TMI Blog2007 (4) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... t in one house only. If a floor is constructed to the new house or if it is renovated it remains a house and this will not be two houses. Thus, it is held that exemption under sections 54 and 54F of the Act would be allowable in respect of one residential house only. If the assessee has purchased more than one residential house, then the choice would be with assessee to avail the exemption in respect of either of the houses provided the other conditions are fulfilled. However, where more than one unit are purchased which are adjacent to each other and are converted into one house for the purpose of residence by having common passage, common kitchen, etc., then, it would be a case of investment in one residential house and consequently, the assessee would be entitled to exemption. Hence, we find that investment was made in two flats located at different localities in Mumbai. Accordingly, the assessee was entitled to exemption in respect of investment in one house only of her choice. The Assessing Officer has already allowed exemption in respect of house which permitted higher deduction. Therefore, on the basis of opinion expressed by us, we reverse the order of the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viii) Dy. CIT v. Mohanlal K Zaveri [ITA No. 2747/M/1998, dated 15-12-2005]. The Division Bench also noticed that Mumbai Bench of the Tribunal in the case of Ratanchand Murarka had also considered the decision of the Hon'ble Bombay High Court in the case of K.C. Kaushik and distinguished the same and thereby held that exemption under section 54/54F was available in respect of investments made in two house properties even if they were distantly located from each other. The Division Bench also found that contrary opinion has also been expressed by other Benches of the Tribunal in the case of Krishangopal Nagpal v. Dy. CIT [2004] 82 TTJ (Pune) 481, as well as in the case of Mrs. Gulshanbanoo R. Mukhi v. Jt. CIT [2002] 83 ITD 649 (Mum.) even after considering the earlier decision of the Tribunal in the case of Ratanchand Murarka. Since inconsistent views were expressed by the different Benches, the Division Bench referred the matter to the Hon'ble President, ITAT, under section 255(3) of the Act for constituting the Special Bench to adjudicate the aforesaid question. The Hon'ble President, ITAT, was pleased to constitute this Bench to decide this appeal including the question mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st mentioned in the earlier paragraph would not be relevant in adjudicating the question referred before this Bench inasmuch as in all those cases, the flats purchased were either adjacent to each other or on two floors having common staircase. Proceeding further, it was submitted that the language of the provisions of section 54/54F is plain and unambiguous since the word "a" means only one. Even if the word "a" means "any", it does not mean many. According to him, the word "any" would mean one out of many. Thus, he pressed into service the cardinal rule of interpretation that where language of a statute is unambiguous, then its plain and natural meaning should be applied. If so construed, then "a residential house" would only mean one residential house. In support of his contention, he relied on the decision of the Tribunal in the case of Mrs. Gulshanbanoo R. Mukhi as well as another decision in the case of Krishangopal Nagpal, wherein it has been held that exemption is available only in respect of investment in one residential house. 4. On the other hand, the learned Sr. counsel, Mr. Firoz B. Andhyarujina, appearing on behalf of the assessee has supported the order of the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perties within one year of the sale of his house, the assessee has choice to claim exemption under section 54 of the Act against the purchase of anyone of the properties. Thus, according to him, the said decision is quite distinguishable and cannot be applied to the present case. 5. Coming to the decision of the Tribunal in the case of Mrs. Gulshanbanoo R. Mukhi, it has been pointed out by him that the Bench relied on the principles of interpretation to the effect that if the language employed by the Legislature is plain and simple and does not create any ambiguity, then its plain and natural meaning has to be applied. According to the said Bench, the plain and natural meaning of the word "a residential house" meant one residential house only. Had the Legislature intended to give exemption for more than one residential house, then it could have used the words "residential house or houses". The learned counsel for the assessee has assailed the said order of the Tribunal by submiting that expression "a residential house" is not unambiguous inasmuch as the word "a" is an indefinite word as held by the Hon'ble Bombay High Court in the case of the Mahomedali Tajbhoy v. CEPT [1951] 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where house was purchased by different deeds. Reference was made to the decision of the Hon'ble Calcutta High Court to submit that expression was allowed even where assessee purchased a house and made further investment in construction of additional floor thereon. Lastly, it was contended that as compared to the word "a", the word "the" is definite word. If the Legislature had intended to restrict the exemption to one residential house, it could use the word "the" instead of "a". It was vehemently contended that the word "a" has been used to stress the nature of house i.e., residential. Alternatively, it was suggested that Legislature could use the word "unit" instead of "house" if it had intended to allow exemption in respect of one house. Finally, he concluded his arguments by submitting that the word "a" should be construed with reference to the object of the Legislature which according to him is to re-invest the amount of capital gain/sale consideration in the residential properties irrespective of their locations. 7. Rival submissions have been considered carefully. The real controversy is about the meaning of the expression "a residential house" used by the Legislature in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Edition), it means- "Sometimes, "a" is read as "the", sometimes as "some" but more frequently as "any". Similarly meaning is given by the Law Lexicon." Perusal of the above clearly shows that the word "a" is ambiguous as it has no definite meaning. Various meanings are given to the word "a". It not only means "one" or "any" but it has various other meanings depending upon the context in which it is to be used. Therefore, the cardinal principle of interpretation cannot be applied and consequently, the intention of the Legislature has to be discovered by resorting to the aids to the interpretation. One of the rules of interpretation is to find out the context in which such word is used by the Legislature. Before coming to the context in which word "a" is used in section 54/54F, we would like to mention that much emphasis was made on the word "any". It has been contended that the word "a" means "any" which in turn means "many" or "more than one". This appears to be partially true. As per various dictionary meanings, it also includes "one" or "one out of many". According to Law Lexicon, the word "any" may have several meanings according to the circumstances. It may mean "all", " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er land for being used for agricultural purposes, 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......" "54D. [Subject to the provisions of sub-section (2), where the capital gain arises] from the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or any right in land or building, forming part of an industrial undertaking belonging to the assessee which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee for the purposes of the business of the said undertaking (hereafter in this section referred to as the original asset), and the assessee has within a period of three years after that date purchased any other land or building or any right in any other land or building or constructed any other building for the purposes of shifting or re-establishing the said undertaking or setting up another industrial undertaking, then, instead of the capital gain being charged to income-tax as the income of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n arises from the transfer of any long-term capital asset, not being a residential house (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 (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say......" Perusal of the above provisions clearly reveals that the Legislature has used the words "a" and "any" with reference to investment of capital gain/sale consideration in certain asset or assets. The Legislature was not oblivious regarding the meaning of these two words. The word "any" has been used by the Legislature in sections 54B, 54D, 54E, 54EA and 54EB while the word "a" has been used in sections 54 and 54F of the Act. This clearly shows that the Legislature intended different meanings to be given to these two words. A close reading of these sections shows that Legislature intended to allow exemption in respect of investment in more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as single house for the residence of the family. As already observed, the intention of the Legislature is that investment should be made in one residential house. So long as the house purchased is one even after conversion, the exemption would be available. On the other hand, if the investment is made in two independent residential houses, even located in the same complex, then, in our opinion, exemption cannot be allowed for investment in both the houses. However, the choice would be with assessee to avail exemption in respect of anyone house as held by the Hon'ble Bombay High Court in the case of K.C. Kaushik. The view taken by us in this para is also justified by the decision of the Hon'ble Calcutta High Court in the case of B.B. Sarkar v. CIT [1981] 132 ITR 150, wherein purchase of ground floor of a house and thereafter construction of first floor was held to be an investment in one house only. Their Lordships at page 156 observed as under: "If a floor is constructed to the new house or if it is renovated it remains a house and this will not be two houses." 11. In view of the above discussion, it is held that exemption under sections 54 and 54F of the Act would be allowab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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