TMI Blog2021 (7) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... me for the Assessment Year 2010-11 on 26.07.2010 admitting a total income of ₹ 7,568/-. The case was selected for scrutiny and notice dated 23.08.2011 was issued under Section 143 (2). Thereafter, notice under Section 142(1) was issued. The assessee is a non-resident and sold her property for a consideration of ₹ 3,15,00,000/- vide Sale Deed dated 03.06.2009. The guide line for the property for the purpose of stamp duty was ₹ 4,36,52,800/-. The assessee had computed the long term capital gains on the sale of house property and claimed exemption under Section 54. The Assessing Officer had raised various queries with regard to the disallowance of exemptions and the assessee had explained the claim. The assessee has claimed deduction under Section 54 amounting to ₹ 2,05,92,000/-. The Assessing Officer has rejected the claim of deduction made by the assessee under Section 54. The Assessing Officer disallowed the claim made under Section 54 and arrived at a total income of ₹ 4,17,67,626/-. Aggrieved over the same, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) and the Appellate Authority, partly allowed the appeal and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 2/1/2003 without incurring any cost. The assessee sold the capital asset on 30/6/2003 for ₹ 1,10,00,000/-. Since the assessee held the capital asset for less than thirty six months (2/1/2003 to 30/6/2003) in the ordinary course, as per Section 2(42A) of the Act the assessee would have held the asset as a short term capital asset and accordingly liable for short term capital gains tax. However, in view of Explanation 1(i)(b) to Section 2(42A) of the Act which provides that in determining the period for which any asset is held by an assessee under a gift, the period for which the said asset was held by the previous owner shall be included, the assessee is deemed to have held the asset as a long term capital asset and accordingly,liable for long term capital gains tax. Thus, by applying the deeming provision contained in the Explanation 1(i)(b) to Section 2(42A) of the Act, the assessee is deemed to have held the asset from 29/1/2003 to 30/6/2003 (by including the period for which the said asset was held by the previous owner) and accordingly held liable for long term capital gains tax. 14.It is not disputed by the revenue that the assessee must be deemed to have held the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to seventy-five per cent of average rise in the Consumer Price Index for urban non-manual employees for the immediately preceding previous year to such previous year, by notification in the Official Gazette, specify, in this behalf. 16. It is the contention of the revenue that since the indexed cost of acquisition as per clause (iii) of the Explanation to Section 48 of the Act has to be determined with reference to the Cost Inflation Index for the first year in which the asset was held by the assessee and in the present case, as the assessee held the asset with effect from 1/2/2003, the first year of holding the asset would be FY 2002-03 and accordingly, the cost inflation index for 2002-03 would be applicable in determining the indexed cost of acquisition. 17. We see no merit in the above contention. As rightly contended by Mr. Rai, Learned Counsel for the assessee, the indexed cost of acquisition has to be determined with reference to the cost inflation index for the first year in which the capital asset was 'held by the assessee'. Since the expression 'held by the assessee' is not defined under Section 48 of the Act, that expression has to be understo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions contained in sub-section(1) of section 54F of the Income-tax Act, before its amendment by Act, inter-alia, provided that where capital tains arises from transfer of a long-term capital asset, not being a residential house, and the assessee within a period of one year before or two years after the date of transfer, purchases, or within a period of three years after the date of transfer constructs, a residential house, then, the portion of capital gains in the ratio of cost of new asset to the net consideration received on transfer is not chargeable to tax. 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-section (1) of Section 54 of the Income-tax Act has been amended to provide that the rollover relief under the said section is available if the investment is made in one residential house situated in India. 20.4.Similarly, sub-section (1) of Section 54F of the Income-tax Act has been amended to provide that the exemption is available if the investment is made in one residential house situated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly prospectively from A.Y.2015- 2016. Once we can hold that the word 'a' employed can include plural residential houses also in Section 54 prior to its amendment such interpretations will not change merely because the purchase of new assets in the form of residential houses is at different addresses which would depend upon the facts and circumstances of each case. So long as the same Assessee (HUF) purchased one or more residential houses out of the sale consideration for which the capital gain tax liability is in question in its own name, the same Assessee should be held entitled to the benefit of deduction under Section 54 of the Act, subject to the purchase or construction being within the stipulated time limit in respect of the plural number of residential houses also. The said provision also envisages an investment in the prescribed securities which to some extent the present Assessee also made and even that was held entitled to deduction from Capital Gains tax liability by the authorities below. If that be so, the Assessee-HUF in the present case, in our opinion, complied with the conditions of Section 54 of the Act in its true letter and spirit and, therefore was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Leena Jugalkishor Shah vs. Asstt, CIT, [2016] 72 taxmann.com 185/[2017] 392 ITR 18 (Guj), Dipankar Mohan Ghosh, in re [2018 89 taxmann.com 218/401 ITR 129 (AAR New Delhi) and CIT vs. Anurag Pandit in I.T.A.No.1169/2018 dated 14.05.2019 (New Del). We concur with the view taken by Delhi, Gujarat and Madras High Courts. In view of preceding analysis, the substantial question of law framed by this court is answered in the affirmative and against the revenue. In the result, the appeal fails and the same is hereby dismissed. 7.Mr.Kaushik appearing on behalf of Mr.S.Sridhar, learned counsel for the respondent-assessee submitted that in view of the judgments reported in [2011] 16 taxmann.com 42 (Bombay) [Commissioner of Income-tax-12 Vs. Manjula J. Shah], [2019] 105 taxmann.com 151 (Madras) [Tilokchand Sons Vs. Income-tax Officer, Ward-II (4), Madurai] and [2020] 121 taxmann.com 243 (Karnataka) [Commissioner of Income Tax Vs. Vinay Mishra] , both the appeals may be dismissed. 8.Having regard to the submissions made by the learned counsel on either side, following the ratio laid down in the judgments reported in [2011] 16 taxmann.com 42 (Bombay) [Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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