intention of the legislature to convey the meaning that it refers to a single residential house. The letter "a" in the context, which is used, should not be construed as meaning singular, but being a indefinite article, the said expression should be read in consonance with the other words "buildings and lands" and therefore, the singular "a residential house" also permits use of plural by virtue of Section 13(2) of the General Clauses Act. 18. Therefore, we are of the view, in the facts and circumstances of this case, the acquisition of two residential houses by the assessee out of the capital gains falls within the phrase "residential house" and accordingly, the assessee is entitled to the benefit conferred under Section 54(1) of the Act. However, we make it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid." 21. A reading of the aforesaid provision makes it very clear that the capital gain acquired by sale of a property should be deposited on or before the due date prescribed under Section 139(1) of the Act in the relevant year in which the property was sold. Thereafter, the assessee has to utilize the said amount for purchasing the residential house within two years and if he is constructing a residential house within three years. In the event of the purchase or construction is completed within a year or two, the question is, is he liable to offer the unutilized capital gain immediately thereafter in the said current financial year? The answer is "no" because the proviso to Section 54(2) expressly provides that, if the amount deposited under sub-section (2) of Section 54 of the Act is not utilized wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then the amount not so utilized shall be charged under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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