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TMI Blog2019 (12) TMI 1543X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding sale of immovable property at T. Nagar by one Shri B. Sundararajan and Smt. B. Vatsala (mother of Shri Sundararajan) of Rs..45 crores. The total consideration of Rs..45 crores was divided between the two as Rs..25 crores for Shri B. Sundararajan and Rs..20 crores for Smt. B. Vathsala, assessee. Accordingly, the case reopened under section 147 of the act and notice under section 148 of the Act was issued. Upon the request, the assessee was intimated the reasons for reopening of assessment. After considering the submissions of the assessee and disposing the objections, the Assessing Officer completed the assessment under section 143(3) r. w s. 147 of the Act by assessing the total income at Rs.. 6,59,56,280/- after making the disallowance under section 54F of the Act of Rs.. 6,39,34,520/-. On appeal, by following the decision in the case of CIT vs. Smt. V.R. Karpagam [2015] 373 ITR 127 (Mad.) and CIT vs. Gumanmal Jain [2017] 394 ITR 666 (Mad.), the Ld. CIT(A) directed the AO to allow assessee's claim of deduction under section 54F of the Act. 3. The Revenue is in appeal before the Tribunal. The ld. DR submitted that even before the amendment to section 54F of the Act by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has submitted before the ld. CIT(A) that the assessee reinvested in the assessment year 2008-09 in which there was no restriction that an assessee should reinvest in only one residential property. It was also pointed out that the amendment restricting the reinvestment to one residential property was introduced prospectively w.e.f. the assessment year 2015-16.The AR of the assessee has relied on two decisions in the case of V.R. Karpagam and Gumanmal Jain (supra). By reproducing the head-notes of both the above decisions, the ld. CIT(A) held that both the case law squarely applies to the assessee's case in her favour and directed the Assessing Officer to allow the claim of deduction under section 54F of the Act for reinvestment in both the residential properties. 4.2 The contention of the Department is that the reinvestment in multiple properties located in different addresses is not eligible for claiming deduction under section 54F of the Act even before the amendment to the said section. However, as relied on by the assessee in the recent decision in the case of Tilokchand & Sons v ITO (supra), the Hon'ble Jurisdictional High Court has held that profit on sale of property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id words in brackets read like this. Constructed, a residential house] 16. We are conscious of the fact that the questions posed for our consideration have to be answered in the context of an Assessee which is a HUF, which has a special character. It is only by deeming fiction of law that a HUF, is treated as a separate assessable entity by including the same in the definition of the word 'person' under Section 2 (31) of the Act. The definition of the word "Assessee" under Section 2(7) of the Act means a 'person' by whom any tax or sum of money is payable under the Act. Thus, the HUF is also a 'person' and a separate assessable entity under the Income Tax Act, 1961. 17. The purpose of Section 54 appears to allow a deduction to an Assessee, being an individual or HUF, to the extent of investment made in residential house as against the Capital Gains accruing on the sale of original residential house or sold capital asset. The word 'a' has been used in the said provisions of Section 54 (1) of the Act at more than one place and such word 'a' was not replaced by way of amendment by Finance (No.2) Act 2014 with effect from 01.04.2015 at all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstructs, 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 Incometax 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 India. 20.5. Applicability:- These amendments take effect from 1st April, 2015 and will accordingly apply in relation to assessment year 2015- 16 and subsequent assessment years." 19. A closer and bare reading of the aforesaid Explanatory Notes to the provisions of the said Act, clearly shows that the said amendment was intended to be specifically applied only prospectively with effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 entitled to the deduction under Section 54 of the Act for the entire investment in the properties and securities. Therefore, in our opinion, Judgment rendered by the Karnataka High Court in CIT Vs. D. Ananda Basappa ((2009) 309 ITR 329 (Karn)) & Khoobchand M.Makhija (supra) cited at bar by the learned counsel for the Assessee apply on all fours to the facts of the present case. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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