TMI Blog2020 (6) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... ject to restrict the plurality to mean singularity by substituting the word 'a residential house' with the word 'one residential house'. The aforesaid amendment came into force with effect from 01.04.2015. Subsequent amendment of Section 54(1) also fortifies the fact that the legislature felt the need of amending the provisions of the Act with a view to give a definite meaning to the expression 'a residential house', which was interpreted as plural by various courts by taking into account the context in which the aforesaid expression was used. See M/S. TILOKCHAND AND SONS [ 2019 (4) TMI 713 - MADRAS HIGH COURT] and GITA DUGGAL [ 2013 (3) TMI 101 - DELHI HIGH COURT] As interpreted the expression 'a residential house' and have held that the aforesaid expression includes plural. The ratio of the decisions rendered by coordinate bench of this court are binding on us and we respectively agree with the view taken by this court while interpreting the expression 'a residential house'. Therefore, the contention of the revenue that the assessee is not entitled to benefit of exemption under Section 54(1) of the Act in the facts of the case does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee declared long term capital gain arising out of the sale of the above property of ₹ 15,44,009/- after claiming deduction towards incidental charges for transfer of property, the cost of acquisition and the deduction admissible under Section 54 of the Act in respect of two properties purchased in Bangalore viz., Koramangala and Domlur, II Stage, Bangalore, respectively on 23.09.2002 and 23.10.2002. The assessing officer by an order dated 24.12.2008 inter alia held that fair market value for the proposes of assessment is to be adopted on the basis of guidance value as prescribed by stamp valuation authorities. It was further held that the guidance value of the property sold was ₹ 4,62,56,000/- and the aforesaid value was adopted subject to valuation report. It was further held that assessee's claim for deduction under Section 54 of the Act in respect of investments made in acquiring two residential properties is not admissible in view of the decision of the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short) dated 30.04.2008 in ITO VS. SMT.H.V.RAJLAKSHMI. Therefore, the assessee's claim for deduction under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s directed to re-compute the value of the property at ₹ 2,71,03,330/- instead of ₹ 4,06,56,735/-. The tribunal agreed with the findings recorded by the Commissioner of Income Tax (Appeals) insofar as it pertains to denial of benefit under Section 54 of the Act. In the result, the appeal was partly allowed. In the aforesaid factual background, the assesses have approached this court. 7. Learned Senior Counsel for the assessee has submitted that claim of the assessee in this appeal relates to exemption under Section 54 of the Act in respect of investment made in two residential properties. It is argued that there is no dispute with regard to computation of capital gains or factum of investments in two properties. It is pointed out that Section 54(1) was amended by Finance Act, 2014 with effect from 01.04.2015, by the which the words 'constructed a residential house' were substituted and the words 'constructed one residential house in India' was substituted. It is argued that the expression 'a residential house' used in Section 54 of the Act refers to the nature of house and the number of residential units to be purchased by the assessee and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for assessee, it was held that assessee is entitled to benefit to Section 54(1) of the Act. Therefore, the aforesaid decision is of no assistance to the assessee. 9. By way of rejoinder, learned Senior Counsel for the assessee has submitted that there is no finding by any of the authorities that assessee had engaged either in tax planning or tax evasion and in various decisions, the expression 'a residential house' has been interpreted and the ratio laid down in the aforesaid decision applies to the fact situation of the instant case. 10. We have considered the submissions made on both the sides and have perused the record. In order to appreciate the rival submissions made at the bar, we deem it appropriate to reproduce Section 54(1) of the Act, which read, prior to its amendment by Finance Act No.2/2014, as under: 54(1) Subject to the provisions of sub- Section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head Income from ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers also. The Delhi High Court also took the similar view in case of GITA DUGGAL supra. 13. It is well settled in law that an Amending Act may be purely clarificatory in nature intended to clear a meaning of a provision of the principal Act, which was already implicit. [SEE: DECISION OF THE SUPREME COURT IN 'CIT VS. NEW DELHI VS. RAMKRISHNA DAS' IN CIVIL APPEAL NO.3211/2019 DECIDED ON 26.03.2019]. In view of aforesaid enunciation of law by different High Courts including this court and with a view to give definite meaning to the expression 'a residential house', the provisions of Section 54(1) were amended with an object to restrict the plurality to mean singularity by substituting the word 'a residential house' with the word 'one residential house'. The aforesaid amendment came into force with effect from 01.04.2015. The relevant extracts of Explanatory note to provisions of Finance Act No.2/2014 reads as under: 20.3 Certain courts had interpreted that the exemption is also available if investment is made in more than one residential house. The benefit was intended for investment in one residential house within India. Accordingly, sub-Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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