TMI Blog2017 (2) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that the residential house consists of several independent units can be permitted to act as an impediment to the allowance of the deduction under Section 54/54F. It is neither expressly nor by necessary implication prohibited. The ratio laid down by Hon'ble Delhi High Court in CIT vs Gita Duggal (2013 (3) TMI 101 - DELHI HIGH COURT ) supports the case of the assessee. Exemption u/s 54 will be available in respect of any number of long term capital assets, being residential houses, if other conditions are fulfilled. If the sale proceeds of the long term capital asset is not utilised, within specified time, then it will be dealt with in accordance with law. In the present appeal, it is not the case of the Revenue that the proceeds received upon transfer of long term capital asset was not utilised by the assessee. Thus, considering the totality of facts, the appeal of the assessee is allowed. - ITA No.7688/Mum/2014 - - - Dated:- 2-12-2016 - Shri Joginder Singh, Judicial Member, and Shri Rajesh Kumar, Accountant Member For The Assessee : Shri Dalpat Shah For The Revenue : Shri A. Ramachandran-DR ORDER Per Joginder Singh (Judicial Member) The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from house property (hereafter in this section referred to as the original asset), and 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 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 s. 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed only in respect of indexed gain of ₹ 88,55,558 in respect of flat No. 41 with respect to the investment of ₹ 95,71,364 in Girnar flat. The investment being more than capital gain in respect of sale of flat No. 41, the capital gain was exempted whereas the indexed gain of ₹ 85,55,058 in respect of flat No. 51 was held taxable. In appeal CIT(A) upheld the view taken by the AO aggrieved by which the assessee is in appeal before the Tribunal. 3. Before us the learned Authorised Representative for the assessee reiterated the submissions made before lower authorities that exemption under s. 54 was allowable in respect of any number of flats sold as there was no restriction placed in the section for allowing exemption only in respect of sale of one flat. However, he agreed that corresponding to each sale of flat there has to be investment in one residential property. It was pointed out that the decision of the Special Bench in case of Ms. Sushila M. Jhaveri (supra) was distinguishable as in that case the assessee had claimed exemption in relation to investment in two properties against the sales of one flat. In case of the assessee, the investments in two flats ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead Income from house property is exempt if the capital gain is invested in a residential house in the manner prescribed in the said section. There is no restriction placed anywhere in the s. 54 that exemption is available only in relation to 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 asset being a residential house. The provisions of s. 54 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 is restricted to one asset, a suitable provision is incorporated in the relevant section itself. For instance s. 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 because of his employment/business/profession being carried on at some other place. Based on such provisions contained in s. 23(2), income from any number of properties being residential house which are selfoccupied wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all other conditions are fulfilled. Thus in case there is sale of more than one residential house, the exemption will be available in relation to each set of sale and corresponding investment in the residential house. However, we are unable to agree with the plea of the assessee that exemption has to be calculated considering the aggregate of capital gain and aggregate of investment in the residential houses. In case there are sales of more than one residential house, in our view exemption has to be computed considering each set of sale of residential house and the corresponding investment in one residential house and the combination which is beneficial to the assessee has to be allowed. In this case the learned Authorised Representative has submitted that indexed gain of ₹ 88,55,558 in respect of sale of flat No. 41 should be considered against the investment in flat at Girnar for ₹ 95,71,364 which is allowed and the investment being more entire indexed gain of ₹ 88,55,558 in respect of sale of flat No. 41 will be exempt. The indexed gain of ₹ 85,55,508 in respect of sale of flat No. 51 will have to be considered against the investment of ₹ 81,57,624 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain. (2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words used are buildings or lands which are plural in number and that: is referred to as a residential house , the original asset. An asset newly acquired after the sale of the original asset also can be buildings or lands appurtenant thereto, which also should be a residential house. Therefore the letter a in the context it is used should not be construed as meaning singular. But, being an 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. CIT V. D. Ananda Bassappa (2009) 223 (kar) 186: (2009) 20 DTR (Kar) 266 can be followed. 2.4. There could also be another angle. Section 54/54F uses the expression a residential house . The expression used is not a residential unit . This is a new concept introduced by the assessing officer into the section. Section 54/54F requires the assessee to acquire a residential house and so long as the assessee acquires a building, which may be constructed, for the sake of convenience, in such a manner as to consist of several units which can, if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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