TMI Blog2022 (1) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 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 inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as against the deduction u/s 54 of Income Tax Act, 1961 claimed by assessee of ₹ 1,38,67,143/- in respect of two residential houses acquired. 2.4 That on the facts and circumstances and in law, the learned Assessing Officer and Commissioner of Income-Tax (Appeals), 19, New Delhi erred in not allowing deduction u/s 54 of Income Tax Act, 1961 on the contention that appellant did not deposit unutilized amount in Capital Gain account scheme as per section 54(2) of Income Tax Act, 1961 despite the fact that appellant had utilized amounts more than Long term Capital Gain earned by appellant before the filing of return of income. 2.4 Without prejudice, on the facts and circumstances and in law, the learned Assessing Officer and Commissioner of Income-Tax (Appeals), 19, New Delhi erred in net allowing deduction u/s 54 of Income Tax Act, 1961 In respect of payments made within one year before sale of residential property for acquiring residential property. 3. That the appellant craves permission to add, amend, alter or vary all or any grounds of appeal on or before the date of hearing of appeal. 3. Representatives of both the sides were heard at length. Cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or purchase or construction of property within specified period and since in the case of the assessee most of the payments have been made and beyond the specified period of one year, therefore, mere execution of sale deed within the period as mentioned in section 54 of the Act is not sufficient and concluded by holding that only ₹ 2592437/- is eligible for exemption in respect of CWG property. 10. In so far as the investment in another residential house at Priyadarshni Vihar for ₹ 6405100/-, the AO was of the opinion that the assessee is entitled for exemption only in respect of one residential house property accordingly concluded by holding that the claim of the assessee u/s. 54 against investment in two residential house property at two different places is hereby rejected and allowed to the extent of the purchase value of only one flat/ residential house having higher value of ₹ 6405100/- of Priyadarshani Vihar, Delhi property and made addition of ₹ 7462043/-. 11. Assessee carried the matter before the CIT(A) but without any success. 12. Before us the counsel for the assessee vehemently stated that this controversy of investment in two resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. We have discussed about the two decisions from the Karnataka High Court, which, in our opinion, dealt with similar controversy as is raised before us herein. The only difference which we find is that the purchase of the residential houses in the present case is at different address in the same city of Madurai. In D. Ananda Basappa case stated (supra), two flats in question were admittedly adjacent to each other and which were joined to become one residential house. In the case of Khoobchand M.Makhija (supra), two door nos are given viz., 623 and 729. but the complete addresses and even the name of the city is not clear in the facts narrated in the said Judgment. But in our considered opinion, the difference of location of the newly purchased residential house(s) will not alter the position for interpretation of the word 'a residential house' to the effect that it may include more than one or plural residential houses, as held by Karnataka High Court, with which we respectfully agree. The location of the newly purchased houses by the same assessee viz.. HUF out of sale consideration received on the sale of original capital Asset or a residential house in the gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion? 9 RlLaw arose, renders little help to the arguments advanced by the learned counsel for the Revenue. 17. The Hon ble High Court has also considered the amendment brought into the statute by way of explanatory note. The relevant findings of the Hon ble High court read as under :- 17. The purpose The very need to amend the later part of Section 54(l) seems to have been to restrict such plurality to be included in word a by inserting word one residential house with effect from 01.04.201 5. 18. It would be of interest to refer to the Explanatory notes along with the Finance Bill by which the said amendment was incorporated in Section 54, which is quoted below for ready reference: 20.Capital gains exemption in case of investment in a residential house property 20.1. The provisions contained in sub-section (1) of Section 54 of the Income Tax Act, before its amendment by the Act, inter alia, provided that where capital gain arises from the transfer of long-term capital asset, being buildings or land appurtenant thereto, and being a residential house, and the assessee within a period of one year before or two years after the date of tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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